PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
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OCTOBER 15, 2001
BUYER:
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REALTY INCOME CORPORATION,
A MARYLAND CORPORATION
SELLER:
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THE SPORTS AUTHORITY, INC.,
A DELAWARE CORPORATION
PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
TABLE OF CONTENTS
RECITALS.................................................................... 1
1. TOTAL PURCHASE PRICE................................................... 1
2. OPENING OF ESCROW...................................................... 1
3. TITLE TO PROPERTIES.................................................... 2
4. CONDITIONS TO BUYER'S OBLIGATION TO PURCHASE........................... 2
4.1 Approvals by Buyer................................................ 2
4.2 Accuracy of Representations....................................... 3
4.3 Failure of Conditions............................................. 3
4.4 Leases............................................................ 4
5. CONDITIONS TO SELLER'S OBLIGATION TO SELL.............................. 4
5.1 Performance by Buyer.............................................. 4
5.2 Accuracy of Representations....................................... 4
5.3 Payment of Total Purchase Price................................... 4
6. BUYER'S DELIVERIES TO ESCROW AGENT AND SELLER.......................... 4
6.1 Total Purchase Price.............................................. 4
6.2 Leases; Memorandums of Lease...................................... 4
6.3 Failure to Deliver................................................ 4
7. SELLER'S DELIVERIES TO ESCROW AGENT AND BUYER.......................... 5
7.1 Deeds............................................................. 5
7.2 Leases............................................................ 5
7.3 Failure to Deliver................................................ 5
8. THE CLOSING............................................................ 5
8.1 Date and Manner of Closing........................................ 5
8.2 Delay in Closing; Authority to Close.............................. 5
9. PRORATION, COSTS AND EXPENSES.......................................... 6
9.1 Prorations and Apportionments..................................... 6
9.2 Payment of Adjustments to Proration............................... 6
9.3 Seller's Costs and Expenses....................................... 6
9.4 Buyer's Costs and Expenses........................................ 6
10. DISTRIBUTION OF FUNDS AND DOCUMENTS.................................... 6
10.1 Form of Distributions............................................. 6
10.2 Recorded Documents................................................ 6
10.3 Non-Recorded Documents............................................ 7
10.4 Cash Disbursements................................................ 7
10.5 Copies of Documents............................................... 7
11. RETURN OF DOCUMENTS AND FUNDS UPON TERMINATION......................... 7
11.1 Return of Seller's Documents...................................... 7
11.2 Return of Buyer's Documents....................................... 7
(i)
11.3 No Effect on Rights of Parties.................................. 7
11.4 Payment of Termination Fee...................................... 7
12. DEFAULT............................................................... 8
12.1 Seller's Remedy................................................. 8
12.2 Buyer's Remedies................................................ 8
13. REPRESENTATIONS AND WARRANTIES OF SELLER.............................. 8
13.1 Authority of Seller............................................. 8
13.2 Condition of Properties......................................... 8
13.3 Use and Operation............................................... 8
13.4 Land Use Regulation............................................. 9
13.5 Due Diligence Materials......................................... 9
13.6 Absence of Fraud and Misleading Statements...................... 9
13.7 Litigation...................................................... 9
13.8 Other Contracts to Convey....................................... 9
13.9 Environmental Compliance/Hazardous Materials.................... 9
13.10 Use Permits and Other Approvals................................. 10
13.11 Survival........................................................ 10
13.12 No Broker....................................................... 10
14. REPRESENTATIONS & WARRANTIES OF BUYER................................. 10
14.1 Authority of Buyer.............................................. 10
14.2 Absence of Fraud and Misleading Statements...................... 11
14.3 Litigation...................................................... 11
14.4 Financial Condition............................................. 11
14.5 Survival........................................................ 11
14.6 No Broker....................................................... 11
15. COVENANTS............................................................. 11
15.1 Indemnification by Parties...................................... 11
15.2 Maintenance..................................................... 11
16. LOSS BY FIRE OR OTHER CASUALTY; CONDEMNATION.......................... 12
16.1 Damage or Destruction........................................... 12
16.2 Condemnation.................................................... 12
17. POSSESSION............................................................ 12
18. NOTICES............................................................... 12
19. GENERAL PROVISIONS.................................................... 14
19.1 Recitals........................................................ 14
19.2 Manner of Taking Title.......................................... 14
19.3 Right to Assign................................................. 14
19.4 Gender; Number.................................................. 14
19.5 Captions........................................................ 14
19.6 Exhibits........................................................ 14
19.7 Entire Agreement................................................ 14
19.8 Modification.................................................... 14
19.9 Attorneys' Fees................................................. 14
19.10 Joint and Several Liability..................................... 15
19.11 Governing Law................................................... 15
(ii)
19.12 Time of Essence............................................... 15
19.13 Severability.................................................. 15
19.14 Successors and Assigns........................................ 15
19.15 Drafting...................................................... 15
19.16 No Agreement Until Accepted................................... 15
19.17 Waiver of Trial by Jury....................................... 15
19.18 Seller's Knowledge............................................ 15
19.19 Counterparts.................................................. 17
EXHIBIT "A" - PROPERTY LIST
EXHIBIT "B" - FORM OF LEASE AGREEMENT
EXHIBIT "C" - SAMPLE DEED
EXHIBIT "D" - CLOSING CHECKLIST
EXHIBIT "E" - MINIMUM REQUIREMENTS FOR ALTA/ACSM LAND TITLE SURVEYS
(iii)
PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
This Purchase Agreement and Escrow Instructions (this "Agreement"), dated
October 15, 2001 for reference purposes only, is made by and between THE SPORTS
AUTHORITY, INC., a Delaware corporation ("Seller"), and REALTY INCOME
CORPORATION, a Maryland corporation ("Buyer"), and is made with reference to the
recitals set forth below, and constitutes (i) a contract of purchase and sale
between the parties and (ii) escrow instructions to FIRST AMERICAN TITLE
INSURANCE COMPANY ("Escrow Agent").
RECITALS
A. Properties. Seller, or one or more wholly-owned subsidiaries
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controlled by Seller, owns certain real properties, together with all
improvements located thereon and appurtenances thereunto belonging, which real
properties are identified on the "Property List," attached hereto and
incorporated herein as Exhibit "A." The term "Properties" as used in this
Agreement shall mean certain or all (as the context may require) of the real
properties identified on the Property List. The term "Seller" as used in this
Agreement shall also refer to those subsidiaries of Seller that own the
Properties, as the context may require.
B. Purchase and Sale. Seller desires to sell all of Seller's and its
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subsidiaries' right, title and interest in and to the Properties upon the terms
and conditions set forth below. Buyer desires to purchase all of Seller's
right, title, and interest in and to the Properties upon the terms and
conditions set forth below.
C. Leasehold Interest. Concurrently with the Closing (as defined in
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Section 8), Buyer, as landlord, shall lease the Properties to Seller, as tenant,
pursuant to land and building lease agreements (the "Leases"), substantially in
the form of attached hereto as Exhibit "B."
1. TOTAL PURCHASE PRICE
In consideration of the covenants contained in this Agreement, Seller
shall sell and Buyer shall purchase the Properties for a total purchase price
("Total Purchase Price") of FORTY-FOUR MILLION SEVEN HUNDRED SIXTY THOUSAND
DOLLARS ($44,760,000). The Total Purchase Price shall be delivered by Buyer to
Escrow Agent on or before the Closing in Cash (defined as (i) United States
currency, (ii) cashier's or certified check(s) currently dated, payable to
Escrow Agent, and honored upon presentation for payment, (iii) an amount
credited by wire transfer into Escrow Agent's bank account, or (iv) if monies
are deposited with Escrow Agent within twenty (20) days prior to the Closing,
funds in such form as Escrow Agent in its sole discretion requires). The
portion of the Total Purchase Price allocated to each of the Properties (the
"Individual Purchase Price") is listed on Exhibit "A," which is based upon
Buyer's allocation of the values of the Properties.
2. OPENING OF ESCROW
Within five (5) business days following the execution of this Agreement,
Buyer and Seller shall open an escrow (the "Escrow") with Escrow Agent for the
Properties and shall
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deposit with Escrow Agent fully executed counterparts of this Agreement for use
as escrow instructions. Buyer and Seller shall execute Escrow Agent's usual form
of supplemental escrow instructions for transactions of this type; provided,
however, that such escrow instructions shall be for the purpose of implementing
this Agreement, shall incorporate this Agreement by reference, and shall
specifically provide that no provisions shall have the effect of modifying this
Agreement unless it is so expressly stated and initialed on behalf of Buyer and
Seller.
3. TITLE TO PROPERTIES
At Closing, Seller shall convey to Buyer fee simple title to the
Properties by execution and delivery of deeds for the Properties substantially
in the form attached hereto as Exhibit "C" (the "Deeds"). At the Closing Buyer
shall receive from FIRST AMERICAN TITLE INSURANCE COMPANY ("Title Company") an
ALTA (TLTA for Properties in Texas) Owner's Extended Policy of Title Insurance
(the "Title Policy") with liability in the full amount of the Individual
Purchase Price insuring fee simple title to each of the Properties in Buyer,
subject only to exceptions approved by Buyer as provided in Section 4.1,
together with such endorsements as may be reasonably required by Buyer.
Indemnification of the Title Company to induce it to insure any otherwise non-
permitted exception to title shall not be allowed except with the prior written
consent of Buyer after full disclosure to Buyer of the nature and substance of
such exception and indemnity. The Title Policies shall provide survey coverage
and shall provide full coverage against mechanics' and materialmen's liens
arising out of the construction, repair, or alteration of any of improvements
located on the Properties. The requirements set forth in this Section 3 shall
be deemed satisfied at Closing.
4. CONDITIONS TO BUYER'S OBLIGATION TO PURCHASE
Buyer's obligation to purchase the Properties is expressly conditioned
upon each of the following:
4.1 Approvals by Buyer
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Buyer's receipt and approval for each of the Properties of the following
prior to the Closing:
4.1.1 Commitment for Policy of Title Insurance. Prior to execution of
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this Agreement, Seller has caused the issuance of ALTA (TLTA for
Properties in Texas) commitments for policies of title insurance,
together with complete legible copies of all encumbrances and
liens of record (the "Commitment"), for each of the Properties to
be forwarded to Buyer for approval. The Commitment shall be
deemed approved by Buyer as of the Closing.
4.1.2 As-built Survey. Prior to execution of this Agreement, Seller has
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caused a survey of each the Properties (the "As-built Survey") to
prepared by a licensed surveyor conforming to the Minimum
Requirements for ALTA/ACSM Land Title Surveys as more
particularly set forth on the attached Exhibit "E." The As-built
Survey shall be deemed approved by Buyer as of the Closing.
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4.1.3 Phase I Environmental Site Assessment Report. Prior to execution
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of this Agreement, Seller has caused a Phase I environmental site
assessment report ("Phase I") to be prepared for each of the
Properties by an environmental consultant in accordance with ASTM
guidelines. The Phase I shall be deemed approved by Buyer as of
the Closing.
4.1.4 Plans and Specifications. Prior to execution of this Agreement,
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Seller submitted complete as-built plans and specifications to
Buyer for certain of the Properties. The plans and specifications
shall be deemed approved by Buyer as of the Closing, and no
further plans and specifications will be required.
4.1.5 Appraisal. Prior to execution of this Agreement, Seller has
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caused a narrative appraisal (the "Appraisal") to be prepared on
a completed project basis, covering the land, improvements, and
the Lease for each of the Properties by an independent appraiser
who is a member in good standing of a recognized professional
appraisal association. The Appraisal shall be deemed approved by
Buyer as of the Closing.
4.1.6 Certificate of Occupancy. Prior to execution of this Agreement,
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Seller has delivered to Buyer a copy of its permanent certificate
of occupancy for each of the Properties. The certificate of
occupancy shall be deemed approved by Buyer as of the Closing.
4.1.7 Other Documents. Prior to the execution of this Agreement, Seller
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has delivered all other documents listed on the attached Exhibit
"D" entitled "Closing Checklist" for each of the Properties. The
documents listed on the Closing Checklist shall be deemed
approved by Buyer as of the Closing.
4.1.8 Property Condition Survey. Prior to execution of this Agreement,
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Seller has delivered a property condition survey (the "Property
Condition Survey") prepared by an engineering consultant approved
by Buyer for each of the Properties. The Property Condition
Survey shall be deemed approved by Buyer as of the Closing.
4.2 Accuracy of Representations
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All of Seller's representations and warranties contained in or made
pursuant to this Agreement shall have been true and correct to the best of
Seller's knowledge when made and as of the Closing, and Seller shall have
complied with all of Seller's covenants and agreements contained in or made
pursuant to this Agreement.
4.3 Failure of Conditions
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4.3.1 The foregoing conditions contained in this Section 4 are intended
solely for the benefit of Buyer. If any of the foregoing
conditions are not
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satisfied or approved by Buyer, Buyer shall have the right at its
sole election either (i) to waive the condition in question and
proceed with the purchase of the Properties pursuant to all of
the other terms of this Agreement, or (ii) to not purchase such
of the Properties on which conditions are not satisfied.
4.3.2 By written agreement, the Closing may be extended for a
reasonable time if required to allow the conditions contained in
this Section 4 to be satisfied, subject to Buyer's further rights
to terminate this Agreement upon the expiration of the period of
any extension if all such conditions have not then been
satisfied.
4.4 Leases
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Execution by Buyer and Seller of the Leases for the Properties.
5. CONDITIONS TO SELLER'S OBLIGATION TO SELL
Seller's obligation to sell is expressly conditioned upon each of the
following:
5.1 Performance by Buyer
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Timely performance of each obligation, covenant, and delivery required of
Buyer.
5.2 Accuracy of Representations
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All of Buyer's representations and warranties contained in or made pursuant
to this Agreement shall have been true and correct to the best of Buyer's
knowledge when made and as of the Closing, and Buyer shall have complied with
all of Buyer's covenants and agreements contained in or made pursuant to this
Agreement.
5.3 Payment of Total Purchase Price
-------------------------------
Payment of the Total Purchase Price at the Closing in the manner provided
in this Agreement.
6. BUYER'S DELIVERIES TO ESCROW AGENT AND SELLER
6.1 Total Purchase Price
--------------------
Buyer shall deliver in Cash to Escrow Agent the Total Purchase Price as set
forth in Section 1, less or plus adjustments, if any, made pursuant to Section
9.
6.2 Leases; Memorandums of Lease
----------------------------
On or before the Closing, Buyer shall deliver to Escrow Agent the Leases
and Memorandums of Lease for the Properties executed and acknowledged by Buyer.
6.3 Failure to Deliver
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The failure of Buyer to make any required delivery within the specified
time shall constitute a material breach by Buyer.
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7. SELLER'S DELIVERIES TO ESCROW AGENT AND BUYER
7.1 Deeds
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On or before the Closing, Seller shall deliver to Escrow Agent the Deeds
for the Properties executed and acknowledged by Seller.
7.2 Leases
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On or before the Closing, Seller shall deliver to Escrow Agent the Leases
and Memorandums of Lease for the Properties executed and acknowledged by Seller.
7.3 Failure to Deliver
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The failure of Seller to make any required delivery within the specified
time shall constitute a material breach by Seller.
8. THE CLOSING
8.1 Date and Manner of Closing
--------------------------
Escrow Agent shall close the Escrow (the "Closing") on or before October
17, 2001 (the "Scheduled Closing Date"), provided that all of the conditions to
Buyer's obligation to purchase have been either satisfied or waived. The Escrow
shall be deemed closed when (i) all documents required to be delivered to Buyer,
Seller and/or Escrow Agent (as the case may be) pursuant to this Agreement have
been delivered or delivery of such document(s) has been waived; (ii) Title
Company is irrevocably committed to issuing the Title Policy; (iii) all funds
required to be delivered to Escrow Agent pursuant to this Agreement have been
delivered; and (iv) Escrow Agent has been authorized by Seller and Buyer,
respectively, to release said documents and funds.
Seller, at its election, may authorize Escrow Agent to close on the
Properties all at once or individually in certain intervals. If Seller
authorizes Escrow Agent to close on the Properties individually, Buyer shall
deliver to Escrow Agent the portion of the Total Purchase Price representing
payment due in connection with those Properties for which Escrow Agent has
received authorization to close.
8.2 Delay in Closing; Authority to Close
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If Escrow Agent cannot close the Escrow on or before the Scheduled Closing
Date, it will nevertheless close when all conditions have been satisfied or
waived, notwithstanding that one or more of such conditions was not timely
performed, unless after the Scheduled Closing Date and prior to the close of the
delayed Escrow, Escrow Agent receives a written notice to terminate the Escrow
and this Agreement, with respect to the applicable Properties on which the
Closing has been delayed, from a party who, at the time such notice is
delivered, is not in default. Neither (i) the exercise of the right of
termination, (ii) delay in the exercise of the right of termination, nor (iii)
the return of monies and documents, shall affect the right of the party giving
notice of termination to pursue legal or equitable remedies for the other
party's breach of this Agreement. Nor shall (i) the giving of such notice, (ii)
the failure to object to termination of the
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Escrow, or (iii) the return of monies and documents affect the right of the
other party to pursue legal or equitable remedies for the breach of the party
who gives notice.
9. PRORATION, COSTS AND EXPENSES
9.1 Prorations and Apportionments
-----------------------------
Contemporaneously with the Closing, Seller intends to lease the Properties
from Buyer. Therefore, the parties do not anticipate the need to prorate
revenues or expenses. However, in the event an item of expense or revenue must
be prorated, it shall be prorated and apportioned as of 12:01 a.m. on the date
of the Closing so that Seller shall bear all expenses with respect to the
Properties and shall have the benefit of all income with respect to the
Properties through and including the period preceding the date of the Closing.
Any taxes or other amounts which cannot be ascertained with certainty as of the
Closing shall be prorated on the basis of the parties' reasonable estimates of
such amount(s) and shall be the subject of a final proration thirty (30) days
after the Closing or as soon thereafter as the precise amounts can be
ascertained.
9.2 Payment of Adjustments to Proration
-----------------------------------
Either party owing the other party a sum of money based on adjustments made
to prorations after the Closing shall promptly pay that sum to the other party,
together with interest thereon at the rate of twelve percent (12%) per annum to
the date of payment if payment is not made within thirty (30) days after mutual
agreement of the amount due.
9.3 Seller's Costs and Expenses
---------------------------
Seller shall pay: (i) Seller's own attorneys' fees; (ii) all financial
advisory fees or commissions payable to REF Advisory, LLC in connection with the
transaction contemplated hereby; (iii) any and all documentary, deed or other
transfer taxes applicable to the sale(s); (iv) the cost of the Title Policy and
any endorsements to be issued pursuant to the Commitment; (v) As-built Survey;
(vi) Appraisal; (vii) Phase I; (viii) Property Condition Survey; (ix) Escrow
fees; and (x) recording fees.
9.4 Buyer's Costs and Expenses
--------------------------
Buyer shall pay for Buyer's own attorneys' fees.
10. DISTRIBUTION OF FUNDS AND DOCUMENTS
10.1 Form of Distributions
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All disbursements by Escrow Agent shall be made by checks of Escrow Agent
or by wire transfers to the account of, and as directed by, the receiving party;
provided, however, all disbursements made to Seller shall be by wire transfer
only.
10.2 Recorded Documents
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Escrow Agent shall cause the County Recorder of the County in which the
Properties are located to return the Deeds and Memorandums of Lease (and any
other documents which are required by this Agreement to be, or by general usage
are, recorded) after recordation, to Escrow Agent or to the grantee,
beneficiaries, or person (i) acquiring rights under the documents or (ii) for
whose benefit the documents were acquired.
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10.3 Non-Recorded Documents
----------------------
Escrow Agent shall, at the Closing, deliver by United States mail (or shall
hold for personal pickup, if requested), each non-recorded document received by
Escrow Agent to the payee or person (i) acquiring rights under the document or
(ii) for whose benefit the documents were acquired.
10.4 Cash Disbursements
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At the Closing, Escrow Agent shall arrange for wire transfer (i) to Seller,
or order, the cash plus any proration or other credits to which Seller shall be
entitled for the Properties and less any appropriate proration or other charges
and (ii) to Buyer, or order, any excess funds previously delivered to Escrow
Agent by Buyer.
10.5 Copies of Documents
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Following the Closing, Escrow Agent shall deliver to Buyer and to Seller a
copy of the Deeds (conformed to show recording data) and each other recorded
document for the Properties.
11. RETURN OF DOCUMENTS AND FUNDS UPON TERMINATION
11.1 Return of Seller's Documents
----------------------------
In the event the Escrow is terminated for any reason (other than the
default of Seller), Buyer shall, within fifteen (15) calendar days following the
termination, deliver to Seller all documents and materials, if any, relating to
the Properties previously delivered to Buyer on behalf of Seller. Escrow Agent
shall deliver all documents and materials relating to the Properties previously
deposited by Seller and then in Escrow Agent's possession to Seller.
11.2 Return of Buyer's Documents
---------------------------
In the event the Escrow is terminated for any reason (other than the
default of Buyer), Seller shall, within fifteen (15) calendar days following
termination, deliver to Buyer all funds and documents, if any, relating to the
Properties, previously delivered to Seller by Buyer. Escrow Agent shall deliver
all documents, materials, and funds relating to the Properties previously
deposited by Buyer and then in Escrow Agent's possession to Buyer.
11.3 No Effect on Rights of Parties
------------------------------
The return of documents and monies as set forth above shall not affect the
right of either party to seek the legal or equitable remedies that the party may
have with respect to the enforcement of this Agreement.
11.4 Payment of Termination Fee
--------------------------
Escrow Agent may condition its deliveries upon payment of a termination fee
by the party requesting delivery. Notwithstanding the foregoing, any termination
fee shall be paid (or reimbursed) by the defaulting party, or paid equally if
neither party is then in default.
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12. DEFAULT
12.1 Seller's Remedy
---------------
In the event that the transaction fails to close on account of Buyer's
fault or Buyer's breach of this Agreement, Seller shall be entitled to such
remedies for breach of contract as may be available under applicable law,
including, without limitation, the remedy of specific performance.
12.2 Buyer's Remedies
----------------
In the event that the transaction fails to close on account of Seller's
fault or Seller's breach of this Agreement, Buyer shall be entitled to such
remedies for breach of contract as may be available under applicable law,
including, without limitation, the remedy of specific performance.
13. REPRESENTATIONS AND WARRANTIES OF SELLER
The following representations and warranties made by Seller in this
Section 13 are now and shall, at the Closing, be true and correct to the best of
Seller's knowledge. If during the period between the execution of this
Agreement and the Closing, Seller learns of or has a reason to believe that any
of the following representations and warranties may cease to be true, Seller
covenants to give notice thereof to Buyer immediately.
13.1 Authority of Seller
-------------------
Seller is corporation duly organized and validly existing and in good
standing under the laws of the State of Delaware and Seller (or The Sports
Authority Florida, Inc., a Florida corporation, as the case may be) has the
authority to own and convey the Properties. The Sports Authority Florida, Inc.
is in good standing under the laws of Florida. This Agreement and all documents
executed by Seller which are to be delivered to Buyer are, or at the time of the
Closing will be, duly authorized, executed, and delivered by Seller and do not,
and at the time of the Closing will not, violate any provisions of any agreement
or judicial order to which Seller is a party or to which Seller or the
Properties are subject.
13.2 Condition of Properties
-----------------------
To the knowledge of Seller, the Properties are in material compliance with
all applicable governmental laws, ordinances, regulations and requirements,
including, but not limited to, the Americans with Disabilities Act. In addition,
there are no existing leases on the Properties that have not been disclosed in
writing to Buyer. Buyer acknowledges the existence of that certain Sign Location
Lease dated March 16, 1990 encumbering a portion of the Gainesville, Florida
property.
13.3 Use and Operation
-----------------
To Seller's knowledge, the use and operation of the Properties now is in
material compliance with applicable environmental, zoning and land use laws.
PAGE 8 OF 17 PAGES
13.4 Land Use Regulation
-------------------
Seller has not received written notice of any pending or threatened
condemnation affecting a material portion of the Properties, environmental,
zoning, or other land use regulation proceedings concerning the Properties, nor
has Seller received notice of any special assessment proceedings affecting the
Properties.
13.5 Due Diligence Materials
-----------------------
Seller makes absolutely no representation or warranty whatsoever relating
to the accuracy or completeness of any documents, materials or information
provided to Buyer by or on behalf of Seller (collectively, the "Due Diligence
Materials") except and expressly provided in this Agreement. In addition,
except as expressly provided in this Agreement, Buyer hereby releases Seller
from any and all losses, liabilities, damages, claims, demands, causes of
action, costs and expenses, whether known or unknown, arising out of or in any
way relating to the Due Diligence Materials, including, without limitation, the
inaccuracy or incompleteness thereof, which release will survive the termination
of this Agreement or the Closing; provided, however, that nothing herein shall
limit the liability of Seller under any express representation of Seller
contained in this Agreement.
13.6 Absence of Fraud and Misleading Statements
------------------------------------------
No representation, warranty, or statement of Seller in this Agreement or
in any closing document executed by Seller furnished or to be furnished to Buyer
pursuant thereto, contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact necessary to make the
statements or facts not misleading. All representations and warranties of
Seller are based upon the knowledge of Seller as of the time of their making and
there has been no subsequent material change in the information.
13.7 Litigation
----------
To the knowledge of Seller, there is no litigation (pending or threatened)
against Seller or any basis therefor that: (i) might detrimentally affect the
use or operation of the Properties for their intended purpose; (ii) or might
detrimentally affect the value of the Properties; or (iii) might adversely
affect the ability of Seller to perform its obligations under this Agreement,
which litigation would not be covered by existing policies of insurance
maintained by Seller.
13.8 Other Contracts to Convey
-------------------------
Seller has not committed nor obligated itself in any manner whatsoever to
sell the Properties to any party other than Buyer. Seller has not hypothecated
or assigned any rents or income from the Properties in any manner other than
pursuant to existing mortgages or deeds of trust that will be released at or
prior to the Closing.
13.9 Environmental Compliance/Hazardous Materials
--------------------------------------------
To the knowledge of Seller, the Properties are not, and, as of the Closing
will not be, in violation of any federal, state, or local law, ordinance, or
regulation relating to industrial hygiene or to the environmental conditions on,
under, or about the Properties including, but not limited to, soil and
groundwater conditions. Other than as disclosed in the Phase I, there are no
Hazardous Materials (as defined below) present on the Properties other than
Hazardous Materials that are necessary or useful to Tenant's business and are
used, kept and stored in a manner that
PAGE 9 OF 17 PAGES
complies with all laws relating to such Hazardous Material. Seller further
warrants and represents that during the time in which Seller owned the
Properties, neither Seller nor, to the best of Seller's knowledge, after due and
diligent inquiry, any third party has used, generated, manufactured, produced,
stored, or disposed of on, under, or about the Properties or transported to or
from the Properties any Hazardous Materials in violation of law. To the
knowledge of Seller, there is no proceeding or inquiry by any governmental
authority with respect to the presence of Hazardous Materials on the Properties
or the migration of Hazardous Materials from or to the Properties. Except as
disclosed in any Phase I, there are no storage tanks located in or under the
Properties. The term "Hazardous Material" means, but is not limited to, any
substance, material, or waste which is toxic, ignitable, reactive, or corrosive;
which is or can be injurious to the health, safety, or welfare of the public or
environment, and which is or becomes regulated by any local or state
governmental authority or the United States Government. The term "Hazardous
Material" includes, without limitation, any material or substance which is (i)
defined as a "hazardous waste," "extremely hazardous waste," "restricted
hazardous waste," "hazardous substance," "pollutant or contaminant," or
"hazardous material," by any local or state law, (ii) oil and petroleum products
and their by-products, (iii) asbestos or asbestos-containing materials, (iv)
designated as a "hazardous substance" pursuant to the Federal Water Pollution
Control Act, (v) defined as a "hazardous waste" pursuant to the Federal Resource
Conservation and Recovery Act, or (vi) defined as a "hazardous substance"
pursuant to the Comprehensive Environmental Response, Compensation and Liability
Act.
13.10 Use Permits and Other Approvals
-------------------------------
To the best of Seller's knowledge, Seller has materially complied with
all licenses and permits and has not received any notice that any licenses or
permits will not be renewed upon expiration, or of any material conditions which
will be imposed in order to receive any renewal.
13.11 Survival
--------
The representations and warranties of Seller contained herein shall
survive the Closing and delivery of the Deeds for a period of one (1) year from
the Closing.
13.12 No Broker
---------
Seller warrants to Buyer that other than the fee to be paid by Seller to
REF Advisory, LLC, there are no brokerage commissions or finder's fees payable
as a result of the Closing herein or as a result of any agreements with Seller
or actions of Seller. Seller shall indemnify and hold harmless Buyer from any
claims, costs, damages, or liability based on any statement, representations, or
agreement by Seller with respect to the payment of any brokerage commissions or
finders' fees.
14. REPRESENTATIONS & WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
14.1 Authority of Buyer
------------------
Buyer is a corporation duly organized and validly existing under the laws
of the State of Maryland. This Agreement and all documents executed by Buyer
which are to be delivered to Seller at the Closing are, or at the time of
Closing will be, duly authorized, executed, and delivered by Buyer, and are, or
at the Closing will be, legal, valid, and binding obligations of
PAGE 10 OF 17 PAGES
Buyer, and do not, and at the time of Closing will not, violate any provisions
of any agreement or judicial order to which Buyer is a party or to which it is
subject.
14.2 Absence of Fraud and Misleading Statements
------------------------------------------
No representation, warranty, or statement of Buyer in this Agreement or
in any document, certificate, or schedule furnished or to be furnished to Seller
pursuant thereto contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact necessary to make the
statements or facts not misleading. All representations, warranties, or
statements of Buyer are based upon current, accurate, and complete information
as of the time of their making and there has been no subsequent material change
in the information.
14.3 Litigation
----------
There is no litigation pending or, to Buyer's knowledge, threatened,
against Buyer or any basis therefore before any court or administrative agency
that might adversely affect the ability of Buyer to perform its obligations
under this Agreement.
14.4 Financial Condition
-------------------
Buyer has adequate financial resources to make timely payment of all sums
due from Buyer hereunder and to perform all of its obligations hereunder.
14.5 Survival
--------
The representations and warranties of Buyer contained herein shall
survive the Closing for a period of one (1) year.
14.6 No Broker
---------
Buyer warrants that there are no brokerage commissions payable as a
result of the Closing herein or as a result of any agreements with Buyer or
actions of Buyer. Buyer shall indemnify and hold harmless Seller from any
claims, costs, damages, or liability based on any statement, representations, or
agreement by Buyer with respect to the payment of any brokerage commissions or
finders' fees.
15. COVENANTS
Matters as to which Escrow Agent need not be concerned, Seller and Buyer
covenant and agree with one another as follows:
15.1 Indemnification by Parties
--------------------------
Each party shall indemnify the other party and hold the other party
harmless from and against any and all claims, demands, liabilities, liens,
costs, expenses, penalties, damages, and losses, including, without limitation,
reasonable attorneys' fees and costs, suffered as a direct or indirect result of
any misrepresentation, breach of warranty, or breach of covenant made pursuant
to this Agreement or in any document executed by such party, certificate, or
exhibit given or delivered pursuant to or in connection with this Agreement.
15.2 Maintenance
-----------
Between the Seller's execution of this Agreement and the Closing, Seller
shall, at Seller's sole cost and expense, maintain the Properties in good order,
condition, and repair,
PAGE 11 OF 17 PAGES
reasonable wear and tear excepted, and shall operate the Properties in the same
manner as before the making of this Agreement as though Seller were retaining
the Properties.
16. LOSS BY FIRE OR OTHER CASUALTY; CONDEMNATION
16.1 Damage or Destruction
---------------------
In the event that any of the improvements on the Properties are
materially damaged or destroyed by fire or other casualty prior to the Closing,
then Seller shall provide written notice to Buyer and such notice shall
terminate this Agreement with respect to the applicable Properties only,
relieving both Buyer and Seller from any further obligations under this
Agreement with respect to such Properties. Seller shall pay escrow and related
transaction costs, if any, that exist as a result of terminating this Agreement
as to the applicable Properties under this Section. Properties shall be deemed
materially damaged or destroyed if, in Seller's reasonable business judgment,
the Properties will be closed to the public for business for a period of sixty
(60) days or longer for repairs and restoration.
In the event that any of the improvements on the Properties are
immaterially damaged or destroyed by fire or other casualty prior to the
Closing, Seller and Buyer shall proceed with the transaction, in which case the
Total Purchase Price shall not be reduced and Seller shall repair and restore
the improvements so damaged pursuant to its obligations as tenant under the
applicable Lease.
16.2 Condemnation
------------
In the event that prior to the Closing a governmental entity shall
commence any eminent domain proceeding to take any material portion of the
Properties, Buyer shall have the option to make either of the following
elections:
16.2.1 Terminate this Agreement with respect to the applicable
Properties only by written notice to Seller within five (5)
days of its receiving notice of such action of condemnation;
or
16.2.2 Proceed with the transaction in which case the Total Purchase
Price shall not be reduced and the condemnation award shall be
handled in the manner set forth in the Lease for the
Properties.
17. POSSESSION
Possession of the Properties shall be delivered to Buyer at the Closing,
subject to the tenant's rights pursuant to the Leases
18. NOTICES
All notices, request, or demands herein provided to be given or made, or
which may be given or made by either party to the other, shall be given or made
only in writing and shall be deemed to have been duly given effective on receipt
or refusal of receipt: (i) when delivered personally at the address set forth
below, or to any agent of the party to whom notice is being given, or (ii) on
the date delivered when sent via Overnight Mail, properly addressed and postage
PAGE 12 OF 17 PAGES
prepaid, or (iii) on the date sent via facsimile transmission, with receipt
confirmed, or (iv) after being sent by United States mail, properly addressed
and first class postage prepaid, return receipt requested. The proper address
to which notices, requests, or demands may be given or made by either party
shall be the address set forth at the end of this Section or to such other
address or to such other person as any party shall designate. Such address may
be changed by written notice given to the other party in accordance to this
Section.
If to Buyer:
Realty Income Corporation
Attn: Legal Department
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (Fax)
If to Seller:
The Sports Authority, Inc.
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (Fax)
With Copy to:
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇, P.A.
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (Fax)
If to Escrow:
First American Title Insurance Company
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (Fax)
PAGE 13 OF 17 PAGES
19. GENERAL PROVISIONS
19.1 Recitals
--------
The Recitals set forth above commencing on Page 1 of this Agreement are
incorporated herein by reference.
19.2 Manner of Taking Title
----------------------
Buyer shall have the right to take title to the Properties at the Closing
in a name other than Buyer's name.
19.3 Right to Assign
---------------
Buyer shall have the right to assign Buyer's rights hereunder, but any
such assignment shall not relieve Buyer of Buyer's obligations herein unless
Seller expressly relieves Buyer.
19.4 Gender; Number
--------------
The use of (i) the neuter gender includes the masculine and feminine and
(ii) the singular number includes the plural whenever the context requires.
19.5 Captions
--------
Captions in this Agreement are inserted for the convenience of reference
only and do not define, describe, or limit the scope or the intent of this
Agreement or any of its terms.
19.6 Exhibits
--------
All attached exhibits are a part of this Agreement and are incorporated
in full by this reference.
19.7 Entire Agreement
----------------
This Agreement contains the entire agreement between the parties relating
to the transactions contemplated hereby and all prior or contemporaneous
agreements, understandings, representations, and statements, oral or written,
are merged into this Agreement.
19.8 Modification
------------
No modification, waiver, amendment, discharge, or change of this
Agreement shall be valid unless it is in writing and signed by the party against
which the enforcement of the modification, waiver, amendment, discharge, or
change is or may be sought.
19.9 Attorneys' Fees
---------------
Should any party employ an attorney for the purpose of enforcing or
construing this Agreement, or any judgment based on this Agreement, in any legal
proceeding whatsoever, including insolvency, bankruptcy, arbitration,
declaratory relief, or other litigation, the prevailing party shall be entitled
to receive from the other party or parties, reimbursement for all attorneys'
fees and all costs, including, but not limited to, service of process, filing
fees, court and court reporter costs, investigative costs, expert witness fees,
and the cost of any bonds, whether taxable or not, and that such reimbursement
shall be included in any judgment or final order issued in that proceeding. The
"prevailing party" means the party determined by the court to most nearly
prevail and not necessarily the one in whose favor a judgment is rendered.
PAGE 14 OF 17 PAGES
19.10 Joint and Several Liability
---------------------------
If any party consists of more than one person or entity, the liability of
each such person or entity signing this Agreement shall be joint and several.
19.11 Governing Law
-------------
This Agreement shall be construed and enforced in accordance with the
laws of the state in which the Properties are located.
19.12 Time of Essence
---------------
Time is of the essence of this Agreement and every provision hereof.
19.13 Severability
------------
In the event any term, covenant, condition, or provision of this
Agreement is held to be invalid, void, or otherwise unenforceable by any court
of competent jurisdiction, the fact that such term, covenant, condition, or
provision is invalid, void, or otherwise unenforceable shall in no way affect
the validity or enforceability of any other term, covenant, condition, or
provision of this Agreement.
19.14 Successors and Assigns
----------------------
All terms of this Agreement shall be binding upon, inure to the benefit
of, and be enforceable by the parties and their respective legal
representatives, successors, and assigns.
19.15 Drafting
--------
This Agreement shall not be construed more strictly against one party
than the other because it may have been drafted by one of the parties or its
counsel, each having contributed substantially and materially to the negotiation
and drafting hereof.
19.16 No Agreement Until Accepted
---------------------------
Buyer's delivery of unexecuted copies or drafts of this Agreement is
solely for the purpose of review by the party to whom delivered and is in no way
to be construed as an offer by Buyer nor in any way implies that Buyer is under
any obligation to purchase the Properties. When this Agreement has been
executed by both Buyer and Seller, it shall constitute a binding agreement to
purchase and sell the Properties upon the terms and conditions provided herein
and Buyer and Seller agree to execute all instruments and documents and take all
actions as may be reasonably necessary or required in order to consummate the
purchase and sale of the Properties as contemplated herein.
19.17 Waiver of Trial by Jury
-----------------------
Seller and Buyer hereby waive the right to a trial by jury in connection
with any litigation arising as a result of this Agreement and the transaction
contemplated hereby.
19.18 Seller's Knowledge
------------------
Whenever used in this Agreement, the phrase "to Seller's knowledge" and
similar verbiage shall be limited in meaning to the actual (as distinguished
from implied, imputed and constructive) knowledge of the corporate officers of
Seller at a senior vice president level or
PAGE 15 OF 17 PAGES
above, the senior real estate counsel and the property administrator (each, an
"Informed Party"), without inquiry or investigation, and without imputation to
the Informed Party or Seller of facts and matters otherwise within the personal
knowledge of any other employees of Seller or third parties.
THE REMAINDER OF THIS PAGE WAS LEFT BLANK INTENTIOANLLY.
PAGE 16 OF 17 PAGES
19.19 Counterparts
------------
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original. The counterparts shall together constitute
but one agreement. Any signature on a copy of this Agreement or any document
necessary or convenient thereto sent by facsimile shall be binding upon
transmission by facsimile and the facsimile copy may be utilized for the
purposes of this Agreement.
BUYER: SELLER:
----- ------
REALTY INCOME CORPORATION, THE SPORTS AUTHORITY, INC.,
a Maryland corporation a Delaware corporation
By:____________________________ By:_______________________________
Date:__________________________ Date:_____________________________
ESCROW AGENT:
------------
FIRST AMERICAN TITLE INSURANCE COMPANY
By:____________________________
Date:__________________________
PAGE 17 OF 17 PAGES
PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
EXHIBIT "A"
PROPERTY LIST
----------------------------------------------------------
Individual
Store# City State Purchase Price
----------------------------------------------------------
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇ $ 3,720,000
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ 5,070,000
▇▇▇ ▇▇▇▇▇▇▇ ▇▇ 3,770,000
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇ 3,530,000
▇▇▇ ▇▇ ▇▇▇▇ ▇▇ 3,200,000
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇ 4,920,000
515 Bowie MD 5,130,000
▇▇▇ ▇▇▇▇▇▇ ▇▇ 3,920,000
▇▇▇ ▇▇▇▇▇▇ ▇▇ 4,970,000
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇ 6,530,000
TOTALS $44,760,000
----------------------------------------------------------
EXHIBIT "A"
PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
EXHIBIT "B"
FORM OF LAND AND BUILDING LEASE AGREEMENT
EXHIBIT "B"
LEASE AGREEMENT
---------------
THIS LEASE AGREEMENT made as of the __ day of October, 2001, by and between
______________________________________, having an office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Landlord"), and THE SPORTS AUTHORITY, INC, a
Delaware corporation, having its principal office at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Tenant").
In consideration of the rents and provisions herein stipulated to be paid
and performed, Landlord and Tenant, intending to be legally bound, hereby
covenant and agree as follows:
1. Demise of Premises. Landlord hereby demises and lets to Tenant and Tenant
------------------
hereby takes and leases from Landlord for the term and upon the provisions
hereinafter specified the following described property ("Leased Premises"): (i)
the lot or parcel of land described in Exhibit "A" attached hereto and made a
part hereof, together with the easements, rights and appurtenances thereunto
belonging or appertaining ("Land"); (ii) the buildings, structures and other
improvements on the Land (collectively, the "Improvements"); and (iii) the
machinery and equipment which is attached to the Improvements in such a manner
as to become fixtures under applicable law, together with all additions and
accessions thereto, substitutions therefor and replacements thereof permitted by
this Lease, excepting therefrom the Trade Fixtures (collectively, the
"Equipment").
2. Certain Definitions.
-------------------
"Additional Rent" shall mean Additional Rent as defined in Paragraph 32.
"Adjoining Property" shall mean all sidewalks, curbs, gores and vault
spaces adjoining the Leased Premises.
"Alteration" or "Alterations" shall mean any or all changes, additions
(whether or not adjacent to or abutting any then existing buildings), expansions
(whether or not adjacent to or abutting any then existing buildings),
improvements, reconstructions, removals or replacements of any of the
Improvements or Equipment, both interior or exterior, and ordinary and
extraordinary.
"Basic Rent" shall mean Basic Rent as defined in Paragraph 6.
"Basic Rent Payment Dates" shall mean the Basic Rent Payment Dates as
defined in Paragraph 6.
"Commencement Date" shall mean the Commencement Date as defined in
Paragraph 5.
"Condemnation" shall mean a Taking and/or a Requisition.
1
"Default Rate" shall mean the Default Rate as defined in Paragraph
19(c)(v).
"Equipment" shall mean the Equipment as defined in Paragraph 1 (which
excludes all Trade Fixtures).
"Event of Default" shall mean an Event of Default as defined in Paragraph
19(a).
"Impositions" shall mean the Impositions as defined in Paragraph 8.
"Improvements" shall mean the Improvements as defined in Paragraph 1.
"Insurance Requirement" or "Insurance Requirements" shall mean, as the case
may be, any one or more of the terms of each insurance policy required to be
carried by Tenant under this Lease and the requirements of the issuer of such
policy, and whenever Tenant shall be engaged in making any Alteration or
Alterations, repairs or construction work of any kind (collectively, "Work"),
the term "Insurance Requirement" or "Insurance Requirements" shall be deemed to
include a requirement that Tenant obtain or cause its contractor to obtain
completed value builder's risk insurance when the estimated cost of the Work in
any one instance exceeds the sum of Five Hundred Thousand ($500,000.00) Dollars
[Three Hundred Thousand ($300,000.00) Dollars in all states other than Florida]
and such insurance is available (unless such coverage is provided under the
insurance maintained by Tenant pursuant to Paragraph 14(a)) and that Tenant or
its contractor shall obtain worker's compensation insurance or other comparable
insurance coverage covering all persons employed in connection with the Work,
whether by Tenant, its contractors or subcontractors and with respect to whom
death or bodily injury claims could be asserted against Landlord.
"Land" shall mean the Land as defined in Paragraph 1.
"Law" shall mean any applicable constitution, statute or rule of law.
"Leased Premises" shall mean the Leased Premises as defined in Paragraph 1.
"Lease Year" shall mean the first twelve (12) full calendar months after
the Commencement Date (as defined in Paragraph 5) and each subsequent twelve
(12) month period thereafter during the term and any extensions. If the
Commencement Date is other than the first day of the month, then the first Lease
Year also will include the partial month in which the Commencement Date occurs.
"Legal Requirement" or "Legal Requirements" shall mean, as the case may be,
any one or more of all present and future Laws, codes, ordinances, orders,
judgments, decrees, injunctions, rules, regulations and requirements, even if
unforeseen or extraordinary, of every duly constituted governmental authority or
agency (but excluding those which are not applicable to and do not impose any
obligation on Tenant, Landlord or the Leased Premises) and all covenants,
restrictions and conditions now of record, or of record in the future if created
or filed by or with the consent of
2
Tenant, which may be applicable to Tenant, Landlord (with respect to the repair,
maintenance or condition of the Leased Premises) or to all or any part of or
interest (other than liens) in Leased Premises, or to the use, manner of use,
occupancy, possession, operation, maintenance, alteration, repair or
reconstruction of the Leased Premises, even if compliance therewith (i)
necessitates structural changes or improvements (including changes required to
comply with the "Americans with Disabilities Act") or results in interference
with the use or enjoyment of the Leased Premises or (ii) requires Tenant to
carry insurance other than as required by the provisions of this Lease.
"Lender" shall mean an entity identified as such in writing to Tenant,
which makes a Loan to Landlord, secured by a Mortgage and evidenced by a Note or
which is the holder of the Mortgage and Note as a result of an assignment
thereof.
"Loan" shall mean a loan made by a Lender to Landlord secured by a Mortgage
and evidenced by a Note.
"Mortgage" shall mean a first priority mortgage or similar security
instrument hereafter executed covering the Leased Premises from Landlord to
Lender.
"Net Award" shall mean the entire award payable to Landlord by reason of a
Condemnation, less any actual and reasonable expenses incurred by Landlord in
collecting such award.
"Net Proceeds" shall mean the entire proceeds of any insurance required
under clauses (i), (iv), or (v) of Paragraph 14(a), less any actual and
reasonable expenses incurred by Landlord in collecting such proceeds; provided,
however, that the term "Net Proceeds" shall exclude any amounts paid to Tenant
for Tenant's Trade Fixtures and other personal property.
"Note" or "Notes" shall mean a Promissory Note or Notes hereafter executed
from Landlord to Lender, which Note or Notes will be secured by a Mortgage and
an assignment of leases and rents.
"Permitted Encumbrances" shall mean those covenants, restrictions,
reservations, liens, conditions, encroachments, easements and other matters of
title that affect the Leased Premises as of the date of Landlord's acquisition
thereof and those items which hereafter affect title as permitted under this
Lease, excepting, however, any of the foregoing matters arising from the acts of
Landlord (such as liens arising as a result of judgments against Landlord).
"Prohibited Use" shall mean each of the following uses: a factory,
processing or rendering plant, massage parlor, peep show store, head shop store,
topless or strip club, adult book or video store (which shall mean a store which
primarily sells or offers for sale sexually explicit printed materials, audio or
video tapes, or sexual devices), or flea market.
"Replaced Equipment" or "Replacement Equipment" shall mean the Replaced
Equipment and Replacement Equipment, respectively, as defined in Paragraph
11(d).
3
"Requisition" shall mean any temporary condemnation or confiscation of the
use or occupancy of the Leased Premises by any governmental authority, civil or
military, whether pursuant to an agreement with such governmental authority in
settlement of or under threat of any such requisition or confiscation, or
otherwise.
"Restoration" shall mean the Restoration as defined in Paragraph 13(c)(i).
"State" shall mean the State or Commonwealth in which the Leased Premises
is situated.
"Taking" shall mean any taking of the Leased Premises in or by condemnation
or other eminent domain proceedings pursuant to any law, general or special, or
by reason of any agreement with any condemnor in settlement of or under threat
of any such condemnation or other eminent domain proceedings or by any other
means, or any de facto condemnation.
"Term" shall mean the Term as defined in Paragraph 5.
"Termination Date" shall mean the Termination Date as defined in Paragraph
13(b)(i)(A).
"Trade Fixtures" shall mean all fixtures, equipment and other items of
personal property (whether or not attached to the Improvements), which are owned
by Tenant and used in the operation of the business conducted on the Leased
Premises.
3. Title and Condition.
-------------------
(a) The Leased Premises are demised and let subject to (i) the Permitted
Encumbrances, (ii) all Legal Requirements and Insurance Requirements, including
any existing violation of any thereof, and (iii) the condition of the Leased
Premises as of the commencement of the Term; without representation or warranty
by Landlord except that Landlord represents and warrants title against the
lawful claims of others arising from the acts of Landlord (other than the
mortgage lien holder that has executed a Subordination, Non-Disturbance and
Attornment Agreement of even date herewith with Tenant); it being understood and
agreed, however, that the recital of the Permitted Encumbrances herein shall not
be construed as a revival of any thereof which for any reason may have expired
or been terminated.
(b) EXCEPT FOR THE LIMITED WARRANTY OF TITLE CONTAINED IN PARAGRAPH 3(a),
LANDLORD HAS NOT MADE AND WILL NOT MAKE ANY INSPECTION OF ANY OF THE LEASED
PREMISES, AND LANDLORD LEASES AND WILL LEASE AND TENANT TAKES AND WILL TAKE THE
LEASED PREMISES "AS IS", AND TENANT ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING
AS LANDLORD HEREUNDER OR IN ANY OTHER CAPACITY) HAS NOT MADE AND WILL NOT MAKE,
NOR SHALL LANDLORD BE DEEMED TO HAVE MADE, ANY WARRANTY OR REPRESENTATION,
EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE LEASED PREMISES, INCLUDING ANY
WARRANTY OR REPRESENTATION AS TO ITS FITNESS
4
FOR USE OR PURPOSE, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE, AS TO
THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, AS TO
LANDLORD'S TITLE THERETO, OR AS TO VALUE, COMPLIANCE WITH SPECIFICATIONS,
LOCATION, USE, CONDITION, MERCHANTABILITY, QUALITY, DESCRIPTION, DURABILITY OR
OPERATION, IT BEING AGREED THAT ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY
TENANT. Tenant acknowledges that the Leased Premises are of its selection and to
its specifications, and that Tenant has inspected the Leased Premises and they
are satisfactory to Tenant. In the event of any defect or deficiency in any of
the Leased Premises of any nature, whether patent or latent, Landlord shall not
have any responsibility or liability with respect thereto or for any incidental
or consequential damages (including strict liability in tort) except as
otherwise provided herein. The provisions of this Paragraph 3(b) have been
negotiated, and the foregoing provisions are intended to be a complete exclusion
and negation of any warranties by Landlord, express or implied, with respect to
any of the Leased Premises, arising pursuant to the uniform commercial code or
any other Law now or hereafter in effect or otherwise, except for the limited
warranty of title contained in Paragraph 3(a).
(c) Tenant acknowledges and agrees that Tenant has examined the title to
the Leased Premises prior to the execution and delivery of this Lease and has
found such title to be satisfactory for the purposes contemplated by this Lease,
except that Tenant is relying on Landlord's representation in Paragraph 3(a) as
to matters arising from the acts of Landlord.
(d) Landlord hereby assigns, without recourse or warranty whatsoever, to
Tenant, (i) all claims against third parties for damages to the Leased Premises
to the extent that such damages are Tenant's responsibility to repair pursuant
to the provisions of this Lease, and (b) all warranties, guaranties and
indemnities, express or implied, and similar rights which Landlord may have
against any manufacturer, seller, engineer, contractor or builder in respect of
any of the Leased Premises, including, but not limited to, any rights and
remedies existing under contract or pursuant to the uniform commercial code
(collectively, the "guaranties"). Such assignment shall remain in effect until
the termination of this Lease. Landlord shall also retain the right to enforce
any guaranties assigned in the name of Tenant upon the occurrence of an Event of
Default. Landlord hereby agrees to execute and deliver at Tenant's expense such
further documents, including powers of attorney, as Tenant may reasonably
request in order that Tenant may have the full benefit of the assignment
effected or intended to be effected by this Paragraph 3(d). If Landlord shall
receive any monies under the rights assigned pursuant to this subparagraph (d),
whether during or after the term of this Lease, that relate to damages and/or
repairs that are the Tenant's responsibility under this Lease, such monies shall
be paid by Landlord to Tenant. Upon the termination of this Lease, subject to
the provisions of the immediately preceding sentence, the guaranties shall
automatically revert to Landlord. The foregoing provision of reversion shall be
self-operative and no further instrument of reassignment shall be required. In
confirmation of such reassignment Tenant shall execute and deliver promptly any
certificate or other instrument, which Landlord may request. Any monies
collected by Tenant under any of the guaranties after the occurrence of and
during the continuation of an Event of Default shall be held in trust by Tenant
and promptly paid over to Landlord, to be applied to Tenant's obligations under
this Lease.
5
(e) Landlord agrees to enter into, at Tenant's expense, such easements,
covenants, waivers, approvals or restrictions for utilities, parking or other
matters as desirable for operation of the Leased Premises or properties adjacent
thereto (collectively, "Easements") as reasonably requested by Tenant, subject
to Lender's and Landlord's approval of the form thereof, not to be unreasonably
withheld or delayed; provided, however, that no such Easement shall result in
any diminution in the value or utility of the Leased Premises for use as a
retail site and further provided that no such Easement shall render the use of
the Leased Premises dependent upon any other property or condition the use of
the Leased Premises upon the use of any other property, each of which Tenant
shall certify to Landlord and Lender in writing delivered with Tenant's request
with respect to such Easement. Tenant's request shall also include Tenant's
written undertaking acknowledging that Tenant shall remain liable hereunder as
principal and not merely as a surety or guarantor notwithstanding the
establishment of any Easement. If either Landlord or Lender shall fail to
approve or disapprove the form of any such Easements, within a period of thirty
(30) days from their respective receipt of same, then either Landlord or Lender,
as the case may be, shall be deemed to have approved the form of any such
Easement.
(f) Tenant agrees that, during the Term of this Lease, Tenant is obligated
to and shall perform all obligations of the owner of the Leased Premises under
and pay all expenses which the owner of the Leased Premises may be required to
pay in accordance with any reciprocal easement agreement or any other agreement
or document of record now, or of record in the future if created or filed by or
with the consent of Tenant, affecting the Leased Premises, herein referred to
collectively as the "REA", and that Tenant shall comply with all of the terms
and conditions of the REA during the Term of this Lease, but only to the extent
such obligations, expenses, terms and conditions pertain to the Leased Premises.
Landlord shall cooperate with Tenant by providing such authorizations under the
REA as may be necessary to enable Tenant to perform such REA obligations of
Landlord. Promptly after the request of Tenant, Landlord shall execute such
documents as may be reasonably requested by Tenant in connection with any REA so
that to the extent permitted by such REA (i) Tenant is entitled to directly
receive any notices under the REA, (ii) Tenant is named as a co-insured under
any insurance policies required to be maintained by any other party under the
REA, (iii) Tenant is afforded the benefit all rights, easements, licenses and
benefits afforded to the Leased Premises under the REA, and (iv) Tenant is able
to directly enforce the REA and to directly exercise all rights and remedies in
connection with any breach of the REA by any other party. Subject to such
cooperation by Landlord, Tenant further covenants and agrees to indemnify,
defend and hold harmless Landlord and Lender against any claim, loss or damage
suffered by Landlord or Lender by reason of Tenant's failure to perform any
obligations or pay any expenses as required under any REA that are allocable to
the Leased Premises or comply with the terms and conditions of any REA
pertaining to the Leased Premises as herein above provided during the Term of
this Lease. without obtaining the prior written consent of Tenant, Landlord
shall not (i) consent to the modification or amendment of any REA or other
covenant, condition or restriction affecting the Leased Premises or impose any
additional covenant, condition or restriction upon the Leased Premises, or (ii)
grant any consent or waiver under any REA.
6
[Additional provision to be added to Fresno Lease: (g) Tenant acknowledges
that the Leased Premises are subject to that certain Declaration of Covenants,
Conditions and Restrictions (The Marketplace at River Park) recorded on April
14, 1997, in the Official Records of Fresno County, California, as Document No.
97048016 ("CC&Rs"). The CC&Rs grant, among other things, the "Developer"
thereunder the right to recapture ("Right of Recapture") the "TSA Tract" (as
defined in the CC&R's) upon which the Leased Premises are located, all as more
particularly set forth in Section 8 of the CC&Rs. Tenant agrees to take all such
actions so that the Developer shall not be entitled to exercise the Right of
Recapture at any time during the Term of this Lease. If any event or
circumstance shall exist that would enable the Developer to acquire the Leased
Premises during the Term of this Lease pursuant to the Right of Recapture (a
"Triggering Event"), Tenant shall immediately pay to Landlord, upon demand, the
Contingent Payment Amount. The "Contingent Payment Amount" shall be equal to the
sum by which (i) the total purchase price paid by Landlord in connection with
its acquisition of the Leased Premises from Tenant on the Commencement Date,
exceeds (ii) the net sales proceeds received by Landlord in connection with the
acquisition of the Leased Premises by the Developer pursuant to the Right of
Recapture. In no event, however, shall the Contingent Payment Amount be due and
payable by the Tenant unless the Developer actually acquires the Leased Premises
pursuant to the Right of Recapture during the Term. Without limiting the
generality of the foregoing, the Contingent Payment Amount shall not be due and
payable in connection with any event or circumstance if Tenant obtains a written
agreement or acknowledgment (in form and substance reasonably acceptable to
Landlord) from the Developer that it shall not exercise the Right of Recapture
in connection with such event or circumstance. Tenant agrees to promptly furnish
to Landlord a copy of any such agreement or acknowledgment obtained from
Developer during the Term. The right of Landlord to receive the Contingent
Payment Amount under this Paragraph 3 shall be in addition to all other rights
and remedies of Landlord under this Lease that relate to the period prior to any
acquisition of the Leased Premises by the Developer during the Term as a result
of the exercise of the Right of Recapture. Tenant acknowledges that the
Contingent Payment Amount is an appropriate measure of the damages that will be
suffered by Landlord if any Triggering Event shall occur.]
4. Use of Leased Premises; Quiet Enjoyment.
---------------------------------------
(a) Tenant may use the Leased Premises as a retail store (the "Initial
Use") or for any other lawful purpose, other than any Prohibited Use, so long as
such other lawful purpose would not (i) have a material adverse effect on the
value of the Leased Premises, (ii) materially increase (when compared to use as
a retail store) the likelihood that Tenant, Landlord or Lender would incur
liability under any provisions of the Act referred to in Paragraph 26 of this
Lease, or (iii) result in or give rise to any material environmental
deterioration or degradation of the Leased Premises. In no event shall the
Leased Premises be used for any purpose which shall violate any of the
provisions of any Permitted Encumbrance or any covenants, restrictions or
agreements hereafter created by or consented to by Tenant applicable to the
Leased Premises. Tenant agrees that with respect to the Permitted Encumbrances
and any covenants, restrictions or agreements hereafter created by or consented
to by Tenant, Tenant shall observe, perform and comply with and carry out the
provisions thereof, required therein to be observed and performed by Landlord to
the extent that such provisions
7
are reasonably subject to performance by Tenant. Tenant has satisfied itself
that its Initial Use is lawful and conforms to all applicable zoning and other
use restrictions and regulations applicable to the Leased Premises.
(b) Subject to Tenant's rights under Paragraph l8 hereof, Tenant shall not
permit any unlawful occupation, business or trade to be conducted on the Leased
Premises or any use to be made thereof contrary to applicable Legal Requirements
or Insurance Requirements. Subject to Tenant's rights under Paragraph 18,
Tenant shall not use, occupy or permit any of the Leased Premises to be used or
occupied, nor do or permit anything to be done in or on any of the Leased
Premises, in a manner which would (i) make void or voidable any insurance which
Tenant is required hereunder to maintain then in force with respect to any of
the Leased Premises unless Tenant obtains substitute insurance in compliance
with the requirements of this Lease, (ii) render Tenant unable to obtain any
insurance which Tenant is required to furnish hereunder, or (iii) cause any
injury or damage to any of the Improvements unless pursuant to Alterations
permitted under Paragraph 12 hereof.
(c) Subject to all of the provisions of this Lease, so long as no Event of
Default exists hereunder, Landlord covenants to do no act to disturb the
peaceful and quiet occupation and enjoyment of the Leased Premises by Tenant.
5. Term.
----
(a) Subject to the provisions hereof Tenant shall have and hold the Leased
Premises for an initial term commencing on October __, 2001 (the "Commencement
Date") and ending on October 31, 2021 (the "Expiration Date") (such initial
term, together with any Renewal Term, hereinafter defined, which comes into
effect as hereinafter provided, is herein called the "Term").
(b) Provided that no Event of Default exists at the time of the exercise
of each option as provided below and this Lease shall not have been previously
terminated pursuant to the terms of this Lease, Tenant shall have the option to
extend the Term of this Lease on all the provisions contained in this Lease,
except for Basic Rent, for three (3) consecutive five (5) year periods] (each, a
"Renewal Term") [the Lease for the Fresno property will instead include the
following language: for three (3) consecutive periods, the first two (2) of
which shall be for five (5) years each and the third extension period shall end
on September 30, 2036 (each, a "Renewal Term"),] following expiration of the
initial Term or the prior Renewal Term, as the case may be. Provided that no
Event of Default exists when Tenant exercises such option, Tenant may exercise
each such option by giving written notice of the exercise of the option to
Landlord at least six (6) months prior to the expiration of the initial Term or
the then current Renewal Term, as the case may be. Any Renewal Term shall be
subject to all of the provisions of this Lease, and all such provisions shall
continue in full force and effect, except that the Basic Rent for each Renewal
Term shall be the amounts determined in accordance with the schedule set forth
in Exhibit "B" attached hereto and made a part hereof.
8
(c) It is the intention of the parties that Tenant's right to extend the
Term of this Lease not be lost through Tenant's inadvertent failure to give
notice of the exercise of an option to extend the Term as provided herein.
Accordingly, if Tenant fails to notify Landlord of its exercise of an option,
such option shall nevertheless remain in full force and effect for a period of
thirty (30) days after Landlord's delivery to Tenant of a subsequent written
notice setting forth the expiration date of the Lease and advising Tenant that
notice of exercise of such option has not been received. Notwithstanding the
foregoing, if Landlord at any time not earlier than twelve (12) months before
the expiration of the initial Term or the current Renewal Term, nor later than
seven (7) months prior to the expiration of the initial Term or the current
Renewal Term, as the case may be, notifies Tenant of the date by which Tenant
must exercise Tenant's option to extend the Term and if Tenant thereafter fails
to timely exercise such option, then the foregoing provisions of this
subparagraph (c) shall not apply and Tenant must exercise its option, if at all,
at least six (6) months before the expiration of the initial Term or the current
Renewal Term, as the case may be.
6. Rent.
----
(a) Tenant shall pay to Landlord (or to Lender, if directed by Landlord),
as minimum annual rent for the Leased Premises during the Term, the amounts set
forth in Exhibit "B" attached hereto ("Basic Rent"), commencing on the
Commencement Date for the current month and continuing on the first day of each
month thereafter during the Term, in each case for the current month (the said
days being called the "Basic Rent Payment Dates"), and shall pay the same at
Landlord's address set forth below, or at such other place as Landlord from time
to time may designate to Tenant in writing, in funds which at the time of such
payment shall be legal tender for the payment of public or private debts in the
United States of America. If the Commencement Date shall not be the first day
of a calendar month, Basic Rent for the period from and including the
Commencement Date through and including the end of the calendar month in which
the Commencement Date occurs shall be prorated on the basis of the actual number
of days in such calendar month and shall be paid on the Commencement Date.
(b) Tenant shall pay and discharge before the imposition of any fine,
lien, interest or penalty may be added thereto for late payment thereof, as
Additional Rent, all other amounts and obligations which Tenant assumes or
agrees to pay or discharge pursuant to this Lease, together with every fine,
penalty, interest and cost which may be added by the party to whom such payment
is due for nonpayment or late payment thereof. In the event of any failure by
Tenant to pay or discharge any of the foregoing, Landlord shall have, after the
expiration of all applicable cure periods, all rights, powers and remedies
provided herein, by Law or otherwise, in the event of nonpayment of Basic Rent.
(c) If any installment of Basic Rent is not paid within five (5) days
after written notice is received by Tenant from Landlord or Lender (or Lender's
servicer or other designee of Lender) that the same is overdue (an "Overdue
Notice"), Tenant shall pay to Landlord or Lender, as the case may be, on demand,
as Additional Rent, a late charge equal to three percent (3%) (the "Late
Charge") on such overdue installment of Basic Rent; provided, however, that (i)
if two (2) Overdue Notices are
9
sent in any calendar year as a result of the failure of Tenant to pay Basic Rent
on or before the due date thereof with respect to two different months, then for
the balance of such calendar year (commencing with the Overdue Notice for the
third monthly delinquency), a Late Charge shall be applicable if any installment
of Basic Rent is thereafter not paid within three (3) days (one of which days
must be a business day) after Tenant's receipt of the Overdue Notice; and (ii)
no Late Charge shall be payable if the installment of Basic Rent has been sent
by U.S. mail, properly addressed with postage prepaid, at least two (2) business
days prior to the due date thereof (regardless of the date of receipt of such
installment). If any installment of Basic Rent is not paid prior to such date on
which a Late Charge is applicable pursuant to the foregoing provisions, then
Landlord or Lender shall be entitled thereafter to send a second Overdue Notice.
If the relevant installment of Basic Rent is not paid within three (3) business
days after the second Overdue Notice is received by Tenant, Tenant shall pay to
Landlord or Lender, as the case may be, on demand, as Additional Rent, an
additional late charge equal to two percent (2%) on such overdue installment of
Basic Rent.
(d) Landlord and Tenant agree that this Lease is a true lease and does not
represent a financing arrangement. Each party shall reflect the transactions
represented by this Lease in all applicable books, records and reports
(including, without limitation, income tax filings) in a manner consistent with
"true lease" treatment rather than "financing" treatment.
7. Net Lease; Non-Terminability.
----------------------------
(a) This is a net-net-net Lease. It is the intention of Landlord and
Tenant that the Basic Rent and other sums and charges provided herein shall be
absolutely net to Landlord. Except as otherwise specifically set forth in this
Lease, Tenant shall pay, as Additional Rent, all costs, charges, obligations,
assessments, and expenses of every kind and nature against or relating to the
Leased Premises or the use, occupancy, area, possession, leasing, operation,
management, maintenance, or repair thereof, which may arise or become due
during, and that are allocable to, the Term hereof. Basic Rent, Additional Rent
and all other sums payable hereunder by Tenant shall be paid, except as
otherwise expressly set forth in this Lease, without notice, demand, setoff,
counterclaim, recoupment, abatement, suspension, deferment, diminution,
deduction, reduction or defense.
(b) Except as otherwise expressly provided in this Lease, this Lease shall
not terminate and Tenant shall not have any right to terminate this Lease,
during the Term. Except as otherwise expressly provided in this Lease, Tenant
shall not be entitled to any setoff, counterclaim, recoupment, abatement,
suspension, deferment, diminution, deduction, reduction or defense of or to
Basic Rent, Additional Rent or any other sums payable under this Lease; and
except as otherwise expressly provided in this Lease, the obligations of Tenant
under this Lease shall not be affected by any interference with Tenant's use of
any of the Leased Premises by anyone other than Landlord or anyone claiming by
or through Landlord for any reason, including but not limited to the following:
(i) any damage to or destruction of any of the Leased Premises by any cause
whatsoever, (ii) any Condemnation, (iii) the prohibition, limitation or
restriction of Tenant's use of any of the Leased Premises, (iv) any eviction by
paramount title or otherwise other than as a result of Landlord's actions, (v)
Tenant's acquisition of ownership of any of the Leased Premises other than
pursuant to
10
an express provision of this Lease, (vi) any latent or other defect in, or any
theft or loss of any of the Leased Premises, (vii) the breach of any warranty of
any seller or manufacturer of any of the Equipment, (viii) any other cause,
whether similar or dissimilar to the foregoing, any present or future Law to the
contrary notwithstanding. It is the intention of the parties hereto that, except
as otherwise expressly provided in this Lease, the obligations of Tenant under
this Lease shall be separate and independent covenants and agreements, and that
Basic Rent, Additional Rent and all other sums payable by Tenant hereunder shall
continue to be payable in all events (or, in lieu thereof, Tenant shall pay
amounts equal thereto), and that, except as otherwise expressly provided in this
Lease, the obligations of Tenant under this Lease shall continue unaffected,
unless this Lease shall have been terminated pursuant to an express provision of
this Lease.
(c) Tenant agrees that it shall remain obligated under this Lease in
accordance with its provisions and that, except as otherwise expressly provided
herein, it shall not take any action to terminate, rescind or avoid this Lease,
notwithstanding (i) the bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution, winding-up or other proceeding affecting
Landlord provided that this Lease is not rejected by or on behalf of the
Landlord, or (ii) the exercise of any remedy, including foreclosure, under the
Mortgage so long as the rights of Tenant under this Lease are not disturbed as a
result of such exercise.
(d) Except as otherwise expressly provided in this Lease, this Lease is the
absolute and unconditional obligation of Tenant. Tenant waives all rights which
are not expressly stated in this Lease but which may now or hereafter otherwise
be conferred by Law (i) to quit, terminate or surrender this Lease or any of the
Leased Premises, (ii) to any setoff, counterclaim, recoupment, abatement,
suspension, deferment, diminution, deduction, reduction or defense of or to
Basic Rent, Additional Rent or any other sums payable under this Lease, except
as otherwise expressly provided in this Lease, and (iii) for any statutory lien
or offset right against Landlord or its property.
8. Payment of Impositions; Compliance with Legal Requirements and Insurance
-------------------------------------------------------------------------
Requirements.
------------
(a) (i) Subject to the provisions of Paragraph 18 hereof relating to
contests and the provisions of Paragraph 8(a)(ii), Tenant shall, before interest
or penalties are due thereon, pay and discharge (all of the following, but
excluding the items excluded pursuant to Paragraph 8(a)(ii), being herein
collectively called the "Impositions"): all taxes of every kind and nature
(including real, ad valorem, personal property and sales taxes) on or with
respect to the Leased Premises; all charges and/or taxes allocable to the Leased
Premises for any easement or agreement maintained for the benefit of the Leased
Premises; all general and special assessments, levies, permits, inspection and
license fees on or with respect to the Leased Premises; all water and sewer
rents and other utility charges on or with respect to the Leased Premises; all
ground rents on or with respect to the Leased Premises; and all other public
charges and/or taxes whether of a like or different nature, even if unforeseen
or extraordinary, imposed or assessed upon or with respect to the Leased
Premises, prior to or during the Term and allocable to the Term, against
Landlord, Tenant or any of the Leased Premises as a result of or arising in
respect of the occupancy, leasing, use, maintenance, operation,
11
management, repair or possession thereof, or any activity conducted on the
Leased Premises, or the Basic Rent or Additional Rent, including without
limitation, any sales tax, occupancy tax or use tax levied by any governmental
body on or with respect to such Basic Rent or Additional Rent, but excluding all
items excluded from Impositions under Paragraph 8(a)(ii). If received by
Landlord, Landlord shall promptly deliver to Tenant any ▇▇▇▇ or invoice with
respect to any Imposition. Upon request, Tenant shall provide Landlord with
evidence of its payment of Impositions.
(ii) Nothing herein shall obligate Tenant to pay, and the term
"Impositions" shall exclude, federal, state or local (A) transfer taxes,
documentary stamp taxes, intangibles taxes, and other similar taxes as the
result of a conveyance, encumbrance, or transfer of Landlord's interest, or
foreclosure by or against (or suffered by) Landlord, (B) payroll, franchise,
capital stock or similar taxes if any, of Landlord, (C) income, excess profits,
excise or other taxes, if any, of Landlord, determined on the basis of or
measured by its income or gross receipts (other than sales and use taxes on
rental payments), (D) any estate, inheritance, succession, gift, capital levy or
similar taxes, or (E) taxes and assessments allocable to any period after the
Term, when prorated on a daily basis, provided, however, that the taxes referred
to in clauses (B) and (C) above shall not be excluded to the extent they are in
lieu of or a substitute for any other tax or assessment upon or with respect to
any of the Leased Premises which, if such other tax or assessment were in effect
at the commencement of the Term, would be payable by Tenant. In the event that
any assessment against any of the Leased Premises may be paid in installments,
Tenant shall have the option to pay such assessment in installments; and in such
event, Tenant shall be liable only for those installments, which become due and
payable during the Term. Tenant shall prepare and file all tax reports required
by governmental authorities, which relate to the Impositions. Tenant shall
deliver to Landlord and to Lender, within twenty (20) days after Landlord's
written request therefor, copies of all settlements and notices pertaining to
the Impositions which may be issued by any governmental authority and receipts
for payments of all Impositions made during each calendar year of the Term,
within thirty (30) days after payment.
(b) While any Event of Default exists under this Lease, Landlord shall
have the right to require Tenant to make a monthly escrow deposit into an
interest-bearing account (the "Escrow Account") maintained at a federally
insured bank of Landlord's choice (the "Escrow Account Bank"). All interest
earned on the funds in the Escrow Account will belong to Tenant, and the Escrow
Account Bank shall pay the interest to Tenant no less frequently than quarterly.
The amount of each monthly escrow deposit will be equal to 1/12 of the total of
all Impositions that Landlord or any Lender reasonably estimates will be due and
payable during the ensuing twelve months. From time to time, Landlord or any
Lender may change the monthly escrow deposit to an amount reasonably determined
by Landlord or any Lender to reflect an accurate escrow of Tenant's estimated
obligation to discharge Impositions, by giving Tenant thirty (30) days prior
written notice. The notice must include information reasonably supporting the
new amount. Tenant shall pay the noticed amount as its monthly escrow deposit
for each deposit due after the expiration of the 30-day period. Unless any Event
of Default exists under this Lease, Tenant will not be required to maintain an
Escrow Account for the payment of Impositions, but subject to the provisions of
Paragraph 18, Tenant shall instead pay all Impositions directly, before interest
or penalties are due thereon.
12
(c) If an Escrow Account is being maintained pursuant to subparagraph (b)
above, then before interest or penalties are due thereon, but subject to the
provisions of Paragraph 18, Tenant shall direct the Escrow Account Bank to pay
all Impositions from the Escrow Account. If the amount of funds in the Escrow
Account is insufficient to fully pay and discharge any Impositions, Tenant shall
pay the difference from its own accounts. If Tenant fails to pay any Impositions
when due, or if Landlord or any Lender reasonably determine that because of
Tenant's bankruptcy or similar occurrence, Tenant is unable to generally to pay
its bills when due, Tenant hereby authorizes Landlord and any Lender to use
funds in the Escrow Account to pay the Impositions and any penalties or interest
due thereon. If the amount of the Impositions paid by the Landlord or any Lender
exceeds the amount in the Escrow Account, Landlord or any Lender may ▇▇▇▇ the
Tenant for the excess, and Tenant shall pay the excess to Landlord or any
Lender, as appropriate, within fifteen (15) business days after receiving the
▇▇▇▇.
(d) Subject to the provisions of Paragraph 18 hereof, Tenant shall
promptly comply with and conform to all of the Legal Requirements and Insurance
Requirements.
9. Liens; Recording and Title.
--------------------------
(a) Subject to the provisions of Paragraph 18 hereof, Tenant shall not,
directly or indirectly, create or permit to be created or to remain, and shall
promptly discharge, any lien on Landlord's interest in the Leased Premises, on
the Basic Rent, Additional Rent or on any other sums payable by Tenant under
this Lease, other than the Mortgage, the Permitted Encumbrances and any
mortgage, lien, encumbrance or other charge created by or resulting from any act
or omission by Landlord or those claiming by, through or under Landlord (except
Tenant). Notice is hereby given that Landlord shall not be liable for any
labor, services or materials furnished or to be furnished to Tenant, or to
anyone holding any of the Leased Premises through or under Tenant, and that no
mechanic's or other liens for any such labor, services or materials shall attach
to or affect the interest of Landlord in and to any of the Leased Premises. [To
be added to Leases for Florida properties: No mechanic's lien shall lie against
Landlord's interest in the Leased Premises, including buildings and all
improvements located thereon, arising as a result of any improvements made, or
work performed, by or on behalf of Tenant, and no person who furnishes work,
labor, services, or materials to the Leased Premises at the request of Tenant
shall acquire any lien rights under Chapter 713, Florida Statutes, against the
interest of Landlord. Further, Tenant hereby agrees to notify each and every
contractor and subcontractor making any improvements to Tenant's leasehold
interest that the Lease provides that the interest of Landlord shall not be
subject to any liens for improvements made by Tenant.] Notwithstanding anything
in this Lease to the contrary, Tenant shall have the right, without notice to or
the consent of Landlord, to encumber Tenant's interest in Trade Fixtures,
inventory, receivables and/or other tangible or intangible property located on,
in, arising from or otherwise relating to the Leased Premises.
(b) Each of Landlord and Tenant shall execute, acknowledge and deliver to
the other a written Memorandum of this Lease to be recorded in the appropriate
land records of the jurisdiction
13
in which the Leased Premises is located, in order to give public notice and
protect the validity of this Lease. In the event of any discrepancy between the
provisions of said recorded Memorandum of this Lease and the provisions of this
Lease, the provisions of this Lease shall prevail. [In the lease for the
Maryland property, the foregoing will be replaced by the following: Each of
Landlord and Tenant shall execute, acknowledge and caused to be delivered to
Tenant a Memorandum of this Lease, which at Tenant's option may be recorded in
the appropriate land records of the jurisdiction in which the Leased Premises is
located. In the event of any discrepancy between the provisions of said
Memorandum of this Lease and the provisions of this Lease, the provisions of
this Lease shall prevail.]
(c) Nothing in this Lease and no action or inaction by Landlord shall be
deemed or construed to mean that Landlord has granted to Tenant any right, power
or permission to do any act or to make any agreement which may create, give rise
to, or be the foundation for, any right, title, interest or lien in or upon the
estate of Landlord in any of the Leased Premises.
10. Indemnification.
---------------
(a) (i) Except as otherwise provided in Paragraph 14(h), Tenant covenants
to defend and indemnify Landlord and its subsidiaries, parents, affiliates,
officers, directors, shareholders, partners, beneficial owners, trustees,
members, managers and employees (collectively, the "Landlord Affiliates"), and
hold Landlord and the Landlord Affiliates harmless (except for loss or damage
resulting from the negligence or willful misconduct of Landlord, its agents,
contractors, licensees, tenants other than Tenant, or employees), from and
against any and all claims, actions, damages, liability and expense, including
reasonable attorneys' fees, in connection with or arising from any cause
whatsoever in or about the Leased Premises during the Term, including, without
limiting the generality of the foregoing: (A) any default by Tenant in the
observance or performance of any of the terms, covenants, or conditions of this
Lease on Tenant's part to be observed or performed; (B) the use or occupancy of
the Leased Premises by Tenant or any person claiming by, through, or under
Tenant; (C) the condition of the Leased Premises or any occurrence or happening
on the Leased Premises from any cause whatsoever; or (C) any acts, omissions, or
negligence of Tenant or any person claiming by, through, or under Tenant, or of
the contractors, agents, servants, employees, visitors, or licensees of Tenant
or any such person, in, on, or about the Leased Premises, either prior to or
during the Lease Term (including, without limitation, any holdovers in
connection therewith), including, without limitation, any acts, omissions, or
negligence in the making or performance of any alterations. The provisions of
this Paragraph shall survive the expiration or sooner termination of this Lease
with respect to any claims or liability occurring prior to such expiration or
termination, and shall not be limited by reason of any insurance carried by
Landlord and Tenant.
(ii) Except as otherwise provided in Paragraph 14(h), Landlord
covenants to defend and indemnify Tenant and its subsidiaries, parents,
affiliates, officers, directors, shareholders, partners, beneficial owners,
trustees, members, managers and employees (collectively, the "Tenant
Affiliates") and hold Tenant and the Tenant Affiliates harmless (except for loss
or damage resulting
14
from the acts or omissions of Tenant, its agents, contractors, licensees or
employees) from and against any and all claims, actions, damages, liability and
expense, including reasonable attorneys' fees, occasioned by the gross
negligence or intentional misconduct of Landlord, its agents, contractors and
employees during the Term.
(b) The following procedures shall be applicable with respect to all
indemnity provisions of this Lease:
(i) Any party entitled to indemnification under this Lease (an
"Indemnitee") agrees that upon its obtaining actual knowledge of any facts which
the Indemnitee recognizes to be the basis for a claim for indemnity (a "Claim")
under the provisions of this Lease (including, without limitation, the receipt
of any demand, assertion, claim, action or proceeding, judicial or otherwise),
it will give reasonably prompt notice thereof in writing to the other party to
this Lease (the "Indemnitor") together with a statement of all information
respecting such Claim as it shall then have. The Indemnitor shall not be
obligated to indemnify the Indemnitee for the increased amount of any Claim
which would otherwise have been payable under this Lease to the extent (but
solely to the extent) that the increase resulted from the lack of notice
required by this provision.
(ii) The Indemnitor is entitled at its cost and expense to contest,
defend by all appropriate legal proceedings, handle and settle any Claim with
respect to which it is called upon to indemnify the Indemnitee under the
provisions of this Lease; provided, however, that notice of the intention to do
so shall be delivered by the Indemnitor to the Indemnitee within a reasonable
time in light of the circumstances then existing. Any contest may be conducted
in the name and on behalf of the Indemnitor or conducted in the name and on
behalf of the Indemnitee, if necessary, as may be determined by the Indemnitor.
Any contest shall be conducted by attorneys engaged by the Indemnitor (which
shall be reasonably acceptable to the Indemnitee), but the Indemnitee shall have
the right to participate in the proceedings and to be represented by attorneys
of its own choosing at its own cost and expense. If the Indemnitee joins in any
contest, however, the Indemnitor shall have full authority to determine all
action to be taken; provided however that the Indemnitor shall have no authority
to reject a settlement offer that is fully covered by insurance unless
Indemnitee agrees to reject such offer. If the Indemnitor does not elect to
contest a Claim, handle the Claim or negotiate a settlement thereof, the
Indemnitor shall be bound by the result obtained by the Indemnitee. The
Indemnitee shall take such commercially reasonable actions as may be requested
by Indemnitor to resolve, settle or compromise the asserted Claim at the cost
and expense of the Indemnitor.
(iii) If requested by the Indemnitor, the Indemnitee agrees to cooperate
with the Indemnitor and its counsel in contesting any Claim which the Indemnitor
elects to contest or, if appropriate, in making any counterclaim against the
person asserting the Claim, or any cross-complaint against any person, and
further agrees to take any other action as reasonably may be requested by the
Indemnitor to reduce or eliminate any loss for which the Indemnitor would have
responsibility, but the Indemnitor will reimburse the Indemnitee for any
reasonable expenses incurred by it in so cooperating or acting at the request of
the Indemnitor.
15
(iv) The Indemnitee shall provide reasonable advance written notice to
the Indemnitor of any meeting with all persons (including governmental
authorities) asserting any Claim and any meetings with representatives
(including counsel) of such persons. Indemnitor and its counsel shall have the
opportunity to be present at and participate in such meetings, and Indemnitor
shall have the right to determine the action to be taken in or with respect to
any such meeting.
(v) The Indemnitor shall pay to the Indemnitee the amount to which the
Indemnitee may become entitled by reason of the provisions of this Lease within
twenty (20) days after the amount owed is finally determined either by mutual
agreement of Landlord and Tenant, pursuant to any settlement of any Claim
reached by the Indemnitor, or pursuant to the final unappealable judgment of a
court of competent jurisdiction.
(c) The respective rights and obligations of Landlord and Tenant under this
Paragraph 10 shall survive any termination of this Lease.
11. Maintenance and Repair.
----------------------
(a) Except for any Alterations that Tenant is permitted to make pursuant to
this Lease and as otherwise provided in this Lease, Tenant shall at all times
during the Term, put, keep and maintain the Leased Premises (including, without
limitation, the roof, landscaping, walls, footings, foundations and structural
components of the Leased Premises) and the Equipment in the same condition and
order of repair as exists as of the date of this Lease, except for ordinary wear
and tear, and shall promptly make all repairs and replacements of every kind and
nature, whether foreseen or unforeseen, which may be required to be made upon or
in connection with the Leased Premises in order to keep and maintain the Leased
Premises in the order and condition required by this Paragraph 11(a). Tenant
shall do or cause others to do all shoring of the Leased Premises or of
foundations and walls of the Improvements and every other act necessary or
appropriate for preservation and safety thereof, by reason of or in connection
with any excavation or other building operation upon any of the Leased Premises,
whether or not Landlord shall, by reason of any Legal Requirements or Insurance
Requirements, be required to take such action or be liable for failure to do so.
Landlord shall not be required to make any repair, whether foreseen or
unforeseen, or to maintain any of the Leased Premises or Adjoining Property in
any way, and Tenant hereby expressly waives the right to make repairs at the
expense of the Landlord, which right may be provided for in any Law now or
hereafter in effect. Nothing in the preceding sentence shall be deemed to
excuse Landlord for any repairs arising from Landlord's default under this Lease
or its gross negligence or intentional misconduct or to preclude Tenant from
being entitled to insurance proceeds or condemnation awards for Restoration
pursuant to Paragraphs 13(c) and 14(g) of this Lease. Tenant shall, in all
events, make all repairs for which it is responsible hereunder promptly, and all
repairs shall be in a good, proper and workmanlike manner.
(b) In the event that any Improvement shall violate any Legal Requirements
or Insurance Requirements and as a result of such violation enforcement action
is threatened or commenced against Tenant or with respect to the Leased
Premises, then Tenant, at the request of Landlord, shall
16
either (i) obtain valid and effective waivers or settlements of all claims,
liabilities and damages resulting from each such violation, whether the same
shall affect Landlord, Tenant or both, or (ii) take such action as shall be
necessary to remove such violation, including, if necessary, any Alteration. Any
such repair or Alteration shall be made in conformity with the provisions of
Paragraph 12.
(c) If Tenant shall be in default under any of the provisions of this
Lease, Landlord may after written notice given to Tenant and failure of Tenant
to commence the cure within thirty (30) business days after receipt of such
notice and diligently prosecute the cure to completion (but subject to
extensions during periods of remodeling, reconstruction and/or repair), but upon
telephonic or other available communication in the event of an emergency, do
whatever is reasonably necessary to cure such default as may be appropriate
under the circumstances for the account of and at the expense of Tenant. In the
event of an emergency Landlord shall notify Tenant of the situation by phone or
other available communication. All reasonable sums so paid by Landlord and all
reasonable costs and expenses (including, without limitation, attorneys' fees
and expenses) so incurred, together with interest thereon at the Default Rate
from the date of payment or incurring the expense, shall constitute Additional
Rent payable by Tenant under this Lease and shall be paid by Tenant to Landlord
on demand.
(d) Tenant shall from time to time replace with other operational equipment
or parts (the "Replacement Equipment") any of the Equipment (the "Replaced
Equipment") which shall have become worn out or unusable for the purpose for
which it is intended, been taken by a Condemnation as provided in Paragraph 13,
or been lost, stolen, damaged or destroyed as provided in Paragraph 14. Tenant
shall repair at its sole cost and expense all damage to the Leased Premises
caused by the removal of Equipment or Replaced Equipment or other personal
property of Tenant or the installation of Replacement Equipment. All
Replacement Equipment shall become the property of Landlord, shall be free and
clear of all liens and rights of others and shall become a part of the Equipment
as if originally demised herein.
12. Alterations.
-----------
(a) Tenant shall not make any Alterations which would (after the completion
thereof) impair the structural integrity of the Leased Premises, without
Landlord's written consent, which consent Landlord agrees not unreasonably to
withhold or delay. Tenant may make any other Alterations without the prior
written consent of the Landlord provided such Alterations comply with all of the
provisions of Paragraph 12(b). Any alterations, additions, and improvements
made or installed by Tenant that exist at the expiration or earlier termination
of this Lease shall remain upon the Leased Premises and shall be surrendered
with the Leased Premises to Landlord upon such expiration or earlier
termination.
(b) In the event that Landlord gives its prior written consent to any
Alterations, or if such consent is not required, Tenant agrees that in
connection with any Alteration: (i) the fair market value of the Leased
Premises shall not be lessened in any material respect after the completion of
any
17
such Alteration, or its structural integrity impaired; (ii) the Alteration
and any Alteration theretofore made or thereafter to be made shall not in the
aggregate reduce the gross floor area of the Improvements by more than ten
percent (10%); (iii) all such Alterations shall be performed in a good and
workmanlike manner, and shall be expeditiously completed in compliance with all
Legal Requirements; (iv) all work done in connection with any such Alteration
shall comply with all Insurance Requirements; (v) Tenant shall promptly pay all
costs and expenses of any such Alteration, and shall (subject to the provisions
of Paragraph 18 hereof) discharge all liens filed against any of the Leased
Premises arising out of the same; (vi) Tenant shall procure and pay for all
permits and licenses required in connection with any such Alteration; (vii) all
such Alterations shall be the property of Landlord and shall be subject to this
Lease; (viii) in the case of any Alteration the estimated cost of which in any
one instance exceeds Five Hundred Thousand Dollars ($500,000), such Alterations
shall not be made by Tenant without prior written consent of Landlord (which
consent shall not be unreasonably withheld and shall be subject to the
provisions of subparagraph (c) below); and (ix) any such Alteration shall be in
conformity with applicable laws, regulations and covenants, conditions and
restrictions encumbering the Leased Premises and, for Alterations requiring
Landlord's prior written consent, by a licensed contractor that is reasonably
acceptable to Landlord. Tenant shall pay when due all claims for labor and
materials furnished in connection with any Alterations. Landlord may enter upon
the Leased Premises, in such case, for the purpose of posting appropriate
notices, including, but not limited to, notices of non-responsibility. Upon
completion of any Alterations for which the Landlord's consent is required,
Tenant shall provide to Landlord "as-built" plans to the extent such Alterations
affect the structure of the Leased Premises, any new certificate of occupancy
that may have issued in connection with the Leased Premises after completion of
the Alterations, and a copy of the final unconditional lien waivers from the
contractor(s).
(c) If Landlord does not deliver to Tenant its written disapproval of any
proposed Alterations and/or contractor within five (5) business days after
Tenant's request for Landlord's consent, together with the specific reason(s)
for such disapproval, then Landlord shall be deemed to have approved the
proposed Alterations and/or contractor.
(d) At any time prior to the expiration or termination of this Lease,
Tenant shall have the right to remove any Trade Fixtures from the Leased
Premises provided that Tenant promptly shall make such repairs and restoration
of the Leased Premises as are necessary to repair any damage to the Leased
Premises caused by the removal of the Trade Fixtures.
13. Condemnation.
------------
(a) Tenant, promptly after obtaining knowledge of the institution of any
proceeding for Condemnation, shall notify Landlord thereof and Landlord shall be
entitled to participate in any Condemnation proceeding at its own cost and
expense. Landlord, promptly after obtaining knowledge of the institution of any
proceeding for Condemnation, shall notify Tenant thereof and Tenant shall have
the right to participate in such proceedings at its own cost and expense.
Subject to the provisions of this Paragraph 13 and Paragraph 15, Tenant hereby
irrevocably assigns to Lender or
18
to Landlord, in that order, any award or payment in respect of any Condemnation
of Landlord's interest in the Leased Premises provided that such proceeds are
held, applied and disbursed as provided in this Lease, except that nothing in
this Lease shall be deemed to assign to Landlord or Lender any award relating to
the value of the leasehold interest created by this Lease or any award or
payment on account of the Trade Fixtures, moving expenses and out-of-pocket
expenses incidental to the move, if available, loss of goodwill, or other
damages that may be pursued by Tenant to the extent Tenant shall have a right to
make a separate claim therefor against the condemnor, it being agreed, however,
that Tenant shall in no event be entitled to any payment that reduces the award
to which Landlord is or would be entitled for the condemnation of Landlord's fee
interest in the Leased Premises.
(b) (i) (A) If (I) the entire Leased Premises or (II) at least ten
percent (10%) of the Land or the building constructed on the Land or any means
of ingress, egress or access to the Leased Premises, the loss of which even
after Restoration would, in Tenant's reasonable business judgment, be
substantially and materially adverse to the business operations of Tenant at the
Leased Premises, shall be subject of a Taking by a duly constituted authority or
agency having jurisdiction, then Tenant may, not later than sixty (60) days
after Tenant has received actual written notice from Landlord or the condemning
authority of such authority's final plans relating to the Taking, serve notice
("Tenant's Termination Notice") upon Landlord of Tenant's intention to terminate
this Lease on any Basic Rent Payment Date specified in such Tenant's Termination
Notice, which date (the "Termination Date") shall be no sooner than the first
Basic Rent Payment Date occurring at least thirty (30) days after the date of
such Tenant's Termination Notice and not later than the actual date of the
Taking. For purposes hereof, "final plans" shall mean information that (1) is
not subject to material change prior to the effectiveness of the Taking and (2)
is sufficiently detailed to allow Tenant to determine the exact property that
will be the subject of the Taking and the specific impact of the Taking on the
Leased Premises (including, without limitation, the impact on ingress, egress,
access, signage or visibility).
(B) In the event of the delivery by Tenant of Tenant's Termination
Notice as provided in subparagraph (A) above, then (I) this Lease and the Term
shall terminate on the Termination Date specified in Tenant's Termination
Notice, and (II) the entire award made in the Condemnation proceeding with
respect to the Landlord's interest in the Leased Premises shall be paid to
Lender or to Landlord in that order.
(c) (i) In the event of a Condemnation of any part of the Leased Premises
which does not result in a Termination of this Lease, this Lease shall terminate
as to the portion of the Leased Premises that is the subject of the Taking on
the first to occur of the date that fee title to, or physical possession of, the
Leased Premises is taken and the Net Award of such Condemnation shall be paid to
Landlord to be held, applied and disbursed as provided in this Paragraph 13(c)
and Paragraph 15; and promptly after such Condemnation, Tenant shall commence
and diligently continue to restore the Leased Premises as nearly as possible to
its value, condition and character immediately prior to such Condemnation, in
accordance with the provisions of this Lease, including but not limited to the
19
provisions of Paragraphs 11(a), 12 and 15 (such restoration following a
Condemnation and restoration following a casualty is, as the context shall
require, herein called a "Restoration").
(ii) Upon the payment to Landlord of the Net Award of a Taking which
falls within the provisions of this Paragraph 13(c), Landlord and Lender shall,
to the extent received, make that portion of the Net Award equal to the cost of
Restoration (the "Restoration Award") available to Tenant for Restoration, in
-----------------
accordance with the provisions of Paragraph 15 (provided, however, if any Event
of Default then exists, Landlord shall be entitled to first apply the Net Award
to the sums due to Landlord or to otherwise cure the Event of Default), with the
balance of the Net Award paid to Tenant after completion of any required
Restoration, and all Basic Rent, Additional Rent and other sums payable
hereunder shall continue unabated and unreduced. Notwithstanding the foregoing,
in the event of a De Minimis Taking (as defined below), Landlord shall be
entitled to receive and retain the Net Award, and all Basic Rent, Additional
Rent and other sums payable hereunder shall continue unabated and unreduced.
For purposes hereof, "De Minimis Taking" shall mean a Taking (A) for which the
-----------------
aggregate amount of the award, together with all other condemnation awards (if
any) retained by Landlord in connection with the Leased Premises during the
Term, is less than or equal to $25,000, (B) that does not in any way require
Tenant to restore or repair the Leased Premises, (C) that does not affect any
building located on the Leased Premises, (D) that does not affect signage,
access, traffic flow, lighting, or parking for the Leased Premises, or
visibility of the building on or signage for the Leased Premises, and (E) that
otherwise does not have any material adverse impact on Tenant's business being
conducted on the Leased Premises.
(iii) In the event of a Requisition of the Leased Premises, Landlord
shall apply the Net Award of such Requisition, to the extent available, to the
installments of Basic Rent, Additional Rent or other sums payable by Tenant
hereunder thereafter payable and Tenant shall pay any balance remaining after
such application. Upon the expiration of the Term, any portion of such Net
Award, which shall not have been previously credited to Tenant on account of the
Basic Rent and Additional Rent, shall be retained by Landlord.
(d) Except with respect to an award or payment to which Tenant is entitled
pursuant to the provisions of Paragraph 13(a), 13(b) and 13(c), or an award or
payment to which Landlord is entitled to retain in connection with a De Minimis
Taking, no agreement with any condemnor in settlement of or under threat of any
Condemnation shall be made by either Landlord or Tenant without the written
consent of the other, and of Lender, if the Leased Premises are then subject to
a Mortgage, which consent shall not be unreasonably withheld or delayed.
(e) If the Leased Premises are located in the State of California, there is
attached hereto Exhibit "C" entitled "California Provisions" and all of the
provisions, terms and conditions thereof are incorporated herein and made a part
hereof. Exhibit "C" includes Paragraph 13(e), which is incorporated at this
point if the Leased Premises are located in the State of California.
20
14. Insurance.
---------
(a) Tenant shall maintain at its sole cost and expense the following
insurance on the Leased Premises at all times during the Term of this Lease:
(i) Insurance against loss or damage to the Improvements and Equipment
under a ISO special causes of loss form policy (or its equivalent); flood
insurance if the Leased Premises is located within an area having special flood
hazards and such insurance is customarily maintained for similar commercial
properties and is available; and earthquake insurance if the Leased Premises is
located in an area where earthquake insurance is customarily maintained for
similar commercial properties. Such insurance shall be in amounts not less than
the actual replacement cost of the Improvements and Equipment (excluding
footings and foundations and other parts of the Improvements which are not
insurable) as determined from time to time at Lender's request but not more
frequently than once in any 12-month period, by agreement of Landlord, Lender
and Tenant, or if not so agreed, at Tenant's expense, by the insurer or insurers
or by an appraiser approved by Landlord. Such insurance policies may contain
reasonable exclusions, retention and deductible amounts.
(ii) Contractual and comprehensive commercial general liability
insurance and, if necessary, commercial umbrella insurance, against claims for
bodily injury, death or property damage occurring on, in or about the Leased
Premises, which insurance shall be written on a so-called "Occurrence Basis,"
and shall provide minimum protection with a combined single limit in an amount
not less than Five Million ($5,000,000) Dollars (or in such increased limits
from time to time, but no more than once in any five year period, to reflect
declines in the purchasing power of the dollar as Landlord may reasonably
request), for bodily injury, death and property damage in any one occurrence.
(iii) Worker's compensation insurance covering all persons employed by
Tenant on the Leased Premises in connection with any work done on or about any
of the Leased Premises for which claims for death or bodily injury could be
asserted against Landlord, Tenant or the Leased Premises.
(iv) Insurance against loss or damage from explosion of any steam or
pressure boilers or similar apparatus located in or about the Improvements in an
amount not less than the actual replacement cost of the Improvements and
Equipment (excluding footings and foundations and other parts of the
Improvements which are not insurable).
(v) Within thirty (30) days after the written request of Lender, such
additional and/or other insurance with respect to the Improvements located on
the Leased Premises and in such amounts as at the time is customarily carried by
prudent owners or tenants with respect to improvements similar in character,
location and use and occupancy to the Improvements located on the Leased
Premises.
21
(b) During such time as (i) no Event of Default is outstanding hereunder,
(ii) the tangible net worth of Tenant (or of the guarantor of Tenant's
obligations under this Lease) shall be not less than One Hundred Million
($100,000,000.00) Dollars as determined in accordance with generally accepted
accounting principles consistently applied, and (iii) Tenant (or the guarantor
of Tenant's obligations under this Lease) has a Standard & Poor's rating of BBB
or better, Tenant may self-insure all or any portion of the coverage referred to
in Paragraph 14(a), provided that the self insurance program of this
subparagraph (b) does not violate any Legal Requirements of any state which
regulates a Lender domiciled in said state.
(c) Except as otherwise provided in Paragraph 14(b), the insurance
required by Paragraph 14(a) shall be written by companies having a general
policy rating of A- or better and a financial class of VIII or better as listed
in the most recent edition of AM Best Company's Best Rating Guide, and all such
companies shall be approved, authorized or licensed to provide insurance in the
State, or otherwise agreed to by Landlord and Lender. Sums due from Tenant in
lieu of insurance proceeds because of such self-insurance programs shall be
treated as insurance proceeds for all purposes under this Lease. The insurance
policies (i) shall be in amounts sufficient at all times to satisfy any
coinsurance requirements thereof or any coinsurance requirement in the relevant
policy shall be eliminated through the attachment of an agreed amount
endorsement, the activation of an agreed value option, or as is otherwise
appropriate under the policy form, and (ii) shall, with respect to the insurance
maintained under Paragraph 14(a)(i), (ii) and (iv), name Landlord, Tenant and
any Lender as additional insured parties, as their respective interests may
appear. If said insurance or any part thereof shall expire, be withdrawn, become
void by breach of any condition thereof by Tenant or become void or unsafe by
reason of the failure or impairment of the capital of any insurer, Tenant shall
immediately obtain new or additional insurance reasonably satisfactory to
Landlord and Lender.
(d) Each insurance policy referred to in clauses (i), (iv) (and (v) if
requested by Lender) of Paragraph 14(a), shall contain standard non-
contributory/first mortgage mortgagee clauses in favor of any Lender which holds
a Mortgage on the Leased Premises. Each such policy shall provide that it may
not be canceled except after thirty (30) days prior notice to Landlord and any
Lender. Each such policy shall also provide that any losses otherwise payable
thereunder shall be payable notwithstanding any act or omission of Landlord or
Tenant which might, absent such provision, result in a forfeiture of all or a
part of such insurance payment.
(e) Tenant shall pay as they become due all premiums for the insurance
required by this Paragraph 14, shall renew or replace each policy, and shall
deliver to Landlord and Lender a certificate or other evidence (reasonably
satisfactory to Lender and Landlord) of the existing policy and such renewal or
replacement policy at least thirty (30) days prior to the Policy Expiration Date
(as hereinafter defined) of each policy. Each such policy shall provide that it
shall not expire until the Landlord and Lender shall have been provided with
thirty (30) days prior written notice of the expiration date (the "Policy
------
Expiration Date") thereof. In the event of Tenant's failure to comply with any
---------------
of the foregoing requirements of this Paragraph 14 within five (5) business days
of the giving of written notice by Landlord to Tenant, Landlord shall be
entitled to procure such insurance.
22
Any sums expended by Landlord in procuring such insurance shall be Additional
Rent and shall be repaid by Tenant, together with interest thereon at the
Default Rate, from the time of payment by Landlord until fully paid by Tenant
immediately upon written demand therefor by Landlord.
(f) Anything in this Paragraph 14 to the contrary notwithstanding, any
insurance which Tenant is required to obtain pursuant to Paragraph 14(a) may be
carried under a "blanket" policy or policies covering other properties or
liabilities of Tenant and/or its affiliates, provided that such "blanket" policy
or policies otherwise comply with the provisions of this Paragraph 14. In the
event any such insurance is carried under a blanket policy, Tenant shall deliver
to Landlord and Lender evidence of the issuance and effectiveness of the policy,
the amount and character of the coverage with respect to the Leased Premises and
the presence in the policy of provisions of the character required in the above
sections of this Paragraph 14.
(g) In the event of any casualty loss exceeding $500,000 or in the event
of casualty loss that results in the inability of Tenant to operate its store
located on the Leased Premises, Tenant shall give Landlord immediate notice
thereof. Tenant shall adjust, collect and compromise any and all claims, with
the consent of Lender and Landlord, not to be unreasonably withheld or delayed
(but the consent of Lender and Landlord shall not be required in connection with
any claims relating to Tenant's Trade Fixtures and other personal property), and
Landlord and Lender shall have the right to join with Tenant therein. If the
estimated cost of Restoration or repair shall be One Hundred Thousand
($100,000.00) Dollars or less, all proceeds of any insurance required under
clauses (i) and (iv) (and (v) if requested by Lender) of Paragraph 14(a) shall
be payable to Tenant. If the estimated cost of Restoration or repair shall be
Five Hundred Thousand ($500,000.00) Dollars or less, all proceeds of any
insurance required under clauses (i) and (iv) (and (v) if requested by Lender)
of Paragraph 14(a) shall be payable to Tenant, provided that Tenant (or the
guarantor of the Tenant's obligations under this Lease) at such time shall have
a tangible net worth of not less than One Hundred Million ($100,000,000.00)
Dollars as determined in accordance with generally accepted accounting
principles, consistently applied, and in all other events to an escrow holder
agreed upon by Landlord and Tenant and reasonably satisfactory to Lender or, if
they are unable to agree, to a trustee which shall be a federally insured bank
or other financial institution to act as trustee selected by Landlord and Tenant
and reasonably satisfactory to Lender (such escrow holder, bank or financial
institution so selected is called the "Trustee"). If the Leased Premises shall
be covered by a Mortgage, Lender, if it so desires, shall be the Trustee. Each
insurer is hereby authorized and directed to make payment under said policies
directly to such Trustee instead of to Landlord and Tenant jointly; and Tenant
and Landlord each hereby appoints such Trustee as its attorney-in-fact to
endorse any draft therefor for the purposes set forth in this Lease after
approval by Tenant of such Trustee, if Trustee is other than Lender. In the
event of any casualty (whether or not insured against) resulting in damage to
the Leased Premises or any part thereof, the Term shall nevertheless continue
and there shall be no abatement or reduction of Basic Rent, Additional Rent or
any other sums payable by Tenant hereunder. The Net Proceeds of such insurance
payment shall be retained by the Trustee and, promptly after such casualty,
Tenant, as required in Paragraphs 11(a) and 12, shall commence and diligently
continue to perform the Restoration to the Leased Premises. Upon payment to the
Trustee of such Net Proceeds, the Trustee shall, to the extent available, make
the Net
23
Proceeds available to Tenant for Restoration, in accordance with the provisions
of Paragraph 15. Tenant shall, whether or not the Net Proceeds are sufficient
for the purpose, promptly repair or replace the Improvements and Equipment in
accordance with the provisions of Paragraph 11(a) and the Net Proceeds of such
loss shall thereupon be payable to Tenant, subject to the provisions of
Paragraph 15 hereof. In the event that any damage or destruction shall occur at
such time as Tenant shall not have maintained third-party insurance in
accordance with Paragraph 14(a)(i),(iv) or (v), Tenant shall pay to the Trustee
the amount of the proceeds that would have been payable had such insurance
program been in effect (the "Tenant Insurance Payment").
(h) Landlord and Tenant, on their own behalf and on behalf of anyone
claiming under or through either one by way of subrogation, hereby release and
waive all rights of recovery and causes of action against each other and their
respective subsidiaries, parents, affiliates, officers, directors, shareholders,
partners, managers, members, beneficial owners, trustees, employees
(collectively, for purposes of this subparagraph (h), their "Affiliates") from
any and all liability for any loss or damage to property or resulting from
damage to such property (and, in either case, any resulting loss of business or
rental income), whether caused by the negligence or fault of the other party,
which is insured under the property insurance required to be maintained under
Paragraph 14(a)(i) or (iv) above, or any other property insurance policy now or
hereafter issued to Landlord or Tenant excluding, however, any secondary or
excess insurance policies maintained by Landlord solely for its own benefit. The
foregoing waiver is in addition to any other waiver or release contained in this
Lease. Tenant shall have the property insurance policies required under
Paragraph 14(a)(i) and (iv) issued in such form as to waive any right of
subrogation that might otherwise exist, and shall provide written evidence
thereof to Landlord upon written request.
(i) Notwithstanding anything to the contrary provided in this Lease,
Tenant shall have the right to settle all insurance claims relating to Tenant's
Trade Fixtures, inventory and other personal property without the participation
or consent of Landlord, and all such insurance proceeds shall be paid directly
to Tenant and neither Landlord nor Lender shall have any interest therein.
5. Restoration. Net Proceeds, Restoration Award and Tenant Insurance Payment
-----------
(the aggregate of which being herein defined as the "Restoration Fund") shall be
----------------
disbursed by the Trustee in accordance with the following conditions:
(a) If the cost of Restoration will exceed $500,000, prior to commencement
of the Restoration the architects, general contractor(s), and plans and
specifications for the Restoration shall be approved by Landlord, which approval
shall not be unreasonably withheld or delayed; and which approval shall be
granted to the extent that the plans and specifications depict a Restoration
which is substantially similar to the Improvements and Equipment which existed
prior to the occurrence of the Casualty or Taking, whichever is applicable.
(b) At the time of any disbursement, no Event of Default shall exist and
no mechanics' or materialmen's liens shall have been filed and remain
undischarged or unbonded.
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(c) Disbursements shall be made from time to time in an amount not
exceeding the hard and soft cost of the work and costs incurred since the last
disbursement upon receipt of (1) satisfactory evidence, including architects'
certificates of the stage of completion, of the estimated cost of completion and
of performance of the work to date in a good and workmanlike manner in
accordance with the contracts, plans and specifications, (2) partial releases of
liens, and (3) other reasonable evidence of cost and payment so that Landlord
can verify that the amounts disbursed from time to time are represented by work
that is completed in place or delivered to the site and free and clear of
mechanics' lien claims.
(d) Each request for disbursement shall be accompanied by a certificate of
Tenant describing the work, materials or other costs or expenses, for which
payment is requested, stating the cost incurred in connection therewith and
stating that Tenant has not previously received payment for such work or expense
and the certificate to be delivered by Tenant upon completion of the work shall,
in addition, state that the work has been substantially completed and complies
with the applicable requirements of this Lease.
(e) The Trustee may, and shall if so requested by Landlord, retain ten
percent (10%) of the Restoration Fund until the Restoration is at least fifty
percent (50%) complete, and thereafter five percent (5%) until the Restoration
is substantially complete.
(f) The Restoration Fund shall be kept in a separate interest-bearing
federally insured account by the Trustee or by Lender, with the interest that
accrues thereon to be added to the Restoration Fund.
(g) At all times the undisbursed balance of the Restoration Fund held by
Trustee plus any funds contributed thereto by Tenant, at its option, shall be
not less than the cost of completing the Restoration, free and clear of all
liens.
(h) In addition, prior to commencement of Restoration and at any time
during Restoration, if the estimated cost of Restoration, as reasonably
determined by Landlord, exceeds the amount of the Net Proceeds, the Restoration
Award and Tenant Insurance Payment available for such Restoration, the amount of
such excess shall be paid by Tenant to the Trustee to be added to the
Restoration Fund or Tenant shall fund at its own expense the costs of such
Restoration until the remaining Restoration Fund is sufficient for the
completion of the Restoration. Any sum in the Restoration Fund, which remains
in the Restoration Fund upon the completion of Restoration, shall be paid to
Tenant. For purposes of determining the source of funds with respect to the
disposition of funds remaining after the completion of Restoration, the Net
Proceeds or the Restoration Award shall be deemed to be disbursed prior to any
amount added by Tenant.
(i) Notwithstanding anything to the contrary provided in this Lease, if
the estimated cost of Restoration or repair after any Condemnation or casualty
occurring during the last three (3) years of the Term of this Lease shall exceed
50% of the replacement cost of the Improvements, Tenant shall have the right to
terminate this Lease upon the delivery of at least thirty (30) days' prior
written
25
notice to Landlord and Lender provided existing uncured defaults (if any) of
Tenant are cured on or before the date upon which this Lease would otherwise be
terminated pursuant to this Section. In the event of the termination of this
Lease by Tenant in accordance with this subparagraph (i), (A) the Term and this
Lease shall terminate on the date provided in Tenant's written notice of
termination, (B) Tenant shall have no obligation to restore or repair the Leased
Premises, and (C) the entire Net Award or Net Proceeds, as applicable, shall be
payable to Lender and Landlord, in that order, and Tenant shall pay to Landlord
an amount equal to Tenant's self-insured retention.
16. Subordination to Financing.
--------------------------
(a) (i) Subject to the provisions of Paragraph 16(a)(ii), Tenant agrees
that this Lease shall at all times be subject and subordinate to the lien of any
Mortgage provided that the holder thereof has executed and delivered to Tenant
an agreement, in recordable form, confirming its agreement to the provisions set
forth in subparagraph (ii) below, and Tenant agrees, upon demand, without cost,
to execute instruments as may be required to further effectuate or confirm such
subordination.
(ii) Except as expressly provided in this Lease by reason of the
occurrence of an Event of Default, Tenant's tenancy and Tenant's rights under
this Lease shall not be disturbed, terminated or otherwise adversely affected,
nor shall this Lease be affected, by any default under any Mortgage, and in the
event of a foreclosure or other enforcement of any Mortgage, or sale in lieu
thereof, the purchaser at such foreclosure sale shall be bound to Tenant for the
Term of this Lease and any Renewal Term, the rights of Tenant under this Lease
shall expressly survive, and this Lease shall in all respects continue in full
force and effect so long as no Event of Default has occurred and is continuing.
Tenant shall not be named as a party defendant in any such foreclosure suit,
except as may be required by Law to exercise the remedies available to Lender
under the Mortgage, but not for the purpose of terminating this Lease or
affecting any of the rights of the Tenant hereunder. Any Mortgage to which this
Lease is now or hereafter subordinate shall provide, in effect, that during the
time this Lease is in force insurance proceeds and Restoration Award shall be
permitted to be held, used and disbursed in accordance with the provisions of
this Lease. Notwithstanding an Event of Default, but provided no event of
default has occurred under any Qualified Sublease (as defined below), the
provisions of this Paragraph 16(a) shall continue to apply for the benefit of
the relevant Qualified Subtenant referred to in Paragraph 17 herein.
(b) Notwithstanding the provisions of Paragraph 16(a), the holder of
any Mortgage to which this Lease is subject and subordinate shall have the
right, at its sole option, at any time, to subordinate and subject the Mortgage,
in whole or in part, to this Lease by recording a unilateral declaration to such
effect, provided that such holder shall have agreed that during the time this
Lease is in force insurance proceeds and Restoration Award shall be permitted to
be held, used and disbursed in accordance with the provisions of this Lease.
(c) At any time prior to the expiration of the Term, Tenant agrees,
at the election and upon demand of any owner of the Leased Premises, or of a
Lender who has granted non-disturbance to Tenant pursuant to Paragraph 16(a)
above and has recognized and affirmed that this Lease shall
26
continue to be binding on such owner or Lender in accordance with the provisions
of Paragraph 16(a) above, to attorn, from time to time, to any such owner or
Lender, upon the terms and conditions of this Lease, for the remainder of the
Term. The provisions of this Paragraph 16(c) shall inure to the benefit of any
such owner or Lender, shall apply notwithstanding that, as a matter of law, this
Lease may terminate upon the foreclosure of the Mortgage, shall be self-
operative upon any such demand, and no further instrument shall be required to
give effect to said provisions.
(d) Each of Tenant, any owner and Lender, however, upon demand of the
other, hereby agrees to execute, from time to time, instruments in confirmation
of the foregoing provisions of Paragraphs 16(a) and 16(c), reasonably
satisfactory to the requesting party acknowledging such subordination, non-
disturbance and attornment as are provided in such subparagraphs and setting
forth the terms and conditions of its tenancy.
(e) Each of Tenant, Landlord and Lender agrees that, if requested by any
of the others, each shall, without charge, enter into a Subordination, Non-
Disturbance and Attornment Agreement reasonably requested by Lender, provided
such agreement contains provisions relating to non-disturbance and other
provisions set forth in subparagraph (a) and Tenant hereby agrees for the
benefit of Lender that (i) no amendment or modification of this Lease shall be
effective against Lender without in each case the prior written consent of
Lender, which shall not be unreasonably withheld, conditioned or delayed
(provided, however, Lender, in Lender's sole discretion may withhold or
condition its consent to any amendment or modification which would or could (A)
alter in any way the amount or time for payment of any Basic Rent, Additional
Rent or other sum payable hereunder, (B) alter in any way the absolute and
unconditional nature of Tenant's obligations hereunder or materially diminish
any such obligations, (C) result in any termination hereof prior to the end of
the initial term except in accordance with the express terms of this Lease, or
(D) otherwise, in Lender's reasonable judgment, affect the rights or obligations
of Landlord or Tenant hereunder), (ii) without the prior written consent of
Lender which may be withheld in Lender's sole discretion, Tenant shall not
cancel or surrender or seek to cancel or surrender the Term hereof except in
accordance with the express terms of this Lease, or enter into any agreement
with Landlord to do so (the parties agreeing that the foregoing shall not be
construed to affect the rights or obligations of Tenant, Landlord or Lender with
respect to any termination permitted under the express terms hereof), and (iii)
Tenant will not pay any installment of Basic Rent more than one (1) month in
advance of the due date thereof or otherwise than in the manner provided for in
this Lease.
17. Assignment, Subleasing.
----------------------
(a) Tenant may assign, mortgage or pledge its interest in this Lease and
may sublet the Leased Premises in whole or in part, from time to time, without
the consent of Landlord, subject to the terms of this Lease.
(b)(i) Each sublease of the Leased Premises or any part thereof shall be
subject and subordinate to the provisions of this Lease. Except in connection
with an assignment to a Qualified Replacement Tenant (as defined below), no
assignment or sublease shall affect or reduce any of the
27
obligations of Tenant hereunder, and all such obligations shall continue in full
force and effect as obligations of a principal and not as obligations of a
guarantor, as if no assignment or sublease had been made. Notwithstanding any
assignment or subletting, except in connection with an assignment to a Qualified
Replacement Tenant, Tenant shall continue to remain liable and responsible for
the payment of the Basic Rent and Additional Rent and the performance of all its
other obligations under this Lease. No assignment or sublease shall impose any
obligations on Landlord under this Lease except as otherwise provided in this
Lease. Tenant agrees that in the case of an assignment of the Lease, Tenant
shall, within fifteen (15) days after the execution and delivery of any such
assignment, deliver to Landlord (i) a duplicate original of such assignment in
recordable form and (ii) an agreement executed and acknowledged by the assignee
in recordable form wherein the assignee shall agree to assume and agree to
observe and perform all of the terms and provisions of this Lease on the part of
the Tenant to be observed and performed from and after the date of such
assignment. Notwithstanding anything to the contrary provided in this Lease, in
the event of any assignment of this Lease to a Qualified Replacement Tenant and
the compliance by Tenant with the provisions of the immediately preceding
sentence, the assignor shall have no further obligations or liabilities as the
"Tenant" under this Lease from and after the assignment and all references to
the "Tenant" under this Lease shall thereafter refer to and mean the assignee
and its successors and assigns. However, the assignor shall not be released from
accrued obligations and liabilities under this Lease that exist at the time of
the assignment. In the case of a sublease, Tenant shall, within fifteen (15)
days after the execution and delivery of such sublease, deliver to Landlord a
duplicate original of such sublease.
(ii) A "Qualified Replacement Tenant" shall be any assignee of Tenant's
rights, title and interest under this Lease that either (A) has an Acceptable
Credit Rating (as defined below) at the time of the assignment to such assignee,
or (B) causes an entity that has an Acceptable Credit Rating at the time of the
assignment to such assignee to execute and deliver to the Landlord a guaranty in
form and substance reasonably acceptable to Landlord and the Tenant's assignee.
For purposes hereof, the term "Acceptable Credit Rating" shall mean a Standard &
Poor's (or other nationally recognized statistical rating organization's) rating
of not less than four grade levels above the then existing grade level of the
assigning Tenant (by way of example only, the Standard & Poor's rating that is
four grade levels above B- is BB), but in no event less than a Standard & Poor's
rating at the time of the assignment of BB (or an equivalent rating of any other
nationally recognized statistical rating organization).
(c) Upon the occurrence of an Event of Default under this Lease,
Landlord shall have the right to collect and enjoy all rents and other sums of
money payable under any sublease of any of the Leased Premises, and Tenant
hereby irrevocably and unconditionally assigns such rents and money to Landlord,
which assignment may be exercised upon and after (but not before) the occurrence
of an Event of Default.
(d)(i) Landlord agrees for itself, its successors and assigns, promptly
upon Tenant's request, to enter into a nondisturbance and attornment agreement
with any Qualified Subtenant, as defined below, upon the terms described below,
pursuant to which Landlord shall agree, for so long as such Qualified Subtenant
is not in default under its Qualified Sublease, as defined below, that the
28
Qualified Sublease shall not be terminated as a result of any termination of
this Lease and such Qualified Subtenant's use and occupancy of the Leased
Premises shall not be disturbed by Landlord, and pursuant to which such
Qualified Subtenant shall agree to attorn to Landlord or its successor as
landlord under the Qualified Sublease upon any termination of this Lease. Said
agreement shall further provide that nothing therein contained shall impose any
obligation on the Landlord or the Lender to (A) return or apply any security
deposit under such sublease, unless such security deposit shall be transferred
and turned over to the Landlord or Lender or their or either of their
successors, (B) expend any sums to make any installations or alterations
provided to be made by the Landlord under said sublease or reimburse the Tenant
under said sublease for any installations or alterations made by it, (C) be
liable for any act or omission of Tenant as sublandlord (or any successor to
Tenant as sublandlord) or be subject to any offsets or defense which such
subtenant might have against Tenant as sublandlord (or any successor to Tenant
as sublandlord), (D) be bound by any rent or additional rent which such
subtenant might have paid for more than the current month to any prior landlord,
or (E) be bound by any amendment or modification of the sublease made without
the prior written consent of Landlord, the terms of which amendment or
modification if included in the original sublease would have prevented such
sublease from meeting the criteria for a Qualified Sublease.
(ii) Any subtenant under a Qualified Sublease, as defined below, is a
"Qualified Subtenant." A "Qualified Sublease" shall be any sublease of all of
the Leased Premises, pursuant to which the subtenant thereunder had, at the time
such sublease was entered into, a Standard & Poor's rating of BB, or higher, or
a ▇▇▇▇▇'▇ rating of Ba, or higher (or equivalent rating of any other nationally
recognized statistical rating organization), such sublease to be on the terms
and conditions of this Lease (except the Basic Rent or Additional Rent (or both)
may be higher), and for a term not to exceed the Term of this Lease, (and if any
such Qualified Sublease shall include all or part of any Renewal Term or Renewal
Terms, then Tenant shall be conclusively deemed to have irrevocably waived the
right to issue a Renewal Term Cancellation Notice as to such Renewal Term or
Renewal Terms, which waiver Tenant will confirm in writing to Landlord if
requested to do so, except that if thereafter such Qualified Sublease shall
terminate prior to its original term and on or before the last day as of which
Tenant would otherwise be entitled to issue a Renewal Term Cancellation Notice
as to any Renewal Term originally included within the term of such Qualified
Sublease, then Tenant's right to issue a Renewal Term Cancellation Notice as to
such Renewal Term and all subsequent Renewal Terms originally falling within the
term of such Qualified Sublease shall be reinstated in accordance with the terms
of this Lease).
(e)(i) Landlord agrees for itself, its successors and assigns, promptly
upon Tenant's request, to enter into an agreement with any Qualified Assignee,
as defined below, pursuant to which Landlord shall agree, for so long as such
Qualified Assignee is not in default of its obligations under this Lease, that
no defaults or Event of Default shall be deemed to have occurred under this
Lease by reason of the occurrence of one or more of the events designated in
Paragraphs 19(a)(iii), (iv), (v) or (vi) with respect to any party who was a
Tenant under this Lease prior to the date of the assignment of this Lease to the
Qualified Assignee.
29
(ii) A "Qualified Assignee" shall be any assignee of the Tenant's rights,
title and interest under this Lease which, at the time of the assignment to it,
had a Standard & Poor's rating of BB, or higher, or a ▇▇▇▇▇'▇ rating of Ba, or
higher, (or equivalent rating of any other nationally recognized statistical
rating organization).
18. Permitted Contests.
------------------
(a) After prior written notice to Landlord, Tenant shall not be required
to (i) pay any Imposition, (ii) comply with any Legal Requirement, (iii)
discharge or remove any lien referred to in Paragraphs 9 or 12, or (iv) take any
action with respect to any violation referred to in Paragraph 11(b) so long as
Tenant shall contest, in good faith and at its expense, the existence, the
amount or the validity thereof, the amount of the damages caused thereby, or the
extent of its or Landlord's liability therefor, by appropriate proceedings which
shall operate during the pendency thereof to prevent (A) the collection of, or
other realization upon, the Imposition or lien so contested, (B) the sale,
forfeiture or loss of any of the Leased Premises, any Basic Rent or any
Additional Rent to satisfy the same or to pay any damages caused by the
violation of any such Legal Requirement or by any such violation, (C) any
interference with the use or occupancy of any of the Leased Premises, (D) any
interference with the payment of any Basic Rent or any Additional Rent, and (E)
the cancellation of any fire or other insurance policy unless prior to the
effective date of such cancellation, the policy is replaced by a substitute
policy that complies with the requirements of this Lease. Subject to the
foregoing, and at no cost to Landlord, Landlord shall fully cooperate with the
commencement and prosecution of any such contest.
(b) In no event shall Tenant pursue any contest with respect to any
Imposition, Legal Requirement, lien, or violation, referred to above in such
manner that exposes Landlord or Lender to (i) criminal liability, penalty or
sanction, (ii) any civil liability, penalty or sanction for which Tenant has not
made provisions reasonably acceptable to Landlord and Lender or (iii) defeasance
of its interest in the Leased Premises.
(c) Tenant agrees that each such contest shall be promptly and
diligently prosecuted to a final conclusion, except that Tenant shall have the
right to attempt to settle or compromise such contest through negotiations.
Tenant shall pay and save Lender and Landlord harmless against any and all
losses, judgments, decrees and costs (including all reasonable attorneys' fees
and expenses) in connection with any such contest and shall, promptly after the
final determination of such contest, 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, together with all penalties, fines,
interest, costs and expenses thereof or in connection therewith, and perform all
acts the performance of which shall be ordered or decreed as a result thereof.
19. Default Provisions.
------------------
(a) The occurrence of any one or more of the following events (any such
event being specified herein as a "failure" or "default") shall constitute an
Event of Default under this Lease:
30
(i) Failure by Tenant to make any payment of Basic Rent which
continues unremedied for a period of five (5) business days after written notice
("Nonpayment Notice") thereof given to Tenant by Landlord or Lender or Lender's
designee; or
(ii) Failure by Tenant to make any payment of Additional Rent or other
sum herein required to be paid by Tenant which continues unremedied for a period
of ten (10) business days after a Nonpayment Notice is given to Tenant by
Landlord or Lender or Lender's designee; or
(iii) Failure by Tenant to perform and observe, or a violation or breach
of, any other provision in this Lease and such default shall continue for a
period of thirty (30) days after written notice thereof is given by Landlord or
Lender or Lender's designee to Tenant or if such default is of such a nature
that it cannot reasonably be cured within such period of thirty (30) days, such
period shall be extended for such longer time as is reasonably necessary
provided that Tenant has commenced to cure such default within said period of
thirty (30) days and is actively, diligently and in good faith proceeding with
continuity to remedy such default; or
(iv) Tenant or any guarantor of Tenant's obligations hereunder shall
(A) voluntarily be adjudicated a bankrupt or insolvent, (B) or voluntarily
consent to the appointment of a receiver or trustee for itself or for any of the
Leased Premises, (C) voluntarily file a petition seeking relief under the
bankruptcy or other similar laws of the United States, any state or any
jurisdiction, or (D) voluntarily file a general assignment for the benefit of
creditors; or
(v) A court shall enter an order, judgment or decree appointing, with
the voluntary consent of Tenant or any guarantor of Tenant's obligations
hereunder, a receiver or trustee for Tenant or any guarantor of Tenant's
obligations hereunder or for the Leased Premises or approving a petition filed
against Tenant or any guarantor of Tenant's obligations hereunder which seeks
relief under the bankruptcy or other similar laws of the United States or any
State, and such order, judgment or decree shall remain in force, undischarged or
unstayed, one hundred twenty (120) days after it is entered; or
(vi) Tenant or any guarantor of Tenant's obligations hereunder shall in
any insolvency proceedings be liquidated or dissolved or shall voluntarily
commence proceedings towards its liquidation or dissolution; or
(vii) The estate or interest of Tenant in the Leased Premises shall be
levied upon or attached in any proceeding and such estate or interest is about
to be sold or transferred or such process shall not be vacated or discharged
within one hundred twenty (120) days after such levy or attachment.
(b) If any Event of Default shall have occurred, Landlord shall have
the right at its option, then or at any time thereafter, to do any one or more
of the following without demand upon or notice to Tenant except to the extent
such notice as is required below:
31
(i) Landlord may give Tenant notice (following the occurrence of an
Event of Default) of Landlord's intention to terminate this Lease on a date
specified in such notice (which date shall be no sooner than twenty (20) days
after the date of the notice). Upon the date therein specified, unless the Event
of Default for which the termination is effected has been cured by Tenant, the
Term and the estate hereby granted and all rights of Tenant hereunder shall
expire and terminate as if such date were the date herein above fixed for the
expiration of the Term, and Landlord shall be entitled to recover the damages
incurred by Landlord as a result of the Event of Default as provided in
subparagraph (c) below.
(ii) Landlord may, whether or not the Term of this Lease shall have
been terminated pursuant to clause (i) above, give Tenant notice (following the
occurrence of an Event of Default) to surrender the Leased Premises to Landlord
on a date specified in such notice (which date shall be no sooner than thirty
(30) days after the date of the notice), at which time Tenant shall surrender
and deliver possession of the Leased Premises to Landlord unless the Event of
Default for which the termination of Tenant's right of possession is effected
has been cured by Tenant. Upon or at any time after taking possession of the
Leased Premises, Landlord may remove any persons or property therefrom. Landlord
shall be under no liability for or by reason of any such entry, repossession or
removal. No such entry or repossession shall be construed as an election by
Landlord to terminate this Lease unless Landlord gives a written notice of such
intention to Tenant pursuant to clause (i) above.
(iii) Landlord may continue this Lease in effect for so long as Landlord
does not so terminate Tenant's right to possession, and enforce all Landlord's
rights and remedies under this Lease, including, without limitation, the right
to recover Basic Rent and Additional Rent as they become due.
(c)(i) In the event of any termination of this Lease or repossession of
any of the Leased Premises by reason of the occurrence of an Event of Default,
Tenant shall pay to Landlord Basic Rent, Additional Rent and all other sums
required to be paid by Tenant to and including the date of such expiration or
repossession.
(ii) After repossession of the Leased Premises pursuant to subparagraph
(b)(ii) above, Tenant shall, until the end of what would have been the Term in
the absence of such repossession, and whether or not any of the Leased Premises
shall have been relet (but subject to the mitigation requirements set forth
below), be liable to Landlord for and shall pay to Landlord as damages: (A)
Basic Rent, Additional Rent and all other sums which would be payable under this
Lease by Tenant in the absence of such repossession, less (B) the net proceeds,
if any, of any reletting pursuant to paragraph 19 (c)(iii) and any other
revenues generated by the Leased Premises (including, without limitation,
receipts from subtenants, licensees, concessions or other possessory
arrangements), after deducting from such proceeds all of Landlord's reasonable
expenses in connection with such reletting (including all reasonable
repossession costs, brokerage commissions, legal expenses, attorneys' fees,
employees' expenses, costs of Alteration, expenses of preparation for
reletting), and
32
other costs and expenses incurred by Landlord as a result of Tenant's default.
Tenant hereby agrees to be and remain liable for all sums aforesaid and Landlord
may recover such damages from Tenant and institute and maintain successive
actions or legal proceedings against Tenant for the recovery of such damages.
Nothing herein contained shall be deemed to require Landlord to wait to begin
such action or other legal proceedings until the date when the Term would have
expired by limitation had there been no such Event of Default.
(iii) After repossession of any of the Leased Premises pursuant to
subparagraph (b)(ii) above, Landlord may relet the Leased Premises or any part
thereof to such tenant or tenants for such term or terms (which may be greater
or less than the period which would otherwise have constituted the balance of
the Term) for such rent, on such conditions (which may include concessions or
free rent) and for such uses as Landlord, in its reasonable discretion, may
determine; and Landlord shall collect and receive any rents payable by reason of
such reletting. All rental and use income received in connection with the Leased
Premises, including without limitation, the rents received on such reletting,
shall be applied (A) first to the reasonable and actual expenses of such
reletting and collection, including without limitation necessary renovation and
alterations of the Leased Premises, reasonable and actual attorneys' fees and
any reasonable and actual real estate commissions paid, and (B) thereafter
toward payment of all sums due or to become due Landlord hereunder. If a
sufficient amount to pay such expenses and sums shall not be realized or
secured, then Tenant shall pay Landlord any such deficiency monthly, and
Landlord may bring an action therefor as such monthly deficiency shall arise.
Landlord shall not, in any event, be required to pay Tenant any sums received by
Landlord on a reletting of the Leased Premises in excess of the rent provided in
this Lease, but such excess shall reduce any accrued present or future
obligations of Tenant under this Lease. Landlord's re-entry and reletting of the
Leased Premises without termination of this Lease shall not preclude Landlord
from subsequently terminating this Lease as set forth above. Landlord may make
such Alterations as Landlord in its reasonable discretion may deem advisable.
Tenant agrees to pay Landlord, as Additional Rent, immediately upon demand, all
reasonable expenses incurred by Landlord in obtaining possession, in performing
Alterations and in reletting any of the Leased Premises, including fees and
commissions of attorneys, architects, agents and brokers.
(iv) If Landlord shall have reentered the Leased Premises, as the case
may be, whether or not Landlord shall have recovered any amounts under Paragraph
19(c)(ii) or 19(c)(iii), Landlord shall be entitled to recover from Tenant and
Tenant shall pay to Landlord, on demand, as and for liquidated and agreed final
damages for Tenant's default, the amount by which the Basic Rent, and all
Additional Rent reserved hereunder for the unexpired portion of the Term demised
herein as if the Lease had not expired or been terminated exceeds the then fair
and reasonable rental value of the Leased Premises for the same period,
discounted to present worth at the annual rate of nine percent (9%), minus any
such monthly deficiencies previously recovered from Tenant under Paragraph
19(c)(ii) and (iii) if applicable. Tenant shall have no further liability for
the payment of monthly deficiencies under Paragraph 19(c)(ii) and (iii) after
the exercise by the Landlord of the remedy provided in this subparagraph (iv).
33
(v) Upon the occurrence of any Event of Default, Tenant shall pay to
Landlord on any installment of Basic Rent or any Additional Rent not paid on or
before the date when each such payment is due, interest on the delinquent amount
at the rate of twelve percent (12%) per annum (the "Default Rate") computed from
the date such payment of Basic Rent or Additional Rent was due to and including
the date of payment.
(vi) In the event of the termination of this Lease or repossession of
the Leased Premises after the occurrence of any Event of Default, Landlord
agrees to exercise reasonable efforts to mitigate the damages arising as a
result of the occurrence of such Event of Default.
(vii) Except as provided in Paragraph 19(d), Landlord may exercise any
other right or remedy now or hereafter existing by law or in equity. If the
Leased Premises are located in the State of California, there is attached hereto
Exhibit "C" entitled "California Provisions" and all of the provisions, terms
and conditions thereof are incorporated herein and made a part hereof. Exhibit
"C" includes an addition to Paragraph 19(c)(vii), which is incorporated at this
point if the Leased Premises are located in the State of California.
(d) If Landlord elects to terminate this Lease or Tenant's right to
possession of the Leased Premises on account of any default by Tenant, Landlord
shall have the right, to the maximum extent provided by law, to terminate any
and all subleases, licenses, concessions, or other consensual arrangements for
possession entered into by Tenant and affecting the Leased Premises unless
Landlord has executed (or is obligated pursuant to the terms of Paragraph 16 of
this Lease to execute) a nondisturbance and attornment agreement with respect to
the sublease or other agreement, or, in Landlord's sole discretion, Landlord may
succeed to Tenant's interest in such subleases, licenses, concessions, or
arrangements. In the event of Landlord's election to succeed to Tenant's
interest in any such subleases, licenses, concessions, or arrangements, Tenant
shall have no further right to or interest in the rent or other consideration
receivable thereunder as of the date of notice by Landlord of such election, but
the same shall be applied as in accordance with this Paragraph.
(e) Landlord and Tenant agree that upon the occurrence of any Event of
Default by Tenant, the remedies provisions of this Lease are intended to
supersede any common law or statutory rights that Landlord may have to
accelerate the Basic Rent and Additional Rent due under this Lease, and Landlord
hereby waives any such statutory or common law rights. Subject to Landlord's
continuing ability to enforce the remedies provided in this Lease upon an Event
of Default by Tenant, Landlord's waiver hereunder shall apply to all such rights
of acceleration whether same are currently available under existing statutes or
common law(s) or whether such rights of acceleration are hereafter available
under future statutes or common law(s). Furthermore, notwithstanding any
provision to the contrary in this Lease, any amount received by Landlord under
this Lease or in connection with the Leased Premises after the occurrence of any
Event of Default shall be applied to the obligations of Tenant hereunder.
Without limiting the generality of the foregoing, the amount of any Net Proceeds
and Net Award received by Landlord which, but for the occurrence of such Event
of Default, would otherwise be available to Tenant for Restoration, shall be
applied to reduce the liability of Tenant under this Lease as to such
Restoration.
34
(f) If any statute or rule of law governing a proceeding in which the
damages provided for in Paragraph 19(c) are to be proved shall validly limit the
amount thereof to an amount less than the amount above agreed upon, Landlord
shall be entitled to the maximum amount allowable under such statute or rule of
law.
(g)(i) If Landlord fails to perform any of its obligations under this
Lease, Tenant shall give Landlord written notice thereof. Landlord shall have
the right to cure such breach during the 30-day period following receipt of
Tenant's notice hereunder; provided, however, that if Landlord commences to cure
such breach within such 30 day period and thereafter diligently prosecutes the
same to completion, Landlord shall not be in default hereunder. If the breach of
Landlord materially adversely affects Tenant's use and enjoyment of the Leased
Premises and if Landlord has not cured such breach during the 30 day period
following receipt of Tenant's notice hereunder, then notwithstanding any
continuing efforts of Landlord to cure such breach, Tenant shall have the right,
but not the obligation, to cure such breach.
(ii) If the Leased Premises are subject to a Mortgage, Tenant shall
serve Lender concurrent copies of any notices of default served on Landlord
hereunder, and if Landlord fails to complete any cure within the cure period(s)
provided above, Lender shall have an additional period of thirty (30) days after
the expiration of any such cure period(s) to cure any default of Landlord.
Notwithstanding such additional cure period of Lender, if Landlord fails to cure
any Landlord breach within the cure period(s) described above, Tenant shall have
the right, but not the obligation, to cure such breach.
(iii) If pursuant to the foregoing provisions Tenant cures any breach of
Landlord, the reasonable costs and expenses incurred by Tenant in connection
with such cure (including attorneys' fees incurred with respect thereto, if
any), together with interest thereon at the Default Rate from the respective
date(s) of Tenant's payment of each item of cost or expense, shall be payable by
Landlord upon demand. Tenant shall look solely to Landlord's interest in the
Leased Premises, the rent and income therefrom, any condemnation or insurance
proceeds attributable to the Leased Premises, and the proceeds from any sale or
disposition of the Leased Premises for the recovery of any judgment against
Landlord, and neither Landlord nor its partners, members, managers, directors,
officers or shareholders shall be personally liable for any such judgment. If a
default by Landlord shall occur under this Lease as a result of the breach of
Paragraph 4(c) of this Lease (providing for the quite occupation and enjoyment
of the Leased Premises by Tenant) or the failure of Landlord to hold, apply and
disburse any Net Award or Net Proceeds as provided in Paragraphs 13 and 14 of
this Lease, and in any such event the Landlord fails to cure the default within
the cure periods set forth above, Tenant may, in addition to its remedies
described above and any other rights available at law or in equity, terminate
this Lease upon the delivery of at least ten (10) days' prior written notice to
Landlord. Upon the date specified in such termination notice, the Term shall
terminate unless the Landlord's default is cured by Landlord.
35
(iv) If Landlord should fail to pay to Tenant any sums owing from
Landlord to Tenant under this Lease within thirty (30) days after receipt by
Landlord of written demand therefor from Tenant specifying the amount payable
and the paragraph(s) under this Lease pursuant to which Landlord is responsible
to make such payment, Landlord shall pay to Tenant the Default Rate on the
amount unpaid, computed from the date such payment was first due Tenant to and
including the date of payment.
20. Additional Rights of Landlord and Tenant.
----------------------------------------
(a) Except as provided in Paragraph 19(d), no right or remedy conferred
upon or reserved to Landlord in this Lease is intended to be exclusive of any
other right or remedy; and each and every right and remedy shall be cumulative
and in addition to any other right or remedy contained in this Lease. No delay
or failure by Landlord or Tenant to enforce its rights under this Lease shall be
construed as a waiver, modification or relinquishment thereof. In addition to
the other remedies provided in this Lease, Landlord and Tenant shall be
entitled, to the extent permitted by applicable law, to injunctive relief in
case of the violation or attempted or threatened violation of any of the
provisions of this Lease, or to specific performance of any of the provisions of
this Lease.
(b) Tenant hereby waives and surrenders for itself and all those
claiming under it, including creditors of all kinds, any right and privilege
which it or any of them may have under any present or future Law to redeem any
of the Leased Premises or to have a continuance of this Lease after termination
of this Lease or of Tenant's right of occupancy or possession pursuant to any
court order or any provision hereof.
(c) Landlord hereby waives any right to distrain or levy upon Trade
Fixtures or any property of Tenant and any Landlord's lien or similar lien upon
Trade Fixtures and any other property of Tenant regardless of whether such lien
is created or otherwise. Landlord agrees at the request of Tenant, to execute a
waiver of any Landlord's or similar lien for the benefit of any present or
future holder of a security interest in or lessor of any of Trade Fixtures or
any other personal property of Tenant.
(d) Landlord acknowledges and agrees in the future to acknowledge (in a
written form reasonably satisfactory to Tenant) to such persons and entities at
such times and for such purposes as Tenant may reasonably request that the Trade
Fixtures are Tenant's property and not part of the Improvements (regardless of
whether or to what extent such Trade Fixtures are affixed to the Improvements)
or otherwise subject to the terms of this Lease.
(e) Each of Tenant and Landlord (herein called "Paying Party") agrees to
pay to the other party (herein called "Demanding Party") any and all reasonable
costs and expenses incurred by the Demanding Party in connection with any
litigation or other action instituted by the Demanding Party to enforce the
obligations of the Paying Party under this Lease, to the extent that the
Demanding Party has prevailed in any such litigation or other action. Any amount
payable by Tenant to Landlord pursuant to this Paragraph 20(e) shall be due and
payable by Tenant to Landlord as Additional Rent.
36
As used in this Paragraph, "costs and expenses" shall include, without
limitation, reasonable attorneys' fees at trial, on appeal and on any petition
for review, and in any proceeding in bankruptcy, in addition to all other sums
provided by Law.
21. Notices. All notices, demands, requests, consents, approvals, offers,
-------
statements and other instruments or communications required or permitted to be
given pursuant to the provisions of this Lease (collectively "Notice" or
"Notices") shall be in writing and shall be deemed to have been given for all
purposes (i) upon receipt, or attempted delivery, after having been sent by
United States mail, by registered or certified mail, return receipt requested,
postage prepaid, addressed to the other party at its address as stated below, or
(ii) upon receipt, or attempted delivery, after having been sent by Federal
Express, United Parcel or other nationally recognized air courier service.
To the Addresses stated below:
If to Landlord:
Realty Income Corporation
Attn: Legal Department
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
If to Tenant:
c/o The Sports Authority, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Senior Vice President and General Counsel
With a separate copy to each of the following:
c/o The Sports Authority, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Senior Vice President and Treasurer
c/o The Sports Authority, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Property Administrator
37
c/o The Sports Authority, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Vice President Real Estate
If any Lender shall have advised Tenant by Notice in the manner aforesaid
that it is the holder of a Mortgage and states in said Notice its address for
the receipt of Notices, then simultaneously with the giving of any Notice by
Tenant to Landlord, Tenant shall send a copy of such Notice to Lender in the
manner aforesaid. For the purposes of this Paragraph 21, any party may
substitute its address by giving fifteen (15) days' notice to the other party in
the manner provided above. Any Notice may be given on behalf of any party by its
counsel. If Tenant shall have advised Landlord by Notice in the manner
aforesaid that it desires to have copies of Notices given by Landlord to Tenant
under this Lease to also be given to an assignee or sublessee and the address of
the assignee or sublessee is provided by Tenant to Landlord, then simultaneously
with the giving of any Notice by Landlord to Tenant, Landlord shall send a copy
of such Notice to such assignee or subtenant in the manner aforesaid.
22. Estoppel Certificates. Landlord and Tenant shall at any time and from time
---------------------
to time, upon not less than twenty (20) days' prior written request by the
other, execute, acknowledge and deliver to the other a statement in writing,
certifying (i) that this Lease is unmodified and in full effect (or, if there
have been modifications, that this Lease is in full effect as modified, setting
forth such modifications), (ii) the dates to which Basic Rent, payable hereunder
has been paid, (iii) that to the knowledge of the signer of such certificate no
default by either Landlord or Tenant exists hereunder or specifying each such
default of which the signer may have knowledge, (iv) the remaining Term hereof,
(v) with respect to a certificate signed on behalf of Tenant, that to the
knowledge of the signer of such certificate, there are no proceedings pending or
threatened against Tenant before or by any court or administrative agency which
if adversely decided would materially and adversely affect the financial
condition and operations of Tenant or if any such proceedings are pending or
threatened to said signer's knowledge, specifying and describing the same, and
(vi) such other matters as may reasonably be requested by the party requesting
the certificate. It is intended that any such statements may be relied upon by
Lender, the recipient of such statements or their assignees or by any
prospective purchaser, assignee or subtenant of the Leased Premises.
23. Surrender and Holding Over.
--------------------------
(a) Upon the expiration or earlier termination of this Lease, Tenant shall
peaceably leave and surrender the Leased Premises (except as to any portion
thereof with respect to which this Lease has previously terminated) together
with all Alterations in existence at the time of the expiration or earlier
termination of this Lease, and in good condition and repair (except as otherwise
permitted herein), normal wear and tear excepted, broom clean, and shall
surrender all keys for the Leased Premises to Landlord. Tenant shall remove from
the Leased Premises on or prior to such expiration or earlier termination the
Trade Fixtures and personal property which is owned by Tenant or third parties
other than Landlord, and Tenant at its expense shall, on or prior to such
expiration or earlier
38
Termination, repair any damage caused by such removal. Trade Fixtures and
personal property not so removed at the end of the Term or within thirty (30)
days after the earlier termination of the Term for any reason whatsoever shall
become the property of Landlord, and Landlord may thereafter cause such property
to be removed from the Leased Premises. The reasonable cost of removing and
disposing of such property and repairing any damage to any of the Leased
Premises caused by such removal shall be borne by Tenant. Landlord shall not in
any manner or to any extent be obligated to reimburse Tenant for any property,
which becomes the property of Landlord as a result of such expiration or earlier
termination.
(b) Any holding over by Tenant of the Leased Premises after the expiration
or earlier termination of the Term of this Lease or any extensions thereof, with
the consent of Landlord, shall operate and be construed as tenancy from month to
month only, at one hundred fifty percent (150%) of the Basic Rent reserved
herein and upon the same terms and conditions as contained in this Lease.
Notwithstanding the foregoing, any holding over without Landlord's consent shall
entitle Landlord, in addition to collecting Basic Rent at a rate of one hundred
fifty percent (150%) thereof, to exercise all rights and remedies provided by
law or in equity, including the remedies of Paragraph 19.
24. No Merger of Title. There shall be no merger of this Lease nor of the
------------------
leasehold estate created by this Lease with the fee estate in or ownership of
any of the Leased Premises by reason of the fact that the same person,
corporation, firm or other entity may acquire or hold or own, directly or
indirectly, (a) this Lease or the leasehold estate created by this Lease or any
interest in this Lease or in such leasehold estate and (b) the fee estate or
ownership of any of the Leased Premises or any interest in such fee estate or
ownership. No such merger shall occur unless and until all persons,
corporations, firms and other entities having any interest in (i) this Lease or
the leasehold estate created by this Lease and (ii) the fee estate in or
ownership of the Leased Premises or any part thereof sought to be merged shall
join in a written instrument effecting such merger and shall duly record the
same.
25. Definition of Landlord.
----------------------
(a) Anything contained herein to the contrary notwithstanding, any claim
based on or in respect of any liability of Landlord under this Lease shall be
enforced only against the Landlord's interest in the Leased Premises, the rents
and income from this Lease, any condemnation or insurance proceeds payable in
connection with the Leased Premises, and proceeds from the sale of the Leased
Premises, and shall not be enforced against the Landlord individually or
personally.
(b) The term "Landlord" as used in this Lease so far as covenants or
obligations on the part of Landlord are concerned, shall be limited to mean and
include only the owner or owners of the Leased Premises or holder of the
Mortgage in possession at the time in question of the Leased Premises and in the
event of any transfer or transfers of the title of the Leased Premises, the
Landlord herein named (and in case of any subsequent transfers or conveyances,
the then grantor) shall be automatically freed and relieved from and after the
date of such transfer and conveyance of all personal liability as respects the
performance of any covenants or obligations on the part of Landlord
39
contained in this Lease thereafter to be performed provided that upon or
promptly after any such transfer by Landlord (excluding a transfer that may
occur through or under threat of foreclosure), Landlord shall deliver to Tenant
a copy of a fully executed assumption agreement whereby the transferee assumes,
subject to the limitations in Paragraph 25(a), Landlord's obligations and
liabilities under the Lease from and after the date of transfer. Tenant shall be
under no obligation to pay Basic Rent, Additional Rent or any other sums due and
payable pursuant to the provisions of this Lease to the transferee and Tenant
shall be under no obligation to amend any insurance certificates to name the
transferee (and its mortgagee, as applicable) until Tenant receives written
notice of such transfer from Landlord (together with a copy of the fully
executed assumption agreement, if required above) and notice from the transferee
(i) that it has succeeded to the interest of Landlord, (ii) of the new address
for the remittance of monetary payments and (iii) of the notice address for the
transferee. The notice shall be provided to Tenant at least ten (10) days prior
to the Tenant having any obligation to pay Basic Rent, Additional Rent or any
other sums due and payable pursuant to the provisions of this Lease to such
transferee and at least fifteen (15) days prior to Tenant having any obligation
to amend such insurance certificates to name such transferee (and its mortgagee,
as applicable).
26. Hazardous Substances.
--------------------
(a) Tenant agrees that it will not on, about, or under the Leased Premises,
make, release, treat or dispose of any "hazardous substances" as that term is
defined in the Comprehensive Environmental Response, Compensation and Liability
Act, and the rules and regulations promulgated pursuant thereto, as from time to
time amended, 42 U.S.C. (S) 9601 et seq. (the "Act"); but the foregoing shall
not prevent the use of any hazardous substances in accordance with applicable
Laws and regulations. Tenant represents and warrants that it will at all times
comply with the Act and any other federal, state or local Laws, rules or
regulations governing "Hazardous Materials". "Hazardous Materials" as used
herein shall mean all chemicals, petroleum, crude oil or any fraction thereof,
hydrocarbons, polychlorinated biphenyls (PCBs), asbestos, asbestos-containing
materials and/or products, urea formaldehyde, or any substances which are
classified as "hazardous" or "toxic" under the Act; hazardous waste as defined
under the Solid Waste Disposal Act, as amended 42 U.S.C. (S) 6901 et seq.; air
pollutants regulated under the Clean Air Act, as amended, 42 U.S.C. (S) 7401, et
seq.; pollutants as defined under the Clean Water Act, as amended, 33 U.S.C. (S)
1251, et seq., any pesticide as defined by Federal Insecticide, Fungicide, and
Rodenticide Act, as amended, 7 U.S.C. (S) 136, et seq., any hazardous chemical
substance or mixture or imminently hazardous substance or mixture regulated by
the Toxic Substances Control Act, as amended, 15 U.S.C. (S) 2601, et Seq., any
substance listed in the United States Department of Transportation Table at 45
CFR l72.101; any chemicals included in regulations promulgated under the above
listed statutes; any explosives, radioactive material, and any chemical or other
substance regulated by federal, state or local statutes similar to the federal
statutes listed above and regulations promulgated under such federal, state or
local statutes.
(b) To the extent required by the Act and/or any federal, state or local
Laws, rules or regulations governing Hazardous Materials, Tenant shall remove
any hazardous substances (as
40
defined in the Act) and Hazardous Materials (as defined above) whether now or
hereafter existing on the Leased Premises arising out of or in any manner
connected with Tenant's occupancy of the Leased Premises during the Term. In
addition to, and without limiting Paragraph 10 of this Lease Tenant shall and
hereby does agree to defend, indemnify and hold Lender and Landlord, their
officers, directors, shareholders, partners, beneficial owners, trustees,
members, managers and employees, harmless from and against any and all causes of
actions, suits, demands or judgments of any nature whatsoever, losses, damages,
penalties, expenses, fees, claims, costs (including response and remedial
costs), and liabilities, including, but not limited to, reasonable attorneys'
fees and costs of litigation, arising out of the use of or operations in the
Leased Premises by Tenant or anyone occupying or using the Leased Premises
during the Term and in any manner connected with (i) the violation of any
applicable federal, state or local environmental Law with respect to the Leased
Premises by Tenant or any other person or entity occupying or using the Leased
Premises during the Term; (ii) the "release" or "threatened release" during the
Term by Tenant, its agents, invitees, employees, contractors, subcontractors,
licensees, or anyone occupying or using the Leased Premises or failure to
remove, as required by this Paragraph 26, "hazardous substances" (as defined in
the Act) and Hazardous Materials (as defined above) at or from the Leased
Premises or any portion or portions thereof released by such persons during the
Term.
(c) Tenant agrees that it will not install any underground storage tank at
the Leased Premises without specific, prior written approval from the Landlord
and Lender. Tenant agrees that it will not store combustible or flammable
materials on the Leased Premises in violation of the Act or any other federal,
state or local Laws, rules or regulations governing Hazardous Materials.
27. Entry by Landlord. Landlord and its authorized representatives shall have
-----------------
the right upon reasonable notice (which shall be not less than two (2) business
days except in the case of emergency) to enter the Leased Premises at all
reasonable business hours (and at all other times in the event of an emergency):
(a) for the purpose of inspecting the same or for the purpose of doing any work
under Paragraph 11(c), and may take all such action thereon as may be necessary
or appropriate for any such purpose (but nothing contained in this Lease or
otherwise shall create or imply any duty upon the part of Landlord to make any
such inspection or do any such work), and (b) for the purpose of showing the
Leased Premises to prospective purchasers and mortgagees and, at any time within
six (6) months prior to the expiration of the Term of this Lease for the purpose
of showing the same to prospective tenants. No such entry shall constitute an
eviction of Tenant but any such entry shall be done by Landlord in such
reasonable manner as to minimize any disruption of Tenant's business operation.
28. Financial Information and Statements.
------------------------------------
(a) Landlord and Lender may obtain copies of the Forms 10Q and 10K of
Tenant when filed with the Securities and Exchange Commission (the "SEC"). Upon
the request of Landlord or Lender, Tenant will submit to Lender copies of Forms
10Q and 10K of Tenant within thirty (30) days after filing with the SEC. If at
any time Tenant is no longer a public company, upon the request of Landlord or
Lender, Tenant shall submit to Lender or its designee an annual financial
statement
41
within one hundred twenty (120) days following the close of each fiscal year;
provided, however, that the Lender or its designee must maintain the
confidentiality of such financial statements and the information contained
therein.
(b) During the period of time during Term of this Lease in which the
Leased Premises are owned by Realty Income Corporation or an affiliate or
subsidiary thereof ("Realty Income"), Tenant shall provide to Realty Income a
summary profit and loss statement (in substantially the same form as delivered
by Tenant to Realty Income prior to the Commencement Date) pertaining to the
retail sales operations conducted by Tenant on the Leased Premises for the prior
year. Such statement shall be provided by Tenant to Realty Income prior to the
latter to occur of (a) thirty (30) days after Realty Income's written request,
or (b) one hundred twenty (120) days after the end of the relevant calendar
year. The obligation of Tenant under this Paragraph 28(b) shall automatically
terminate at such time as Realty Income no longer owns the Leased Premises.
Realty Income agrees to keep the summary profit and loss statements delivered by
Tenant pursuant the foregoing provisions in strictest confidence.
29. No Usury. The intention of the parties being to conform strictly to the
--------
applicable usury laws, whenever any provision herein provides for payment by
Tenant to Landlord of interest at a rate in excess of the legal rate permitted
to be charged, such rate herein provided to be paid shall be deemed reduced to
such legal rate.
30. Separability. Each and every covenant and agreement contained in this
------------
Lease is, and shall be construed to be, a separate and independent covenant and
agreement, and the breach of any such covenant or agreement by Landlord shall
not discharge or relieve Tenant from its obligation to perform the same. If any
term or provision of this Lease or the application thereof to any provision of
this Lease or the application thereof to any person or circumstances shall to
any extent be invalid and unenforceable, the remainder of this Lease, or the
application of such term or provision to person or circumstances other than
those as to which it is invalid or unenforceable, shall not be affected thereby,
and each term and provision of this Lease shall be valid and shall be enforced
to the extent permitted by law.
31. Miscellaneous.
-------------
(a) The paragraph headings in this Lease are used only for convenience in
finding the subject matters and are not part of this Lease or to be used in
determining the intent of the parties or otherwise interpreting this Lease.
(b) As used in this Lease the singular shall include the plural as the
context requires and the following words and phrases shall have the following
meanings: (i) "including" shall mean "including but not limited to"; (ii)
"provisions" shall mean "provisions, terms, agreements, covenants and/or
conditions"; (iii) "lien" shall mean "lien, charge, encumbrance, title retention
agreement, pledge, security interest, mortgage and/or deed of trust"; and (iv)
"obligation" shall mean "obligation, duty, agreement, liability, covenant or
condition".
42
(c) Any act which, Landlord is permitted to perform under this Lease, may
be performed at any time and from time to time by Landlord or any person or
entity designated by Landlord. Any act, which, Tenant is required to perform
under this Lease, shall be performed at Tenant's sole cost and expense.
(d) This Lease may be modified, amended, discharged or waived only by an
agreement in writing signed by the party against whom enforcement of any such
modification, amendment, discharge or waiver is sought.
(e) The covenants of this Lease shall run with the Land and bind Tenant,
the successors and assigns of Tenant and all present and subsequent
encumbrancers and subtenants of any of the Leased Premises, and shall inure to
the benefit of and bind Landlord, its successors and assigns.
(f) This Lease will be simultaneously executed in several counterparts,
each of which when so executed and delivered shall constitute an original, fully
enforceable counterpart for all purposes.
(g) This Lease shall be governed by and construed according to the laws of
the State in which the Leased Premises is located. If the Leased Premises are
located in the State of Virginia, this Lease Agreement is hereby termed a "Deed
of Lease," and this Lease is intended to be and shall constitute a deed of lease
in accordance with Virginia law for all purposes
(h) Wherever the consent or approval of Landlord is required hereunder,
Landlord agrees that it will not unreasonably withhold or delay such consent or
approval.
(i) Whenever used in this Lease, the term "attorneys' fees" shall include
all attorneys' fees and paralegal fees, whether any lawsuit or other proceeding
is instituted or not, and if a lawsuit or other proceeding is instituted, all
fees incurred at any level (whether before, during or after the lawsuit or
proceeding and at all appellate levels).
32. Additional Rent. The term "Additional Rent" as used herein includes all
---------------
amounts, costs, expenses, liabilities and obligations (including but not limited
to Tenant's obligation to pay any Net Awards or Purchase Price hereunder) which,
Tenant is required to pay, pursuant to the terms of this Lease other than Basic
Rent.
33. Trademarks. Landlord agrees and acknowledges that all right, title and
----------
interest in and to the trade names, trademarks and service marks "THE SPORTS
AUTHORITY" and "THE SPORTS AUTHORITY, LTD.", including any related logotypes,
designs and trade dress, any replacement or secondary marks, and the trademark
applications and registrations therefor (herein collectively, "Tenant's
Trademarks"), are the sole and exclusive property of Tenant or its licensor(s).
Landlord and anyone claiming, through or under the Landlord shall not use
Tenant's Trademarks or any trademark, service ▇▇▇▇ or trade name confusingly
similar to Tenant's Trademarks now or in the
43
future except with Tenant's prior written authorization, which Tenant may
withhold in its sole discretion. Landlord agrees not to directly or indirectly
challenge, attack or impair Tenant's right, title and interest in Tenant's
Trademarks and to always follow Tenant's instructions concerning proper use of
Tenant's Trademarks, including ceasing use as directed by Tenant if necessary.
All goodwill associated with the use of Tenant's Trademarks shall inure to the
Tenant or its licensor(s). Landlord shall not in any manner represent that it
has any ownership interest in Tenant's Trademarks and Landlord specifically
acknowledges that any use of Tenant's Trademarks permitted by Tenant shall not
create in Landlord any right, title or interest therein.
34. Signs. Subject to the provisions of any applicable REA, Tenant shall be
-----
entitled to erect any signage on the Leased Premises that is permitted by law.
Construction and/or installation of signage shall be deemed an Alteration under
this Lease. Upon the request of Tenant, Landlord shall take all such actions as
may be reasonably be requested by Tenant to insure the Tenant is entitled to the
maximum allowable signage (including, without limitation, all signage afforded
to the Leased Premises pursuant to any REA), and Landlord shall cooperate with
Tenant in obtaining all necessary approvals in connection with any such signage;
provided, however, that Tenant shall reimburse Landlord for all costs and
expenses incurred by Landlord in complying with the requirements of this
sentence.
35. Authority. Each of Landlord and Tenant represents and warrants to the
---------
other that it has not entered into any agreement or incurred or created any
obligation which might require the other to pay any broker's commission,
finder's fee or other commission or fee relating to the leasing of the Leased
Premises, and each of Landlord and Tenant shall defend, indemnify and hold
harmless the other from and against any claims for any such commissions or fees
by anyone claiming by or through the indemnifying party.
36. Complete Agreement. The terms of this Lease are intended by the parties as
------------------
a final expression of their agreement with respect to the Leased Premises and
the transaction described herein, and may not be contradicted by evidence of any
prior or contemporaneous agreement, arrangement, understanding or negotiation
(whether oral or written). This Lease constitutes the complete and exclusive
statement of its terms, and no extrinsic evidence whatsoever may be introduced
in any judicial proceeding involving this Lease. The language in all parts of
this Lease shall in all cases be construed as a whole and in accordance with its
fair meaning and shall not be construed more favorably for either party.
37. Business Days. If any payment or performance required under this Lease
-------------
shall be due, or if any time period shall end, on a day that is not a business
day, such due date or time period shall be extended to the next succeeding
business day. As used in this Lease, the term "business day" shall mean any day
that is not a Saturday, Sunday or legal holiday in Florida or in the state in
which the Leased Premises is located.
38. WAIVER OF TRIAL BY JURY. LANDLORD AND TENANT HEREBY WAIVE THE RIGHT TO A
-----------------------
TRIAL BY JURY IN CONNECTION WITH ANY LITIGATION ARISING AS A
44
RESULT OF THIS LEASE, ANY DOCUMENTS NOW OR HEREAFTER EXECUTED IN CONNECTION WITH
THIS LEASE, ANY COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR
ACTIONS OR INACTIONS OF EITHER LANDLORD OR TENANT. THE FOREGOING WAIVER IS A
MATERIAL INDUCEMENT FOR THE EXECUTION OF THIS LEASE BY TENANT.
39. No Waiver of Breach. No waiver by Landlord of any breach of any one or
-------------------
more of the terms, covenants, conditions, or agreements of this Lease shall be
deemed to imply or constitute a waiver of any succeeding or other breach.
Failure of Landlord to insist upon the strict performance of any of the terms,
conditions, covenants, and agreements of this Lease shall not constitute or be
considered as a waiver or relinquishment of Landlord's rights to subsequently
enforce any default, term, condition, covenant, or agreement, which shall all
continue in full force and effect. The rights and remedies of Landlord under
this Lease shall be cumulative and in addition to any and all other rights and
remedies which Landlord has or may have.
40. Radon Gas Notification. Radon is a naturally occurring radioactive gas
----------------------
that, when it has accumulated in a building in sufficient quantities, may
present health risks to persons who are exposed to it over time. Levels of
radon that exceed federal and state guidelines have been found in buildings in
the State of Florida. If the Leased Premises is located within the State of
Florida, additional information regarding radon and radon testing may be
obtained from the county public health unit.
[The following provision will be added to the Leases for the Fort ▇▇▇▇▇ and
Orlando properties, and the appropriate Addendum will be attached to such
Leases:
41. Addendum. Landlord and Tenant agree to terms, provisions and conditions of
--------
the Addendum attached hereto and by this reference made a part hereof, to the
same extent and with the same effect as if set forth at length in the body of
this Lease. In the event of any conflict between the Addendum and this Lease,
the terms and provisions of the Addendum shall govern and control.]
IN WITNESS WHEREOF, Landlord and Tenant have caused this instrument to be
executed under seal as of the day and year first above written.
[signature pages follow]
45
LANDLORD'S SIGNATURE PAGE
-------------------------
Attached to and made a part of Lease Agreement dated October __, 2001,
between _______________________ and THE SPORTS AUTHORITY, INC.
Sports Authority Store No.
Location:
Witnesses: LANDLORD:
________________________________
____________________________________
First Witness
By:_____________________________
____________________________________ Name:
Printed Name of First Witness Title:
____________________________________
Second Witness
____________________________________
Printed Name of Second Witness
46
TENANT'S SIGNATURE PAGE
-----------------------
Attached to and made a part of Lease Agreement dated October __, 2001,
between ________________________ and THE SPORTS AUTHORITY, INC.
Sports Authority Store No.
Location:
Witnesses: TENANT:
THE SPORTS AUTHORITY, INC., a Delaware
____________________________________ corporation
First Witness
____________________________________ By:_________________________________
Printed Name of First Witness Name:
Title:
____________________________________
Second Witness
____________________________________
Printed Name of Second Witness
47
EXHIBIT "A"
[LEGAL DESCRIPTION OF THE LAND IS ATTACHED ON THE FOLLOWING PAGES]
EXHIBIT "B"
1. Basic Rent for the first five (5) years (the first 60 full calendar months)
of the initial Term shall be at the annual rate of
___________________________________________ Dollars ($_____________), in monthly
installments of $___________, each month.
2. Basic Rent shall be increased on each Adjustment Date (as defined below),
by the lesser of (a) 10% or (b) the percentage increase, if any (but not
decrease), in the Index (as defined below) from (i) the most recent Index
available on that date which is five (5) years and three (3) months prior to
such Adjustment Date to (b) the most recent Index available on that date which
is three (3) months prior to the Adjustment Date.
"Adjustment Date" shall mean the first day of the sixth (6th) lease year
and each fifth (5th) anniversary thereafter (i.e., on the first (1st) day of the
eleventh (11th) lease year and sixteenth (16th) lease year during the initial
Term and on the first day of each Renewal Term)
"Index" shall mean the U.S. Department of Labor, Bureau of Labor
Statistics, Consumer Price Index for All Urban Consumers, U.S. City Average
1982-84=100, as published by the Bureau of Labor Statistics, United States
Department of Labor (the "Bureau") or any successor agency. In the event the
Index is no longer published at any time during the Term, Landlord shall
reasonably select (subject to Tenant's approval, which shall not be unreasonably
withheld) another index of similar nature showing changes in the cost of living
to be used to calculate the increase in the Basic Rent. In the event the Index
ceases to use the 1982-84 average of 100 as the basis of calculation or any
other significant change is made in the determination of the Index, the figures
used in making adjustments to Basic Rent shall be appropriately adjusted using,
to the extent available, any conversion information published by the Bureau.
Landlord shall notify Tenant of each adjustment to the Basic Rent by a
written statement that shall include a detailed calculation of the increase to
Basic Rent as provided in this Exhibit B. Tenant shall not be responsible for
payment of Basic Rent at the increased rate until fifteen (15) days after such
written statement is received from Landlord; however, the new Basic Rent shall
apply retroactively to the Adjustment Date once such written statement is
received by Tenant.
All capitalized terms used in this Exhibit B, unless otherwise defined
herein, shall have the meanings set forth in the Lease Agreement.
1
EXHIBIT "C"
[California]
California Provisions
I. Paragraph 13(e)
(e) The terms and provisions of this Paragraph 13 are intended to provide
for all rights and obligations of the parties to this Lease in the event of the
acquisition of all or a portion of the Leased Premises for public use as
contemplated by Section 1265.160 of the California Code of Civil Procedure.
II. Paragraph 19(c)(vii)
--------------------
There is added to the end of the first sentence of Paragraph 19(c)(vii) of Lease
the following:
". . ., including, without limitation, the remedies provided for in: (i)
California Civil Code Section 1951.2, including, without limitation, paragraph
(3) of subdivision (a) thereof; and (ii) California Civil Code Section 1951.4,
which provides, in effect, that a lessor may continue a lease in effect after
the lessee's breach and abandonment and may recover rent as it becomes due, if
the lessee has the right to sublet or assign, subject only to reasonable
limitations. Notwithstanding anything set forth herein to the contrary,
Landlord shall give such notice as may be required under California Code of
Civil Procedure Section 1161 or as may otherwise be required under California
law prior to instituting any action to recover possession of the Leased Premises
or for the appointment of a receiver to take possession of the Leased Premises
after the occurrence of any Event of Default or prior to instituting any action
for damages as a consequence of any Event of Default."
PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
EXHIBIT "C"
SAMPLE DEED
Recording requested by, and
After recording return to:
REALTY INCOME CORPORATION
ATTN: LEGAL DEPARTMENT
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
STATE OF_____________________ (S)
(S)
(S) KNOW ALL MEN BY THESE PRESENTS:
(S)
COUNTY OF____________________ (S)
THAT, ______________________________, a _______________ corporation
("Grantor"), for and in consideration of the sum of Ten Dollars ($10) and other
good and valuable consideration in hand paid to the undersigned by
_________________________, a _____________________ ("Grantee"), whose mailing
address is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, the receipt
and sufficiency of such consideration being hereby acknowledged, has GRANTED,
SOLD AND CONVEYED, and by these presents does hereby GRANT, SELL, CONVEY and
CONFIRM unto Grantee that certain real property being more particularly
described on Exhibit "A," attached hereto and made a part hereof for all
purposes, together with all improvements situated thereon (collectively, the
"Property"); subject, however to those matters described on Exhibit "B,"
attached hereto and made a part hereof for all purposes.
THE REMAINDER OF THIS PAGE WAS LEFT BLANK INTENTIONALLY.
EXHIBIT "C" - PAGE 1 OF 2 PAGES
TO HAVE AND TO HOLD the Property, together with all and singular the
rights, hereditaments, and appurtenances thereto in anywise belonging, unto
Grantee, its successors and assigns, and Grantor hereby agrees to WARRANT AND
FOREVER DEFEND all and singular the Property unto Grantee, its successors and
assigns, against every person whomsoever lawfully claiming, or claim the same,
or any part thereof, by, through, or under Grantor but not otherwise.
EXECUTED this__________day of_______,_____.
GRANTOR:
-------
______________________________,
a ____________________ corporation
___________________________ By: _______________________________
Signature of Witness
___________________________
Printed Name of Witness Printed Name: _____________________
___________________________
Signature of Witness Title: ____________________________
___________________________
Printed Name of Witness
STATE OF FLORIDA____________________)
) ss
COUNTY OF BROWARD___________________)
The foregoing instrument was acknowledged before me this _____ day of
__________, 2001, by _________________________, of _________________________, a
____________________ corporation, on behalf of the corporation. He/she
personally known to me or has produced ________________ as identification.
_______________________________________
Signature of Notary Public
_______________________________________
(Print name of notary)
AFFIX NOTARY STAMP
_______________________________________
Title or rank
_______________________________________
Serial number, if any
EXHIBIT "C" - PAGE 2 OF 2 PAGES
PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
EXHIBIT "D"
CLOSING CHECKLIST
LOCATION: _________________________
-------------------------------------------------------------------------------------------------------
ITEM RECEIVED
-------------------------------------------------------------------------------------------------------
1. Aerial Photograph
-------------------------------------------------------------------------------------------------------
2. Area/Location Map
-------------------------------------------------------------------------------------------------------
3. Area Demographics
-------------------------------------------------------------------------------------------------------
4. Copy of Existing Title Policy
-------------------------------------------------------------------------------------------------------
5. Acceptable Commitment of Title Insurance
-------------------------------------------------------------------------------------------------------
6. Copy of Seller's Vesting Deed
-------------------------------------------------------------------------------------------------------
7. Zoning Permits and Regulations
-------------------------------------------------------------------------------------------------------
8. Insurance Certificates
-------------------------------------------------------------------------------------------------------
9. Copy of Tax Statement
-------------------------------------------------------------------------------------------------------
10. Corporate Resolution
-------------------------------------------------------------------------------------------------------
11. Standard Parcel Map or Subdivision Plat
-------------------------------------------------------------------------------------------------------
12. Site Plan
-------------------------------------------------------------------------------------------------------
13. Phase I Environmental Site Assessment Report, Reliance Letter, E&O Insurance
-------------------------------------------------------------------------------------------------------
14. Project Pro Forma/Operating Profit & Loss Statement
-------------------------------------------------------------------------------------------------------
15. Final As-built Plans and Specifications
-------------------------------------------------------------------------------------------------------
16. Certified ALTA/ACSM As-Built Survey (per Buyer's Guidelines)
-------------------------------------------------------------------------------------------------------
17. MAI Leased Fee Appraisal (including Land Valuation) & Reliance Letter
-------------------------------------------------------------------------------------------------------
18. Property Condition Survey
-------------------------------------------------------------------------------------------------------
19. Certificate of Occupancy
-------------------------------------------------------------------------------------------------------
EXHIBIT "D"
PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
EXHIBIT "E"
MINIMUM REQUIREMENTS FOR ALTA/ACSM LAND TITLE SURVEYS
1. Label: The survey must be labeled as an ALTA/ACSM Land Title survey and
performed to the 1999 Minimum Standard Detail Requirements, including Table A
Optional Survey Responsibilities and Specifications - Items: 2-4, 6, 7(a),
7(b)(1), 7(c), 8, 9, 10, 11(a) and 13.
2. Legal Description and Boundary Lines: A full metes and bounds legal
----------------
description must be shown on the face of the survey and when at all possible the
bearings and distances along the boundary lines should agree with the deed
contained in the provided title commitment. All bearings should be shown in a
clockwise manner.
3. Title Commitment Exceptions: Show the location, size, description and
recorded references to book and page of all easements and other survey related
matters as cited in the Schedule B - Exceptions section of the title commitment.
List all exceptions and denote whether they affect or do not affect the subject
property. For those that affect, but cannot be plotted, or for those that are
blanket in nature and cannot be plotted - so state on the face of the survey.
4. Appurtenant Easements/Parcels: Appurtenant easements are to be incorporated
into the legal descriptions as easement parcels and plotted on the face of the
survey.
5. Encroachments: Include a note section that identifies all observed
encroachments and plot on the face of the survey.
6. Improvements: Location of all buildings and all surface/surrounding
improvements. Include a five (5)-foot overlap of all boundary lines.
7. Square Footage: Show the square footage of each building and the land.
8. Utilities: Location of all observable utilities, whether on the surface or
overhead (wires, cables, manholes, drains, valves, etc.). Include a five (5)-
foot overlap of all boundary lines.
9. Access ways: Location of all parking areas, curb cuts/lines and driveways.
If spaces are striped, show the striping and a count on the number of regular,
as well as handicap or other types of spaces, as observed.
10. Vicinity Map: Vicinity map showing the subject site and the surrounding
area. Show at least one (1) major intersection. Include a north arrow.
11. Legend: Show all symbols and abbreviations used.
12. Flood Zone: Show the zone designation, map reference and date, whether the
subject property lies wholly or partially within a Special Flood Hazard Area,
and what the zone designation represents.
EXHIBIT "E" - PAGE 1 OF 2 PAGES
13. Zoning: Zoning designation and description. Where possible, cite the
front, side and rear yard restrictions, along with any other restrictions as
found in local zoning or building codes. Also, show maximum building height and
any required parking space data.
14. No Loan: No references are to be made as to loan purposes (e.g., "this
survey for loan purposes only").
15. Signature: Affix Surveyor Signature, registration number, state, official
seal and date to the face of the survey.
16. Certification: Certification language is to begin with certifying to:
Realty Income Corporation (or assigns), the appropriate Title Company providing
the title commitment and others as required. Certification shall be as follows:
I HEREBY CERTIFY TO: REALTY INCOME CORPORATION, THE SPORTS AUTHORITY, INC. AND
FIRST AMERICAN TITLE INSURANCE COMPANY THAT THIS MAP OR PLAT AND THE SURVEY ON
WHICH IT IS BASED WERE MADE IN ACCORDANCE WITH "MINIMUM STANDARD DETAIL
REQUIREMENTS FOR ALTA/ACSM LAND TITLE SURVEYS" JOINTLY ESTABLISHED AND ADOPTED
BY ALTA, ACSM AND NSPS IN 1999, AND INCLUDES ITEMS 2-4, 6, 7(a), 7(b)(1), 7(c),
8, 9, 10, 11(a), and 13 OF TABLE A THEREOF. PURSUANT TO THE ACCURACY STANDARDS
AS ADOPTED BY ALTA, NSPS AND ACSM AND IN EFFECT ON THE DATE OF THIS
CERTIFICATION, THE UNDERSIGNED FURTHER CERTIFIES THAT PROPER FIELD PROCEDURES,
INSTRUMENTATION, AND ADEQUATE SURVEY PERSONNEL WERE EMPLOYED IN ORDER TO ACHIEVE
RESULTS COMPARABLE TO THOSE OUTLINED IN THE MINIMUM ANGLE, DISTANCE, AND CLOSURE
REQUIREMENTS FOR SURVEY MEASUREMENTS WHICH CONTROL LAND BOUNDARIES FOR ALTA/ACSM
LAND TITLE SURVEYS.
EXHIBIT "E" - PAGE 2 OF 2 PAGES