Exhibit 10.5
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SHOPPING CENTER LEASE AGREEMENT
by and between
FIESTA MART, INC.
(Landlord)
and
C. A. I., L.P.
(Tenant)
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TABLE OF CONTENTS
PAGE
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ARTICLE I. DEFINITIONS AND BASIC LEASE PROVISIONS ...........................1
1.1 Certain Defined Terms ..............................................1
1.2 Construction of Definitions ........................................4
ARTICLE II. TERM ............................................................4
ARTICLE III. ACCEPTANCE OF PREMISES .........................................4
3.1 Suitability of Demised Premises ....................................4
3.2 Tender of Possession ...............................................5
3.3 Memorandum of Lease ................................................5
3.4 [Intentionally Left Blank] .........................................5
ARTICLE IV. RENTAL ..........................................................5
4.1 Accrual of Rental ..................................................5
4.2 Minimum Guaranteed Rental ..........................................5
4.3 Intentionally Left Blank ...........................................5
4.4 Intentionally Left Blank ...........................................5
4.5 Intentionally Left Blank ...........................................5
4.6 Interest on Past Due Rentals .......................................5
4.7 Intentionally Left Blank ...........................................5
4.8 Late Charge; Returned Checks .......................................5
ARTICLE V. INTENTIONALLY LEFT BLANK .........................................6
ARTICLE VI. COMMON AREA .....................................................6
6.1 Use and Regulation of Common Area ..................................6
6.2 Substitute Parking .................................................7
6.3 Maintenance of Common Area .........................................7
6.4 Common Area Costs ..................................................7
6.5 Tenant's Audit Rights ..............................................8
ARTICLE VII. USE ............................................................8
7.1 Use of Demised Premises ............................................8
7.2 Continuous Operation ...............................................8
7.3 Operation of Business ..............................................9
7.4 Disposal of Trash ..................................................9
7.5 Compliance with Laws ...............................................9
7.6 Alterations by Landlord ............................................9
ARTICLE VIII. MAINTENANCE AND REPAIRS .......................................9
8.1 Landlord's Obligations .............................................9
8.2 Tenant's Obligations ..............................................10
ARTICLE IX. ALTERATIONS ....................................................10
9.1 Required Approval and Renewals ....................................10
9.2 Construction by Tenant ............................................10
ARTICLE X. ACCESS ..........................................................10
10.1 Entry by Landlord ................................................10
10.2 Placement of Signs ...............................................11
ARTICLE XI. EXTERIOR CHANGES AND SIGNS .....................................11
ARTICLE XII. UTILITIES .....................................................11
12.1 Facilities .......................................................11
(i)
12.2 Payment for Services .............................................11
12.3 Water Usage Charges ..............................................11
12.4 Interruption in Service ..........................................12
12.5 Utility Deregulation .............................................12
ARTICLE XIII. INSURANCE AND INDEMNITY ......................................12
13.1 Indemnity ........................................................12
13.2 Tenant's Liability Insurance .....................................12
13.3 Tenant's Fire Insurance ..........................................13
13.4 Landlord's Liability Insurance ...................................13
13.5 Landlord's Fire and Extended Coverage Insurance ..................13
13.6 Waiver of Subrogation ............................................13
ARTICLE XIV. LANDLORD'S LIABILITY ..........................................14
ARTICLE XV. DAMAGE BY FIRE AND OTHER CAUSES ................................14
15.1 Notice of Loss ...................................................14
15.2 Demised Premises Usable ..........................................14
15.3 Demised Premises Unusable ........................................14
15.4 Damage to Shopping Center ........................................14
15.5 Scope of Repair by Landlord ......................................14
15.6 Continuation of Tenant's Business ................................15
15.7 Commencement of Repairs ..........................................15
ARTICLE XVI. EMINENT DOMAIN ................................................15
16.1 Major Taking .....................................................15
16.2 Minor Taking .....................................................15
16.3 Taking of Common Area ............................................15
16.4 Award.............................................................16
ARTICLE XVII. ASSIGNMENT AND SUBLETTING ....................................16
17.1 Prohibition ......................................................16
17.2 Permitted Assignments and Subleases ..............................16
17.3 Sublease of Surrender Space ......................................17
17.4 Conditions to Consent ............................................17
17.5 Transfer by Landlord .............................................17
ARTICLE XVIII. TAXES AND INSURANCE PREMIUMS ................................18
18.1 Taxes on Tenant's Property .......................................18
18.2 Taxes ............................................................18
18.3 Substitute Taxes .................................................18
18.4 Insurance Premiums ...............................................18
ARTICLE XIX. DEFAULT .......................................................19
19.1 Events of Default ................................................19
19.2 Remedies .........................................................19
19.3 Alteration of Locks ..............................................20
19.4 Landlord's Right to Cure Defaults ................................20
19.5 Termination by Landlord ..........................................20
19.6 Termination of Tenant's Right to Possession ......................21
19.7 Obligation to Relet ..............................................21
19.8 Injunctive Relief ................................................21
19.9 Expenses of Litigation ...........................................21
19.10 Default by Landlord ..............................................22
19.11 Prepaid Rental ...................................................22
ARTICLE XX. WAIVER OF LANDLORD'S LIEN ......................................22
ARTICLE XXI. HOLDING OVER ..................................................23
(ii)
ARTICLE XXII. SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE ................23
22.1 No Prior Lien on Shopping Center .................................23
22.2 Conditional Subordination to Future First Lien ...................23
22.3 Notice to Mortgagee ..............................................23
ARTICLE XXIII. [INTENTIONALLY LEFT BLANK ...................................23
ARTICLE XXIV. [INTENTIONALLY LEFT BLANK ....................................23
ARTICLE XXV. NOTICES .......................................................23
ARTICLE XXVI. [INTENTIONALLY LEFT BLANK] ...................................24
ARTICLE XXVII. LEASEHOLD MORTGAGES .........................................24
27.1 Leasehold Mortgages ..............................................24
27.2 Event of Default .................................................24
27.3 Exercise of Remedies .............................................24
27.4 Termination of Lease .............................................24
27.5 Limited Liability ................................................24
27.6 Lender's Agreement ...............................................25
ARTICLE XXVIII. MISCELLANEOUS ..............................................25
28.1 Relationship Between Parties .....................................25
28.2 Independent Obligations ..........................................25
28.3 Landlord's and Tenant's Liability ...............................25
28.4 Consent of Parties ...............................................25
28.5 No Waivers .......................................................25
28.6 Force Majeure ....................................................26
28.7 Certifications; Financial Statements .............................26
28.8 Governing Law ....................................................26
28.9 No Bankruptcy ....................................................26
28.10 Captions .........................................................26
28.11 Genders ..........................................................26
28.12 Successors .......................................................26
28.13 Entire Agreement .................................................26
28.14 Time of the Essence ..............................................27
28.15 [Intentionally Left Blank] .......................................27
28.16 [Intentionally Left Blank ........................................27
28.17 Brokers ..........................................................27
28.18 Disclaimers ......................................................27
28.19 Preliminary Negotiations .........................................27
ARTICLE XXIX. REPRESENTATIONS AND WARRANTIES ...............................27
29.1 Landlord's Affirmative Covenants .................................27
29.2 Landlord's Negative Covenants ....................................28
29.3 Landlord's Representations .......................................28
29.4 Tenant's Affirmative Covenants ...................................29
29.5 Tenant's Negative Covenants ......................................30
29.6 Tenant's Representations .........................................31
29.7 Surrender Space ..................................................31
Exhibit A - Legal Description
Exhibit B - Site Plan
Exhibit C - Construction Rider
Exhibit D - Sign and Graphics Criteria
Exhibit E - Guaranty Agreement
Exhibit F - Trash Disposal Rider
(iii)
Exhibit G - Confirmation of Demised Premises
Exhibit H - Options to Renew
Exhibit I - Subordination, Non-Disturbance and Attornment Agreement
Exhibit J - Landlord's Agreement
Exhibit K - Tax Abatement Provisions
(iv)
SHOPPING CENTER LEASE AGREEMENT
This Shopping Center Lease Agreement is entered into as of the 3rd day of May,
2000, (the "Effective Date") by and between the Landlord and the Tenant
hereinafter named.
ARTICLE I. DEFINITIONS AND BASIC LEASE PROVISIONS
1.1 Certain Defined Terms
(a) Landlord: FIESTA MART, INC.
(b) Landlord's Address:
(i) For Payment of P. O. ▇▇▇ ▇▇▇▇▇▇
of Rent: ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
(ii) For Notices: c/o United Equities Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(iii)Copy To: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
General Counsel
Fiesta Mart, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(c) Tenant: C.A.I., L.P.,
a Texas limited partnership
(d) Tenant's Address:
(i) At the Demised
Premises: c/o Conn Appliances, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
(ii) For Notices:
(A) Prior to the c/o Conn Appliances, Inc.
Commencement ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇.
Date: ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(B) From and after the c/o Conn Appliances, Inc.
Commencement ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
Date: ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(iii)Contact ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, CEO
(iv) Copy To: ▇.▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇▇▇▇▇, DeCordova & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(e) Tenant's Taxpayer
Identification Number
or Social Security
Number: ▇▇-▇▇▇▇▇▇▇
Tenant's Telephone No: (▇▇▇) ▇▇▇-▇▇▇▇
Tenant's Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
(f) Tenant's Trade Name: "Conn's" and "Conn Appliances"
(g) Additional Charges: All rental and other amounts payable under
this Lease by Tenant, other than Minimum Guaranteed Rental.
(h) Commencement Date: The earlier of (i) one hundred twenty (120)
days after tender of possession of the Demised Premises to Tenant
by Landlord, or (ii) five (5) days after a certificate of
occupancy is issued with respect to the Demised Premises.
(i) Demised Premises: Approximately 88,283 square feet of space in
the Shopping Center and being the space circumscribed by red
lines on the Site Plan attached hereto as Exhibit "B". Tenant
acknowledges that in determining the number of square feet of
space in the Demised Premises, all distances have been measured
from the exterior face of all exterior walls and the center of
all partition walls which separate the Demised Premises from any
interior area. Upon determination of the exact square footage of
the Demised Premises, Tenant will execute a Confirmation of
Demised Premises reflecting the size of the Demised Premises and
matters related thereto, the form and substance of which is
attached hereto as Exhibit "G". With regard to the Site Plan, the
parties agree that the Site Plan is attached solely for the
purpose of locating the Shopping Center and the Demised Premises
within the Shopping Center and that no representation, warranty
or covenant is to be implied by any other information shown on
the Site Plan (i.e., any information as to buildings, tenants or
prospective tenants, etc. and is subject to change at any time).
(j) Guarantor; Conn Appliances, Inc. The form of the Guaranty
Agreement is attached as Exhibit "E").
(k) Late Charge: Ten percent (10%) of the delinquent amount on which
the Late Charge is imposed, as set forth in Section 4.8 below.
(1) Lease: This Shopping Center Lease Agreement.
(m) Lease Term: The period beginning on the Commencement Date and
ending on the last day of the one hundred twentieth (120th) full
calendar month after the Commencement Date.
(n) Lease Year: In the case of the first Lease Year, the period
beginning on the Commencement Date and ending on the last day of
the twelfth (12th) full calendar month after the Commencement
Date. Such first Lease Year shall include the partial month, if
any, at the commencement of the Lease Term if the Lease Term does
not commence on the first (1st) day of a calendar month. Each
subsequent Lease Year shall be the period of twelve (12) full
calendar months commencing with the date following the last day
of the preceding Lease Year and ending on the last day of the
twelfth (12th) full calendar month thereafter.
(o) Minimum Guaranteed Rental: $2,618,400.00, payable in monthly
installments as follows:
Months Monthly Rental
------ --------------
1-12 $17,722.00
13-60 $20,232.00
61-120 $23,910.00
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(p) Options to Renew: Two (2) two five (5) year options pursuant to
the provisions of Exhibit "H" attached hereto.
(q) Intentionally left blank.
(r) Intentionally left blank
(s) Permitted Use: Only for general office purposes and uses related
directly thereto, and for no other purpose whatsoever.
(t) Prepaid Rental and other charges: $24,269.66, being Minimum
Guaranteed Rental, Tenant's Estimated Pro Rata Share of Common
Area Costs, Real Estate Taxes, and Insurance Premiums for the
first month of the Lease Term.
(u) Rent: All Minimum Guaranteed Rental and Additional Charges.
(v) Security Deposit: - None -
(w) Shopping Center: Beaumont Shopping Center, a commercial shopping
center consisting of the existing and future buildings, parking
areas, sidewalks, service areas and other improvements now
existing or hereafter erected on the land located in the City of
Beaumont, Jefferson County, Texas, more particularly described in
Exhibit "A" attached hereto and made a part hereof for all
purposes.
(x) Site Plan: The map outlining the Shopping Center and showing the
Demised Premises in relation thereto, attached hereto as Exhibit
"B" and made a part hereof for all purposes.
(y) Tenant's Pro Rata Share: A fraction having as its numerator the
total number of square feet contained in the Demised Premises, as
set forth in Section 1.1(i) and having as its denominator the
total number of square feet contained in all rentable space in
all buildings in the Shopping Center (whether or not actually
leased) on the first day of January for the relevant calendar
year for which any calculation of Tenant's pro rata share is
being made. On the Effective Date hereof, Landlord represents
that the specified fraction is 88,283/137,514.
(z) Tenant's Pro Rata Share of Common Area Costs: Estimated to be
$43,258.18 for the first calendar year, based on an annual amount
equal to $0.49 per square foot of floor area in the Demised
Premises, payable in equal monthly installments of $3,604.89,
subject to adjustment as provided in Sections 6.4 and 6.5 below.
Should Tenant occupy the Demised Premises for any period less
than the full calendar year, Tenant's Pro Rata Share of Common
Area Costs shall be prorated accordingly to reflect the amount of
time Tenant actually occupies the Demised Premises.
(aa) Tenant's Pro Rata Share of Insurance Premiums: Estimated to be
$5,297.04 for the first calendar year, based on an annual amount
equal to $0.06 per square foot of floor area in the Demised
Premises, payable in equal monthly installments of $441.42,
subject to adjustment as provided in Section 18.4. Should Tenant
occupy the Demised Premises for any period less than the full
calendar year, Tenant's Pro Rata Share of Insurance Premiums
shall be prorated accordingly to reflect the amount of time
Tenant actually occupies the Demised Premises.
(bb) Tenant's Pro Rata Share of Taxes: Estimated to be $30,016.20 for
the first calendar year, based on an annual amount equal to $0.34
per square foot of floor area in the Demised Premises, payable in
equal monthly installments of
3
$2,501.35, subject to adjustment as provided in Section 18.2.
Should Tenant occupy the Demised Premises for any period less
than the full calendar year, Tenant's Pro Rata Share of Taxes
shall be prorated accordingly to reflect the amount of time
Tenant actually occupies the Demised Premises.
(cc) Hazardous Substance shall mean any substance or material defined
or designated as hazardous or toxic waste, hazardous or toxic
material, a hazardous or toxic substance, or other similar term,
by any federal, state or local environmental health, safety or
similar laws, statutes, rules, regulations or ordinances
presently in effect or which may be promulgated in the future, as
such laws, statutes, rules, regulations and/or ordinances may be
supplemented or amended from time to time (collectively,
"Environmental Laws").
1.2 Construction of Definitions. Each of the foregoing definitions and
basic provisions shall be construed in conjunction with and limited by the
references thereto in the other provisions of this Lease.
ARTICLE II. TERM
In consideration of the obligation of Tenant to pay Rent as herein provided
and perform Tenant's other obligations performable by Tenant under the
provisions of this Lease, and in consideration of the other terms, covenants and
conditions hereof, Landlord hereby demises and leases to Tenant, and Tenant
hereby takes from Landlord, the Demised Premises. TO HAVE AND TO HOLD the
Demised Premises for the Lease Term all upon the terms and conditions set forth
in this Lease. Landlord further agrees that if Tenant shall perform all of the
covenants and agreements herein required to be performed by Tenant, Tenant
shall, subject to the terms of this Lease, at all times during the continuance
of this Lease have peaceful and quiet possession of the Demised Premises.
ARTICLE III. ACCEPTANCE OF PREMISES
3.1 Suitability of Demised Premises. By occupying the Demised Premises,
Tenant shall be deemed to have accepted the same and to have acknowledged that
the same comply fully with Landlord's covenants and obligations hereunder.
Tenant represents and warrants to Landlord that Tenant has, prior to the
execution of this Lease, fully inspected the Demised Premises and that Tenant
has made, performed and obtained all studies, inspections, reports and tests
that Tenant desires relative to the condition of the Demised Premises and
Tenant's proposed use thereof. Tenant acknowledges and agrees that, except as
otherwise expressly provided in this Lease, Tenant is accepting the Demised
Premises in its present "AS-IS," "WHERE-IS" condition, "WITH ALL FAULTS". Tenant
further represents and warrants that it has used all due diligence in conducting
such studies, inspections and tests on the Demised Premises that Tenant deemed
necessary or appropriate. By execution of this Lease by Tenant, Tenant shall be
deemed to have acknowledged that the roof, mechanical, electrical and plumbing
systems and the heating and air conditioning system with respect to the Demised
Premises are in good working condition, reasonable wear and tear excepted and
that Landlord is under no obligation to make any improvements whatsoever with
respect to the Demised Premises or the Shopping Center. Tenant further
acknowledges that except as herein expressly set forth with specificity to the
contrary, Landlord has not made and does not make, and Landlord hereby
disclaims, any and all other warranties, expressed or implied, which in any way
relate to the Demised Premises or the condition thereof, including, without
limitation, any implied warranty of suitability or habitability. Tenant further
understands that Landlord has relied upon Tenant's representations and
warranties aforesaid and Tenant's having made all inspections desired by Tenant
prior to leasing the Demised Premises from Landlord, and that but for such
inspections by Tenant, Landlord would not have leased the Demised Premises to
Tenant. Additionally, the parties hereto agree that the obligation of Tenant to
pay all Rent and other sums hereunder provided to be paid by Tenant, and the
obligation of Landlord to perform Landlord's covenants and duties hereunder
constitute independent, separate and unconditional obligations to be performed
at all times provided for hereunder, save and except only when an abatement
thereof or reduction therein is expressly provided for herein and not otherwise.
Except as herein expressly provided to the contrary, Tenant waives and
relinquishes all rights which Tenant might have to
4
claim any nature of a lien against or withhold or deduct from or offset against
any Rent or other sums provided hereunder to be paid to Landlord by Tenant,
including without limitation, any rights Tenant might otherwise have under
Section 91.004 of the Texas Property Code.
3.2 Tender of Possession. Possession for the purpose of performing the
Tenant Work as hereinafter defined, will be tendered on the date that Landlord
executes this Lease (the "Delivery Date").
3.3 Memorandum of Lease. Tenant agrees that at the request of Landlord it
will execute and deliver a short form or memorandum of lease in recordable form
containing the basic provisions of this Lease and acknowledging that Tenant has
accepted possession and reciting the exact Commencement Date and termination
date of this Lease.
3.4 [Intentionally Left Blank].
ARTICLE IV. RENTAL
4.1 Accrual of Rental. Rental shall accrue hereunder from the Commencement
Date, and shall be payable to Landlord at the address specified in Section
1.1(b)(i) above, or at such other address as Landlord may designate from time to
time by written notice to Tenant. All Rent and other- sums provided to be paid
by Tenant hereunder shall be due and payable to Landlord without demand,
deduction, abatement or set-off except as expressly provided herein.
4.2 Minimum Guaranteed Rental. Tenant shall pay to Landlord Minimum
Guaranteed Rental in monthly installments in the amounts specified in Section
1.1 (o) above. The number of installments of Minimum Guaranteed Rental included
in the amount specified in Section 1.1(t) shall be due and payable on the
execution of this Lease by Tenant and subsequent installments shall be due and
payable on or before the first day of each calendar month during the Lease Term;
provided that if the Commencement Date is a date other than the first day of a
calendar month, there shall be due and payable on or before such date as Minimum
Guaranteed Rental for the balance of such calendar month a sum equal to that
proportion of the Minimum Guaranteed Rental specified for the first full
calendar month as herein provided, which the number of days from the
Commencement Date to the end of the calendar month during which the Commencement
Date shall fall bears to the total number of days in such month.
4.3 Intentionally Left Blank.
4.4 Intentionally Left Blank.
4.5 Intentionally Left Blank.
4.6 Interest on Past Due Rentals. It is understood that the Minimum
Guaranteed Rental and Additional Charges are payable on or before the first day
of the month (as provided elsewhere in this Lease), without offset or deduction
of any nature. In the event any Rent is not received within three (3) business
days after its due date for any reason whatsoever, it is agreed that the amount
then due shall bear interest at the maximum contractual rate which could legally
be charged under applicable law in the event of a loan of such amounts to Tenant
(but in no event to exceed 1-1/2% per month), such interest to accrue
continuously on any unpaid balance due to Landlord by Tenant during the period
commencing with the aforesaid due date and terminating with the date on which
Tenant makes full payment of all amounts, owing to Landlord at the time of said
payment. Any such interest shall be payable as an Additional Charge hereunder
and shall be payable immediately on demand.
4.7 Intentionally Left Blank.
4.8 Late Charge; Returned Checks. If any Rent is not received by Landlord
prior to three (3) business days after Landlord's written notice to Tenant that
monthly Rent has not been received, the Late Charge shall be due and payable (in
addition thereto). Notwithstanding the foregoing, Landlord shall only be
obligated to provide two (2) such notices during any Lease Year, after which, no
further notice shall be required and the Late Charge shall be due and payable
three (3) business
5
days after the Rent's due date. Such Late Charge is for the purpose of
reimbursing Landlord for the extra cost and expense incurred in connection with
the handling and processing of such late payment. To the extent any personal or
corporate check is returned to Landlord, Tenant will pay Landlord a fee equal to
$100.00 to reimburse Landlord for the extra cost and expense incurred in
connection with the handling and processing of such returned item.
ARTICLE V. INTENTIONALLY LEFT BLANK.
ARTICLE VI. COMMON AREA
6.1 Use and Regulation of Common Area. The term "Common Area" is defined
for all purposes of this Lease as that part of the Shopping Center intended for
the common use of all tenants, including among other facilities (as such may be
applicable to the Shopping Center) parking areas, private streets and alleys,
landscaping, curbs, loading area, sidewalks, malls and promenades (enclosed or
otherwise), gutters and down-spouts, sprinkler risers serving all or any
buildings in the Shopping Center, drainage facilities, lighting facilities,
drinking fountains, meeting rooms, public toilets, Shopping Center signs,
service areas, common utility lines, pipes and conduits and the like but
excluding space in buildings (now or hereafter existing) designed for rental for
commercial purposes, as the same may exist from time to time, and further
excluding streets and alleys maintained by a public authority. Landlord reserves
the right to change from time to time the dimensions and location of the Common
Area including, without limitation, changes in the location or configuration of
driveways, entrances, exits, vehicular parking spaces, parking areas or the
direction of the flow of traffic, as well as the dimensions, identity and type
of any buildings in the Shopping Center. Except as hereinafter provided, Tenant,
and its employees and customers, and when duly authorized pursuant to the
provisions of this Lease, its subtenants, licensees and concessionaires, shall
have the non-exclusive right to use the Common Area as constituted from time to
time, such use to be in common with Landlord, other tenants of the Shopping
Center and other persons permitted by Landlord to use the same, and subject to
such reasonable rules and regulations governing use as Landlord may from time to
time uniformly prescribe, except that in all events, since Tenant will not be
conducting a retail sales operation from the Demised Premises, Tenant's
employees, invitees, subtenants, licensees and concessionaires shall be entitled
to park at all times, on an equal basis, first come, first served, upon the
general parking areas of the Shopping Center, as Shopping Center customers
and/or invitees of other tenants, and not as "employees". Tenant will not load
or unload any trucks or permit any trucks serving the Demised Premises, whether
owned by Tenant or not, to be loaded or unloaded in the Shopping Center, except
in the areas specifically designated for such use by Landlord. Tenant shall not
solicit business or display or offer for sale merchandise within the Common Area
or at any other point outside the Demised Premises or distribute handbills in
the Common Area or take any action which would interfere with the rights of
other persons to use the Common Area. In addition, Tenant shall not hang, place
or otherwise maintain or permit to be hanged, placed or otherwise maintained in
the Common Area or on any building in the Shopping Center any sign, banner or
pennant. If Tenant violates the foregoing prohibition, Landlord shall have the
right to remove any such unauthorized sign, banner or pennant and dispose of the
same as Landlord sees fit, and Tenant shall reimburse Landlord for all costs and
expenses incurred by Landlord in effecting such removal and disposition.
Landlord may temporarily close any part of the Common Area for such periods of
time as may be reasonably necessary to make repairs or alterations or to prevent
the public from obtaining prescriptive rights. Landlord shall have the right to
designate specified smoking areas in the Common Area and Tenant shall cause its
employees to utilize this smoking area as the only permitted area in the
Shopping Center where smoking by Tenant's employees shall be permitted. Tenant
shall be obligated to clean and maintain the smoking area and receptacles placed
therein at Tenant's sole cost and expense. Should Tenant fail to properly
maintain said area, Landlord shall be entitled to maintain and clean the smoking
area whereupon Tenant shall be obligated to reimburse Landlord for the cost
thereof within thirty (30) days of being invoiced therefore. Notwithstanding
anything contained in this Lease to the contrary, certain portions of the
parking area located in the Shopping Center are hereby designated as exclusive
parking for Tenant while other areas have been designated as exclusive parking
for Specialties Entertainment, Inc. dba Golden Nugget Bingo ("Specialties"), all
as depicted more fully on the Site Plan attached hereto as Exhibit "B". Landlord
shall, as a Common Area Cost, properly ▇▇▇▇ and designate those areas which are
for the exclusive parking of Tenant and Specialties, respectively. Any portion
of the parking areas not designated as either exclusive for Tenant or
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Specialties are available for use by all tenants of the Shopping Center. Nothing
contained herein is intended to authorize Tenant to tow any unauthorized
vehicles parked in Tenant's exclusive parking areas.
6.2 Substitute Parking. Landlord may from time to time substitute, as to
all tenants of the Shopping Center on a uniform basis, for any parking area
other areas reasonably accessible to the tenants of the Shopping Center, which
areas may be elevated, surface or underground.
6.3 Maintenance of Common Area. Landlord shall be responsible for the
operation, management, and maintenance of the Common Area, the manner of such
maintenance and the expenditures therefor to be in the sole discretion of
Landlord, conditioned that operation, management and maintenance shall be
consistent with standard shopping center practices of similar sized shopping
centers in Beaumont, Jefferson County, Texas.
6.4 Common Area Costs. In addition to Rent and other charges prescribed in
this Lease, Tenant shall pay to Landlord Tenant's Pro Rata Share of Common Area
Costs. The term "Common Area Costs", as used herein, means all costs and
expenses of every kind and nature which may be paid or incurred by Landlord
during the Lease Term in operating, managing, policing, equipping, lighting,
repairing, replacing and maintaining the Common Area, including, without
limitation, costs of resurfacing and re-striping the parking area; repainting,
cleaning, sweeping, and other janitorial services provided to the Common Area;
security guards and other security services and systems (Landlord makes no
representation it will provide any security services whatsoever); purchase,
construction and maintenance of refuse receptacles; planting and re-landscaping
including the cost of installing and maintaining a sprinkler system and related
equipment; cost of maintaining or installing directional signs and other
markers; car stops; traffic control expenses including the cost of hiring off
duty policemen for such purpose; lighting and other utilities provided to the
Common Area, including the cost of tubes, bulbs and ballasts; repairing and
maintaining overhead canopies; repairing gutters and down-spouts; exterminating
and pest control in and about the Shopping Center; professional fees and
expenses incurred by Landlord for ad valorem tax consultants or tax-rendering
services; maintenance and repair (but not replacement) of utility systems,
including water, sanitary and storm sewer lines and other utility lines, pipes
and conduits within the Common Area; drainage systems serving the Shopping
Center; rental charges or depreciation if owned, for machinery and equipment
used in operation, maintenance and repair of the Common Area; installing,
operating and maintaining Shopping Center identification signs; premiums on
public liability and property damage insurance; costs of personnel to implement
all of the foregoing, including wages, unemployment taxes, social security taxes
and workmen's compensation insurance premiums; personal property taxes; fees for
required licenses and permits; supplies; any modifications to the Common Area
precipitated by applicable governmental statutes, regulations, rules or demands,
including without limitation, the Americans With Disabilities Act; and an
allowance to Landlord for Landlord's supervision of the Common Area and for
accounting, bookkeeping and collection costs in an amount equal to fifteen
percent (15%) of the total of all Common Area Costs (but there shall be excluded
from Common Area Costs depreciation of the cost of constructing, erecting and
installing the Common Area). Landlord may cause any or all of said services to
be provided by a third party contractor or contractors (which may be an
affiliate of Landlord) and all fees, charges and expenses paid to such
contractors shall be a Common Area Cost. Tenant shall make such payments to
Landlord monthly, in advance, with the regular monthly installments of Minimum
Guaranteed Rental due and payable pursuant to this Lease, such monthly payments
being based upon the Landlord's estimate of the annual Common Area Costs,
payable in advance but subject to adjustment from time to time by Landlord
during the Lease Term on the basis of the actual Common Area Costs for such
calendar year. Following the end of each calendar year occurring during the
Lease Term, Landlord will give Tenant notice of the total amount paid by Tenant
for the relevant calendar year together with the actual amount of Tenant's Share
of Common Area Costs for such calendar year. If the actual amount of Tenant's
Share of such Common Area Costs with respect to such period exceeds the
aggregate amount previously paid by Tenant with respect thereto during the such
period, Tenant shall pay to Landlord the deficiency within ten (10) days
following notice from Landlord. If, however, the aggregate amount previously
paid by Tenant with respect thereto exceeds Tenant's Share of such Common Area
Costs for such period, then, Landlord shall refund such net surplus to Tenant.
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6.5 Tenant's Audit Rights. Landlord will maintain accurate records of all
costs and expenses incurred by Landlord which constitute Common Area Costs.
Tenant shall have the right to inspect and/or audit Landlord's books and records
relating to Common Area Costs and request copies of specific supporting
documentation pertaining thereto for any Lease Year during the Lease Term and
any renewal thereof. Should Tenant elect to audit the Common Area Costs, Tenant
shall advise Landlord in writing of such request within one hundred twenty (120)
days of Tenant's receipt of the year end reconciliation reflecting the total
amount due and owing from Tenant with respect to the immediately preceding
calendar year. Should Tenant fail to timely elect to proceed with its audit
rights pursuant hereto, Tenant shall be deemed to have accepted Landlord's
report and Tenant shall have no right to proceed with the audit for such
calendar year. Any such inspection or audit conducted by Tenant shall be
conducted at Landlord's office during normal business hours. Tenant shall not be
entitled to have more than two people in Landlord's office at any time and
Tenant shall proceed on an expedited basis to conclude such audit in a
reasonable time. If Landlord and Tenant mutually agree that an error occurred
and the amount of such error, Landlord shall refund Tenant such amount within
thirty (30) days or Tenant shall pay within thirty (30) days such additional
amount to Landlord as reflected by the audit. If the parties cannot agree on
whether errors exist or the cumulative amount of any errors, then the parties
shall submit such dispute for resolution to a panel of not more than three
arbitrators with one arbitrator selected by Landlord, one by Tenant and one
selected by the foregoing two arbitrators. The arbitrators shall be certified
public accountants with at least ten years experience in the real estate
industry and none of the arbitrators shall work for or have been employed by
Landlord or Tenant for at least three (3) years prior to such appointment. After
at least ten (10) days prior written notice to Landlord and Tenant, such
arbitrators shall hold a hearing at which Landlord and Tenant may present
evidence and such arbitrators shall render a written decision within twenty (20)
days after the date of such hearing. The decision of the arbitrators will be
final, binding and non-appealable. The non-prevailing party in such dispute
shall pay the reasonable cost of such arbitration. In the event of an
overstatement of charges pertaining to Common Area Costs exceeds 5% of the sum
actually due and owing by Tenant to Landlord, Landlord shall reimburse Tenant
for the reasonable expenses of such audit not to exceed however, $500.00.
Notwithstanding any dispute between Landlord and Tenant concerning Common Area
Costs, Tenant shall nevertheless continue to pay the monthly estimates of Common
Area Costs as provided in this Lease.
ARTICLE VII. USE
7.1 Use of Demised Premises. The Demised Premises may be used only for the
purpose or purposes specified in Section 1.1(s) above, and for no other purposes
without the prior written consent of Landlord. Tenant shall use in the
transaction of business in the Demised Premises the trade name specified in
Section 1.1(f) above and no other trade name without the prior written consent
of Landlord. No public or private auction or any fire, "going out of business,"
liquidation, "lost-our-lease," bankruptcy or similar sale or auctions or
"wholesale or factory outlet store" a "second hand" store, a "surplus" store,
shall be conducted in or from the Demised Premises. Tenant shall not, without
Landlord's prior written consent, keep anything within the Demised Premises or
use the Demised Premises for any purpose which increases the insurance premium
cost or invalidates any insurance policy carried on the Demised Premises or
other parts of the Shopping Center. All property kept, stored or maintained
within the Demised Premises by Tenant shall be at Tenant's sole risk. During the
term of this Lease, Tenant shall not install any public telephones or arcade
games in or about the Demised Premises or the Shopping Center and shall not
install any vending machines in the Common Area of the Shopping Center. Any
attempt to install or the actual installation by Tenant of public telephones or
arcade games in or about the Demised Premises or the Shopping Center shall
constitute a default by Tenant under this Lease.
7.2 Continuous Operation. Tenant shall not at any time leave the Demised
Premises vacant, but shall in good faith continuously throughout the term of
this Lease conduct and carry on in the entire Demised Premises the business for
which the Demised Premises are leased. Notwithstanding the foregoing, in the
event Tenant determines to cease operating its business at the Demised Premises,
Tenant shall have the right to cease operating its business at the Demised
Premises provided (i) Tenant shall notify Landlord at least ninety (90) days
prior to the date Tenant intends to close its business at the Demised Premises,
and (ii) Tenant shall continue to be obligated to pay all amounts due under this
Lease and to perform all covenants and obligations hereunder for
8
the Lease Term. To the extent Tenant ceases operating its business in the
Demised Premises or vacates the Demised Premises, Landlord will have the option
at any time thereafter to terminate this Lease whereupon Landlord and Tenant
will be released from all further liabilities and obligations under the Lease
from and after the effective date of such termination except for those matters
which survive the termination or expiration of this Lease.
7.3 Operation of Business. Tenant shall not permit any objectionable or
unpleasant odors to emanate from the Demised Premises; nor place or permit any
radio, television, loudspeaker or amplifier on the roof or outside the Demised
Premises or where the same can be seen or heard from outside the building in
which the Demised Premises are located; nor place any antenna, awning or other
projection on the exterior of the Demised Premises; nor take any other action
which would constitute a nuisance or would disturb or endanger other tenants of
the Shopping Center or unreasonably interfere with their use of their respective
premises; nor do anything which would tend to injure the reputation of the
Shopping Center. Tenant shall maintain all display windows in a neat, attractive
condition, and shall keep all display windows, exterior electric signs and
exterior lighting under any canopy in front of the Demised Premises lighted from
dusk until 10:00 o'clock p.m. every day, including Sundays and holidays.
7.4 Disposal of Trash. Tenant shall take good care of the Demised Premises
and keep the same free from waste at all times. Tenant shall keep the Demised
Premises and sidewalks, service-ways and loading areas adjacent to the Demised
Premises neat, clean and free from dirt or rubbish at all times, and shall store
all trash and garbage within the Demised Premises, arranging for the regular
pick-up of such trash and garbage at Tenant's expense. Receiving and delivery of
goods and merchandise and removal of garbage and trash shall be made only in the
manner and areas prescribed by Landlord. Tenant shall not operate an incinerator
or burn trash or garbage within the Shopping Center area. Tenant shall provide
for its own trash and garbage removal as specified in Exhibit "F" attached
hereto.
7.5 Compliance with Laws. Tenant shall procure at its sole expense any
permits and licenses required for the transaction of Tenant's business in the
Demised Premises and otherwise comply with all applicable laws, codes,
ordinances and governmental rules and regulations applicable to the Demised
Premises and the business conducted therein by Tenant, including without
limitation, the Americans With Disabilities Act and the Texas Architectural
Barriers Act.
7.6 Alterations by Landlord. Tenant acknowledges that neither Landlord nor
any agent of Landlord has agreed to undertake any modification, alteration or
improvement to the Demised Premises.
ARTICLE VIII. MAINTENANCE AND REPAIRS
8.1 Landlord's Obligations. Landlord, at Landlord's expense shall keep the
foundation and exterior walls (except plate glass; windows, doors, door closure
devices and other exterior openings; window and door frames, molding, locks and
hardware; special store fronts; lighting, heating, air conditioning, plumbing
and other electrical, mechanical and electromotive installations, equipment and
fixtures; signs, placards, decorations or advertising media of any type; damage
caused by break-ins or attempted break-ins to the Demised Premises; and interior
painting) and roof (excluding, however, damage to flashing around rooftop air
conditioning units caused by the activities of Tenant or Tenant's contractors,
which shall be Tenant's expense) in good repair. Landlord, however, shall not be
required to make any repairs occasioned by the act or negligence of Tenant, its
agents, employees, subtenants, licensees and concessionaires; and the provisions
of the previous sentence are expressly recognized to be subject to the
provisions of Article XV and Article XVI of this Lease. In the event that the
Demised Premises should become in need of repairs required to be made by the
Landlord hereunder, Tenant shall give immediate written notice thereof to
Landlord; and Landlord shall not be responsible in any way for failure to make
any such repairs until a reasonable time shall have elapsed after receipt by
Landlord of such written notice. Further, to the extent Tenant fails to timely
notify Landlord pursuant hereto, Tenant shall be responsible for the additional
costs incurred by Landlord to effect such repairs as the result of Tenant's
failure to timely notify Landlord thereof.
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8.2 Tenant's Obligations. Tenant shall keep the Demised Premises in good,
clean and habitable condition and shall at its sole cost and expense keep the
Demised Premises free of insects, rodents, vermin and other pests and make all
needed repairs and replacements, including replacement of cracked or broken
glass except for repairs and replacements required to be made by Landlord under
the provisions of Section 8.1, Article XV and Article XVI. Without limiting the
coverage of the previous sentence, it is understood that Tenant's
responsibilities shall include the repair and replacement of all lighting,
heating, air conditioning, plumbing and other electrical, mechanical and
electromotive installation, equipment and fixtures; all utility repairs in
ducts, conduits, pipes and wiring in the Demised Premises; any sewer stoppage
located in, under and above the Demised Premises; and all damage caused by
break-ins or attempted break-ins to the Demised Premises. In the event that any
roof penetration is required in connection with any repairs or maintenance
required to be made by Tenant hereunder, Landlord shall perform such roof
penetration at Tenant's cost within a reasonable time after notice from Tenant,
in which event Tenant shall reimburse Landlord, upon demand, for the cost
thereof or, at Landlord's option, such roof penetration shall be performed by
Tenant, using a contractor approved, in advance, by Landlord. If any repairs
required to be made by Tenant hereunder are not made within thirty (30) days
after written notice delivered to Tenant by Landlord, Landlord may at its option
make such repairs without liability to Tenant for any loss or damage which may
result to its inventory or other property or business by reason of such repairs;
and Tenant shall pay to Landlord upon demand, as additional Rent hereunder, the
cost of such repairs plus interest at the rate of eighteen percent (18%) per
annum, such interest to accrue continuously from the date of payment by Landlord
until repayment by Tenant. At the expiration of this Lease, Tenant shall
surrender the Demised Premises in good condition, excepting reasonable wear and
tear and losses required to be restored by Landlord under Section 8.1, Article
XV and Article XVI of this Lease. Notwithstanding anything contained in this
Lease to the contrary, should Tenant cause any work to be performed on the roof
of the building in which the Demised Premises is a part and such work voids or
otherwise adversely impacts any existing roof warranty, Tenant shall be
responsible for all damages, claims, costs and expenses incurred by Landlord as
a result of the voiding or impacting of the roof warranty. Any such damages,
claims, costs and expenses will be due and payable by Tenant to Landlord upon
demand by Landlord.
ARTICLE IX. ALTERATIONS
9.1 Required Approval and Renewals. Tenant shall not make any alterations,
additions or improvements to the Demised Premises without the prior written
consent of Landlord, and without Landlord's prior written approval of Tenant's
plans and specifications for any such alterations, additions or improvements,
except for the installation of unattached, movable trade fixtures which may be
installed without drilling, cutting or otherwise defacing the Demised Premises
or any other portion of the Shopping Center. The submission and approval of
Tenant's plans and specifications shall be in accordance with the provisions of
Exhibit "C" attached hereto and made a part hereof. All alterations, additions,
improvements and fixtures (other than Tenant's unattached, readily movable
furniture and office equipment) which may be made or installed by either party
in the Demised Premises including without limitation, the heating, ventilating
and air conditioning system and equipment, shall be surrendered with the Demised
Premises and become the property of Landlord at the termination of this Lease,
unless Landlord requests their removal in which event Tenant shall remove the
same and restore the Demised Premises to their original condition at Tenant's
expense.
9.2 Construction by Tenant. All construction work done by Tenant within the
Demised Premises shall be performed in accordance with Exhibit "C" attached
hereto and incorporated herein for all purposes by this reference.
ARTICLE X. ACCESS
10.1 Entry by Landlord. Landlord shall have the right to enter upon the
Demised Premises at any time during normal business hours, with not less than
one (1) days' notice to Tenant (provided, however, no notice shall be required
in the event of an emergency), for the purpose of inspecting the same, or of
making repairs to the Demised Premises, or of making repairs, alterations or
additions to adjacent premises, or of showing the Demised Premises to
prospective purchasers,
10
lessees or lenders or of removing non-conforming signs, graphics and other
materials under the provisions of Article XI hereof.
10.2 Placement of Signs. Tenant will permit Landlord to place and maintain
"For Rent" or "For Lease" signs on the Demised Premises during the last ninety
(90) days of the Lease Term, it being understood that such signs shall in no way
affect Tenant's obligations under any provision of this Lease.
ARTICLE XI. EXTERIOR CHANGES AND SIGNS
Tenant shall not, without Landlord's prior written consent (a) make any
changes to the store front or (b) install any exterior lighting, decorations,
paintings, awnings, canopies or the like or (c) erect or install any signs,
window or door lettering, placards, decorations or advertising media of any type
which can be viewed from the exterior of the Demised Premises, excepting only
dignified displays in its display windows. All signs, lettering, placards,
decorations and advertising media shall conform in all respects to the sign
criteria attached hereto as Exhibit "D" and as otherwise established by Landlord
for the Shopping Center from time to time in its sole discretion, and shall be
subject to the prior written approval of Landlord as to construction, method of
attachment, size, shape, height, lighting, color and general appearance. All
signs shall be kept in good condition and in proper operating order at all
times. Tenant shall submit to Landlord a design for Tenant's building sign which
design shall conform to the sign and graphics criteria attached hereto as
Exhibit "D". If the design of Tenant's sign complies with the sign criteria and
is otherwise satisfactory to Landlord, Tenant shall thereafter install or cause
to be installed such sign at Tenant's sole cost and expense. Tenant shall
immediately remove any signs, window or door lettering, placards, decorations or
advertising media of any type which is not in conformity with the above
mentioned sign and graphics criteria. In the event such removal is not completed
within twenty-four (24) hours following written demand for such removal by
Landlord, Landlord shall have the right to enter upon the Demised Premises
during normal business hours and remove all such non-conforming signs, window or
door lettering, placards, decorations or advertising media at Tenant's sole cost
and expense. If Tenant shall elect to install a sign on the Demised Premises,
Tenant shall cause Tenant's building sign to be placed on a time clock device
which will cause such sign to be illuminated automatically, from dusk until
12:00 midnight every day during the Lease Term.
ARTICLE XII. UTILITIES
12.1 Facilities. Landlord agrees to cause to be provided the necessary
mains, conduits and other facilities to be available in the Shopping Center to
the exterior walls of the Demised Premises for tap-in by Tenant, so as to enable
Tenant to run the necessary lines to secure the water, electricity, telephone
service and sewage service required by Tenant in the Demised Premises.
12.2 Payment for Services. Tenant shall promptly pay, prior to delinquency,
all charges for electricity, water, telephone service, sewage service and other
utilities furnished to the Demised Premises.
12.3 Water Usage Charges. Tenant shall pay to Landlord, Tenant's Pro Rata
Share of Water Usage Charges as calculated by Landlord on an equitable basis
with respect to all such water usage which is metered to Tenant in common with
other tenants of the Shopping Center. Tenant shall pay to Landlord in monthly
installments, on the same dates as and in addition to the monthly installment of
Minimum Guaranteed Rental and Additional Charges, an amount equal to one-twelfth
(1/12th) of Tenant's Pro Rata Share of Water Usage Charges, as estimated by
Landlord in good faith from time to time. As soon as practicable after the close
of each calendar year during the Lease Term, Landlord shall furnish a statement
in writing to Tenant specifying the actual amount due by Tenant in respect of
Tenant's Pro Rata Share of Water Usage Charges. In the event the total of the
monthly payments theretofore paid by Tenant under this Section 12.3 for such
year exceeds the actual amount due, then the excess shall be applied pro rata as
a credit on the monthly installments thereafter becoming due under this Section
12.3. In the event the total of the monthly payments theretofore paid by Tenant
under this Section 12.3 for such year is less than the actual amount due, any
such deficiency shall be due and payable by Tenant to Landlord within thirty
(30) days after Tenant's receipt of such statement. During any year which shall
be less than a full calendar year,
11
Tenant's Pro Rata Share of Water Usage Charges shall be pro rated on a daily
basis between the parties to the end that Tenant shall only pay for water
charges attributable to the portion of the calendar year occurring within the
Lease Term. Tenant's audit rights specified in Section 6.5 above shall likewise
apply to Water Usage Charges.
12.4 Interruption in Service. Landlord shall not be liable for any
interruption whatsoever in utility services not furnished by it, nor for
interruptions in utility services furnished by it which are due to fire,
accident, strike, acts of God or other causes beyond the control of Landlord or
in order to make alterations, repairs or improvements.
12.5 Utility Deregulation. Landlord has advised Tenant that presently
Entergy ("Electric Service Provider") is the utility company selected by
Landlord to provide electricity service for the Shopping Center. Notwithstanding
the foregoing, if permitted by applicable law, Landlord shall have the exclusive
right in its sole discretion at any time and from time to time during the Lease
Term or any renewal thereof, to either contract for services from a different
company or companies providing electricity service (each such company shall
hereinafter be referred to as an "Alternate Service Provider"), or continue to
contract for service from the Electric Service Provider, conditioned that no use
of an Alternate Service Provider shall result in an increase in Tenant's
electrical charges over rates then available from the Electric Service Provider.
Tenant shall cooperate with Landlord, the Electric Service Provider and any
Alternate Service Provider at all times and, as reasonably necessary, shall
allow Landlord, Electric Service Provider, and any Alternate Service Provider
reasonable access to the Demised Premises' electric lines, feeders, risers,
wiring, and any other machinery and equipment within the Demised Premises as it
relates to the electric service provided thereto.
ARTICLE XIII. INSURANCE AND INDEMNITY
13.1 Indemnity. Landlord shall not be liable to Tenant or to Tenant's
employees, agents, or visitors, or to any other person whomsoever, for any
injury to person or damage to property on or about the Demised Premises or the
Common Area caused by the act, negligence or misconduct of Tenant, its
employees, subtenants, licensees or concessionaires, or of any other person
entering the Shopping Center under express or implied invitation of Tenant, or
arising out of the use of the Demised Premises by Tenant and the conduct of its
business therein, or arising out of any breach or default by Tenant in the
performance of its obligations hereunder; and Tenant hereby agrees (except for
claims as to which the Landlord shall have waived rights of subrogation) to
indemnify Landlord and hold Landlord harmless from any loss, liability, expense
or claims arising out of such damage or injury or on account of any occurrence
in, upon or at the Demised Premises and/or the Shopping Center, or resulting
from the occupancy or use thereof by Tenant, Tenant's customers, invitees,
agents, contractors, employees, subtenants, assignees, licensees or
concessionaires or by reason of the use or misuse by Tenant or any such person
of the parking area or any other Common Areas in the Shopping Center; and,
without limiting the generality of the foregoing, Tenant further covenants and
agrees to indemnify and save Landlord harmless from and against any penalty,
damage or charge incurred or imposed by reason of any violation of law or
ordinance by Tenant. THE FOREGOING INDEMNITY SHALL NOT TERMINATE UPON RELEASE OR
OTHER TERMINATION OF THIS LEASE WITH RESPECT TO ANY CIRCUMSTANCE OR EVENT
EXISTING OR OCCURRING PRIOR TO SUCH RELEASE OR TERMINATION, BUT WILL SURVIVE
TERMINATION OF THIS LEASE. In the event of any action or claim against which
Landlord is entitled to indemnification hereunder, Tenant shall immediately
notify Landlord of the same and shall furnish Landlord with all relevant
information concerning such action or claim, and Landlord shall be entitled, at
Tenant's expense, to participate in, and to the extent that Landlord wishes, to
assume the defense thereof. The indemnification given by Tenant pursuant to this
Section 13.1 shall in no event apply to any claim, fine, cause of action, damage
or expense arising out of the negligence or misconduct of Landlord or Landlord's
officers, directors, shareholders, employees, servants and agents.
13.2 Tenant's Liability Insurance. Tenant shall procure and maintain
throughout the term of this Lease a policy or policies of Commercial General
Liability Insurance, at its sole cost and expense, insuring Tenant and covering
Tenant's use or occupancy of the Demised Premises, the limits of such policy or
policies to be in an amount not less than $2,000,000.00 combined single
12
limit, to be written by insurance companies authorized to transact business in
the State of Texas with a Best's Rating of "A" or higher, with not less than a
$3,000,000.00 Excess Liability or Commercial Umbrella Policy in addition
thereto. The Commercial General Liability Policy and the Excess Liability and/or
Commercial Umbrella Policy shall name Landlord (and any of its affiliates,
subsidiaries, successors and assigns designated by Landlord) as an additional
insured. Tenant shall obtain a written obligation on the part of each insurance
company to notify Landlord at least thirty (30) days prior to cancellation of or
any material change in such policies. Such policies or duly executed
certificates of insurance shall be promptly delivered to Landlord and renewals
thereof as required shall be delivered to Landlord at least thirty (30) days
prior to the expiration of the respective policy terms. If Tenant should fail to
comply with the foregoing requirements relating to liability insurance, Landlord
may obtain such insurance and Tenant shall pay to Landlord on demand as
additional Rent hereunder the premium cost thereof plus interest at the rate of
eighteen percent (18%) per annum from the date of payment until repaid by
Tenant. Further, should Tenant fail to deliver Landlord the required insurance
policies or certificates of insurance within twenty (20) days after written
demand therefore by Landlord, Tenant shall be obligated to pay Landlord a fee
equal to $250.00. Notwithstanding the foregoing, Landlord shall have the right
to modify the amount of the respective insurance coverage required in this
Section 13.2 at the commencement of any renewal term provided for in this Lease
to such amounts as reasonably determined by Landlord provided Landlord carries
the same limits of insurance pursuant to Section 13.4 below.
13.3 Tenant's Fire Insurance. Tenant agrees to take out and maintain at all
times during the Lease Term a policy of fire and extended coverage insurance on
its leasehold improvements, alterations, trade fixtures, inventory and other
personal property placed in or upon the Demised Premises from time to time in
such amounts as are acceptable to Landlord. Such policy shall contain a
replacement cost endorsement. Any policy proceeds shall be used for the repair
or replacement of the property damaged or destroyed unless this Lease is
terminated under the other provisions hereof. A certified copy of such policy or
policies shall be delivered to Landlord reflecting the payment of the premiums
for such policies. Further, should Tenant fail to deliver Landlord the required
insurance policies or certificates of insurance within twenty (20) days after
written demand therefore by Landlord, Tenant shall be obligated to pay Landlord
a fee equal to $250.00.
13.4 Landlord's Liability Insurance. Landlord agrees to maintain in force
during the Lease Term, as part of the Insurance Premiums referenced in Section
18.4 below, a policy of Commercial General Liability Insurance written by one or
more responsible insurance companies licensed to do business in the State of
Texas with a Best's Rating of "A" or higher, insuring Landlord against loss of
life, bodily injury and/or property damage with respect to the Common Areas of
the Shopping Center and the operation of the Shopping Center, which the policy
shall be in the face amount of $2,000,000.00 combined single limit, with not
less than a $3,000.000.00 Excess Liability or Commercial Umbrella Policy in
addition thereto. Except for injury, loss, claims or damage to any person or
property while on the Common Areas of the Shopping Center caused by an act,
omission, neglect or default of Tenant, its agents, employees or contractors,
and subject to Section 13.5 hereof, the Landlord's insurance required under this
Section 13.4 will provide primary coverage.
13.5 Landlord's Fire and Extended Coverage Insurance. Throughout the full
term of this Lease and any extensions hereof, Landlord shall maintain with
responsible companies qualified to do business in the State of Texas, as part of
the Insurance Premiums referenced in Section 18.4 below, "all-risk" casualty
coverage insurance (including earthquake and flood insurance) to the extent of
the full replacement value of the buildings and the improvements now located or
hereafter constructed on the Shopping Center. The proceeds of any such insurance
shall be dedicated to the repair of casualty damage to the Shopping Center and
the shell of the Demised Premises, subject, however, to the provisions of
Article XV hereof.
13.6 Waiver of Subrogation. Landlord and Tenant hereby release each other
and their respective agents, employees, partners, shareholders, officers and
directors from any claims or actions for damage to any person or to the Demised
Premises or the Shopping Center that are caused by or result from risks actually
insured or which are required to be insured by the parties hereto under the
terms of this Lease or are in force at the time of any such damage. Landlord and
Tenant each covenant and agree that no insurer shall hold any right of
subrogation against the other with respect to any such damage or loss. Each
party shall cause each insurance policy obtained by it to provide
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that the insurance company waives all rights of recovery by way of subrogation
against the other party in connection with any damage covered by any such
policy.
ARTICLE XIV. LANDLORD'S LIABILITY
Landlord and Landlord's agents and employees shall not be liable to Tenant
for injury to person or damage to property caused by the Demised Premises or
other portions of the Shopping Center becoming out of repair or by defect or
failure of any structural element of the Demised Premises or of any equipment,
pipes or wiring, or broken glass, or by the backing up of drains, or by gas,
water, steam, electricity or oil leaking, escaping or flowing into the Demised
Premises (except where due to Landlord's willful failure to make repairs), nor
shall Landlord be liable to Tenant for any loss or damage that may be occasioned
by or through the acts or omissions of other tenants of the Shopping Center or
of any other persons whomsoever. Landlord shall have no liability for damage,
loss or disappearance of any of the contents from the Demised Premises from
whatever cause, whether by casualty, theft, riot or otherwise. Landlord shall
not be responsible or liable for any loss or damage to any property or person on
the Demised Premises or the Shopping Center occasioned by theft, fire, acts of
God, public enemy, injunction, riot, strike, insurrection, court order,
requisition or order of governmental authority, or any other manner beyond
Landlord's control, or the acts or omissions of Tenant, its agents, employees,
contractors, visitors, or invitees.
ARTICLE XV. DAMAGE BY FIRE AND OTHER CAUSES
15.1 Notice of Loss. Tenant shall give immediate written notice to Landlord
of any damage caused to the Demised Premises by fire or other casualty.
15.2 Demised Premises Usable. In the event the Demised Premises shall be
damaged by fire or other casualty, but shall not be rendered wholly or partially
unusable by Tenant, Landlord may elect either (i) to cause such damage to be
repaired, in which event the Minimum Guaranteed Rental shall not be reduced or
abated unless the repairs are delayed beyond ten (10) days after commencement of
such repairs, and then on a proportionate basis during the period and to the
extent that the Demised Premises are unfit for use by Tenant and not actually
used by Tenant in the ordinary conduct of its business, or (ii) to give Tenant
written notice within forty-five (45) days following the date of such damage of
Landlord's intention to terminate this Lease.
15.3 Demised Premises Unusable. If the Demised Premises shall be rendered
partially or wholly unusable, Landlord may elect either (i) to cause such damage
to be repaired in which event the Minimum Guaranteed Rental and Additional
Charges which Tenant is obligated to pay shall be reduced proportionately during
the period and to the extent that the Demised Premises are unfit for use by
Tenant and not actually used by Tenant in the ordinary course of its business,
or (ii) to give Tenant written notice within forty-five (45) days following the
date of such damage of its intention to terminate this Lease.
15.4 Damage to Shopping Center. In the event all or part of the Shopping
Center, other than the Demised Premises, shall be damaged or destroyed by fire
or other casualty, Landlord, at its sole discretion, may elect either (i) to
cause such damage to be repaired or (ii) to terminate this Lease by giving
Tenant written notice of termination within forty-five (45) days following the
date of such damage or destruction. Neither Minimum Guaranteed Rental nor the
Additional Charges due under this Lease shall be abated or reduced if Landlord
elects such damage to be repaired under the terms hereof.
15.5 Scope of Repair by Landlord. If Landlord elects to rebuild and repair
any damage or destruction under this Article XV the scope of the work shall be
limited to restoring the shell of the building and the Demised Premises,
exclusive of any alterations, additions, improvements, fixtures and equipment
installed by Tenant, to substantially the same condition in which the same
existed prior to the casualty. Tenant agrees that promptly after completion of
such work by Landlord, Tenant will proceed with reasonable diligence and at
Tenant's sole cost and expense to restore, repair and replace all alterations,
additions, improvements, fixtures, signs and equipment installed by Tenant.
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15.6 Continuation of Tenant's Business. Tenant agrees that during any
period of reconstruction or repair of the Demised Premises it will continue the
operation of its business within the Demised Premises to the extent practicable.
15.7 Commencement of Repairs. Notwithstanding anything contained in this
Lease to the contrary, if the rebuilding of the damage cannot reasonably be
completed within two hundred ten (210) days from the date of the casualty, as
reasonably determined by Landlord, this Lease shall terminate at the option of
either Landlord or Tenant and Rent shall be abated for the unexpired portion of
this Lease effective from the date of the casualty. Tenant shall have the right
to exercise its termination option within thirty (30) days after Landlord
advises Tenant of the time period (in excess of said two hundred ten [210] day
period) within which Landlord reasonably estimates the time to complete such
rebuilding, and should Tenant fail to timely exercise its termination option
pursuant hereto, Tenant will be deemed to have waived such option for all
purposes. If this Lease is not terminated as provided in the immediately
preceding sentence, Landlord, shall promptly commence rebuilding and/or
repairing the shell of the Demised Premises (including the roof, structural
walls and demising walls, but excluding any and all leasehold improvements made
to the Demised Premises) to substantially restore the shell of the Demised
Premises and Landlord will use its best efforts to complete same in a
professional, good and workmanlike manner as soon as reasonably practicable.
Notwithstanding the foregoing, in the event the casualty occurs during the last
two (2) years of the Lease Term and such damage causes the Demised Premises to
be unfit for use by Tenant and is not actually used by Tenant in the ordinary
course of its business, if the rebuilding of the damage cannot reasonably be
completed within one hundred fifty (150) days from the date of the casualty, as
reasonably determined by Landlord, this Lease shall terminate at the option of
either Landlord or Tenant and rent shall be abated for the unexpired portion of
the Lease effective from the date of the casualty. Tenant shall have the right
to exercise its termination option pursuant to the preceding sentence within
thirty (30) days after Landlord advises Tenant of the time period (in excess of
said one hundred fifty [150] day period) within which Landlord reasonably
estimates the time to complete such rebuilding, and should Tenant fail to timely
exercise its option pursuant hereto, Tenant will be deemed to have waived such
option for all purposes.
ARTICLE XVI. EMINENT DOMAIN
16.1 Major Taking. If more than thirty percent (30%) of the floor area of
the Demised Premises should be taken for any public or quasi-public use under
any governmental law, ordinance or regulation or by right of eminent domain or
by private purchase in lieu thereof, this Lease shall, unless Landlord and
Tenant agree otherwise in writing, terminate and the Rent shall be abated during
the unexpired portion of the Lease Term, effective on the date physical
possession is taken by the condemning authority.
16.2 Minor Taking. If less than thirty percent (30%) of the floor area of
the Demised Premises should be taken as aforesaid, this Lease shall not
terminate unless Landlord elects to terminate this Lease and gives written
notice of termination to Tenant within thirty (30) days after the date physical
possession is taken by the condemning authority. If this Lease is not
terminated, Minimum Guaranteed Rental payable hereunder during the unexpired
portion of this Lease shall be reduced in proportion to the area taken,
effective on the date physical possession is taken by the condemning authority.
If this Lease is not terminated by Landlord, following such partial taking,
Landlord shall make all necessary repairs or alterations to the remaining
Demised Premises required to make the remaining portions of the Demised Premises
an architectural whole.
16.3 Taking of Common Area. If any part of the Common Area should be taken
as aforesaid, this Lease shall not terminate, nor shall the Rent payable
hereunder be reduced, except that Landlord may terminate this Lease if the area
of the Common Area remaining following such taking plus any additional parking
area provided by Landlord in reasonable proximity to the Shopping Center shall
be less than eighty percent (80%) of the area of the Common Area immediately
prior to the taking. Any election to terminate this Lease in accordance with
this provision shall be evidenced by written notice of termination delivered to
Tenant within thirty (30) days after the date physical possession is taken by
the condemning authority.
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16.4 Award. All compensation awarded for any taking (or the proceeds of
private sale in lieu thereof) of the Demised Premises or Common Area shall be
the property of Landlord, and Tenant hereby assigns its interest in any such
award to Landlord; provided however, Landlord shall have no interest in any
award made to Tenant for Tenant's moving and relocation expenses or for the loss
of Tenant's fixtures and other tangible personal property if a separate award
for such items is made to Tenant.
ARTICLE XVII. ASSIGNMENT AND SUBLETTING
17.1 Prohibition. Tenant shall not assign or in any manner transfer this
Lease or any interest therein, or sublet or license the Premises (other than the
permitted encumbrance of the leasehold estate as referenced in Exhibit "J"
attached hereto, which encumbrance is approved by Landlord) or any part or parts
thereof, or permit occupancy of all or any part thereof by anyone with, through
or under it, without the prior written consent of Landlord, which consent shall
not be unreasonably withheld or delayed. In the event that Landlord fails to
approve the proposed assignment, subletting or licensing of the Premises (in
whole or in part) within twenty (20) days from and after the date that Landlord
receives Tenant's request to assign, sublet or license the Premises, and
provided the request for approval is given in compliance with the notice
provisions of this Lease, then such assignment, subletting or licensing of the
Demised Premises shall be deemed to have not been approved by Landlord. If
Tenant requests Landlord's consent to a specific assignment or sublease, Tenant
will give Landlord (i) the name and address of the proposed assignee or
subtenant, (ii) the basic terms of the proposed assignment or sublease, and
(iii) reasonably satisfactory information about the nature, financial condition,
business and business history of the proposed assignee or subtenant, and its
proposed initial use of the Premises. Consent by Landlord to one or more
assignments or subletting shall not operate as a waiver of Landlord's rights as
to any proposed subsequent assignments or sublettings. Should the Demised
Premises be occupied in whole or in part by anyone other than Tenant without the
express prior written consent of Landlord, Landlord may nevertheless collect
rent from the assignee, sublessee, mortgagee or other party to whom the
leasehold interest was transferred and apply the net amount collected to the
Rent payable hereunder, but no such transaction or collection of Rent through
application thereof by Landlord shall be deemed to waive the provisions hereof
or release Tenant from the further performance by Tenant of its covenants,
duties and obligations hereunder. Any request for an assignment or subletting
consideration must be accompanied with a $500.00 non-refundable processing fee.
In addition, Tenant shall be responsible to reimburse Landlord for all costs and
expenses incurred by Landlord in connection with such assignment or subletting
request, including without limitation, reasonable attorney's fees, which sum
will be due and payable within thirty (30) days after Tenant receives an invoice
for such expenses.
17.2 Permitted Assignments and Subleases. Notwithstanding the foregoing,
Tenant may, without the approval of Landlord, assign the Lease, or any part
thereof, or sublease the Premises, in whole or in part, to: (a) any corporation
or other legal entity which has the power to direct Tenant's management and
operation, or any corporation whose management and operation is controlled by
Tenant; or (b) any corporation a majority of whose voting stock is owned by
Tenant; or (c) any corporation or other entity in which or with which Tenant is
merged or consolidated, in accordance with applicable statutory provisions for
merger or consolidation of corporations or other entities, so long as the
liabilities of the corporations or other entities participating in such merger
or consolidation are assumed by the corporation or other entity surviving such
merger or created by such consolidation; or (d) any corporation or other entity
acquiring this Lease and a substantial portion of Tenant's assets; or (e) any
corporate or other successor to a successor corporation or entity becoming such
by either of the methods described in subsections (c) or (d); or (f) any entity
(or member of a group of affiliated entities) which is acquiring the majority of
Tenant's other similar stores located in the Houston, Texas, "Area of Dominant
Influence for Media Coverage" (as such term is commonly defined in the
advertising industry), or (g) as permitted in Exhibit "J" attached hereto.
Tenant must deliver prompt written notice of any such assignment or sublease to
Landlord. Notwithstanding any assignment or sublease pursuant to this provision,
Tenant and any guarantor of Tenant's obligations under this Lease shall at all
times remain fully responsible and liable for the payment of Rent herein
specified and for compliance with all of Tenant's other obligations under this
Lease.
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17.3 Sublease of Surrender Space. Further, Tenant may, without the approval
of Landlord, sublet the "Surrender Space" (as defined in Section 29.7 below) so
long as the sublessee complies with all of the terms and conditions of this
Lease, including without limitation, the Permitted Use. Should the proposed
sublessee desire to utilize the Demised Premises for other than the Permitted
Use, such use shall be subject to the prior written consent of Landlord, which
consent will not be unreasonably withheld or delayed provided however, under no
circumstances shall the Demised Premises be utilized for any "Prohibited Use"
(hereafter defined). Tenant must deliver prompt written notice of any such
sublease to Landlord. Notwithstanding any sublease pursuant hereto, Tenant and
the guarantor of Tenant's obligations under this Lease shall at all times remain
fully responsible and liable for the payment of Rent herein specified and for
compliance with all of Tenant's other obligations under this Lease. For purposes
hereof, the term "Prohibited Use" shall mean any of the following: (a) any use
which emits an obnoxious odor, noise or sound which can be heard or smelled
outside of the Demised Premises; (b) any operation primarily used as warehouse
operation and any assembling, manufacturing, distilling, refining, rendering,
processing, smelting, agricultural or mining operations; (c) any mobile home
park, trailer court, labor camp, junkyard or stockyard; (d) any central laundry
or dry cleaning plant; (e) any automobile, truck, trailer, or recreational
vehicle sales, leasing, display, repair or body shop; (f) any theater of any
type or character; (g) any living quarters, sleeping apartments, hotel or
lodging rooms; (h) any veterinary hospital or animal raising facilities (except
that this prohibition shall not prohibit pet shops); (i) any mortuary or funeral
home; (j) an adult book store or adult video tape store or any establishment
selling or exhibiting pornographic materials or massage parlor or any form of a
sexually oriented business; (k) any bar, tavern or brew pub; (1) any flea
market; (m) carwash; (n) a facility for the sale of paraphernalia for use with
illicit drugs; (o) a carnival, amusement park or circus; (p) a facility for any
use which is illegal, dangerous, or constitutes a nuisance; (q) a kennel or
animal boarding or breeding facility; (r) a fire sale, bankruptcy sale or
auction house operation; (s) a gambling facility operation, including but not
limited to an off-track or sports betting parlor, and a facility with table
games such as blackjack or poker, slot machines, and/or video
poker/blackjack/keno machines (provided, however, nothing herein shall be
construed to prohibit the sale of lottery tickets); (t) any use in violation of
any exclusive use restrictions in written leases between Landlord and other
tenants located in the Shopping Center; (u) any use (other than those set forth
in this Section) not in direct competition with the "primary use" (hereinafter
defined) of another tenant in the Shopping Center; or (v) a skating rink or
bowling alley. For purposes hereof, the term "primary use" shall mean any use
which generates greater than 35% of the gross revenues of another tenant in the
Shopping Center. It is understood and agreed that Tenant shall be entitled to
retain any rent received by Tenant attributable to the sublease of the Surrender
Space pursuant hereto without any obligation to account for same to Landlord.
17.4 Conditions to Consent. Notwithstanding any assignment or subletting
with Landlord's consent as required under this Article XVII, Tenant and any
guarantor of Tenant's obligations under this Lease shall at all times remain
fully responsible and liable for the payment of the Rent herein specified and
for compliance with all of Tenant's other obligations under this Lease (even if
future assignments and sublettings occur subsequent to an assignment or
subletting by Tenant, and regardless of whether or not Landlord's approval has
been obtained for such future assignments and sublettings). Moreover, in the
event that the rental due and payable by a sublessee (or a combination of the
rental payable under such sublease plus any bonus or other consideration
therefor or incident thereto) exceeds the Rent payable under this Lease, or if
with respect to a permitted assignment, permitted license or other transfer by
Tenant permitted by Landlord, the consideration payable to Tenant by the
assignee, licensee or other transferee exceeds the Rent payable under this
Lease, then Tenant shall be bound and obligated to pay Landlord all such excess
rental and other excess consideration within ten (10) days following receipt
thereof by Tenant from such sublessee, assignee, licensee or other transferee,
as the case may be.
17.5 Transfer by Landlord. In the event of the transfer and assignment by
Landlord of its interest in this Lease and in the building containing the
Demised Premises to a person expressly assuming Landlord's obligations under
this Lease, Landlord shall thereby be released from any further obligations
hereunder, and Tenant agrees to look solely to such successor in interest of the
Landlord for performance of such obligations. Any security given by Tenant to
secure performance of Tenant's obligations hereunder may be assigned and
transferred by Landlord to such successor in interest, and Landlord shall
thereby be discharged of any further obligation relating thereto.
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ARTICLE XVIII. TAXES AND INSURANCE PREMIUMS
18.1 Taxes on Tenant's Property. Tenant shall be liable for all taxes
levied against Tenant's personal property and trade fixtures placed by Tenant in
the Demised Premises. If any such taxes are levied against Landlord or
Landlord's property and if Landlord elects to pay the same or if the assessed
value of Landlord's property is increased by inclusion of personal property and
trade fixtures placed by Tenant in the Demised Premises and Landlord elects to
pay the taxes based on such increase, Tenant shall pay to Landlord upon demand
that part of such taxes for which Tenant is primarily liable hereunder.
18.2 Taxes. Except as provided in Sections 18.1 and 18.3, Landlord shall
pay or cause to be paid all general real estate taxes and special assessments
and governmental charges (hereinafter collectively referred to as "Taxes")
levied or assessed against the Shopping Center for each real estate tax year.
Tenant shall pay to Landlord in monthly installments, on the same dates as and
in addition to the monthly installment of Minimum Guaranteed Rental and
Additional Charges, an amount equal to one-twelfth (1/12th) of Tenant's Pro Rata
Share of Taxes, as estimated by Landlord in good faith from time to time. As
soon as practicable before or after the close of each calendar year during the
Lease Term, Landlord shall furnish a statement in writing to Tenant specifying
the actual amount due by Tenant in respect of Tenant's Pro Rata Share of Taxes.
In the event the total of the monthly payments theretofore paid by Tenant under
this Section 18.2 for such year exceeds the actual amount due, then the excess
shall be applied pro rata as a credit on the monthly installments thereafter
coming due under this Section 18.2. In the event the total of the monthly
payments theretofore paid by Tenant under this Section 18.2 for such year is
less than the actual amount due, any such deficiency shall be due and payable by
Tenant to Landlord within thirty (30) days after Tenant's receipt of such
statement. If the Demised Premises shall be separately assessed, then Tenant's
Pro Rata Share of the Taxes shall be the amount of such separate assessment.
During any year which shall be less than a full tax year, Tenant's Pro Rata
Share of Taxes shall be prorated on a daily basis between the parties to the end
that Tenant shall only pay for Taxes attributable to the portion of the tax year
occurring within the Lease Term. Notwithstanding anything contained in this
Lease Agreement to the contrary, the provisions contained in Exhibit "K" are
incorporated herein by reference, and shall control as to the amount of any Pro
Rata Share of Taxes payable by Tenant under this Lease Agreement. Tenant's audit
rights specified in Section 6.5 above shall likewise apply to Tax Charges.
18.3 Substitute Taxes. If at any time during the primary term of this Lease
or any renewal or extension thereof a tax or excise on rents, or other tax
however described (except any franchise, estate, inheritance, capital stock,
income or excess profits tax imposed upon Landlord) is levied or assessed
against Landlord by any lawful taxing authority on account of Landlord's
interest in this Lease or the rents or other charges reserved hereunder, as a
substitute in whole or in part, or in addition to the Taxes described in Section
18.2 above, Tenant agrees to pay to the Landlord upon demand, and in addition to
the Rent and Additional Charges described in this Lease, the amount of such tax
or excise. In the event any such tax or excise is levied or assessed directly
against Tenant then Tenant shall be responsible for and shall pay the same at
such times and in such manner as the taxing authority shall require.
18.4 Insurance Premiums. For purposes of this Lease, the term "Insurance
Premiums" shall mean and include the total annual insurance premiums and other
charges for all insurance policies maintained by Landlord, from time to time,
for or with respect to the Shopping Center or any part thereof, or any land,
buildings or other improvements therein, including, without limitation, fire and
extended coverage, public liability, property damage, boiler, rental loss and
other insurance in form and amount deemed necessary by Landlord. Tenant shall
pay to Landlord in monthly installments, on the same dates as and in addition to
the Minimum Guaranteed Rental, an amount equal to one-twelfth (1/12th) of
Tenant's Pro Rata Share of Insurance Premiums, as estimated by Landlord in good
faith from time to time. As soon as practicable after the close of each calendar
year during the term hereof, Landlord shall furnish a statement in writing to
Tenant specifying the actual amount due by Tenant in respect of Tenant's Pro
Rata Share of Insurance Premiums. In the event the total of the monthly payments
theretofore paid by Tenant under this Section 18.4 for such year exceeds the
actual amount due, then the excess shall be applied pro rata as a credit on the
monthly installments thereafter coming due under this Section 18.4. In the event
the total of the monthly
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payments theretofore paid by Tenant under this Section 18.4 for such year is
less than the actual amount due, any such deficiency shall be due and payable by
Tenant to Landlord within thirty (30) days after Tenant's receipt of such
statement. For purposes hereof, premiums paid for insurance policies having
policy years which do not coincide with calendar years shall be prorated on a
per diem basis for each calendar year affected, and total premiums for policies
issued for more than one year will be prorated equally over the number of years
of the term of such policies, regardless of differences in premium amounts
actually paid during any particular year or years of such term. During any part
of the Lease Term which shall be less than a full policy year, Tenant's Pro Rata
Share of Insurance Premiums shall be prorated on a daily basis between the
parties to the end that Tenant shall only pay for Insurance Premiums
attributable to the portion of the policy year occurring within the Lease Term.
Tenant's audit rights specified in Section 6.5 above shall likewise apply to
Insurance Charges.
ARTICLE XIX. DEFAULT
19.1 Events of Default. Each of the following events shall be deemed to be
an Event of Default by Tenant under this Lease:
(a) Tenant shall fail to pay any installment of Rent or any other
obligation hereunder involving the payment of money when due hereunder, and
shall not cure such default within ten (10) days after written notice thereof to
Tenant; provided however, Landlord shall not be obligated to provide more than
two (2) such notices during any Lease Year;
(b) Tenant shall fail to comply with any term, provision or covenant of
this Lease, other than as described in subsections (a) above and (c) through (e)
below, and shall not cure such failure within thirty (30) days after written
notice thereof to Tenant; provided however, Landlord shall not be obligated to
provide more than two (2) such notices during the Lease Term for a particular
type of default;
(c) Tenant or any guarantor of Tenant's obligations under this Lease shall
become insolvent, or shall make a transfer in fraud of creditors, or shall make
an assignment for the benefit of creditors;
(d) Tenant or any guarantor of Tenant's obligations under this Lease shall
file a petition under any section or chapter of the United States Bankruptcy
Code, as amended, or under any similar law or statute of the United States or
any State thereof and same is not dismissed within ninety (90) days from the
date of filing; or Tenant or any guarantor of Tenant's obligations under this
Lease shall be adjudged bankrupt or insolvent in proceedings filed against
Tenant or any guarantor of Tenant's obligations under this Lease; and
(e) A receiver or Trustee shall be appointed for the Demised Premises or
for all or substantially all of the assets of Tenant or any guarantor of
Tenant's obligations under this Lease and same is not dismissed within ninety
(90) days from the date of filing.
19.2 Remedies. Upon the occurrence of any Events of Default, Landlord shall
have the option to pursue any one or more of the following remedies, in addition
to any other remedy provided in this Article XIX or under applicable law, upon
providing Tenant with an additional three (3) days written notice to cure such
Event of Default, after which, no further notice or demand is required:
(a) Terminate this Lease, in which event Tenant shall immediately surrender
possession of the Demised Premises to Landlord, and if Tenant fails to do so,
Landlord may, without prejudice to any other remedy which Landlord may have for
possession or arrearages in Rent, enter upon and take possession of the Demised
Premises and expel or remove Tenant and any other person who may be occupying
the Demised Premises or any part thereof, by force if necessary, without being
liable for prosecution of any claim for damages therefor;
(b) Enter upon and take possession of the Demised Premises and expel or
remove Tenant and any other person who may be occupying the Demised Premises or
any part thereof, by force if
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necessary, without being liable for prosecution or any claim for damages
therefor, with or without having terminated the Lease; and/or
(c) Alter locks and other security devices at the Demised Premises.
Exercise by Landlord of any one or more remedies hereby granted or
otherwise available shall not be deemed to be an acceptance of surrender of the
Demised Premises by Tenant, whether by agreement or by operation of law, it
being understood that such surrender can be effected only by the written
agreement of Landlord and Tenant.
19.3 Alteration of Locks. The following provision shall override and
control any conflicting provisions of the Texas Property Code, as well as any
successor statute governing the right of a landlord to change the door locks of
commercial tenants. Upon any Event of Default by Tenant under this Lease,
Landlord is entitled and is hereby authorized, without any further notice to
Tenant whatsoever (other than the three (3) day notice required by Section 19.2
above), to enter upon the Demised Premises by use of a master key, a duplicate
key or other peaceable means, and to change, alter and/or modify the door locks
on all entry doors of the Demised Premises, thereby permanently excluding Tenant
therefrom. In the event that Landlord has either permanently repossessed the
Demised Premises pursuant to the provisions of this Lease or has terminated this
Lease by reason of Tenant's default, Landlord shall not thereafter be obligated
to provide Tenant with a key to the Demised Premises at any time, regardless of
any amounts subsequently paid by Tenant; provided, however, that in any such
instance, during Landlord's normal business hours and at the convenience of
Landlord, and upon receipt of written request from Tenant accompanied by such
written waivers and releases as Landlord may require, Landlord will either (at
Landlord's option) (i) escort Tenant or its authorized representative to the
Demised Premises to retrieve any personal belongings or other property of Tenant
not subject to the Landlord's lien or security interest described herein, or
(ii) obtain a list from Tenant of such personal property as Tenant intends to
remove, whereupon Landlord shall remove such property and make it available to
Tenant at a time and place designated by Landlord. However, if Landlord elects
option (ii) above, Tenant shall pay, in cash, in advance, all costs and expenses
estimated by Landlord to be incurred in removing such property and making it
available to Tenant and all moving and/or storage charges theretofore incurred
by Landlord with respect to such property. If Landlord elects to exclude Tenant
from the Demised Premises without permanently repossessing or terminating this
Lease pursuant to the provisions hereof, then Landlord shall not be obligated to
provide Tenant a key to re-enter the Demised Premises until such time as all
delinquent Rent and other amounts due under this Lease have been paid in full,
all other Events of Default, if any, have been completely cured to Landlord's
satisfaction (if such cure occurs prior to any actual permanent repossession or
termination). During any such temporary period of exclusion, Landlord will,
during Landlord's regular business hours and at Landlord's convenience, upon
receipt of written request from Tenant (accompanied by such written waivers and
releases as Landlord may require), escort Tenant or its authorized personnel to
the Demised Premises to retrieve personal belongings of Tenant or its employees
and such other property of Tenant as is not subject to the Landlord's lien and
security interest described herein. This remedy of Landlord shall be in addition
to, and not in lieu of, any of its other remedies set forth in this Lease, or
otherwise available to Landlord at law or in equity.
19.4 Landlord's Right to Cure Defaults. If Tenant should fail to make any
payment or cure any default hereunder within the time herein permitted, if any,
Landlord, without being under any obligation to do so and without thereby
waiving such default, may make such payment and/or remedy such other default for
the account of Tenant (and enter the Demised Premises for such purpose), and
thereupon Tenant shall be obligated, and hereby agrees, to pay Landlord, upon
demand, all costs, expenses and disbursements (including reasonable attorneys'
fees) incurred by Landlord in taking such remedial actions.
19.5 Termination by Landlord. In the event Landlord elects to terminate
this Lease by reason of an Event of Default, then notwithstanding such
termination, Tenant shall be liable for and shall pay to Landlord the sum of all
Rent and other indebtedness accrued to the date of such termination plus, as
damages, an amount equal to the aggregate amount of the Rent and all other sums
reserved hereunder for the remaining unexpired portion of the Lease Term (had
this Lease not been so terminated by Landlord) less the then fair rental value
of the Demised Premises for such
20
period as determined by Landlord, the parties hereto hereby stipulating that
such fair rental value shall in no event exceed seventy-five percent (75%) of
the aggregate amount of the Rent reserved for such period.
19.6 Termination of Tenant's Right to Possession. In the event Landlord
elects to repossess the Demised Premises without terminating the Lease, then
Tenant shall be liable for and shall pay to Landlord all Rent and other
indebtedness accrued to the date of such repossession, plus all Rent and other
sums required to be paid by Tenant to Landlord during the remainder of the Lease
Term, diminished by any net sums thereafter received by Landlord through
reletting the Demised Premises during said period (after deducting all expenses
incurred by Landlord as provided herein). In no event shall Tenant be entitled
to any excess rental obtained by reletting over and above the Rent herein
reserved. Actions to collect amounts due by Tenant as provided in this Section
19.6 may be brought from time to time, on one or more occasions, without the
necessity of Landlord's waiting until the expiration of the Lease Term.
19.7 Obligation to Relet. In the event of termination or repossession of
the Demised Premises for an Event of Default, Landlord shall attempt to relet
the Demised Premises, or any portion thereof; and in the event of any such
reletting, Landlord may relet the whole or any portion of the Demised Premises
for any period, to any tenant and for any use or purpose.
Landlord and Tenant agree that any such duty to attempt to mitigate shall
be satisfied and Landlord shall be conclusively deemed to have used objectively
reasonable efforts to relet the Demised Premises by doing the following: (a)
posting a "For Lease" sign on the Demised Premises, (b) advising Landlord's
leasing staff of the availability of the Demised Premises; and (c) advising at
least one commercial brokerage entity familiar with the market in which the
Shopping Center is located of the availability of the Demised Premises.
Furthermore, Landlord shall be required to use only the same efforts Landlord
then uses to lease premises in the Shopping Center generally. Landlord shall not
in any event be required to give any preference or priority to the leasing of
the Demised Premises over any other space that Landlord may have available in
the Shopping Center. Landlord shall not be required to: (i) take any instruction
or advice given by Tenant regarding reletting the Demised Premises; (ii) accept
any proposed tenant unless such tenant has a creditworthiness acceptable to
Landlord in its sole discretion; (iii) accept any proposed tenant unless the
proposed use of the Demised Premises by such tenant is acceptable to Landlord in
its sole discretion; (iv) accept any proposed tenant unless such tenant leases
the entire Demised Premises upon terms and conditions satisfactory to Landlord
in its sole discretion (after giving consideration to all expenditures by
Landlord for tenant improvements, broker's commissions and other leasing costs);
or (v) consent to any assignment or sublease for a period which extends beyond
the expiration of the current term or which Landlord would not otherwise be
required to consent to under the provision of this Lease. If the rental received
through reletting does not at least equal the Rent provided for herein, Tenant
shall pay and satisfy the deficiency between the amount of the Rent so provided
for and that received through reletting, including but not limited to, broker's
fees, advertisements, concessions granted to a new tenant upon reletting, the
cost of renovating, altering and decorating for a new tenant, reasonable
attorney's fees and all other costs of reletting. Further, Tenant shall not in
any event ever be entitled to any excess rental and other sums provided herein,
and the same shall belong solely to Landlord. Nothing herein shall be construed
as in any way denying Landlord the right, in the event of abandonment of the
Demised Premises or other breach of this Lease by Tenant, to treat the same as
an entire breach and at Landlord's option to terminate this Lease at any time
thereafter as herein provided.
19.8 Injunctive Relief. In the event of the breach or the attempted or
threatened breach of any covenant or provision contained in this Lease by
Tenant, Landlord shall have, in addition to all other remedies provided to it
hereunder or by law or equity, the right to obtain an injunction prohibiting
such breach or attempted breach without the necessity of proving the inadequacy
of legal remedy, irreparable harm or probable right of recovery.
19.9 Expenses of Litigation. In the event that either Landlord or Tenant
institutes any action or proceeding to enforce payment of a monetary sum due
hereunder or to otherwise enforce the performance by the other party of its
obligations hereunder, the prevailing party in such action shall be entitled to
recover from the non-prevailing party reasonable costs incurred by the
prevailing
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party in attempting to collect such sum or enforce such obligations, including
reasonable attorneys' fees.
19.10 Default by Landlord. In the event of any default by Landlord,
Tenant's exclusive remedy shall be an action for damages (Tenant hereby waiving
the benefit of any laws granting to it a lien upon the property of Landlord
and/or upon Rent due Landlord), but prior to any such action Tenant will give
Landlord written notice specifying such default with particularity, and Landlord
shall thereupon have thirty (30) days in which to cure such default or to
commence to cure such default if any such default cannot be cured within such
30-day period, in which event Landlord shall prosecute such cure with diligence
to a conclusion. Unless and until Landlord fails to so cure or proceed with
diligence to cure any default after such notice, Tenant shall not have any
remedy or cause of action by reason thereof. All obligations of Landlord
hereunder will be construed as covenants, not conditions; and all such
obligations will be binding upon Landlord only during the period of its
ownership of the Shopping Center and not thereafter. In the event Landlord fails
to cure its default within the time period set forth herein, Tenant may, at its
option (in addition to all other rights and remedies provided Tenant at law, in
equity or under this Lease), upon written notice to Landlord of Tenant's
intention to exercise its self-help remedies hereunder, incur any reasonable
expense necessary to perform the obligation of Landlord specified in such notice
and ▇▇▇▇ Landlord for the cost thereof. If Landlord has not reimbursed Tenant
within thirty (30) days after receipt of Tenant's ▇▇▇▇, Tenant may deduct the
reasonable cost of such expense from the Minimum Guaranteed Rent and Additional
Charges next becoming due after the expiration of said thirty (30) day period.
The self-help option given in this Section is for the sole protection of Tenant,
and its existence shall not release Landlord from its obligation to perform the
terms, provisions, covenants and agreements herein provided to be performed by
Landlord or deprive Tenant of any legal rights which it may have by reason of
any such default by Landlord. Notwithstanding the foregoing, Tenant shall not
deduct more than one-quarter of the Minimum Guaranteed Rental from any monthly
installment thereof if there are sufficient months remaining in the Lease Term
to enable Tenant to fully recover the amount owed by Landlord pursuant hereto.
19.11 Prepaid Rental. Landlord hereby acknowledges receipt from Tenant of
the Prepaid Rental to be applied to the first accruing installments of Minimum
Guaranteed Rental and Additional Charges.
ARTICLE XX. WAIVER OF LANDLORD'S LIEN
Landlord hereby waives any statutory liens and any rights of distress with
respect to the personal property (trade fixtures, equipment and merchandise) of
Tenant from time to time located within the Demised Premises ("Tenant's
Property"). This Lease does not grant a contractual lien or any other security
interest to Landlord or in favor of Landlord with respect to Tenant's Property.
Respecting any lender of Tenant having a security interest in Tenant's Property
("Tenant's Lender"), Landlord agrees as follows: (i) to provide Tenant's Lender,
upon written request of Tenant (accompanied by the name and address of Tenant's
Lender), with a copy of any default notice(s) given to Tenant under this Lease,
and (ii) to allow Tenant's Lender, prior to any termination of the Lease or
repossession of the Demised Premises by Landlord, the same period of time (which
period of time shall run concurrently with Tenant's cure period provided
Landlord delivers a copy of any such notice of default to Tenant's Lender
concurrently with delivery of such notice to Tenant), after its receipt of such
copy of default notice, to cure such default as is allowed Tenant under the
Lease, and (iii) to permit Tenant's Lender to go upon the Demised Premises for
the purpose of removing Tenant's Property any time within twenty (20) days after
the effective date of any termination of this Lease or any repossession of the
Demised Premises by Landlord (with Landlord having given Tenant's Lender prior
written notice of such date of termination or repossession); provided, however,
Tenant's Lender shall be responsible for any damages caused to either the
Demised Premises or the Shopping Center in connection with the removal of
Tenant's Property and Tenant's Lender shall indemnify and hold Landlord harmless
from any and all claims, damages, causes of action, costs and expenses incurred
by Landlord related directly or indirectly to the removal of Tenant's Property
by Tenant's Lender. Further, Tenant's Lender, as a condition hereof, shall be
required to agree that in the event Tenant's Lender fails to timely remove
Tenant's Property, Tenant's Lender shall be deemed to have abandoned Tenant's
Property whereupon Landlord shall be entitled to dispose of Tenant's Property as
Landlord deems appropriate in its sole discretion without any obligation to
account for the proceeds of such disposition to either Tenant or Tenant's
Lender. Landlord further agrees to
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execute and deliver such instruments reasonably requested by Tenant's Lender
from time to time to evidence or effect the aforesaid waiver and agreements of
Landlord.
ARTICLE XXI. HOLDING OVER
In the event Tenant remains in possession of the Demised Premises after the
expiration of this Lease and without the execution of a new lease, it shall be
deemed to be occupying the Demised Premises as a tenant at will at a rental
equal to the Rent herein provided plus fifty percent (50%) of such amount and
otherwise subject to all the conditions, provisions and obligations of this
Lease insofar as the same are applicable to a tenancy at will. No holding over
by Tenant after the expiration or termination of this Lease shall be construed
to extend the Lease Term or in any other manner be construed as a permission by
Landlord to hold over. Tenant shall indemnify Landlord (i) against all claims
for damages by any other tenant to whom Landlord may have leased all or any part
of the Demised Premises effective upon the termination or expiration of the
Lease Term, and (ii) for all of the losses, expenses, including reasonable
attorneys' fees, incurred by reason of such holding over.
ARTICLE XXII. SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE
22.1 No Prior Lien on Shopping Center. Landlord represents that it is the
owner of good and indefeasible fee simple title to the Shopping Center and to
the Demised Premises, subject to no lien or encumbrance superior to the
leasehold estate herein created in favor of Tenant.
22.2 Conditional Subordination to Future First Lien. Tenant shall, upon
Landlord's request, subordinate this Lease in the future to any first lien
placed by Landlord upon the Demised Premises, or the Shopping Center or building
of which the Demised Premises forms a part, with an Institutional First
Mortgagee, provided that such lender executes and delivers to Tenant a
non-disturbance agreement providing that this Lease shall not terminate, so long
as Tenant is not in default under this Lease, as a result of the foreclosure of
such lien, or conveyance in lieu thereof, and Tenant's rights under this Lease
shall continue in full force and effect and its possession shall be undisturbed,
except in accordance with the provisions of this Lease. Tenant will, upon
request of either Landlord or the lienholder, be a party to such an agreement,
and will agree that, if such lienholder succeeds to the interest of Landlord,
Tenant will recognize said lienholder (or successor in interest of the
lienholder) as its landlord under the terms of this Lease. Such agreement shall
be substantially in form and content as EXHIBIT "I" attached hereto.
22.3 Notice to Mortgagee. At any time when the holder of an outstanding
mortgage, deed of trust or other lien covering Landlord's interest in the
Demised Premises or the Shopping Center as a whole has given Tenant written
notice of its interest in this Lease, Tenant shall not exercise any remedy for
default by Landlord hereunder unless and until the holder of the indebtedness
secured by such mortgage, deed of trust or other lien shall have received
written notice of such default and a reasonable time for curing such default
shall thereafter have elapsed.
ARTICLE XXIII. [INTENTIONALLY LEFT BLANK]
ARTICLE XXIV. [INTENTIONALLY LEFT BLANK]
ARTICLE XXV. NOTICES
Wherever any notice is required or permitted hereunder such notice shall be
in writing. Any notice required or permitted to be delivered hereunder shall be
delivered by hand or sent by United States Registered or Certified Mail, Return
Receipt Requested, adequate postage prepaid and, for purposes of the calculation
of the various time periods referred to herein, shall be deemed received when
delivered to the place for giving notice to a party referred to herein in the
case of delivery by hand or upon the earlier to occur of (i) actual receipt as
indicated on the signed receipt, or (ii) one (1) day after posting as herein
provided, in the case of delivery by mail in the manner provided above. All
notices given hereunder shall be addressed to the parties hereto at their
respective addresses set out in Sections 1.1(b)(ii) and 1.1(d)(ii) above (or at
Landlord's option, to Tenant at the Demised Premises), or at such other
addresses as they have theretofore specified by written
23
notice, except that the Demised Premises may not be used by Tenant as its sole
address for notice purposes.
ARTICLE XXVI. [INTENTIONALLY LEFT BLANK]
ARTICLE XXVII. LEASEHOLD MORTGAGES
27.1 Leasehold Mortgages. Tenant may at any time execute and deliver one or
more mortgages or deeds of trust (such mortgage or deed of trust being
hereinafter called a "Leasehold Mortgage") of Tenant's leasehold estate and
rights hereunder without the consent of Landlord; provided, however, that Tenant
shall be and remain liable hereunder for the payment of all Rent and for the
performance of all the covenants and conditions of this Lease. If either Tenant
or the mortgagee under any such Leasehold Mortgage shall send Landlord a notice
informing Landlord of the existence of such Leasehold Mortgage and the address
of the mortgagee thereunder for the service of notices, such mortgagee shall be
deemed to be a Leasehold Mortgagee as such term is used in this Lease. Landlord
shall be under no obligation under this Section 27.1 to any mortgagee, grantee
or corporate trustee under a Leasehold Mortgage of whom Landlord has not
received such notice.
27.2 Event of Default. If an Event of Default under this Lease shall occur,
written notice thereof shall be sent by Landlord to any Leasehold Mortgagee, and
Landlord shall take no action to terminate this Lease or to interfere with the
occupancy, use or enjoyment of the Demised Premises unless Landlord has provided
the Leasehold Mortgagee the same notice Landlord provided Tenant with respect to
any Event of Default and the same time period to cure such Event of Default as
provided to Tenant under this Lease.
27.3 Exercise of Remedies. Upon Leasehold Mortgagee becoming the owner of
the interest of Tenant in this Lease, Leasehold Mortgagee shall be obligated to
execute an assumption agreement whereby the Leasehold Mortgagee will be
responsible and directly obligated for all of the obligations and liabilities of
Tenant under this Lease including without limitation, the obligation to pay all
Rent and to cure any existing Events of Default with respect to this Lease.
Leasehold Mortgagee shall not have the right to assign to any person such
interest or such new lease without the prior written consent of Landlord, which
consent will not be unreasonably withheld or delayed. Upon any such assignment
by Leasehold Mortgagee after complying with the conditions of the preceding
sentence, Leasehold Mortgagee shall no longer be liable for the performance and
observance of any covenants and conditions with respect to this Lease from and
after the effective date of such assignment.
27.4 Termination of Lease. If this Lease shall terminate for any reason or
be rejected or disaffirmed pursuant to bankruptcy law or other law affecting
creditors' rights, any Leasehold Mortgagee or a person designated by such
Leasehold Mortgagee shall have the right, exercisable by notice to Landlord,
within twenty (20) days after the effective date of such termination, to enter
into a new lease of the Premises with Landlord. The term of said new lease shall
begin on the date of the termination of this Lease and shall continue for the
remainder of the Lease Term. Such new lease shall otherwise contain the same
terms and conditions as those set forth herein, except for requirements which
are no longer applicable or have already been performed, provided that such
Leasehold Mortgagee shall have remedied all defaults on the part of Tenant
hereunder which are susceptible of being remedied by the payment of money, and
provided further that such new lease shall require the tenant thereunder
promptly to commence, and expeditiously to continue, to remedy all other
defaults on the part of Tenant hereunder. The provisions of this Section 27.4
shall survive the termination of this Lease and shall continue in full force and
effect thereafter to the same extent as if this Section 27.4 were a separate and
independent contract among Landlord, Tenant and each Leasehold Mortgagee. From
the date on which any Leasehold Mortgagee shall execute the new lease, such
Leasehold Mortgage may use and enjoy the Demised Premises without hindrance by
Landlord.
27.5 Limited Liability. No Leasehold Mortgagee shall become personally
liable for the performance or observation of any covenants or conditions to be
performed or observed by Tenant unless and until such Leasehold Mortgagee
becomes the owner of Tenant's interest hereunder upon
24
the exercise of any remedy provided for in any leasehold mortgage or enters into
a new lease with Landlord pursuant to Section 27.4 above.
27.6 Lender's Agreement. Simultaneously with the execution of this Lease,
Landlord and the Leasehold Mortgagee agree to execute a Landlord's Agreement in
substantially the form attached hereto as EXHIBIT "J".
ARTICLE XXVIII. MISCELLANEOUS
28.1 Relationship Between Parties. Nothing herein contained shall be deemed
or construed by the parties hereto, nor by any third party, as creating the
relationship of principal and agent or of a partnership or joint venture between
the parties hereto, it being understood and agreed that neither the method of
computation of Rent, nor any other provision contained herein, nor any acts of
the parties hereto, shall be deemed to create any relationship between the
parties hereto other than the relationship of landlord and tenant.
28.2 Independent Obligations. Tenant shall not for any reason withhold or
reduce Tenant's required payments of Rent and other charges provided in this
Lease, it being agreed that the obligations of Landlord hereunder are
independent of Tenant's obligations except as may be otherwise expressly
provided. In this regard it is specifically understood and agreed that in the
event Landlord commences any proceedings against Tenant for non-payment of Rent
or any other sum due and payable by Tenant hereunder, Tenant will not interpose
any counter-claim or other claim against Landlord of whatever nature or
description in any such proceedings; and in the event that Tenant interposes any
such counter-claim or other claim against Landlord in such proceedings, Landlord
and Tenant stipulate and agree that, in addition to any other lawful remedy of
Landlord, upon motion of Landlord, such counter-claim or other claim asserted by
Tenant shall be severed out of the proceedings instituted by Landlord and the
proceedings instituted by Landlord may proceed to final judgment separately and
apart from and without consolidation with or reference to the status of such
counter-claim or any other claim asserted by Tenant.
28.3 Landlord's and Tenant's Liability. Under no circumstances whatsoever
shall Landlord or Tenant ever be liable hereunder for consequential damages,
punitive damages or special damages. Notwithstanding anything in this Lease to
the contrary, the liability of Landlord to Tenant for any default by Landlord
under the terms of this Lease shall be limited to the proceeds of sale on
execution of the interest of Landlord in the Shopping Center; and Landlord shall
not be personally liable for any deficiency, nor shall Landlord, its agents,
employees, officers, directors, shareholders, partners, successors and assigns
ever be personally liable hereunder. Tenant hereby waives any and all lien
rights Tenant might otherwise have under Section 91.004 of the Texas Property
Code for any damages sustained by Tenant.
28.4 Consent of Parties. Except as may be otherwise herein provided, in all
circumstances under this Lease where prior consent or permission of one party
("First Party"), whether it be Landlord or Tenant, is required before the other
party ("Second Party") is authorized to take any particular type of action, the
matter of whether to grant such consent or permission shall be within the sole
and exclusive judgment and discretion of the First Party; and it shall not
constitute any nature of breach by the First Party hereunder or any defense to
the performance of any covenant, duty or obligation of the Second Party
hereunder that the First Party delayed or withheld the granting of such consent
or permission, whether or not the delay or withholding of such consent or
permission was, in the opinion of the Second Party, prudent or reasonable or
based on good cause.
28.5 No Waivers. The acceptance of any Rent by Landlord shall not
constitute a waiver as to any breach of any covenants or conditions of Tenant
contained herein nor a waiver of any of Landlord's rights hereunder. One or more
waivers of any covenant, term or condition of this Lease by either party shall
not be construed as a waiver of a subsequent breach of the same covenant, term
or condition. The consent or approval by either party to or of any act by the
other party requiring such consent or approval shall not be deemed to waive or
render unnecessary consent to or approval of any subsequent similar act. No
right or remedy of either party hereunder or covenant, duty or obligation of
either party shall be deemed waived by the other party unless such waiver is in
writing and signed by the party to be charged.
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28.6 Force Majeure. Except with respect to the payment of Rent by Tenant,
for which force majeure is not applicable, whenever a period of time is herein
prescribed for action to be taken by Landlord or Tenant, Landlord or Tenant
shall not be liable or responsible for, and there shall be excluded from the
computation of any such period of time, any delays due to strikes, riots, acts
of God, shortages of labor or materials, war, governmental laws, regulations or
restrictions or any other causes of any kind whatsoever which are beyond the
reasonable control of Landlord or Tenant, respectively.
28.7 Certifications; Financial Statements. Tenant shall execute and deliver
to Landlord, in recordable form, a certificate stating that this Lease is
unmodified and in full force and effect, or in full force and effect as
modified, and stating the modifications. The certificate also shall state the
amount of Minimum Guaranteed Rental and Additional Charges, the dates to which
Rent has been paid in advance, if any, and the amount of the Security Deposit
and Prepaid Rent. The certificate shall also state whether or not, to the best
of knowledge of the signer of such certificate, the Landlord is in default in
performance of any covenant, agreement or condition contained in this Lease and,
if so, specify each such default of which the signer may have knowledge and such
other information as may be reasonably requested by a lender or proposed
purchaser of the Shopping Center. Failure to deliver the certificate within ten
(10) days, after the same is requested, shall be conclusive upon the party
failing to deliver the certificate for the benefit of the party requesting the
certificate and any successor to the party requesting the certificate, that (i)
this Lease is in full force and effect and has not been modified except as
represented by the party requesting the certificate, (ii) that to Tenant's
knowledge, there are no uncured defaults in Landlord's performance, and (iii)
that no Rent has been paid in advance except as set forth in this Lease. Within
one hundred thirty-five (135) days after the expiration of Tenant's fiscal year,
Tenant shall deliver to Landlord its current financial statements of Tenant
(with an opinion by a certified public accountant, if available), including a
balance sheet and profit and loss statement for the fiscal year previously
ended, all prepared in accordance with generally accepted accounting principles
consistently applied.
28.8 Governing Law. The laws of the State of Texas shall govern the
interpretation, validity, performance and enforcement of this Lease. If any
provision of this Lease should be held to be invalid or unenforceable, the
validity and enforceability of the remaining provisions of this Lease shall not
be affected thereby. All obligations of Landlord and Tenant (including, without
limitation, any monetary obligation of Landlord or Tenant for damages for any
breach of the respective covenants, duties or obligations of Landlord or Tenant
hereunder) are performable exclusively in Beaumont, Jefferson County, Texas.
28.9 No Bankruptcy. Neither Landlord, Tenant nor any Guarantor has ever
filed a petition under any section or chapter of the United States Bankruptcy
Code, as amended, or under any similar law or statute of the United States or
any state thereof or has ever had a petition filed against Tenant thereof or
Guarantor or Landlord under any section or chapter of the United States
Bankruptcy Code, as amended.
28.10 Captions. The captions used herein are for convenience only and do
not limit or amplify the provisions hereof.
28.11 Genders. Whenever herein the singular number is used, the same shall
include the plural and words of any gender shall include each other gender.
28.12 Successors. The terms, provisions and covenants contained in this
Lease shall apply to, inure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors, administrators, successors,
assigns (when permitted under the terms of this Lease) and legal
representatives, except as otherwise herein expressly provided.
28.13 Entire Agreement. This Lease contains the entire agreement between
the parties, and no agreement shall be effective to change, modify or terminate
this Lease in whole or in part unless such is in writing and duly signed by the
party against whom enforcement of such change, modification or termination is
sought. Landlord and Tenant hereby acknowledge that they are not relying on any
representation or promise of the other, except as may be expressly set forth in
this Lease.
26
28.14 Time of the Essence. In all instances where Tenant is required
hereunder to pay any sum or due any act at a particular indicated time or within
an indicated period, it is understood and agreed that time is of the essence.
28.15 [Intentionally Left Blank]
28.16 [Intentionally Left Blank]
28.17 Brokers. Tenant warrants that it has engaged no broker in connection
with the negotiation or execution of this Lease, and no fee or commission is
payable to any such broker representing Tenant in connection herewith. Landlord
may or may not be obligated to pay a brokerage fee to any broker engaged by
Landlord in connection with the negotiation or execution of this Lease, and if
so, pursuant to a separate agreement between Landlord's broker, if any, and
Landlord, to which Tenant is not a party. Landlord agrees to indemnify and
hold-harmless Tenant from all claims for commissions due to any broker engaged
by Landlord.
28.18 Disclaimers. LANDLORD AND TENANT EXPRESSLY ACKNOWLEDGE AND AGREE, AS
A MOVING AND MATERIAL PART OF THE CONSIDERATION FOR LANDLORD'S ENTERING INTO
THIS LEASE WITH TENANT, THAT, EXCEPT TO THE EXTENT SPECIFICALLY SET FORTH IN
THIS LEASE WITH PARTICULARITY, LANDLORD HAS MADE NO WARRANTIES TO TENANT AS TO
THE USE OR CONDITION OF THE DEMISED PREMISES OR THE SHOPPING CENTER, EITHER
EXPRESS OR IMPLIED, AND LANDLORD EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTY THAT
THE DEMISED PREMISES OR THE SHOPPING CENTER ARE SUITABLE FOR TENANT'S INTENDED
COMMERCIAL PURPOSE OR ANY OTHER WARRANTY (EXPRESS OR IMPLIED) REGARDING THE
DEMISED PREMISES OR THE SHOPPING CENTER. TENANT EXPRESSLY WAIVES (TO THE EXTENT
NOT PROHIBITED BY APPLICABLE LAW) ANY CLAIMS UNDER FEDERAL, STATE OR OTHER LAW
THAT TENANT MIGHT OTHERWISE HAVE AGAINST LANDLORD RELATING IMPLIED WARRANTIES AS
TO THE USE, CHARACTERISTICS OR CONDITION OF THE DEMISED PREMISES OR THE SHOPPING
CENTER. LANDLORD AND TENANT EXPRESSLY AGREE THAT THERE ARE NO, AND SHALL NOT BE
ANY, IMPLIED WARRANTIES OF MERCHANTABILITY, HABITABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR ANY OTHER KIND ARISING OUT OF THIS LEASE AND THAT ALL
EXPRESS AND IMPLIED WARRANTIES IN CONNECTION HEREWITH ARE EXPRESSLY DISCLAIMED
AND WAIVED.
28.19 Preliminary Negotiations. The submission of this Lease form by Tenant
for examination does not constitute an offer to lease on the terms set forth
herein. In addition Landlord and Tenant acknowledge that neither of them shall
be bound by the representations, promises or preliminary negotiations with
respect to the Demised Premises made by the parties respective employees or
agents. It is the intention of the parties that neither party be legally bound
in any way until this Lease has been fully executed by both Landlord and Tenant.
ARTICLE XXIX. REPRESENTATIONS AND WARRANTIES
29.1 Landlord's Affirmative Covenants. Landlord covenants and agrees
throughout the Lease Term, as follows:
(a) To indemnify, protect, defend and hold Tenant harmless from and
against any and all claims, demands, losses, liabilities, penalties and costs
(including, without limitation, reasonable attorneys' fees at all trial and
appellate levels, whether or not suit is brought) arising directly or indirectly
from or out of, or in any way connected with the presence, leakage, escape,
emanation or release of any Hazardous Substances on, under, above or about the
Real Property or the Demised Premises caused by Landlord, its agents, employees
or contractors.
(b) To indemnify, protect, defend and hold Tenant harmless from and
against any and all injury, loss, claims or damage to any person or property
while on the Common Areas of the Shopping Center unless caused by an act,
omission, neglect or default of Tenant, its agents,
27
employees, contractors or invitees; and, subject to Section 13.6 hereof, to
indemnify, protect, defend and hold Tenant harmless from and against any and all
injury, loss, claims or damage to any person or property occasioned by any
negligence or willful act or omission of Landlord, its agents, employees or
contractors.
(c) Landlord will perform all repairs and replacements which are
Landlord's responsibility under the terms of this Lease in a good and
workmanlike manner within the time periods set forth in this Lease.
29.2 Landlord's Negative Covenants. Landlord covenants and agrees
throughout the Lease Term not to materially reduce the number of parking spaces
within the Shopping Center without providing comparable, additional parking
(unless due to governmental action such as condemnation, in which event Article
XVI hereof shall govern).
29.3 Landlord's Representations. Landlord, in order to induce Tenant to
enter into this Lease, hereby represents:
(a) That, as of the Effective Date and again as of the Delivery Date,
Landlord, to its current actual knowledge, is not aware of the presence of any
Hazardous Substance (including without limitation asbestos material) on, under
or above the Shopping Center except as reflected in the Fiesta Mart's Asbestos
Inspection prepared by Analytical Labs Environmental Service Company, Inc.
("Report"), a copy of which has been made available to Tenant.
(b) Except as set forth in the Report, that, as of the Effective Date
and again as of the Delivery Date, Landlord has not received any notice with
respect to, and has no current actual knowledge of, any facts which would
constitute violations of any Environmental Laws relating to the use, ownership
or occupancy of the Shopping Center.
(c) Except as set forth in the Report, that, as of the Effective Date
and again as of the Delivery Date, Landlord has not engaged in the generation,
storage, treatment, recycling, transportation or disposal of any Hazardous
Substances on, under or above the Shopping Center (any such activity is referred
to herein as a "Regulated Activity") except in compliance with all applicable
Environmental Laws, and no Regulated Activity engaged in by Landlord has
occurred on, under or above the Shopping Center, except in compliance with
applicable Environmental Laws.
(d) That Landlord is duly organized and validly existing under the
laws of the State of Texas and has full power and authority to enter into this
Lease.
(e) That Landlord is not a party to any agreement or litigation which
could adversely affect the ability of Landlord to perform its obligations under
this Lease or which would constitute a default on the part of Landlord under
this Lease, or otherwise adversely affect Tenant's rights or entitlements under
this Lease.
(f) That Landlord is the sole fee simple owner of the Shopping Center
and has good and indefeasible title thereto. Landlord is not a party to any
lease, contract or agreement which restricts the use of the Demised Premises by
Tenant as it relates to the Permitted Use.
(g) That, to Landlord's knowledge, the execution, delivery and
performance of this Lease by Landlord will not conflict with, be inconsistent
with, or result in any breach or default of any of the terms, covenants,
conditions or provisions of any indenture, mortgage, deed of trust, instrument,
document, agreement or contract of any kind or nature to which Landlord is a
party or by which Landlord or the Demised Premises may be bound.
(h) That any construction activities being conducted by, through or
under Landlord shall be performed in a manner having as little adverse effect as
possible (under the circumstances) on Tenant's use of the Demised Premises and
in particular, Landlord shall use its best efforts to avoid using the parking
areas directly in front of the Demised Premises as a staging area for trucks or
equipment or the storage of materials as it relates to any such activities.
28
29.4 Tenant's Affirmative Covenants. Tenant covenants and agrees throughout
the Lease Term and all renewals thereof, as follows:
(a) To perform all of the obligations of Tenant set forth in this
Lease and in the Exhibits attached hereto.
(b) To use the Premises only for the Permitted Use.
(c) Subject to Landlord's repair and maintenance obligations expressly
set forth in this Lease, at Tenant's sole cost and expense, to (i) maintain and
keep all the Demised Premises in a good condition and state of repair, including
all equipment, facilities and fixtures therein; (ii) keep all glass, including
that in windows, doors and skylights, clean and in good condition, and to
immediately replace any glass which may be damaged or broken with glass of
equivalent quality; and (iii) keep the HVAC system serving the Demised Premises
in good working order.
(d) To (i) make all repairs, alterations or other improvements in and
to the interior of Demised Premises required by governmental authority; (ii)
keep the Demised Premises equipped with all safety appliances so required
because of Tenant's use of the Demised Premises; (iii) procure any licenses and
permits required for any such use; and (iv) comply with the orders and
regulations of all governmental authorities having jurisdiction over the use of
the Demised Premises. Notwithstanding anything to the contrary contained in this
Lease, Tenant agrees to cause the interior of the Demised Premises (excluding
structural portions constructed or installed by Landlord) to comply with all
laws (including without limitation the "Americans with Disabilities Act"),
codes, regulations and other governmental requirements (both now or hereafter in
effect).
(e) To pay when due the entire cost of any work on the Demised
Premises, including equipment, facilities, signs and fixtures therein,
undertaken by Tenant, so that the Demised Premises shall at all times be free of
liens for labor and materials; to procure all necessary permits before
undertaking such work; to perform such work in a good and workmanlike manner,
employing materials of good quality; to comply with all governmental
requirements; and to save Landlord harmless and indemnified from all injury,
loss, claims or damage to any person or property occasioned by or arising out of
such work.
(f) To save Landlord harmless and indemnified from all injury, loss,
claims or damage to any person or property while on the Demised Premises, unless
caused by any act, omission, neglect or default of Landlord, its agents,
employees and subcontractors; and, subject to Section 13.6 hereof, to save
Landlord harmless and indemnified from all injury, loss, claims or damage to any
person or property occasioned by any negligent act or omission of Tenant, its
agents or employees. Tenant shall additionally be obligated to maintain workers
compensation insurance (with the limits required by applicable law) covering all
of Tenant's employees working in the Demised Premises and to deposit with
Landlord a certificate of insurance with respect thereto bearing the endorsement
that the policy will not be canceled or reduced in scope of coverage or amount
of coverage until thirty (30) days after written notice to Landlord.
Notwithstanding the requirement that Tenant provide workers compensation
insurance, in the event that Tenant elects to become a non-subscriber on a
company-wide basis, the failure to continue workers compensation insurance shall
not constitute an Event of Default under this Lease.
(g) At the termination of this Lease, peaceably to give up and
surrender the Demised Premises, including all alterations and additions made by
Tenant and all fixtures permanently attached to the Demised Premises, during the
Lease Term; except removable fixtures and such built in fixtures as Landlord
shall direct Tenant to remove; the Demised Premises and improvements to be in
good order, repair and condition, excepting only reasonable wear and tear, fire
or other casualty, a taking by eminent domain or any repairs that are the
obligation of Landlord under this Lease.
(h) To remain fully obligated under this Lease notwithstanding any
assignment or sublease, or any indulgence, granted by Landlord to Tenant or to
any assignee or sublessee, unless expressly released by Landlord.
29
(i) To obtain all permits or licenses necessary to conduct business
and to pay all taxes upon its merchandise, stock, fixtures, equipment and
leasehold improvements in the Demised Premises.
29.5 Tenant's Negative Covenants. Tenant covenants and agrees throughout
the Lease Term all renewals thereof, as follows:
(a) Not to intentionally or negligently injure, deface or otherwise
harm the Demised Premises or any part thereof or any equipment or installation
therein; nor commit any nuisance; nor permit the emission of any objectionable
noise or odor, nor burn any trash or refuse within the Shopping Center; nor make
any use of the Demised Premises or of any part thereof or equipment therein
which is improper, offensive or contrary to any law or ordinance or to
reasonable rules and regulations of Landlord as such may be promulgated from
time to time, or which will invalidate or increase the cost of any of Landlord's
insurance over a standard rate for similar commercial properties,
notwithstanding the Permitted Use; nor use any advertising medium which may
constitute a nuisance, such as loud speakers or tape recorders, in a manner to
be heard outside the Demised Premises; nor conduct any auction, fire, "going out
of business," bankruptcy or similar distress sales; nor to sell or display
merchandise on, or otherwise obstruct, the Common Area.
(b) Not to permit to be created nor to remain undischarged, and to
indemnify Landlord against, any lien, encumbrance or charge filed against the
Demised Premises or any part thereof by reason of any work, labor, services or
materials performed at or furnished to the Demised Premises, to Tenant, or to
anyone holding the Demised Premises through or under Tenant, and not to suffer
any other matter or thing whereby the estate, right and interest of Landlord in
the Demised Premises or any part thereof may be impaired. Notice is hereby given
that Landlord shall not be liable for any work or materials furnished to Tenant
on credit and that no mechanic's or other lien for any such work or materials
shall attach to or affect Landlord's interest in the Demised Premises or
Shopping Center based on any work or material supplied to Tenant or anybody
claiming through Tenant. Should Tenant receive written notice of such a lien
having attached to Landlord's interest, Tenant shall forthwith take such action
by bonding or otherwise as will remove or satisfy such lien. If Tenant shall
fail to cause such lien to be discharged within thirty (30) days after receipt
by Tenant of written notice of the filing thereof and before judgment or sale
thereunder, then, in addition to any other right or remedy of Landlord, Landlord
may, but shall not be obligated to, discharge the same by paying the amount
reasonably claimed to be due or by bonding or other proceeding deemed
appropriate by Landlord, and the amount so paid by Landlord and/or all
reasonable costs and expenses, including interest at eighteen percent (18%) per
annum and reasonable attorneys' fees, incurred by Landlord in procuring the
discharge of such lien shall be deemed to be Additional Charges and shall be due
and payable by Tenant to Landlord on the first day of the next following month.
(c) Not to dispose of or discharge, or allow any of Tenant's
employees, contractors, agents, or invitees to discharge any Hazardous Substance
on, in, or about the Demised Premises. Tenant will properly store and handle any
Hazardous Substance Tenant is legally permitted to bring onto the Demised
Premises. Tenant will only bring onto the Demised Premises such Hazardous
Substances as are necessary for Tenant to carry on the Permitted Use and then
only to the extent in compliance with all applicable laws. Tenant will promptly
furnish to Landlord copies of all notices given by Tenant, its agents, or
employees, to any governmental agency, court, or other entity, or received by
Tenant, its agents, or employees from any governmental agency, court, or other
entity, in connection with any Hazardous Substance relating to the Demised
Premises. Tenant will promptly notify Landlord of the pendency or threat of
private or governmental claims or judicial or administrative actions relating to
environmental impairment or regulatory requirements relating to Hazardous
Substances on the Demised Premises caused by the acts or omissions of Tenant,
its agents or employees. If Tenant defaults in any of its obligations under this
Section, Landlord will have the right (but not the obligation) to cure such
default (at Tenant's sole expense), including the repair of the Demised
Premises. The amount so paid by Landlord, together with any reasonable
attorneys' fees incurred by Landlord, will be immediately due from Tenant to
Landlord as Additional Charges. Tenant hereby indemnifies, protects, defends,
and holds Landlord harmless from and against any and all claims, demands,
losses, liabilities, and penalties (including, without limitation, reasonable
attorneys' fees at all trial and appellate levels, whether or not suit is
brought) arising from or out of
30
the presence of any Hazardous Substance on the Demised Premises or any violation
of any local, state or federal environmental law, regulation, ordinance or
administrative or judicial order relating to any Hazardous Substance, provided
such has been caused by the acts or omissions of Tenant, its agents,
contractors, employees or invitees. The provisions of this Section 29.5 (c)
shall survive the expiration or earlier termination of this Lease.
(d) Tenant shall not install any storage or other type of tanks on or under
the Demised Premises or on or under the Shopping Center.
29.6 Tenant's Representations.
(a) That Tenant is duly organized and validly existing under the laws of
the State of Texas and has full power and authority to enter into this Lease.
(b) That Tenant is not a party to any agreement or litigation which could
adversely affect the ability of Tenant to perform its obligations under this
Lease or which would constitute a default on the part of Tenant under this
Lease, or otherwise adversely affect Landlord's rights or entitlements under
this Lease.
(c) That all statements made here are true and correct in all material
respects.
(d) That, to Tenant's knowledge, the execution, delivery and performance of
this Lease by Tenant will not conflict with, be inconsistent with, or result in
any breach or default of any of the terms, covenants, conditions or provisions
of any indenture, mortgage, deed of trust, instrument, document, agreement or
contract of any kind or nature to which Tenant is a party or by which Tenant may
be bound.
29.7 Surrender Space. Notwithstanding anything contained in this Lease to
the contrary, Tenant shall have the option to surrender 21,900 square feet of
the Demised Premises as outlined in yellow on the Site Plan attached hereto as
Exhibit "B" ("Surrender Space") provided (i) Tenant has delivered written notice
to Landlord not later than the expiration of the eleventh (11th) month of the
Lease Term of its election to deliver the Surrender Space to Landlord at the end
of the first Lease Year, and (ii) Tenant is not in default with respect to this
Lease at the time of its election pursuant hereto. Should Tenant fail to timely
provide the required notice or be in default under this Lease, Tenant will be
deemed to have waived its option to deliver the Surrender Space to Landlord. To
the extent Tenant timely elects to return the Surrender Space to Landlord
pursuant hereto and is not in default under this Lease, Tenant shall deliver the
Surrender Space to Landlord not later than the end of the first Lease Year and
shall vacate the Surrender Space not later than the expiration of the first
Lease Year. Should Tenant timely elect to deliver the Surrender Space to
Landlord and actually delivers possession thereof to Landlord at the expiration
of the first Lease Year, the Minimum Guaranteed Rental for the remainder of the
Lease Term for the remaining Demised Premises shall be $1,808,904.00, payable in
monthly installments as follows:
Months Monthly Rental
------ --------------
13-60 $15,213.00
61-120 $17,978.00
To the extent Tenant timely elects to tender the Surrender Space to Landlord
pursuant hereto, Tenant shall continue to be obligated to pay all Rent and the
Additional Charges which accrue pursuant to the terms of this Lease and be
responsible for all of the covenants and obligations contained in this Lease as
it relates to the entire Demised Premises for the remainder of the first Lease
Year, and for the remaining Demised Premises for the entire Lease Term. Should
Tenant default with respect to any of its obligations under this Lease prior to
the delivery of the Surrender Space to Landlord, Tenant will be deemed to have
waived its option to return the Surrender Space to Landlord pursuant hereto.
31
EXECUTED as of the date hereinabove stated, the" Effective Date.".
LANDLORD:
FIESTA MART, INC.
a Texas corporation
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
TENANT:
C.A.I., L.P., a Texas limited partnership
By: CONN APPLIANCES, INC.,
a Texas corporation,
its General Partner
By: /s/ ▇.▇. ▇▇▇▇▇
-------------------------------------
▇.▇. ▇▇▇▇▇, Chief Financial Officer
32
EXHIBIT A
Legal Description
BEING an 11.79 acre tract of land out of Lots 60 through 66, Inclusive, College
Acres Addition, and ▇▇▇▇ ▇▇, ▇▇, ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ Subdivision No. l,
in the ▇▇▇▇▇ ▇▇▇▇▇ League, Abstract 5, Beaumont, Jefferson County, Texas, plat
of said College Acres Addition being recorded in Volume 5, Page 34, and the plat
of said Columbus ▇▇▇▇▇▇▇▇▇▇ Subdivisions No. 1 being recorded in Volume 1, Page
112, both of the Map Records, Jefferson County, Texas, the 11.79 acre tract
being located along and adjacent to the south right-of way line of College
Street, along and adjacent to the east right-of-way, line of ▇▇▇ ▇▇▇▇▇▇, and
along and adjacent to the north right-of-way line of ▇▇▇▇▇ Street and more
fully described by metes and bounds as follows;
BEGINNING at the southwest corner of Lot 29 of the Columbus ▇▇▇▇▇▇▇▇▇▇
Subdivision No. l at the intersection of the east line of ▇▇▇ ▇▇▇▇▇▇ and the
north line of ▇▇▇▇▇ Street and being the southwest corner of the 11.79 acre
tract;
THENCE north 00 DEG. 02'00" west along the east line of ▇▇▇ ▇▇▇▇▇▇ and the west
line of the said Lot 29 and the west line of Lot 60, College Acres Addition, at
467.00' the northwest corner of said Lot 29 and the southwest corner of said Lot
60, and at 688.70' a point for corner 127.00' south of the northwest corner of
said ▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇ being in the south line of College
Street;
THENCE north 89 DEG. 45'50" east parallel to the south line of College Street,
at 100.00' the east line of Lot 60 and the west line of Lot 61, and at 123.00'
point for corner;
THENCE north 00 DEG. 02'00 west, parallel to the east line of ▇▇▇
▇▇▇▇▇▇, a distance of 127.00 feet to corner in the south line of College Street
and the north line of Lot 61;
THENCE north 89 DEG. 45'50" east, along the south line of college Street and the
north line of Lots 61 through 66, inclusive, College Acres Addition, a distance
of 577.00' to corner at the northeast ▇▇▇▇▇ of Lot 66;
THENCE south 00 DEG. 09'30" cast along the cast line of Lot 66 and said east
line extended, at 350.40' the southeast corner of Lot 66 and the north line of
Lot 31, Columbus ▇▇▇▇▇▇▇▇▇▇ Subdivisions No.1, and at 530,40' point for corner
it said Lot 31;
THENCE south 87 DEG. 15'48" west, a distance of 151.65' to ▇▇▇▇▇,
THENCE south 00 DEG. 05'10" east, a distance of 280' to corner in the north line
of ▇▇▇▇▇ Street and the south line of said Lot 30, Columbus ▇▇▇▇▇▇▇▇▇▇
Subdivision No.1;
THENCE south 89 DEG. 54'10" west along the north line of ▇▇▇▇▇ Street and
the south line of Lots 30 and 29, Columbus ▇▇▇▇▇▇▇▇▇▇ Subdivision No.1, at
220.00' the southwest ▇▇▇▇▇ of ▇▇▇ ▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇ and at
550.00' the PLACE OF BEGINMNG containing in area 11.79 acres of land, more or
less.
EXHIBIT "B"
[LOGO] FIESTA - BEAUMONT
BEAUMONT, TEXAS
[GRAPHIC]
DEMISED PREMISES
SURRENDER SPACE
EXHIBIT "C"
CONSTRUCTION RIDER
This Construction Rider is attached to and forms a part of that certain
Shopping Center Lease Agreement (the "Lease") dated ,
----------------------
2000, between Fiesta Mart, Inc., as "Landlord" and C.A.I., L.P., as "Tenant".
1. The term "Tenant's Work" shall mean all work required to be performed by
Tenant, at the sole cost and expense of Tenant, to make the interior of the
Demised Premises suitable for Tenant's intended use, including but not limited
to the furnishing and equipping the Demised Premises. Tenant will be responsible
for the construction of the interior leasehold improvements and for the
installation of its fixture package in accordance with the interior detail to be
provided to Landlord, and subject to Landlord's approval, as specified in
Paragraph 3. below.
2. Upon the execution of the Lease and conditioned that Tenant has provided
a certificate reflecting the existence of the required Commercial General
Liability Policy under Section 13.2 of the Lease, Tenant shall have the right to
come onto the Demised Premises in order to, take measurements and commence
Tenant's Work, including fixturing, but such entry by Tenant shall be at
Tenant's sole risk.
3. Tenant's Work will be performed in a good and workmanlike manner,
without the imposition of any liens on the Shopping Center or Demised Premises.
Prior to commencement of Tenant's Work, Tenant will provide a copy of Tenant's
plans and specifications to Landlord for Landlord's approval, which approval
will not be unreasonably withheld or delayed.
4. Tenant shall cause Tenant's Work to be substantially completed within
one hundred twenty (120) days from and after the Effective Date of the Lease,
subject to the extension by virtue of force majeure only.
5. At all times while Tenant is constructing and completing the Tenant's
Work and installing its trade equipment, furniture and fixtures, Tenant shall
not interfere with the conducting of business at the Shopping Center. Tenant
shall comply with reasonable requests of Landlord for the purpose of avoiding
such interference. If at any time during the course of Tenant's Work at the
Demised Premises the storefront of the Demised Premises is not fully secure,
Tenant shall construct a barricade of plywood or other material approved by
Landlord to secure the Demised Premises.
6. In connection with the performance of Tenant's Work, with respect to any
labor performed or materials furnished by Tenant at the Demised Premises, the
following shall apply: All such labor shall be performed and materials furnished
at Tenant's own cost, expense and risk. With respect to any contract for any
such labor or materials, Tenant will act as a principal and not as the agent of
Landlord. Tenant agrees to indemnify and hold Landlord harmless from all claims
(including costs and expenses of defending against such claims) arising or
alleged to arise from any act or omission of Tenant or Tenant's agents,
employees, contractors, subcontractors, laborers, materialmen or invitees or
arising from any bodily injury or property damage occurring or alleged to have
occurred incident to Tenant's Work at the Demised Premises. Tenant shall have no
authority to place any lien upon the Demised Premises or any interest therein
nor in any way to bind Landlord. If, because of any actual or alleged act or
omission of Tenant, any lien, affidavit, charge or order for payment of money
shall be filed against Landlord, the Demised Premises or the Shopping Center or
any portion thereof or interest therein, whether or not such lien, affidavit,
charge or order is valid or enforceable, Tenant shall, at its own cost and
expense, cause same to be discharged of record by payment, bonding or otherwise
no later than fifteen (15) days after notice to Tenant of the filing thereof,
but in all events, prior to any foreclosure thereof. All of Tenant's
construction at the Premises shall be performed in compliance with the working
drawings, applicable codes and other legal requirements, and in a good and
workmanlike manner reasonably satisfactory to Landlord and in such manner as to
not cause Landlord's fire and extended coverage insurance to be canceled or the
rate therefor increased. All of Tenant's construction at the Demised Premises
shall be performed in compliance with the plans and specifications previously
approved by Landlord in a good and
workmanlike manner. Further, all such work shall be performed by Tenant in
strict compliance with all applicable building codes, regulations and all other
legal requirements.
7. Upon completion of Tenant's Work by Tenant, Tenant shall deliver to the
Landlord of the following:
(a) A general contractor's affidavit and lien waiver with respect to the
Demised Premises and the Shopping Center, executed by the general contractor(s)
performing Tenant's Work for Tenant, stating that construction has been
completed and that all materials and labor for such work have been paid in full,
provided that if Tenant acts as its own general contractor, Tenant will execute
such affidavit.
(b) A sub-contractor's affidavit and lien waiver with respect to the
Demised Premises and the Shopping Center, executed by each sub-contractor
performing Tenant's Work of a value in excess of $10,000.00, stating that all
materials and labor employed by such sub-contractor have been paid in full.
(c) Notice from Tenant to Landlord that Tenant has opened for business at
the Demised Premises, together with evidence, if required by Landlord, of
payment to any contractors or subcontractors which shall then be due and owing
by Tenant related to Tenant's Work.
(d) A certificate of occupancy (or other certificates evidencing inspection
and acceptance of all of Tenant's construction by appropriate governmental
authorities).
(e) Certificate of substantial completion from Tenant's architect or
engineer certifying that Tenant's Work has been fully completed in accordance
with the approved plans and specifications.
(f) Delivery to Landlord of one (1) set of as-built plans for the Demised
Premises.
2
EXHIBIT "D"
SIGN CRITERIA
The purpose of this sign criteria is to outline the standards which have been
established to govern the design, fabrication and installation of tenant's signs
on the Beaumont Shopping Center.
This information should be given to your sign company to serve as a guide in
preparing their cost estimate for your approval, Three (3) copies of your sign
drawings must be submitted to offices of the center's Landlord for their review
and approval.
FASCIA MOUNTED TENANT SIGNS
1. The maximum overall length of a sign shall not exceed 75% of the lease
frontage.
2. The maximum overall vertical height for a sign shall not exceed twenty
(20) inches.
3. The maximum overall depth of a sign shall not exceed ten (10) inches.
4. All signs shall be an interior-illuminated box type.
5. All cans shall be fabricated of 20 GA. Sheetmetal with a steel angle
frame. All exposed exterior surfaces sha11 match the building's canopy
color.
6. All fasteners, screws, bolts, etc., used shall be rust proof.
7. All cans to be lighted with lamps overlapped for even illumination.
8. Transformers and all electrical shall be UL approved and mounted
inside of sign can.
9. All signs are to be centered over the leased premises.
LIABILITY
a. The sign company shall be held liable and shall bear all costs for
removal, repair and/or correction of all non-conforming signs and for
all buildings repairs resulting from same.
b. All signs shall be constructed and installed at tenant's expense.
c. All permits for signs and their installation shall be obtained by the
tenant or his representative.
d. Tenant vacating premises for any reason shall bear all costs for
removal of signs and for repair of fascia panels damaged or penetrated
by tenant's sign.
EXHIBIT "E"
GUARANTY
For Value Received, CONN APPLIANCES, INC., a Texas corporation, hereinafter
called Guarantor, in consideration of the premises and of the benefits that will
accrue (whether directly or indirectly) to Tenant and Guarantor from that
certain Lease between Fiesta Mart, Inc. as Landlord, and CAI, L.P. as Tenant,
covering approximately 88,293 square feet in the Beaumont Shopping Center, ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇, (the "Lease"), which
consideration is acknowledged by Guarantor to be new, independent and
sufficient, and as a material inducement to Landlord to enter the Lease,
Guarantor does hereby unconditionally, fully and absolutely guarantee without
offset or deduction, the prompt payment when due of all sums payable by Tenant
under the Lease, and to do or cause to be done, or perform or cause to be
performed, all duties, covenants and obligations of Tenant under the Lease, for
the full Lease Term and any renewals thereof, this Guaranty constituting an
absolute and unconditional guaranty (1) of full payment, and not of collection
of all sums due under the Lease, and (2) that Tenant will perform punctually and
faithfully under and in accordance with the terms of the Lease. Guarantor
further agrees to indemnify and hold harmless Landlord from any and all losses,
damages, costs, and expenses (including, without limitation, costs of court and
attorney's fees incurred by Landlord) in the event of any default or breach by
Guarantor of its obligations under this Guaranty.
Guarantor hereby agree that Guarantor, as principal obligor, will pay or
otherwise provide for or bring about promptly when due all payments required of
Tenant under the Lease and the timely and full performance of all duties,
covenants and obligations of Tenant under the Lease, notwithstanding any fact or
circumstance, including, but not limited to, (1) the liquidation, dissolution,
receivership, insolvency or bankruptcy of Tenant, (2) the making by Tenant of an
assignment for the benefit of its creditors, (3) the reorganization,
arrangement, composition or readjustment of Tenant, or (4) any proceeding
affecting the status, existence or assets of Tenant. Without limiting the
foregoing, Guarantor expressly and specifically agrees that it will not be
necessary or required, and Guarantor shall not be entitled to require, that
Landlord shall file suit or proceed to or obtain a judgment against Tenant or
any other party, or make any effort of collection from Tenant or any other
party, or exercise any remedy or remedies provided in the Lease or by law
before, or as a condition precedent to, enforcing the liability of Guarantor
hereunder; and Guarantor, knowingly and with the express intention of
extinguishing legal rights (if any may exist), hereby waives any and all rights,
whether existing by rule, statute, general law, equity or otherwise, to assert
or require that (1) Landlord previously seek or obtain judgment against Tenant
or any other party prior to Landlord's suing Guarantor for the enforcement of
this Guaranty, or (2) Landlord joins Tenant or any other party in any suit
against Guarantor for the enforcement of this Guaranty.
Guarantor waives notice of the acceptance of this Guaranty (such acceptance
being hereby conclusively presumed). The obligations of Guarantor shall be
continuous from the date hereof until the payment and performance hereby
guaranteed has been fully paid or performed, and Guarantor's obligations
hereunder shall continue in full force and effect notwithstanding (1) any
release of Tenant or any other party liable for payment or performance under the
Lease, (2) any changes, modifications, amendments, assignments or extensions of
the Lease, or (3) any waiver or forbearance on the part of Landlord in enforcing
payment or performance by Tenant under the Lease.
Guarantor stipulates that in accordance with Article 1302-2.06, Vernon's
Annotated Civil Statutes of Texas, the directors of Guarantor have determined
that the action taken pursuant hereto may reasonably be expected to benefit the
Guarantor, directly or indirectly.
This Guaranty (1) constitutes the entire agreement between Guarantor and
Landlord and supersedes all prior agreements or understandings, both written and
oral, regarding the subject matter hereof, (2) shall inure to the benefit of
Landlord and Landlord's successors and assigns, and (3) may be modified or
amended only by a written instrument signed by Guarantor and Landlord and dated
subsequent to the date of this Guaranty.
Failure of Landlord to insist upon strict performance or observance of any
of the terms, provisions or covenants of the Lease or to exercise any right
therein contained shall not be construed as a waiver or relinquishment for the
future of any such term, provision, covenant or right, but the same shall
continue and remain in full force and effect. Receipt by Landlord of any
monetary sum
or acceptance of performance of any obligation of Tenant under the Lease with
knowledge of the default or breach of any provision of the Lease shall not be
deemed a waiver of such breach.
Guarantor further agrees that in any right of action which shall accrue to
Landlord with respect to the Lease or under this Guaranty, Landlord may, at its
option, proceed against Tenant alone (without having made any prior demand upon
Guarantor or having commenced any action against Guarantor or having obtained or
having attempted to satisfy any judgment against Guarantor) or may proceed
against Guarantor and Tenant, jointly or severally, or may proceed against
Guarantor alone (without having made any prior demand upon Tenant or having
commenced any action against Tenant or having obtained or having attempted to
satisfy any judgment against Tenant other than as may be required by the Lease).
Under no circumstances shall the liability of Guarantor under this Guaranty be
terminated either with respect to any period of time when the liability of
Tenant under the Lease continues or with respect to any circumstances as to
which the liability of Tenant has not been fully discharged by performance.
Guarantor agrees that in the event that Tenant shall become insolvent or
shall be adjudicated a bankrupt, or shall file a petition for reorganization,
arrangement or other relief under any present or future provisions of the
National Bankruptcy Act, or if such a petition be filed by creditors of said
Tenant, or if Tenant shall seek a judicial readjustment of the rights of its
creditors under any present or future Federal or State law or if a receiver of
all or part of its property and assets is appointed by any State or Federal
court, no such proceeding or action taken therein shall modify, diminish or in
any way affect the liability of Guarantor under this Guaranty and the liability
of Guarantor with respect to such Lease shall be of the same scope as if
Guarantor had itself executed said Lease as the named tenant thereunder and no
"rejection" and/or "termination" of such Lease in any of the proceedings
referred to in this paragraph shall be effective to release and/or terminate the
continuing liability of Guarantor to Landlord under this Guaranty with respect
to such Lease for the remainder of the lease term stated therein unaffected by
any such "rejection" and/or "termination" in said proceedings; and if, in
connection with any of the circumstances referred to in this paragraph, Landlord
should request that Guarantor execute a new Lease for the balance of the term of
said Lease (unaffected by any such "rejection" and/or "termination" in any of
said proceedings), but in all other respects identical with said Lease,
Guarantor shall do so as the named "Tenant" under such new Lease (irrespective
of the fact that the existing Lease may have been "rejected" or "terminated" in
connection with any proceedings referred to in this paragraph). In the event of
failure or refusal of Guarantor to execute such new Lease as herein provided,
without limiting any of the legal or equitable remedies of Landlord on account
of such failure or refusal, Guarantor agrees that Landlord shall have the right
to obtain a decree of specific performance against Guarantor.
In the event of the dissolution of Guarantor while this Guaranty is in
force, and without regard to whether Tenant shall be in default under the Lease,
no distribution or disposition of the assets of Guarantor shall be made without
first making provision acceptable to Landlord for the payment or satisfaction of
Guarantor's obligations (and contingent obligations) hereunder.
Should any portion of this Guaranty ever be held legally invalid or
unenforceable, the balance of this Guaranty shall not thereby be affected, but
shall remain in full force and effect in accordance with its terms and
provisions.
The stated rights and remedies of Landlord under this Guaranty against
Guarantor with respect to the liability of Guarantor hereunder shall be
understood as not excluding any other legal or equitable rights and remedies of
Landlord against Guarantor not expressly set forth herein, but shall be
understood as being cumulative of all such other legal and equitable rights and
remedies of Landlord not expressly stated herein.
All terms and provisions hereof shall inure to the benefit of the
successors and assigns of Landlord and shall be binding upon the heirs, legal
representatives, administrators, successors and assigns of Guarantor.
2
EXECUTED by Guarantor on the day and year shown opposite Guarantor's
signature below.
Date: , 2000 CONN APPLIANCES, INC.,
------------ a Texas Corporation
By:
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, CEO
3
EXHIBIT "F"
TRASH DISPOSAL RIDER
This Trash Disposal Rider is attached to and forms a part of that certain
Shopping Center Lease Agreement (the "Lease") dated , 2000, by
-----------------
and between Fiesta Mart, Inc., hereinafter referred to as "Landlord", and
C.A.I., LTD., a Texas Limited Partnership, hereinafter referred to as "Tenant".
1. Tenant agrees to contract for the supplying of a "dumpster" for Tenant's
exclusive use, such dumpster to be located as a location on the Shopping Center
mutually agreeable to Landlord and Tenant. Landlord's consent to the location of
such dumpster at a location convenient to the Demised Premises will not be
unreasonably withheld.
2. Tenant hereby agrees to place all of its trash from the normal operation
of its business activities at the Demised Premises (excluding construction) into
the dumpster container so provided by Tenant, and Tenant agrees that no other
trash container may be utilized by Tenant outside the Demised Premises.
3. Tenant agrees to contract for a dumpster service which will empty the
dumpster on a regular basis.
4. In consideration for Tenant's supplying such dumpster and contracting
for the service to said dumpster, Tenant shall not be required to pay, as part
of the Common Area Costs or otherwise, any portion of the trash disposal
expenses incurred by Landlord as a result of trash removal which may be provided
for other tenants of Landlord.
5. The foregoing provisions shall not, however, exclude Tenant from paying
its Pro Rata Share of trash removal from the Common Area as part of the Common
Area Costs to be prorated under the terms of the Lease.
EXHIBIT "G"
CONFIRMATION OF DEMISED PREMISES
This Confirmation of Demised Premises ("Confirmation") is made this
----
day of , 2000 by and between Fiesta Mart, Inc. ("Landlord") and
------------
C.A.I., L.P. ("Tenant").
W I T N E S S E T H:
WHEREAS, Landlord and Tenant have entered into that certain Shopping Center
Lease Agreement ("Lease") dated , 2000 for the lease of
------------------------
certain premises located at , Texas ("Demised Premises");
--------------------
and
WHEREAS, Landlord and Tenant wish to set forth certain agreements as to the
exact size of the Demised Premises and issues related thereto.
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other good and
valuable consideration as described in the Lease, Landlord and Tenant agree as
follows:
1. Except as otherwise defined herein, all capitalized terms shall have the
same meaning as set forth in the Lease.
2. The square footage of the Demised Premises is square feet of
----------
space.
3. Tenant's Pro Rata Share of Common Area Costs for the first year of the
Lease Term is estimated to be $ , payable in equal monthly installments
---------
of $ , subject to adjustment as provided in Section 6.4 of the Lease.
--------
4. Tenant's Pro Rata Share of Insurance Premiums for the first year of the
Lease Term is estimated to be $ , payable in equal monthly installments
--------
of $ , subject to adjustment as provided in Section 18.4 of the Lease.
--------
5. Tenant's Pro Rata Share of Taxes for the first year of the Lease Term is
estimated to be $ , payable in equal monthly installments of $ ,
-------- ----------
subject to adjustment as provided in Section 18.2 of the Lease, subject
reduction if tax abatement obtained.
6. Tenant's Pro Rata Share of Water Usage Charges for the first year of the
Lease Term is estimated to be $ , payable in equal monthly installments
--------
of $ , subject to adjustment as provided in Section 12.3 of the Lease,
----------
if any.
Except as otherwise provided herein, the Lease remains unmodified, in full
force and effect. IN WITNESS WHEREOF, the parties hereto have executed this
Confirmation as of the day and year first above written.
TENANT: LANDLORD:
C.A.I., L.P., a Texas limited partnership FIESTA MART, INC.
a Texas corporation
By: CONN APPLIANCES, INC.,
a Texas corporation,
its General Partner By:
---------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
By:
------------------------------
▇. ▇. ▇▇▇▇▇,
Chief Financial Officer
EXHIBIT "H"
OPTIONS TO RENEW
Provided there is no existing Event of Default under the Lease, Tenant may,
by written notice six (6) months or more prior to the expiration of the Lease
Term, advise Landlord in writing of its intention to extend the Lease Term for
an additional term of five (5) years ("First Renewal Term") upon the same terms
and conditions provided in this Lease (except as otherwise provided in this
paragraph) commencing on the first day following the expiration of the Lease
Term. The Minimum Guaranteed Rental for the First Renewal Term shall be an
amount equal to the product of $4.25 multiplied by the square footage of the
Demised Premises (being either 66,383 or 88,283, as applicable), payable in
equal monthly installments. Failure of Tenant to give Landlord timely notice of
the exercise of its renewal option shall cause the renewal option for the First
Renewal Term to lapse and be of no further force and effect and the Lease Term
shall expire at the end of the initial Lease Term. Provided there is no existing
Event of Default, Tenant may, by written notice six (6) months or more prior to
the expiration of the First Renewal Term, advise Landlord in writing of its
intention to extend the First Renewal Term for an additional term of five (5)
years ("Second Renewal Term") upon the same terms and conditions provided in
this Lease except the Minimum Guaranteed Rental for the Second Renewal Term
shall be an amount equal to the product of $5.25 multiplied by the square
footage of the Demised Premises (being either 66,383 or 88,283, as applicable),
payable in equal monthly installments. Should Tenant fail to timely give the
requisite notice, the renewal option for the Second Renewal Term will lapse and
be of no further force and effect and the Lease shall expire at the end of the
First Renewal Term. Tenant shall have no further renewal options after the
expiration of the Second Renewal Term. Tenant shall be obligated to execute a
lease amendment evidencing Tenant's exercise of any renewal option pursuant
hereto within thirty (30) days after being provided the form thereof, in the
absence of which, the renewal option shall be deemed to have lapsed and the
Lease shall expire at the end of the Lease Term or the First Renewal Term, as
applicable.
EXHIBIT "I"
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT ("Agreement")
executed by and between , a(n)
-----------------------------------
("Mortgagee") and CAI, L. P., a Texas limited partnership
--------------------
("Tenant").
WITNESSETH:
WHEREAS, ("Landlord") has entered into a certain lease
---------------
("Lease") with Tenant dated , 2000 relating to certain premises located
---------
in the County of , City of , State of
----------- --------- ----------
("Premises"), said Premises being more particularly described in said Lease and
being situated on a portion of the real property described in EXHIBIT A attached
hereto and made a part hereof; and
WHEREAS, Mortgagee [has committed to make a] [has made a] mortgage loan to
Landlord in the original principal amount of
----------------------------
Dollars ($___________), secured by a Mortgage [dated _______ ] ("Mortgage")
covering the Premises [ , which Mortgage is recorded in Book _____, Page ______,
of __________ ];
NOW, THEREFORE, it is mutually agreed as follows:
1. The Lease is and shall be subject and subordinate to the Mortgage and to
all renewals, modifications, consolidations, replacements and extensions of the
Mortgage.
2. In the event of a foreclosure of the Mortgage or should Mortgagee obtain
title by deed in lieu thereof, or otherwise, Mortgagee, for itself, its
successors or assigns (which shall include any persons acquiring title by
voluntary deed, assignment or other disposition or transfer in lieu of
foreclosure), agrees that the Lease remains unaffected in full force and effect
and Tenant may continue its occupancy of the Premises in accordance with the
terms and provisions of the Lease, so long as Tenant is not in default under the
Lease beyond any applicable notice and cure period. Mortgagee agrees not to name
Tenant as a party defendant in any foreclosure action.
3. Tenant agrees to attorn to: (a) Mortgagee when in possession of the
Premises; (b) a receiver appointed in an action or proceeding to foreclose the
Mortgage or otherwise; or (c) to any party acquiring title to the Premises as a
result of foreclosure of the Mortgage or deed in lieu thereof. Tenant further
covenants and agrees to execute and deliver, upon request of Mortgagee, or its
assigns, an appropriate agreement of attornment, in form and content reasonably
acceptable to Tenant and Mortgagee (but which shall not amend the terms of the
Lease or otherwise diminish Tenant's rights thereunder) with any subsequent
titleholder of the Premises.
4. So long as the Mortgage on the Premises remains outstanding and
unsatisfied, Tenant will deliver to Mortgagee a copy of all notices of default
given to Landlord by Tenant. At any time before the rights of Landlord shall
have been forfeited or adversely affected because of any default under the Lease
as therein provided, Mortgagee shall have the right (but not the obligation) to
cure such default within the same period of time as is allowed Landlord under
the Lease.
5. If Mortgagee shall succeed to the interest of Landlord under the Lease,
Mortgagee shall be bound to Tenant under all the terms, covenants and conditions
of the Lease, and Tenant shall, from and after Mortgagee's succession to the
interest of Landlord under the Lease, have the same remedies against Mortgagee
for the breach of an agreement contained in the Lease that Tenant might have had
under the Lease against Landlord if Mortgagee had not succeeded to the interest
of Landlord; provided further, however, that Mortgagee shall not be:
(a) liable for any warranty, act or omission of any prior landlord
(including Landlord), except those of a continuing nature; or
(b) subject to any offsets or defense which Tenant might have against
any prior landlord (including Landlord), except (i) offsets specifically
provided for in the Lease, or (ii) those which arose out of such Landlord's
default under the Lease and accrued after Tenant has notified Mortgagee and
given Mortgagee an opportunity to cure as provided in Paragraph 4 above; or
(c) bound by any rent or additional rent which Tenant might have paid
for more than the current month to any prior landlord (including Landlord); or
(d) bound by any amendment or modification of the Lease or any
collateral agreement made without Mortgagee's consent.
6. This Agreement shall be binding upon and inure to the benefit of the
heirs, successors and assigns (which shall include any persons acquiring title
by voluntary deed, assignment or other disposition or transfer in lieu of
foreclosure) of the parties.
7. Any notices under this Agreement may be delivered by hand or sent by
commercial delivery services or United States Postal Service express mail, in
either case for overnight delivery with proof of service, or sent by certified
mail, return receipt requested, to the following addresses:
To Tenant: C.A.I., L.P., a Texas limited partnership
c/o CONN APPLIANCES, INC.
P. O. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman\CEO
To Lender:
--------------------------
--------------------------
--------------------------
--------------------------
The notice shall be deemed to have been given on the date it was actually
received.
9. This Agreement may be executed and delivered in counterparts for the
convenience of the parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
indicated below their respective signatures.
MORTGAGEE: ------------------------------------------
a(n)
By:
--------------------------------------
Print Name:
-------------------------------
Print Title:
------------------------------
Date: , 2000
---------------
TENANT: C.A.I., L.P., a Texas limited partnership
By: CONN APPLIANCES, INC.,
a Texas corporation,
its General Partner
By:
--------------------------------------
Date: , 2000 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman\CEO
---------------
2
STATE OF (S)
---------------
(S) SS:
COUNTY OF (S)
---------------
I, the undersigned, a Notary Public in and for said County in said State,
hereby certify that , whose name as of
----------------------- ----------------
, a , is signed to the foregoing instrument, who
--------------- ---------------
is known to me, acknowledged before me on this day that, being informed of the
contents of the instrument, he, as such officer and with full authority,
executed the same voluntarily for and as the act of said corporation.
Given under my hand and official seal this day of , 20 .
---- -------- --
-------------------------------
Notary Public
State of:
---------------------
My Commission expires:
--------
STATE OF (S)
---------------
(S) SS:
COUNTY OF (S)
---------------
This instrument was acknowledged before me on the day of ,
---- -------
2000, by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman/CEO of Conn Appliances, Inc., a Texas
corporation, on behalf of said corporation, as General Partner on behalf of
CAI, L.P., a Texas limited partnership.
Given under my hand and official seal this day of , 2000.
---- ---------
-------------------------------
Notary Public
State of:
---------------------
My Commission expires:
--------
3
EXHIBIT J
LANDLORD'S AGREEMENT
The undersigned, as lessor ("Lessor"), has entered into a lease (such
lease, including all amendments, modifications, renewals, and extensions
thereto, being hereinafter referred to as the "Lease"), with CAI, L.P., a Texas
limited partnership, as lessee ("Lessee"), with respect to a portion of the real
property more particularly described on Exhibit "A" annexed hereto and made a
part hereof (the "Real Estate"). A true and complete copy of the Lease is
annexed hereto as Exhibit "B". The premises leased to Lessee by the Lease are
all or part of the Real Estate and are more particularly described in the Lease
(the "Premises").
Lessor has been informed that Chase Bank of Texas, National Association,
individually and as Administrative Agent (the "Agent"), and NationsBank, N.A.,
individually and as Documentation Agent ("NationsBank"), and the other financial
institutions listed on the signature pages of the Credit Agreement (as
hereinafter defined) (the Agent, NationsBank and all the foregoing, are
collectively the "Lenders") are providing loans to Lessee and certain of its
subsidiaries to be used by Lessee and those subsidiaries by Lessee for various
purposes. In connection with such financing, Lessee intends to grant to Lenders
(i) a first leasehold deed of trust or mortgage (the "Leasehold Mortgage") on
Lessee's interest in the Lease and (ii) a security interest and first lien (the
"Security Interest") in and to Lessee's interest in the property more
particularly described in Exhibit "C" annexed hereto and made a part hereof (all
of such property being hereinafter collectively referred to as the "Collateral"
[PLEASE ADVISE AS TO NATURE OF COLLATERAL]), pursuant (i) to a Credit Agreement
among, Lessee, certain subsidiaries of Lessee and Lenders, (ii) to various
security agreements and pledge agreements such as the one contained in the
Leasehold Mortgage, and (iii) to certain financing statements and other
documents filed in connection therewith ((i), (ii), and (iii) collectively the
"Loan Documents"). Lessor has also been informed that owners of a majority of
the issued and outstanding stock of Lessee (the "Stock") intend to pledge such
Stock as security for the above-referenced financings.
For Ten Dollars ($10.00) and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Lessor and Lessee
hereby represent, warrant, and agree, for the benefit of Lenders, as follows:
1. Notwithstanding any provisions to the contrary in the Lease, Lessor
hereby consents to the grant of the Leasehold Mortgage on Lessee's interest in
the Lease to the Agent for the benefit of the Lenders (or to a trustee for the
benefit of the Agent for the benefit of the Lenders), and to the grant of the
Security Interest in the Collateral pursuant to the Loan Documents. Lessor
hereby further consents to the (x) recording of the Leasehold Mortgage against
the Real Estate and (y) filing of any and all financing statements or other
documents executed by Lessee and required or permitted under the Uniform
Commercial Code of the State in which the Real Estate is located in order to
perfect the Leasehold Mortgage on Lessee's interest in the Lease and the
Security Interest in the Collateral. In connection therewith, Lessor agrees to
execute a memorandum or short form of the Lease in recordable form and in such
form as is reasonably required by Lenders and is reasonably acceptable to
Lessor, provided, however, Lessee shall be obligated to simultaneously execute a
Termination of Memorandum which will be held by Lessor for recording upon
expiration or termination of the Lease.
2. Lessor and Lessee hereby agree as follows:
(a) Promptly upon default by Lessee under the Lease, Lessor shall give
to the Agent written notice of such default. Such notice shall be effective in
accordance with the notice provision set forth in Article XXV of The Lease, at
the following address (or at such alternative address as the Agent may have
given Lessor by prior written notice):
Chase Bank of Texas, National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. Dolphin
(b) Agent shall have the rights of a "Leasehold Mortgagee" under
Article XXVII of the Lease;
(c) Lessor shall accept performance by Lenders of any term, covenant,
condition or agreement to be performed by Lessee under the Lease with the same
force and effect as though performed by Lessee;
(d) Upon the occurrence of a non-monetary default under the Lease by
Lessee, which default Lenders intend to cure but Lenders are prevented from
curing such non-monetary default within the time period set forth in the Lease
because such default is of a personal nature to Lessee (such as a bankruptcy) or
any cure by Lenders first requires possession of the Premises by Lenders, so
long as Lenders are proceeding diligently and in good faith to cure such
non-monetary default, Lenders shall be entitled to such additional time as may
be necessary to cure such non-monetary default provided however, under no
circumstances, shall Lenders be entitled to more than seventy-five (75) days to
cure such non-monetary default from the date of Lessor's original notice to
Lessee and Lenders regarding such non-monetary default.
(e) Lenders or their trustee or designee shall have the right, without
Lessor's consent, (i) to foreclose the Leasehold Mortgage or to accept
assignment of Lessee's interest in the Lease in lieu of foreclosure of the
Leasehold Mortgage; and (ii) to foreclosure on the Stock or to accept assignment
or endorsement of the Stock, in lieu of foreclosure, or to otherwise realize on
its Security Interest in some or all of the Collateral.
3. All of the Collateral shall be and remain subject to the Leasehold
Mortgage and to the Security Interest until such time as the Leasehold Mortgage
and the Security Interest shall be released by the Agent.
4. Lessor hereby agrees that any lien for rent or similar charges, whether
arising by operation of law or otherwise, whether now existing or hereafter to
arise, and each and every right which Lessor now has or hereafter may have,
either to levy or distrain upon the Collateral or to claim or assert title to
the Collateral, or make any other claim against the Collateral, whether under
the Lease or the laws of the State in which the Real Estate is located, or under
any other applicable Federal, State, municipal or local law, ordinance or
otherwise, or under any mortgage now in effect or hereafter executed, whether by
reason of a default under the Lease or otherwise, shall be subject and
subordinate in every respect to all of the terms, provisions and conditions of
the Leasehold Mortgage and the Loan Documents and to the Security Interest in
the Collateral. Lenders and their agents and legal representatives, (i) may
remove any or all of the Collateral located at the Real Estate from the Real
Estate (a) whenever Lenders, in their sole discretion, believe such removal is
necessary to protect the Security Interest in the Collateral; or (b) whenever
Lenders seek to sell or foreclose upon the Collateral and (ii) subject to the
terms and provisions of the Lease, shall have access to Real Estate, the
Premises, and the Collateral at all times. Lenders shall be liable for any and
all damages to the Demised Premises and Shopping Center related directly or
indirectly to the removal by Lenders of the Collateral. Further, Lenders agree
to indemnify and hold Lessor harmless from any and all claims, damages, causes
of action, and costs and expenses incurred by Lessor as a result of Lender's
access to the Real Estate, the Premises and the removal of the Collateral
therefrom. Further, Lenders agree that in the event Lenders fail to remove the
Collateral from the Demised Premises within twenty (20) days after receipt of
notice therefrom Lessor to remove the Collateral, Lenders shall be deemed to
have abandoned the Collateral whereupon Lessor shall be entitled to dispose of
the Collateral as Lessor deems appropriate in its sole discretion without any
obligation to account for the proceeds of such disposition to either Lessee or
Lenders.
5. Lessor hereby recognizes and acknowledges that any claim that Lenders
may now have or hereafter have against the Collateral is and at all times shall
be and shall be deemed to be superior to any lien, security interest or claim of
any kind or nature whatsoever which Lessor now has or hereafter may have against
the Collateral, whether by statute, the Lease or otherwise.
6. Lenders may, without affecting the validity of this Agreement, increase
the amount of, or extend the time of payment of, any indebtedness of Lessee to
Lenders or alter the performance of any of the terms and conditions of any
agreement between Lessee and Lenders, including, without limitation, the
Leasehold Mortgage and the Loan Documents, without the consent of, or notice to,
Lessor and without in any manner whatsoever impairing or affecting the Leasehold
Mortgage or the Security Interest in the Collateral.
2
7. Lessor represents, warrants and agrees that, as of the date hereof (i)
the Lease is unmodified and in full force and effect; (ii) no rent, additional
rent or other amounts payable by Lessee are past due under the terms of the
Lease, and (iii) no violations under the terms of the Lease are in existence.
8. The rights of Lenders and Lessor under this Agreement are in addition
to, and cumulative of, any rights granted to, or for the benefit of, Lenders and
Lessor under the terms of the Lease or this Agreement. This Agreement shall
inure to the benefit of Lenders and Lessor and their respective successors and
assigns and shall be binding upon the heirs, personal representatives,
successors and assigns of Lenders, Lessor and Lessee, as applicable.
9. Upon payment in full of the loan evidenced by the Leasehold Mortgage,
Lenders shall immediately record an appropriate release of its liens pursuant
thereto in the appropriate real property records of Jefferson County, Texas, at
Lessee's sole cost and expense.
IN WITNESS WHEREOF, Lessor, Lessee and Lenders have caused this Agreement
to be duly executed as of this day of , 20 .
---- ----------------------------- --
Lessor: BEAUMONT DEVELOPMENT GROUP, L.P.
By ▇▇▇▇▇▇▇▇ Development Corporation,
Date: , 20 By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------- -- --------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, President
Lessee: C.A.I., L.P., a Texas limited partnership
By: CONN APPLIANCES, INC.,
a Texas corporation,
its General Partner
Date: , 20 By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------- -- ----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman\CEO
Lenders:
3
EXHIBIT C
TO LANDLORD'S AGREEMENT
Collateral
1. Stock of Lessee; and
2. All of Lessee's right, title and interest in all movable trade fixtures,
equipment (specifically excluding, however, any equipment which is
permanently attached to the Real Estate), inventory, contract rights,
goods, condemnation proceeds, insurance policies and other general
intangibles (including but not limited to trademarks, trade names, and
symbols), deposits, instruments and documents, and all other personal
property of every kind and character, now owned or hereafter acquired by
Lessee, which are now or hereafter attached to, used in connection with, or
situated in, on, or about the Premises or the improvements located on the
Premises or related to Lessee's rights in and to the Lease, and all
proceeds and products thereof.
EXHIBIT K
TAX ABATEMENT PROVISIONS
Tenant has notified Landlord that Tenant plans to pursue a tax abatement
related to the continued location of its executive offices in Beaumont,
Jefferson County, Texas, and to such end, Landlord agrees to cooperate with
Tenant, at no cost to Landlord, to achieve the maximum benefit for the Shopping
Center or any part thereof, and/or the Demised Premises. Such cooperation shall
include, but not be limited to, Landlord's agreement to allow the Demised
Premises to be treated as a separate tax parcel from the balance of the Shopping
Center if necessary to accommodate Tenant's sought for tax abatement.
Any tax abatement actually obtained by Tenant as to all or part of the
Shopping Center and/or the Demised Premises, shall attribute solely to Tenant,
and not to Landlord or any other tenants of Landlord, and shall be reflected in
a direct reduction in Tenant's Pro Rata Share of Taxes otherwise payable under
any provisions of this Lease Agreement. As a condition to Tenant receiving
credit for the entire tax abatement obtained by Tenant, Tenant shall be required
to supply written confirmation to Landlord from the taxing authority granting
such tax abatements specifying (a) the amount of taxes for the specified
calendar year as a result of such tax abatement; and (b) the amount that such
taxes would be absent such tax abatement.
Should Tenant default with respect to its obligations under this Lease
which results in the early termination or expiration of the Lease attributable
thereto, should the applicable taxing authorities retroactively adjust the taxes
for such prior years as if no tax abatement was granted, Tenant shall be solely
responsible for all such additional taxes as a result thereof and Tenant shall
remit such payment to Landlord within thirty (30) days of being invoiced for
such taxes.
