ASSIGNMENT AND ASSUMPTION OF LEASE AND ASSIGNMENT OF GUARANTY OF
LEASE
THIS ASSIGNMENT AND ASSUMPTION OF LEASE AND ASSIGNMENT OF
GUARANTY OF LEASE (this "ASSIGNMENT") is made and entered into as
of the 5th day of November, 2002,but made effective the 7th day
of November, 2002 by and between ▇▇▇▇▇▇▇▇ ROAD DEVELOPMENT, LLC,
a New York limited liability company ("ASSIGNOR"), and AEI
PRIVATE NET LEASE MILLENNIUM FUND LIMITED PARTNERSHIP, a
Minnesota limited partnership whose corporate general partner is
AEI Fund Management XVIII, Inc., a Minnesota corporation and AEI
INCOME & GROWTH FUND 24 LLC, a Delaware limited liability
corporation whose corporate managing member is AEI Fund
Management XXI, Inc., a Minnesota Corporation ( "ASSIGNEE").
RECITALS:
A. Assignor and Assignee are parties to that certain
Purchase and Sale Agreement dated October 1, 2002 as it may have
been amended (the "AGREEMENT"), pursuant to which Assignee is
acquiring from Assignor the real property and improvements,
located on property more particularly described on EXHIBIT A
attached hereto and incorporated herein by this reference.
B. Pursuant to the terms of the Agreement, Assignor desires to
sell, assign, convey, transfer and set over to Assignee and
Assignee desires to assume all of Assignor's interest in that
certain Lease dated February 4, 2002, as amended on March 27,
2002 (the "LEASE"), by and between Assignor and Sterling Inc.
(the "TENANT"), including all rents prepaid for any period
subsequent to the date of this Assignment, and in that certain
Guaranty of Lease dated February 6, 2002 (the "Guaranty") given
by Sterling Jewelers, Inc. (the "Guarantor") subject to the terms
and conditions set forth below.
C. Assignor is the Landlord under the Lease with full right and
title to assign the Lease, the Rent, and the Guaranty to Assignee
as provided herein. The Lease and the Guaranty are in full force
and effect and have not been modified or amended. So far as is
known to Assignor, there is no default by Tenant under the Lease
and no Rent has been waived, anticipated, discounted, compromised
or released.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the
parties, Assignor and Assignee hereby agree as follows:
1 Assignor hereby irrevocably and unconditionally sells,
assigns, conveys, transfers and sets over unto Assignee, its
heirs, successors and assigns as of the date hereof (the
"EFFECTIVE DATE"), all of Assignor's right, title and interest
in, to and under: (i) the Lease, and (ii) any and all rents
prepaid as of the Effective Date, held by Assignor in connection
with the Lease (the "RENT"), and (iii) the Guaranty.
2. Assignee hereby assumes and shall be liable for any and
all liabilities, claims, obligations, losses and expenses,
including reasonable attorneys' fees arising in connection with
the Lease which are actually incurred, and which arise by virtue
of acts or omissions occurring thereunder, on or after the
Effective Date. Assignor shall indemnify and hold Assignee
harmless from any and all liabilities, claims, obligations,
losses and expenses, including reasonable attorneys' fees arising
in connection with the Lease which are actually incurred, and
which arise by virtue of acts or omissions occurring thereunder,
prior to the Effective Date. Assignee shall indemnify and hold
Assignor harmless from any and all liabilities, claims,
obligations, loss and expenses, including reasonable attorneys
fees, arising in connection with the Lease or as a result of
Assignee's failure to fulfill the landlord's duties and
obligations accruing under the Lease on or after the Effective
Date. Assignee shall be entitled to receive all income arising
from the Lease from and after said Effective Date. Assignor shall
be entitled to receive all income accruing from the Lease prior
to the Effective Date.
3. Assignor shall
direct the tenant and any successor tenant under the Lease to pay
to Assignee the Rent and all other monetary obligations due or to
become due under the Lease for the period beginning on the
Effective Date.
4. This Assignment shall be governed by and construed in
accordance with the laws of the state in which the Property is
located.
5. All rights and obligations of Assignee and Assignor
hereunder shall be binding upon and inure to the benefit of
Assignor, Assignee and the heirs, successors and assigns of each
such party.
6. This Assignment may be executed in any number of
counterparts, each of which shall be effective only upon delivery
and thereafter shall be deemed an original, and all of which
shall be taken to be one and the same instrument, for the same
effect as if all parties hereto had signed the same signature
page. Any signature page of this Assignment may be detached from
any counterpart of this Assignment without impairing the legal
effect of any signatures thereon and may be attached to another
counterpart of this Agreement identical in form hereto but having
attached to it one or more additional signature pages.
7. Whenever the context so requires in this Assignment,
all words used in the singular shall be construed to have been
used in the plural (and vice versa), each gender shall be
construed to include any other genders, and the word "person"
shall be construed to include a natural person, a corporation, a
firm, a partnership, a joint venture, a trust, an estate or any
other entity.
[Signatures are on the following page]
IN WITNESS WHEREOF, Assignor and Assignee have executed this
Assignment effective as of the day and year first above written.
ASSIGNOR: ▇▇▇▇▇▇▇▇ ROAD DEVELOPMENT, LLC
A New York limited liability company
By: Westlake Holding, Inc.,
Its: Sole member, a New York corporation
By: /s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇, President
ASSIGNEE: AEI PRIVATE NET LEASE MILLENNIUM FUND
LIMITED PARTNERSHIP, a Minnesota limited
partnership
By: AEI Fund Management XVIII,
Inc., a Minnesota corporation
Its: General Partner
By: /s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
AEI INCOME & GROWTH FUND 24 LLC, a Delaware
limited liability corporation
By: AEI Fund Management XXI, Inc.,
a Minnesota corporation
Its: Managing Member
By: /s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
STATE OF NEW YORK )
) ss.
COUNTY OF Onondaga )
The forgoing instrument was acknowledged before me
this 5th day of November, 2002, by ▇▇▇▇▇▇ ▇. ▇▇▇▇, as President
of Westlake Holding, Inc., sole member of ▇▇▇▇▇▇▇▇ ROAD
DEVELOPMENT, LLC.
WITNESS my hand and official seal. [notary seal]
My commission expires March 7, 2006
/s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇
Notary Public
[Notarial Seal]
STATE OF MINNESOTA )
) ss.
CITY/COUNTY OF ▇▇▇▇▇▇ )
The forgoing instrument was acknowledged before me
this 5th day of November, 2002, by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as
President of AEI Fund Management XVIII, Inc, corporate general
partner of AEI PRIVATE NET LEASE MILLENNIUM FUND LIMITED
PARTNERSHIP, on behalf of said limited partnership.
WITNESS my hand and official seal.
/s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
Notary Public
[Notarial Seal]
STATE OF MINNESOTA )
) ss.
CITY/COUNTY OF ▇▇▇▇▇▇ )
The forgoing instrument was acknowledged before me
this 5th day of November, 2002, by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as
President of AEI Fund Management XXI, Inc, managing member of AEI
Income & Growth Fund 24 LLC.
WITNESS my hand and official seal.
/s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
Notary Public
[Notarial Seal]
EXHIBIT A TO ASSIGNMENT AND ASSUMPTION OF LEASE
DESCRIPTION OF PROPERTY
All that certain parcel of land situate in the Township of ▇▇▇▇, County
of Allegheny and Commonwealth of Pennsylvania, being all of Lot No.1 in
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ Plan of record in the Recorder's Office of Allegheny
County in Plan Book Volume 200, pages 104 and 105.
Being designated as Block 431-B, Lot 17 in the Deed Registry Office of
Allegheny County, Pennsylvania.
01/31/02
Store No. 419
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
LEASE
BETWEEN
▇▇▇▇▇▇▇▇ ROAD DEVELOPMENT, LLC
a New York limited liability company
AND
STERLING INC.,
an Ohio corporation
Dated: February 4, 2002
01/31/01
LEASE
In consideration of the rents and covenants set forth below, Landlord
(as hereinafter defined) hereby leases to Tenant (as hereinafter defined),
and Tenant hereby leases from Landlord, the Premises (as hereinafter defined),
upon the following terms and conditions:
ARTICLE 1
FUNDAMENTAL LEASE PROVISIONS
The provisions in this Article shall be referred to in this Lease as the
"Fundamental Lease Provisions."
1.1 EXHIBITS TO LEASE. The following exhibits are attached to and made a
part of this Lease, and are incorporated herein by reference:
EXHIBIT "A". The description of the Premises.
EXHIBIT "B". The site plan showing the location of the Premises and
the Building and other improvements to the Premises, parking areas,
driveways and common area, and containing other general information
relative to the development of the Premises Site (the "Site Plan").
Landlord and Tenant acknowledge that three (3) different versions of the
Site Plan are attached hereto and are acceptable to both Landlord and
Tenant. Upon determination of which of the attached three versions is the
final Site Plan, Landlord and Tenant agree to execute an amendment to this
Lease verifying and confirming the Site Plan to be used for this Lease.
EXHIBIT "C". The list of Tenant's prototypical Plans and
Specifications prepared and provided by Tenant and approved by Landlord,
wherein are detailed Landlord's Work (as hereinafter defined) in the
Premises.
EXHIBIT "C-1 ". The list of items which comprise Tenant's Work (as
hereinafter defined).
EXHIBIT "D". The plans and specifications prepared and provided by
Tenant and approved by Landlord, wherein are detailed Tenant's exterior
sign(s).
EXHIBIT "E". The Premises Cost.
EXHIBIT "F". Tenant's Trade Fixtures which shall remain the personal
property of Tenant and which Tenant may remove upon expiration or
termination of this Lease.
EXHIBIT "G". The existing exclusives for which the Premises may not
be used.
EXHIBIT "H".The form of Guaranty of Lease to be executed by Sterling
Jewelers Inc.
01/31/02
1.2 DEFINITIONS. Unless otherwise defined herein, capitalized terms used
in this Lease shall have the meanings listed in the Fundamental Lease
Provisions.
Building: shall mean the building containing approximately 5,856
square feet of floor area and all improvements thereto
(including Tenant's Work) to be constructed on the Premises
and as identified on ~EXHIBIT "B" attached hereto.
Commencement Date: shall mean the earlier of thirty (30) days after the
Delivery Date or the day that Tenant opens for and conducts
business in the Premises.
Construction Period:shall mean that period commencing on the date of execution
of this Lease and ending on October 3, 2002.
Delivery Date: shall mean the date that Landlord delivers the Premises to
Tenant with Landlord's Work fully complete (excepting the
Punchlist Items (as hereinafter defined).
Fixed Monthly Rent: 12% of the Premises Cost (as detailed on EXHIBIT "E")
divided by twelve, subject to proration as provided in
Section 2.3, which for Lease Years 1-5 shall be Twenty-
seven Thousand Eight Hundred Ten and 76/100 Dollars
($27,810.76) per month ($333,729.12 per annum).
Force Majeure: shall mean the occurrence of one of the below listed events
which prevents, delays or hinders the performance of any
act required hereunder (other than the payment of money):
strikes, lockouts, inability to procure materials, failure
of power, restrictive governmental laws or regulations,
riots, insurrection, war, or any other reason of a like
nature not the fault of the party delayed in performing
work or doing any act required under the terms of this
Lease.
Gross Leasable Area:shall mean the number of square feet of the Building.
Increase Date: fifth (5th) anniversary of the Commencement Date, and every
five (5) years thereafter, including Renewal Terms.
01/31/02
Increase Percentage:ten percent (10%).
Initial Term: twenty (20) Lease Years, plus any Partial Lease Years,
commencing on the Commencement Date.
Landlord: ▇▇▇▇▇▇▇▇ Road Development, LLC
c/o Westlake Development, LLC
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax:(▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇▇▇ Curtm ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.C.
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
FAX:(▇▇▇) ▇▇▇-▇▇▇▇
Landlord's Work: shall mean the work to be performed by or at the direction
of Landlord in constructing the Premises, the Building and
related improvements, as more particularly specified in
Article 15 below and EXHIBIT "C".
Lease Year: shall mean a period of twelve (12) consecutive calendar
months during the Term, the first of which shall begin on
the first day of February next following the Commencement
Date, (unless the Commencement Date shall be the first day
of February, in which event the first Lease Year shall
begin on the Commencement Date) and ending on the following
January 31.
Partial Lease Year: shall mean the period, if any, of fewer than twelve (12)
consecutive calendar months between the Commencement Date
and the first day of the first Lease Year, and the period,
if any, of less than twelve (12) consecutive calendar
months between the last day of the last Lease Year and the
expiration of the Lease Term.
Permitting Period: shall mean the period commencing on the date of this Lease
and ending on June 2, 2002.
01/31/02
Proposed Use: shall mean the display and sale, at retail, of gold,
silver, diamonds, colored gemstones and other fine jewelry,
watches, and clocks, crystal, porcelain, and related items
normally sold in Tenant's other stores and, as incidental
thereto, the repair and/or appraisal of the same.
Plans and Specifications:shall mean the prototypical plans and specifications
for the construction of the Premises which were previously
delivered to and approved by Landlord, a list of which is
set forth on attached EXHIBIT "C", as the same may be
modified only by written agreement by and between Landlord
and Tenant.
Premises: that certain real property more particularly described in
Exhibit A" together with all improvements thereon, located
at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇.
Premises Cost: shall mean the agreed upon cost to perform Landlord's Work,
which cost is computed on EXHIBIT "E" attached hereto and
made a part hereof.
Premises Site: shall mean the land described on EXHIBIT A.
Public Entity: shall mean the Federal, State, County, municipal or other
governmental unit however denominated, and any agency,
division, department or public official thereof, now or
hereafter having jurisdiction, in any respect, over the
Premises.
Punchlist Items: shall mean such minor, incomplete items of Landlord's Work
which do not materially deviate from the Plans and
Specifications or materially interfere with Tenant's
ability to open or operate the Premises.
Option to Purchase
Agreement: shall mean that certain agreement between Retail
Development Network, Inc. and Landlord entered into on or
about October 1, 2001 whereby Landlord has the right to
exercise an option to purchase the Premises.
Renewal Terms: four (4) additional terms of five (5) year(s) each.
01/31/02
Sign Drawings: shall mean the plans and specifications for Tenant's
exterior sign(s) on the Premises, in the form of EXHIBIT
"D", as the same may be modified only by written agreement
by and between Landlord and Tenant.
Tenant: Sterling Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: Real Estate Department
FAX:(▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LPA
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇, Esq.
FAX:(▇▇▇)▇▇▇-▇▇▇▇
Tenant's Work: shall mean the work to be performed by or at the direction
of Tenant in fixturing the Premises as more specifically
identified on EXHIBIT "C-1", attached hereto.
Tenant's Trade Fixtures: those items listed on attached EXHIBIT "F", which are
and shall remain the personal property of Tenant.
ARTICLE 2
TERM AND RENT
2.1 TERM. The Initial Term of this Lease shall be as set forth in the
Fundamental Lease Provisions. Provided Tenant is not then in default under this
Lease, Tenant shall have the option to extend the Initial Term by the number of
successive Renewal Terms described in the Fundamental Lease Provisions bygiving
Landlord written notice of its election to extend the term of this Leasefor the
succeeding Renewal Term not less than one hundred eighty (180) days priorto the
expiration of the Initial Term or the then-running Renewal Term, as thecase may
be. Excepting the amount of the Fixed Monthly Rent, as adjusted, the terms and
conditions of this Lease shall apply during each Renewal Term. The InitialTerm,
as it may be extended by one or more Renewal Terms, shall be hereinafter
referred to as the "LEASE TERM."
2.2 Intentionally Omitted.
01/31/02
2.3 FIXED MONTHLY RENT. For the use and occupancy of the Premises, Tenant
shall pay Landlord the Fixed Monthly Rent, in advance, commencing on the
Commencement Date and continuing on the first day of each calendar month
thereafter during the Lease Term, without any offset or deduction except as
specifically provided for herein. The Fixed Monthly Rent payable under this
Lease shall increase by the Increase Percentage on each Increase Date. Should
the Lease Term commence on a day other than the first day of a calendar month,
then the rental for such first fractional month shall be computed on a daily
basis for the period from the Commencement Date to the end of such calendar
month at an amount equal to 1/30th of the Fixed Monthly Rent for each day.
Should the Lease Term end on a day other than the last day of a calendar month,
then the rental for such fractional month shall be computed on a daily basis at
an amount equal to 1/30th of the Fixed Monthly Rent for each day. Tenant shall
pay Landlord the Fixed Monthly Rent in lawful money of the United States at the
address for Landlord set forth in the Fundamental Lease Provisions, or to such
other persons or at such other places as Landlord may designate in writing to
Tenant. Landlord and Tenant acknowledge that the Premises Cost computation on
EXHIBIT "E" is based on Landlord's review of the prototypical Plans and
Specifications. Within thirty (30) days after receipt of the final Plans and
Specifications from Tenant, Landlord shall notify Tenant in writing of any
differences between the prototypical Plans and Specifications and the final
Plans and Specifications which increase the Premises Cost set forth onattached
EXHIBIT "E", together with at least three (3) bids which support such increase.
Within fifteen (15) days after receipt of such notice from Landlord, Tenant
shall have the right to object to Landlord's proposed increase by providing
written notice to Landlord, including a bid to support Tenant's objection.
Landlord and Tenant shall thereafter cooperate with each other to resolve such
dispute including obtaining an independent bid to resolve such discrepancy if
necessary. Upon final resolution of the PremisesCost, but in any event prior to
Landlord's commencement of Landlord's Work,Landlord and Tenant shall enter into
a Supplemental Lease Agreement prepared by Tenant which modifies and replaces
the Premises Cost set forth on EXHIBIT "E". In the event there is no
modification of the Premises Cost, or upon execution of a Supplemental Lease
Agreement modifying the Premises Cost, Landlord and Tenant agree that the
Premises Cost shall be deemed to be final and not subject to any further
adjustment, and that Tenant shall not be responsible for any other costs
associated with Landlord's Work except for change orders which have been
initiated, requested and approved by Tenant.
2.4 ADDITIONAL RENT. In addition to the Fixed Monthly Rent, as increased,
Tenant shall pay to the parties respectively entitled thereto all Additional
Rent, including, but not limited to, insurance premiums, Taxes (as defined in
Article 4), and any other charges, costs and expenses which arise or may be
contemplated under any provision of this Lease during the Lease Term
(collectively, the "ADDITIONAL RENT"). Tenant shall furnish to Landlord,
promptly after payment of any Taxes or insurance premiums, and, with respect to
any other Additional Rent, promptly upon request of Landlord, official receipts
or other satisfactory proof evidencing payment of such Additional Rent.
2.5 INTEREST AND LATE CHARGE. If during the Lease Term, Tenant fails to
pay the full amount of any Fixed Monthly Rent or Additional Rent within seven
(7) days after receipt of
6
01/31/02
writtennotice from Landlord that the same is due and payable, then Tenant shall
pay to Landlord (a) interest at the monthly rate of one percent (1%) per month
on the unpaid amount from and after the date on which any such sum shall be due
and payable ("Interest"); and (b) a late charge of fifty dollars ($50.00) to
cover the extra expense involved in handling such delinquency ("Late Charge").
In the event Landlord has issued one (1) such notice to Tenant withinany Lease
Year, Interest and a Late Charge shall automatically accrue on anyFixed Monthly
Rent or Additional Rent which Tenant fails to pay when due during such Lease
Year without Landlord being required to issue any further notices during such
Lease Year.Any payment to be made by Tenant under this Lease shall be deemed to
have been paid upon the date that it is received by Landlord. The provision for
Interest and a Late Charge as set forth herein shall not be deemed to grant
Tenant any grace period or extension of time or prevent Landlord fromexercising
any of its other rights under this Lease.
2.6 NET LEASE. This Lease is what is commonly called a "triple netlease,"
it being understood that Landlord shall receive the Fixed Monthly Rentfree and
clear of any and all Taxes, other Additional Rent, liens, charges,liabilities
or expenses of any nature whatsoever incurred in connection with the ownership
and operation of the Premises.
ARTICLE 3
USE OF THE PREMISES
3.1 USE OF THE PREMISES. Tenant shall use the Premises for the Proposed
Use or any other lawful purpose as long as such use does not diminish the value
of the Premises or violate any existing exclusive uses then in effect with
respect to the Premises including, but not limited to, the existing exclusive
uses set forth on attached EXHIBIT "G"; provided, however, that Landlord shall
not grant or consent to any additional exclusive uses other than as setforth on
EXHIBIT "G" without Tenant's prior written consent which Tenant shall not
unreasonably withhold.
3.2 COMPLIANCE WITH LAW.
3.2.1 As of the Delivery Date, Tenant shall, at Tenant's sole expense,
comply in all respects with all applicable laws, ordinances, orders,rules, or
regulations of any governmental authorities and with any directive of anypublic
officer which shall impose any violation, order or duty upon Landlord or Tenant
with respect to the Premises or the use or occupation thereof or signage
thereon, including, without limitation, any governmental law or statute, rule,
regulation, ordinance, code, policy or rule of common law now or hereafter in
effect relating to the environment, health or safety.
3.2.2 Tenant shall not use or permit the Premises to be used in any
manner which will result in waste, reasonable wear and tear(subject to Tenant's
obligations under Section 6.1) and casualty excepted, or the creation of a
nuisance, and Tenant shall maintain the Premises free of any objectionable
noises, odors, or disturbances.
01/31/02
3.3 TENANT'S ENVIRONMENTAL COMPLIANCE. Excepting acts or omissions of
Landlord orits employees, contractors or agents, for which Tenant shall have no
liabilities, Tenant acknowledges and agrees to the following:
3.3.1 Tenant shall, at its sole cost and expense at all times during
the Term,comply in all respects with the Environmental Laws (as defined below)
in its use and operation of the Premises.
3.3.2 Tenant shall not use the Premises for the purpose of storing
Hazardous Materials (as defined below) except in full compliance with the
Environmental Laws and other applicable law, and shall not cause the release of
any Hazardous Materials.
3.3.3 Tenant shall notify Landlord promptly and in reasonable detail in
the event that Tenant becomes aware of or suspects (i) the presence of any
Hazardous Materials on the Premises (other than any Permitted Hazardous
Materials, as defined below), or (ii) a violation of the Environmental Laws on
the Premises.
3.3.4 If Tenant uses or permits the Premises to be used so as to
subject Tenant, Landlord or any occupant of the Premises to a claimofviolation
of the Environmental Laws (unless contested in good faith by appropriate
proceedings),Tenant shall, at its sole cost and expense, immediately cease or
cause cessation of such use or operations and shall remedy and fully cure any
conditions arising therefrom.
3.3.5 At its sole cost and expense, Tenant shall (i) immediately pay,
when due, the cost of compliance with the Environmental Laws within thePremises
required as a result of any acts or omissions of Tenant, or as otherwise
required by this Lease, and (ii) keep the Premises free of any liens imposed
pursuant to the Environmental Laws. Tenant shall, at all times, use, handle and
dispose of any Permitted Hazardous Material in a commercially reasonable manner
and in compliance with the Environmental Laws and applicable industrystandards.
Tenant shall cooperate with Landlord in any program between Landlord and any
governmental entity for proper disposal and/or recovery of any Permitted
Hazardous Material.
3.3.6 Without limiting any other agreement of indemnity by Tenant of
Landlord, Tenant hereby agrees to indemnify, save and hold Landlord harmless
from and against any and all claims, losses, liabilities, damages, penalties,
fines and expenses of whatever kind or nature (including, without limitation,
reasonableattorneys' fees and disbursements) arising from, out of or by reason
of anyviolation of Tenant's covenants and obligations contained in this Section
by Tenant, or out of any violation of the Environmental Laws by Tenant, its
owners, employees, agents, or contractors, which indemnity obligation shall
survive the expiration or termination of this Lease.
3.3.7 In the event that Tenant fails to comply with the any of the
foregoing requirements of this Section, after the expiration of the cure period
permitted under the Environmental Laws, if any, Landlord may, but shall not be
obligatedto (i) elect that such failure constitutes a default under this Lease;
and/or (ii) take any and all actions, at Tenant's sole cost
01/31/02
and expense, that Landlord deems necessary or desirable to cure any such
noncompliance. Tenant shall reimburse Landlord as Additional Rent for any costs
incurredby Landlord in exercising its options under this subsection within five
(5) days after receipt of a ▇▇▇▇ therefor.
3.3.8 Landlord acknowledges and covenants that in the event that
through no fault of Tenant, Tenant's use, occupancy and enjoyment of the
Premises ("Occupancy") shall be materially interfered with by reason of the
existence or remediation of any Hazardous Materials for a period of one (1)year
or more, then from and after such one (1) year period of interference, a fair
and just proportion of the rents and other charges payable hereunder, taking
into account the nature of the interference to Tenant's Occupancy, shall be
abated until Tenant's Occupancy is no longer so interfered. If Tenant's
Occupancy shall be so materially interfered with for a period of one (1) yearor
more in the last three (3) years of the Lease Term or any Renewal Term, Tenant
shall have the right to terminate this Lease by giving written notice to
Landlord of its election to do so, whereupon this Lease shall automatically
terminate and end effective as of the date of such notice and neither party
shall have any further obligations hereunder. During any time period where
Tenant's Occupancy is so interfered, Landlord and Tenant agree to work together
and cooperate with one another to rectify and remediate any Hazardous Materials
existing on the Premises and to recover any and all costs and expenses from the
party responsible for such Hazardous Materials.
3.3.9 The provisions of this Section shall survive the expiration or
termination of the Lease Tenn.
3.4 LANDLORD'S ENVIRONMENTAL COMPLIANCE. Excepting acts or omissions of
Tenant or its employees, invitees, contractors or agents, for which Landlord
shall have no liabilities, Landlord acknowledges the following:
3.4.1 Landlord shall not cause or permit any Hazardous Materials to be
sold, used, stored, brought upon, released, discharged or disposed of
(collectively a "Use") in, on, under or about the Premises without in each case
obtaining all necessary permits required in connection therewith, and complying
with all permit requirements and Environmental Laws, and otherwise taking all
appropriate steps and making adequate arrangements to assure that such Use isin
the ordinary course of business and will be performed safely, without
contamination of the Premises or any portion thereof and fully in compliance
with all applicable laws.
3.4.2 Without limiting any other agreement of indemnity by Landlord of
Tenant, Landlord hereby agrees to indemnify, save and hold Tenant harmless from
and against any and all claims, losses, liabilities, damages, penalties, fines
and expenses of whatever kind or nature (including, without limitation,
reasonable attorneys' fees and disbursements) arising from, out of or by reason
of any violation of Landlord's covenants and obligations contained in this
Section by Landlord, any violation of the Environmental Laws by Landlord, its
owners, employees, agents, or contractors, any pre-existing Hazardous Materials,
or the release or discharge of Hazardous Materials on the Premises if caused by
Landlord, its contractors, agents, employees, or any other person acting under
Landlord, which indemnity obligation shall survive the expiration or earlier
termination of this Lease.
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3.4.3 The provisions of this Section shall survive the expiration or
termination of the Lease Term.
3.5 ~DEFINITIONS. Capitalized terms used in this Article 3 and not
otherwise defined herein shall have the following meanings.
"HAZARDOUS MATERIALS" means any of the following as defined by the
Environmental Laws: solid wastes; medical or nuclear waste or materials;
toxic or hazardous substances; natural gas, liquefied natural gas or
synthetic fuel gas; petroleum products or derivatives, wastes or
contaminants (including, without limitation, polychlorinated biphenyls);
paint containing lead; urea-formaldehyde foam insulation; asbestos
(including, without limitation, fibers and friable asbestos); explosives,
and discharges of sewage or effluent.
"ENVIRONMENTAL LAWS" means all requirements of environmental,
ecological, health, or industrial hygiene laws or regulations or rules of
common law related to the Property, including all requirements imposed by
any law, rule, order, or regulation of any federal, state, or local
executive, legislative, judicial, regulatory, or administrative agency,
board, or authority, which relate to (i) noise; (ii) pollution or
protection of the air, surface water, ground water, or land; (iii) solid,
gaseous, or liquid waste generation, treatment, storage, disposal, or
transportation; (iv) exposure to Hazardous Materials; or (v) regulation of
the manufacture, processing, distribution and commerce, use, or storage of
Hazardous Materials.
"PERMITTED HAZARDOUS MATERIAL" means any Hazardous Materials which
are necessary and commercially reasonable for the provision of any good or
service related to the Permitted Uses and which are used, stored and
disposed of in compliance with all Environmental Laws.
ARTICLE 4
TAXES AND UTILITIES
4.1 PAYMENT OF TAXES. Tenant shall pay, as Additional Rent, the Taxes(as
defined in the following Section) applicable to the Premises during the Lease
Term. Landlord shall provide Tenant with copies of any tax bills applicable to
the Premises promptly after receipt of such bills. All such payments shall be
made at least ten (10) days prior to the delinquency date of such payment.
Tenant shall promptly furnish Landlord with satisfactory evidence that such
Taxes have been paid.If any such Taxes paid by Tenant shall cover any period of
time prior to, or after the expiration of, the Lease Term, Landlord shall
reimburse Tenant to the extent required. If Tenant shall fail to pay any such
Taxes, Landlord shall have the right (but not the obligation) to pay the same,
in which case Tenant shall repay such amount plus any penalties and interest
resulting therefrom to Landlord within five (5) days after receipt of a ▇▇▇▇
therefor.
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4.2 DEFINITION OF "TAXES". As used herein, the term "Taxes" shall include:
4.2.1 any form of real estate tax or assessment, ad valorem tax or
gross receipts tax imposed by any authority having the direct or indirect power
to tax, including, but not limited to, any town, county, state, or federal
government, or any school, agricultural, sanitary, fire, lighting, sewer,
street, drainage, or other improvement district thereof, on, against or with
respect to the Premises, this Lease, any legalor equitable interest of Landlord
or any superior landlord in the Premises, or in the real property of which the
Premises are a part, Landlord's right to rent or other income therefrom and
Landlord's business of leasing the Premises;
4.2.2 any tax, fee, levy, assessment, penalty, interest or other charge
(i) in substitution of, partially or totally, any tax, fee, levy, assessment,or
charge hereinabove included within this definition of Taxes, or (ii) any tax or
increase in any tax which is imposed as a result of a transfer, either partial
or total, of Landlord's interest in the Premises to Tenant, or (iii)any tax or
increase in tax which is imposed by reason of this transaction, any
modifications or changes hereto, or any transfers hereof; and
4.2.3 all inspection fees, taxes, bonds, permits, certificates,
assessments and sales, use, property or other taxes, fees or tolls of anynature
whatsoever (together with any related interest or penalties) now or hereafter
imposed against Landlord or Tenant by any federal, state, county or local
governmental authority upon or with respect to the Premises,or the use thereof,
or upon the possession, leasing, use, operation or other disposition thereof,or
upon the rents, receipts or earnings arising therefrom or upon or with respect
to this Lease; and
4.2.4 all taxes assessed against and levied upon trade fixtures,
furnishings, equipment, and all other personal property of Tenant contained in
the Premises or elsewhere, which Tenant shall cause to be separately assessed
and billed directly to Tenant.
Tenant shall pay when due,or reimburse and indemnify and hold Landlord harmless
from and against, any Taxes. Notwithstanding the foregoing, the term "Taxes"
shall not include any general income taxes, inheritance taxes, and estate taxes
imposed upon Landlord.
4.3 TENANT'S RIGHT TO CONTEST TAXES.
4.3.1 Tenant shall have the right, at its sole cost and expense, to
contest the amount or validity, in whole or in part,of any Taxes by appropriate
proceedings diligently conducted in good faith, but no such contest shall be
carried on or maintained by Tenant after the time limit for the payment of any
Taxes if such contest would threaten Landlord's interest in the Premises and
unless Tenant shall (1) pay the amount involved under protest; (ii) procure and
maintain a stay of all proceedings to enforce any collection of any Taxes,
together with all penalties, interest, costs and expenses, by a deposit of a
sufficient sum of money, or by such undertaking,as may be required or permitted
by law to accomplish such stay; or (iii) deposit with Landlord, as security for
the performance by Tenant of its obligations hereunder with respect to such
Taxes,120% of such contested amount or such other reasonable security as may be
reasonably
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demanded by Landlord to insure payment of such contested Taxes and all
penalties, interest, costs and expenses which may accrue during the period of
the contest. Upon the termination of any such proceedings, Tenant shall pay the
amount of such Taxes or part thereof,as finally determined in such proceedings,
together with any costs, fees (including all reasonable attorneys' fees and
expenses), penalties or other liabilities in connection therewith; provided,
however, that if Tenant has deposited cash or cash equivalents with Landlord as
security under clause (iii) above, then,so long as no default exists under this
Lease, Landlord shall arrange to pay such Taxes (or part thereof) together with
the applicable costs, fees and liabilities as described above out of such cash
or cash equivalents and return any unused balance,if any, to Tenant. Otherwise,
Landlord shall return to Tenant all amounts, if any, held by or on behalf of
Landlord which were deposited by Tenant in accordance with such clause (iii).
4.3.2 Tenant shall have the right, at its cost and expense, to seek a
reduction in the valuation of the Premises as assessed for tax purposes and to
prosecute any appropriate action or proceeding in connection therewith.Provided
Tenant is not in default hereunder,Tenant shall be authorized to retain any tax
refund of any tax paid by Tenant.
4.3.3 Landlord agrees that whenever Landlord's cooperation is required
in any proceeding brought by Tenant to contest any tax,Landlord will reasonably
cooperate therein, provided same shall not entail any cost,liability or expense
to Landlord. Tenant shall pay,indemnify and save Landlord harmless of and from,
any and all liabilities, losses, judgments, decrees, costs and expenses
(including all reasonable attorneys' fees and expenses) in connection with any
such contest and shall, promptly after the final settlement, fully pay and
discharge the amounts which shall be levied, assessed, charged or imposed or be
determined to be payable therein or in connection therewith, and Tenant shall
perform and observe all acts and obligations, the performance of which shall be
ordered or decreed as a result thereof. No such contest shall subject Landlord
to the risk of any civil liability or the risk of any criminal liability, and
Tenant shall give such reasonable indemnity or security to Landlord as may
reasonably be demanded by Landlord to insure compliance with the foregoing
provisions of this Section.
4.4 PAYMENT OF UTILITIES. Beginning on the Delivery Date, Tenant shall pay
to the utility companies or other parties entitled to payment the cost of all
water, heat, air conditioning, gas, electricity, telephone, and other utilities
and services provided to or for the Premises. If any utility service is
interrupted for a period in excess of seventy-two (72) hours due to the
negligence or intentional misconduct of Landlord, its agents, contractors or
employees, Rent shall ▇▇▇▇▇ until such time as such utility service resumes.
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ARTICLE 5
INSURANCE AND INDEMNIFICATION
5.1 TENANT'S INSURANCE. From and after taking possession of the Premises,
Tenant shall carry and maintain, at its sole cost and expense, the following
types and amounts of insurance:
INSURANCE TYPE AMOUNT OF COVERAGE RISKS COVERED
Commercial General
Liability $1,000,000 per occurrence and bodily injury, property
damage
$2,000,000 in the aggregate and contractual liability
Property Damage full replacement value of the "all risk", including
sprinkler
Building and all improvements damage and flood insurance
Located on the Premises
Business Interruption not less than 12 installments of
loss of earnings by at least the
Fixed Monthly Rent perils of fire and lightning,
extended coverage, vandalism,
malicious mischief and
sprinkler leakage
Worker's Compensation as required by law
5.2 POLICY FORM.
5.2.1 Tenant shall obtain all policies of insurance required by Section
5.1 from insurance companies reasonably acceptable to Landlord which are
qualified todo business in the jurisdiction where the Premises are situated and
which have an "A" or higher claims paying rating as ascribed by Standard &
Poor's rating service. All such policies shall be issued in the names of
Landlord and Tenant, and,if requested by Landlord, any mortgagee or beneficiary
of Landlord, as additional insureds. In addition, all such policies providing
coverage for physical damage shall include loss payee and mortgagee endorsement
in favor of Landlord and Landlord's mortgagee or beneficiary, respectively and
as applicable. Tenant shall cause copies of such policies of insurance or
originally executed certificates thereof to be delivered to Landlord prior to
Landlord's execution of this Lease, and not less than thirty (30) days prior to
any renewal thereof. As often as any such policy shall expire or terminate,
Tenant shall procure and maintain renewal or additional policies with like
terms.None of such policies shall contain any co-insurance requirements and all
such policies shall provide for written notice to Landlord and any mortgagee or
beneficiary of Landlord not less than thirty (30) days prior to any
modification, cancellation, lapse, or reduction in the amounts of insurance,and
shall further provide that any loss otherwise payable thereunder shall be
payable notwithstanding any act or
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negligence of Landlord or Tenant which might, absent such provision,result in a
forfeiture of all or part of the payment of such loss. All general liability,
property damage, and other casualty policies shall be written on an occurrence
basis as primary policies, not contributing with or in excess of coverage which
Landlord may carry.
5.2.2 Tenant's obligations to carry the insurance provided for above
may be brought within the coverage of an "umbrella" policy or policies of
insurance carried and maintained by Tenant; provided, however, that such policy
or policies shall (i) have limits of not less than $5,000,000, (ii) name
Landlord and any mortgagee or beneficiary of Landlord as additional insureds as
their interests may appear, (iii) provide that the coverage afforded Landlord
willnot be reduced or diminished by reason of the use of such blanket policies;
and (iv) otherwise comply with the provisions of this Article V. Tenant agrees
to permit Landlord at all reasonable times to inspect any policies of insurance
of Tenant which Tenant has not delivered to Landlord.
5.3 SUBROGATION-WAIVER. Landlord (for itself and its insurer) hereby
waives any rights, including rights of subrogation, and Tenant (for itself and
its insurer) hereby waives any rights, including rights of subrogation,each may
have against the other on account of any loss or damage occasioned to Landlord
or Tenant,as the case may be, to their respective property, the Premises or its
contents that are caused by or result from risks insured against under any
insurance policies carried by the parties hereto and in force atthe time of any
such damage. The foregoing waivers of subrogation shall be operative only so
long as available inthe jurisdiction where the Premises are located and so long
as no policy of insurance is invalidated thereby.
5.4 PAYMENT OF INSURANCE. In the event that Tenant shall fail to obtain
the insurance policies required hereunder or to pay the premiums due for the
insurance policies required hereby, Landlord shall have the right, but not the
obligation, to pay the same in which case Tenant shall repay such amount plus
any penalties or additional amounts resulting therefrom to Landlord as
Additional Rent within five (5) days after receipt of a ▇▇▇▇ therefor.
5.5 INDEMNIFICATION.
5.5.1 Subject to Subsection 5.5.2 below and without limiting any other
agreement of indemnity by Tenant of Landlord set forth in this Lease, Tenant
shall indemnify Landlord for, defend Landlord against, and save Landlord
harmless from any liability,loss, cost, injury, damage or other expense or risk
whatsoever that may occur or be claimed by or with respect to any person(s) or
property on or about the Premises and resulting directly or indirectly from:
(a) the use, occupancy, possession, operation, maintenance or management
of the Premises by Tenant or other persons claiming through or under
Tenant, or their respective agents, employees, licensees, invitees,
guests or other such persons;
(b) any work or thing done by Tenant, its employees, agents or licensees,
in respect of construction of, in or to the Premises or any part of
the improvements now or hereafter constructed on the Premises (other
than work by Landlord);
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6.2 LANDLORD'S OBLIGATIONS. Excepting Landlord's duties and obligations
under Article 15 hereof, Landlord shall have no obligation whatsoever to repair
and maintain the Premises or the Building, nor any improvements or equipment
thereon, whether interior or exterior, structural or nonstructural, ordinary or
extraordinary. Except as otherwise provided in this Lease, Tenant expressly
waives the benefit of any statute or law now or hereafter in effect which would
otherwise afford Tenant the right to terminate this Lease because of Landlord's
failure to keep the Premises or the Building in good order, condition, and
repair,or the right to repair and offset the cost related thereto against rent.
6.2.1. Landlord shall obtain in the name of Tenant and Landlord all
warranties specified in the Plans and Specifications (the "Warranties").
Further,in the event Tenant is not deemed a third-party beneficiary or a direct
assignee of the contract(s) Landlord enters into with its contractors
("Landlord's Contractor's") in connection with Landlord's Work, Landlord shall
take such action as may be reasonably necessary to enable Tenant to make any
demand upon or claim upon or bring any action against Landlord's Contractors(i)
for any loss, cost, injury, damage or other expense caused by any failure or
defect, structural or non-structural, of the Premises or any part thereof or
(ii) to enforce the Warranties.
6.3 LANDLORD'S RIGHTS. If Tenant refuses or neglects to make repairs or
maintain the Premises or the Building, or any part thereof, in a manner
reasonably satisfactory to Landlord, without prejudice to any other remedy
Landlord may have hereunder, upon giving Tenant ten (10) days prior written
notice, Landlord shall have the right to enter the Premises and perform such
maintenance or make such repairs on behalf of and for the account of Tenant. In
the event Landlord so elects, Tenant shall pay to Landlord as Additional Rent
the cost of such repairs, maintenance, or replacements within five (5) days
following receipt of a ▇▇▇▇ therefor. Tenant agrees to permit Landlord or its
agent to enter the Premises, upon reasonable notice to Tenant and in the
presence of Tenant's store manager during normal business hours,for the purpose
of inspecting the Premises.
ARTICLE 7
ALTERATIONS
7.1 CONSENT TO ALTERATIONS. Tenant may make any interior non-structural
alterations, replacements, additions, changes and improvements to the Building
that Tenant, in its sole discretion, deems advisable. Subject to the prior
written consent of Landlord, which consent shall not be unreasonably withheld,
Tenant may, at its sole cost and expense, make any alterations, replacements,
additions, changes, and improvements (collectively referred to in this Article
as "ALTERATIONS") to the Building and the Premises, other than interior non-
structural Alterations,as it may find necessary or convenient for its purposes,
so long as complete copies of all architectural plans and specifications
relating to any such Alterations are delivered to Landlord at the time of
Tenant's request for Landlord's consent. Landlord shall respond within ten (10)
days of Tenant's request for such Alterations and Landlord shall not
unreasonably withhold its consent thereto.
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7.2 REMOVAL OF ALTERATIONS. Except as set forth in Subsection 7.2.1 below,
all Alterations made on the Premises shall become the property of Landlord at
the expiration or termination of the Lease Term and shall be surrendered with
the Premises.
7.2.1 All signs, furnishings, trade fixtures, inventory, equipment and
other property of Tenant which by its nature is readily removable from the
Premises, including but not limited to Tenant's Trade Fixtures, as listed on
EXHIBIT "F" attached hereto, installed in or on the Premises by Tenant, shall
remain the personal property of Tenant, shall not be subject to any Landlord's
lien or lien or security interest against the property of Landlord,and shall be
removed by Tenant not later than fifteen (15) days after the termination or
expiration of this Lease,provided that Tenant shall repair any damage caused by
removal of the foregoing. If, however, any such personal property of Tenant is
not removed on or before the fifteenth (15th) day following the termination of
this Lease,Landlord shall provide written notice to Tenant and if such property
is not removed within ten (10) days of receipt of such notice such property
shall be deemed abandoned.
7.3 ALTERATIONS REQUIRED BY LAW. Subsequent to Tenant's acceptance of
Landlord's delivery of the Premises, Tenant shall,at its sole cost and expense,
make any Alteration, structural or otherwise, to or on the Premises,or any part
thereof, which may be necessary or required by reason of any law, rule,
regulation, or order promulgated by competent government authority.
7.4 GENERAL CONDITIONS RELATING TO ALTERATIONS. Any Alteration shall be
subject to the following conditions:
7.4.1 No Alteration shall be undertaken until Tenant shall have
procured and paid for all required permits and authorizations of all municipal
departments and governmental subdivisions having jurisdiction.
7.4.2 Any Alteration shall be made promptly and in a good workmanlike
manner, by properly qualified and licensed personnel,and in compliance with all
applicable permits and authorizations and building and zoning laws andall laws,
and in accordance with the orders, rules and regulations of the Board of Fire
Insurance Underwriters and anyother body hereafter exercising similar functions
having or asserting jurisdiction over the Premises.
7.4.3 No Alteration shall tie-in or connect the Premises or any
improvements thereon with any property outside the Premises without the prior
written consent of Landlord.
7.4.4 No Alteration shall reduce the value of the Premises or impair
the structural integrity of any building comprising a part of the Premises.
7.5 LIENS. In connection with Alterations or otherwise, Tenant shall do
all things reasonably necessary to prevent the filing of any liens or
encumbrances against the Premises, or any part thereof, or upon any interest of
Landlord or any mortgagee or beneficiary under a deed of trust or any ground or
underlying lessor in any portion of the Premises, by reason of labor,
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services or materials supplied or claimed to have been supplied to Tenant, or
anyone holding the Premises, or any part thereof, through or under Tenant. If
any such lien or encumbrance shall at any time be filed against all or any
portion of the Premises, Tenant shall either cause same to be discharged of
record within thirty (30) days after the date of filing of same or,if Tenant in
good faith determines that such lien should be contested, Tenant shall either
(i) bond over such lien in accordance with applicable law, or (ii) furnish such
security as Landlord shall determine to be necessary and/or required to prevent
any foreclosure proceedings against all or any portion of the Premises during
the pendency of such contest. If Tenant shall fail to discharge or bond over
such lien or encumbrance or fail to furnish such security within such period,
then, in addition to any other right or remedy of Landlord resulting from said
default of Tenant, Landlord may, but shall not be obligated to, discharge the
same either by paying the amount claimed tobe due or by procuring the discharge
of such lien by giving security or in such other manner as is or may be
prescribed by law, and Tenant agrees to reimburse Landlord, as Additional Rent,
within five (5) days after demand for all costs, expenses, and other sums of
money spent in connection therewith.
7.6 SIGNS. Tenant shall have the right to install and maintain a sign or
signs on all fascia of the Premises. In addition,Tenant shall have the right to
install a sign on the rear of the Premises.All such signs shall comply with all
requirements of (i) appropriate governmental authorities; and (ii)agreements or
restrictions of record (or disclosed to Tenant before its execution of this
Lease) running with the Premises. All necessary permits, licenses or approvals
shall be obtained by Tenant. Tenant shall maintain its signs in good condition
and repair at all times, and shall save the Landlord harmless from injury to
person or property arising from the erection and maintenance of said signs.Upon
vacating the Premises, Tenant shall remove all signs and repair all damage
caused by such removal. Landlord covenants and warrants that it has approved
Tenant's signs and the Sign Drawings attached hereto as EXHIBIT "D" prior to or
simultaneously with its execution of this Lease,which approval shall not in any
way be construed as a waiver of Tenant's obligation to obtain all necessary
permits, licenses and approvals required for such signs. Tenant's failure to
obtain all necessary permits,licenses and approvals for Tenant's signs shall in
no way affect any of Tenant's obligations hereunder nor entitle Tenant to
terminate this Lease.
ARTICLE 8
DAMAGE, DESTRUCTION, OBLIGATION TO REBUILD
8.1 OBLIGATION TO REBUILD. In the event of damage to or destruction of the
Premises, or any portion thereof, by casualty or any other cause whatsoever,
then Tenant, and not Landlord, shall be obligated to complete the restoration
and repair thereof in accordance with the terms of this Section 8.1; provided,
however,that Tenant shall have the right to use the casualty insurance proceeds
for such restoration and repair in accordance with the terms set forth herein
and shall be obligated to repair the Premises only to their condition on the
Delivery Date pursuant to the Plans and Specifications (subject to alterations
thereof required by changes in any governmental codes). Tenant shall have the
sole right to negotiate, prosecute and adjust any claim for casualty insurance
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proceeds.Any repair or restoration of the Premises shall be commenced by Tenant
within sixty (60) days after receipt of casualty insurance proceeds and all
necessary approvals for repair and restoration(but in no event greater than two
hundred seventy (270) days following the casualty, not including delays in
obtaining the necessary approvals for repair and restoration which are beyond
Tenant's control) and Tenant shall make diligent efforts to complete the repair
and restoration within one hundred eighty (180) days following commencement of
the restoration. Within thirty (30) days after an event of damage or
destruction, Tenant shall deliver to Landlord notice of the anticipated period
of restoration. Unless this Lease is terminated in accordance with Section 8.2
below, all casualty insurance proceeds for the Premises shall be paid into a
construction escrow account to ensure that the Premises will be restored as
required herein to be held by a title company selected jointly by Landlord,
Landlord's lender and Tenant. The construction escrow account shall be released
to Tenant to restore or rebuild the Premises pursuant to the terms of an
agreement to be agreed to by Landlord, Landlord's lender and Tenant, all acting
reasonably, allowing for draws by Tenant on at least a monthly basis as
construction proceeds and requiring the customary presentation of architects'
certifications, title policy updates and lien waivers or releases for the
disbursement of money from such construction escrow account. Upon Tenant's
completion of any repair or restoration as required herein and certification by
Tenant's architect that such repair and restoration has been completed in
accordance with the plans and specifications for such restoration, Tenant's
obligation to repair or restore following the casualty shall be satisfied and
thereafter Tenant shall have nofurther obligation or liability to Landlord with
respect to the condition of the Premises and the Building other than as
specifically set forth in this Lease.
8.2 TERMINATION RIGHTS IN THE EVENT OF CASUALTY. In the event 50% or more
of the Premises is destroyed during the last two (2) years of the Lease Term or
of any Renewal Term, Tenant shall have the right to terminate this Lease upon
thirty (30) days advance written notice to Landlord and, in such event, Fixed
Monthly Rent, Additional Rent and any other charges under this Lease shall be
abated as of the date of such termination. If this Lease is so terminated, then
all insurance proceeds attributable to the casualty to the Building or
improvements on the Premises(excluding insurance proceeds, if any, attributable
to Tenant's Trade Fixtures, which shall be and remain the property of Tenant)
shall be paid to Landlord and/or Landlord's lender.
ARTICLE 9
EMINENT DOMAIN
9.1 TAKING. If the whole of the Premises or the sole direct access from
the Premises to any adjacent street or highway shall be taken by any public or
quasi-public authority under the power of eminent domain or condemnation, then
this Lease shall terminate onthe date of taking of possession by the condemning
authority or the date title vests in the condemning authority.
In the event that (i) Twenty Five (25%) percent or more of the Building or
the parking serving the Building shall be taken or conveyed by the power of
eminent domain or
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condemnation or (ii) as a result of any taking, regardless of the amount so
taken,the remainder of the Premises is rendered unsuitable in Tenant's opinion,
reasonably exercised, for the continued operation of Tenant's business, then
Tenant shall have the right to terminate this Lease by written notice given to
Landlord within thirty (30) days after receipt of written notice from Landlord
advising Tenant that a portion of the Premises has been so taken.
If any part of the Premises is so taken or conveyed, and the Lease is not
terminated as set forth above,then: (i) this Lease shall continue in full force
and effect, except that the Fixed Monthly Rent shall be reduced in the same
proportion that the portion of the Premises so taken or conveyed bears to the
area of the Premises leased to Tenant, such reduction commencing as of the date
that Tenant is required to surrender possession of the part of the Premises
taken or conveyed; and (ii) Landlord shall make all necessary repairs or
alterations to restore that portion of the Premises remaining as near to its
former condition as the circumstances will permit and to constitute the portion
of the Building not taken as a complete architectural unit.
9.2 RIGHTS ON TERMINATION. Upon any termination of this Lease as a result
of eminent domain or condemnation as provided herein,(1) all Fixed Monthly Rent
and Additional Rent and charges ofall type shall be adjusted and prorated as of
the date of such termination; and (ii) all other rights and obligations of the
parties hereunder shall be terminated as of said date except for unsatisfied
obligations which accrued prior to the date of termination and the distribution
of any award or compensation for such taking and as provided otherwise in this
Lease; provided that Tenant shall be allowed a reasonable period of time to
remove its property from the Premises.
9.3 WAIVER OF RIGHT TO COMPENSATION. In the event of a taking under the
power of eminent domain of the Premises, whether whole or partial, all
compensation awarded for such taking of the fee and leasehold estate, or
consideration paid for a conveyance in lieu of condemnation, as damages or
otherwise, shall belong to and be the property of Landlord, except that Tenant
shall be entitled to recover from the condemning authority, such amounts as may
be separately awarded to Tenant for the value of Tenant's Trade Fixtures,
removal expenses, business dislocation damages and search and relocation
expenses ("Tenant's Costs"). In the event no such separate award is made for
Tenant's Costs, Tenant shall be entitled to receive from Landlord that portion
of Landlord's award specifically made for Tenant's Costs so long as the same
does not diminish the award to which Landlord is otherwise entitled to receive.
ARTICLE 10
ASSIGNMENT AND SUBLETTING
10.1RIGHT OF ASSIGNMENT AND SUBLETTING.
10.1.1 Tenant shall have the free right to assign this Lease or sublet
the entire Premises provided that in any such case Tenant shall remain liable
under this Lease and further provided that the proposed assignee's or
sublessee's intended use does not violate any protected,exclusive or restricted
uses then in effect with respect to the Premises or otherwise violate any other
term, covenant or condition contained in this Lease.
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10.1.2 Any permitted assignee, subtenant, transferee, licensee,
concessioner, or mortgagee shall be bound by, and shall assume and perform all
of the terms, covenants,and conditions of this Lease from and after the date of
any such transfer.
10.2NO RELEASE OF TENANT.
10.2.1 No assignment shall release Tenant of Tenant's obligation or
alter the primary liability of Tenant to pay the rent and to perform all other
obligations to be performed by Tenant hereunder. The acceptance of rent by
Landlord from any other person shall not be deemed tobe a waiver by Landlord of
any provision hereof. In the event of default by any assignee of Tenant,or any
successor Tenant, in the performance of any of the terms hereof, Landlord may,
subject to Landlord's duty to mitigate by using commercially reasonable efforts
to relet the Premises, proceed directly against Tenant without the necessity of
exhausting remedies against such assignee.
ARTICLE 11
DEFAULT; REMEDIES
11.1DEFAULT. The occurrence of any one or more of the following events
shall constitute a default by Tenant under this Lease:
11.1.1 The failure by Tenant to make any payment of Fixed Monthly Rent,
Additional Rent or any other payment required to be made by Tenant hereunder,
where after written notice thereof from Landlord to Tenant, such failure shall
continue for a period often (10) days.
11.1.2 Except as otherwise provided in this Lease, the failure by Tenant
to observe or perform any of the non-monetary covenants, conditions, or
provisions of this Lease to be observed or performed by Tenant, where such
failure shall continue for a period of thirty (30) days after written notice
thereof from Landlord to Tenant; provided, however, that if the nature of
Tenant's noncompliance is such that more than thirty (30) days are reasonably
required for its cure, then Tenant shall not be deemed to be in default if
Tenant commences such cure within said thirty (30)day period and thereafter
diligently prosecutes such cure to completion.
11.1.3 Institution by or against Tenant of any bankruptcy, insolvency,
reorganization,receivership or other similar proceeding involving the creditors
of Tenant,which is not dismissed within ninety (90) days after the commencement
thereof.
11.1.4 The issuance or filing of any judgment, attachment, levy,
garnishment orthe commencement of any related proceeding or the commencement of
any other judicial process upon or with respect to all or substantially all of
the assets of Tenant, or the Premises.
11.1.5 Dissolution, termination of existence, or assignment for the
benefit of creditors of or by Tenant.
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11.2REMDEDIES. Upon the occurrence of a default by Tenant pursuant to the
foregoing Subsection or otherwise under this Lease, Landlord may at any time
thereafter, with or without notice or demand and without limiting Landlord in
the exercise of any right or remedy which Landlord may have by reason of such
default:
11.2.1 Terminate Tenant's right to possession of the Premises and re-
enter the Premises by any lawful means, in which case Tenant shall immediately
surrender possession of the Premises to Landlord. In such event, Landlord shall
be entitled to recover from Tenant all damages permitted by applicable law
including those damages set forth in Subsection 11.2.2. Landlord shall use
reasonable efforts to mitigate its damages by making commercially reasonable
efforts to relet the Premises upon commercially reasonable terms.
11.2.2 If Tenant defaults under this Lease and Landlord elects to
terminate Tenant's right to possession as provided in Subsection 11.2.1, Tenant
shall be liable toand shall continue to pay Landlord Fixed Monthly Rent and all
Additional Rent as it becomes due until such time as Landlord relets the
Premises, so long as Landlord makes commercially reasonable efforts to mitigate
its damage and relet the Premises as provided in Subsection 11.2.1. Further, on
the date Landlord relets the Premises, Tenant shall, at Landlord's option,
either (a) pay Landlord, as it becomes due until the expiration of the Term or
the then running Renewal Term, the difference between the rental amount and the
amounts to be paid for taxes, insurance premiums and other costs and expenses
obtained by Landlord upon such reletting of the Premises (which rental amount
shall be upon commercially reasonable terms) and the Fixed Monthly Rent and
Additional Rent due from Tenant, with the excess amount, if any, being applied
to any future amounts owed by Tenant; or (b) pay Landlord the present value, if
any, of the difference between the rental amount and the amounts to be paid for
taxes,insurance premiums and other costs and expenses obtained by Landlord upon
such reletting of the Premises (which rental amount shall be upon commercially
reasonable terms) and the Fixed Monthly Rent and Additional Rent due from
Tenant, in which event Tenant shall have no further liability under the Lease.
Present value shall be calculated based on a five percent (5%) discount per
annum.
11.2.4 Pursue any other remedy now or hereafter available to Landlord
under the laws or judicial decisions of the jurisdiction where the Premises are
located.
11.2.5. Recover from Tenant, as an element of its damages, the cost of
reletting the Premises, including, but not limited to, reasonable brokerage
fees, attorneys' fees, retrofit costs and other expenses of reletting.
11.3CUMULATIVE REMEDIES. Except as specifically provided herein to the
contrary, no remedy or election hereunder shall be deemed exclusive but shall,
wherever possible, be cumulative with all other remedies provided in this
Article or otherwise available at law or in equity.
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ARTICLE 12
REPRESENTATIONS AND WARRANTIES OF LANDLORD
Landlord represents, warrants and covenants as follows:
(1) As of the Commencement Date, Landlord will be the fee owner
of the Premises and has the legal right and power to lease the Premises to
Tenant for Tenant's operation of the Premises for the Proposed Use or such
other uses consistent with ▇-▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ in ▇▇▇▇ Township,
Pennsylvania; and
(ii)As of the date of execution of this Lease, Landlord hereby
acknowledges receipt of the Plans and Specifications, approves of the
Plans and Specifications, and agrees to construct the Building and
improvements for the Premises in accordance with the final plans and
specifications which are based on the Plans and Specifications and which
are agreed to by Landlord and Tenant; and
(iii) As of the date of execution of this Lease, the Premises is
zoned to permit the use of the Premises for those principal uses which are
permitted in the C-i Zoning District in ▇▇▇▇ Township, Pennsylvania
including, without limitation, the Proposed Use, and there are no
restrictions applicable to, upon or within the Premises which would limit
or prevent Tenant's use of the Premises for the Proposed Use; and
(iv) There shall be no change to the Site Plan; provided,
however, that Landlord may make minor, site-specific modifications, which
are necessary for the development of the Premises and which do not in any
way affect the construction of the Building in accordance with the terms
of this Lease, upon obtaining the prior written consent of Tenant which
consent shall not be unreasonably withheld; and
(v) There shall be no change to the Plans and Specifications
without the prior written consent of Tenant which may be withheld in
Tenant's sole discretion.
The foregoing representations, warranties and agreements are material
considerations and inducements to Tenant in executing this Lease, the breach of
which will cause irreparable and severe harm to Tenant. Without limiting any
other right or remedy of Tenant under this Lease or available to Tenant at law
or equity by reason ofthe breach of the representations, warranties, guaranties
and agreements herein set forth, Tenant shall have the right to terminate this
Lease at any time during the period of such breach by providing written notice
to Landlord. If Landlord fails to cure such breach within thirty (30)days after
receipt of such written notice from Tenant, this Lease shall automatically
terminate. Notwithstanding the foregoing, once the conditions set forth in
Section 15.5 are complete such that Landlord has no further construction
obligations under the Lease, Tenant shall have no right to terminate this Lease
in connection with Subsection (iv) and (v) of this Article 12.
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ARTICLE 13
CONDITIONS PRECEDENT
13.1PERMITS. Tenant has entered into this Lease subject to Landlord
obtaining the necessary governmental or quasi-governmental permits, variances,
licenses, permissions or other authorizations (collectively "Permits") from the
applicable Public Authorities necessary for the construction and operation of
the Premises and the Building, excluding Tenant's signs and all improvements
thereto, built in accordance with the Plans and Specifications. In the event
Landlord is unable to obtain the Permits required to construct and operate the
Premises,the Building and all improvements thereto by the end of the Permitting
Period, Tenant shall have the right to terminate this Lease upon thirty (30)
days prior written notice to Landlord (which termination shall be nullified if
Landlord obtains any outstanding Permits within such thirty (30)day period) and
declare it null and void and of no further force and effect, in which event
Landlord and Tenant shall have no further liability hereunder.
13.2DUE DILIGENCE MATERIALS. Landlord has provided Tenant with copies of
the following tests, surveys and reports applicable to the Premises which
Landlord has obtained: (a) the most recent title commitment for the Premises
dated October 3, 2001 with copies of the exception documents; (b) the ALTA
Survey Map for the Premises dated October 24, 2001; (c) Phase I Environmental
Report; and (d) Geotechnical Report (the "Due Diligence Materials"). As of the
date of this Lease, Tenant has reviewed the Due Diligence Materials, has
approved of the Due Diligence Materials and shall have no right to terminate
this Lease in connection with anything contained therein. Notwithstanding the
foregoing,Landlord represents and warrants that prior to obtaining title to the
Premises, it shall cause to be removed of record the current mortgage held by
WAK Business Trust dated October 29, 1996 recorded in Mortgage Book Volume
16155,page 1 and the Memorandum of Lease and Option Agreement dated October 29,
1996 recorded in Deed Book Volume 9814, page 403.
13.3ENVIRONMENTAL COMPLIANCE. The Lease is also contingent upon Landlord
delivering the Premises to Tenant on the Delivery Date free of all Hazardous
Materials (as previously defined) and in compliance with all Environmental Laws
(as previously defined).
13.4NON-DISTURBANCE AND ATTORNMENT AGREEMENT. This Lease is further
contingent upon Landlord obtaining a non-disturbance and attornment agreementin
favor of Tenant, in a form reasonably acceptable to Tenant, in accordance with
Section 16.3. In the event Landlord is unable to obtain such an agreement in
favor of Tenant within thirty (30) days after the Delivery Date, Tenant shall
have the right to terminate the Lease and declare it null and void and of no
further force and effect, in which event Landlord and Tenant shall have no
further liability hereunder.
13.5LANDLORD OBTAINING FEE TITLE TO THE PREMISES. This Lease is also
contingent upon Landlord obtaining fee title to the Premises pursuant to the
Option to Purchase Agreement. In the event Landlord fails to close on the
acquisition of the Premises by way of the Option to
Purchase Agreement and obtain title to the Premises by June 4, 2002, Tenant
shall have the right to terminate the Lease upon thirty (30) days prior written
notice to Landlord(which termination shall be nullified if Landlord obtains fee
title to the Premises within such thirty (30) day period) and declare it null
and void and of no further force and effect.
13.6CROSS-ACCESS AND PARKING AGREEMENT. This Lease is contingent upon
Landlord obtaining and filing of record a cross-access and parking agreement
with either the owner of the shopping plaza located adjacent to and to the west
of the Premises or the owner of the Denny's parcel located adjacent to and to
the south of the Premises (the "Neighboring Owner"), in a form reasonably
acceptable to Tenant, whereby Tenant, together with its agents, employees,
customers, and invitees, has (a) the right to vehicular and pedestrian access
over and across the parking, drive aisles and other paved areas of the
Neighboring Owner's parcel for ingress to and egress from the Premises and all
public streets and highways; and (b) the right to park in all parking spaces
located on the Neighboring Owner's parcel (specifically excluding any right for
Tenant's employees to so park) (the "Easement Agreement"). The Easement
Agreement shall provide reciprocal rights to the Neighboring Owner, together
with its agents, employees, customers and invitees,for vehicular and pedestrian
access over the parking, drive aisles and other paved areas of the Premises
together with rights to park on the parking spaces located on the Premises
(specifically excluding any right of employees to so park). Landlord further
agrees to obtain an appropriate endorsement or other affirmative insurance in
the title policy for the Premises insuring the rights under the Easement
Agreement. Inthe event Landlord fails to obtain and file of record the Easement
Agreement, and obtain the necessary title endorsement or other affirmative
insurance set forth herein, prior to June 4, 2002, Tenant shall have the right
to terminate the Lease upon thirty (30) days prior written notice to Landlord
(which termination shall be nullified if Landlord files the Easement Agreement
of record or obtains the appropriate title endorsement or other affirmative
insurance within such thirty (30) day period) and declare it null and void and
of no further force and effect,in which event Landlord and Tenant shall have no
further liability hereunder. Any amounts required to be paid under the Easement
Agreement shall be paid by Landlord at its sole cost and expense (the "Easement
Costs"). Tenant's share of the Easement Costs shall be fifty percent (50%) of
the Easement Costs up to, but not to exceed, Thirty Thousand and no/l00 Dollars
($30,000.00), which amount shall be added to the Premises Cost and paid by
Tenant through Fixed Monthly Rent throughout the Term of the Lease.Landlord and
Tenant acknowledge that the Premises Cost attached hereto as Exhibit E includes
the $30,000.00 maximum amount of Tenant's share of the Easement Costs. Landlord
agrees to provide Tenant with copies of all notices received from the
Neighboring Owner in connection with the Easement Agreement, including but not
limited to any notices relating to the failure of Landlord to pay the Easement
Costs. In the event Landlord fails to pay the Easement Costs in accordance with
the terms of the Easement Agreement, Tenant shall have the right, but not the
obligation, to pay the Easement Costs for and on behalf of Landlord. In the
event Tenant pays any Easement Costs for and on behalf of Landlord,Tenant shall
have the right, at Tenant's option, to recover such costs from Landlord by
either (a) requesting reimbursement of such costs directly from Landlord;or (b)
setting-off and deducting such costs from Fixed Monthly Rent until Tenant is
reimbursed in full.
13.7TENANT REIMBURSEMENT. If Tenant terminates the Lease due to Landlord's
failure
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to comply with Sections 13.5 and 13.6 of this Lease, Landlord shall be required
to reimburse Tenant within thirty (30) days after Tenant's termination of the
Lease for all of the actual costs and expenses paid by Tenant for architectural
drawings.
ARTICLE 14
[Intentionally Omitted]
ARTICLE 15
CONSTRUCTION
15.1PERMITS. Landlord shall use its diligent efforts to obtain the Permits
(as previously defined)on or before the expiration of the Permitting Period. In
the event Landlord fails to obtain the Permits by the end of the Permitting
Period, Tenant shall have the right to terminate this Lease and declare it null
and void and of no further force and effect as provided in Section 13.1. Once
Landlord has secured all necessary Permits, Landlord shall provide Tenant with
written notice (the "Permit Approval Notice").
15.2LANDLORD'S WORK. Landlord shall demolish the existing structures on
the Premises and construct the Building and related improvements onthe Premises
at no cost to Tenant (except for change orders which are initiated, requested
and approved by Tenant which shall be at Tenant's cost), in a good and
workmanlike manner, in accordance with the Plans and Specifications (a list of
which is attached hereto as EXHIBIT "C"), and in accordance with the
environmental, health and safety codes of the governmental units in which the
Premises are situated ("Landlord's Work"). Landlord's Work shall be completed,
excepting Punchlist Items, and possession of the completed Premises shall be
delivered to Tenant for the commencement of Tenant's Work within the
Construction Period, subject to Force Majeure. Landlord and Tenant hereby agree
that the Construction Period is based on Tenant's delivery of the final Plans
and Specifications to Landlord by April 1, 2002. In the event Tenant fails to
deliver the final Plans and Specifications by April 1, 2002, the Construction
Period and the November 7, 2002 date set forth in Section 15.6 shall each be
extended one day for each day after April 1, 2002 until Tenant delivers the
final Plans and Specifications to Landlord; provided, however,that such failure
to deliver the final Plans and Specifications shall in no way be deemed to be a
default by Tenant under this Lease. Tenant shall have the right to install on
the roof ofthe Premises a satellite dish in accordance with all applicable laws
and provided such satellite dish is properly screened.
15.3DELIVERY DATE NOTICE. Landlord shall give Tenant written notice of the
Delivery Date not less than ten (10) days before the Delivery Date (the
"Delivery Date Notice"). Upon receipt of Landlord's Delivery Date Notice,Tenant
shall have access to the Premises for inspection. In the event Landlord and
Tenant are simultaneously performing work on the Premises, Landlord and Tenant
hereby agree to cooperate with one another and work in good faith to complete
such work without unreasonably interfering with one another inthe completion of
such work.
15.4INSPECTION AND PUNCHLIST WORK. Notwithstanding anything to the
contrary in this Lease, within five (5) days after Landlord has provided Tenant
with the Delivery Date Notice,
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Tenant and a representative of Landlord, at a mutually agreeable time, shall
inspect the Premises (the "Inspection") and shall compile a list of items which
have not been completed as required in the Plans and Specifications. If after
the Inspection, there are any items other than Punchlist Items which Landlord
has failed to complete or not properly completed in accordance with the Plans
and Specifications, Landlord's Work shall not be deemed to be completed and
Landlord shall promptly complete such items within the Construction Period. If
after the Inspection, there are only Punchlist Items remaining, Landlord's Work
shall be deemed completed provided Landlord completes such Punchlist Items
within twenty-one (21)days after the Delivery Date. Tenant shall have the right
to supplement the list of Punchlist Items during the first twenty-one (21)days
following the Delivery Date and Landlord shall use reasonable efforts to
complete such supplemental Punchlist Items within twenty-one (21) days after
Landlord's receipt of a supplemental list of Punchlist Items. If Landlord fails
to complete the Punchuist Items or the supplemental Punchlist Items within the
time periods set forth above, Tenant may elect to complete such Punchlist Items
for and on behalf of Landlord and at Landlord's cost and expense by providing
prior written notice to Landlord. If Landlord fails to complete the Punchlist
Items within five (5) days after the receipt of such notice, Tenant shall have
the right to complete the Punchlist Items and, at Tenant's option, (a) recover
the cost of completing such Punchlist Items, including interest at the rate of
twelve percent (12%) per annum from the date of the advance of such costs until
the date of repayment; or (b) set-off and deduct the cost of completing the
Punchlist Items, together with interest as aforesaid, from Fixed Monthly Rent
and Additional Rent. In no event shall Tenant be required to accept delivery of
the Premises unless and until Landlord has fully completed Landlord's Work
(excepting Punchlist Items)and all conditions to the occurrence of the Delivery
Date have been satisfied.
15.5PRE-COMPLETION ACCEPTANCE. If the Delivery Date has not occurred
within the Construction Period, Tenant shall have the right, but shall not be
obligated, to accept delivery of the Premises prior to Landlord's completion of
Landlord's Work ("Pre-Completion Acceptance"),without relieving Landlord of any
obligation to fully complete Landlord's Work. If Tenant accepts delivery of the
Premises prior to the completion of Landlord's Work, Landlord shall complete
Landlord's Work,including completing any Punchlist Items as provided in Section
15.4, as soon as possible, and in so doing shall not interfere, and shall cause
its contractors not to interfere, with the fixturing, furnishing, equipping and
stocking of the Premises by Tenant and its contractors. In the event Tenant has
opened for business in the Premises and Landlord still has not fully completed
Landlord's Work (excepting the Punchlist Items), Landlord shall still be
obligated to complete Landlord's Work and the Punchlist Items, and Tenant shall
have the right to offset or withhold Rent until such time as Landlord has fully
completed the same. Notwithstanding the foregoing, once (i) Tenant has taken
possession of the Premises; and (ii) Landlord has fully completed Landlord's
Work; and (iii) all Punchlist Items have been completed, and (iv)the Warranties
(as previously defined) have been assigned to Tenant, Landlord shall have no
further construction obligations hereunder.
15.6FAILURE TO DELIVER. Notwithstanding any provision of this Lease to the
contrary, if Landlord has not completed Landlord's Work and the Delivery Date
has not occurred by November 7, 2002 (subject to Force Majeure), Tenant shall
have the right, in addition to and not in lieu of any and all other rights and
remedies available at law or equity, to cancel this Lease by
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giving written notice to Landlord atany time thereafter but before the Delivery
Date (the "Notice of Cancellation"). If Tenant provides timely Notice of
Cancellation and Landlord does not deliver the Premises to Tenant with
Landlord's Work complete within fifteen (15)days after receipt of the Notice of
Cancellation, this Lease shall terminate and be null and void and of no further
force and effect, Tenant shall be relieved of all obligations hereunder and
Tenant shall not be liable to Landlord in damages or otherwise.
15.7LIQUIDATED DAMAGES. In the event Landlord does not deliver the
Premises to Tenant in the condition as herein required within the Construction
Period, Landlord shall pay to Tenant the sum of Two Hundred Dollars ($200.00),
for each day between the last day of the Construction Period and the Delivery
Date, or, if Tenant exercises its right to cancel for Landlord's failure to
deliver, for each day between the last day of the Construction Period and the
effective date of Tenant's Notice of Cancellation(subject to Force Majeure). If
Landlord fails to pay Tenant as aforesaid, then Tenant shall have the right
(without limiting any other right or remedy of Tenant) to deduct such amount
from Rent and other payments due Landlord. The liability of Landlord under this
paragraph shall bein addition to all other claims which Tenant may have against
Landlord. Landlord agrees that the amount provided for in this Section
constitutes a reasonable estimate of the damages that Tenant is likely to incur
in the event of a breach by Landlord as herein provided, and shall not
constitute a penalty.
ARTICLE 16
GENERAL PROVISIONS
16.1QUIET ENJOYMENT. Subject to the terms and conditions of this Lease,
Tenant shall have the quiet and peaceful possession of the Premises.
16.2DEFINITION OF RENT. All monetary obligations of Tenant to Landlord
under the terms of this Lease, including, without limitation, Fixed Monthly
Rent,the Taxes, insurance premiums and other Additional Rent payable hereunder,
shall be deemed to be "Rent".
16.3SUBORDINATION. This Lease shall be subject and subordinate to the lien
of any superior lease, mortgage, deed of trust, or any other hypothecation or
security now existing or hereafter placed upon the Premises, and to any and all
advances made on the security thereof and to all renewals, modifications,
consolidations, replacements, and extensions thereof, and Tenant hereby agrees,
within thirty (30) days of written request by Landlord, to execute and deliver
to Landlord and its lender(s) a subordination, non-disturbance and attornment
agreement in a form reasonably acceptable to Tenant prescribed bysuch lender(s)
with respect to anysuch superior lease, mortgage, deed of trust, hypothecation,
or security; provided, however, that no such instrument shall limit Tenant's
rights or expand Tenant's obligations under this Lease. Landlord agrees to
obtain a non-disturbance and attornment agreement from the holder of any
mortgage given with respect to the Premises existing immediately following
Landlord's acquisition of the Premises or at such other times thereafter as may
be reasonably requested by Tenant.
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16.3.1 It is a condition, however, of the subordination provisions of
Section 16.3 above that Landlord shall procure from any such mortgagee an
agreement in writing,which shall be delivered to Tenant, providing in substance
that (i) so long as Tenant shall faithfully discharge the obligations on its
part to be kept and performed under the terms of this Lease, Tenant's tenancy
will not be disturbed nor this Lease affected by any default or foreclosure
under such mortgage, and that the mortgagee agrees that this Lease shall remain
in full force and effect even though default in and foreclosure under the
mortgage may occur; and (ii) such mortgagee shall permit insurance proceeds or
condemnation awards, as the case may be, to be used for any restoration and
repaid as required by the provisions of this Lease as set forth in Sections 8
and 9. The word "mortgage" as used herein means (i)any lease of land only or of
land and buildings ina sale-lease-back transaction involving all or any part of
the Premises, or (ii) any mortgage, deed of trust or other similar security
instruments constituting a lien upon all or any part of the Premises, whether
the same shall be in existence as of the date hereof or created hereafter, and
any modifications,extensions, renewals and replacements thereof. "Mortgagee" as
used herein means a party having the benefit of a Mortgage, whether as lessor,
mortgagee, trustee or note-holder.
16.3.2 No change in ownership of all or any portion of the Premises, or
assignment of this Lease, or the rentals provided for herein, shall be binding
upon Tenant forany purpose until after Tenant has been furnished with evidence,
including photostat or certified copy of deed or assignment, showing change in
ownership or assignment.
16.3.3 In the event Tenant receives a written notice from any party
claiming a collateral interest in this Lease or in the rentals hereunder and,by
reason thereof, a present entitlement to collect the rentals under this Lease,
Tenant shall pay such rentals to such party which payment shall satisfy'any and
all liabilities of Tenant to Landlord with respect to such payment without
obligation on the part of Tenant to make further inquiry but subject to such
party's providing to Tenant a copy of the instrument pursuant to which such
party claims such entitlement and to such claim being plausible on the face of
such instrument.
16.4SURRENDER OF PREMISES. Except for changes resulting from eminent
domain proceedings, at the expiration or sooner termination of the Lease Term,
Tenant shall surrender the Premises in the same condition as the Premises were
in upon delivery of possession thereto under this Lease, reasonable wear and
tear and damage due to casualty excepted, and shall surrender all keys for the
Premises to Landlord at the place then fixed for the payment of Rent and shall
inform Landlord of all combinations on locks, safes and vaults, if any, in the
Premises. Tenant shall at such time remove all of Tenant's Trade Fixtures
including, but not limited to, equipment, signs, furnishings, inventory,
machinery, and other personal property, and shall repair any damage to the
Premises caused thereby. Any or all of such property not so removed shall, at
Landlord's option, become the exclusive property of Landlord or be disposed of
by Landlord, at Tenant's sole cost and expense, if not removed by Tenant after
receipt of written notice from Landlord pursuant to Section 7.2.1. In the event
Tenant shall fail to pay the cost of any such repair, Landlord may do so and
Tenant shall reimburse Landlord for the amount thereof within five (5) days
after receipt of a ▇▇▇▇ therefore. If Tenant shall not so surrender the
Premises, Tenant shall indemnify Landlord against loss or liability resulting
from the delay by Tenant in so
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surrendering the Premises including, without limitation, any claims made by any
succeeding occupant founded on such delay. Tenant's obligation to observe or
perform this covenant shall survive the expiration or other termination of the
Lease Term.
16.4.1 Tenant shall have the right, no earlier than thirty (30) days
before the date Tenant vacates the Premises,to place a sign at the front of the
Premises,in a place visible to Tenant's customers, directing Tenant's customers
to another of Tenant's stores and/or providing Tenant's customers with a
telephone number as long as such signage does not violate (i) applicable laws,
ordinances, orders, rules or regulations of any governmental authority; or (ii)
covenants running with the Premises. Tenant shallbe entitled to leave said sign
at the front of the Premises until the earlier to occur of (i) three months
after Tenant vacates the Premises, or (ii) the date a new tenant takes
possession of the Premises.
16.5ESTOPPEL CERTIFICATES. Each party (each a "RESPONDING PARTY") shall at
any time upon not less than thirty (30)days prior written notice from the other
party (each a "REQUESTING PARTY") execute, acknowledge, and deliver to the
Requesting Party a statement in a form prescribed by the Requesting Party and
reasonably acceptable to the Responding Party certifying and acknowledging the
following: (i) that this Lease represents the entire agreement between Landlord
and Tenant, and is unmodified and in full force and effect (or, if modified,
stating the nature of such modification and certifying that this Lease, as so
modified, is in full force and effect) and the date to which the Fixed Monthly
Rent and other charges are paid in advance, if any; and (ii)that there are not,
to the Responding Party's knowledge, any uncured defaults on the part of the
Requesting Party, or specifying such defaults if any are claimed. Any such
statement may be conclusively relied upon by any prospective purchaser or
encumbrancer of the Premises or of the business of the Requesting Party.
16.6SEVERABILITY. The invalidity of any provision of this Lease as
determined by a court of competent jurisdiction shall in no way affect the
validity of any other provision hereof.
16.7ENTIRE AGREEMENT. This Lease constitutes the entire agreement between
Landlord and Tenant and supersedes all prior agreements between them with
respect to the Premises, whether written or oral.
16.8NOTICES. Any notice required or permitted to be given hereunder shall
be in writing and may be given by facsimile, personal delivery, certified mail,
return receipt requested, or by nationally recognized overnight courier service
delivered to Tenant or to Landlord, as the case may be, at the FAX numbers or
addresses for each set forth in the Fundamental Lease Provisions. Either party
may by notice to the other specify a different FAX number or address for notice
purposes. A copy of all notices required or permitted to be given to Landlord
hereunder shall be concurrently transmitted to such party or parties at such
addresses as Landlord may from time to time hereafter designate by notice to
Tenant.
16.9WAIVERS. No waiver by Landlord or Tenant of any provision hereof shall
be deemed a waiver of anyother provision hereof or of any subsequent default by
Landlord or Tenant of the same of any other provision. Landlord's consent to,or
approval of, any act shall
01/31/02
not be deemed to render unnecessary the obtaining of Landlord's consent to or
approval of any subsequent act by Tenant. The acceptance of Rent hereunder by
Landlord shall not be a waiver of any preceding default by Tenant hereunder,
other than the failure of Tenant to pay the particular Rent so accepted,
regardless of Landlord's knowledge of such preceding default at the time of
acceptance of such Rent.
16.10 RECORDING. Either Landlord or Tenant shall, upon request of the
other, execute, acknowledge, and deliver to the other a "short form" memorandum
of this Lease for recording purposes. Such memorandum shall be in the form
reasonably prescribed by Landlord, and the party requesting same shall be
responsible for all costs, fees and taxes incident to recording same. In
addition,any termination agreement shall be similarly recorded, which agreement
shall survive the termination of this Lease. In no event shall any such
memorandum be recorded prior to Landlord's acquisition of the Premises.
16.10.1 At the time that the Commencement Date of the term of this Lease
is firmly established, the parties shall promptly enter into a Supplemental
Lease Agreement, setting forth the actual commencement and expiration of the
Initial Term and any extensions thereof, describing the Premises and setting
forth the Fixed Monthly Rent and annual Rent to be paid by Tenant hereunder,but
containing no further provisions of this Lease, which Supplemental Lease
Agreement shall be prepared by Tenant and which may be recorded by either party
with the party recording same to be responsible for all costs, fees and taxes
incident to recording same. If the Commencement Date is firmly established
before a short form lease or memorandum of lease has been executed by the
parties, the short form lease or memorandum of lease and the Supplemental Lease
Agreement may be consolidated into a single recordable document.
16.11 HOLDING OVER. If Tenant remains in possession of the Premises or
any part thereof after the expiration or termination of the Lease Term, such
occupancy shallbe a tenancy from month-to-month upon all the provisions of this
Lease pertaining tothe obligations of Tenant and Tenant shall thereby waive its
rights of notice to quit, but Tenant's right as to any Renewal Term shall
terminate.The monthly rent due during such hold-over period shall be equal to
125% of the Fixed Monthly Rent then in effect, and Tenant shall continue to be
obligated to pay all Additional Rent and other amounts required to be paid by
the terms of this Lease. Notwithstanding the foregoing, in the event that
Landlord and Tenant are engaged in active and good faith negotiations for a new
lease atthe expiration or termination of the Lease Term, then the Fixed Monthly
Rent payable by Tenant during Tenant's continuing possession shall be at the
rate last paid by Tenant hereunder, but only for so long as such negotiations
continue. However, Landlord shall in its sole discretion have the right to
notify Tenant in writing, that Landlord elects to terminate such negotiations
whereupon thirty (30) days after Tenant's receipt of such notice the monthly
rent due thereafter shall be equal to 125% of the Fixed Monthly Rent then in
effect.
16.12 CHOICE OF LAW. The laws of the jurisdiction in which the Premises
are located shall govern the validity, performance, and enforcement of this
Lease.
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16.13 ATTORNEYS' FEES. Should either party institute any action or
proceedingto enforce any provision hereof or for a declaration of such party's
rights or obligations hereunder, the prevailing party shall be entitled to
receive from the losing party such amounts as the court may adjudge to be
reasonable attorneys' fees and expenses for services rendered to the party
prevailing in any such action or proceeding, and such fees shall be deemed to
have accrued upon the announcement of such action or proceeding and shall be
enforceable whether or not such action or proceeding is prosecuted to judgment.
16.14 WAIVER OF JURY TRIAL. LANDLORD AND TENANT EACH HEREBY WAIVE ALL
RIGHT TO A TRIAL BY JURY IN ANY CLAIM, ACTION, PROCEEDING OR COUNTERCLAIM BY
EITHER LANDLORD OR TENANT AGAINST THE OTHER ON ANY MATTERS ARISING OUT OF OR IN
ANY WAY CONNECTED WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT,
AND/OR TENANT'S USE OR OCCUPANCY OF THE PREMISES.
16.15 LIABILITY OF LANDLORD. In the event of any sale or other transfer
of Landlord's interestin the Premises, Landlord shall automatically be relieved
of all liabilities and obligations of Landlord hereunder arising after the date
of such transfer. Notwithstanding anything contained herein to the contrary,
neither Landlord nor its partners, members, officers, shareholders, principals
or employees shall have any personal liability in respect of any of the terms,
covenants, conditions or provisions of this Lease. In the event of a breach or
default by Landlord of any of its obligations under this Lease, Tenant, and any
persons claiming by, through or under Tenant, shall look solely tothe equity of
the Landlord in the Premises for the satisfaction of Tenant's and/or such
persons' remedies and claims for damages, and no other property or assets of
Landlord, or of its partners, members, officers, shareholders, principals or
employees shall be subject to levy, execution or other enforcement procedures
for the satisfaction of Tenant's and/or such person's remedies and claims for
damages.
16.16 NO MERGER. There shall be no merger of this Lease, or the
leasehold estate created by this Lease, with any other estate or interest inthe
Premises, or any part thereof, by reason of the fact that the same person,firm,
corporation or other entity may acquire or own or hold, directly or indirectly,
(i) this lease or the leasehold estate created by this Lease or any interest in
this Lease or in any such leasehold estate; and (ii) any such other estate or
interest in the Premises or any part thereof. No such merger shall occur unless
and until all persons, corporations,firms and other entities having an interest
(including a security interest) in (1) this Lease or the leasehold estate
created by this Lease; and (2) any such other estate or interest in the
Premises,or any part thereof, shall join in a written instrument effecting such
merger and shall duly record the same.
16.17 INTERPRETATION. The captions by which the Articles and Sections
of this Lease are identified are for convenience only and shall have no effect
upon the interpretation of this Lease. Whenever the context so requires,
singular numbers shall include the plural, the plural shall refer to the
singular, the neuter gender shall include the masculine and feminine genders,
and the terms "Landlord" and "Tenant" and "person" shall include corporations,
limited liability companies, partnerships, associations, other legal entities,
and individuals.
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16.18 RELATIONSHIP OF THE PARTIES. Nothing in this Lease shall create a
partnership, joint venture, employment relationship, borrower and lender
relationship, or any other relationship between Landlord and Tenant, other than
the relationship of landlord and tenant.
16.19 SUCCESSORS. This Lease shall be binding upon and inure to the
benefit of the parties hereto and their respective personal and legal
representatives, heirs, successors, and assigns.
16.20 MODIFICATIONS. This Lease may not be altered, amended, changed,
waived, terminated, or modified in any manner except by a written instrument
executed by Landlord and Tenant.
16.21 BROKERAGE FEES. Landlord and Tenant each represent and warrant
that they have not employed a broker in connection with the execution of this
Lease. Landlord and Tenant shall each indemnify and holdthe other harmless from
and against any claim or claims for brokerage or other commissions arising from
such party having employed a broker contrary to its representation in this
Section.
16.22 WAIVER OF REDEMPTION. To the extent permitted by law, Tenant
hereby waives any and all rights of redemption with respect to this Lease.
Tenant hereby waives any rights it may have to any notice to cure or vacate or
to quit provided byany current or future law; provided that the foregoing shall
not be deemed to waive any notice expressly provided in this Lease.
16.23 NOT BINDING UNTIL EXECUTED. This Lease does not constitute an
"offer" and is not binding until fully executed and delivered by Landlord.
16.24. REASONABLE CONSENT. Unless specifically and expressly stated to
the contrary, wherever Landlord's consent or approval shall be required herein,
such consent or approval shall not be unreasonably or arbitrarily withheld or
delayed.
16.25 NO CONTINUOUS OPERATION/LANDLORD'S RIGHT OF RECAPTURE. (a)
Notwithstanding anything contained in this Lease, expressly or impliedly,to the
contrary, and notwithstanding the agreement herein contained for the payment by
Tenant of rent, it is specifically and expressly understood and agreed that
Tenant shall be under no duty or obligation, either express or implied,to open,
or thereafter to continuously conduct, its business in the Premises at any time
during the Term. Further, Tenant's failure to open for business in the Premises
shall not otherwise entitle Landlord to commence or to maintain any action,
suit, or proceeding, whether in law or in equity, relating in any way to
Tenant's failure to open or thereafter to continuously conduct its business in
the Premises. Without limiting the generality of the foregoing, Tenant shall
have the right to close two partial days per year to take inventory and shall,
at Tenant's option, be closed Thanksgiving Day, Christmas Day, New Years Day,
and Easter; (b) If at any time during the Lease Term Tenant, or its assignee or
sublessee,if any, shall discontinue its operations at the Premises for a period
of greater than one hundred eighty (180) consecutive days
01/31/02
(except as may result from fire or other casualty, a taking under the power of
eminent domain or condemnation, or periods of remodeling), Landlord may, at any
time following such one hundred eighty day (180) period, and prior to any
recommencement of operations, terminate this Lease upon sixty (60) days' prior
written notice to Tenant. If Tenant, or its assignee or sublessee, if any,
reopens for business or recommences its operations within such sixty (60) day
period, Landlord's right to terminate the Lease shall be nullified and of no
further force and effect. If Landlord elects to terminate the Lease as provided
herein, the Lease shall be null and void and of no further force and effect,and
the parties hereto shall be released from any and all further unaccrued
liability with respect to this Lease from and after the effective date of such
termination.
16.26 FINANCIAL STATEMENTS. Upon written request from Landlord, Tenant
shall cause Sterling Jewelers Inc. to provide a copy of its latest financial
statements for its last fiscal year.
16.27 GUARANTY OF LEASE. This Lease is conditioned on Tenant delivering
to Landlord, simultaneously with the execution copies of this Lease, four (4)
copies ofa Guaranty of Lease executed by Sterling Jewelers Inc. in the form set
forth on attached Exhibit "H".
[SIGNATURES CONTINUED ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties have executed this Lease as of the 4th
day of 2002.
WITNESSES LANDLORD:
▇▇▇▇▇▇▇▇ ROAD DEVELOPMENT, LLC,
a New York limited liability company
By: Westlake Holding, Inc.
/s/ Christian J Daraher
Print Name:
/s/ ▇▇▇▇▇ ▇ ▇▇▇▇▇ Its: Sole Member
Print Name ▇▇▇▇▇ ▇ ▇▇▇▇▇ By:/s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
Its: President
TENANT:
STERLING INC.
By:/s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇
Print Name: ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇
Its: EXECUTIVE VICE PRESIDENT
/s/ ▇▇▇▇▇▇▇ Marcheut
Print Name: ▇▇▇▇▇▇▇ Marcheut
STATE OF NEW YORK )
)SS:
COUNTY OF ONONDAGA )
BEFORE ME, a Notary Public, in and for said County and State, personally
appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇, the President of Westlake Holding, Inc., the Sole
Member of ▇▇▇▇▇▇▇▇ Road Development, LLC,who acknowledged that he did sign the
foregoing instrument and that the same is his free act and deed, and the free
act and deed of said limited liability company.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal this
4th day of February, 2002.
/s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇
Notary Public
STATE OF OHIO )
) SS: [notary seal]
COUNTY OF SUMMIT )
BEFORE ME, a Notary Public, in and for said County and State, personally
appeared ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇, the Exec V.P. of Sterling Inc., who acknowledged
that he did sign the foregoing instrument and that the same is his free act
and deed, and the free act and deed of said corporation.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal this
4th day of February, 2002.
/s/ ▇▇▇▇▇▇ L House
Notary Public
[notary seal]
All that certain parcel of land situate in the Township of ▇▇▇▇, County of
Allegheny and Commonwealth of Pennsylvania, being all of Lot No. I in ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ Plan of record in the Recorder's Office of Allegheny County in Plan
Book Volume 200, pages 104 and 105.
Being designated as Block 431-B,Lot 17 in the Deed Registry Office of Allegheny
County, Pennsylvania.
Being part of the property awarded to PNC Bank and ▇▇▇▇ ▇▇▇▇▇▇▇, Trustees under
the Will of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, by decree dated September 3,1997 at
Proceedings No. 5021 of 1996,a certified copy of which is recorded in Deed Book
Volume 10052, page 322; as amended and corrected by decree dated January 13,
1998, a certified copy of which is recorded in Deed Book Volume 10129, page574.