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EXHIBIT 10.38
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
SHOPPING CENTER LEASE
by and between
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By and through its Agent
TERRANOMICS RETAIL SERVICES, INC.
"Landlord"
and
FIESTA RESTAURANTS, INC., d/b/a
CASA OLE RESTAURANT AND CANTINA
"Tenant"
November 7, 1996
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TABLE OF CONTENTS
1. BASIC LEASE PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. LEASE TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4. COMMENCEMENT OF LEASE TERM . . . . . . . . . . . . . . . . . . . . . . . 4
5. FAILURE TO DO BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . 4
6. FIXED MINIMUM RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
7. PERCENTAGE RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
8. DEFINITION OF "GROSS SALES . . . . . . . . . . . . . . . . . . . . . . . 6
9. BOOKS AND RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
10. REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
11. AUDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
12. ADDITIONAL RENT AND ADJUSTMENTS. . . . . . . . . . . . . . . . . . . . . 8
13. PAST DUE RENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
14. PLACE OF PAYMENTS AND ESTIMATES. . . . . . . . . . . . . . . . . . . . . 8
15. ADVANCE RENT AND SECURITY DEPOSIT . . . . . . . . . . . . . . . . . . . . 9
16. FINANCING: [INTENTIONALLY DELETED] . . . . . . . . . . . . . . . . . . . 9
17. CANCELLATION: [INTENTIONALLY DELETED] . . . . . . . . . . . . . . . . . . 9
18. CONDITION OF PREMISES. . . . . . . . . . . . . . . . . . . . . . . . . . 9
19. OWNERSHIP OF IMPROVEMENTS . . . . . . . . . . . . . . . . . . . . . . . . 10
20. TENANT'S INSTALLATIONS . . . . . . . . . . . . . . . . . . . . . . . . . 10
21. PERMITTED USE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
22. OPERATION OF BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . . . 11
23. LAWS, WASTE OR NUISANCE . . . . . . . . . . . . . . . . . . . . . . . . 11
24. HAZARDOUS MATERIALS... . . . . . . . . . . . . . . . . . . . . . . . . . 12
25. COMPETITION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
26. CONCESSIONAIRES AND LICENSEES... . . . . . . . . . . . . . . . . . . . . 13
27. SIGNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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28. ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . . . . . . . . . 14
29. REPAIRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
30. TENANT'S FAILURE TO REPAIR . . . . . . . . . . . . . . . . . . . . . . . 17
31. COVENANT AGAINST LIENS . . . . . . . . . . . . . . . . . . . . . . . . . 17
32. UTILITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
33. TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
34. COMMON AREAS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
35. COST OF MAINTENANCE OF COMMON AREAS . . . . . . . . . . . . . . . . . . . 22
36. PROMOTION OF CENTER AND TENANT'S BUSINESS . . . . . . . . . . . . . . . . 25
(a) Promotional Fund . . . . . . . . . . . . . . . . . . . . . . . . . . 25
(b) Merchants' Association . . . . . . . . . . . . . . . . . . . . . . . 25
(c) Media Fund, Joint Advertising . . . . . . . . . . . . . . . . . . . . 25
(d) Payments, Increases, and Unused Funds . . . . . . . . . . . . . . . . 25
(e) Tenant Advertising . . . . . . . . . . . . . . . . . . . . . . . . . 26
(f) Landlord's Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 26
37. INDEMNITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
38. FIRE INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(a) BY LANDLORD.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(b) BY TENANT.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(c) WAIVER OF SUBROGATION... . . . . . . . . . . . . . . . . . . . . . . 28
(d) TENANT'S ADDITIONAL INSURANCE . . . . . . . . . . . . . . . . . . . . 28
39. INSURANCE REQUIREMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 28
40. PAYMENT OF INSURANCE PREMIUMS . . . . . . . . . . . . . . . . . . . . . . 29
41. DESTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
42. CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
43. BANKRUPTCY-INSOLVENCY . . . . . . . . . . . . . . . . . . . . . . . . . . 32
44. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
45. LANDLORD'S LIEN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
46. ACCESS TO PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
47. EXCAVATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
48. SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
49. ATTORNMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
50. ATTORNEY-IN-FACT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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51. QUIET ENJOYMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
52. UNAVOIDABLE DELAYS . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
53. SURRENDER OF PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . 39
54. HOLDING OVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
55. RELATIONSHIP OF PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . 39
56. NO WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
57. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
58. RECORDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
59. PARTIAL INVALIDITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
60. BROKER'S COMMISSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 40
61. DEFINITION OF LAW(S) . . . . . . . . . . . . . . . . . . . . . . . . . . 40
62. PROVISIONS BINDING . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
63. ENTIRE AGREEMENT, ETC . . . . . . . . . . . . . . . . . . . . . . . . . . 40
64. WAIVER OF LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
65. TENANT STATUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
66. DELETIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
67. RULES AND REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 42
68. COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
69. SPECIAL STIPULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 42
EXHIBIT "A" SITE PLAN
EXHIBIT "A-1" DESCRIPTION OF SHOPPING CENTER LAND
EXHIBIT "A-1"- PART 2 DESCRIPTION OF LANDLORD'S SITE
EXHIBIT "B" DESCRIPTION OF TENANT'S WORK AND WORK TO BE
PERFORMED BY LANDLORD IN THE PREMISES
EXHIBIT "C" RULES
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SHOPPING CENTER LEASE
THIS LEASE made as of the 7 day of November, 1996, between THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA ("Landlord"), a New Jersey
corporation, by and through its agent, TERRANOMICS RETAIL SERVICES, INC.,
having a place of business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and FIESTA RESTAURANTS, INC., d/b/a Casa Ole Restaurant and Cantina
("Tenant"), a Texas corporation whose principal place of business is located
at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
BASIC PROVISIONS
1. BASIC LEASE PROVISIONS:
A. Tenant's Tradename: Casa Ole Restaurant and Cantina
B. Shopping Center: Greenspoint Mall which is more
particularly described on Exhibit "B"
attached hereto and by this reference
made a part hereof
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
C. Premises: Space No. 263 at the Shopping Center,
consisting of approximately 5,973
rentable square feet, the approximate
location of which is shown cross-
hatched on Exhibit "A" hereto. (See
Par. 2)
D. Lease Term: (See Par. 3 and Par. 4) Seven (7)
years
The Lease Term shall commence upon
the Commencement Date. If the
Commencement Date is any day other
than the first day of a calendar
month, the first lease year shall be
the period of time from the
Commencement Date through January 31;
each lease year thereafter shall
be a successive period of twelve (12)
calendar months beginning on February
1, and expiring on January 31
(hereinafter referred to as "Lease
Year").
E. Commencement Date: (i) October 1, 1996, or (ii) the date
upon which Tenant opens the Premises
for business to the public, whichever
shall first occur.
F. Expiration Date: January 31, 2004
G. Permitted Use: The operation of a Mexican Food sit
down restaurant, including the sale
of alcoholic beverages and for no
other use or purpose whatsoever.
H. Fixed Minimum Rent (See Par. 6)
Rent Period Monthly Amount Annual Amount
----------- -------------- -------------
(a) Commencement Date Through
Lease Year 3 $5,113.51 $61,362.12
(b) Years 4 - Expiration Date $5,624.86 $67,498.33
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1. Percentage Rent:
Period Amount Each Lease Year
------ ----------------------
Commencement Date through Expiration Date Six percent (6%) of
Annual Gross Sales
over $1,073,837.10
Prorations of Breakpoints for Partial Lease Years, and prorations for
Lease Years containing two different Breakpoints for different periods,
shall be as described in Par. 7
J. Initial Estimated Annual Operating Costs: $7.93 psf (See Par. 35)
K. Initial Estimated Annual Taxes: $4.61 psf (See Par. 33)
L. Initial Annual Promotion Fund Charge: $2.00 psf (See Par. 36)
M. Media Fund: $1.75 (See Par. 36[c])
N. Initial Annual Sprinkler Main Charge: $0.10 psf (See Par.
32(d))
O. Trash Charge: $0.25 psf (See Par. 32)
P. Food Court Charge: (See Food Court Tenant Addendum)
Water, Storm and Sewer (Submetered)
Seating Area Maintenance Cost N/A
Grease Trap Cleaning N/A
Q. Security Deposit: N/A
R. Radius Restriction: Six (6) miles from the Shopping Center
S. Guarantor: N/A
T. Rent Payment Address: Tenant shall forward all rent to Landlord at
the following address, or such other address
or addresses as to which Landlord shall
provide advance notice: ▇.▇. ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. Tenant shall
forward all insurance certificates and gross
sales reports to Landlord at the following
address, or such other address or addresses
as to which Landlord shall provide advance
notice: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇.
U. Rent Shall Be Payable To: Terranomics Retail Services, Inc., or such
other entity as Landlord shall designate
from time to time in writing.
V. Advance Rent: N/A
2. PREMISES: (a) Landlord does hereby lease to Tenant and Tenant does
hereby lease from Landlord those certain premises constituting a part of a
shopping center development hereafter to be erected, or presently erected,
whichever the case may be, now known as the Greenspoint Mall (the "Shopping
Center"), situated in Houston, Texas, which premises are more particularly
identified on Exhibit "A" attached to this Lease and made a part hereof.
Frontage of the Premises shall be measured from the center of partition to
center of partition except in the event the Premises or any part thereof is an
end space, said measurement shall include the full width of end walls; and the
Gross Leasable Area ("GLA") of the Premises shall be measured from the
exterior faces of the walls (outside dimensions) or if the Premises or any
part thereof are not surrounded by walls, then the space within and up to the
lease lines of the Premises as shown on Exhibit "A" shall be included in the
computation (store fronts shall not be deemed ▇▇▇▇▇); and in computing the GLA
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of the Premises no deduction or exclusion shall be made from areas or space
otherwise computed by reason of any installations, interior partitions,
mezzanines, basements or other interior construction or equipment (all
hereinafter collectively called the "Premises"). If Tenant at any time
constructs a mezzanine in the Premises, then the GLA of the Premises mentioned
herein shall be increased in an amount equal to the square footage of such
mezzanine; and, the rents and other charges reserved hereunder shall be
proportionately adjusted. Prior to the commencement of the construction of any
such mezzanine, Landlord and Tenant shall execute an amendment to this Lease
confirming such adjustments. No mezzanines shall be permitted in stores located
on the upper level of a two (2) level mall.
(b) Whenever reference in this Lease is made to the "Shopping Center"
it is understood to mean only that portion of the property owned by Landlord or
controlled by Landlord under a leasehold interest or reciprocal operating
agreement. The Shopping Center's GLA shall equal the aggregate amount of the
gross leasable areas of all premises in the Shopping Center as same may be
modified, altered, expanded or reduced from time to time, excluding the GLA of
Department Stores and any noncontiguous storage areas, mezzanines, basements or
kiosks, community rooms, and space donated to government agencies. The term
"Department Stores" shall mean any store, other than a supermarket, which
occupies 25,000 square feet or more and the respective sublessees, successors
and assigns of such stores.
(c) The location and boundaries of the Premises is outlined on
diagrams of the Shopping Center which are marked Exhibit "A" attached to this
Lease, and made a part hereof. Exhibit "A" shows the general layout of the
Shopping Center, certain proposed Department Stores adjoining the Shopping
Center and other tenants, but shall not be deemed to be a warranty,
representation or agreement on the part of Landlord that said Shopping Center or
said Department Stores and/or any additional or different Department Stores or
other tenants will be as shown on Exhibit "A" or will, in fact, occupy stores in
the Shopping Center. Landlord reserves the right without any liability to Tenant
and without detracting from the agreement of the parties that the location of
the Premises is fixed and determined; (i) to shift the location of the Premises
along the enclosed mall a distance within but not in excess of thirty (30) feet
in either direction by Landlord giving to Tenant a twenty (20) day notice in
writing at any time prior to the Delivery of Possession Date of the Premises;
(ii) to increase, reduce or change the number, size, height, layout or locations
of the buildings, walks, parking and/or other common areas and facilities now or
at any time hereafter forming a part of the Shopping Center; and (iii) to make
alterations or additions to, and to build additional stories on the buildings of
which the Premises forms a part, and to add buildings adjoining the same or
elsewhere in the Shopping Center. Landlord also reserves the right to relocate
the Premises upon not less than six (6) months notice to Tenant, if Landlord
effects an expansion or renovation of the Shopping Center. Such relocation shall
be at the sole cost and expense of the Landlord. In the event Tenant declines to
accept the substituted premises, this Lease shall terminate at the expiration of
the six (6) month notice period or at such earlier date agreed upon by Landlord
and Tenant.
(d) Tenant's right to use and occupy the Premises during the Lease
Term shall include a license to use the common areas and facilities of the
Shopping Center as defined in this Lease in common with others.
(e) Nothing contained in this Lease shall be construed as a
conveyance by Landlord to Tenant of the roof or exterior walls of the building
of which the Premises forms a part, of the space above the Premises and below
the underside of the roof slab, of the land below the sub-base of or air rights
above the Premises, or of the common areas and facilities of the Shopping
Center. Landlord also reserves the right to install, maintain, use, repair and
replace pipes, duct work, conduits, utility lines and wires through hung
ceiling space, column space, and partitions, in or beneath the floor slab or
above or below the Premises and serving the Premises or other parts of the
Shopping Center, except that Landlord shall not unreasonably interfere with or
interrupt the business operations of Tenant within the Premises, and except
where necessary as determined by Landlord's architect, no pipes, conduits,
utility lines or wires installed by Landlord shall be exposed in the sales area
of the Premises.
3. LEASE TERM: To have and to hold the Premises for the period set forth in
Paragraph 1(D) of this Lease unless sooner terminated or extended as
hereinafter provided.
4. COMMENCEMENT OF LEASE TERM: (a) The Commencement Date of the Lease Term
shall be the date set forth in Paragraph 1(E) of this Lease. If Paragraph 1(E)
does not provide for a fixed
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Commencement Date, then the Lease Term shall commence upon the earlier of the
following dates; (i) thirty (30) days following the date Landlord has notified
Tenant that the Premises are ready for Tenant's work to commence in accordance
with Section (d) of Paragraph 5; or (ii) the date on which Tenant shall open
the Premises for business. However, Tenant agrees to cooperate with Landlord to
effect a joint opening or reopening of the Shopping Center (where the Shopping
Center is not yet open to the public or a grand reopening is planned following
renovation of the Shopping Center), and, at Landlord's request, agrees to delay
the opening of Tenant's business in the Premises (and to delay the Commencement
Date hereof) from the date Tenant otherwise would have been required to open
for business under the provisions of this Lease. If Landlord requests such a
delay, then the Commencement Date shall be the date set by Landlord for such
joint opening or reopening ("Grand Opening") of the Shopping Center. Landlord
shall not be responsible or liable to Tenant or those claiming by, through or
under Tenant for loss or damages caused by or resulting from a delayed joint
opening of the Shopping Center.
(b) When the Commencement Date is determined, Tenant agrees, upon
request of Landlord, to execute and deliver to Landlord, without charge, a
certificate: (1) ratifying this Lease; (2) confirming the commencement and
expiration dates of the Lease Term; (3) certifying that Tenant is in occupancy
of the Premises, the date Tenant commenced operating Tenant's business therein
and that this Lease is in full force and effect and has not been assigned,
modified, supplemented or amended, except by such writings as shall be stated;
(4) that all conditions under this Lease to be performed by the Landlord have
been satisfied, except such as shall be stated; (5) that there are no defenses
or offsets against the enforcement of this Lease by Landlord, or stating those
claimed by Tenant; (6) reciting the amount of advance rental, if any, paid by
Tenant and the date to which rental has been paid; and (7) reciting the amount
of Security Deposit, if any. Tenant further agrees to execute and deliver
similar certificates from time to time when requested by Landlord, Landlord's
mortgage lenders, ground or underlying lessors and/or purchasers, and each of
such parties shall be entitled to rely upon such certificates made by Tenant.
5. FAILURE TO DO BUSINESS: The parties covenant and agree that because of
the difficulty or impossibility of determining Landlord's damages by way of
loss of the anticipated Percentage Rent from Tenant or other tenants or
occupants in or adjoining the Shopping Center, or by way of loss of value in
the property because of diminished saleability or mortgageability or adverse
publicity or appearance by Tenant's actions, should Tenant (a) subject to
Paragraphs 4 and 52 hereof, fail to take possession and open for business in
the Premises fully fixtured, stocked and staffed on the Commencement Date of
the Lease Term, or (b) vacate, abandon or desert the Premises; or (c) cease
operating or conducting Tenant's business in the Premises (except where the
Premises are made untenantable by reason of fire, casualty, permitted repairs
or alterations or other causes beyond Tenant's control mentioned in Paragraph
51 hereof), or (d) fail or refuse to maintain business hours on such days or
nights or any part thereof as provided in Paragraph 22 hereof, then and in any
such event (hereinafter collectively referred to as "failure to do business"),
Landlord shall have the right to collect not only Fixed Minimum Rent and other
rents and charges herein reserved, but also Additional Rent equal to one-
quarter (1/4) of the Fixed Minimum Rent reserved for the period of the Tenant's
failure to do business, computed at a monthly rate for each and every month or
part thereof during such period; and such Additional Rent shall be deemed to be
liquidated damages instead of any Percentage Rent that might have been payable
to Landlord for such period. As used herein the terms "vacate," "abandon" or
"desert" shall not be avoided because Tenant may have left all or any part of
its trade fixtures or other personal property in the Premises.
6. FIXED MINIMUM RENT: Tenant agrees to pay to Landlord during the Lease
Term, without any prior demand therefor and without any setoffs or deductions
whatsoever, the Fixed Minimum Rent, payable in equal monthly installments, in
advance, on the first day of each and every calendar month throughout the Lease
Term.
7. PERCENTAGE RENT: (a) In addition to the Fixed Minimum Rent, Tenant
agrees to pay to Landlord, as additional rent (hereinafter referred to as
"Percentage Rent") for each Lease Year or partial
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Lease Year, a sum equal to the amount of Tenant's Gross Sales in excess of the
Breakpoint multiplied by the Percentage Rent Rate payable as provided in
subsection (b) of this Paragraph 7.
(b) Percentage Rent shall be determined and paid, without any prior
demand therefor, on a monthly basis commencing with the first month in each
Lease Year in which Tenant's Gross Sales for such Lease Year exceed the
applicable Breakpoint. Such payments shall be made on or before the fifteenth
(15th) day of each calendar month with respect to Gross Sales made during each
preceding month as set forth in Paragraph 1(I) of this Lease.
(c) If the Fixed Minimum Rent shall be abated or reduced as a result
of any event mentioned under this Lease, then the amount of the Breakpoint
shall be appropriately reduced in an amount equal to the percentage of decrease
in the Fixed Minimum Rent.
8. DEFINITION OF "GROSS SALES": (a) The phrase "Gross Sales," shall mean
the dollar total of (i) the entire amount of the price charged for all goods,
wares and merchandise sold, leased, licensed or delivered, and all charges for
all services sold or performed by Tenant from all business conducted at, upon
or from the Premises by Tenant, whether made for cash, by check, on credit,
charge accounts or otherwise, without reserve or deduction for inability or
failure to collect the same, including, but not limited to, transactions: (1)
where the orders therefor originate at or are accepted by Tenant in the
Premises, but delivery or performance thereof is made from or at any other
place; all sales made and orders received in or at the Premises shall be deemed
as made and completed therein, even though the payment of account may be
transferred to another office for collection, and all orders which result from
solicitation off the Premises but which are conducted by personnel operating
from or reporting to or under the control or supervision of any employee of
Tenant employed at the Premises shall be deemed part of Gross Sales; (2)
pursuant to mail, telephone, telegraph or other similar orders received or
billed at or from the Premises; (3) by means of mechanical or other vending
devices; (4) originating from whatever source, and which Tenant in the normal
and customary course of Tenant's operations would credit or attribute to
Tenant's business conducted in the
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Premises, and (ii) all monies or other things of value received by Tenant from
Tenant's operations at, upon or from the Premises which are neither included in
nor excluded from Gross Sales by the other provisions of this definition but
without any duplication, including, without limitation, finance charges, price
of gift or merchandise certificates and all deposits not refunded to customers.
(b) Each charge or sale upon installment or credit shall be treated
as a sale for the full price in the month during which such charge or sale is
made, whether Tenant shall actually receive full or partial payment. Each lease
or rental of merchandise shall be treated as a sale in the month during which
such lease or rental is made, for a price equal to the total rent payable.
(c) For the purpose of ascertaining the amount of Gross Sales upon
which the payment of Percentage Rent is to be computed, the following may be
deducted from Gross Sales: (i) the exchange of merchandise between stores of
Tenant or its subsidiaries where such exchanges are made solely for the
convenient operation of Tenant's business and not for the purpose of
consummating a sale which has been made at, upon or from the Premises; (ii)
returns to shippers or manufacturers; (iii) sales of trade fixtures after use
thereof, which are not part of Tenant's stock in trade and not sold in the
regular course of Tenant's business; (iv) cash or credit refunds made upon
transactions included within Gross Sales but not exceeding the selling price of
the merchandise returned by the purchaser; or (v) the amount of any local,
county, State or Federal sales, luxury or excise tax on such sales provided
such tax is both added to the selling price and paid to the taxing authority by
Tenant (but not by any vendor of Tenant) provided, however, no franchise or
capital stock tax and no income or similar tax based upon income, profits or
gross sales as such, shall be deducted from Gross Sales in any event whatsoever
in the computation of Percentage Rent.
(d) The term "Tenant" shall be deemed to include any of Tenant's
subtenants, concessionaires or licensees.
9. BOOKS AND RECORDS: Tenant shall prepare and keep for a period of at
least thirty-six (36) months following the end of each Lease Year, true and
accurate books of account and records, conforming to generally sound and
accepted accounting principles consistently applied, including, but not limited
to, sales tax and other reports filed with governmental agencies, all purchases
and receipts of merchandise, inventories and all sales and other transactions
by Tenant from which Gross Sales at, upon or from the Premises can be
determined. Tenant agrees to record all sales, at the time each sale is made,
and to retain cumulative cash register tapes or such other cumulative records
concerning such sales as are approved by Landlord.
10. REPORTS: (a) Tenant agrees to submit to Landlord on or before the tenth
(10th) day following the end of each calendar month during the Lease Term
(including the tenth [10th] day of the month following the end of the Lease
Term) a written statement, signed by an authorized representative of Tenant as
true and correct showing the amount of Gross Sales from the business conducted
at, upon or from the Premises by Tenant during the preceding calendar month,
and an itemization of all permissible deductions therefrom. Tenant further
agrees to submit to Landlord on or before the sixtieth (60th) day following the
end of each Lease Year or partial Lease Year (including the last Lease Year
hereof, as to which Tenant's obligation shall survive the expiration of the
Lease Term) a written statement, signed and verified by an authorized
representative of Tenant as true and correct, showing the amount of such Gross
Sales during the preceding Lease Year or partial Lease Year and an itemization
of all permissible deductions therefrom. Said annual statement shall also be
duly certified to be true and correct in compliance with the definition of
Gross Sales contained in Paragraph 8 by Tenant or an officer of Tenant in
accordance with sound and accepted accounting practice consistently applied.
The statements referred to in this Paragraph shall be in such form and style
and shall contain such details and information as Landlord may reasonably
designate and shall be delivered to the address as Landlord may from time to
time designate. The acceptance by Landlord of payments of Percentage Rent or
Gross Sales reports shall be without prejudice and shall not constitute a
waiver of Landlord's right to claim a deficiency in the payment of Percentage
Rent or to audit Tenant's books and records. The Gross Sales for any portion of
a calendar month prior to the commencement of the first full calendar month,
shall be included in the report due for the next succeeding month.
(b) If Tenant's Gross Sales are required to be reported on any
Federal, State or local sales tax return and Gross Sales so reported on any of
said returns shall exceed the Gross Sales as reported by Tenant under
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this Lease, then the Gross Sales shall be taken at the highest figure so
reported. If any governmental authority shall increase the Gross Sales reported
by Tenant on any such tax return for any Lease Year for which such sales have
been reported, then Tenant shall notify Landlord promptly of such increase,
supply to Landlord a true copy of such governmental action and pay any
additional Percentage Rent due under this Lease.
11. AUDIT: Landlord shall have the right, upon fifteen (15) days' notice to
Tenant to cause a complete audit of all statements of Gross Sales and in
connection with such audit, to examine Tenant's books of account and records
(including all supporting data and any other records from which Gross Sales may
be tested or determined) of Gross Sales disclosed in any statement given to
Landlord by Tenant; and Tenant shall make all such records available for such
examination at the office where such records are regularly maintained. Landlord
shall have the right to copy and duplicate such information as Landlord may
require. If any such audit discloses that the actual Gross Sales transacted by
Tenant exceed those reported, then Tenant shall pay Landlord such additional
Percentage Rent as may be payable and if the excess so disclosed shall be one
percent (1%) or more, Tenant shall also pay the reasonable costs of such audit
and examination. If such audit or examination shall disclose an understatement
of more than five percent (5%), Landlord shall also have the right to cancel
this Lease by written notice given to Tenant within six (6) months after such
audit. The furnishing by Tenant of any fraudulent or materially inaccurate
statement shall constitute a breach of this Lease. If any audit shall be
commenced by Landlord or if a difference or dispute shall arise concerning
Gross Sales, then Tenant's books of account and records (including all
supporting data and any other records from which Gross Sales may be tested or
determined) shall be preserved and retained by Tenant until a final resolution
of such audit, dispute or difference. Any information obtained by Landlord as a
result of such audit shall be treated as confidential, except Landlord may
disclose the same to its property manager, employees and agents and in any
litigation or proceeding between the parties and, except further, that Landlord
may disclose such information to prospective purchasers, to prospective or
existing lenders, to prospective or existing ground lessors and in any
statement filed with the Securities and Exchange Commission, Internal Revenue
Service, or other similar governmental agency or pursuant to any subpoena or
judicial process. If Landlord shall fail to audit any annual reports within
thirty-six (36) months after the same have been actually received by Landlord,
then any such report shall be deemed conclusively true and correct, except as
to any fraudulent report.
12. ADDITIONAL RENT AND ADJUSTMENTS: (a) In addition to the Fixed Minimum
Rent and Percentage Rent, all other payments to be made by Tenant hereunder
shall be deemed for the purposes of securing collection to be Additional Rent
under this Lease, whether so designated or not, and shall be due and payable on
demand or together with the next succeeding installment of Fixed Minimum Rent,
whichever shall first occur; and Landlord shall have the same rights and
remedies upon Tenant's failure to pay the same as for the non-payment of Fixed
Minimum Rent. Landlord shall have the right (but not the obligation) to pay for
or perform any act which requires the expenditure of any sums of money by
reason of the failure or neglect of Tenant to perform any of the provisions of
this Lease within any applicable grace period; and, in the event Landlord shall
elect to pay such sums or perform such acts requiring money expenditures,
Tenant agrees to pay Landlord, upon demand, all such sums, which shall be
deemed for the purpose of securing the collection thereof to be Additional Rent
hereunder.
(b) In the event the Commencement Date of the Lease Term is other
than the first day of a calendar month, the Fixed Minimum Rent, Additional Rent
and other charges reserved under this Lease for the portion of such partial
month shall be prorated and payable based on a thirty (30) day month and shall
be paid on the Commencement Date of the Lease Term.
13. PAST DUE RENTS: (a) If Tenant shall fail to pay any rents, Additional
Rents or other charges after the same become due and payable, such unpaid
amounts shall bear interest from the due date thereof to the date of payment at
the greater of (i) fourteen percent (14%) per annum, or (ii) two points above
the prime rate then being charged by Chase Manhattan Bank, N.A. to its most
credit worthy customers determined as of the first day of the calendar year
quarter that any rents become due and payable by Tenant under this Lease
("Default Interest Rate") provided, however, that such Default Interest Rate
shall not exceed the maximum legal rate of interest allowed to be charged to
Tenant under any applicable law of the state where the Shopping Center is
located.
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(b) In addition thereto, if Tenant shall fail to pay any rents,
Additional Rents or other charges within ten (10) days after the same become
due and payable, then Tenant shall also pay to Landlord a late payment service
charge (covering administrative and overhead expense) equal to four cents
($.04) per each One Dollar ($1.00) owed but not less than Fifty Dollars
($50.00) for each calendar month or part thereof after the due date of such
payment until received by Landlord. The provisions herein for late payment
service charges shall not be construed to extend the date for payment of any
sums required to be paid by Tenant hereunder or to relieve Tenant of its
obligation to pay all such sums when due. Notwithstanding the imposition of
such service charges, Tenant shall be in default under this Lease if any or all
payments required to be made by Tenant are not made when due, and the demand by
Landlord for payment of such late payment service charges shall not be
construed as a cure of such default on the part of the Tenant.
14. PLACE OF PAYMENTS AND ESTIMATES: (a) All payments required to be paid by
Tenant to Landlord shall be made payable to the order of the Landlord and shall
be delivered to Landlord's Payment Address set forth in paragraph 1(Q) of this
Lease.
(b) Landlord shall estimate the amount of monthly Additional Rent
required to be paid by Tenant and shall ▇▇▇▇ Tenant for the amount of such rent
either prior to or as promptly as possible after the term Commencement Date and
thereafter from time to time during the Lease Term. Tenant shall continue to
pay such estimated monthly charges until billed for the new estimated monthly
charges, at which time the new estimated monthly charge shall be paid. For
convenience, Tenant may include the total of the estimated monthly charges with
its payment of the Fixed Minimum Rent. Landlord shall annually furnish Tenant
with a reconciliation of all estimated charges not previously reconciled based
on the applicable computation, and shall credit Tenant's next succeeding
estimated monthly charges for any overpayment (or shall refund such amount to
Tenant if the Lease has terminated and Tenant is not then indebted to Landlord
under the Lease) or shall ▇▇▇▇ Tenant for any underpayment.
The Additional Rent to be estimated pursuant to this subparagraph (b)
shall consist of the Tax Charge, Common Area Charge, Scavenger Charge,
Sprinkler Charge, Water, Storm and Sewer Charge, Utilities Charge, Media Fund,
Promotion Fund, and any other fixed or adjustable charge required to be paid by
Tenant under this Lease excluding the Fixed Minimum Rent and Percentage Rent.
15.
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16. FINANCING: [INTENTIONALLY DELETED]
17. CANCELLATION: [INTENTIONALLY DELETED]
18. CONDITION OF PREMISES: Tenant agrees to accept the Premises, Shopping
Center and any Systems and Equipment serving the Premises "as is" without any
agreements, representations, understandings or obligations on the part of
Landlord to perform any alterations, repairs or improvements except as may be
expressly provided in Exhibit ""B'' hereto or elsewhere in this Lease
("Landlord's Work"). Tenant shall on or before the Commencement Date: (i)
completely remodel the Premises and install a new storefront, storefront sign
and trade fixtures in and for the same in accordance with the other provisions
of this Lease, including Exhibit "B" and the Rules ("Tenant's Initial Work"),
and (ii) open the Premises for business to the public, fully stocked and staffed
and in compliance with all provisions of this Lease, including without
limitation, Paragraph 22. Landlord may require that Tenant accept possession of
the Premises and proceed with Tenant's Initial Work and/or the preparation and
submission of plans therefor prior to the Commencement Date upon ten (10) days
advance notice. During any period that Tenant shall be permitted or required to
enter the Premises prior to the Commencement Date (to plan or perform Tenant's
Initial Work), Tenant shall comply with all terms and provisions of this Lease,
except those provisions requiring the payment of Rent.
19. OWNERSHIP OF IMPROVEMENTS: (a) All betterments and improvements in or
upon the Premises, made by either party (except Tenant's personal property,
furniture, signs and trade fixtures) including all affixed lighting fixtures,
heating, ventilating and air conditioning equipment, and all pipes, ducts,
conduits, wiring, paneling, partitions, floor covering, railing, mezzanine
floors, galleries and the like, shall become the property of Landlord and shall
remain upon and be surrendered with the Premises at the expiration or sooner
termination of the Lease Term.
(b) Tenant shall not assign, lien, encumber, chattel mortgage or
create a security interest in, to or upon any improvement or its sign, trade
fixtures or other personal property in or serving the Premises without first
obtaining in each and every instance the prior written consent of Landlord. Any
consent by Landlord to such security interest shall apply only to the specific
transaction thereby authorized and shall not be a waiver of consent to any
subsequent transaction. Any chattel mortgage, security interest or other
encumbrance granted by Tenant in violation of the terms of this provision shall
be null and void and of no force and effect. Any consent by Landlord to such
security interest shall be subject and subordinate to Landlord's security
interest and lien provided under Paragraph 44 hereof and Tenant shall notify
all other secured parties of Landlord's prior interest. In no event shall
Tenant assign, lien, encumber, chattel mortgage or create a security interest
in leasehold improvements which have been incorporated in the Premises
including, but not limited to, affixed lighting fixtures, heating, ventilating,
air conditioning equipment, pipes, ducts, conduits, wiring, paneling,
partitions, floor covering, railing, mezzanine floors, galleries and the like
which become the property of Landlord.
20. TENANT'S INSTALLATIONS: Tenant shall fully equip the Premises with all
trade fixtures and equipment necessary for the proper operation of Tenant's
business. Tenant shall not install any equipment or fixtures on the roof or
exterior to the Premises without the prior written consent of Landlord. Should
Tenant install air conditioning, heating or other equipment on the roof or
otherwise penetrate such roof of the building of which the Premises forms a
part, Tenant agrees to assume primary responsibility for the cost of
maintenance and repair of that portion of the roof (including all areas and
space covered by such equipment or penetration) where such installation is
made; and such installation and the operation, maintenance and repair thereof
shall be made so that the rights of Landlord under any roofing bond or roofing
guaranty then in force shall not be affected or voided thereby and Tenant shall
be solely responsible for all damages to Landlord and/or other tenants
resulting from the installation, operation, maintenance and/or repair of such
equipment or penetration.
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21. PERMITTED USE: Tenant agrees to and shall use the Premises solely for
the purpose of conducting the Permitted Use as outlined in Section 1(G) of this
Lease and for no other business or purpose. Tenant shall occupy 100% of the
Premises during the Term and shall use not less than 80% thereof as the sales
and display area. Tenant also agrees not to conduct any catalogue, mail or
telephone order sales in or from the Premises, except of merchandise which
Tenant is permitted to sell "over the counter" in the Premises. Tenant agrees
to conduct Tenant's business in the Premises under Tenant's Trade Name, which
Tenant represents that it has the right to use. Tenant acknowledges that the
Permitted Use is not a use granted exclusively to Tenant and that Landlord
reserves the right to lease premises in the Shopping Center to others for the
same or a similar permitted use. Tenant further acknowledges that it has
received no written or oral inducements from Landlord or any of Landlord's
representatives concerning this Lease (other than as specifically set forth
herein) or that Tenant will be granted any such exclusive rights.
22. OPERATION OF BUSINESS: Tenant agrees: (a) subject to Paragraph 51
hereof, to continuously and uninterruptedly occupy and use the entire Premises
for the Permitted Use during the Lease Term and to conduct Tenant's business in
a reputable manner;
(b) to remain open for business during the "Required Hours." Required
Hours herein shall mean those hours established from time to time by Landlord
for the Shopping Center in general, in Landlord's sole discretion; provided,
Landlord shall not require that Tenant open for business before 9:00 a.m. or
remain open after 10:00 p.m., except; (i) for holiday, seasonal or other
special sales or promotions, or (ii) when at least one Department Store or a
majority of the tenants at the Shopping Center will be open. If Tenant desires
to operate the Premises during additional hours beyond those required by
Landlord hereunder, Tenant shall first obtain Landlord's written approval
(which may be withheld in Landlord's sole discretion), and Tenant shall pay all
additional costs and expenses and Landlord's reasonable charges in connection
therewith, including, without limitation, any additional utilities, security
services, cleaning and trash removal. Without limiting the generality of the
foregoing, Landlord reserves the right to close the Shopping Center on holidays
or certain hours of holidays, including without limitation, New Year's Day,
Easter, Thanksgiving and Christmas;
(c) to adequately staff its store with sufficient employees to handle
the maximum business and carry sufficient stock of seasonal merchandise of a
character and quality to accomplish the same;
(d) to maintain displays of merchandise in any display windows;
(e) to keep any display windows and signs well lighted during such
hours and days that the enclosed mall is lighted by Landlord, but in no event
beyond 11:00 p.m.;
(f) to keep and maintain the Premises, Tenant's personal property and
signs therein or thereon and all exterior and interior portions of windows,
doors and glass in a neat, clean, sanitary and safe condition;
(g) to warehouse, store or stock in the Premises only such goods,
wares and merchandise as Tenant is permitted to offer for sale;
(h) to apply for, secure, maintain and comply with all licenses or
permits which may be required for the conduct by Tenant of the business
permitted to be conducted in the Premises and to pay when due all license and
permit fees and charges of a similar nature in connection therewith;
(i) to use for office or other non-selling purposes only such space
as is reasonably required for the conduct of Tenant's business in the Premises;
(j) not to conduct any auction, distress, fire or bankruptcy sale or
any going out of business sale, but nothing contained herein shall restrict
Tenant from determining the selling price of its own merchandise or preclude
periodic seasonal, promotional or clearance sales; and
(k) not to operate its business under this Lease so as to breach or
violate any restrictive covenant to which the Shopping Center is subject or
contained in any other lease entered into by Tenant, or violate any restrictive
agreement contained in any contract, judgment or decree of a court of competent
jurisdiction
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entered into or imposed upon Tenant, and Tenant represents that its execution
of this Lease and operation of the Permitted Use will not violate any such
restrictive covenants or agreements.
23. LAWS, WASTE OR NUISANCE: (a) Tenant agrees, at Tenant's cost and
expense; (i) to comply with all present and future governmental laws,
ordinances, orders and regulations concerning Tenant's use or occupancy or the
general use or occupancy of the Premises (including Tenant's alterations and
additions thereto) including the Americans with Disabilities Act of 1990 and
any rules or regulations now or hereafter promulgated thereunder; and (ii) to
comply with all present and future rules, regulations and recommendations of
the Board of Fire Underwriters, Landlord's insurance carriers and organizations
establishing insurance rates concerning Tenant's use of the Premises (including
Tenant's alterations and additions thereto); and (iii) to comply with all
restrictive covenants of record which affect or are applicable to the Shopping
Center and/or the Premises and/or the common areas, provided, however, the same
do not prohibit the Permitted Use of the Premises.
(b) Tenant further agrees not to suffer, permit or commit any waste,
nor to allow, suffer or permit any odors, vapors, steam, water, vibrations,
noises or undesirable effects to emanate from the Premises or any equipment or
installation therein into other portions of the building of which the Premises
forms a part or into the mall, nor to allow, suffer or permit any material or
device defined as hazardous or otherwise controlled under any governmental law,
rule or regulation to be installed, used or kept in the Premises, or otherwise
to allow, suffer or permit the Premises or any use thereof to constitute a
nuisance or to unreasonably interfere with the safety, comfort or enjoyment of
the Shopping Center by Landlord, any other occupants of the Shopping Center or
their customers, invitees or any others lawfully in or upon the Shopping
Center. Upon written notice by Landlord to Tenant that any of the aforesaid is
occurring, Tenant agrees forthwith to cease and discontinue the same and within
ten (10) days thereafter to make such changes in the Premises and/or install or
remove such apparatus or equipment therein or therefrom as may be required by
Landlord for the purpose of obviating any such condition; and if any such
condition is not remedied, then Landlord may, at its option, enter upon the
Premises and cure such condition in any manner Landlord shall deem necessary
and add the cost and expense incurred by Landlord together with all damages,
including reasonable attorneys' fees, sustained by Landlord to the next
installment of the Fixed Minimum Rent due and Tenant agrees to pay such amount.
Tenant hereby further agrees to indemnify and save Landlord free and harmless
from all fines, claims, demands, actions, proceedings, judgments and damages
(including court costs and reasonable attorneys' fees) of any kind or nature by
anyone whomsoever arising or growing out of any breach or non-performance by
Tenant of the covenants contained in this Paragraph.
24. HAZARDOUS MATERIALS: (a) Tenant shall not incorporate into the Shopping
Center nor transport, use, store, maintain, generate, manufacture, handle,
dispose, release or discharge any "Hazardous Material" (as defined below) upon
or about the Shopping Center, or permit Tenant's employees, agents,
contractors, invitees and other occupants of the Premises to engage in such
activities upon or about the Shopping Center. However, the foregoing provisions
shall not prohibit the transportation to and from, and use, storage,
maintenance, and handling within the Premises of substances customarily used in
the business or activity expressly permitted to be undertaken in the Premises
pursuant to Paragraph 1(G) of this Lease, provided (i) such substances shall be
used and maintained only in such quantities as are reasonably necessary for
such permitted use of the Premises and the ordinary course of Tenant's business
therein, strictly in accordance with applicable Law, highest prevailing
standards, and the manufacturer's instructions therefor, (ii) such substances
shall not be disposed of, released or discharged in the Shopping Center, and
shall be transported to and from the Premises in compliance with all applicable
Laws, and as Landlord shall reasonably require, (iii) if any applicable Law or
Landlord's trash removal contractor requires that any such substances shall be
disposed of separately from ordinary trash, Tenant shall make arrangement; at
Tenant's expense for such disposal directly with a qualified and licensed
disposal company at a lawful disposal site (subject to scheduling and approval
by Landlord), (iv) any remaining such substances shall be completely, properly
and lawfully removed from the Shopping Center upon expiration or earlier
termination of this Lease, and (v) for purposes of removal and disposal of any
such substances, Tenant shall be named as the owner and generator, obtain a
waste generator identification number, and execute all permit applications,
manifests, waste characterization documents and any other required forms.
(b) Tenant shall promptly notify Landlord of: (i) any enforcement,
cleanup or other regulatory action taken or threatened by any governmental or
regulatory authority with respect to the presence of any
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Hazardous Material on the Premises or the migration thereof from or to other
property, (ii) any demands or claims made or threatened by any party relating
to any loss or injury resulting from any Hazardous Material on the Premises,
(iii) any release, discharge or non-routine, improper or unlawful disposal or
transportation of any Hazardous Material on or from the Premises or in
violation of this Paragraph 24, and (iv) any matters where Tenant is required
by Law to give a notice to any governmental or regulatory authority respecting
any Hazardous Material on the Premises. Landlord shall have the right (but not
the obligation) to join and participate, as a party, in any legal proceedings
or actions affecting the Premises initiated in connection with any
environmental, health or safety Law. At such times as Landlord may reasonably
request, Tenant shall provide Landlord with a written list, certified to be
true and complete, identifying any Hazardous Material then used, stored, or
maintained upon the Premises, the use and approximate quantity of each such
material, a copy of any material safety data sheet ("MSDS") issued by the
manufacturer therefor, and such other information as Landlord may reasonably
require or as may be required by law. The term "Hazardous Material" for
purposes hereof shall mean any chemical, substance, material or waste or
component thereof which is now or hereafter listed, defined or regulated as a
hazardous or toxic chemical, substance, material or waste or component thereof
by any federal, state or local governing or regulatory body having
jurisdiction, or which would trigger any employee or community "right-to-know"
requirements adopted by any such body, or for which any such body has adopted
any requirements for the preparation or distribution of an MSDS, including but
not limited to OSHA and EPA as defined in paragraph (d) hereinbelow.
(c) If any Hazardous Material is incorporated into the Shopping
Center or released, discharged or disposed of by Tenant or any other occupant
of the Premises, or their employees, agents or contractors, on or about the
Shopping Center in violation of the foregoing provisions, Tenant shall
immediately, properly and in compliance with applicable laws clean up and
remove the property (whether or not owned by Landlord), at Tenant's expense
(without limiting Landlord's other remedies therefor). Such clean up and
removal work shall be subject to Landlord's prior written approval (except in
emergencies), and shall include, without limitation, any testing,
investigation, and the preparation and implementation of any remedial action
plan required by any court or governmental body having jurisdiction or
reasonably required by Landlord. If Landlord or any Lender or governmental body
arranges for any tests or studies showing that this Paragraph 24 has been
violated by Tenant, Tenant shall pay the costs of such tests. If any Hazardous
Material is released, discharged or disposed of on or about the Shopping Center
and such release, discharge or disposal is not caused by Tenant or other
occupants of the Premises, or their employees, agents or contractors and is in
excess of levels set by EPA or OSHA for such materials and affect Tenant's use
of occupancy of the Premises, such release, discharge or disposal shall be
deemed casualty damage under Paragraph 41 of this Lease to the extent that the
Premises is affected thereby; in such case, Landlord and Tenant shall have the
obligations and rights respecting such casualty damage provided under this
Paragraph 41 of this Lease. Tenant's obligations under this Paragraph 24 shall
survive the expiration or earlier termination of this Lease.
(d) Tenant acknowledges that Landlord has made available at
Landlord's offices for Tenant's inspection, review and copying an asbestos
survey of the Premises ("Asbestos Survey"). The purpose of said Asbestos Survey
is to indicate the presence or absence of asbestos-containing material(s) at
the Premises. In addition, Tenant acknowledges that Landlord has received
copies of asbestos surveys for other premises at the Center which indicate the
presence of asbestos-containing materials at such other premises. Copies of all
such surveys are available at Landlord's offices at the Center for review and
copying by Tenant upon request. However, the Asbestos Survey and other asbestos
surveys in Landlord's possession do indicate that the asbestos is in a
condition or state which violates lawful levels or requires removal or controls
beyond those already implemented by Landlord [based on the present levels or
content of said material as said levels or content are presently set by the
U.S. Environmental Protection Agency ("EPA") or the U.S. Occupational Safety
and Health Administration ("OSHA"). To insure that the asbestos containing
materials (as identified by the Asbestos Survey or any other asbestos surveys
in Landlord's possession) are not improperly disturbed or handled by untrained
persons, all maintenance, repairs or renovations by Tenant to any area shown on
the Asbestos Survey to contain asbestos, must be coordinated with and approved
in advance by Landlord. Tenant shall insure and agrees that all contractors
(and their subcontractors) engaged by Tenant agree in writing to be bound by
and will perform all work in accordance with the Operations and Maintenance
Program ("O&M Program") as from time to time in force at the Center to
periodically monitor
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and deal with the asbestos at the Center. Tenant agrees to cooperate with
Landlord in all reasonable procedures or actions necessary for the conduct of
any O&M Program.
Landlord makes no representations or warranties whatsoever to Tenant
regarding (i) hazardous materials at the Center or in the Premises or (ii) the
Asbestos Survey, the same being furnished as a courtesy, and Landlord has
informed Tenant that the Asbestos Survey is not a comprehensive survey of the
Premises or the Center for all asbestos or for all hazardous or toxic
materials. Tenant has the right and should make such studies and
investigations, conduct such test and surveys and engage such specialists as
Tenant deems appropriate to fairly evaluate the Premises or the Center and any
risks from the presence of asbestos-containing material at the Center or
hazardous or toxic materials. In connection with any inspections or tests to be
conducted by Tenant at the Premises or at the Center, Tenant shall first notify
Landlord of each proposed inspection or test and the scope, impact and intent
thereof and obtain Landlord's written consent to perform same, which consent
shall not be unreasonably withheld. Tenant shall furnish Landlord with a
complete and legible copy of any study, report, test, survey or investigation
performed by or on behalf of Tenant involving any portion of the Premises or
the Center. Tenant shall restore the Premises and/or the Center to the
condition existing immediately prior to any such test and/or inspection, and
Tenant hereby agrees to indemnify and hold Landlord harmless from any loss,
damage, liability or claim resulting from or arising from Tenant's samples,
investigations or activities (including, but not limited to, those of Tenant's
agents, employees and/or contractors). If Tenant ever has knowledge of the
presence in the Premises or the Center of toxic or hazardous materials or
asbestos-containing material, Tenant shall notify Landlord in writing promptly
after obtaining such knowledge.
25. COMPETITION: In recognition of the fact that this Lease provides for a
Percentage Rent based on Gross Sales made by Tenant in or from the Premises,
Tenant agrees that if Tenant, or any of its principal shareholders, or any
affiliate or subsidiary of Tenant, directly or indirectly shall operate, manage
or have any interest in any other competing store or business for the sale of
merchandise similar to that permitted under Paragraph 1(G) of this Lease
including a department or concession in another store, the distance specified
in Paragraph 1(o) of this Lease, as shown on Exhibit "A," then Tenant shall
include fifty percent (50%) of the Gross Sales of such other store in the Gross
Sales transacted in the Premises for the purpose of computing Percentage Rent
due hereunder, as though said sales had actually been made from the Premises.
However, any such store owned or leased by Tenant and existing as of the Date of
Lease shall be excluded from the provisions of this Paragraph provided there is
no increase in the size of such other store.
26. CONCESSIONAIRES AND LICENSEES: Tenant shall not grant any concessions or
licenses except upon Landlord's written consent and except for the operation in
the Premises of one or more departments of the business permitted to be
conducted by Tenant under this Lease, provided, however, that such concessions
or licenses shall be subject to the following conditions:
(a) each such concession or license shall be subject to all of the
terms and provisions of this Lease including provisions concerning statements,
reports and audits;
(b) the Gross Sales (as herein defined) from the operation of each
such concession or license shall be deemed to be part of the Gross Sales of
Tenant for the purpose of determining the Percentage Rent payable to Landlord;
(c) the business to be operated by such concessionaires or licensees
shall occupy, in total, no more than 25% of the sales area of the Premises; and
(d) in no event shall Tenant suffer, permit, install or operate in
the Premises any coin-operated vending machines or similar or other devices for
the sale of goods, wares, merchandise, food and beverages, including but not
limited to, machines for the sale of candy, gum, cigarettes or other edibles,
except in areas restricted to the sole and exclusive use of Tenant's employees.
27. SIGNS: Subject to Exhibit "B," Tenant shall, at its cost and expense,
install a suitable identification sign of such size, design and character as
Landlord shall first approve in writing at a place or places designated by
Landlord. Tenant shall maintain any such sign in good condition and repair.
Other than such permitted signs, Tenant shall not place or install or suffer to
be placed or installed or maintain any sign upon
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or outside the Premises or in the Shopping Center. Tenant shall not place or
install or suffer to be placed or installed on the exterior of the Premises any
awning, canopy, banner, flag, pennant, aerial, antenna or the like; nor shall
Tenant place or maintain on the glass of any window or door of the Premises any
sign, decoration, lettering, advertising matter, shade, blind or other thing of
any kind. Landlord shall have the right, without liability and with or without
notice to Tenant, to remove any item installed by Tenant in violation of this
Paragraph 27 and to charge Tenant for the cost of such removal and/or any
repairs necessitated thereby.
28. ASSIGNMENT AND SUBLETTING: (a) Tenant may sublet the Premises in part or
in its entirety or assign this entire Lease only with the prior written
permission and consent of Landlord, subject to the conditions hereafter
mentioned. Any such subletting or assignment shall be subject to and
conditioned upon the following: (i) at the time of any such proposed subletting
or assignment, Tenant shall not be in default under any of the terms,
provisions or conditions of this Lease; (ii) the sublessee or assignee shall
only occupy the Premises and conduct business in accordance with the Permitted
Use; and (iii) that if the Fixed Minimum Rent, or any additional rent or
charges required to be paid by any such sublessee or assignee exceeds the
rentals and/or charges reserved hereunder, then Tenant shall pay to Landlord
monthly the entire amount of such excess, which shall be deemed Additional
Rent, and in no event shall the annual Fixed Minimum Rent required to be paid
by the assignee or sublessee be less than the average sum (or in the case of a
partial subletting, the proportionate share) of the Fixed Minimum Rent plus
Percentage Rent paid by Tenant from the term Commencement Date to the end of
the Lease Year immediately preceding such assignment or subletting or during
the immediately preceding two (2) Lease Years, whichever period is shorter; and
(iv) Tenant and its assignee or sublessee shall execute, acknowledge and
deliver to Landlord a fully executed counterpart of a written assignment of
lease or sublease as the case may be, duly consented to by Tenant's Guarantor,
if any, by the terms of which: (x) in case of an assignment, Tenant assigns to
such assignee Tenant's entire interest in this Lease, together with all prepaid
rents hereunder, and the assignee accepts said assignment and assumes and
agrees to perform, directly for the benefit of Landlord, all of the terms,
covenants and conditions of this Lease on the Tenant's part to be performed
hereunder; or (y) in case of subletting, the sublease is in all respects
subject and subordinate to all of the terms, covenants and conditions of this
Lease and that the sublessee thereunder will agree to be bound by and to
perform all of the terms, covenants and conditions of this Lease on the
Tenant's part to be performed hereunder, except the payment of rent,
additional rents and other charges reserved hereunder, which Tenant shall
continue to pay to Landlord (provided that Landlord may elect, at Landlord's
option, to collect such sublease rents directly from such subtenant); and (v)
notwithstanding any such assignment or subletting or the consent of Landlord
under the terms of this Paragraph 28, both Tenant and its Guarantor, if any,
will not be released or discharged from any liability whatsoever under this
Lease and will continue liable thereon with the same force and effect as though
no assignment or sublease has been made; and (vi) Tenant shall pay to Landlord
the sum of One Thousand Dollars ($1,000.00) to cover the Landlord's
administrative costs, overhead and counsel fees in connection with such
assignment or subletting, and review of same.
(b) A request for Landlord's consent to a subletting or an assignment
shall be deemed an offer by Tenant for Landlord to either sublease the Premises
for the remainder of the Lease term upon the terms and conditions contained
herein or to take an assignment of this Lease, which offer shall remain
irrevocable for a one (1) month period commencing on the date Landlord actually
receives a written request for such consent
(c) Other than the foregoing permitted assignment or subletting,
Tenant shall not voluntarily, involuntarily or by operation of law, assign,
transfer, mortgage or otherwise encumber this Lease or any interest of Tenant
therein, in whole or in part, nor sublet the whole or any part of the Premises
or permit the Premises or any part thereof to be used or occupied by others.
Any attempt to encumber, assign the Lease or sublet the Premises not in
compliance with the provisions of this Paragraph shall be void and of no force
and effect
(d) If Tenant or its Guarantor, if any, is a corporation or
partnership, and if at any time during the Lease Term the persons who, on the
Date of Lease, own a majority of such corporation's voting shares or the
general partner's interest in such partnership, as the case may be, cease to
own a majority of such shares (whether such sale occurs at one time or at
intervals so that, in total, such a transfer shall have occurred), or general
partner's interest, as the case may be (except as the result of transfer by
gift or inheritance) or if
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Tenant's Guarantor, if any, is dissolved, Tenant shall so notify Landlord and
Landlord shall have the right, at its option, to terminate this Lease by notice
to Tenant given within thirty (30) days thereafter or within ninety (90) days
after Landlord shall have received other notice thereof, except that this
subparagraph (d) shall not be applicable to any corporation, all the
outstanding voting stock of which is listed on a national securities exchange
(as defined in the Securities Exchange Act of 1934, as amended). For the
purpose of this subparagraph (d), stock ownership shall be determined in
accordance with the principles set forth in Section 544 of the Internal Revenue
Code of 1954, as the same existed on August 16, 1954, and the term "voting
stock" shall refer to shares of stock regularly entitled to vote for the
election of directors of the corporation.
29. REPAIRS: (a) Landlord shall not be required to make any repairs or
improvements of any kind upon or to the Premises, except as stated in this
Paragraph 29. Landlord shall maintain in good condition throughout the Lease
term and make all necessary repairs to the Shopping Center foundations, roofs,
downspouts, gutters and structural repairs to the exterior of the building
(excluding the interior of all walls within the Premises and the exterior and
interior of all windows, glass, showcases, doors, door frames and bucks) and
the sewer and water lines servicing the Premises that are located outside of
the Premises and the sprinkler system, unless the necessity for any of such
repairs shall have been occasioned by any action, omission to act or negligence
of Tenant, its assignees, subtenants, concessionaires or licensees, or their
respective employees, agents, or contractors, in which event Tenant agrees to
make such repairs, at Tenant's cost and expense. Landlord shall not be required
to commence any such repair until after written notice from Tenant that the
same is necessary, which notice, except in case of an emergency, shall allow
Landlord a reasonable time in which to commence and complete such repair.
Landlord shall use reasonable efforts to do said repair work with minimum
inconvenience, annoyance, disturbance and loss of business to Tenant, as may be
reasonably possible under the circumstances consistent with accepted
construction practice in the vicinity, and so that such work shall be
expeditiously completed, but in no event shall Landlord be required to incur
any additional expenses for work to be done during hours or days other than
regular business hours and days.
(b) Subject to the provisions of subparagraph (a) of this Paragraph
29, Tenant agrees, at Tenant's cost and expense, to keep and maintain the
Premises and each and every part thereof for Tenant's use and general use, in
good repair, order and condition and in compliance with all Laws and to make
all repairs and replacements thereto, and to the fixtures and equipment therein
and the appurtenances thereto, including without limiting the generality of the
foregoing, the Tenant's Work designated in Exhibit "B," the exterior and
interior windows and window frames, doors and door frames, entrances, store
fronts, including store front metal work, signs, showcases, floor and wall
coverings, interior walls, partitions, insulation, and the lighting, electrical,
heating, air conditioning, plumbing, and sewerage systems, lines, pipes,
equipment, fixtures and facilities within or serving the Premises, or plenum
above the Premises, and the escalators and elevators therein, if any, and the
floor slab and that portion of any pipes, lines, ducts, wires or conduits
installed by Landlord or Tenant contained under, above or within, and
exclusively serving the Premises. Tenant shall keep and maintain the Premises in
a first-class and attractive condition throughout the Lease Term. Tenant shall
replace all damaged or broken glass with glass of equal quality with that broken
or damaged, except in the case of damage or destruction by fire or other
insurable casualty or by eminent domain, the obligations of Landlord and Tenant
shall be controlled as hereinafter provided.
(c) Following the initial construction of the Premises in compliance
with this Lease, Tenant may, with prior notice to Landlord, at Tenant's cost
and expense, paint or paper interior walls or change floor coverings in the
interior of the Premises only, provided that (i) the structural integrity of
the building shall not be affected or diminished; (ii) the value of the
building is not diminished; (iii) the exterior appearance (including store
front) of the Premises is not altered or changed; (iv) the cost of any such
alteration, addition or decoration does not exceed Five Thousand Dollars
($5,000.00); and (v) the sprinkler system design is not affected, modified,
altered or changed. In all other instances, Tenant shall secure the prior
approval and consent of Landlord for any alteration, construction or
improvement.
(d) In the event (i) Landlord undertakes a substantial remodeling of
the common areas and/or the exterior of the Shopping Center, including, without
limitation, an expansion of the Shopping Center in an amount equal to or in
excess of ten percent (10%) of the then existing GLA of the enclosed mail, or
(ii) this Lease provides for a lease term in excess of five (5) years, then, in
the event mentioned in (i) hereof, Tenant
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shall, at Tenant's cost and expense, remodel the exterior and interior of the
Premises and such remodeling work shall be completed within sixty (60) days
after Landlord's completion of such remodeling and/or expansion of the Shopping
Center, and, in the event mentioned in (ii) hereof, Tenant shall remodel the
storefront and install new floor and wall covering in the Premises within one
hundred eighty (180) days after the fifth (5th) full Lease Year. Nothing
contained in this Paragraph shall constitute a representation or warranty by
Landlord that it will remodel and/or expand the Shopping Center.
(e) Tenant shall submit to Landlord plans and specifications for any
such remodeling work, together with a statement of the estimated costs of such
work and the name of the contractor Tenant proposes to engage at least sixty
(60) days prior to the date Tenant is to commence any such remodeling work.
After receiving Landlord's written approval and prior to the commencement of
such work, Tenant agrees to deliver to Landlord a policy or certificate of
workmen's compensation insurance in statutory limits from Tenant's contractor
as well as evidence of maintenance by Tenant of the insurance coverages to be
maintained by Tenant hereunder. Such work may then be commenced and shall be
diligently prosecuted to completion in accordance with such approved plans and
specifications and all applicable laws, ordinances, rules and requirements of
Landlord's insurance carriers, subject, however, to the terms of Tenant's
indemnity set forth under Paragraph 36 and Tenant's obligation to insure such
assumed liability under Tenant's Comprehensive General Liability policy.
(f) "Repairs," as used in this Paragraph, shall mean all repairs,
replacements, alterations, additions, improvements and betterments. "Maintain"
or "maintenance," as used in this Paragraph 29, shall include appropriate
heating, cooling, inspection, drainage, insulation and cleaning or cleanout of
all portions of the Premises, including all lines and pipes, as appropriate.
(g) Tenant shall enter into a service repair agreement which provides
for the regular maintenance, service, repair and replacement (for example,
without limitation, regular filter changes, fan belt replacement, etc.) to the
heating, ventilating and air conditioning equipment serving the Premises, and
shall provide Landlord with a copy of such service repair agreement within
thirty (30) days after request together with reasonable evidence of the
performance of such repairs.
30. TENANT'S FAILURE TO REPAIR: If Tenant shall fail, refuse or neglect to
maintain or make repairs in accordance with the terms and provisions of this
Lease or if Landlord is required to make any repairs by reason of any act,
omission to act or negligence of Tenant, or its assignees, subtenants,
concessionaires or licensees, or their respective employees, agents or
contractors, Landlord shall have the right, at its option, after Landlord shall
have given to Tenant a ten (10) day notice (except in case of an emergency), to
make such repairs on behalf of and for the account of Tenant and to enter upon
the Premises for such purposes, and add the cost and expense thereof, to the
next installment of the Fixed Minimum Rent due and Tenant agrees to pay such
amount, but nothing contained in this Paragraph shall be deemed to impose such
duty upon Landlord or affect in any manner the obligations of Tenant hereunder.
Any cost or expense incurred by Landlord and chargeable to Tenant as herein
provided shall be reduced to the extent that Landlord is reimbursed therefor
under any policy of insurance.
31. COVENANT AGAINST LIENS: Tenant shall do all things necessary to prevent
the filing of any mechanics' or other liens against the Premises or any other
portion of the Shopping Center or the interest of the Landlord or any ground or
underlying lessors or the interest of any mortgagees or holders of any deed of
trust covering the Shopping Center by reason of any work, labor, services or
materials performed or supplied or claimed to have been performed or supplied
to Tenant, or anyone holding the Premises, or any part thereof, through or
under Tenant. If any such lien shall at any time be filed, Tenant shall either
cause the same to be vacated and cancelled of record within thirty (30) days
after the date of the filing or, if Tenant in good faith determines that such
lien should be contested, Tenant shall furnish such security, by surety bond or
as is otherwise prescribed by applicable law, to release the same as a lien
against the real property and to prevent any foreclosure of such lien during
the pendency of such contest and upon any final non-appealable judgment of any
such contest to promptly pay any adjudicated amount due. If Tenant shall fail
to vacate or release such lien in the manner and within the time period
allowed, then, in addition to any other right or remedy of Landlord resulting
from Tenant's default, Landlord may, but shall not be obligated to, vacate or
release the same either by paying the amount claimed to be due or by procuring
the release of such lien by giving security or in such other manner as may be
prescribed by law. Tenant shall repay to
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Landlord, on demand, all sums disbursed or deposited by Landlord pursuant to
this Paragraph, including Landlord's costs, expenses and reasonable attorney's
fees incurred in connection therewith. Nothing contained herein shall imply the
consent or agreement on the part of Landlord or any ground or underlying
lessors or mortgagees or holders of deeds of trust of the Shopping Center to
subject their respective estates or interest to liability under a mechanics' or
other lien law, whether or not the performance or the furnishing of such work,
labor, services or materials to Tenant or anyone holding the Premises, or any
part thereof, through or under Tenant, shall have been consented to by Landlord
and/or any of such parties.
32. UTILITIES: (a) Tenant shall install and use the utilities (including
water, gas, electricity, sewers and telephone supplied to or serving the
Premises) in accordance with the criteria set forth in Exhibit "B," the rules
and regulations of Landlord and the public utility company or the governmental
agency supplying the same. Landlord shall not be liable in damages or otherwise
for any interruption in the supply of any utility to the Premises nor shall any
such interruption constitute any ground for an abatement of any of the rents
reserved hereunder. Tenant shall not at any time overburden or exceed the
capacity of the mains, feeders, ducts, conduits or other facilities by which
such utilities are supplied to, distributed in or serve the Premises. If Tenant
desires to install any equipment which requires additional utility facilities or
utility facilities of a greater capacity than the facilities to be provided by
Landlord under Exhibit "B," such installation shall be at Tenant's expense and
subject to Landlord's prior written approval of Tenant's plans and
specifications therefor. If approved by Landlord, Tenant agrees to pay Landlord,
on demand, the cost for providing such additional utility facilities or utility
facilities of greater capacity.
(b) Landlord shall not be responsible for providing any meters or
other devices for the measurement of utilities supplied to the Premises. Tenant
shall make application for and arrange for the installation of all such meters
or other devices and Tenant shall be solely responsible for and promptly pay,
when due and payable, all charges for water, sewer, electricity, gas, telephone
and any other utility used or consumed in the Premises.
(c) (i) Should Landlord elect or be requited to supply any utility
services used or consumed in the Premises, Tenant agrees to reimburse Landlord
for the same at a cost not to exceed that which the utility company would have
charged Tenant for furnishing such utilities and based on a distribution or
other use method for computing the amount of utility usage. In the event of any
dispute, Tenant shall pay the ▇▇▇▇ for all such utilities furnished for the
Premises in accordance with Landlord's billing, and such payment shall not
prejudice Tenant's position. If the dispute is determined in Tenant's favor, by
agreement or otherwise, Landlord shall refund the overpayment to Tenant. Any
▇▇▇▇ or statement shall be binding and conclusive on Tenant if Tenant fails to
object thereto in writing (stating the reasons therefor) within thirty (30)
days after the date thereof. If Landlord is furnishing Tenant any utility or
utilities hereunder, Landlord may, at any time, at Landlord's option and on at
least thirty (30) days' prior notice to Tenant, discontinue furnishing any such
utility to the Premises; and in such case, Tenant shall contract directly with
the public or private service company supplying such utility service for the
purchase by Tenant of such utility, and (ii) throughout the Lease Term Landlord
shall keep in good order and repair and shall maintain the telephone raceway
and interface wiring system and shall make any necessary repairs to or
replacements of such telephone raceway and/or interface wiring system (except
that Landlord's obligation shall not include repair or replacement of service
extensions, wiring or other telephone systems exclusively servicing the
Premises and that Tenant shall reimburse Landlord for any and all repairs
thereto necessitated by any acts, omissions to act or negligence of Tenant or
Tenant's agents, employees and contractors).
(d) (i) Throughout the Lease Term Landlord shall keep in good order
and repair and shall maintain the sprinkler system in the Premises, including
checking, testing and servicing thereof, and shall make any necessary repairs
to or replacements of such sprinkler system (except that Tenant, at its expense,
shall make any or all repairs and replacements thereto necessitated by any
acts, omissions to act or negligence of Tenant or Tenant's agents, employees
and contractors and any expansions or improvements desired by Tenant to such
portion of the sprinkler system servicing the Premises). In consideration
thereof, Tenant shall pay to Landlord, for each Lease Year or partial Lease
Year during the Lease Term hereof, a Sprinkler Charge as set forth in Section
1M of this Lease, which shall be payable in twelve (12) equal monthly
installments, in advance, on the first day of each month during the Lease Term
and any additional charge billed by Landlord for repairs or replacements made
necessary by reason of the acts, omissions to act or negligence of Tenant or
Tenant's agents, employees or contractors. All modifications to such sprinkler
system that Tenant may
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desire shall be performed as provided in Exhibit "B" and (ii) should the
utility company furnishing water to the Shopping Center levy, assess or
impose upon Landlord a sprinkler system backup charge, then Tenant shall pay
to Landlord its proportionate share thereof, which shall be in an amount equal
to the product obtained by multiplying said charge by a fraction, the numerator
of which shall be the GLA of the Premises and the denominator of which shall
be the GLA in the Shopping Center served by such sprinkler system determined as
of the date such charge is billed to Tenant; and shall be paid by Tenant
within ten (10) days after billing by Landlord.
(e) (i) Tenant shall pay to Landlord for each Lease Year or partial
Lease Year during the Lease Term, the Water Charge for normal usage of cold
water for drinking and sanitary purposes. Tenant's Water Charge shall be paid
in twelve (12) equal monthly installments, in advance, on the first day of each
month during the Lease Term, (ii) Tenant agrees that the Water Charge shall be
adjusted from time to time by a percentage factor equal to the percentage of
increase or decrease in the amount of water used in the Premises and/or of the
water rates existing as of the Commencement Date of the Lease Term, and (iii)
the Water Charge shall also include all sewer charges if such sewer charges are
billed to Landlord by the utility company as a combined water and sewer charge.
(f) Tenant shall pay to Landlord a charge (the "Trash Charge") in the
amount set forth in Paragraph 1(O) of the Lease, on the first day of each month
in advance, for the furnishing of trash and garbage removal from the Premises
by Landlord.
33. TAXES: (a) Tenant shall, in all instances, pay its proportionate
share of all real estate taxes ("Taxes") which may be levied or assessed by the
lawful taxing authorities against the land, buildings and all other improvements
and betterments in the Shopping Center. For the purpose of this Paragraph 33
only, the term "Shopping Center" shall include any adjacent property leased by
Landlord to a Department Store if Landlord is the owner of the Department Store
building. The term "Taxes" shall mean and include all real estate taxes,
assessments, water and sewer rents (except such water and sewer charges which
are measured by the consumption by the actual user of the item or service for
which the charge is made) and other governmental levies and charges of every
kind and nature whatsoever, general and special, extraordinary and ordinary,
foreseen and unforeseen, and each and every installment thereof, which shall or
may during the Lease Term be levied, assessed, imposed, become due and payable,
or liens upon, or arising in connection with the use, increased valuation from
sale or otherwise, occupancy or possession of, or grow due and payable out of,
or for, the Shopping Center or any part thereof or any land, buildings or other
improvements therein (as initially constructed or as the same may at any time
thereafter be enlarged or reduced), including interest on installment payments,
and all costs, expenses and fees (including reasonable attorney's and
appraiser's fees) incurred or expended by Landlord in reviewing tax charges or
contesting such Taxes, assessments and/or negotiating with the public
authorities as to the same; provided, however, that if at any time during the
Lease Term the methods of taxation prevailing at the Commencement Date of the
Lease Term shall be altered so that in addition to, or in lieu of, or as a
substitute for the whole or any part of the Taxes now levied, assessed or
imposed on real estate as such there shall be levied, assessed or imposed (i) a
tax on the rents received from such real estate, (ii) a license fee measured by
the rents receivable by Landlord for the Shopping Center or any portion thereof,
or (iii) a tax or license imposed upon Landlord which is otherwise measured by
or based in whole or in part upon the Shopping Center or any portion thereof,
then the same shall be included in the computation of Taxes, computed as if the
amount of such tax or fee so payable were that part due if the Shopping Center
were the only property of Landlord subject thereto. Nothing herein contained
shall be construed to include as Taxes any inheritance, estate, succession,
transfer, gift, franchise, corporation, income or profit tax or capital levy
that is or may be imposed upon the Landlord.
(b) Tenant shall pay to Landlord the Tax Charge (as defined
hereafter) based on the amount of Taxes to be assessed or levied as soon as
such amount is reasonably determinable in an amount equal to the product
obtained by multiplying the entire amount of such Taxes by a fraction, the
numerator of which shall be the GLA of the Premises and the denominator of
which shall be the greater of (i) eighty percent (80%) of the GLA in the
Shopping Center, or (ii) the GLA in the Shopping Center occupied by tenants of
the Shopping Center, both determined as of August 1 of each Lease Year
(hereinafter called the "Tax Charge"). GLA in the Shopping Center, for the
purposes of this Section 33(b) only, shall be deemed to mean the actual number
of square feet of floor space in all buildings in the Shopping Center (as
initially constructed or as the same may be enlarged or reduced) which is
exclusively appropriated for use by lessees and tenants of the
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Shopping Center, excluding the square footage of the building roofs, common
areas of the Shopping Center (as defined in Paragraph 33 hereof), outdoor sales
areas, project manager's offices, mechanical penthouses and machinery utility
and equipment rooms. All measurements shall be made in the manner set forth in
Paragraph 2. A determination by Landlord's architect shall be conclusive as to
the number of square feet of GLA and space in each instance in which a
determination thereof shall be required under the provisions of this Lease. If
any part or parcel of the Shopping Center property and/or the buildings and
improvements erected thereon shall be separately assessed and taxed and
Landlord shall not be required to pay the Taxes levied thereon, then, and in
such event, for the purpose of computing such Taxes the GLA and the Taxes
levied against such part or parcel and/or the buildings and improvements
thereon as may be separately assessed shall not form a part of the foregoing
computation. Tenant's Tax Charge shall be paid to Landlord in equal monthly
installments, in advance (as the same may be subsequently increased or
decreased). If the amount of such monthly payments paid by Tenant exceeds the
amount actually due, the overpayment shall be credited on Tenant's next
succeeding payment or during the last Lease Year, Landlord will refund such
excess to Tenant within thirty (30) days following the expiration of the Lease
Term. If the amount of such monthly payments paid by Tenant shall be less than
the actual amount due, Tenant shall pay to Landlord the difference between the
amount paid by Tenant and the actual amount due, within ten (1O) days after
demand by Landlord. If, on the first day of the month in question the amount of
Taxes payable during the then current tax year shall not have been determined
by the taxing authority, the Tax Charge then payable by Tenant shall be
estimated by Landlord based on the amount of the corresponding Taxes for the
immediately preceding tax year, and any anticipated increase, subject to
adjustment when the amount of such Taxes shall be determined and payment of any
adjustment shall be made by Tenant upon billing by Landlord. If any mortgagee
or ground lessor of Landlord should require tax escrow deposits, in advance of
the due date, then Tenant shall deposit with Landlord, in advance, its share of
such Taxes.
(c) Any fiscal tax year or years commencing during any Lease Year or
partial Lease Year shall be deemed to correspond to such Lease Year or partial
Lease Year, except that with respect to the first and last Lease Years of the
Lease Term, the Taxes for the then current fiscal tax year or years and the Tax
Charge payable by Tenant shall be prorated from the Commencement Date of the
first Lease Year or partial Lease Year and to the end of the last Lease Year,
as to which Tenant's obligation shall survive the expiration of the Lease Term.
(d) Tenant agrees to pay, prior to delinquency, any and all taxes and
assessments levied or assessed during the Lease Term upon or against (i) all
furniture, fixtures, signs, equipment and any other personal property installed
or located within the Premises, (ii) all alterations, additions, betterments
and improvements of whatsoever kind or nature, made by Tenant to the Premises,
including such improvements and betterments mentioned in Exhibit "B" as
Tenant's Work, as the same may be separately levied, taxed and assessed against
or imposed directly upon Tenant by the taxing authorities, and (iii) the
rentals payable hereunder by Tenant to Landlord (other than Landlord's Federal,
State and local income taxes thereon).
(e) Should any governmental authority require that a tax, other than
the Taxes above mentioned, be paid by Tenant, but collected by Landlord, for
and on behalf of the governmental authority, and forwarded by the Landlord to
the governmental authority, the same shall be paid by Tenant to Landlord,
monthly, in advance.
(f) Landlord shall have the right, if permitted by law, to make
installment payments of any assessments levied against the Shopping Center, and
such Taxes shall be computed upon the installments and interest thereon paid by
Landlord in each Lease Year if Landlord elects such installment method.
Landlord shall have the right to contest the validity or amount of any Tax by
appropriate proceedings. In the event Landlord receives any refund of such
Taxes, Landlord shall proportionately credit such refund as shall be allocable
to payments of the Tax Charge actually made by Tenant (less costs, expense and
reasonable attorneys' and appraisers' fees) against the next succeeding
payments of the Tax Charge due from Tenant, or during the last Lease Year,
Landlord will refund Tenant's share of such net refund to Tenant within thirty
(30) days following the expiration of the Lease Term.
(g) Any amount payable by Tenant to Landlord under this Paragraph
shall be paid within ten (10) days after receipt by Tenant from Landlord of a
▇▇▇▇ setting forth such amount.
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(h) In the event of a good faith dispute, Tenant shall pay the Tax
Charge in accordance with the applicable ▇▇▇▇ or statement, and such payment
shall be without prejudice to Tenant's position. If the dispute shall be
determined in Tenant's favor, by agreement or otherwise, Landlord shall refund
to Tenant the amount of Tenant's overpayment.
(i) Any such ▇▇▇▇ or statement shall be deemed binding and conclusive
on Tenant if Tenant fails to object thereto in writing (stating the reasons
therefor) within thirty (30) days after the date thereof or if Tenant fails to
comply with the provisions of subparagraph (h) of this Paragraph 33.
(j) With respect to any Taxes for which Tenant is responsible
hereunder, the official tax ▇▇▇▇ shall be conclusive evidence of the amount of
Taxes assessed or levied, and of the items taxed. A copy of such tax ▇▇▇▇
shall, upon request of Tenant, be submitted when available by Landlord to
Tenant.
34. COMMON AREAS: All common areas and other common facilities (hereinafter
collectively called "common areas") made available by Landlord in or about the
Shopping Center shall be subject to the exclusive control and management of
Landlord, expressly reserving to Landlord, without limitation, the right to
erect, install or operate within the enclosed malls or the parking areas,
kiosks, planters, pools, sculpture, free-standing buildings, advertising
displays, entertainment, educational displays, events or otherwise. Common
areas (as initially constructed or as the same may at any time thereafter be
enlarged or reduced) shall mean all areas, space, facilities, equipment, signs
and special services from time to time made available by Landlord for the
common and joint use and benefit of Landlord, the Tenant and other tenants and
occupants of the Shopping Center, and their respective employees, agents,
subtenants, concessionaires, licensees, customers and invitees, which may
include (but shall not be deemed a representation as to their availability),
the sidewalks, parking areas, access roads, driveways, landscaped areas, truck
serviceways, tunnels, loading docks, pedestrian malls (enclosed or open),
courts, stairs, ramps, elevators, escalators, comfort and first aid stations,
public washrooms, community hall or auditorium and parcel pick-up stations.
Landlord hereby expressly reserves the right, from time to time, to
construct, maintain and operate lighting and other facilities, equipment and
signs on all of said common areas; to police the same; to change the area,
level, location and arrangement of the parking areas and other facilities
forming a part of said common areas; to build multi-story parking facilities;
to restrict parking by tenants and other occupants of the Shopping Center and
their employees, agents, subtenants, concessionaires and licensees; to enforce
parking charges (by operation of meters or otherwise), but in such event the
net proceeds from such charges, after deducting the cost of enforcing the same,
shall be applied in reduction of the cost of maintaining the common area except
when multi-story parking facilities are constructed by Landlord after the
initial grand opening of the Shopping Center; to close temporarily all or any
portion of the common areas for the purpose of making repairs or changes
thereto and to discourage non-customer parking; and to establish, modify and
enforce reasonable rules and regulations with respect to the common areas and
the use to be made thereof. Landlord shall operate, manage, equip, light and
maintain the common areas in such manner as Landlord, in its reasonable
discretion, may from time to time determine, and Landlord shall have the right
and exclusive authority to employ and discharge all personnel with respect
thereto.
Tenant, its customers, employees, invitees and guests, are hereby given
a license during the Lease Term (in common with all others to whom Landlord has
or may hereafter grant rights) to use the common areas of the Shopping Center
as they may now or at any time during the Lease Term exist, provided, however,
that if the size, location or arrangement of such common areas or the type of
facilities at any time forming a part thereof be changed or diminished,
Landlord shall not be subject to any liability, nor shall Tenant be entitled to
any compensation or diminution or abatement of rent, nor shall such change or
diminution of such areas be deemed a constructive or actual eviction. In order
to establish that the Shopping Center or any portion thereof is and will
continue to remain private property and to prevent a dedication thereof or the
accrual of any rights to any person or to the public therein, Landlord hereby
reserves the unrestricted right to close all or any portion of the Shopping
Center owned, leased or controlled by Landlord to the general public for one
(1) day in each calendar year, and, in connection therewith, to seal off all
entrances to the Shopping Center, or any portion thereof. Tenant hereby
acknowledges, consents and agrees that any and/or all services, facilities and
access by the public to the Premises and/or to the Shopping Center may be
suspended in whole or in part during such temporary times as all of the
Department Stores adjoining
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the Shopping Center are not open for business, on legal holidays, on such other
days as may be declared by local, State or Federal authorities as days of
observance, and/or during any periods of actual or threatened civil commotion,
insurrection or other circumstances beyond Landlord's control when Landlord, in
Landlord's reasonable judgment, shall deem the suspension of such services,
facilities and access necessary for the protection and/or preservation of
persons and/or property.
35. COST OF MAINTENANCE OF COMMON AREAS: (a) Landlord shall maintain the
common areas and facilities in good order, condition and repair. Tenant agrees
to pay Landlord, in the manner provided and as computed in subparagraph (b) of
this Paragraph 35, a share of the Operating Costs of the common areas of the
Shopping Center. "Operating Costs" shall mean the total costs and expenses
incurred in operating, maintaining and repairing the common areas and
facilities, including, without limitation, personal and real property taxes and
special assessments; surcharges levied upon or assessed against parking spaces
or areas; payments toward mass transit or car pooling facilities or otherwise
as required by Federal, State or local governmental authorities; costs and
expenses in connection with maintaining Federal, State and local governmental
ambient air and environmental standards; the cost of all materials, supplies
and services purchased or hired therefor; the cost and expense of operating,
maintaining, repairing and replacement of curbs, sidewalks, parking surfaces,
paving, walkways, roadways, landscaping, gardening and planting, cleaning,
painting (including line painting), decorating, repairing, paving, lighting,
sanitary control, removal of snow, trash, garbage and other refuse, heating,
ventilating, air conditioning of and smoke control for the enclosed malls and
other enclosed portions of the common areas, fire protection, water and
sewerage charges, the cost of all types of insurance coverages carried by
Landlord covering the common areas, including, without limitation, public
liability, personal and bodily injury and property damage liability and
automobile coverage, fire and extended coverage, vandalism and malicious
mischief and all broad form coverages, sign insurance and any other insurance
that may be carried by Landlord covering the common areas all in limits
selected by Landlord (it is agreed and understood that Landlord may self-insure
or internally perform other functions relating to the Shopping Center included
in Operating Costs, and, in such event, Landlord may include in Operating Costs
the reasonable and competitive cost of such functions performed internally by
Landlord), operation of loud speakers and any other equipment supplying music
to the common areas or any parts thereof, operation of public toilets,
installing and renting of signs, maintenance and repair of roofs, foundations,
exterior walls, downspouts and gutters, maintenance, repair and replacement of
utility systems serving the common areas, including water, sanitary sewer and
storm water lines and other utility lines, pipes and conduits, replacement
reserve for heating, ventilating, air conditioning and/or smoke control
equipment, depreciation or rental value of machinery and equipment owned and
used in the operation, maintenance and repair of the common areas, or the
rental charges for such machinery and equipment, the cost of any services
deemed necessary by Landlord to prevent, restrict or control the use of the
Common Areas by members of the public for uses for which they are not intended
and/or to maintain such common areas as private property, including court costs
and attorneys' fees, the cost of the Shopping Center manager and the personnel
reasonably required (including applicable benefits, payroll taxes, workmen's
compensation insurance and disability insurance) to implement all of the
foregoing, including the policing of the common areas and the directing of
traffic and parking of automobiles on the parking areas thereof, administrative
costs attributable to the common areas and an overhead cost equal to fifteen
percent (15%) of the total Operating Costs (hereinafter referred to as the
"Total Operating Costs"). Subject to the provisions hereof, Operating Costs
shall not include initial costs of equipment properly chargeable to capital
account consisting of items real estate in nature and the original cost of
constructing the common areas but shall, however, include those capital costs
allowed as "Permitted Capital Pass Through Costs" as defined in subparagraph
35(7) below. Landlord may cause any or all of said services to be provided by
an independent contractor or contractors.
(b) Tenant's Common Area Charge shall be an amount equal to the
product obtained by multiplying the Total Operating Costs paid or incurred by
Landlord during the first accounting period and each subsequent accounting
period, as hereafter defined, by a fraction, the numerator of which shall be
the GLA of the Premises and the denominator of which shall be the greater of
(i) eighty percent (80%) of the GLA in the Shopping Center, or (ii) the GLA in
the Shopping Center occupied by tenants of the Shopping Center, both determined
as of August 1 of each Lease Year. If any Tenant or occupant of any free-
standing buildings or structures which shall be erected in the Shopping Center
make payment toward the common area Operating Costs of the Shopping Center,
then the GLA of such free-standing buildings or structures shall not be
included in the GLA in the Shopping Center and payments actually received by
Landlord from
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the tenants or occupants of such free-standing buildings or structures as their
share of the Operating Costs shall be deducted from the Total Operating Costs
paid or incurred by Landlord during the particular accounting period when such
payments are received before computing Tenant's Common Area Charge; and (iii)
if Landlord should elect or be required to maintain the common areas owned or
leased by Department Stores adjoining the Shopping Center, then for the purpose
of computing Tenant's Common Area Charge, the Operating Costs paid or incurred
by Landlord in maintaining such adjoining common areas shall be included in the
Operating Costs defined under subparagraph (a) of this Paragraph and payments
actually received by Landlord from such Department Stores as their share of
Operating Costs shall be deducted from the Total Operating Costs paid or
incurred by Landlord during the particular accounting period when such payments
are received before computing Tenant's Common Area Charge. The term "accounting
period" shall be such period as Landlord shall select using accepted accounting
principles and practices consistently applied but shall initially be the
applicable calendar year. Tenant's share of such Total Operating Costs shall be
payable as follows:
(1) During that portion of the Lease Term falling within the first
accounting period (subject to adjustment as set forth in subparagraph [b][3]
hereof), Tenant shall pay Landlord monthly, in advance, on the first day of
each month, a sum in such amounts as are billed to Tenant by Landlord, as an
estimate of Tenant's share of such Total Operating Costs during the first
accounting period.
(2) The foregoing estimated sum under subparagraph (b)(1) shall be
adjusted and revised by Landlord from time to time during the Lease Term on the
basis of the actual Total Operating Costs for the immediately preceding
accounting period plus reasonable anticipated increases or decreases in such
costs. Upon Landlord furnishing to Tenant a written statement setting forth
such revised estimated Operating Costs, Tenant shall pay Landlord the revised
Common Area Charge in monthly installments, in advance, on the first day of
each month until the next succeeding revision in such estimate.
(3) Within ninety (90) days following the end of the first accounting
period and each subsequent accounting period, Landlord shall furnish Tenant a
written statement covering the accounting period just expired, showing in
reasonable detail a general breakdown of the actual Total Operating Costs, the
amount of Tenant's Common Area Charge for such accounting period and the
payments made by Tenant with respect to such accounting period. Tenant shall
pay Landlord the deficiency within ten (10) days after the furnishing of said
statement; and if said payments exceed Tenant's Common Area Charge, Tenant
shall be entitled to a credit for such excess against payments next thereafter
to become due Landlord on account of Tenant's Common Area Charge, or during the
last Lease Year, Landlord will refund such excess to Tenant within thirty (30)
days following the expiration of the Lease Term.
(4) As to the first accounting period or any subsequent accounting
period a portion only of which is contained in the Lease Term, Tenant's
obligation for a share of the actual Total Operating Costs shall be prorated on
the basis of the actual number of days in the portion of such accounting period
contained in the Lease Term, as to which Tenant's obligation shall survive the
expiration of the Lease Term.
(5) In the event of any dispute, Tenant shall pay the amount of
Landlord's ▇▇▇▇ or statement, and such payment shall be without prejudice to
Tenant's position. If the dispute shall be determined in Tenant's favor, by
agreement or otherwise, Landlord shall refund to Tenant the amount of Tenant's
overpayment. Provided Tenant is not then in default under this Lease, Tenant
may, at its expense and on not less than fifteen (15) days prior written notice
to Landlord and not more than once during each Lease Year, review the Total
Common Area Charges for the immediately preceding Lease Year at the office of
Landlord where such records are maintained.
Failure by Tenant to exercise any audit right granted herein, or
Landlord to dispute any Tenant audit within the specified time period or the
failure of either party to otherwise fail to contest or dispute the allocation
of Additional Rent or Common Area Maintenance Charges ("CAM") within twelve
(12) months of the date any statement for Additional Rent or CAM charges or
fees is submitted to Tenant:
(a) is deemed a waiver of the applicable audit or dispute
right and any right to contest the Additional Rent charges
(undercharges or overcharges) for the applicable Lease Year;
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(b) is deemed acceptance of the Additional Rent charges as
submitted to and reviewed by Tenant; and
(c) constitutes full release of Landlord by Tenant for any
overcharges of Additional Rent more than one (1) year old
and a full release of Tenant by Landlord for any
undercharging of Additional Rent more than one (1) year
old.
(6) Any such ▇▇▇▇ or statement shall be deemed binding and conclusive
if Tenant fails to object thereto in writing (stating the reason therefor),
within thirty (30) days after the date thereof or if Tenant fails to comply
with the provisions of subparagraph (5) of this Paragraph 35.
Notwithstanding anything to the contrary contained herein, failure by
Tenant to exercise any audit right granted herein or Landlord to dispute any
Tenant audit within the specified time period or the failure of either party to
otherwise fail to contest or dispute the allocation of Additional Rent or CAM
charges within twelve (12) months of the date any statement for Additional Rent
or CAM charges or fees is submitted to Tenant:
(a) is deemed a waiver of the applicable audit or dispute
right and any right to contest the Additional Rent charges
(undercharges or overcharges) for the applicable Lease
Year;
(b) is deemed acceptance of the Additional Rent charges as
submitted to and reviewed by Tenant; and
(c) constitutes full release of Landlord by Tenant for any
overcharges of Additional Rent more than one year old and
a full release of Tenant by Landlord for any undercharging
of Additional Rent more than one year old.
(7) "Permitted Capital Pass Through Cost" shall mean the following
costs and expenses incurred by Landlord from and after January 1 of the calendar
year in which this Lease is executed: (i) the cost of any capital improvement
made to the Property by Landlord that is required under any governmental law or
regulation which was not promulgated, or which was promulgated but was not
applicable to the Building, at the time the Building was constructed, amortized
over such period as Landlord shall reasonably determine, together with an
amount equal to interest at the rate of twelve percent (12%) per annum (the
"Amortization Rate") on the unamortized balance thereof; (ii) the cost of any
capital improvement made to the Common Areas of the Property that is required
under interpretations or regulations issued from time to time under the
provisions of Tex. Rev. Civ. Stat. ▇▇▇. art. 9102 and the provisions of the
Americans with Disabilities Act of 1990, 42 U.S.C.
Sections 12101-12213 (collectively, the "Disability Acts"), amortized over such
period as Landlord shall reasonably determine, together with an amount equal to
interest at the Amortization Rate on the unamortized balance thereof; (iii) the
cost of any labor-saving or energy-saving device or other equipment installed
in the Building (provided Landlord reasonably anticipates that the installation
thereof will reduce Operating Expenses), amortized over such period as is
reasonably determined by Landlord, together with an amount equal to interest at
the Amortization Rate on the unamortized balance thereof; and (iv) all other
capital costs and expenses which would generally be regarded as ownership,
operating, maintenance and management costs and expenses which would normally
be amortized over a period not to exceed five (5) years.
36. PROMOTION OF CENTER AND TENANT'S BUSINESS.
(a) Promotional Fund: Tenant shall pay Landlord the monthly Promotion
Fund Charge set forth in Paragraph 1(L), subject to increases as described
below (the fund created by such charges and any similar charges paid by other
tenants or parties shall be referred to herein as the "Promotional Fund").
Landlord shall use the Promotional Fund to promote, advertise and market the
Shopping Center through television, radio, newspaper or other media, or through
other non-media promotions or events. Although Landlord may appoint a committee
of representatives from one or more tenants or Department Stores to advise
Landlord concerning the use of the Promotion Fund, Landlord reserves the right
to use the Promotion Fund for the foregoing purposes in Landlord's sole
discretion. Tenant shall also pay a non-recurring supplemental
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Promotion Fund Charge equal to twelve (12) times the monthly amount: (i) upon
Tenant's execution of this Lease, and (ii) each time Landlord spends at least
$1,000,000 expanding or renovating the Shopping Center from time to time during
the Term upon ten (10) days written request by Landlord.
(b) Merchants' Association: Landlord may, from time to time in
Landlord's sole discretion, require that Tenant participate in a merchants'
association for the Shopping Center sponsored or designated by Landlord. In
such case: (i) Tenant shall participate as an active member in such
association, (ii) Tenant shall continue to pay the Promotion Fund Charge to
Landlord, and such Promotion Fund Charge shall be deemed to satisfy any
obligations of Tenant to pay regular monthly dues to such association, (iii)
Landlord shall turn over such Promotion Fund Charge to the association, or at
Landlord's option shall continue to use the same or a portion thereof in
conjunction with or on behalf of the association for the purpose of promoting,
advertising and marketing the Shopping Center, and (iv) Tenant shall pay any
special assessments and participate in any joint advertising or promotional
events sponsored by such association, and shall comply with all other
requirements of such association.
(c) Media Fund, Joint Advertising: Tenant shall pay Landlord the
monthly Media Fund Charge set forth in Paragraph 1(M), subject to increases as
described below (the fund created by such charges and any similar charges paid
by other tenants or parties shall be referred to herein as the "Media Fund").
Landlord shall use the Media Fund to supplement any Promotion Fund or in order
to promote, advertise and market the Shopping Center through television, radio,
newspaper or other electronic or print media, in Landlord's sole discretion.
Landlord may, from time to time in Landlord's sole discretion and until further
notice, reduce the Media Fund Charge and in lieu thereof require that Tenant
spend an amount not exceeding such reduction on joint advertising prepared,
established, sponsored or required for the Shopping Center by Landlord (with
such design and content as Landlord shall reasonably approve in advance).
(d) Payments, Increases, and Unused Funds: Tenant shall pay the
Promotion Fund Charge and Media Fund Charge in advance on or before the first
day of each calendar month during the Term. The Promotion Fund Charge and Media
Fund Charge shall be subject to increases effective each January 1 during the
Term or at such other times as Landlord may reasonably determine. Landlord
shall determine each increase based on the percentage increases in the "CPI"
from the Commencement Date through the latest date for which a current index is
available prior to the scheduled increase. Notwithstanding the foregoing, in
the case of the Media Fund Charge, Landlord may use the percentage increase in
the electronic, print and outdoor advertising rates of the media utilized by
Landlord over such rates for the preceding year in the media market in which
the Shopping Center is located. In no event shall the Promotion Fund Charge or
Media Fund Charge ever be reduced, even if the "CPI" or advertising rates
decrease for any given period. Any amounts of the respective Funds remaining
after the end of any calendar year shall be used by Landlord in subsequent
years, and Landlord shall have no obligation to refund any unused amounts to
Tenant after expiration of this Lease or otherwise whatsoever. For the purposes
of this provision CPI shall mean "The Revised Consumer's Price Index for Urban
Wage Earners and Clerical Workers, all Cities (CPI-W) (1982 = 100)," issued by
the Bureau of Labor Statistics of the U.S. Department of Labor in the Current
Labor Statistic Section of the Monthly Labor Review ("CPI").
(e) Tenant Advertising: In order to help maximize Gross Sales, Tenant
agrees to spend an amount equal to at least two percent (2%) of Tenant's Gross
Sales to advertise Tenant's business in the Premises in the market area in
which the Shopping Center is located during each Lease Year. Such amount shall
be in addition to the Promotion Fund Charge and Media Fund Charge. Tenant shall
provide Landlord with evidence of such advertising programs in the market area
in which the Shopping Center is located, Tenant shall include the Premises so
that it receives at least as much publicity as other stores owned or operated
by Tenant in such market area. All references to Landlord or the Shopping
Center in such programs shall be in good taste and shall identify the Shopping
Center by the name designated by Landlord from time to time.
(f) Landlord's Expenses: Landlord shall be reimbursed out of the
Promotion Fund or by any merchants' association for all costs and expenses
incurred by Landlord in administering such Funds or in providing services to
such association, including without limitation, costs for performing or
procuring services for audits, tax filings and bookkeeping, and the
compensation, benefits and related expenses for a marketing director and staff,
rental value of space in the Shopping Center used by the same, all office
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equipment, utilities and supplies, postal and travel expenses in connection
therewith, and the cost of all Shopping Center advertisements and promotional
and marketing activities and events.
37. INDEMNITY: (A) LANDLORD'S INDEMNITY OF TENANT. EXCLUSIVE OF: (I) ANY
CLAIM OR LOSS COVERED BY TENANT'S INSURANCE ACTUALLY CARRIED BY TENANT OR
REQUIRED TO BE CARRIED BY TENANT UNDER THIS LEASE, (II) ANY HAZARDOUS OR TOXIC
MATERIAL CLAIMS OR LIABILITY, CONDEMNATION OR FIRE OR CASUALTY CLAIMS, EACH OF
WHICH SHALL BE CONTROLLED BY THE SPECIFIC PARAGRAPHS UNDER THIS LEASE DEALING
WITH THOSE MATTERS, AND/OR (III) ANY INJURY, DEATH, DAMAGE, LIABILITY OR CLAIMS
ARISING FROM OR OUT OF THE WILLFUL ACTS, MISCONDUCT OR NEGLIGENCE OF TENANT,
ITS EMPLOYEES, CONTRACTORS, AGENTS AND INVITEES, LANDLORD SHALL INDEMNIFY AND
HOLD TENANT HARMLESS (INCLUDING TENANT'S OFFICERS, DIRECTORS AND EMPLOYEES),
FROM AND AGAINST (SUBJECT TO THE FOREGOING EXCLUSIONS) ANY AND ALL FINES,
ORDERS, DECREES, CLAIMS, LIABILITIES, SUITS, JUDGMENTS, LOSSES OR DAMAGES
(INCLUDING COSTS AND REASONABLE ATTORNEY FEES) ARISING OUT OF OR CONNECTED WITH
ANY INJURY TO PERSON, DEATH, OR DAMAGE TO PROPERTY OCCURRING IN, ON OR ABOUT
THE COMMON AREAS OF THE SHOPPING CENTER. TENANT AGREES TO LOOK FIRST TO ANY
INSURANCE COVERAGE CARRIED BY TENANT (WHICH SHALL BE PRIMARY) FOR RELIEF FROM
OR UNDER ANY FINE, ORDER, DECREE, CLAIM, LIABILITY, LOSS SUIT, JUDGMENT OR
DAMAGE INCURRED BY OR BROUGHT AGAINST TENANT PRIOR TO MAKING A CLAIM UNDER OR
SEEKING TO ENFORCE THIS INDEMNITY.
TENANT'S INDEMNITY OF LANDLORD. EXCLUSIVE OF: (I) ANY CLAIM OR LOSS
COVERED BY LANDLORD'S INSURANCE ACTUALLY CARRIED BY LANDLORD OR REQUIRED TO BE
CARRIED BY LANDLORD UNDER THIS LEASE, (II) ANY HAZARDOUS OR TOXIC MATERIAL
CLAIMS, EACH WHICH SHALL BE CONTROLLED BY THE SPECIFIC PARAGRAPHS UNDER THIS
LEASE DEALING WITH THOSE MATTERS, AND/OR (III) ANY INJURY, DEATH, DAMAGE,
LIABILITY OR CLAIMS ARISING FROM OR OUT OF THE WILLFUL ACTS, MISCONDUCT OR
NEGLIGENCE OF LANDLORD, ITS EMPLOYEES, CONTRACTORS, AGENTS AND INVITEES, TENANT
SHALL INDEMNIFY AND HOLD LANDLORD AND LANDLORD'S PROPERTY MANAGER FOR THE
SHOPPING CENTER HARMLESS (INCLUDING LANDLORD'S AND LANDLORD'S PROPERTY
MANAGER'S OFFICERS, DIRECTORS AND EMPLOYEES), FROM AND AGAINST (SUBJECT TO THE
FOREGOING EXCLUSIONS) ANY AND ALL FINES, ORDERS, DECREES, CLAIMS, LIABILITIES,
SUITS, JUDGMENTS, LOSSES OR DAMAGES (INCLUDING COSTS AND REASONABLE ATTORNEY
FEES) ARISING OUT OF OR CONNECTED WITH ANY INJURY TO PERSON, DEATH, OR DAMAGE
TO PROPERTY OCCURRING IN, OR ABOUT THE PREMISES OR IN CONNECTION WITH ANY
IMPROVEMENTS THEREIN. EXCEPT FOR COMPREHENSIVE GENERAL LIABILITY COVERAGE
REQUIRED TO BE CARRIED BY TENANT UNDER THIS LEASE (WHERE LANDLORD AND
LANDLORD'S PROPERTY MANAGER ARE NAMED INSUREDS, SUCH COVERAGE BEING PRIMARY FOR
ALL PURPOSES), LANDLORD AGREES TO LOOK FIRST TO ANY INSURANCE COVERAGE REQUIRED
TO BE CARRIED BY LANDLORD UNDER THIS LEASE (WHICH, EXCEPT AS SET FORTH ABOVE,
SHALL BE PRIMARY) FOR RELIEF FROM OR UNDER ANY FINE, ORDER, DECREE, CLAIM,
LIABILITY, LOSS, SUIT, JUDGEMENT OR DAMAGE INCURRED BY OR BROUGHT AGAINST
LANDLORD PRIOR TO MAKING A CLAIM UNDER OR SEEKING TO ENFORCE THIS INDEMNITY.
(B) TENANT AND ALL THOSE CLAIMING BY, THROUGH, OR UNDER TENANT SHALL
STORE THEIR PROPERTY IN AND SHALL OCCUPY AND USE THE PREMISES AND ANY
IMPROVEMENTS THEREIN AND APPURTENANCES THERETO AND ALL PORTIONS OF THE SHOPPING
CENTER SOLELY AT THEIR OWN RISK AND TENANT AND ALL THOSE CLAIMING BY, THROUGH,
AND UNDER TENANT HEREBY RELEASE LANDLORD, TO THE FULL EXTENT PERMITTED BY LAW,
FROM ALL CLAIMS OF EVERY KIND, INCLUDING LOSS OF LIFE, PERSONAL OR BODILY
INJURY, DAMAGE TO MERCHANDISE, EQUIPMENT, FIXTURES OR OTHER PROPERTY, OR DAMAGE
TO BUSINESS OR FOR
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BUSINESS INTERRUPTION, ARISING, DIRECTLY OR INDIRECTLY, OUT OF OR FROM OR ON
ACCOUNT OF SUCH OCCUPANCY AND USE OR RESULTING FROM ANY PRESENT OR FUTURE
CONDITION OR STATE OF REPAIR THEREOF.
(C) LANDLORD SHALL NOT BE RESPONSIBLE OR LIABLE FOR DAMAGES AT ANY
TIME TO TENANT, OR TO THOSE CLAIMING BY, THROUGH OR UNDER TENANT, FOR ANY LOSS
OF LIFE, BODILY OR PERSONAL INJURY, OR DAMAGE TO PROPERTY OR BUSINESS, OR FOR
BUSINESS INTERRUPTION, THAT MAY BE OCCASIONED BY OR THROUGH THE ACTS, OMISSIONS
OR NEGLIGENCE OF ANY OTHER PERSONS, OR ANY OTHER TENANTS OR OCCUPANTS OF ANY
PORTION OF THE SHOPPING CENTER AND/OR THE DEPARTMENT STORES ADJOINING THE
SHOPPING CENTER.
(D) LANDLORD SHALL NOT BE RESPONSIBLE OR LIABLE FOR DAMAGES AT ANY
TIME FOR ANY DEFECTS, LATENT OR OTHERWISE, IN ANY BUILDINGS OR IMPROVEMENTS IN
THE SHOPPING CENTER OR ANY OF THE EQUIPMENT, MACHINERY, UTILITIES, APPLIANCES
OR APPARATUS THEREIN, NOR SHALL LANDLORD BE RESPONSIBLE OR LIABLE FOR DAMAGES
AT ANY TIME FOR LOSS OF LIFE, OR INJURY OR DAMAGE TO ANY PERSON OR TO ANY
PROPERTY OR BUSINESS OF TENANT, OR THOSE CLAIMING BY, THROUGH OR UNDER TENANT,
CAUSED BY OR RESULTING FROM THE BURSTING, BREAKING, LEAKING, RUNNING, SEEPING,
OVERFLOWING OR BACKING UP OF WATER, STEAM, GAS, SEWAGE, SNOW OR ICE IN ANY PART
OF THE PREMISES OR CAUSED BY OR RESULTING FROM ACTS OF GOD OR THE ELEMENTS, OR
RESULTING FROM ANY DEFECT OR NEGLIGENCE IN THE OCCUPANCY, CONSTRUCTION,
OPERATION OR USE OF ANY BUILDINGS OR IMPROVEMENTS IN THE SHOPPING CENTER,
INCLUDING THE PREMISES, AND/OR THE DEPARTMENT STORES ADJOINING THE SHOPPING
CENTER OR ANY OF THE EQUIPMENT, FIXTURES, MACHINERY, APPLIANCES OR APPARATUS
THEREIN.
(E) TENANT EXPRESSLY ACKNOWLEDGES THAT ALL OF THE FOREGOING
PROVISIONS OF THIS PARAGRAPH 37 SHALL APPLY AND BECOME EFFECTIVE FROM AND AFTER
THE DATE TENANT OR ITS AGENTS ENTER UPON THE PREMISES TO UNDERTAKE ACTIVITIES
PERMITTED HEREUNDER.
(F) WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, TENANT
SPECIFICALLY ACKNOWLEDGES THAT THE INDEMNITY UNDERTAKING HEREIN SHALL APPLY TO
CLAIMS IN CONNECTION WITH OR ARISING OUT OF ANY "WORK" AS DESCRIBED IN
PARAGRAPH 18, THE USE OR CONSUMPTION OF ANY UTILITIES IN THE PREMISES, ANY
REPAIRS OR OTHER WORK BY OR FOR TENANT (WHETHER OR NOT SUCH MATTERS SHALL HAVE
BEEN THERETOFORE APPROVED BY LANDLORD), EXCEPT TO THE EXTENT THAT ANY OF THE
SAME ARISES FROM THE INTENTIONAL OR GROSSLY NEGLIGENT ACTS OF LANDLORD OR
LANDLORD'S AGENTS OR EMPLOYEES.
38. FIRE INSURANCE: (a) BY LANDLORD: Landlord agrees, during the Lease Term,
to procure and maintain insurance against fire, vandalism and malicious
mischief and such other perils as are from time to time included in a standard
extended coverage endorsement insuring the building improvements and
betterments described in Exhibit "B," (Description of Landlord's Work) in an
amount equal to one hundred percent (100%) actual replacement cost (exclusive
of the cost of footings below floor level, excavations and foundations). Any
insurance provided for in this subparagraph 38(a) above may be effected by
self-insurance or by a policy or policies of blanket insurance covering
additional items or locations or assureds, provided that the requirements of
this subparagraph (a) are otherwise satisfied. Tenant shall have no rights in
any policy or policies maintained by Landlord.
(b) BY TENANT: Tenant agrees, during the Lease Term, to procure and
maintain insurance against fire, earthquake, vandalism, malicious mischief,
water damage and sprinkler leakage and such other perils as are from time to
time included in a standard extended coverage endorsement insuring the (i)
building improvements and betterments to the Premises described in Exhibit "B,"
(Description of Tenant's Work), (ii) any permitted alterations, additions or
improvements made by Tenant to the Premises at any time, (iii)
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Tenant's trade fixtures, furniture, furnishings, decorations, personal
property, signs, inventory and contents, in an amount equal to one hundred
percent (100%) actual replacement cost, including, by endorsement, any increase
in the value of any of such improvements, betterments or property mentioned in
subsections (i), (ii), and (iii) hereof resulting from increased construction
costs, exclusive of depreciation, and (iv) business interruption and loss
coverage. In addition, Tenant shall provide worker's compensation insurance
insuring against and satisfying Tenant's obligations and liabilities under the
worker's compensation laws of the State of Texas and Employer's liability
insurance in an amount not less than $1,000,000.00. Such policies of insurance
shall be issued in the names of and for the benefit of Tenant, Landlord and
Landlord's mortgagee, as their respective interest may appear. If Tenant fails
or refuses to procure and maintain the required amount of insurance and as a
result thereof Landlord is adjudged a coinsurer then any losses or penalties
sustained by Landlord shall be paid for by Tenant upon receipt of a ▇▇▇▇ from
Landlord together with reasonably satisfactory evidence of such loss or
penalty.
(c) WAIVER OF SUBROGATION: LANDLORD AND TENANT EACH HEREBY WAIVES ANY
RIGHTS IT MAY HAVE AGAINST THE OTHER (INCLUDING, BUT NOT LIMITED TO, A DIRECT
ACTION FOR DAMAGES) ON ACCOUNT OF ANY LOSS OR DAMAGE OCCASIONED TO LANDLORD OR
TENANT, AS THE CASE MAY BE (WHETHER OR NOT SUCH LOSS OR DAMAGE IS CAUSED BY THE
FAULT, NEGLIGENCE OR OTHER TORTIOUS CONDUCT, ACTS OR OMISSIONS OF LANDLORD OR
TENANT OR THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR INVITEES),
TO THEIR RESPECTIVE PROPERTY, THE PREMISES, ITS CONTENTS OR TO ANY OTHER
PORTION OF THE BUILDING OR THE PROPERTY ARISING FROM ANY RISK COVERED BY THE
CURRENT TEXAS STATE BOARD OF INSURANCE PROMULGATED FORM OF PROPERTY INSURANCE
AND FIRE AND EXTENDED COVERAGE INSURANCE REQUIRED TO BE CARRIED BY TENANT AND
LANDLORD, RESPECTIVELY, UNDER THIS LEASE. IF A PARTY WAIVING RIGHTS UNDER THIS
PARAGRAPH CARRYING A FIRE AND EXTENDED COVERAGE INSURANCE POLICY IN THE
PROMULGATED FORM USED IN THE STATE OF TEXAS AND AN AMENDMENT TO SUCH
PROMULGATED FORM IS PASSED, SUCH AMENDMENT SHALL BE DEEMED NOT A PART OF SUCH
PROMULGATED FORM UNTIL IT APPLIES TO THE POLICY BEING CARRIED BY THE WAIVING
PARTY. WITHOUT IN ANY WAY LIMITING THE FOREGOING WAIVERS AND TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO EACH, ON BEHALF OF THEIR
RESPECTIVE INSURANCE COMPANIES INSURING THE PROPERTY OF EITHER LANDLORD OR
TENANT AGAINST ANY SUCH LOSS, WAIVE ANY RIGHT OF SUBROGATION THAT LANDLORD OR
TENANT OR THEIR RESPECTIVE INSURERS MAY HAVE AGAINST THE OTHER PARTY OR THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR INVITEES AND ALL RIGHTS OF
THEIR RESPECTIVE INSURANCE COMPANIES BASED UPON AN ASSIGNMENT FROM ITS INSURED.
EACH PARTY TO THIS LEASE AGREES IMMEDIATELY TO GIVE TO EACH SUCH INSURANCE
COMPANY WRITTEN NOTIFICATION OF THE TERMS OF THE MUTUAL WAIVERS CONTAINED IN
THIS PARAGRAPH AND TO HAVE SAID INSURANCE POLICIES PROPERLY ENDORSED, IF
NECESSARY, TO PREVENT THE INVALIDATION OF SAID INSURANCE COVERAGE BY REASON OF
SAID WAIVERS. THE FOREGOING WAIVER SHALL BE EFFECTIVE WHETHER OR NOT THE
PARTIES MAINTAIN THE REQUIRED INSURANCE.
(d) TENANT'S ADDITIONAL INSURANCE: Tenant agrees to secure and keep
in force from and after the date Landlord shall deliver possession of the
Premises to Tenant and throughout the Lease Term, at Tenant's cost and expense
(i) Comprehensive General Liability Insurance on an occurrence basis with
minimum limits of liability in an amount of One Million Dollars ($1,000,000.00)
per occurrence and Two Million Dollars ($2,000,000.00) aggregate, including
water damage and sprinkler leakage legal liability; and which insurance shall
contain a contractual liability endorsement covering the matters set forth in
Paragraph 37. Such insurance shall be issued in the names and for the benefit
of Landlord, Landlord's management company, if any, and Tenant, and shall
contain an endorsement that Landlord, and Landlord's management company, if
any, although named as insured, nevertheless shall be entitled to recover under
said policies for any loss or damage occasioned to them, their servants, agents
and employees by reason of the negligence of Tenant; (ii) Broad Form Boiler and
Machinery Insurance or other similar insurance on all air conditioning
equipment, boilers, other pressure vessels or systems, whether fired or
unfired, and electrical panels and
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miscellaneous electrical apparatus adjoining, above or beneath and serving the
Premises in an amount not less than Forty Thousand Dollars ($40,000.00); and
(iii) Plate Glass Insurance covering all plate glass in the Premises, but
Tenant shall have the option either to insure for this risk or self-insure.
39. INSURANCE REQUIREMENTS: (a) All policies of insurance shall be issued by
insurance companies with general policy holder's rating of not less than B+
and a financial rating of not less than Class 9 as rated in the most current
"Best's Insurance Reports," and licensed to do business in the State where the
Shopping Center is located and authorized to issue such policy or policies.
(b) Each party shall have the right to insure and maintain the
insurance coverages required by this Lease under blanket insurance coverages
covering other premises so long as such blanket insurance policies specify a
stated value for the Premises and comply with the amounts of insurance and the
other requirements hereof.
(c) All policies of insurance procured by Tenant shall contain
endorsements providing as follows: (i) such insurance may not be materially
changed, amended or cancelled with respect to Landlord except after thirty (30)
days' prior written notice from the insurance company to Landlord, sent by
registered mail; (ii) that Tenant shall be solely responsible for the payment
of all premiums under such policy and that Landlord or other parties required
to be named as additional insureds shall have no obligation for the payment
thereof notwithstanding that such parties are named as an insured.
(d) The original policy or policies, or duly executed certificates
for the same, together with reasonably satisfactory evidence of payment of the
premium thereof shall be delivered to Landlord on or before the Commencement
Date of the Lease Term and upon renewals of such policies not less than twenty
(20) days prior to the expiration of any such coverage.
(e) The minimum limits of any insurance coverage required to be
carried by Tenant shall not limit Tenant's liability under Paragraph 37 of this
Lease.
40. PAYMENT OF INSURANCE PREMIUMS: (a) Tenant shall not stock, use or sell
or permit or suffer to be stocked, used or sold any article or do anything in
or about the Premises which may be prohibited by or violate the rules and
regulations of the Fire Insurance Rating Organization having jurisdiction which
will increase any insurance rates and premiums on the Premises, the building of
which it forms a part and/or any other buildings or improvements in the
Shopping Center. If as a result of: (i) any failure of Tenant, or anyone
claiming by, through or under Tenant, to comply with the foregoing sentence;
or, (ii) Tenant's abandonment or desertion of the Premises; the insurance rates
applicable to any policies of insurance carried by Landlord covering the
Shopping Center property or the rental income to be derived therefrom shall be
increased, Tenant agrees to pay Landlord, within ten (10) days after Landlord's
written demand therefor, the entire portion of the premiums for said insurance
which shall be attributable to such higher rates. In determining whether any
increase in such rates is the result of any of the aforementioned acts or
omissions of Tenant or anyone claiming by, through or under Tenant, a schedule
or rule book issued by the applicable rating organization shall be conclusive
evidence of the several items and charges which make up the insurance rates and
premiums on the Premises and the Shopping Center. If any such insurance carried
by Landlord shall be cancelled by the insurance carrier as a result of any of
the aforementioned acts or omissions of Tenant or anyone claiming by, through
or under Tenant, Tenant agrees to indemnify and hold Landlord free and harmless
from all damages, costs and expenses which Landlord may sustain by reason
thereof.
(b) In each Lease Year during the Lease Term, Tenant agrees to
reimburse Landlord within thirty (30) days after billing for Tenant's share of
the premium for fire insurance and extended coverage procured and maintained by
Landlord covering the buildings and improvements now or hereafter constructed
in the Shopping Center. Tenant's share of the premium shall equal the product
obtained by multiplying the total premiums by a fraction, the numerator of
which shall be the GLA of the Premises and the denominator of which shall be
the greater of (i) eighty percent (80%) of the GLA in the Shopping Center, or
(ii) the GLA in the Shopping Center occupied by tenants of the Shopping Center,
both determined as of August 1 of each Lease Year. Together with Landlord's
statement of any sum payable by Tenant hereunder, Landlord shall
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furnish Tenant with a copy of the computations thereof. Landlord reserves the
right to include such charge in Operating Costs.
41. DESTRUCTION: Tenant shall give prompt notice to Landlord in case of any
fire or other damage to the Premises. If (a) the Premises shall be damaged to
the extent of thirty percent (30%) or more of the costs of replacement thereof
during the last two (2) years of the Lease Term or (b) the buildings
constituting the Shopping Center shall be damaged to the extent of fifty percent
(50%) or more of the cost of replacement thereof during the last two (2) years
of the Lease Term, whether or not the Premises shall be damaged, or (c) any of
the Department Stores adjoining the Shopping Center are damaged and such
store(s) does not intend to reopen for business after such damage and
destruction, then or in any such events, Landlord (as to [a], [b] and [c], and
Tenant (as to [a] and [b]) shall have the right and option to cancel this Lease
by written notice within ninety (90) days after the date of such occurrence, and
this Lease shall thereupon cease and terminate with the same force and effect as
though such date were the date fixed for the expiration of the Lease Term. In
such case, Tenant shall vacate and surrender the Premises to Landlord. Tenant's
liability for the rents and other charges reserved hereunder shall cease as of
the later of the date of such damage or destruction or the date of termination
and vacation of the Premises and Landlord shall make an equitable refund of any
rents or other charges paid by Tenant in advance and not earned or accrued. In
the event this Lease is terminated, Tenant covenants and agrees to pay to
Landlord the insurance proceeds payable to Tenant under the property insurance
policies mentioned under Paragraph 38, subparagraph (b) (i) and (b) (ii), which
obligation shall survive the expiration of the Lease Term. Unless this Lease is
terminated by Landlord or Tenant, this Lease shall remain in full force and
effect and the parties waive the provisions of any law to the contrary, and
Landlord and Tenant agree that the Premises shall be repaired and restored,with
due diligence to substantially the condition thereof immediately prior to such
damage or destruction in conformity with the approved working drawings (plans
and specifications) under Exhibit "B." Landlord's obligation to repair and
restore shall be limited to the repair and restoration of the work required to
be insured by Landlord under the provisions of Paragraph 38(a) hereof. Tenant's
obligation to repair and restore shall be the repair and restoration of the work
required to be insured by Tenant under the provisions of Paragraph 38(b) hereof.
Tenant shall continue the operation of Tenant's business in the Premises or any
part thereof not so damaged during any such period to the extent reasonably
practicable from the standpoint of prudent business management.
42. CONDEMNATION: (a) Total: If the whole of the Premises or such part
thereof as will render the remainder untenantable or inaccessible shall be
acquired or taken by eminent domain for any public or quasi-public use or
purpose or by private purchase in lieu thereof, then this Lease and the Lease
Term hereof shall automatically cease and terminate as of the date of title
vesting in such proceedings.
(b) Partial: If twenty-five percent (25%) or more of the GLA of the
Premises shall be so taken, then Landlord and Tenant shall each have the right
to terminate this Lease by written notice given to the other within sixty (60)
days after the date of title vesting in such proceedings. If any part of the
Premises shall be so taken and this Lease shall not be terminated, then this
Lease and all of the terms and provisions thereof shall continue in full force
and effect, except that the Fixed Minimum Rent shall be reduced in the same
proportion that the GLA of the Premises taken bears to the original GLA
demised, and Landlord shall, upon receipt of the award in condemnation, make
all necessary repairs or alterations (exclusive of Tenant's trade and lighting
fixtures, furniture, furnishings, personal property, decorations, signs and
contents) to restore the portion of the Premises remaining to as near its
former condition as circumstances will permit, and to the building of which the
Premises forms a part to the extent necessary to constitute the portion of the
building not so taken to a complete architectural unit; provided, however, that
Landlord, in any event, shall not be required to spend for such repair and
alteration work an amount in excess of the respective amounts received by
Landlord as damages for the taking of such part of the Premises and of the
building of which it forms a part; and Tenant, at Tenant's expense, shall make
all necessary repairs and alterations to Tenant's trade and lighting fixtures,
decoration, signs and contents.
(c) As used herein, the amount received by Landlord shall mean that
portion of the award in condemnation received by Landlord from the condemning
authority which is free and clear of all prior claims or collections by the
holders of any mortgages or deeds of trust or any ground or underlying lessors
and less reasonable attorney's and appraiser's fees.
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(d) If more than fifty percent (50%) of the GLA of the building of
which the Premises forms a part or of the Shopping Center shall be taken as
aforesaid, Landlord shall have the right, by written notice given to Tenant, to
terminate this Lease, such termination to be effective as of the date of title
vesting in such proceeding.
(e) If as a result of such taking, any or all of the Department
Stores adjoining the Shopping Center cease operating its business with the
public or cancel or terminate its or their respective leases or operating
agreements, Landlord shall have the right, by written notice given to Tenant,
to terminate this Lease, such termination to be effective as of the date of
cessation of business with the public or cancellation of such leases or
agreements, whichever the case may be.
(f) If part or parts of the parking areas as a result of such taking,
equal or exceed sixty percent (60%) thereof as the same existed prior to such
taking, Tenant shall not be entitled to compensation, diminution or abatement
of any rent or other charges, nor shall the same be deemed an actual or
constructive eviction. If as a result of such taking of the parking areas the
same are reduced below sixty percent (60%) thereof, Landlord shall have the
right within one hundred eighty (180) days after receipt of the award in
condemnation, to supply substitute parking facilities on the property of
Landlord or within reasonable proximity to the Shopping Center; and in
connection therewith, Landlord shall have the right to construct multi-deck,
elevated, subterranean or vertical parking facilities. If Landlord shall be
unable to replace or substitute such parking area so taken to comply with the
provisions of the preceding sentence of this Paragraph, then Landlord and
Tenant shall have the right to cancel and terminate this Lease, within ninety
(90) days thereafter by giving the other party a thirty (30) days' notice in
writing; and in such event this Lease shall come to an end upon the expiration
of said thirty (30) days and neither party shall thereafter have any further
rights and obligations as against the other.
(g) If this Lease is terminated as provided in this Paragraph, all
rents shall be paid by Tenant up to the later of the date that possession is so
taken by public authority or the date Tenant vacates the Premises, and Landlord
shall make an equitable refund of any rents paid by Tenant in advance and not
earned.
(h) Award: All damages or compensation awarded or paid for any such
taking, whether for the whole or a part of the Premises or any part of the
land, buildings and improvements constituting the Shopping Center, shall belong
to and be the property of Landlord without any participation by Tenant, whether
such damages or compensation shall be awarded or paid for diminution in value
of the fee or any interest of Landlord in any ground or underlying lease
covering the Shopping Center or in the leasehold estate created hereby, and
Tenant hereby expressly waives and relinquishes all claims to such award or
compensation or any part thereof and of the right to participate in any such
condemnation proceedings against the owners of any interest in the Shopping
Center; provided, however, that nothing herein contained shall be construed to
preclude Tenant from prosecuting any claim directly against the condemning
authority, but not against Landlord, for the value of or damage to and/or the
cost of removal of Tenant's trade fixtures and other personal property which
under the terms of this Lease would remain Tenant's property upon the
expiration of the Lease Term, as may be recoverable by Tenant in Tenant's own
right, provided further that no such claim shall diminish or otherwise affect
Landlord's award. Each party agrees to execute and deliver to the other all
instruments that may be required to effectuate the provisions of this Paragraph
42.
(i) Any sale, grant, dedication or taking of peripheral or perimeter
parts or portions of the parking area of the Shopping Center for road widening
or road improvement purposes or for the installation of utilities shall not be
deemed a condemnation or taking within the meaning of this Paragraph and Tenant
shall not, in any such event, be entitled to compensation, diminution or
abatement of any rent or other charges.
43. BANKRUPTCY-INSOLVENCY: The parties acknowledge that the Premises
occupied by Tenant consist of a store building located within an integrated
shopping center development owned and operated by Landlord, and in the event
Tenant becomes subject to voluntary or involuntary proceedings under the
Bankruptcy Reform Act of 1978 (the "Act"), as the same may be amended, the
specific provisions of the Act relating to shopping centers shall be applicable
to such proceedings. The parties further acknowledge that in order to protect
the mix of tenants within the Shopping Center and to provide the sales volume
anticipated from Tenant's business operation within the Premises, the purposes
for which the Tenant may use the Premises have been specifically limited by the
provisions of Paragraphs 1(G) and 21 hereof, and that
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the economics of this Lease, particularly with respect to the agreed upon Fixed
Minimum Rent and Additional Rent, were established on the basis of Tenant's
expected business operations. Notwithstanding anything in this Lease to the
contrary, in the event Tenant becomes subject to voluntary or involuntary
proceedings under the Act and Tenant or any trustee, receiver or other
custodian of Tenant or of its assets or properties shall assign this Lease, any
and all amounts paid or to be paid by or for the account of the assignee in
consideration of such assignment shall be and remain the property of the
Landlord and any and all such amounts received by Tenant or such trustee,
receiver or custodian shall be held in trust for the Landlord and remitted to
the Landlord promptly after receipt thereof.
44. DEFAULT: A. The occurrence of any one or more of the following events
shall constitute a "Default" by Tenant and shall give rise to Landlord's
remedies set forth in Paragraph 44(B) below: (i) failure to make when due any
payment of Rent, unless such failure is cured within five (5) days of the due
date of such payment; (ii) failure to observe or perform any term or condition
of this Lease other than the payment of Rent, following written notice, unless
such failure is cured within any period of time specified in other Paragraphs
of this Lease or otherwise within a reasonable time, but in no event more than
fifteen (15) days following written notice plus such additional time as may be
required due to Unavoidable Delays as described herein, and (iii) (a) making by
Tenant or any guarantor of this Lease ("Guarantor") any general assignment for
the benefit of creditors, (b) filing by or against Tenant or any Guarantor of a
petition to have Tenant or such Guarantor adjudged a bankrupt or a petition for
reorganization or arrangement under any Law relating to bankruptcy or
insolvency (unless, in the case of a petition filed against Tenant or such
Guarantor, the same is dismissed within ninety [90] days), (c) appointment of a
trustee or receiver to take possession of substantially all of Tenant's assets
located in the Premises or of Tenant's interest in this Lease, where possession
is not restated to Tenant within thirty (30) days, (d) attachment, execution or
other judicial disposition of substantially all of Tenant's assets located on
the Premises or of Tenant's interest in this Lease, (e) Tenant's or any
Guarantor's convening of a meeting of its creditors or any class thereof for
the purpose of effecting a moratorium upon or composition of its debt, (f)
Tenant's or any Guarantor's insolvency or admission of an inability to pay its
debts as they mature, or (g) a violation by Tenant or any affiliate of Tenant
under any other lease or agreement with Landlord relating to the Shopping
Center which is not cured within the time permitted for cure thereunder.
Failure by Tenant to comply with the same term or condition of this Lease on
two occasions during any twelve month period shall cause any failure to comply
with such term or condition during the succeeding twelve month period, at
Landlord's option, to constitute a default without any notice of the same being
required by Landlord and the same shall constitute, at Landlord's option, an
incurable Default. The notice and cure periods provided herein are in lieu of,
and not in addition to, any notice and cure periods provided by Law; provided,
Landlord may at any time and from time to time elect to comply with such notice
and cure periods as may be provided by Law in lieu of the notice and cure
periods provided herein.
B. Remedies. If a Default occurs, Landlord shall have the rights
and remedies hereinafter set forth to the extent permitted by Law, which shall
be distinct, separate and cumulative with and in addition to any other right or
remedy allowed under any Law or other provisions of this Lease:
(1) Termination of Lease. Upon the occurrence of a default by
Tenant hereunder, Landlord may, terminate this Lease by giving written notice
thereof to Tenant (whereupon all obligations and liabilities of Landlord
hereunder shall terminate) and, without further notice and without liability,
repossess the Premises. Landlord shall be entitled to recover all loss and
damage Landlord may suffer by reason of such termination, whether through
inability to relet the Premises on satisfactory terms or otherwise, including
without limitation, the following (without duplication by any element of
damages):
(a) accrued Rent to the date of termination and late
charges, plus interest thereon at the default interest rate from the date due
through the date paid or date of any judgment or award by any court of
competent jurisdiction, the unamortized cost of Tenant's improvements, brokers'
fees and commissions, attorneys' fees, moving allowances and any other costs
incurred by Landlord in connection with making or executing this Lease, the
cost of recovering the Premises and the costs of reletting the Premises
(including, without limitation, advertising costs, brokerage fees, leasing
commissions, reasonable attorneys' fees and refurbishing costs and other costs
in readying the Premises for a new tenant);
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(b) the present value of the Rent (discounted at a rate
of interest equal to eight percent [8.0%] per annum [the "Discount Rate"]) that
would have accrued under this Lease for the balance of the Lease term but for
such termination, reduced by the reasonable fair market rental value of the
Premises for such balance of the Lease term (determined from the present value
of the actual base rents, discounted at the Discount Rate, received and to be
received from Landlord's reletting of the Premises or, if the Premises are not
relet, the base rents, discounted at the Discount Rate, that would be received
from a comparable lease and comparable tenant for a comparable term and taking
into account among other things, the condition of the Premises, market
conditions and the period of time the Premises may reasonably remain vacant
before Landlord is able to re-lease the same to a suitable replacement tenant,
it being agreed that Landlord shall have no obligation to relet or attempt to
relet the Premises); and any other amounts necessary to compensate Landlord for
all damages proximately caused by Tenant's failure to perform its obligations
under this Lease. For purposes of computing the amount of Rent herein that
would have accrued for the termination date, Tenant's obligation for Percentage
Rent shall be projected based on Tenant's average annual Gross Sales for the 36
months (or lesser period, if 36 months of the Term have not expired) preceding
Tenant's Default, and Tenant's obligations for Taxes, Center Expenses, and
Promotion and Media Fund Charges shall be projected, based upon the average
rate of increase, if any, in such items from the Commencement Date through the
termination date;
(c) plus any other costs or amounts necessary to
compensate Landlord for its damages.
(2) Repossession and Re-entry. Upon the occurrence of a
default by Tenant hereunder, Landlord may, immediately terminate Tenant's right
of possession of the Premises (whereupon all obligations and liability of
Landlord hereunder shall terminate), but not terminate this Lease, and, without
notice, demand or liability, enter upon the Premises or any part thereof, take
absolute possession of the same, expel or remove Tenant and any other person or
entity who may be occupying the Premises and change the locks. If Landlord
terminates Tenant's possession of the Premises under this subparagraph 44B(2)
(i) Landlord shall have no obligation whatsoever to tender to Tenant a key for
new locks installed in the Premises, (ii) Tenant shall have no further right to
possession of the Premises, and (iii) Landlord shall have no obligation
whatsoever to relet or attempt to relet the Premises. Landlord may, however, at
its sole option relet the Premises or any part thereof for such terms and such
rents as Landlord may in its sole discretion elect. If Landlord elects to relet
the Premises, rent received by Landlord from such reletting shall be applied
first, to the payment of any indebtedness other than Rent due hereunder from
Tenant to Landlord (in such order as Landlord shall designate), second, to the
payment of any cost of such reletting, including, without limitation,
refurbishing costs, reasonable attorneys' fees, advertising costs, brokerage
fees and leasing commissions and third, to the payment of Rent due and unpaid
hereunder (in such order as Landlord shall designate), and Tenant shall satisfy
and pay to Landlord any deficiency upon demand therefor from time to time.
Landlord shall not be responsible or liable for any failure to relet the
Premises or any part thereof or for any failure to collect rent due upon any
such reletting. No such re-entry or taking of possession of the Premises by
Landlord shall be construed as an election on Landlord's part to terminate this
Lease unless a written notice of such termination is given to Tenant pursuant
to subparagraph 44(B)(1) above. If Landlord relets the Premises, either before
or after the termination of this Lease, all such rentals received from such
lease shall be and remain the exclusive property of Landlord and Tenant shall
not be, at any time, entitled to recover any such rental. Landlord may at any
time after a reletting elect to terminate this Lease.
(3) Continuing Obligations. No repossession of or re-entering
upon the Premises or any part thereof pursuant to subparagraph 44(B)(2) above
or otherwise and no reletting of the Premises or any part thereof pursuant to
subparagraph 44(B)(2) above shall relieve Tenant or any Guarantor of its
liabilities and obligations hereunder, all of which shall survive such
repossession or re-entering. In the event of any such repossession of or
re-entering upon the Premises or any part thereof by reason of the occurrence
of a default, Tenant will continue to pay to Landlord Rent required to be paid
by Tenant.
(4) Cumulative Remedies. No right or remedy herein conferred
upon or reserved to Landlord 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 given hereunder or now or hereafter existing at
law or in equity or by statute. In addition to the other remedies provided in
this Lease, Landlord shall be entitled, to the extent permitted by applicable
law, to injunctive relief in case of the violation, or attempted
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or threatened violation, of any of the covenants, agreements, conditions or
provisions of this Lease, as to a degree compelling performance of any of the
covenants, agreements, conditions or provisions of this Lease or to any other
remedy allowed to Landlord at law or in equity.
(5) Specific Performance and Collection of Rent. Landlord
shall at all times have the right without prior demand or notice except as
required by applicable Law to: (i) seek any declaratory, injunctive or other
equitable relief, and specifically enforce this Lease or restrain or enjoin a
violation of any provision hereof, and Tenant hereby waives any right to
require that Landlord post a bond in connection therewith, and (ii) ▇▇▇ for and
collect any unpaid Rent which has accrued.
(6) Late Charges and Interest. If Landlord rightfully issues a
notice to Tenant that Tenant has violated this Lease, Tenant shall pay
Landlord, as Additional Rent, an additional notice charge in the amount of One
Hundred Dollars ($100.00) therefor. In addition, any Rent not paid when due
shall accrue interest from the due date at the Default Rate until payment is
received by Landlord. Such notice charges and interest payments shall not be
deemed consent by Landlord to late payments, nor a waiver of Landlord's rights
to insist upon timely payments at any time, nor a waiver of any remedies to
which Landlord is entitled as a result of the late payment of Rent.
(7) Landlord's Cure of Tenant Defaults. If Tenant fails to
perform any obligation under this Lease for five (5) days after notice thereof
by Landlord (except that no notice shall be required in emergencies), Landlord
shall have the right (but not the duty), to perform such obligation on behalf
and for the account of Tenant. In such event, Tenant shall reimburse Landlord
upon demand, as additional Rent, for all expenses incurred by Landlord in
performing such obligation together with an amount equal to fifteen percent
(15%) thereof for Landlord's overhead, and interest thereon at the Default Rate
from the date such expenses were incurred. Landlord's performance of Tenant's
obligations hereunder shall not be deemed a waiver or release of Tenant
therefrom.
(8) Bad Rent Checks. If during the Term, as it may be
extended, Landlord receives two (2) or more checks from Tenant which are
returned by Tenant's bank for insufficient funds, Landlord may require that all
checks thereafter be bank certified or cashier's checks (without limiting
Landlord's other remedies). All bank service charges resulting from any bad
checks shall be borne by Tenant.
(9) Other Matters. No re-entry or repossession, repairs,
changes, alterations and additions, reletting, acceptance of keys from Tenant,
or any other action or omission by Landlord shall be construed as an election
by Landlord to terminate this Lease or Tenant's right to possession, or accept
a surrender of the Premises, nor shall the same operate to release the Tenant
in whole or in part from any of Tenant's obligations hereunder, unless express
written notice of such intention is sent by Landlord or its agent to Tenant.
Landlord may bring suits for amounts owed by Tenant hereunder or any portions
thereof, as the same accrue or after the same have accrued, and no suit or
recovery of any portion due hereunder shall be deemed a waiver of Landlord's
right to collect all amounts to which Landlord is entitled hereunder, nor shall
the same serve as any defense to any subsequent suit brought for any amount not
therefor reduced to judgment. Landlord may pursue one or more remedies against
Tenant and need not make an election of remedies until findings of fact are
made by a court of competent jurisdiction. All rent and other consideration
paid by any replacement tenants shall be applied, at Landlord's option; first,
to the Costs of Reletting, second, to the payment of all costs of enforcing
this Lease against Tenant or any Guarantor, third, to the payment of all
interest and service charges accruing hereunder fourth, to the payment of Rent
theretofore accrued, and the residue, if any, shall be held by Landlord and
applied to the payment of other obligations of Tenant to Landlord as the same
become due (with any remaining residue to be retained by Landlord). "Costs of
Reletting" shall include without limitation, all reasonable costs and expenses
incurred by Landlord for any repairs, maintenance, changes, alterations and
improvements to the Premises (whether to prevent damage or to prepare the
Premises for reletting), brokerage commissions, advertising costs, attorneys'
fees, any economic incentives given to enter leases with replacement tenants,
and costs of collecting rent from replacement tenants. Landlord shall be under
no obligation to observe or perform any provision of this Lease on its part to
be observed or performed which accrues after the date of any Default by Tenant.
The times set forth herein for the curing of violations by Tenant are of the
essence of this Lease. Tenant hereby irrevocably waives any right otherwise
available under any Law to redeem or reinstate this
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Lease or Tenants' right to possession after this Lease or Tenant's right to
possession is terminated based on a Default by Tenant.
C. Mitigation of Damages. If Landlord terminates this Lease or
Tenant's right to possession, Landlord shall have no obligation to mitigate
Landlord's damages except to the extent required by applicable Law. If Landlord
has not terminated this Lease or Tenant's right to possession, Landlord shall
have no obligation to mitigate under any circumstances and may permit the
Premises to remain vacant or abandoned. If Landlord is required by applicable
Law to mitigate damages under this Lease: (a) Landlord shall be required only
to use reasonable efforts to mitigate, which shall not exceed such efforts as
Landlord generally uses to lease other space at the Shopping Center, (b)
Landlord will not be deemed to have failed to mitigate if Landlord leases any,
other portions of the Shopping Center before reletting all or any portion of
the Premises, and (c) any failure to mitigate as described herein with respect
to any period of time shall only reduce the Rent and other amounts to which
Landlord is entitled hereunder by the reasonable rental value of the Premises
during such period, taking into account among other things, the condition of
the Premises, market conditions and the period of time the Premises may
reasonably remain vacant before Landlord is able to re-lease the same to a
suitable replacement tenant, and Cost of Reletting (as defined in subparagraph
[B][1]) that Landlord may incur in order to enter into such replacement lease.
In recognition that the value of the Shopping Center depends on the rental
rates and terms of leases therein, Landlord's rejection of a prospective
replacement tenant based on an offer of rentals below Landlord's published
rates for new leases of comparable space at the Shopping Center at the time in
question, or at Landlord's option, below the rates provided in this Lease, or
containing terms less favorable than those contained herein, shall not give
rise to a claim by Tenant that Landlord failed to mitigate Landlord's damages.
D. Defaults By Landlord. Landlord shall be in default under this
Lease if Landlord fails to perform any of its obligations hereunder and said
failure continues for a period of thirty (30) days after Tenant delivers
written notice thereof to Landlord (to each of the addresses required by this
Section) and each mortgagee who has a lien against any portion of the Property
and whose name and address has been provided to Tenant, provided that if such
failure cannot reasonably be cured within said thirty (30) day period, Landlord
shall not be in default hereunder if the curative action is commenced within
said thirty (30) day period and is thereafter diligently pursued until cured.
In no event shall (i) Tenant claim a constructive or actual eviction or that
the Premises have become unsuitable hereunder or (ii) a constructive or actual
eviction or breach of the implied warranty of suitability be deemed to have
occurred under this Lease, prior to the expiration of the notice and cure
periods provided under this subparagraph 44(D). Any notice of a failure to
perform by Landlord shall be sent to Landlord at the addresses and to the
attention of the parties set forth in the Basic Lease Provisions. Any notice of
a failure to perform by Landlord not sent to Landlord at all addresses and/or
to the attention of all parties required under this Paragraph and to each
mortgagee who is entitled to notice or not sent in compliance with Paragraph 57
below shall be of no force or effect.
E. CERTAIN LIMITATIONS ON LANDLORD'S LIABILITY. UNLESS OTHERWISE
COVERED IN THE LEASE OR CAUSED BY LANDLORD'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT, LANDLORD SHALL NOT BE LIABLE TO TENANT FOR ANY CLAIMS, ACTIONS,
DEMANDS, COSTS, EXPENSES, DAMAGE OR LIABILITY OF ANY KIND (I) ARISING OUT OF
THE USE, OCCUPANCY OR ENJOYMENT OF THE PREMISES BY TENANT OR ANY PERSON THEREIN
OR HOLDING UNDER TENANT OR BY OR THROUGH THE ACTS OR OMISSIONS OF ANY OF THEIR
RESPECTIVE EMPLOYEES, OFFICERS, AGENTS, INVITEES OR CONTRACTORS, (II) CAUSED BY
OR ARISING OUT OF FIRE, EXPLOSION, FALLING SHEETROCK, GAS, ELECTRICITY, WATER,
RAIN, SNOW OR DAMPNESS, OR LEAKS IN ANY PART OF THE PREMISES, (III) CAUSED BY
OR ARISING OUT OF DAMAGE TO THE ROOF, PIPES, APPLIANCES OR PLUMBING WORKS OR
ANY DAMAGE TO OR MALFUNCTION OF HEATING, VENTILATION OR AIR CONDITIONING
EQUIPMENT OR (IV) CAUSED BY TENANTS OR ANY PERSONS EITHER IN THE PREMISES OR
ELSEWHERE IN THE BUILDING (OTHER THAN COMMON AREAS) OR BY OCCUPANTS OF PROPERTY
ADJACENT TO THE BUILDING OR COMMON AREAS OR BY THE PUBLIC OR BY THE
CONSTRUCTION OF ANY PRIVATE, PUBLIC OR QUASI-PUBLIC WORK. IN NO EVENT SHALL
LANDLORD BE LIABLE TO TENANT FOR ANY LOSS OF OR DAMAGE TO PROPERTY OF TENANT OR
OF OTHERS LOCATED IN THE PREMISES OR THE BUILDING BY REASON OF THEFT OR
BURGLARY.
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F. WAIVER OF CONSUMER RIGHTS, TEXAS DECEPTIVE TRADE PRACTICES ACT IT
IS THE INTENT OF LANDLORD AND TENANT TO WAIVE ALL OF THE PROVISIONS OF THE
TEXAS DECEPTIVE TRADE PRACTICES - CONSUMER PROTECTION ACT, AS SUCH PROVISIONS
ARE OR MAY BE APPLICABLE TO THIS LEASE. TENANT WAIVES ALL ITS RIGHTS UNDER THE
TEXAS DECEPTIVE TRADE PRACTICES - CONSUMER PROTECTION ACT, SECTION 17.41 ET.
SEQ. OF THE TEXAS BUSINESS AND COMMERCE CODE (THE "DTPA"), A LAW THAT GIVES
CONSUMERS SPECIAL RIGHTS AND PROTECTIONS. AFTER CONSULTATION WITH AN ATTORNEY
OF TENANT'S OWN SELECTION, TENANT VOLUNTARILY CONSENTS TO THIS WAIVER. THE
FOREGOING WAIVER BY TENANT IS ALSO BINDING ON ANY PERMITTED SUCCESSOR OR ASSIGN
OF TENANT UNDER THIS LEASE. THE PROVISIONS OF THIS PARAGRAPH SURVIVE ANY
TERMINATION OF THIS LEASE. TENANT REPRESENTS TO LANDLORD:
(A) TENANT IS NOT IN A SIGNIFICANTLY DISPARATE BARGAINING
POSITION WITH RESPECT TO THIS LEASE AND THE TRANSACTION EVIDENCED
HEREBY.
(B) TENANT IS REPRESENTED BY LEGAL COUNSEL IN CONNECTION WITH
THIS LEASE.
45. LANDLORD'S LIENS: Tenant hereby expressly grants to Landlord a security
interest in and an express contractual lien upon Tenant's or any other party's
goods, wares, equipment, signs, fixtures, furniture and other personal property
situated in or on the Premises, including all after-acquired property,
replacements and proceeds ("secured property") to secure the performance by
Tenant of its obligations under this Lease, and such property shall not be
removed from the Premises without the written consent of Landlord until all
rents and other sums of money then due to Landlord shall have first been paid
except for the sale of inventory in the ordinary course of Tenant's business so
long as such inventory is replaced by Tenant. Tenant hereby appoints Landlord
as Tenants attorney-in-fact and authorizes Landlord to execute and to file
financing statements signed only by Landlord (as attorney-in-fact) covering
such security or to otherwise take such action as may be necessary to perfect
such security interest and/or contractual lien. Upon an occurrence of an Event
of Default by Tenant, Landlord may, in addition to any other remedies, enter
upon the Premises and take possession of such secured property situated on the
Premises without liability for trespass or conversion, and sell the same with
notice at public or private sale, with or without having such property at the
sale, at which Landlord or its assigns may purchase, and may apply the proceeds
thereof less any and all expenses connected with the taking of possession and
sale of the property, as a credit against any sums due by Tenant to Landlord.
Any surplus shall be paid to Tenant, and Tenant agrees to pay any deficiency
forthwith, after demand. Landlord, at its option may foreclose said security
interest and/or contractual lien in the manner provided by law. The security
interest and contractual lien herein granted to Landlord shall be in addition
to any Landlord's lien that may now or at any time hereafter be provided by
law.
46. ACCESS TO PREMISES: Landlord and its authorized representatives shall
have the right to enter upon the Premises during all regular business hours for
the purpose of inspecting or exhibiting the same to prospective purchasers,
mortgagees and tenants. Landlord shall have the right to maintain and repair
all utility equipment, in, upon, above or under the Premises as may be
necessary for the servicing of the Premises and/or other portions of the
Shopping Center. Landlord shall also have the right to enter the Premises
during all regular business hours (and in emergencies at all times) for the
purpose of making any repairs to the Premises or to the building of which it
forms a part as Landlord may deem necessary, and for any other lawful purpose;
and in connection therewith, Landlord shall have the right to take materials,
tools and equipment in, through or above the Premises that may be required
without the same constituting an actual or constructive eviction of Tenant from
the Premises or any part thereof. Nothing herein shall be deemed to impose any
duty upon Landlord to do any such work which Tenant is required to perform, and
the performance thereof by Landlord shall not be a waiver of Tenant's default
in failing to perform the same. Landlord shall not be liable for any
inconvenience, disturbance, loss of business or other damage to Tenant due to
the performance by Landlord of any work in, upon, above or under the Premises
or for bringing materials, tools and equipment in, through or above the
Premises, and the obligations of Tenant under this Lease shall not thereby be
affected in any manner, nor shall the same constitute any ground for an
abatement of any rents, provided, however, Landlord shall use reasonable
efforts not to interfere with the
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conduct of Tenant's business in the Premises, but Landlord shall not be
required to incur any expense nor perform work during hours or days other than
regular business hours and days. If Tenant or its' employees shall not be
present to permit an entry into the Premises when an emergency or casualty
occurs, Landlord may enter by the use of force or otherwise without rendering
Landlord liable and without in any manner affecting Tenant's obligations under
this Lease. During the period commencing twelve (12) months prior to the
expiration of the Lease Term (or any renewal term), Landlord may place upon the
exterior of the Premises "For Lease," "To Let" or "For Rent" signs of
reasonable size which signs shall not be removed, obliterated or hidden by
Tenant.
47. EXCAVATION: If any excavation shall be made upon land adjacent to the
Premises, Tenant shall permit the party authorized to cause such excavation to
be made to enter upon the Premises for the purpose of doing work as such party
may deem necessary to preserve the wall of the building of which the Premises
forms a part from damage and to support the same with foundations and shoring,
and Tenant hereby waives all claims for inconvenience, disturbance, loss of
business or other damages against Landlord and without in any manner affecting
Tenant's obligations under this Lease, nor shall the same constitute any ground
for an abatement of any rents, provided, however, Landlord shall use reasonable
efforts not to interfere with or interrupt the conduct and operation of
Tenant's business in the Premises, but Landlord shall not be required to incur
any expense nor perform work during hours or days other than regular business
hours and days.
48. SUBORDINATION: Landlord and Tenant agree that this Lease be and is
subject and subordinate at all times to all covenants, restrictions, easements,
reciprocal easement agreements, and ground and underlying leases now or
hereafter affecting the fee title of the Shopping Center property and to all
modifications, amendments and supplements thereto. At Landlord's option, this
Lease shall be and the same is subject and subordinate at all times to all
mortgages or any other method of financing or refinancing in any amounts, and
all advances thereon, which may now or hereafter be placed against or affect
any or all of the land and/or the Premises and/or any or all of the buildings
and improvements now or at any time hereafter constituting a part of or
adjoining the Shopping Center, and to all renewals, modifications,
consolidations, participations, replacements and extensions thereof and to any
reciprocal easement agreement affecting the Shopping Center or any
modifications, amendments or supplements thereto. The term "mortgages" as used
herein shall be deemed to include trust indentures and deeds of trust. The
aforesaid provisions shall be self-operative and no further instrument or
subordination shall be necessary unless required by any such ground or
underlying lessors or mortgagees. Should Landlord or any ground or underlying
lessors or mortgagees desire confirmation of such subordination, the Tenant,
within ten (10) days following Landlord's written request therefore, agrees to
execute and deliver, without charge, any and all documents (in form acceptable
to such ground or underlying lessors or mortgagees) subordinating this Lease
and the Tenant's rights hereunder. Should any such ground or underlying lessors
or mortgagees request that this Lease be made superior, rather than
subordinate, to any such ground or underlying lease and/or mortgage, then
Tenant, within ten (10) days following Landlord's written request therefor
agrees to execute and deliver, without charge, any and all documents (in form
acceptable to such ground or underlying lessors or mortgagees) effectuating
such priority.
49. ATTORNMENT: Tenant agrees that in the event of a sale, transfer, or
assignment of the Landlord's interest in the Shopping Center or any part
thereof, including the Premises, or in the event that any proceedings are
brought for the foreclosure of or for the exercise of any power of sale under
any mortgage made by Landlord covering the Shopping Center or any part thereof,
including the Premises, or in the event of a cancellation or termination of any
ground or underlying lease covering the Shopping Center or any part thereof,
including the Premises, to attorn to and to recognize such transferee,
purchaser, ground or underlying lessor or mortgagee as Landlord under this
Lease.
50. ATTORNEY-IN-FACT: In the event tenant shall fail or refuse to execute
and deliver to Landlord the documents mat may be requited to evidence the
intent of Paragraphs 4, 42, 45 and 48 hereof within ten (10) days after
Landlord's written request therefor, and after Landlord shall have given to
Tenant a further ten (10) day notice thereof, Tenant hereby irrevocably
appoints Landlord as attorney-in-fact for Tenant with full power and authority
to execute and deliver such instruments for and in the name of Tenant.
51. QUIET ENJOYMENT: If Tenant timely pays the rents reserved and performs
all of the other terms, covenants and conditions of this Lease on the Tenant's
part to be performed, then Tenant shall peaceably
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and quietly have, hold and enjoy the Premises during the Lease Term, subject to
the terms of this Lease, and to any mortgages, ground or underlying lease&
agreement and encumbrances to which this ease is or may be subordinated.
52. UNAVOIDABLE DELAYS: The provisions of this Paragraph shall be applicable
if there shall occur any strikes, lockouts or labor disputes, inability to
obtain labor or materials or reasonable substitutes therefor or acts of God,
governmental restrictions, regulations or controls, enemy or hostile government
action, civil commotion, fire or other casualty or other conditions similar or
dissimilar to those enumerated in this Paragraph beyond the reasonable control
of the party obligated to perform and commonly referred to as "force majeure."
If Landlord or Tenant shall, as a direct result of any of the above mentioned
events, fail to timely perform any obligation on its part to be performed, then
the time period for such performance shall be extended and such failure shall
be excused and not be a breach of this Lease by the applicable party in
question, but only to the extent and for the time occasioned by such event. The
provisions of this Paragraph shall not apply to Tenant's obligation to pay when
due, the Fixed Minimum Rent or any additional rents or sums or charges; and in
addition, lack of funds and inability to procure financing shall not be deemed
to be an event beyond the reasonable control of Tenant. In the event of such an
unavoidable delay and as a condition precedent to either Landlord or Tenant
claiming or relying upon such delay, the applicable party shall give notice in
writing describing such event to the other party within ten (10) days after the
occurrence of same.
53. SURRENDER OF PREMISES:Upon the expiration or sooner termination of the
Lease Term, Tenant agrees to quit and surrender the Premises, broom-clean, in
good condition and repair, reasonable use, wear and tear, natural deterioration
and insured casualty excepted, together with all keys and combinations to
locks, safes and vaults and all improvements, alterations, additions, lighting
fixtures and equipment at any time made or installed in, upon or to the
interior or exterior of the Premises (except personal property, signs and trade
fixtures put in at Tenant's expense) all of which shall then become the
property of Landlord without any claim by Tenant, but the surrender of such
property to Landlord shall not be deemed to be a payment of rent or in lieu of
any rent reserved hereunder. Before surrendering the Premises, Tenant shall
remove all of Tenant's personal property, signs and trade fixtures and any and
all materials, substances, devices or equipment defined as hazardous or
otherwise controlled under any governmental law, rule or regulation and, at
Landlord's option, Tenant shall also remove any alterations, additions,
fixtures, equipment and decorations at any time made or installed by Tenant in,
upon or to the interior or exterior of the Premises, and Tenant shall repair
any damage caused thereby. If Tenant shall fail to remove any of Tenant's
personal property and trade fixtures, then at the option of Landlord, the same
shall either be deemed abandoned and become the exclusive property of Landlord,
or Landlord shall have the right to remove and store said property, at the
expense of Tenant, without further notice to or demand upon Tenant and hold
Tenant responsible for any and all charges and expenses incurred by Landlord
therefor. If Tenant shall leave any of said personal property or trade fixtures
on the Premises with Landlord's consent, then Landlord shall have the right to
remove and store such property, at the expense of the Tenant, upon twenty-four
(24) hours notice to Tenant and to hold Tenant responsible for any and all
charges and expenses incurred therefor. If Tenant shall fail to remove any
hazardous or controlled materials, substances, devices or equipment, then
Landlord shall have the right, without further notice or demand, to cause the
removal of such hazardous or controlled materials, substances, devices or
equipment and hold Tenant responsible for any and all cost incurred therefor.
If the Premises be not surrendered as and when aforesaid and after Landlord
shall have given to Tenant a three (3) day notice to quit, Tenant shall
indemnify Landlord against all loss or liability resulting from the delay of
Tenant in so surrendering the same, including, without limitation, any claims
made by any succeeding occupant founded on such delay. Tenant's obligations
under this Paragraph shall survive the expiration or sooner termination of the
Lease Term.
54. HOLDING OVER: Should Tenant remain in possession of the Premises after
the expiration of the Lease Term (or any renewal term hereof) without the
execution of a new lease, such holding over shall be deemed to have created and
be construed as a tenancy from month-to-month terminable on thirty (30) days'
written notice by either party to the other, at a monthly rental equal to twice
the sum of (i) the monthly installment of Minimum Rent payable during the last
month of the Lease Term, (ii) one-twelfth (1/12th) of the average Percentage
Rent payable for the last three Lease Years, (iii) one-twelfth (1/12th) of the
Tax Charge payable for the last Lease Year of the Lease Term, (iv) the monthly
Common Area Charge payable
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for such month, (v) the monthly Sprinkler Charge, (vi) the monthly Water
Charge, (vii) the monthly Marketing Charge, and (viii) one-twelfth (1/12th) of
the Insurance Charge, subject to all the other conditions, provisions and
obligations of the Lease insofar as the same are applicable to a month-to-month
tenancy. Tenant shall not interpose any counterclaim or counterclaims in a
summary proceeding or other action based on holdover except for mandatory or
compulsory counterclaims under the procedural laws of the state where the
Shopping Center is located.
55. RELATIONSHIP OF PARTIES: Nothing contained in this Lease shall be
deemed, construed or implied as creating the relationship of principal and
agent, partnership, joint venture or any other relationship between the parties
hereto, other than the relationship of Landlord and Tenant.
56. NO WAIVER: The failure of Landlord or Tenant to insist upon the strict
performance of any provisions of this Lease, or the failure of Landlord or
Tenant to exercise any right, option or remedy hereby reserved shall not be
construed as a future waiver of any such provision, right, option or remedy or
as a waiver of a subsequent breach thereof. The consent or approval by Landlord
of any act by Tenant requiring Landlord's consent or approval shall not be
construed to waive or render unnecessary the requirement for Landlord's consent
or approval of any subsequent similar act by Tenant. The receipt by Landlord of
rent or other charges with knowledge of a breach of any provision of this Lease
shall not be deemed a waiver unless such waiver shall be specific, in writing,
and signed by the Landlord. No payment by Tenant or receipt by Landlord of a
lesser amount than the rents and/or other charges hereby reserved shall be
deemed to be other than on account of the earliest rents and/or charges then
unpaid, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment by Tenant be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice
to Landlord's right to recover the balance of such rents and/or other charges
due or Landlord may pursue any other remedy in this Lease or by law provided,
and no waiver by Landlord in favor of any other tenant or occupant of the
Shopping Center or Department Store adjoining the Shopping Center shall
constitute a waiver in favor of the Tenant.
57. NOTICES: Every notice, demand, request or other communication which may
be or is required to be given under this Lease shall be in writing and shall be
sent by recognized overnight carrier, United States Certified or Registered
Mail, postage prepaid, return receipt requested, and shall be addressed: (a) if
to Landlord, to the address referred to in subparagraph 1B of this Lease, with
a copy to Legal Department, ▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, and (b) if to Tenant, to Tenant's Address; and the same shall be deemed
delivered when deposited in the United States Mail. Either party may designate,
by written notice to the other party, any other address for such purposes. Each
of the parties hereto waive personal or any service other than as provided for
in this Paragraph. Either party may, however, give the other party telegraphic
notice of the need for emergency repairs subject to subsequent formal notice as
above provided.
58. RECORDING: Tenant shall not record this Lease or any memorandum thereof
without the prior written consent of the Landlord.
59. PARTIAL INVALIDITY: If any provision of this Lease or the application
thereof to any person or circumstance shall to any extent be held void and
invalid, then the remainder of this Lease or the application of such provision
to persons or circumstances other than those as to which it is held void or
invalid shall not be affected thereby, and each provision of this Lease shall
be valid and enforced to the fullest extent permitted by law.
60. BROKER'S COMMISSIONS: Tenant covenants, warrants and represents to
Landlord that there was no broker instrumental in consummating this Lease and
that no conversation nor prior negotiations were had by Tenant with any broker
concerning the renting of the Premises other than Terranomics Retail Services,
Inc., whose commission shall be paid by Landlord pursuant to separate
agreement. Tenant agrees to indemnify and hold Landlord harmless against and
from all liabilities, including reasonable attorney's fees, arising from any
claims for brokerage commissions or finders fees resulting from or arising out
of any conversations or negotiations had by Tenant with any broker.
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61. DEFINITION OF LAW(S): "Law" or "Laws" shall mean all applicable federal,
state, county and local governmental and municipal laws, statutes, ordinances,
rules, regulations, codes, decrees orders and other such requirements, as from
time to time are in force or promulgated applicable equitable remedies and
decisions by courts in cases where such decisions are binding precedents in the
state in which the Shopping Center is located, and decisions of federal courts
applying the Laws of such state.
62. PROVISIONS BINDING: Except as otherwise expressly provided in this
Lease, all covenants, conditions and provisions of this Lease shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
heirs, legal representatives, successors and assigns. Each provision of this
Lease to be performed by Tenant shall be construed to be both a covenant and a
condition, and if there shall be more than one Tenant, they shall all be bound,
jointly and severally, by the provisions of this Lease.
63. ENTIRE AGREEMENT, ETC.: (a) This Lease, including the Exhibits attached
hereto, sets forth the entire agreement between the parties.
(b) All prior conversations or writings between the parties or their
representatives are merged herein and extinguished.
(c) This Lease shall not be modified except by a writing signed by
the parties, nor may this Lease be cancelled by Tenant or the Premises
surrendered except with the express written authorization of Landlord, unless
otherwise specifically provided herein.
(d) The initial submission by Landlord to Tenant of this Lease shall
be deemed to be solely for Tenant's consideration and not for acceptance and
execution. Such submission shall have no binding force and effect, shall not
constitute an option for the leasing of the Premises, and shall not confer any
rights or impose any obligations upon either party. The submission by Landlord
of this Lease for execution by Tenant and the actual execution and delivery
thereof by Tenant to Landlord shall similarly have no binding force and effect
unless and until Landlord shall execute this Lease and a counterpart thereof is
delivered to Tenant.
(e) If any provision contained in any attached Exhibit is
inconsistent or in conflict with any printed provision of this Lease, the
provision contained in such Exhibit shall supersede said printed provision and
shall be paramount and superior.
(f) Tenant hereby acknowledges that this Lease shall not be deemed,
interpreted or construed to contain, by implication or otherwise, any warranty,
representation or agreement on the part of Landlord that any Department Store
or regional or national chain store or any other merchant shall open or remain
open for business or occupy or continue to occupy any premises in or adjoining
the Shopping Center during the Lease Term or any part thereof and Tenant hereby
expressly waives all claims with respect thereto and acknowledges that Tenant
is not relying on any such warranty, representation or agreement by Landlord
either as a matter of inducement in entering into this Lease or as a condition
of this Lease or as a covenant by Landlord.
(g) The captions, numbers, and index appearing herein are inserted
only as matter of convenience and are not intended to define, limit, or
describe the scope or intent of any Paragraph, nor in any way affect this
Lease.
64. WAIVER OF LIABILITY: (A) ANYTHING CONTAINED IN THIS LEASE TO THE
CONTRARY NOTWITHSTANDING, TENANT AGREES THAT TENANT SHALL LOOK SOLELY TO THE
ESTATE AND PROPERTY OF THE LANDLORD IN THE LAND, AND BUILDINGS COMPRISING THE
SHOPPING CENTER OF WHICH THE PREMISES FORMS A PART AND THE NET RENTALS
THEREFROM FOR THE COLLECTION OF ANY JUDGMENT, (OR OTHER JUDICIAL PROCESS)
REQUIRING THE PAYMENT OF MONEY BY LANDLORD IN THE EVENT OF ANY DEFAULT OR
BREACH BY LANDLORD WITH RESPECT TO ANY OF THE TERMS AND PROVISIONS OF THIS
LEASE TO BE OBSERVED AND/OR PERFORMED BY LANDLORD, SUBJECT, HOWEVER, TO THE
PRIOR RIGHTS OF ANY GROUND OR UNDERLYING LESSOR OR THE HOLDER OF ANY MORTGAGE
COVERING
39
44
THE SHOPPING CENTER; AND NO OTHER ASSETS OF THE LANDLORD SHALL BE SUBJECT TO
LEVY, EXECUTION OR OTHER JUDICIAL PROCESS FOR THE SATISFACTION OF TENANT'S
CLAIMS. IN THE EVENT LANDLORD CONVEYS OR TRANSFERS ITS INTEREST IN THE
SHOPPING CENTER OR IN THIS LEASE, EXCEPT AS COLLATERAL SECURITY FOR A LOAN,
UPON SUCH CONVEYANCE OR TRANSFER LANDLORD (AND IN THE CASE OF ANY SUBSEQUENT
CONVEYANCES OR TRANSFERS, THE THEN GRANTOR OR TRANSFEROR) SHALL BE ENTIRELY
RELEASED AND RELIEVED FROM ALL LIABILITY WITH RESPECT TO THE PERFORMANCE OF ANY
COVENANTS AND OBLIGATIONS ON THE PART OF THE LANDLORD TO BE PERFORMED HEREUNDER
FROM AND AFTER THE DATE OF SUCH CONVEYANCE OR TRANSFER, PROVIDED THAT ANY
AMOUNTS THEN DUE AND PAYABLE TO TENANT BY LANDLORD (OR BY THE THEN GRANTOR OR
TRANSFEROR) OR ANY OTHER OBLIGATIONS THEN TO BE PERFORMED BY LANDLORD (OR BY
THE THEN GRANTOR OR TRANSFEROR) FOR TENANT UNDER ANY PROVISIONS OF THIS LEASE,
SHALL EITHER BE PAID OR PERFORMED BY LANDLORD (OR BY THE THEN GRANTOR OR
TRANSFEROR) OR SUCH PAYMENT OR PERFORMANCE ASSUMED BY THE GRANTEE OR
TRANSFEREE; IT BEING INTENDED THAT THE COVENANTS AND OBLIGATIONS ON THE PART OF
THE LANDLORD TO BE PERFORMED SHALL, SUBJECT AS AFORESAID, BE BINDING ON
LANDLORD, ITS SUCCESSORS AND ASSIGNS ONLY DURING AND IN RESPECT OF THEIR
RESPECTIVE PERIODS OF OWNERSHIP OF AN INTEREST IN THE SHOPPING CENTER OR IN
THIS LEASE.
(b) Limitations on Landlord's Liability. Unless caused by Landlord's
gross negligence or willful misconduct, Landlord shall not be liable to Tenant
for any claims, actions, demands, costs, expenses, damage or liability of any
kind (i) arising out of the use, occupancy or enjoyment of the Premises by
Tenant or any person therein or holding Tenant under or by or through the acts
or omissions of any of their respective employees, officers, agents, invitees
or contractors, (ii) caused by or arising out of fire, explosion, falling
sheetrock, gas, electricity, water, rain, snow or dampness, or leaks in any
part of the Premises, (iii) caused by or arising out of damage to the roof,
pipes, appliances or plumbing works or any damage to or malfunction of heating,
ventilation or air conditioning equipment, or (iv) caused by tenants or any
persons either in the Premises or elsewhere in the Building (other than Common
Areas) or by occupants of property adjacent to the Building or Common Areas or
by the public or by the construction of any private, public or quasi-public
work. In no event shall Landlord be liable to Tenant for any loss of or damage
to property of Tenant or of others located in the Premises or the Building by
reason of theft or burglary.
65. TENANT STATUS: (a) If Tenant is or will be a corporation, the persons
executing this Lease on behalf of Tenant hereby covenant, represent and warrant
that Tenant is duly incorporated or a duly qualified corporation and is
authorized to do business in the State where the Shopping Center is located (a
copy of evidence thereof to be supplied to Landlord upon request); and that the
person or persons executing this Lease on behalf of Tenant is an officer or are
officers of such Tenant and that he or they as such officers are duly
authorized to sign and execute this Lease (a copy of a resolution of the same
to be supplied to Landlord upon request).
(b) Tenant agrees to furnish Landlord, from time to time, and within
thirty (30) days after Landlord's request therefor, financial statements in
accordance with generally accepted accounting principles and practices
reflecting Tenant's then current financial condition. If Tenant shall be a
corporation, the stock of which is traded on a national securities exchange,
this obligation shall be deemed satisfied by the submission of the most current
annual report prepared for Tenant's shareholders. The submission of such a
financial statement applicable to any and all Guarantors of this Lease shall
also be deemed to satisfy the obligation of this Section.
66. DELETIONS: Provisions which have been deleted from the printed portions
of the Lease or any of its Exhibits shall not be used to interpret the
remaining provisions thereof and no implication can be drawn from such deletion
nor shall such deletions be deemed to constitute a waiver, consent or
acquiescence with respect to the subject matter of the deleted provision.
40
45
67. RULES AND REGULATIONS: Tenant covenants and agrees to fully comply with
all of the Rules, Regulations and agreements set forth and mentioned under
Exhibit "C" attached to this Lease and made a part hereof.
68. COUNTERPARTS: This Lease may be executed in several counterparts, each
of which shall be deemed an original, and all such counterparts shall together
constitute one and the same instrument.
69. SPECIAL STIPULATIONS: Insofar as the Special Stipulations attached as to
the Lease, if any, conflict with any of the foregoing provisions, the Special
Stipulations shall control and apply.
IN WITNESS WHEREOF, The parties hereto have respectively executed
this Lease as of the Date of Lease set forth in Paragraph 1(b).
LANDLORD: THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By and through its Agent
ATTEST: TERRANOMICS RETAIL SERVICES, INC.
/s/ [ILLEGIBLE] By /s/ [ILLEGIBLE]
-------------------------------- ---------------------------------------
TENANT:
ATTEST: CASA OLE' RESTAURANTS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------- --------------------------------------
Its President ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
By: (See Par. 44)
-----------------------------
Attorney for Tenant
By: (See Par. 44)
-----------------------------
Attorney for Landlord
41
46
SPECIAL STIPULATIONS
To the extent the following Special Stipulations conflict with any of
the provisions contained in the Lease, the Special Stipulations shall control.
1. Tenant Remodeling; Recapture Allowance: As an inducement to Landlord's
entering into this Lease, Tenant has agreed to remodel the Premises. Tenant
shall deliver to Landlord a set of plans and specifications for its proposed
improvements within thirty (30) days of the Commencement Date, such plans being
subject to Landlord's reasonable approval. Tenant agrees to begin to remodel
the Premises within seven (7) months and to proceed diligently to complete such
remodeling. Tenant agrees to expend a minimum of one Hundred Twenty Thousand
and No/100 Dollars ($120,000.00) for such remodeling and shall deliver to
Landlord paid invoices evidencing such expenditures. Provided Tenant has
expended a minimum of One Hundred Twenty Thousand and No/100 Dollars
($120,000.00) toward such remodeling, Tenant may recapture, from its Percentage
Rent payments, up to a maximum of Sixty Thousand and No/100 Dollars
($60,000.00) (the "Recapture Allowance"). In the event Tenant's Gross Sales in
any Lease Year exceed the Percentage Rent Breakpoint of one Million
Seventy-Three Thousand Eight Hundred Thirty-Seven and 10/100, Tenant may deduct
from the Percentage Rent otherwise due and payable a portion of the Recapture
Allowance until such time as Tenant has recaptured the full Recapture
Allowance. Tenant shall provide to Landlord in its annual report of Gross
Sales, a statement specifying the amount recaptured by Tenant during the
preceding Lease Year. From and after the date Tenant has recaptured the entire
Recapture Allowance, Tenant shall commence payment of Percentage Rent as set
forth in the Lease.
2. Grease Traps: In the event Tenant prepares food in the Premises: (I)
grease traps of type designated by Landlord shall be installed and maintained
in a clean and sanitary condition and in good repair in all sinks in the
Premises, and such traps shall be cleaned on a monthly basis; (ii) Tenant shall
have the filters in the hoods for food processing exhaust systems removed daily
and washed, and shall have the hoods scraped and cleaned and exhaust ducts
cleaned a minimum of once every three (3) months, or as designated by Landlord;
and (iii) if gas is used in the Premises, Tenant shall install a proper gas
cut-off valve in the Premises. Immediately after each required cleaning of the
hoods and exhaust ducts, Tenant shall deliver an affidavit from the company
performing such service stating that such work has been performed and stating
the date of such cleaning.
3. Liquor Liability Insurance: If the Premises shall ever be utilized (with
Landlord's express prior written consent) for the sale and/or consumption of
alcoholic or other beverages contemplated by the "Georgia Alcoholic Beverage
Code," as amended, including, without limitation, the sale for on or
off-Premises consumption of alcohol, distilled spirits, beer, malt beverage;
wine or fortified wine (hereinafter sometimes referred to as "alcoholic
beverages"), then Tenant shall obtain and maintain (by endorsement to the
general liability policy required to be maintained by Tenant hereunder or by
separate policy) throughout the term of the Lease so-called "liquor liability"
or "dram shop" insurance (hereinafter sometimes referred to as "liquor
liability insurance"), causing Landlord, and such other entities as Landlord
shall designate from time to time, to be named insureds, in combined single
limit coverage per occurrence of not less than THREE MILLION AND NO/100
($3,000,000.00) DOLLARS (or such higher amount which Landlord may proscribe
from time to time in its sole judgment). Such liquor liability insurance shall
(I) be written in form acceptable to Landlord, and its counsel, by a licensed
insurance carrier in good-standing in the State of Georgia acceptable to
Landlord, and (ii) specifically include, without limitation, liability coverage
for the violation of any governmental statute, ordinance, regulation or rule
pertaining to the sale, gift, distribution or use of any alcoholic beverages,
or liability by reason of the selling, serving or giving of alcoholic beverages
to a minor or to a person under the influence of alcohol, or which causes or
contributes to the intoxication of any persons. The aforementioned liquor
liability insurance policies shall be for the mutual and joint benefit and
protection of Landlord, Tenant, and such other entities as Landlord shall
designate from time to time, and executed copies of such policies of insurance
or certificates thereof shall be delivered to the Landlord within ten (10) days
prior to the delivery of possession of the Premises to Tenant, and
47
thereafter within thirty (30) days prior to the term of each such policy.
Additionally, all such insurance shall contain a provision stating that the
Landlord, although named as an insured, shall nevertheless be entitled to
recovery under said policies for any loss occasioned to it, its servants,
agents, and employees by reason of the negligence of Tenant, its servants,
agents, and employees. As often as any such policy shall expire or terminate,
renewal or additional policies shall be maintained and procured like extent,
subject at all times to the approval of Landlord and its counsel. All such
insurance policies shall likewise contain a provision stating that the
insurance carrier of said policies shall grant to Landlord thirty (30) day's
prior written notice of any cancellation or lapse or the effective date of any
reduction in the amounts of insurance. Notwithstanding the foregoing to the
contrary, in the event Tenant shall fail to procure and/or maintain any
insurance required by this Special Stipulation, or fails to carry insurance
required by law or governmental regulation, Tenant shall be deemed in default
under this Lease and Landlord may, but shall not be required or obligated to,
at any time (without the granting of notice) procure such insurance and pay the
premium therefor, in which event Tenant shall repay all sums so paid by
Landlord, together with interest thereon as provided in this Lease, and any and
all other incidental costs and expenses incurred by Landlord in connection
therewith, within five (5) days after demand by Landlord or its designated
representative or legal counsel.
In furtherance of the foregoing, Tenant hereby agrees and
covenants to indemnify and hold Landlord, its servants, agents, employees, and
representatives, wholly harmless from any and all claims, liabilities, losses,
damages and expenses of whatever kind or nature, including, without limitation,
court costs and attorney's fees, incurred by Landlord in connection with the
sale, gift, distribution or use of any alcoholic beverages in or from the
Premises, including, without limitation, the violation by Tenant of any
statute, ordinance, regulation or rule of whatever kind or nature which shall
be established from time to time by any governmental agency or insurance
carrier in connection therewith. As further assurance for the fulfillment of
the foregoing indemnity, Tenant hereby agrees and covenants to specifically
cause its contractual liability insurance for the Premises to include and cover
this indemnity by Tenant regarding any and all claims, liabilities, losses,
damages and expenses sustained by Landlord, its servants, agents, employees,
and representatives, as a result of the sale, gift, distribution, or use of any
alcoholic beverages in or from the Premises.
2
48
EXHIBIT "A"
[DIAGRAM OF ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇]
▇▇
EXHIBIT "A-1"
DESCRIPTION OF SHOPPING CENTER LAND
A tract of land containing 136.694 acres out of ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇
"▇" ▇▇▇▇▇▇▇▇▇▇ Subdivision, Section 1, said Greensgate Subdivision containing
177.7361 acres of land located in the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Survey, Abstract No.749,
▇▇▇▇▇▇ County, Texas, correct map of said Greensgate Subdivision, Section 1,
being of record in Volume 226, Page 113 of the Map Records of ▇▇▇▇▇▇ County,
Texas, said 136.694 acres of land being fully described as follows:
COMMENCING at an iron rod in the East line of Interstate Highway
No. 45, said iron rod marking the most Westerly corner of said Block 2, Reserve
"C" and said corner being in the Southerly line of Greens Road;
THENCE North 42 degrees 28'39" East with the said Southerly line
of Greens Road, a distance of 10.90 feet to an iron rod;
THENCE North 87 degrees 28'39" East with the said Southerly line
of Greens Road, a distance of 320.37 feet to an iron rod and beginning of a
curve to the left;
THENCE in an Easterly direction with the said Southerly line of
Greens Road, following a curve to the left, said curve having a radius of
2061.00 feet, a central angle of 3 degrees 31'56" and a long chord that bears
North 85 degrees 42'41" East (127.04-foot chord), an arc distance of 127.06
feet to a point for corner and the POINT OF BEGINNING of said 136.694 acres of
land;
THENCE in an Easterly direction with said Southerly line of
Greens Road, following a curve to the left, said curve having a radius of
2061.00 feet, a central angle of 22 degrees 41'13" and a long chord that bears
north 72 degrees 36'06" East (810.76-foot chord), an arc distance of 816.08
feet to an iron rod for corner;
THENCE North 61 degrees 15'30" East with said Southerly line of
Greens Road, a distance of 144.00 feet to an iron rod for corner and the
beginning of a curve to the right;
THENCE in an Easterly direction with the said Southerly line of
Greens Road, following a curve to the right, said curve having a radius of
1939.00 feet, a central angle of 8 degrees 32'29" and a long chord that bears
North 65 degrees 31'44" East (288.79-foot chord), an arc distance of 289.06
feet to an iron rod for corner;
THENCE South 64 degrees 42'54" East with the said Southerly line
of Greens Road, a distance of 14.06 feet to an iron rod for corner in the
Westerly line of Greenspoint Drive;
THENCE South 19 degrees 42'54" East with the said Westerly line of
Greenspoint Drive, a distance of 19.98 feet to an iron rod for corner and the
beginning of a curve to the left;
THENCE in a Southerly direction with the said Westerly line of
Greenspoint Drive, following a curve to the left, said curve having a radius of
1640.00 feet, a central angle of 22 degrees 06'20" and a long chord that bears
South 30 degrees 46'04" East (628.82-foot chord), an arc distance of 632.74
feet to an iron rod for corner;
THENCE South 41 degrees 49'14" East with said Westerly line of
Greenspoint Drive, a distance of 542.35 feet to an iron rod for corner and the
beginning of a curve to the right;
THENCE in a Southerly direction with said Westerly line of
Greenspoint Drive, following a curve to the right, said curve having a radius
of 1960.00 feet, a central angle of 39 degrees 02'56" and a long chord that
bears South 22 degrees 17'46" East (1310.10-foot chord), an arc distance of
1335.80 feet to an iron rod for corner;
THENCE South 02 degrees 46'18" East with the said Westerly line of
Greenspoint Drive, a distance of 969.99 feet to an iron rod for corner;
THENCE South 42 degrees 13'42" West with the said Westerly line of
Greenspoint Drive, a distance of 13.22 feet to an iron rod for corner in the
North line of Beltway 8;
THENCE North 88 degrees 45'59" West with the said North line of
Beltway 8, a distance of 1192.29 feet to an iron rod for corner;
Page 1 of Exhibit A-1
50
THENCE in a Westerly direction with the said North line of
Beltway 8, following a curve to the left, said curve having a radius of 662.80
feet, a central angle of 17 degrees 11'00" and a long chord that bears South 82
degrees 38'31" West (198.03-foot chord), an arc distance of 198.78 feet to an
iron rod for corner;
THENCE South 74 degrees 03'01" West with the said North line of
Beltway 8, a distance of 188.48 feet to an iron rod corner;
THENCE in a Northwesterly direction with the said North line of
Beltway 8 and then the said East line of Interstate Highway No. 45, following a
curve to the right, said curve having a radius of 370.50 feet, a central angle
of 86 degrees 50'54", and a long chord that bears North 62 degrees 31'32" West
(509.36-foot chord), an arc distance of 561.60 feet to the T.H.D. concrete
R.O.W. monument for corner;
THENCE North 19 degrees 06'05" West with the said East line of
Interstate Highway No. 45, a distance of 299.34 feet to an iron rod for corner;
THENCE North 24 degrees 26'05" West with the said East line of
Interstate Highway No. 45, a distance of 583.40 feet to an iron rod for corner;
THENCE North 19 degrees 05'02" West with the said East line of
Interstate Highway No. 45, a distance of 1146.93 feet to an iron rod for
corner;
THENCE North 14 degrees 15'08" West with the said East line of
Interstate Highway No. 45, a distance of 226.29 feet to an iron rod for corner;
THENCE North 19 degrees 04'44" West with the said East line of
Interstate Highway No. 45, a distance of 49.61 feet to an iron rod for corner;
THENCE South 78 degrees 27'10" East, a distance of 240.53 feet to
an iron rod for corner;
THENCE in a Northeasterly direction, following a curve to the
left, said curve having a radius of 50.00 feet, a central angle of 53 degrees
07'48" and a long chord that bears North 38 degrees 06'44" East (44.72-foot
chord), an arc distance of 46.36 feet to a point for corner;
THENCE North 11 degrees 32'50" East, a distance of 382.65 feet to
the POINT OF BEGINNING, containing 136.694 acres of land, more or less.
Page 2 of Exhibit A-1
51
EXHIBIT "A-1" - PART.2
DESCRIPTION OF LANDLORD'S SITE
A tract of land containing 41.254 acres out of ▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇ "▇" ▇▇▇▇▇▇▇▇▇▇
Subdivision, Section 1, said Greensgate Subdivision containing 177.7361 acres
of land located in the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Survey, Abstract No. 749, ▇▇▇▇▇▇ County,
Texas, correct map of said Greensgate Subdivision, Section 1 being of record in
Volume 226, Page 113 of the Map Records of ▇▇▇▇▇▇ County, Texas, said 41.254
acres of land being fully described as follows:
COMMENCING at an iron rod in the West line of Greenspoint Drive,
said iron rod marking the most easterly corner of said Block 2, Reserve "C" and
located North 42 degrees 13'42" East, a distance of 13.22 feet from an iron rod
in the north line of Beltway 8;
THENCE, North 02 degrees 46'1 8" West, with the west line of said
Greenspoint Drive, a distance of 744.71 feet to the POINT OF BEGINNING;
THENCE, South 87 degrees 13'42" West, a distance of 35.31 feet to
a point of curvature for corner;
THENCE, in a westerly direction, following a curve to the right,
said curve having a radius of 470.00 feet, a central angle of 14'22'39" and a
long chord that bears North 85 degrees 34'58" West (117.63-foot chord), an arc
distance of 117.94 feet to a point of tangency for corner;
THENCE, in a northerly direction, following a curve to the right,
said curve having a radius of 50.00 feet, a central angle of 97 degrees 28'51"
and a long chord that bears North 29 degrees 39'14" West (75.17-foot chord), an
arc distance of 85.07 feet to a point for corner;
THENCE, North 19 degrees 05'12" East, a distance of 166.75 feet to
a point of curvature for corner;
THENCE, in a northerly direction, following a curve to the left,
said curve having a radius of 150.00 feet, a central angle of 45 degrees 00'00"
and a long chord that bears North 03 degrees 24'48" West (114.81-foot chord), an
arc distance of 1 17.81 feet to a point of tangency for corner;
THENCE, North 25 degrees 54'48" West, a distance of 219.78 feet to
a point of curvature for corner;
THENCE, in a northerly direction following a curve to the left,
said curve having a radius of 500.00 feet, a central angle of 09 degrees 29'50"
and a long chord that bears North 30 degrees 39'43" West (82.78-foot chord),
and an arc distance of 82.88 feet to a point for corner;
THENCE, South 64 degrees 05'12" West, a distance of 597.65 feet
to a point for corner;
THENCE, South 19 degrees 05'12" West, a distance of 290.68 feet
to a point for corner;
THENCE, North 70 degrees 54'48" West, a distance of 63.00 feet to
a point for corner;
THENCE, South 19 degrees 05'12" West, a distance of 372.88 feet
to a point for corner;
THENCE, South 7 degrees 054'48" East, a distance of 317.50 feet
to a point for corner;
THENCE, South 64 degrees 05'12" West, a distance of 3136 feet to
a point for corner;
THENCE, South 19 degrees 05'12" West, a distance of 380.30 feet
to a point on the said north line of Beltway 8 for corner;
THENCE, with said north line of Beltway 8, the following 2
courses and distances:
1. North 88 degrees 45'59" West, a distance of 214.43 feet to
a point of curvature for corner; and
2. In a westerly direction following a curve to the left
having a radius of 662.80 feet, a central angle of 09 degrees 16'35", and a long
chord that bears South 86 degrees 35'43" West (107.19-foot chord), an arc
distance of 107.31 feet to a point for corner;
THENCE, North 08 degrees 02'34" West, a distance of 99.45 feet to
a point for corner;
Page 1 of Exhibit A-1- Part 2
52
THENCE, North 19 degrees 05'12" East, a distance of 588.26 feet to a
point for corner;
THENCE, North 70 degrees 54'48" West, a distance of 329.00 feet to a
point for corner;
THENCE, North 19 degrees 05'12" East, a distance of 20.96 feet to a
point for corner;
THENCE, North 25 degrees 54'48" West, a distance of 20.57 feet to a point
for corner;
THENCE, North 19 degrees 05'12" East, a distance of 474.11 feet to a
point for corner;
THENCE, North 25 degrees 54'48" West, a distance of 67.89 feet to a point
for corner;
THENCE, North 70 degrees 54'48" West, a distance of 192.91 feet to a
point for corner;
THENCE, South 19 degrees 05' 12" West, a distance of 8.96 feet to a point
for corner;
THENCE, South 70 degrees 54'48" West, a distance of 163.08 feet to a
point for corner;
THENCE, South 19 degrees 05'12" West, a distance of 301.54 feet to a
point for corner;
THENCE, South 25 degrees 54'48" East, a distance of 179.70 feet to a
point for corner;
THENCE, South 19 degrees 05'12" West, a distance of 303.99 feet to a
point for corner;
THENCE, North 48"54'48" West, a distance of 179.80 feet to a point for
corner;
THENCE, South 64 degrees 05'12" West, a distance of 275.00 feet to a
point for corner;
THENCE, with said east line of Interstate Highway No. 45, the following
2 courses and distances:
1. North 24 degrees 26'05" West, a distance of 347.10 feet to an iron
rod for corner;
2. North 19 degrees 05'02" West, a distance of 360.00 feet to a point
for corner;
THENCE, North 70 degrees 54'58" East, a distance of 142.38 feet to a
point for corner;
THENCE, North 64 degrees 05'12" East, a distance of 72.99 feet to a
point for corner;
THENCE, South 21 degrees 06'34" East, a distance of 109.28 feet to a
point for corner;
THENCE, North 67 degrees 1 4'53" East, a distance of 20.00 feet to a
point for corner;
THENCE, North 64 degrees 05'12" East, a distance of 176.1
THENCE, North 25 degrees 54'48" West, a distance of 55.00 feet to a point
for corner;
THENCE, North 64 degrees 05'12" East, a distance of 10.39 feet to a
point for corner;
THENCE, North 25 degrees 54'48" West, a distance of 55.00 feet to a
point for corner;
THENCE, North 64 degrees 05'12"East, a distance of 348.17 feet to a
point for corner;
THENCE, North 25 degrees 54'48" West, a distance of 135.62 feet to a
point for corner;
THENCE, North 19 degrees 05'12" East, a distance of 476.65 feet to a
point for corner;
THENCE, South 70 degrees 54'48" East, a distance of 167.38 feet to a
point for corner;
THENCE, North 64 degrees 05'12" East, a distance of 366.07 feet to a
point for corner;
THENCE, South 19 degrees 05'12" West, a distance of 220.85 feet to a
point for corner;
THENCE, South 70 degrees 54'48" East, a distance of 36.77 feet to a
point for corner;
Page 2 of Exhibit A-1 - Part 2
53
THENCE, South 19 degrees 05' 12" West, a distance of "441.00 feet to a
point for corner;
THENCE, South 70 degrees 54'48 " East, a distance of 296.95 feet to a
point for corner;
THENCE, South 19 degrees 05'12" West, a distance of 56.67 feet to a
point for corner;
THENCE, South 25 degrees 54' 48" East, a distance of 255.84 feet to a
point for corner;
THENCE, North 64 degrees 05'12" East, a distance of 597.50 feet to a
point for corner;
THENCE, North 25 degrees 54'48" West, a distance of 220.00 feet to a
point of curvature for corner;
THENCE, in a northerly direction following a curve to the left, said
curve having a radius of 493.19 feet, a central angle of 16 degrees 51'09" and a
long chord that bears North 34 degrees 20'23" West (144.54-foot chord), an arc
distance of 145.06 feet to a point of reverse curvature for corner;
THENCE, in a northerly direction following a curve to the right, said
curve having a radius of 493.19 feet, a central angle of 16 degrees 51'09" and a
long chord that bears North 34 degrees 20'23"West (144.54-foot chord), an arc
distance of 145.06 feet to a point of compound curvature for corner;
THENCE, in an easterly direction following a curve to the right, said
curve having a radius of 50.00 feet, a central angle of 90 degrees 00'00" and a
long chord that bears North 19 degrees 05'12" East (70.71-foot chord), an arc
distance of 78.54 feet to a point of tangency for corner;
THENCE, North 64 degrees 05'12" East, a distance of 10.00 feet to a
point of curvature for corner;
THENCE, in an easterly direction following a curve to the left, said
curve having a radius of 436.69 feet, a central angle of 15 degrees 54'26" and
a long chord that bears North 56 degrees 07'59" East (120.85-foot chord), an
arc distance of 121.24 feet to a point of tangency for corner;
THENCE, North 48 degrees 10'46" East, a distance of 12.93 feet to a point
on a curve in the said west line of Greenspoint Drive, for corner;
THENCE, in a southerly direction with said west line of Greenspoint
Drive, following a curve to the right, said curve having a radius of 1,960.00
feet, a central angle of 38 degrees 33'07", and a long chord that bears South 22
degrees 02'51" East (1,294.06-foot chord), an arc distance of 1,318.80 feet to
an iron rod at a point of tangency for corner;
THENCE, South 02 degrees 46'18"East, with said west line of Greenspoint
Drive, a distance of 225.28 feet to the POINT OF BEGINNING, containing 41.254
acres of land, more or less.
Page 3 of Exhibit A-1 - Part 2
54
REFERENCES IN THIS EXHIBIT B TO "TENANT'S WORK"
SHALL BE DEEMED TO BE REFERENCES TO THE WORK
AS DEFINED IN THE LEASE
EXHIBIT "B"
DESCRIPTION OF TENANT'S WORK AND WORK TO BE
PERFORMED BY LANDLORD IN THE PREMISES
PREFACE:
This EXHIBIT "B" describes the obligations of the Landlord and the
Tenant for the design and construction of the Premises. Each term used in this
Exhibit which is defined in the main body of the Lease shall have the same
meaning when used herein.
The work described in Section C will be performed by Landlord at
Tenant's expense.
The work described in Section B will be performed by Tenant at Tenant's
expense and shall be completed in accordance with Tenant's Final Plans, as
defined in Exhibit "B", Section D.4, as approved by Landlord.
Landlord wad Tenant have a common interest in opening the Premises on
the Commencement Date. To this end, Landlord will coordinate its work with the
Tenant's work insofar as the schedule and prudent construction practice will
allow.
In order to insure an orderly and aesthetically coordinated storefront
and design and to insure that storefront and signing requirements are
understood by tenants, their respective contractors and fabricators, reference
should be made to the store design criteria ("Store Design Criteria").
SECTION A: LANDLORD'S FACILITIES IN THE BUILDING AT THE CENTER IN WHICH THE
PREMISES ARE LOCATED ("LANDLORD'S BUILDING").
(1) A non-combustible structure including columns, girders, beams,
joists, roof deck, and floors.
(2) Public area floors of concrete with special finishes in various
areas.
(3) Enclosed Mall ("Enclosed Mall") ceilings of various heights, but
not less than twelve feet-six inches (12'6") at the storefront line.
(4) Insulated, built-up roofing to provide a U factor of not more
than.15.
(5) Exterior walls.
(6) Exits from the Enclosed Mall to the exterior in accordance with
the requirements of jurisdictional authorities.
(7) The Climate Controlled Enclosed Mall, which may include without
limitation courts, arcades and public corridors, climate controlled,
landscaping, seating, decorative treatment, areas for promotional features, and
structures leased for retail sales.
(8) Public toilet facilities and public pay telephones.
(9) Demising Partitions.
Non-combustible, unfinished, masonry partitions between the
Premises and any service corridors; unfinished precast concrete panels at
exterior wall, where applicable. Demising partitions between tenant premises
will be metal studs without drywall.
B-1
55
(10) Egress Doors
Egress doors, if any, from the Premises shall be provided with
slide bolt hardware only. Door will be bored to accept dead bolt hardware. The
location of any such egress doors will be indicated on the Lease Outline
Drawing. Such egress doors shall not include customer or storefront doors since
they are the responsibility of Tenant.
(11) Electric Service
An empty conduit for a 277/480 V 3 phase, 4 wire, 60 cycle AC
service with a service capacity sized to accommodate a maximum load of 15 ▇▇▇▇▇
per square foot to Premises will be provided from Landlord's utility room to a
point within the Premises.
(12) Water Service
A 3/4 inch domestic cold water service will be brought to one
point within the Premises. The location of such connection will be indicated on
the Lease Outline Drawing.
(13) Sprinklers
A sprinkler system connection will be installed within the
Premises for extension by Tenant, in accordance with the requirements of the
jurisdictional authorities and the Landlord's insurance carrier. The quantity
of sprinkler heads which may be extended from this connection shall be one per
100 square feet.
(14) Heating and Air Conditioning System
Landlord has installed a heating and air conditioning system for
common and Patio area use. Conditioned air is delivered to unfinished areas
such as stock and storage rooms. Tenant warrants that the heated and cooled are
acceptable to him "AS IS".
(15) Sanitary Sewer
A 4 inch sanitary sewer connection will be installed at one point
below the Premises. The location of such connection will be indicated on the
Lease Outline Drawing.
SECTION B: WORK BY TENANT IN PREMISES
All work by Tenant in the Premises will be performed by contractors
selected by Tenant and approved in advance by Landlord. As one of the
conditions for approval, Landlord may require the contractor to procure a
Payment and Performance Bond for the benefit of the Tenant.
A store with storefront and signing will be designed and installed by
Tenant in accordance with the Store Design Criteria, the Lease Outline Drawing,
the Final Plans as approved in writing by Landlord and the requirements of the
jurisdictional authorities. Storefront construction must extend from the floor
slab to the horizontal neutral strip as indicated in said Criteria. All
storefront track systems will be surface mounted and flush with Mall finish
floor. All partitions facing on the Enclosed Mall, as indicated on the Lease
Outline Drawing, will be considered as Tenant's storefront. For a description
of that portion of work to be performed by the Landlord, at Tenant's expense,
see Section C herein.
Tenant must directly arrange for and procure at Tenant's expense all
state and local building, plumbing, electrical and occupancy permits required
in connection with the construction of its Premises. All construction must be
in accordance with the BOCA Basic Building Code 1978 Edition and amendments, as
adopted by ▇▇▇▇▇▇ County, Texas, NFPA Life Safety Code 101 and other codes as
required.
To the extent that any item of Tenant's Work is in place upon delivery
of possession of the Premises to Tenant and is in compliance with all
requirements of the jurisdictional authorities and the provisions of this
Lease, Tenant shall not be required, as between Landlord and Tenant, to replace
or reconstruct such Work.
Tenant shall commence Tenant's Work and diligently and continually
proceed to complete the Premises in accordance with the approved Final Plans
and permit Landlord to commence the Work specified in Section C.
B-2
56
(1) Utilities by Tenant
Tenant shall directly arrange for and procure at Tenant's
expense:
(a) All building, plumbing, occupancy and other required
permits.
(b) Telephone service between the point of entry in Landlord's
Building and the Premises.
(c) All required utility meters, including, without
limitation, a water meter if requested by Landlord.
(d) Connection to the Landlord-installed utilities.
(e) Gas service between the utility meter and the Premises.
(f) Copper electrical conductor from Landlord's Utility Room
to and throughout the Premises.
(2) Insulation
Tenant shall install wall insulation to the interior surface of
the building exterior wall to the underside of the roof deck, which insulation
shall have an R factor of 10.22 BTU per hour square foot.
The Premises shall have a finished drop ceiling, unless Landlord
gives its prior written consent not to have such a ceiling (which consent
Landlord may withhold in its sole judgment). Tenant shall not construct any
mezzanines in the Premises without Landlord's prior written approval. If Tenant
shall construct a mezzanine in the Premises without such approval, or fails to
construct a drop ceiling throughout the Premises without such consent, Landlord
may in addition to its other remedies hereunder and at law and in equity,
either (i) cause Tenant to remove the mezzanines, or install drop ceiling, as
the case may be, at Tenant's expense or (ii) if Tenant has not removed the
mezzanines or installed drop ceiling, as the case may be, after thirty (30)
days written notice from Landlord to Tenant to do so, remove the mezzanines or
install drop ceilings, as the case may be, and charge Tenant the actual cost of
doing so plus fifteen percent (15%) of the cost as an administration fee.
(3) Demising Partitions
One-half (1/2) inch drywall shall be installed, taped and
floated upon all metal stud demising partitions from the floor to the underside
of the deck and provided fire safing in the deck flutes over the top track when
the partition is 90 deg. to the deck flute direction.
(4) Non-Combustible Construction
All Tenant construction shall be non-combustible. Treated,
fire retardant (Class A) wood will be permitted where approved by the
jurisdictional authorities.
(5) Ceilings
A drop ceiling shall be installed throughout the entire
Premises with a minimum fire rating of at least 2 hours, but shall not be more
than twelve feet (12 ft.) nor less than nine feet (9 ft.) above finished floor
without prior approval by the Landlord. Access (i.e., access panels) will be
provided by Tenant where Landlord deems necessary. All ceilings must also
conform to the requirements of the jurisdictional authorities.
(6) Column Fireproofing
All free-standing structural steel columns shall be
enclosed in accordance with the detail indicated on the Lease Outline Drawing
and the requirements of jurisdictional authorities.
(7) Fixture Support
All Tenant improvements, other than ceilings and lighting
fixtures, shall be floor mounted unless written approval is obtained from the
Landlord to support improvements otherwise.
B-3
57
(8) Mezzanines
No mezzanine shall be constructed unless Landlord approves
such construction in writing. If Landlord approves the construction of a
mezzanine in the Premises, it must meet the following criteria:
(a) The mezzanine framing shall be completely independent
of the Landlord's Building's structural frame.
(b) Additional heating, ventilating, air conditioning,
plumbing, electrical and sprinkler costs will be at
Tenant's expense as described in Section C hereof.
(c) Mezzanine area and construction shall also be in
accordance with the requirements of the
jurisdictional authorities.
(9) HVAC
Tenant will install a heating and air conditioning system. The
system will be designed to maintain a condition, in the sales area only, of 78
degrees F., with fifty percent (50%) relative humidity when the outside
temperature is 95 degrees F., dry-bulb and 79 degrees F., wet-bulb; and 65
degrees F. when the outside temperature is 33 degrees F. The system will be
based upon a minimum of 0.10 CFM of outside air per square foot of rentable
square footage ("GLA") and deliver 1 CFM of supply air per square foot of GLA
with an internal cooling load (lights and occupants) not to exceed 29.2 BTU per
square foot of GLA in the Premises. Conditioned air will be delivered to
unfinished areas such as stock and storage rooms, but without the
qualifications stated for sales area. The HVAC system may be either self-
contained roof top units or "split system" type with the air-cooled condensing
unit located on the roof as indicated on the Lease Outline Drawing and the
fan-coil floor mounted in the Premises. The maximum height of roof top mounted
equipment, including curbs, base, etc. shall not exceed 5'-0" and be mounted on
manufactured metal curbs. Location will be limited to structural bay areas
designated on the Lease Outline Drawing. No wood sleeper mounted equipment over
the roof membrane will be permitted.
Food service establishments will install an independent
ventilation system composed of one hundred ten percent (110%) make-up and
exhaust air capable of eliminating from the Premises all heat and/or odors
associated with food preparation and ducting said odor to the exterior of
Landlord's Building. Systems are to be designed to meet all local Health
Department requirements. Tenant shall supply Landlord with a certified Balancing
Report.
(10) Tenant Mechanical System
(a) No exhaust or vent shall be located within
twenty-five (25) feet of any supply of air intake.
(b) No openings, fans, vents, louvers, grilles, or other
devices shall be installed in any demising partition
or exterior wall without Landlord's written approval.
(c) The requirements for roof openings described in
Section C hereof.
(d) An independent ventilation system composed of make-up
and exhaust air capable of eliminating from the
Premises all heat and/or odors and ducting the
exterior of Landlord's Building.
(e) Hoods and exhaust systems for food processing shall
be protected by a C02 fire extinguishing system
installed in accordance with the requirements of the
jurisdictional authorities and the Landlord's
insurance carrier.
(f) Product-of-combustion vents for gas fired equipment
shall be discharged directly to the exterior of
Landlord's Building.
(g) Combustion of make-up air for any Tenant-installed
system or appliance shall be obtained directly from
the exterior.
(h) Condensate lines for refrigeration and/or
conditioning must terminate within the Premises in
accordance with jurisdictional authorities.
(i) Grease trap for any Tenant installed system on
appliance producing grease or fats.
B-4
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(11) Tenant Electrical Systems
All electrical work, including without limitation Tenant's
main disconnect switch, current transformers, meter sockets, dry type
transformers, circuit panels, branch circuit wiring, wiring devices, lighting
fixtures, lamps, emergency lighting, communication systems, burglar alarms,
sign and logo lighting, and TV and radio systems shall conform to the following
criteria:
(a) The requirements of the jurisdictional authorities,
the National Electric Code and the local utility.
(b) The requirements for roof openings described in
Section C hereof.
(c) All fluorescent lighting should have High Power
Factor Ballast.
(d) Main disconnect in Landlord's Utility Room shall be
bus-duct circuit breaker type bus plug, compatible
with Landlord's bus-duct. Interrupting rating of main
disconnect shall be approved by Landlord prior to
purchase by Tenant. No appurtenances shall be affixed
to the interior walls, exterior wall or roof of the
Landlord's Building without Landlord's written
approval.
(e) Current transformers and meter bases shall be:
(f) Service conductors must be copper throughout the
Premises.
1. 200 Amp service and under - Milbank U-7421,
7 JAW, complete with closure plates and
manual by-pass.
2. Over 200 Amp service - CT's in approved
enclosure, Milbank S-7545, 13 JAW, complete
with closure plates and manual by-pass.
(g) Service conductors from Landlord's Utility Room to
Premises and throughout the Premises shall be copper.
(h) No appurtenances shall be affixed to the exterior
wall or roof of the Landlord's Building without
Landlord's written approval.
(i) Background music systems shall require Landlord's
written approval and shall not be audible outside
the Premises.
(12) Sprinklers
Tenant shall install a fire sprinkler system within its
demised Premises in accordance with drawings approved by Landlord, Landlord's
insurance carrier and the Texas State Board of Insurance, designed on the basis
of not less than one (1) Head per one hundred square feet of GLA in the
Premises.
(13) Certificate of Occupancy
Tenant must secure a certificate of occupancy from the
jurisdictional authorities in sufficient time to allow Tenant to open the
Premises in accordance with the opening requirements of this Lease and will
deliver a copy of the certificate to the Landlord.
(14) Tenant's Obligation
Landlord's work is limited to that required of Landlord by this
Exhibit "C", and Tenant shall be required to make all improvements to the
Premises in accordance with Final Plans (as approved by Landlord) except those
which Landlord is specifically required to make hereunder. Tenant shall conduct
his construction work in such a manner as to not disturb neighbors by dust,
odors, noises, or any other activity. If such activity would be a nuisance to
others it should be done before or after hours. Tenant's contractor is required
to confine his construction procedures to the demised Premises, except as
required to encroach on the Enclosed Mall to erect his storefront. Tenant shall
commence and proceed continually with construction of the Premises in such a way
as not to interfere unreasonably with Landlord, other Tenants or any Center
activities.
B-5
59
(15) Discipline
Tenant shall enforce strict discipline and good order among
the employees of Tenant's contractors and subcontractors.
(16) Character of Employees
Tenant shall not employ any unfit person or anyone not skilled
in the work he is performing, or any ▇▇▇▇▇▇▇ that is incompatible with the
balance of the work force or who will cause, or whose presence will cause,
labor disputes or work stoppages.
(17) Clean Up
Tenant shall maintain the Premises in a clean and orderly
condition during construction and merchandising. Tenant shall promptly remove
at least once a day all unused construction materials, equipment, shipping
containers, packaging, debris and flammable waste from the Center. Tenant shall
contain all construction materials, equipment, fixtures, merchandise, shipping
containers and debris within the Premises. Malls, courts, arcades, public
corridors, service corridors and the exterior of the Landlord's Building shall
be clear of Tenant's equipment, merchandise, fixtures refuse, and debris at all
times. Trash storage within the Premises shall be confined to covered metal
containers.
(18) As-Built Plans
Within thirty (30) days after completion of Tenant's Work
Tenant shall furnish to Landlord a complete set of as-built plans for the
Premises, prepared from Tenant's Final Plans (the "As-Built Plans"). If Tenant
so fails to provide the As-Built Plans, Landlord may obtain such plans from the
local jurisdictional building or planning authorities or otherwise at Tenant's
cost. Such cost shall be payable to Landlord as additional Rent immediately
upon delivery to Tenant of a ▇▇▇▇ therefor.
SECTION C: WORK BY LANDLORD IN PREMISES AT TENANT'S EXPENSE
(1) Required Work
Tenant shall reimburse Landlord for the actual cost of the
work plus fifteen percent (15%) thereof for administration costs. The following
work in the Premises will be done by the Landlord at the Tenant's expense:
(a) Furnish and install base building standard pavers as
the finished floor material between the storefront
lease line and the Tenant's storefront closure. Tenant
shall reimburse Landlord for the actual cost of the
work plus fifteen percent (15 %) thereof for
administration costs.
(b) Furnish and install a service corridor identification
sign setting forth Tenant's name and address number at
the actual cost per door plus fifteen percent (15%)
thereof for administration costs.
(c) Roof penetrations as required. Tenant shall reimburse
Landlord for the actual cost of the work plus fifteen
percent (15%) thereof for administration costs.
(d) Grease traps and grease trap waste line. Tenant shall
reimburse Landlord for the cost of installation plus
fifteen percent (15%) thereof for administration
costs.
(2) Temporary Storefront
Landlord has provided (or will provide) a temporary storefront
in front of the Premises. This storefront shall remain in front of the Premises
during Tenant's construction therein in order to present a barricade to the
Premises for customers in the Center, and to present an aesthetic appearance
during Tenant's construction period. Any lettering, logos, signage or other
visual material which Tenant desires to place upon the temporary storefront in
addition to or in substitution for Landlord's graphics or other finish must be
submitted in advance to Landlord for written approval, which may be given or
withheld in Landlord's sole discretion. Any changes, additions or deletions to
temporary storefront graphics shall similarly require Landlord's prior written
approval. Tenant shall pay Landlord for such temporary storefront an amount
equal to Twenty-Five Dollars ($25.00) per Lineal Foot.
B-6
60
If Landlord has not installed a temporary storefront as
contemplated herein as of the date of the execution of this Lease, Tenant may
request permission from Landlord to have Tenant's contractor construct the
temporary storefront or barricade to Landlord's specifications at Tenant's
expense; in such event, the temporary storefront must be completely installed
prior to the commencement of demolition or construction within the Premises.
At such time as Tenant commences construction of the permanent
storefront, the temporary storefront barricade may be moved into the Enclosed
Mall with additional inside enclosures to be constructed by Tenant's contractor
at Tenant's expense. The distance that this barricade may be moved into the
Enclosed Mall must be approved by Landlord's mall manager. Because the Center
is currently open for business, all construction in the Premises that produces
loud or obnoxious noises (such as jackhammering concrete) must be performed
prior to 9:00 a.m. or after the Enclosed Mall is closed to the public.
It shall be Tenant's responsibility to remove the temporary
barricade after the completion of Tenant's construction. However, Tenant shall
not remove said temporary barricade without prior written approval from
Landlord. If Tenant removes, either partially or completely, the temporary
barricade without Landlord's prior written approval, Tenant shall be required
to pay to Landlord a fine of One Thousand Dollars ($1,000.00) as additional
Rent and shall be required to reconstruct the barricade at Tenant's expense.
(3) Roof Penetration
All roof penetrations and flashing will be performed solely by
Landlord. Tenant will reimburse Landlord for the actual cost of the roof
penetrations required by the installation of Tenant's mechanical equipment plus
fifteen percent (15%) thereof for administration. Landlord reserves the right
to disallow any installation which may exceed the structural capabilities of
the roof system or if, in Landlord's opinion, the appearance of such equipment
will be detrimental to the appearance of the Landlord's Building.
(4) Pavers
A limited supply of building standard pavers is available for
purchase from Landlord for use as finished floor material between the
storefront lease line and Tenant's storefront closure. Tenant may use
compatible, similar pavers of equal or better quality subject to Landlord's
prior written approval.
(5) Additional Work
If the design of the Premises or anything therein necessitates
any or all of the following, Landlord at its sole option shall perform such
work at Tenant's expense, but before proceeding therewith Landlord shall give
Tenant not less than ten (10) days notice of the need for such work; if Tenant
does not eliminate the need therefor within such time and so notify Landlord,
Landlord shall proceed with and thereafter complete such work, the cost to
Tenant of such work shall be Landlord's actual cost, plus fifteen percent (15%)
thereof for administration costs.
(a) Electrical Service. Electrical conduit larger
than installed size; relocation of conduit.
(b) Additional sanitary sewer connection;
relocation of sanitary sewer inverts.
(c) Increase in permitted number of sprinkler
heads. Landlord may refuse to allow
additional sprinkler heads in the event such
additional heads may contribute to exceeding
the capacity of the sprinkler system.
(d) Any roof openings approved by Landlord. Such
openings will include supporting structures,
curbs, flashings, ducts, vents and grilles.
Landlord may refuse any openings which, in
Landlord's judgment, exceed the capability of
the structural system.
(e) Openings in demising partitions, provided
such openings have been approved by the
Landlord in writing.
(f) Any Tenant equipment that requires mounting
on the roof or the exterior walls. Landlord
may refuse the installation of any roof or
wall mounted equipment if, in Landlord's
opinion, the appearance of such equipment
would be detrimental to the appearance of the
Landlord's Building.
B-7
61
(g) Violations
In the event the Tenant is notified of any
violation of codes, ordinances, regulations,
requirements or guidelines, either by the
jurisdictional authorities or by the
Landlord, Tenant shall, at its expense,
correct such violations within ten (10)
calendar days after such notification. Should
Tenant fail to correct such violations within
ten (10) calendar days, Landlord may correct
such violations at Landlord's actual cost
plus fifteen percent (15%) thereof for
administration costs. Such corrections will
be at Tenant's expense.
SECTION D: PROCEDURE
(1) Tenant Coordinator
Landlord's Tenant Coordinator will be responsible for
coordination and review of Tenant's Design Drawings (as hereinafter defined)
and Final Plans. All questions pertaining to the design and construction of
Tenant's Premises and all plan submittals shall be directed to the Tenant
Coordinator at the Center.
(2) Lease Outline Drawing
Landlord shall furnish to Tenant a drawing of the Premises of
the type commonly known as a lease outline drawing (herein sometimes referred
to as the "Lease Outline Drawing" or the " L.0.D."). The L.O.D. will be
prepared by Landlord's architect at a scale of 1/4 inch equal 1 foot and will
show the dimensions and square footage of the Premises. In addition, the L.O.D.
will show the location of the sprinkler feed, electrical conduit, sanitary
sewer, water line, and points of entry of other Landlord supplied services, and
will include an elevation and section of the storefront and a plan of the
structural system showing the approved location for Tenant's rooftop units.
(3) Design Drawings
Tenant shall submit to the Tenant Coordinator for Landlord's
approval two (2) sets of prints and one (1) sepia of the design drawings
(herein called "Design Drawings") specifically including a colored rendering of
the proposed storefront, signage, a sample of materials to be used, and
interior layout of the Premises. The Design Drawings will, to the extent
applicable, be prepared in accordance with the Store Design Criteria and the
Lease Outline Drawing. On or before twenty (20) days after receipt of the
Design Drawings, Landlord will return to Tenant the Design Drawings, marked
either "approved" or "disapproved"; if they are marked "disapproved", Landlord
will also note the reasons for such disapproval.
(4) Final Plans
Upon receipt of marked up Design Drawings, Tenant shall
promptly, within thirty (30) days, submit to the Tenant Coordinator for
Landlord's approval three (3) sets of prints and one (1) sepia of the final
working drawings and specifications ("Final Plans") for architectural,
electrical, mechanical, sprinkler, and plumbing work within the Premises and
all other work required to be performed by Tenant pursuant to Exhibit B. The
Final Plans will be prepared in accordance with the Design Drawings, as marked
"approved" by Landlord; if the Design Drawings have been marked "disapproved"
by Landlord, the Final Plans will incorporate any revisions to the Design
Drawings required to satisfy Landlord's reasons for disapproval of the Design
Drawings. On or before twenty (20) days after receipt of the Final Plans,
Landlord will return to Tenant the Final Plans, marked either "approved" or
"disapproved". If they are marked " disapproved", Landlord will also note the
reasons for such disapproval, and Tenant will, on or before ten (10) days after
receipt of such "disapproved" Final Plans, correct any deficiencies noted by
Landlord and resubmit the corrected Final Plans to Landlord. Tenant's Work
shall be performed only in accordance with the Final Plans, as approved by
Landlord.
(5) Delivery of Premises; Commencement of Tenant's Work
Landlord will give Tenant notice when the Premises have been
or will be sufficiently completed to permit Tenant's Work to begin. Tenant will
thereupon notify the Tenant Coordinator of the date on which Tenant's
Contractor intends to commence construction and the date on which Tenant's
Building Permit was issued. At such time as Tenant's Contractor is actually
prepared to commence work, the Tenant Coordinator will deliver possession of
the Premises.
B-8
62
Tenant will commence Tenant's Work and proceed diligently and
continuously to completion including installation of fixtures and equipment in
the Premises. Further, Tenant will permit Landlord to commence or continue (if
Landlord has already commenced) the work specified in, Exhibit "B", Section C.
Neither Landlord nor Tenant will unreasonably interfere with the others
construction work nor permit their contractors or subcontractors to so
interfere. Tenant agrees that Tenant's Final Plans and the improvements
constructed by Tenant in accordance with Tenant's Work and those Final Plans
will comply with all applicable Laws, and Tenant agrees to indemnify and hold
harmless Landlord from any suit, loss, damage, claims, fine or penalty arising
out of any violation of the same.
(6) Certificate of Occupancy
Tenant must secure a certificate of occupancy from the
jurisdictional authorities in sufficient time to allow Tenant to open the
Premises in accordance with the opening requirements of this Lease and shall
deliver a copy of the certificate to the Tenant Coordinator.
(7) Tenant's Obligation
Landlord's Work is limited to that required of Landlord
by this Exhibit "B" and Tenant shall be required to make all improvements to the
Premises in accordance with Tenant's Final Plans (as approved by Landlord)
except those which Landlord is specifically required to make hereunder.
(8) Tenant's Insurance
Tenant shall not permit Tenant's contractors or any
subcontractor to commence any work until all required insurance has been
obtained and certificates evidencing such coverage have been delivered to
Landlord. Tenant shall secure, pay for and maintain or cause Tenant's
contractors to secure, pay for and maintain during the performance of Tenant's
Work the following insurance, which shall be endorsed in all policies to
include Landlord, Landlord's managing agent for the Center, and any designees
of Landlord as additional insured parties and which shall provide in all
policies that Landlord shall be given ten (10) days' prior written notice of
any alteration or termination of coverage.
(a) Bodily Injury and Property Damage Insurance providing
coverage for explosion, collapse and underground
exposures and contractual liability coverage.
Such insurance shall be provided in the following
minimum amounts:
Bodily Injury Liability - $2,000,000
each occurrence; $2,000,000 aggregate
Property Damage Liability - $2,000,000 each
occurrence; $2,000,000 aggregate
Personal Injury Liability - $2,000,000
aggregate
(b) Comprehensive Automobile Liability Insurance
including the ownership, maintenance and operation of
any automotive equipment owned, hired or non-owned,
including the loading and unloading thereof, in the
following minimum amounts:
Bodily Injury Liability - $2,000,000
each accident
Property Damage Liability - $2,000,000
each accident
The insurance required under (a) and (b)
shall insure Tenant's contractors against any
and all claims for personal injury including
death resulting therefrom and damage to
property of others, arising from operations
under contracts whether such operations are
performed by Tenant's Contractors or by
anyone directly or indirectly employed by any
of them, or by anyone for whose acts any of
them may be liable.
(c) Owner's Protective Liability Insurance insuring
Tenant against any and all liability to third parties
for damage because of bodily injury, including death
resulting therefrom, property damage to others or a
combination thereof which may arise from work in the
completion of the Premises and any other liability for
damages which Tenant's Contractors are required to
insure against under any provisions herein. Said
insurance shall be provided in the following minimum
amounts:
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Bodily Injury Liability - $2,000,000 each
occurrence; $2,000,000 aggregate
Property Damage Liability - $2,000,000 each
occurrence; $2,000,000 aggregate
(d) Builder's Risk Completed Value Form affording "All
Risks of Physical Loss or Damage" on Tenant's Work in
the Premises as it relates to the Building in which
the Premises are located, naming the interests of
Landlord and its agents and employees and Tenant's
Contractors, as their respective interest may appear,
within a radius of one hundred (100) feet of the
Premises.
SECTION E: SPECIAL PROVISIONS
(1) This Lease and this Exhibit "B" shall become a part of the
contract between the Tenant and its contractor, subcontractors
and architects.
(2) A superintendent shall be on the Premises during the
Construction Period.
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DESIGN CRITERIA & EXHIBIT "B" ADDENDUM
Photographic Processing Tenants and Tenants whose operations include dumping
and alkaline and deleterious chemicals into Landlord's sewer system are
required to comply with the following additional regulations and criteria.
1. Safety Regulations
Comply with all applicable OSHA, Federal, State and Local governing
authority regulations pertaining to the handling and use of chemicals
required for Tenant's process and operation.
Tenant is responsible for determining these requirements, which may in
addition to other regulations, require the use of special showers, eye
wash stations, protective clothing and eye protection, and special
exhaust and fresh air make-up.
2. Environmental
In addition to Landlord Requirements, Tenant shall comply with all
applicable regulations of the most stringent of Local, State, and
Federal requirements for the handling and disposal of chemicals listed
for use by Tenant.
3. Chemicals Used In Process
Submit to Landlord a "Hazardous Material List" of all chemicals used
in Tenant process.
4. PH Neutralizing
Prior to dumping chemicals in Landlord's sewer system, all material is
to be neutralized to a Ph between Ph 6.8 and Ph 9, through a
Tenant-supplied water make-up neutralizing system containing calcium
carbonate and approved for this use by Landlord.
The water make-up sequence of operation shall be such that dilution
water is turned "on" no less than 60 seconds prior to chemical
dumping, and turned "off" no less than 180 seconds after completion of
chemical NEUTRALIZATION PROCESS.
5. Water Quantity Control
The water make-up supply pipe must contain a ▇▇▇▇ & ▇▇▇▇▇▇▇ "Circuit
Setter" set for minimum quantity to maintain effluent neutralization.
The "Circuit Setter" must be provided with a tag listing the quantity
and "Circuit Setter" number setting, the date set and the name of the
person and company making the setting.
Tenant must submit control schematic and sequence of operation
outlining method of controlling dilution cycle and proposed water
consumption for each dump cycle.
6. Tenant Sewer Pipe
All Tenant sewer piping emanating from equipment, sinks or
receptacles, dumping non-neutralized chemicals must be contained
within the Tenant space prior to neutralization. Piping material must
be suitable for the chemical waste it is transporting. (No piping will
be permitted below the slab).
7. Tenant Floor Treatment Under Chemical Waste Piping
All floor area under Tenant chemical waste piping must be protected
with a containment system suitable for containing all the chemical
effluent which may leak from piping and equipment in the event of a
pipe seal failure, breakage or equipment leak.
Raised floors above sewer piping must be accessible. The area under
the raised floor will be inspected daily by Landlord for evidence of
leaking equipment or piping.
8. Exhaust
All equipment discharging corrosive or odorous fumes into the Tenant
space must be provided with an exhaust system discharging to outside
atmosphere.
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The exhaust fan shall operate during all business hours, and be roof
mounted to the "Utility Set" type, discharging vertically at a
velocity exceeding 2000 feet per minute.
The space containing the equipment discharging odorous or corrosive
fumes shall be isolated from other of this Tenant space, and shall be
maintained at a negative pressure of twenty-five percent (25%) less
than the air supplied to this space.
NOTE: A supplementary exhaust system is recommended for all apparatus
rejecting "heat" only, to reduce HVAC cooling requirements.
9. System Maintenance, Operation and Design
Tenant is responsible for design, maintenance and operation of all
apparatus associated with this Criteria Addendum. Landlord "Approval"
shall not constitute release of Tenant liability for maintaining
Tenant's disposal system or deleterious effects of the chemicals used
by Tenant on Landlord's or other tenant's areas or systems.
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EXHIBIT "C"
RULES
(1) Common Areas. Tenant shall not use the Common Areas, including areas
adjacent to the Premises, for any purpose other than ingress and
egress, and any such use thereof shall be subject to the other
provisions of this Lease, including these Rules. Without limiting the
generality of the foregoing, Tenant shall not use the Common Areas to
canvass, solicit business or information from, or distribute any
article or material to, other tenants, occupants or invitees of the
Center. Tenant shall not allow anything to remain in any passageway,
sidewalk, court, corridor, stairway, entrance, exit, elevator,
shipping area, or other area outside the Premises. Janitorial closets,
utility closets, telephone closets, broom closets, electrical closets,
storage closets, and other such closets, rooms and areas shall be used
only for the purposes and in the manner designated by Landlord, and
may not be used by Tenant, or its contractors, agents, employees, or
other parties without Landlord's prior written consent
(2) Deliveries. Furniture, inventory and all other deliveries may be
brought into the Center only at times and in the manner designated by
Landlord, in compliance with all Laws, and always at Tenant's sole
risk. Landlord may inspect items brought into the Center or Premises
with respect to weight or dangerous nature or compliance with this
Lease or applicable Laws. Tenant's use of any freight elevators,
loading and service areas at the Center shall be subject to scheduling
by Landlord. Tenant shall not take or permit to be taken in or out of
other entrances or elevators of the Center, any item normally taken,
or which Landlord otherwise requires to be taken, in or out through
service doors or on freight elevators. Tenant shall move all
inventory, supplies, furniture, equipment and other items as soon as
received directly to the Premises. Any hand-carts used at the Center
shall have rubber wheels and side guards. No other material handling
equipment may be brought upon the Center except as Landlord shall
approve in writing in advance.
(3) Trash. All garbage, refuse, trash and other waste shall be kept in the
kind of container, placed in the areas, and prepared for collection in
the manner and at the times and places specified by Landlord, subject
to Article 26 respecting Hazardous Materials. If Landlord designates a
service to pick up such items, Tenant shall use the same at Tenant's
cost. If Landlord shall provide or arrange for such service, Tenant
shall pay Tenant's Proportionate Share of the cost thereof (or such
other share as Landlord may fairly and reasonably determine) to
Landlord on or before the first day of each calendar month in advance,
or Landlord may include such charges in Center Expenses. Landlord
reserves the right to require that Tenant participate in any recycling
program designated by Landlord.
(4) Fire Protection. If Landlord installs or has heretofore installed a
supervised fire sprinkler and/or alarm system for the protection of
the Center, Tenant shall pay Tenant's Proportionate Share of the cost
thereof (or such other share as Landlord may fairly and reasonably
determine) to Landlord on or before the first day of each calendar
month in advance, or Landlord may include such charges in Center
Expenses.
(5) Pest Control. Tenant shall use, at Tenant's cost such pest and rodent
extermination contractor as Landlord may direct and at such intervals
as Landlord may require. In the alternative, from time to time,
Landlord may arrange for pest control (in which case, Tenant shall pay
Tenant's Proportionate Share of the cost thereof, or such other share
as Landlord may fairly and reasonably determine to Landlord on or
before the first day of each calendar month in advance, or Landlord
may include such charges in Center Expenses). Tenant shall provide
Landlord with evidence of Tenant's compliance with this provision
within five (5) days after Landlord's written request.
(6) Signs and Display Windows. Tenant shall not place any sign or other
thing of any kind outside the Premises (including without limitation,
exterior walls and roof), or on the interior or exterior surfaces of
glass panes or doors, except such single sign as Landlord shall
expressly approve in writing for or in connection with Tenant's
storefront. Within the Premises, Tenant shall not: (i) install any
sign that advertises any product, (ii) install any sign within 24
inches of any window, or (iii) install any sign that is visible from
outside the Premises or that is illuminated, without Landlord's prior
written approval. If Landlord approves or requires illuminated signs,
Tenant shall keep the same illuminated each day of the Term during the
hours designated by Landlord from time to time. All Tenant's signs
shall be professionally designed, prepared and installed and in good
taste so as not to detract from the general appearance of the Premises
or the Center and shall comply with the sign criteria or otherwise
developed by Landlord from time to time. After the initial
installation of Tenant's storefront sign as approved in writing by
Landlord in accordance with these provisions, Landlord reserves the
right to require from time to time that Tenant change or replace such
sign in order to comply with any new
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sign criteria developed by Landlord, at Landlord's expense. The term
"sign" in this Rule shall mean any sign, placard, picture, name,
direction, lettering, insignia or trademark, advertising material,
advertising display, awning or other such item, except that Tenant's
storefront sign shall be an actual sign. Blinds, shades, drapes or
other such items shall not be placed in or about the windows in the
Premises except to the extent, if any, that the character, shape,
design, color, material and make thereof is first approved by Landlord
in writing.
(7) Display of Merchandise. Tenant shall not place or maintain any
permanent or temporary fixture or item or display any merchandise: (i)
outside the Premises, or (ii) anywhere inside the Premises within six
(6) feet of any entrance to the Premises (except that for any recessed
entry of the Premises, Tenant shall not so place or maintain fixtures
within three [3] feet of such entrance). All displays of merchandise
shall be tasteful and professional.
(8) Plumbing Equipment. The toilet rooms, urinals, wash bowls, drains and
sewers and other plumbing fixtures, equipment and lines shall not be
misused or used for any purpose other than that for which they were
constructed and no foreign substance of any kind whatsoever shall be
thrown therein, and Tenant shall properly install, maintain, clean,
repair and replace adequate grease traps.
(9) Roof; Awnings and Projections. Tenant shall not install any aerial,
antennae, satellite dish or any other device on the roof, exterior
walls or Common Areas of the Center. Tenant may install and have
access to rooftop HVAC equipment only to the extent approved or
required by Landlord from time to time in connection with Tenant's
obligations under Articles 10 and 11 of this Lease. No awning or
other projection shall be attached by or for Tenant to the exterior
walls of the Premises or the building of which it is a part.
(10) Overloading Floors. Tenant shall not overload any floor or part
thereof in the Premises or Center including any public corridors or
elevators therein, and Landlord may direct and control the location of
safes, vaults and all other heavy articles and require supplementary
supports of such material and dimensions as Landlord may deem
necessary to properly distribute the weight at Tenant's expense
(including expenses for structural review and engineering).
(11) Locks and Keys. Upon termination of the Lease or Tenant's right to
possession, Tenant shall: (i) return to Landlord all keys, parking
stickers or key cards, and in the event of loss of any such items
shall pay Landlord therefor, and (iii) advise Landlord as to the
combination of any vaults or locks that Landlord permits to remain in
the Premises.
(12) Unattended Premises. Before leaving the Premises unattended, Tenant
shall close and securely lock all doors or other means of entry to the
Premises and shut off all lights (except signs required to be
illuminated hereunder), water faucets and other utilities in the
Premises (except heat to the extent necessary to prevent the freezing
or bursting of pipes). This provision shall not imply that Tenant may
leave the Premises unattended in violation of the operating
requirements set forth elsewhere in this lease.
(13) Energy Conservation. Subject to Rule (6) concerning illumination,
Tenant shall not waste electricity, water, heat or air conditioning,
or other utilities or services, and agrees to cooperate fully with
Landlord and comply with any Laws to assure the most effective and
energy efficient operation of the Center.
(14) Food, Beverages, Game and Vending Machines Except to the extent
expressly permitted under Article 1 of this Lease, Tenant shall not:
(i) use the Premises for the manufacture, preparation, display, sale,
barter, trade, gift or service of food or beverages, including without
limitation, intoxicating liquors, or (ii) install, operate or use any
video, electronic or pinball game or machine, or any coin or token
operated vending machine or device to provide products, merchandise,
food, beverages, candy, cigarettes or other commodities or services
including, but not limited to, pay telephones, pay lockers, pay
toilets, scales, and amusement devices; provided, however, that Tenant
may install vending machines for the sale of non-alcoholic beverages,
food, and candy in an area not visible from the sale area or exterior
of the Premises for the exclusive use of Tenant's employees.
(15) Going-Out-Of-Business Sales and Auctions. Tenant shall not use, or
permit any other party to use, the Premises for any distress, fire,
bankruptcy, close-out, "lost our lease" or going-out-of-business sale
or auction. Tenant shall not display any signs advertising the
foregoing anywhere in or about the Premises. This prohibition shall
also apply to Tenant's creditors.
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(16) Labor Relations. Tenant shall conduct its labor relations and
relations with employees so as to avoid strikes, picketing, and
boycotts of, on or about the Premises or Center. If any employees
strike, or if picket lines or boycotts or other visible activities
objectionable to Landlord are established, conducted or carried out
against Tenant, its employees, agents, contractors, or subcontractors
in or about the Premises or Center, Tenant shall immediately close the
Premises and remove or cause to be removed all such employees, agents,
contractors, and subcontractors until the dispute has been settled.
(17) Landlord's Tradename and Trademarks. No symbol, design, name, ▇▇▇▇ or
insignia adopted by Landlord for the Center or picture or likeness of
the Center shall be used by Tenant without the prior written consent
of Landlord, except as provided in Article 9 of this Lease.
(18) Prohibited Activities. Tenant shall not: (i) use strobe or flashing
lights in or on the Premises or in any signs therefor, (ii) use, sell
or distribute any leaflets, handbills, bumper stickers, other stickers
or decals, balloons or other such articles in the Premises (or other
areas of the Center), (iii) operate any loudspeaker, television set,
phonograph, radio, CD player or other musical or sound producing
instrument or device so as to be heard outside the Premises, (iv)
operate any electrical or other device which interferes with or
impairs radio, television, microwave, or other broadcasting or
reception from or in the Center or elsewhere, (v) bring or permit any
bicycle or other vehicle, or dog (except in the company of a blind
party) or other animal, fish or bird in the Center, (vi) make or
permit objectionable noise, vibration or odor to emanate from the
Premises or any equipment serving the same, (vii) do or permit
anything in or about the Premises that is unlawful, immoral, obscene,
pornographic, or which tends to create or maintain a nuisance or do
any act tending to injure the reputation of the Center, (viii) use or
permit upon the Premises anything that violates the certificates of
occupancy issued for the Premises or the Center, or causes a
cancellation of Landlord's insurance policies or increases Landlord's
insurance premiums (and Tenant shall comply with all requirements of
Landlord's insurance carriers, the American Insurance Association, and
any board of fire underwriters), (ix) use the Premises for any
purpose, or permit upon the Premises anything, that may be dangerous
to parties or property (including but not limited to flammable oils,
fluids, paints, chemicals, firearms or any explosive articles or
materials), nor (x) do or permit anything to be done upon the Premises
in any way tending to disturb, bother or annoy any other tenant at the
Center or the occupants of neighboring property.
(19) Parking. Tenant and Tenant's employees shall park their cars only in
those portions of the parking area designated by Landlord for tenant
and employee parking and shall use such areas only for parking cars
(or at Landlord's option, Landlord may require that any or all such
employees park offsite). Tenant shall furnish Landlord with a list
containing the description and automobile license numbers (and State
of issuance) of the cars of Tenant and is employees within five (5)
days of any request by Landlord, and shall thereafter advise Landlord
of any changes, additions or deletions to such list. Landlord reserves
the right to: (i) adopt additional requirements pertaining to parking,
including without limitation, a parking system with charges favoring
carpooling for tenants and their employees, and any other parking
system by validation, metering or otherwise, (ii) assign specific
spaces, and reserve spaces for small cars, handicapped individuals,
and other tenants, customers of tenants or other parties (and Tenant
and its employees and visitors shall not park in any such assigned or
reserved spaces) and (iii) restrict or prohibit full size vans and
other large vehicles. In case of any violation of these provisions or
any applicable Laws, Landlord may: (a) refuse to permit the violator
to park, and remove the vehicle owned or driven by the violator from
the Center without liability whatsoever, at such violator's risk and
expense and/or (b) charge Tenant such reasonable rates as Landlord may
from time to time establish for such violations, which shall be at
least Fifty and No/100 Dollars ($50.00) per day for each vehicle that
is parked in violation of these Rules. These provisions shall be in
addition to any other remedies available to Landlord under this Lease
or otherwise. Notwithstanding the foregoing, Landlord agrees that no
fine shall be due unless and until Landlord has given 24 hours prior
written notice to Tenant of such infractions.
(20) Responsibility for Compliance. Tenant shall be responsible for
ensuring compliance with these Rules, as they may be amended, by
Tenant's employees and as applicable, by Tenant's agents, invitees,
contractors, subcontractors, and suppliers.
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