05/31/01 Chandler Pavilions II
06/13/01 Xxxxxxx Home Furnishings
SHOPPING CENTER LEASE
CHANDLER PAVILIONS II SHOPPING CENTER
THIS INDENTURE OF LEASE (the "Lease"), dated as of the ____
day of June, 2001, by and between OPUS WEST CORPORATION, a
Minnesota corporation, hereinafter referred to as "Lessor", and
ARIZONA FURNITURE COMPANY, a Nevada corporation d/b/a Xxxxxxx
Home Furnishings, hereinafter referred to as "Lessee".
WITNESSETH:
That Lessor, in consideration of the rents and covenants
hereinafter set forth, does hereby lease and let unto Lessee, and
Lessee does hereby hire and take from Lessor, that certain space
shown and designated on the site plan attached hereto and made a
part hereof as Exhibit "A" consisting of approximately 21,000
square feet of floor area. The exact square footage of the
Premises shall be calculated by Lessor's architect. In the event
the actual square footage as calculated by Lessor's architect is
more or less than 21,000 square feet of floor area, appropriate
adjustments shall be made to Annual Minimum Rent and Lessee's
proportionate share (for purposes of allocating Common Area costs
and expenses and Taxes and other purposes in this Lease) to
reflect the actual square footage and such adjustment shall be
set forth in the Commencement Date Memorandum (as herein
defined). The aforesaid space leased and let unto Lessee is
hereinafter referred to as the "Premises".
Exhibit "A" depicts land upon which Lessor intends to
construct a retail shopping complex commonly known as Chandler
Pavilions II Shopping Center, herein called the "Shopping
Center", located at the northeast corner of the intersection of
00xx Xxxxxx xxx Xxxxxxxx Xxxxxx, Xxxx xx Xxxxxxxx, Xxxxxx of
Maricopa, State of Arizona. The Premises are located upon a
portion of the Shopping Center. The Shopping Center along with
all improvements located thereon is hereinafter referred to as
the "Shopping Center Tract". Lessee acknowledges that Exhibit
"A" is intended only to identify the real estate comprising the
Shopping Center and the approximate boundary lines of the
individual parcels and that Exhibit "A" is not to be considered
or construed as a representation or covenant that the shape,
size, location, number and extent of the building improvements
shown thereon shall be constructed.
TO HAVE AND TO HOLD THE SAME PREMISES, without any liability
or obligation on the part of Lessor to make any alterations,
improvements or repairs of any kind on or about the Premises,
except as expressly provided herein, for a term of one hundred
twenty (120) full calendar months (the "Term"), commencing on
September 1, 2001 and ending on the last day of the one hundred
twentieth (120th) full calendar month thereafter, unless sooner
terminated in the manner provided hereinafter, subject to the
covenants and agreements hereinafter contained. Lessor shall use
reasonable efforts to deliver the substantially completed
Premises to Lessee on or before September 1, 2001, subject to
force majeure (the "Delivery Date") for the purpose of Lessee's
installation of its trade fixtures subject to all of the terms,
covenants and conditions of this Lease other than the payment of
rent and the obligation to operate the Permitted Use (as herein
defined). Lessee shall not, by reason of such installation,
interfere with Lessor or Lessor's agents in the performance of
any obligations Lessor may have under this Lease in connection
with the Premises, including the obligation of Lessor to complete
the construction of any improvements or to obtain any required
final approval from any governmental agency having jurisdiction
with respect to such obligation of Lessor. Lessor shall have no
liability for any loss, damage or injury to Lessee's personal
property, equipment, employees or agents which may be on or about
the Premises during the period of such installation by Lessee, in
accordance with the applicable provisions of this Lease, and
Lessee hereby releases Lessor from any claim in respect thereto
from whatever cause. In connection with any such use, Lessee
will not cause a labor dispute. Upon determination of the
Commencement Date, a memorandum ("Commencement Date Memorandum")
shall be prepared by Lessor and executed by Lessor and Lessee,
which shall set forth the precise Commencement Date and
termination date of the Term, the exact floor area of the
Premises as determined by Lessor's architect, the Annual Minimum
Rent and Lessee's share of Common Area costs and expenses and
Taxes.
ARTICLE I. RENT: Lessee covenants and agrees to pay to
Lessor, without setoff, deduction or demand, at c/o Opus West
Management Corporation, 0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxx, Xxxxxxx 00000-0000, or at such other place as Lessor may
designate in writing to Lessee, rental at the following rates and
times:
A. During the first sixty (60) months of the Term, Lessee
shall pay annually the sum of Three Hundred Twenty-Eight Thirty-
Two Thousand Two Four Hundred Thirty and No/100 Dollars
($328,230.00)($332,430.00) as Annual Minimum Rent (based upon an
annual rental rate of $15.63 $15.83 per square foot for 00,000
xxxxxx xxxx xx xxxxx xxxx), which sum shall be payable in twelve
(12) equal monthly installments of Twenty-Seven Thousand Three
Seven Hundred Fifty-Two and 50/100 Dollars
($27,352.50)($27,702.50).
B. During the second sixty (60) months of the Term, Lessee
shall pay annually the sum of Three Hundred Fifty-Nine Sixty-
Three Thousand Seven Nine Hundred Thirty and No/100 Dollars
($359,730.00)($363,930.00) as Annual Minimum Rent (based upon an
Annual Rental Rent of $17.13 $17.33 per square foot for 00,000
xxxxxx xxxx xx xxxxx xxxx), which sum shall be payable in twelve
(12) equal monthly installments of Twenty-Nine Thirty Thousand
Nine Three Hundred Seventy Twenty-Seven and 50/100 Dollars
($29,977.50)($30,327.50).
The Annual Minimum Rent set forth in this Article I.A shall
be subject to adjustment pursuant to the first paragraph of this
Lease. Lessee shall pay the monthly installments of Annual
Minimum Rent on or before the first day of each month, in
advance. Should the Term of this Lease commence or terminate on
a day other than the first day of a calendar month, then the rent
for such partial month shall be equal to the product obtained by
multiplying the number of days of the Term included in the
partial month by a fraction, the numerator of which is the Annual
Minimum Rent and the denominator of which is 365. No payment by
Lessee or receipt by Lessor of a lesser amount than the monthly
rent herein stipulated shall be deemed to be other than on
account of the earliest stipulated rent, nor shall any
endorsement or statement on any check or any letter accompanying
any check or payment as rent be deemed an accord and
satisfaction, and Lessor shall accept such check or payment
without prejudice to Lessor's right to recover the balance of
such rent or pursue any other remedy available to Lessor under
this Lease or at law or in equity.
C. [Intentionally Deleted].
D. Lessee shall pay, as additional rent ("Additional
Rent"), all other charges, sums or amounts permitted to be
imposed against it under any other Article as specifically set
forth in this Lease concurrently with the next succeeding
installment of Annual Minimum Rent following notice of the same,
unless a different time for such payment is specified in this
Lease.
E. Lessee agrees to participate in and to pay its
proportionate share of the cost of a joint opening of the
Shopping Center if requested to do so by Lessor; provided,
however, Lessee shall not by operation of this paragraph be
required to pay a sum in excess of $0.50 per rentable square foot
of floor area multiplied by the number of square feet of floor
area comprising the Premises, as certified by Lessor's architect.
ARTICLE II. [Intentionally Deleted].
ARTICLE III. RECORDS AND REPORTS: Lessee covenants and agrees
(a) that not later than the twentieth (20th) day of the month
immediately following each calendar quarter of the Term it will
deliver to Lessor an informal, unaudited statement signed by
Lessee or by an authorized officer or agent of Lessee showing the
Gross Sales made in each of the calendar months included in such
calendar quarter; and (b) that not later than sixty (60) days
after the close of each Lease Year it will deliver to Lessor a
statement of Gross Sales for the preceding Lease Year accompanied
by the signed opinion of an independent Certified Public
Accountant stating specifically that it has examined the report
of Gross Sales of the preceding Lease Year, that its examination
included such tests of Lessee's books and records as were
necessary under the circumstances, and that such report presents
fairly and accurately the Gross Sales of the preceding Lease
Year. Lessee shall deliver the statements and certificate
referred to hereinabove to Lessor at the same address as rent is
then being paid.
ARTICLE IV. LEASE YEAR: The term "Lease Year" shall mean, in
the case of the first Lease Year, that period from the
Commencement Date to the first succeeding December 31;
thereafter, "Lease Year" shall mean each successive twelve (12)
calendar month period following the expiration of the first Lease
Year, except that in the event of the termination of this Lease
on any day other than on December 31, then the last Lease Year
shall be the period from the end of the preceding Lease Year to
such date of termination. Notwithstanding anything set forth
elsewhere in this Lease to the contrary, the Term shall be a
period of one hundred twenty (120) full calendar months,
commencing with the Commencement Date and expiring on the last
day of the one hundred twentieth (120th) full calendar month
thereafter, unless sooner terminated in any manner set forth
hereinafter.
ARTICLE V. TAXES:
A. Lessee shall pay to Lessor during the Term of this
Lease as Additional Rent its proportionate share of all taxes and
assessments against the land, buildings or improvements
comprising the Shopping Center Tract that are levied or assessed
by any lawful authority during each calendar year, including
without limitation all personal property taxes of Lessor relating
to Lessor's personal property located on the Shopping Center
Tract and used or useful in connection with the operation and
maintenance thereof, and all other governmental charges, general
and special, ordinary and extraordinary, foreseen as well as
unforeseen, of any kind and nature whatsoever, or other tax,
however described, which is levied or assessed by the United
States of America or the state in which the Shopping Center Tract
is located or any city, municipality or political subdivision
thereof, against Lessor or all or any part of the Shopping Center
Tract excluding however any net income tax, estate tax, transfer
tax or inheritance tax of Lessor (such taxes and assessments
being hereinafter called "Taxes"). The Taxes to be paid by
Lessee under this Lease shall be the Taxes assessed for a
particular year notwithstanding that such Taxes may be payable in
a subsequent year. Taxes for any partial calendar year during
the Term shall be prorated, based upon the portion of such
calendar year which is within the Term. For the calendar years
in which this Lease commences and terminates, the provisions of
this Article shall apply, and Lessee's liability for its share of
the Taxes for such years shall be subject to a pro rata
adjustment based on the number of days of said calendar year
during which the Term of this Lease is in effect. In no event
shall Lessee's share of Taxes include any interest charges or
penalties imposed for Lessor's failure to make payments on
account of Taxes in a timely manner unless such failure is due to
Lessee's failure to pay its share of Taxes in the manner provided
in this Article V.
B. Subject to Article V.G, Lessee's share of Taxes shall
be equal to the product obtained by multiplying the Taxes by a
fraction, the numerator of which shall be the number of square
feet of the floor area of the Premises as determined by Lessor's
architect, and the denominator of which shall be the number of
rentable square feet of floor area of all buildings in the
Shopping Center from time to time (hereinafter "Total Floor
Area"). Lessee's share of the Taxes shall be paid in monthly
installments on or before the first day of each calendar month,
in advance, in an amount estimated by Lessor; provided, that in
the event Lessor is required under any mortgage covering the
Shopping Center Tract to escrow Taxes, Lessor may, but shall not
be obligated to, use the amount required to be so escrowed as a
basis for its estimate of the monthly installments due from
Lessee hereunder. Upon receipt of all tax bills and assessment
bills attributable to any calendar year during the Term hereof,
Lessor shall furnish Lessee with a written statement of the
actual amount of Lessee's share of the Taxes for such calendar
year. In the event the total amount of monthly installments paid
by Lessee pursuant to this Article does not equal the sum due
from Lessee as shown on such statement, then Lessee shall pay to
Lessor the deficiency within thirty (30) days of receipt of such
statement, or Lessor shall issue to Lessee at the time the
statement is furnished, a credit invoice for such excess, as the
case may be. A copy of a tax xxxx or assessment xxxx submitted
by Lessor to Lessee shall at all times be sufficient evidence of
the amount of Taxes against the property to which such xxxx
relates. Prior to or at the commencement of the Term of this
Lease and from time to time thereafter throughout the Term
hereof, Lessor shall notify Lessee in writing of Lessor's
estimate of Lessee's monthly installments due hereunder.
Lessor's and Lessee's obligations under this Article shall
survive the expiration of this Lease.
C. Notwithstanding anything in this Article to the
contrary, all costs and expenses incurred by Lessor during
negotiations for or contests of the amount of Taxes shall be
included within the term "Taxes". In the event a refund is
obtained, Lessor shall issue a credit invoice for same, such
portion to be based upon the percentage of the original Taxes
paid by Lessee from which the refund was derived. Lessee hereby
waives any right it may have by statute or otherwise to protest
Taxes.
D. In addition to the foregoing, Lessee shall pay, also as
Additional Rent, all other sums and charges required to be paid
by Lessee under this Lease, and any tax or excise on rents, all
other sums and charges required to be paid by Lessee under this
Lease, and gross receipts tax, transaction privilege tax or other
tax, however described, which is levied or assessed by the United
States of America, the state in which the Shopping Center Tract
is located or any city, municipality or political subdivision
thereof, against Lessor in respect to the Annual Minimum Rent,
Percentage Rent, Additional Rent or other charges reserved under
this Lease or as a result of Lessor's receipt of such rents or
other charges accruing under this Lease; provided, however,
Lessee shall have no obligation to pay net income taxes of
Lessor.
E. In addition to the foregoing, Lessee at all times shall
be responsible for and shall pay, before delinquency, all taxes
levied, assessed or unpaid on any leasehold interest, any right
of occupancy, any investment of Lessee in the Premises, or any
personal property of any kind owned, installed or used by Lessee
including Lessee's leasehold improvements, trade fixtures,
furnishings, equipment, other personal property or on Lessee's
occupancy of the Premises. Lessee shall cause such leasehold
improvements, trade fixtures, furnishings, equipment, or other
personal property to be assessed and billed separately from the
property of Lessor. In the event any or all of Lessee's
leasehold improvements, trade fixtures, furnishings, equipment or
other personal property, or Lessee's occupancy of the Premises,
shall be assessed and taxed with the property of Lessor, Lessee
shall pay to Lessor its share of such taxes within thirty (30)
days after delivery to Lessee by Lessor of a statement in writing
setting forth the amount of such taxes applicable to Lessee's
personal property.
X. Xxxxxx and Lessee recognize the possibility of changes
and/or limitations on the amount of Taxes which can be assessed
on land, buildings and improvements, including the Shopping
Center Tract. Lessor and Lessee further recognize and
acknowledge that as a result of any such changes in structure or
limitations on amount, the amount of Taxes of the type which have
appeared on assessor's tax statements prior to the date hereof
may decrease. Lessor and Lessee further recognize that there may
be imposed new forms of taxes, assessments, charges, levies or
fees, or there may be an increase in certain existing taxes,
assessments, charges, levies or fees placed on, or levied in
connection with, the ownership, leasing, occupancy or operation
of the Shopping Center or the Premises. All such new or
increased taxes, assessments, charges, levies or fees which are
in lieu of, or imposed or increased as a result of, or arising
out of any change in the structure of, the current tax system, or
for the purpose of funding special assessment districts
theretofore funded by taxes, shall also be included within the
meaning of Taxes.
G. Notwithstanding anything to the contrary in this Lease,
Lessor may elect, from time to time, to have Taxes for any
portion of the Shopping Center Tract calculated and paid
separately from the remainder of the Shopping Center Tract. Upon
such election by Lessor, Lessee's share of Taxes shall be
calculated without reference to any excluded portion of the
Shopping Center Tract (notwithstanding that Lessee's share for
other purposes hereunder may then be calculated on a basis which
includes such excluded portion), so that (i) Taxes shall be
reduced to exclude the taxes from the excluded portion of the
Shopping Center Tract and (ii) the denominator of the fraction
determining Lessee's share of Taxes shall include only the number
of rentable square feet of floor area of all buildings in the non-
excluded portion of the Shopping Center Tract. It is agreed
that, as pad or building sites in the Shopping Center Tract are
sold to third parties, Lessor shall have the option to require
that Taxes shall not include real property taxes and assessments
relating thereto, nor shall the denominator of the fraction
determining Lessee's share of Taxes include any floor area of any
building constructed thereon.
ARTICLE VI. COMMON AREA:
A. The term "Common Area" means the entire area designated
from time to time by Lessor for the common use or benefit of the
occupants of the Shopping Center and other persons entitled to
use the same, including, without limitation, parking lots
(permanent and temporary), landscaped and vacant areas, passages
for trucks and automobiles, area-ways, roads, walks, roof, curbs,
corridors, courts and arcades, together with facilities such as
washrooms, comfort rooms, lounges, drinking fountains, toilets,
stairs, ramps, shelters, community rooms, porches and bus
stations, with facilities appurtenant to each, and common utility
facilities, water filtration and treatment facilities (including,
but not limited to, treatment plants and settling ponds), whether
located within or outside of the Shopping Center (provided,
however, the costs and expenses of such facilities included
within paragraph (B) below shall include only those related to
the operation, maintenance, repair or replacement of the Shopping
Center). Lessor shall operate and maintain the Common Area or
shall cause the same to be operated and maintained in a manner
deemed by Lessor reasonable or appropriate for the Shopping
Center. Subject to reasonable, nondiscriminatory rules and
regulations to be promulgated by Lessor, including the
designation of specific areas within the Shopping Center or in
reasonable proximity thereto in which automobiles owned by
Lessee, its employees, subtenants, licensees and concessionaires
may be parked, and subject to the rights of other tenants,
licensees or concessionaires already or to be granted therein,
the Common Area is hereby made available to Lessee and its
employees, agents, customers and invitees for their reasonable
nonexclusive use in common with others, including other tenants
and their employees, agents, customers, invitees, and Lessor for
the purposes for which constructed. Lessor shall have the right:
to change the location and arrangement of parking areas and other
Common Area provided that Lessor maintains a parking ratio of not
less than 4.5 parking spaces per 1,000 square feet of leaseable
area within the Shopping Center; to construct surface or elevated
parking areas and facilities; to establish and change the level
of parking surfaces; to close all or any portion of the Common
Area to such extent as may, in the opinion of Lessor's counsel,
be necessary to prevent a dedication thereof or the accrual of
any rights to any person or to the public therein or to make
repairs or alterations; to close temporarily any or all portions
of the Common Area; and to do and perform such other acts in and
to said area and improvements as, in the exercise of good
business judgment, Lessor shall determine to be advisable with a
view to the improvement of the convenience and use thereof by
tenants and their agents, contractors, servants, employees,
licensees, customers and business invitees. Lessee shall not
solicit business or display merchandise within the Common Area,
or distribute handbills therein, or take any action which would
interfere with the rights of other persons to use the Common Area
without the prior written consent of the Lessor.
B. Lessee shall pay to Lessor during the Term its
proportionate share of the costs and expenses of operating,
maintaining, repairing and replacing the Common Area. Lessee's
proportionate share shall be equal to the product obtained by
multiplying the total of such costs and expenses by a fraction,
the numerator of which shall be the number of square feet of the
floor area of the Premises as determined by Lessor's architect,
and, subject to the last paragraph of this Article VI.B, the
denominator of which shall be the number of rentable square feet
of floor area of all buildings in the Shopping Center from time
to time (hereinafter "Total Floor Area"). Such costs and
expenses shall include, but not be limited to, all sums expended
in connection with the Common Area for operating, maintaining,
repairing, lighting, cleaning, sealing, striping, heating, air
conditioning, ventilating, inspecting, painting (including
painting of the exterior of buildings of the Shopping Center),
and insuring (including liability insurance for personal injury,
death, and property damage and contractual liability, fidelity
bonds for personnel, insurance against fire, theft or other
casualties, rental loss, workmen's compensation and employer's
liability, and including any "deductible" cost incurred in
connection with any covered loss), all costs and expenses of
service and maintenance contracts, including but not limited to,
HVAC, windows and general cleaning, removing of snow, ice, debris
and surface water, security police, electronic intrusion and fire
control and telephone alert system, machinery and equipment
depreciation, all costs and expenses for inspecting, repairing
and maintaining machinery and equipment used in the operation of
the Common Area, all costs and expenses of inspecting,
maintaining, repairing and replacing storm and sanitary drainage
systems, sprinklers and other fire protection systems, and
electrical, gas, water, telephone and irrigation systems, all
costs and expenses for operating, maintaining, repairing and
replacing off-site improvements (including costs of operating,
maintaining, repairing and replacing off-site detention areas and
utility costs for traffic signals), all costs and expenses of
traffic regulation, directional signs and traffic consultants,
fees for permits, program services, and loudspeaker systems, all
costs and expenses of planting and replacing flowers, shrubbery
and planters, all costs and expenses (other than those of a
capital nature) of replacement of, and repairing, paving, curbs,
sidewalks, walkways, roadways, loading docks, roof, parking
surfaces, landscaping, drainage, utilities, lighting facilities,
and signage, costs and assessments of any property owners
association covering the Shopping Center, all costs of uniforms,
supplies and materials used in connection with the operation and
maintenance of the Shopping Center, all payroll taxes,
unemployment insurance costs, vacation allowances, and the cost
of providing disability insurance or benefits, pensions, profit
sharing benefits, hospitalization, retirement or other so-called
fringe benefits, and any other expense imposed on Lessor, its
contractors or subcontractors, pursuant to law or pursuant to any
collective bargaining agreement covering employees engaged in the
management of the Shopping Center or the operation, maintenance,
repair or replacement of the Common Area, and administrative and
overhead costs equal to 12% of the foregoing common area costs
and expenses. Such costs and expenses shall not include any
capital improvement to the Shopping Center other than
replacements required for normal maintenance and repair, nor
shall it include repairs, restoration or other work occasioned by
fire, windstorm or other insured casualty, expenses incurred in
leasing or procuring tenants, leasing commissions, advertising
expenses, expenses for renovating space for new tenants, legal
expenses incident to enforcement by Lessor of the terms of any
lease, interest or principal payments on any mortgage or other
indebtedness of Lessor, nor shall it include expenses for
constructing or renovating the exterior of the buildings in the
Shopping Center. Notwithstanding the foregoing, in the event
Lessor installs equipment in or makes improvements or alterations
to the Shopping Center which are for the purpose of reducing
energy costs, maintenance costs or other Common Area expenses or
which are required under any governmental laws, regulations, or
ordinances (including any accessibility statute) which were not
required at the date of this Lease, Lessor may include in Common
Area expenses reasonable charges for interest on such investment
and reasonable charges for depreciation on the same so as to
amortize such investment over the reasonable life of such
equipment, improvement or alteration on a straight line basis.
Lessee's proportionate share of such costs and expenses for each
Lease Year shall be paid in monthly installments on the first day
of each calendar month, in advance, in an amount estimated by
Lessor from time to time. Within ninety (90) days after the end
of each Lease Year, Lessor shall furnish Lessee with a statement
of the actual amount of Lessee's proportionate share of such cost
and expenses for such period. In the event the total of Lessee's
monthly installments for any Lease Year does not equal Lessee's
proportionate share as shown on such statement, then Lessee shall
promptly pay Lessor any deficiency, or Lessor, upon receipt of
such annual statement, shall issue to Lessee a credit invoice for
such excess, as the case may be.
Notwithstanding anything to the contrary in this Lease,
Lessor may elect, from time to time, to have other tenants or
owners of a portion of the Shopping Center operate and maintain
the Common Area located on such other tenant's or owner's leased
or owned portion of the Shopping Center, in which event such
other tenants or owners (and not Lessor) shall be responsible for
the operation and maintenance of such portion of the Common Area.
In such event, Lessee's proportionate share of the costs and
expenses of operating, maintaining, repairing and replacing the
Common Area shall be calculated by (i) excluding from such costs
and expenses all costs and expenses incurred by such other
tenants and owners, and (ii) including in the denominator of the
fraction determining Lessee's share thereof only the number of
rentable square feet of floor area of all buildings owned or
leased by parties other than the tenants or owners performing or
maintaining their own portion of the Common Area.
ARTICLE VII. USE:
A. Subject to the provisions of Article VII.B, the
Premises shall be used for the operation of a typical Xxxxxxx
Home Furnishing Store from time to time, and for no other use or
purpose whatsoever (the "Permitted Use"). Lessee shall use in
the transaction of business in the Premises the trade name of
"Xxxxxxx Home Furnishings"; provided, however, in the event
Lessee is transacting business in the majority of its stores
engaged in the Permitted Use, or any portion of such use, in the
metropolitan area in which the Shopping Center is located under a
different trade name, Lessee shall transact business in the
Premises under the same trade name as used in the majority of
such stores. Lessee agrees to open the Premises to the public on
or before the Commencement Date. Thereafter, Lessee may from
time to time cease business operations within the Premises;
provided, however, that in the event Lessee should cease the
conduct of business within the Premises for a period in excess of
thirty (30) consecutive days (other than by reason of restoration
following casualty or condemnation or a temporary closure [not in
excess of sixty (60) consecutive days] in connection with
remodeling or remerchandising), then in that event Lessor may
terminate this Lease at any time thereafter and prior to Lessee
re-commencing the conduct of business operations from the
Premises by delivering written notice to Lessee, in which event
this Lease shall terminate on the date thirty (30) days following
Lessor's notice to Lessee, and Lessee shall be obligated to pay
to Lessor Lessor's then unamortized costs with respect to the
Premises (including, without limitation, the costs of tenant
improvements, commissions and base building upgrades). Lessee
shall operate its business with a stock of merchandise comparable
in style and type to those offered at its other stores engaged in
the Permitted Use, or any portion of such use, in the
metropolitan area in which the Shopping Center is located, in a
high class and reputable manner to maximize sales from the
Premises, and shall, except during reasonable periods of
repairing, cleaning and decorating, keep the Premises open to the
public for business with adequate and competent personnel in
attendance on all days and during all hours (including evening)
established by Lessor from time to time as store hours for the
Shopping Center as set forth on Exhibit "B" attached hereto and
incorporated herein by reference, and during any other hours when
the Shopping Center generally is open to the public for business,
except to the extent Lessee may be prohibited from being open for
business by applicable law, ordinance or government regulation.
Notwithstanding the foregoing, Lessee shall not be required to
open for business on Thanksgiving Day, Christmas Day, New Year's
Day or Easter and shall be permitted to close for business up to
two (2) days per Lease Year for the purpose of conducting an
inventory.
B. Lessee acknowledges that various tenants or occupants
of the Shopping Center have been or will be granted exclusive
uses within the Shopping Center, and no part of the Premises
shall be used for any purpose or in any way that violates any of
the provisions set forth on Exhibit "C" hereto or any provision
hereafter deemed to be an additional provision of Exhibit "C"
pursuant to the next to last sentence of this paragraph. Lessee
agrees that neither it nor any successor, assign, concessionaire,
sublessee or assignee shall use the Premises, or any part
thereof, in any way that would violate any of the prohibited uses
listed on Exhibit "C" or hereafter deemed to be an additional
provision thereof, and notwithstanding the provisions of Article
XVIII, Lessee shall be in immediate default under this Lease if
Lessee violates the provisions of this Article VII.B. Lessee
acknowledges that Lessor may hereafter grant other exclusive uses
to other tenants or occupants of the Shopping Center or other
prohibited uses for the benefit of such other tenant or occupant,
and Lessee agrees that neither it nor any successor, assign,
concessionaire, sublessee or assignee shall use the Premises, or
any part thereof, in any way that would violate any such
exclusive or prohibited use hereafter granted of which Lessee has
received written notice, so long as such exclusive or prohibited
use does not prohibit the use of the Premises for the Permitted
Use. Upon receipt by Lessee of written notice of any such
exclusive or prohibited use hereafter granted, such exclusive or
prohibited use shall automatically be deemed to be an additional
provision of Exhibit "C" hereto, so long as such exclusive or
prohibited use does not prohibit the use of the Premises for the
Permitted Use. Lessee agrees that it will not withhold or delay
its written acknowledgement of the addition of any such
additional exclusive or prohibited use to Exhibit "C" if such
acknowledgement is requested in writing by Lessor, and in the
event Lessee fails to furnish such written acknowledgement of
such addition within fifteen (15) days after Lessee's receipt of
Lessor's written request therefor, Lessee shall be deemed to have
given such written acknowledgement as of the expiration of such
15-day period.
C. Lessee shall not, without Lessor's prior written
consent, keep anything within the Premises for any purpose which
increases the insurance premium cost or invalidates any insurance
policy carried on the Premises or other part of the Shopping
Center. Lessee shall pay as Additional Rent, upon demand of
Lessor, any such increased premium cost due to Lessee's use or
occupation of the Premises. Prior to Lessor assessing any such
charge against Lessee, Lessor shall give Lessee notice of such
intended increase at least thirty (30) days prior to its
imposition and Lessee shall have said thirty (30) day period in
which to modify its operation in such a way as to negate the
basis for said additional charge; provided, however, nothing
herein contained shall diminish Lessee's obligation to pay for
any such increased charge. All property kept, stored or
maintained within the Premises by Lessee shall be at Lessee's
sole risk.
D. Lessee shall not (i) conduct within the Premises any
fire, auction, bankruptcy or liquidation (whether of merchandise
only or of the entire business of Lessee) sales, (ii) advertise
that Lessee is "going out of business", (iii) permit any
objectionable or unpleasant odors or noises to emanate from the
Premises, (iv) place or permit any radio, television, loud-
speaker, amplifier or other sound broadcasting system on the roof
or outside the Premises or where the same can be seen or heard
from outside the building or in the Common Area, (v) place an
antenna, awning or other projection on the exterior of the
Premises, (vi) operate or permit the operation of any amusement
or arcade type games in the Premises, (vii) use, or permit to be
used, the malls or sidewalks adjacent to the Premises, or any
other premises outside such space for the sale or display of any
merchandise or for any other business, occupation, or undertaking
except as permitted below, or (viii) take any other action which
in the exclusive judgment of Lessor exercised in good faith would
constitute a nuisance or would disturb or endanger other tenants
of the Shopping Center or interfere with their use of their
respective premises, or which would tend to injure the reputation
of the Shopping Center. Sidewalk sales or other outside
activities of Lessee shall be prohibited, unless in conjunction
with a promotion by all tenants and occupants on the Shopping
Center Tract.
E. Lessee shall include the address and identity of its
business activities in the Premises in all advertisements made by
Lessee that include the address and identity of any of its other
stores engaged in the Permitted Use, or any portion of such use,
located in the metropolitan area in which the Shopping Center is
located.
ARTICLE VIII. UTILITY SERVICES:
A. Lessor agrees to cause to be provided as part of the
Leasehold Improvements (as hereinafter defined) mains, conduits
and other facilities which are capable of supplying electricity,
gas, water and sewer service to the Premises in substantial
accordance with the specifications attached hereto as Exhibit
"F". Lessee hereby acknowledges the limits of the design
standard of the electrical service to be furnished to the
Premises as reflected on the specifications attached hereto as
Exhibit "F" and, if additional capacity or wiring is required by
Lessee, Lessee, after obtaining Lessor's approval with respect to
the same, shall install such additional capacity or wiring at
Lessee's own expense, provided it is permitted under State and
Local code. Lessee shall pay for all electricity, water and
sewer service provided to the Premises and all such utilities
shall be separately metered to the Premises.
B. As part of the Leasehold Improvements, Lessor shall
install a system including all duct work to heat, air condition
and ventilate the Premises in substantial accordance with the
specifications attached hereto as Exhibit "F". Lessee shall pay
the cost for all such heating, air conditioning and ventilation
service provided to the Premises, including the cost of
maintenance, repair and replacement of same. Lessor, at its sole
option, may arrange for a preventative maintenance contract for
the HVAC units; provided, however, Lessor shall provide Lessee
thirty (30) days prior written notice of its intent to so arrange
for a preventive maintenance contract for the HVAC units. The
costs for such a maintenance contract will become a part of the
Common Area costs and expenses. Lessee will also carry insurance
covering said equipment which may be self-insured as provided
herein and will provide proof of insurance satisfactory to Lessor
on said equipment upon occupancy.
X. Xxxxxx may, if it so elects, furnish one or more
utility services to Lessee, and in such event Lessee shall
purchase the use of such services as are tendered by Lessor, and
shall pay within thirty (30) days from receipt of invoice as
additional rental the rates established therefor by Lessor, which
shall not exceed the rates which would be charged for the same
service if furnished directly by the local public utility
companies. All said xxxxxxxx shall be based upon Lessee's actual
consumption of such utility services. Lessor may at any time
upon forty-five (45) days notice to Lessee discontinue furnishing
any such service without obligation to Lessee other than to
connect the Premises to the public utility, if any, furnishing
such service.
X. Xxxxxx shall not be liable in damages or otherwise, nor
shall there be an abatement of rents, if the furnishing by any
supplier of any utility service or other service to the Premises
shall be interrupted or impaired by fire, accident, riot, strike,
act of God, the making of necessary repairs or improvements, or
by any causes beyond Lessor's control.
ARTICLE IX. POSSESSION OF THE PREMISES: If Lessor shall be
unable to give possession of the Premises on September 1, 2001
("the Target Commencement Date") because the construction of the
Shopping Center or the completion of the Leasehold Improvements
has not been substantially completed, or for any other reason,
Lessor shall not be subject to any claims, damages or liabilities
for the failure to give possession on said date; provided,
however, that if substantial completion of the Leasehold
Improvements (as hereinafter defined) is not achieved within
ninety (90) days following the Target Commencement Date
(provided, however, that if delay in substantial completion of
the Leasehold Improvements is caused or contributed to by act or
neglect of Lessee or those acting for or under Lessee, or by
labor disputes, casualties, acts of God or the public enemy,
governmental embargo restrictions, shortages of fuel, labor or
building materials, action or nonaction of public utilities, or
of local, state or federal governments affecting the Lessee
Improvements (such as a delay in the issuance of a building
permit or other governmental approval) or other causes beyond
Lessor's reasonable control (hereafter "Force Majeure"), then the
Target Commencement Date shall be extended for the additional
time caused by such delay), then Lessor shall afford Lessee one
day of occupancy, free of Annual Minimum Rent and Additional
Rent, for each one day of delay between the date which is ninety
(90) days after the Target Commencement Date and the actual
commencement date, up to a maximum of sixty (60) days of such
free occupancy. For purposes of this Article IX, substantial
completion of the Premises shall be deemed to have occurred when
the only work remaining to be completed is such work which can be
accomplished without material adverse interference with Lessee's
business. Except as specifically set forth in the preceding
provisions of this Article IX, if Lessor shall be unable to give
possession of the Premises on the Target Commencement Date
because the completion of the Premises has not been sufficiently
completed to make the Premises ready for occupancy, or for any
other reason, Lessor shall not be subject to any claims, damages
or liabilities for the failure to give possession of said date.
Under said circumstances, the rent reserved and covenant to pay
same shall not commence until the earlier of (i) the date sixty
(60) days following the date that the Leasehold Improvements are
substantially completed, and (ii) the date Lessee opens the
Premises for business to the public (subject to Lessee's right to
abatement of rent as set forth in the first sentence of this
Article), and failure to give possession on the Target
Commencement Date shall in no way affect the validity of this
Lease or the obligations of Lessee hereunder; provided, however,
that if the date of commencement of the initial term is delayed
beyond the Target Commencement Date, the expiration date of the
initial term shall be extended to provide for a full one hundred
twenty (120) month initial term of this Lease; and provided
further, however, if Lessee receives an abatement of Annual
Minimum Rent and Additional Rent pursuant to the first sentence
of this Article, then the expiration date of the initial term
shall be further extended by the same number of days as within
such abatement period. If Lessee is given and accepts possession
of the Premises on a date earlier than the Target Commencement
Date, the rent reserved herein and all covenants, agreements and
obligations herein and the term of this Lease shall commence on
the date that possession of the Premises is given to Lessee. If
on the date the Leasehold Improvements are substantially complete
there should remain items of construction or finishing work to be
completed which do not materially interfere with Lessee's use,
occupancy or enjoyment of the Premises, Lessor and Lessee shall
within thirty (30) business days from the date the Leasehold
Improvements are substantially complete prepare a written list
(the "Punch List") of such uncompleted items. Lessor agrees to
complete the Punch List item(s) within that time period which is
reasonable for completion of such items. In the event of any
dispute as to work performed or required to be performed by
Lessor or the existence of any punch list items or the completion
thereof in accordance with the terms of the Lease, such dispute
shall be decided by Lessor's architect which decision shall be
final and binding upon the parties.
Subject to the preceding paragraph, the acceptance of
possession by Lessee shall be deemed conclusively to establish
that the Premises and all other improvements of the Shopping
Center required to be constructed by Lessor for use thereof by
Lessee hereunder have been completed unless Lessee notifies
Lessor in writing within thirty (30) days after commencement of
the Term as to any items not completed. Lessee waives any claim
as to matters not listed in said notice.
ARTICLE X. OVERDUE AMOUNTS - RENT INDEPENDENT: Lessee shall
pay to Lessor, as liquidated damages, a late charge equal to
three percent of any amount not paid within ten days of the date
due to compensate Lessor for its costs in connection with such
late payment by Lessee. The assessment or collection of a late
charge hereunder shall not constitute the waiver by Lessor of a
default by Lessee under this Lease and shall not bar the exercise
by Lessor of any rights or remedies available under this Lease.
In addition, any installment of Annual Minimum Rent, Percentage
Rent, Additional Rent or other charges to be paid by Lessee
accruing under the provisions of this Lease, which shall not be
paid when due, shall bear interest at the rate of eighteen
percent (18%) per annum from the date when the same is due until
the same shall be paid, but if such rate exceeds the maximum
interest rate permitted by law, such rate shall be reduced to the
highest rate allowed by law under the circumstances (the
"Interest Rate"). Lessee's covenants to pay the Annual Minimum
Rent, Percentage Rent and the Additional Rent are independent of
any other covenant, condition, provision or agreement herein or
elsewhere contained. Annual Minimum Rent, Additional Rent,
Percentage Rent and any other charges due hereunder are
hereinafter sometimes collectively referred to as "rent". Rent
shall be payable without deduction, offset, prior notice or
demand, in lawful money of the United States.
ARTICLE XI. CARE OF THE PREMISES; SIGNS AND STOREFRONT; USE OF
ROOF:
A. Lessee will (a) keep the inside and outside of all
glass in the doors and windows of the Premises clean; (b) keep
all exterior store front surfaces of the Premises clean; (c)
replace promptly, at its expense, any broken door closers and any
cracked or broken glass of the Premises with glass of like kind
and quality; (d) maintain the Premises and the loading dock
contiguous thereto, if any, at its expense in a clean, orderly
and sanitary condition and free of insects, rodents, vermin and
other pests; (e) keep any garbage, trash, rubbish or refuse
removed at its expense on a regular basis and temporarily stored
in the Premises in accordance with local codes or, if in Lessor's
sole judgment it provides trash removal service for all tenants,
Lessee shall participate in and pay Lessor for such service; if
Lessor shall install compactors within the Shopping Center in
lieu of providing trash pick-up, Lessee shall use said compactor
service as designated by Lessor in such times and in such manner
as Lessor shall direct, and for the use of said compactor
service, Lessee agrees to pay a reasonable monthly charge as
determined by Lessor, which may be adjusted by Lessor as of the
first day of each Lease Year to reflect any increase or decrease
in the rates for said service; (f) keep all mechanical apparatus
free of vibration and noise which may be transmitted beyond the
Premises; (g) comply with all laws, ordinances, rules and
regulations of governmental authorities, including without
limitation, the Act (as herein defined) and those pertaining to
indoor air quality, and all recommendations of the insurance
services office and/or Lessor's insurance carrier now or
hereafter in effect relative to the use and occupancy of the
Premises and the transaction of the business of Lessee in the
Premises; and (h) light the show windows of the Premises and
exterior signs until one-half hour after the closing of the
Shopping Center and replace promptly all light bulbs and tubes
when no longer serviceable. Lessee will not, without the written
consent of Lessor, place or maintain any merchandise or other
articles outside of the Premises; use or permit the use of any
loudspeakers, phonographs, public address systems, flashing,
moving and/or rotating lights, sound amplifiers, radio or
broadcasts within the Premises which are in any manner audible or
visible outside the Premises; cause or permit odors to emanate or
be dispelled from the Premises; solicit business or distribute
advertising material within the Shopping Center except within the
Premises; or permit the parking of delivery vehicles so as to
unreasonably interfere with the use of any driveway, walk,
parking area, mall or other portion of the Common Area in the
Shopping Center. Except as otherwise provided in this Article,
the Premises shall at all times be kept in good order, condition
and repair, reasonable wear and tear excepted, of equal quality
with the original work by Lessor and Lessee at Lessee's own cost
and expense and in accordance with all laws, directions, rules
and regulations of regulatory bodies or officials having
jurisdiction in that regard. If Lessee refuses or neglects to
commence repairs within ten (10) days after receipt of written
demand, or if Lessee fails to complete such repairs within a
reasonable time thereafter, Lessor may make the repairs without
liability to Lessee for any loss or damage that may accrue to
Lessee's stock or business by reason thereof, and if Lessor makes
such repair, Lessee shall pay to Lessor the costs thereof with
interest at the Interest Rate from the date of completion of such
repairs and delivery of an invoice therefor until repayment.
B. Subject to including the costs thereof in Common Area
expenses pursuant to Article VI hereof, Lessor shall keep or
cause to be kept the foundations, the four outer walls, roof,
downspouts and gutters of the building of which the Premises are
a part and, to the extent Lessee or other tenants are not
obligated to maintain the same, all utility systems, lines,
conduits and appurtenances thereto located within the Shopping
Center Tract in good repair, ordinary wear and tear excepted,
said costs to be Common Area expenses; provided however, if the
need for such repair is attributable to or result from the
business activity being conducted within the Premises, then, in
such case, Lessee agrees to reimburse Lessor for the reasonable
costs and expenses incurred by Lessor with respect to such
repair. Subject to the foregoing, it is agreed and understood
that Lessee shall only be responsible for keeping in good repair
the utility systems, lines, conduits and appurtenances thereto
located within the Premises and solely and exclusively serving
the Premises. Lessor shall commence repairs it is required to do
hereunder as soon as reasonably practicable after receiving
written notice from Lessee of the necessity of such repairs, but
in no event shall Lessor be required to make any other repairs,
subject to the provisions of Article XV and XVI herein and Lessor
shall have no liability for any damage or injury arising out of
any condition or occurrence causing a need for such repairs.
C. Lessee shall not, without Lessor's prior written
consent (i) make any changes to or paint the store front; or (ii)
install any exterior lighting, decorations, banners or temporary
or portable signs; or (iii) affix signs, advertisements, banners,
or other material to the outside of store windows nor to the
exterior of any doors, nor to any exterior columns or storefront
walls. All signage must be tastefully and professionally done
and the use of handscribed signs of any kind is expressly
prohibited. Lessor reserves the right to remove unauthorized
signage.
Lessee agrees to have erected and/or installed and fully
operative on or before the Commencement Date all signs in
accordance with the Signage Guidelines for Xxxxxxxx Pavilions II.
Lessee, upon vacation of the Premises, or the removal or
alteration of its sign for any reason, shall be responsible for
the repair, painting and/or replacement of the building fascia
surface where signs are attached. Any signs or letterings placed
on storefronts and pylon signs shall be paid for by Lessee. If,
as a result of a renovation of the Shopping Center by Lessor,
Lessor requests that Lessee's exterior storefront sign be
removed, all storage costs, reinstallation costs, and costs for
fabrication of a different sign of comparable dimensions, type
and character, if required, shall be at the sole cost and expense
of Lessor and will be done by Lessor and Lessor shall fabricate
such different sign based upon Lessee's plans and specifications
complying with Lessor's sign criteria.
D. Lessee will repair promptly, at its expense, any damage
to the Premises or any other improvements within the Shopping
Center Tract (i) caused by Lessee or anyone claiming by or
through Lessee or (ii) caused by the installation or removal of
Lessee's property, regardless of fault or by whom such damage
shall be caused, unless caused by Lessor, its agents,
contractors, servants, employees or licensees; if Lessee shall
fail to make such repairs as aforesaid, Lessor may make the same
(provided Lessor has given Lessee notice of its intent to make
such repairs and Lessee has not commenced such repairs within ten
(10) days following receipt of said notice) and Lessee agrees to
pay the cost thereof to Lessor together with interest at the
Interest Rate from the date of commencement of said repairs until
repayment.
X. Xxxxxx shall have the exclusive right to use all or any
part of the roof of the Premises for any purpose; to erect
additional stories or other structures over all or any part of
the Premises; to erect temporary scaffolds and other aids to
construction on the exterior of the Premises, provided that
access to the Premises shall not be denied; and to install,
maintain, use, repair and replace within the Premises pipes,
ducts, conduits, wires and all other mechanical equipment serving
other parts of the Shopping Center Tract. Lessor may make any
use it desires of the side or rear walls of the Premises,
provided that such use shall not encroach on the interior of the
Premises.
ARTICLE XII. INSURANCE: Lessor shall keep the Shopping Center
Tract insured for the benefit of Lessor in an amount equivalent
to the full replacement value thereof (excluding foundation,
grading and excavation costs) against:
(a) Loss or damage by fire; and
(b) such other risk or risks of a similar or
dissimilar nature as are now, or may in the future be,
customarily covered with respect to buildings and improvements
similar in construction, general location, use, occupancy and
design to the Shopping Center Tract, including, but without
limiting the generality of the foregoing, windstorms, hail,
explosion, vandalism, malicious mischief, civil commotion and
such other coverage as may be deemed necessary by Lessor,
provided such additional coverage is obtainable and provided such
additional coverage is such as is customarily carried with
respect to buildings and improvements similar in construction,
general location, use, occupancy and design to the Shopping
Center.
These insurance provisions shall in no way limit or modify
any of the obligations of Lessee under any provision of this
Lease. Lessor agrees that such policy or policies of insurance
shall contain a waiver of subrogation clause as to Lessee, and,
to the extent of insurance proceeds received therefor, Lessor
waives, releases and discharges Lessee from all claims or demands
whatsoever which Lessor may have or acquire arising out of damage
to or destruction of the Shopping Center Tract or Lessor's
business therein occasioned by fire or other cause, which such
claim or demand may arise because of the negligence or fault of
Lessee and its agents, contractors, servants, employees,
licensees, customers, business invitees or otherwise, and Lessor
agrees to look to the insurance coverage only in the event of
such loss. Notwithstanding the foregoing, Lessee shall be
obligated to pay the rental called for hereunder in the event of
damage to or destruction of the Premises or the Shopping Center
Tract if such damage or destruction is occasioned by the
negligence or fault of Lessee or its agents or employees.
Insurance premiums paid thereon shall be a portion of the Common
Area expenses described in Article VI hereof.
Lessee shall keep all of its machinery, equipment,
furniture, fixtures, personal property (including also property
under the care, custody, or control of Lessee) and business
interests which may be located in, upon or about the Premises
insured for the benefit of Lessee in an amount equivalent to the
full replacement value or insurable value thereof against:
(a) loss or damage by fire; and
(b) such other risk or risks of a similar or
dissimilar nature as are now, or may in the future be,
customarily covered with respect to a tenant's machinery,
equipment, furniture, fixtures, personal property and business
located in a building similar in connection, general location,
use, occupancy and design to the Shopping Center Tract,
including, but without limiting the generality of the foregoing,
windstorms, hail, explosions, vandalism, theft, malicious
mischief, civil commotion and such other coverage as Lessee may
deem appropriate or necessary.
Lessee agrees that such policy or policies of insurance
shall contain a waiver of subrogation clause as to Lessor, and
Lessee waives, releases and discharges Lessor from all claims or
demands whatsoever which Lessee may have or acquire arising out
of damage to or destruction of the machinery, equipment,
furniture, fixtures, personal property and business of Lessee
occasioned by fire or other cause, whether such claim or demand
may arise because of the negligence or fault of Lessor and its
agents, contractors, servants, employees, licensees or otherwise,
and Lessee agrees to look to the insurance coverage only in the
event of such loss.
Lessor shall, as a portion of the Common Area expenses
described in Article VI, maintain, for its benefit and the
benefit of its managing agent, general public liability insurance
against claims for personal injury, death or property damage
occurring upon, in or about the Shopping Center Tract, such
insurance to afford protection to Lessor and its managing agent.
Lessee shall, at Lessee's sole cost and expense but for the
mutual benefit of Lessor, its managing agent and Lessee, maintain
general public liability insurance against claims for personal
injury, death or property damage occurring upon, in or about the
Premises (including so-called "Dram Shop" or liquor liability
coverage if the Premises are permitted to be used for serving or
dispensing alcoholic beverages; provided, however, nothing herein
contained shall be deemed as permitting such use without the
consent of Lessor, in its sole and absolute discretion), such
insurance to afford protection to Lessor, its managing agent and
Lessee to the limit of not less than One Million and No/100
Dollars ($1,000,000.00) in respect to the injury or death to a
single person, and to the limit of not less than Three Million
and No/100 Dollars ($3,000,000.00) in respect to any one
accident. Such policies of insurance shall be written in
companies reasonably acceptable to Lessor, naming Lessor and its
managing agent as additional insureds thereunder, and such
policies, or a memorandum or certificate of such insurance, shall
be delivered to Lessor endorsed "Premium Paid" by the company or
agency issuing the same or accompanied by other evidence
satisfactory to Lessor that the premium has been paid. At such
time as insurance limits required of tenants in shopping centers
comparable to the Shopping Center in the area in which the
Shopping Center is located are generally increased to greater
amounts, Lessor shall have the right to reasonably require such
greater limits as may then be customary. Lessee agrees to
include in such policy the contractual liability coverage
insuring Lessee's indemnification obligations provided for
herein. Any such coverage shall be deemed primary to any
liability coverage secured by Lessor. Such insurance shall also
afford coverage for all claims based upon acts, omissions, injury
or damage, which claims occurred or arose (or the onset of which
occurred or arose) in whole or in part during the policy period.
Lessee agrees to indemnify and save Lessor and its managing
agent harmless against and from any and all claims by or on
behalf of any persons, firms or corporations arising from any
breach or default on the part of Lessee in the performance of any
covenant or agreement on the part of Lessee to be performed
pursuant to the terms of this Lease, or arising from any act or
negligence on the part of Lessee or its agents, contractors,
servants, employees or licensees, or arising from any accident,
injury or damage to the extent caused by Lessee or its agents,
contractors, servants, employees and licensees, to any person,
firm or corporation occurring during the Term of this Lease or
any renewal thereof, in or about the Premises and Shopping Center
Tract, and from and against all costs, reasonable counsel fees,
expenses and liabilities incurred in or about any such claim or
action or proceeding brought thereon; and in case any action or
proceeding be brought against Lessor or its managing agent by
reason of any such claim, Lessee, upon notice from Lessor,
covenants to resist or defend such action or proceeding by
counsel reasonably satisfactory to Lessor.
Lessee agrees, to the extent not expressly prohibited by
law, that Lessor and its agents, contractors, servants, employees
and licensees shall not be liable, and Lessee waives all claims,
for damage to property and business sustained during the Term of
this Lease by Lessee occurring in or about the Shopping Center,
resulting directly or indirectly from any existing or future
condition, defect, matter or thing in the Premises, the Shopping
Center or any part thereof, or from equipment or appurtenances
becoming out of repair, or from accident, or from any occurrence
or act or omission of Lessor or its agents, employees or servants
or any tenant or occupant of the Building or any other person.
This paragraph shall apply especially, but not exclusively, to
damage caused as aforesaid or by the flooding of basements or
other subsurface areas, or by refrigerators, sprinkling devices,
air conditioning apparatus, water, snow, frost, steam, excessive
heat or cold, falling plaster, broken glass, sewage, gas, odors
or noise, or the bursting or leaking of pipes or plumbing
fixtures, and shall apply equally, whether any such damage
results from the act or omission of other tenants or occupants in
the Shopping Center or any other persons, and whether such damage
be caused by or result from any of the aforesaid, or shall be
caused by or result from other circumstances of a similar or
dissimilar nature.
Anything herein to the contrary notwithstanding, in the
event any damage to the Shopping Center Tract results from any
act or omission of Lessee or its agents, contractors, servants,
employees, business invitees, customers or licensees, and all or
any portion of Lessor's loss is "deductible", Lessee shall pay to
Lessor the amount of such deductible loss (not to exceed $2,500
per event). All property in the Shopping Center or on the
Premises belonging to Lessee or its agents, contractors,
servants, employees, licensees, customers or business invitees or
otherwise located at the Premises shall be at the risk of Lessee
only, and Lessor shall not be liable for damage thereto or theft,
misappropriation or loss thereof, and Lessee agrees to defend and
hold Lessor and its agents, contractors, servants, employees and
licensees harmless from and indemnify them against claims and
liability for injuries to such property.
Anything herein to the contrary notwithstanding, Lessee
shall not be precluded from taking out insurance of the kind and
in the amount provided for in this Article under a blanket
insurance policy or policies (certificates thereof reasonably
satisfactory to Lessor shall be delivered to Lessor) which may
cover other properties owned or operated by Lessee as well as the
Premises; provided, however, that such policies of blanket
insurance shall, as respects the Premises, contain the various
provisions required of such an insurance policy by the foregoing
provisions of this Article and shall contain an agreed amount
specifically allowing coverage to the Premises.
In the event Lessee fails to provide Lessor with evidence of
insurance required under this Article, Lessor may, but shall not
be obligated to, without further demand upon Lessee, and without
waiving or releasing Lessee from any obligation contained in this
Lease, obtain such insurance and Lessee agrees to repay, upon
demand, all such sums incurred by Lessor in effecting such
insurance. All such sums shall become a part of the Additional
Rent payable hereunder, but no such payment by Lessor shall
relieve Lessee from any default under this Lease.
ARTICLE XIII. ALTERATIONS AND IMPROVEMENTS: Lessee shall not
make any modifications, improvements, alterations, additions or
installations in or to the Premises (hereinafter referred to in
this paragraph as the "work") without Lessor's prior written
consent, which consent may be withheld in Lessor's sole and
absolute discretion. Along with any request for Lessor's consent
and before commencement of any work or delivery of any materials
to be used in any work to the Premises or into the Shopping
Center, Lessee shall furnish Lessor with plans and
specifications, names and addresses of contractors, copies of
contracts, necessary permits and Licenses, an indemnification in
such form and amount as may be reasonably satisfactory to Lessor,
and a performance bond executed by a commercial surety reasonably
satisfactory to Lessor in an amount equal to the cost of the work
and for the payment of all liens for labor and material arising
therefrom. Lessee agrees to defend and hold Lessor harmless from
any and all claims and liabilities of any kind and description
which may arise out of or be connected in any way with said
modifications, improvements, alterations, additions or
installations. All such work shall be done only by contractors
or mechanics reasonably approved by Lessor and at such time and
in such manner as Lessor may from time to time reasonably
designate. Lessee shall pay the cost of all such modifications,
improvements, alterations, additions or installations, and also
the cost of painting, restoring or repairing the Premises and the
Shopping Center occasioned by such modifications, improvements,
alterations, additions or installations. Upon completion of the
work, Lessee shall furnish Lessor with contractor's affidavits
and full and final waivers of liens. All such work shall comply
with all insurance requirements and all laws, ordinances, rules
and regulations of all governmental authorities including without
limitation the Act (as herein defined) and shall be constructed
in a good and workmanlike manner. Lessee shall permit Lessor to
inspect construction operations in connection with any such work.
Lessee or Lessee's contractor shall perform all work in such
manner as to avoid materially interfering with Lessor's operation
of the Shopping Center Tract and to avoid any labor dispute or
stoppage or impairment of other construction activities at the
Shopping Center. In the event that any such stoppage or
impairment of work occurs or any such labor dispute or potential
dispute arises, then Lessee shall undertake such action necessary
to eliminate such stoppage, improvement or dispute, including,
without limitation: (a) removing all disputants from the job
site until such time as the dispute no longer exists, (b) seeking
a temporary restraining order or other injunctive relief with
regard to illegal union activities or breach of contract between
Lessee and Lessee's contractors, or (c) filing such unfair labor
practice charges as may be appropriate. Notwithstanding anything
to the contrary contained herein, Lessee shall be permitted to
perform work not affecting the structural, electrical or
mechanical systems of the Premises or the Shopping Center which
does not in the aggregate cost more than $5,000.00 in any twelve
(12) month period (but subject to all the other terms of this
Article other than (i) the requirements set forth in the second
sentence of this Article and (ii) furnishing Lessor with
contractors' affidavits and lien waivers if requested by Lessor),
provided Lessee notifies Lessor at least ten (10) days prior to
the commencement of such work and delivers to Lessor a copy of
the plans for such work, if Lessee has arranged to have plans
prepared therefor.
Lessee shall keep the Premises and the Shopping Center Tract
free from any liens arising out of any work performed, material
furnished or obligations incurred by Lessee, and Lessee shall
indemnify, protect, defend and hold harmless Lessor from any
liens and encumbrances arising out of any work performed or
material furnished by or at the direction of Lessee. In the
event that Lessee shall not, within ten (10) days following the
imposition of any such lien, cause such lien to be released of
record by payment or posting of a proper bond, Lessor shall have,
in addition to all other remedies provided herein and by law, the
right, but not the obligation, to cause the same to be released
by such means as it shall deem proper, including payment of
and/or defense against the claim giving rise to such lien. All
such sums paid by Lessor and all expenses incurred by it in
connection therewith, including attorneys' fees and costs, shall
be payable as Additional Rent to Lessor by Lessee on demand with
interest at the rate provided in Article X accruing from the date
paid or incurred by Lessor until reimbursed to Lessor by Lessee.
ARTICLE XIV. ASSIGNMENT AND SUBLETTING: Lessee shall not,
without the prior written consent of Lessor, which consent shall
not be unreasonably withheld, (i) transfer, pledge, mortgage or
assign this Lease or any interest hereunder; (ii) permit any
assignment of this Lease by voluntary act, operation of law or
otherwise; (iii) sublet the Premises or any part thereof; or (iv)
permit the use of the Premises by any parties other than Lessee
or its employees. Lessee shall seek such written consent of
Lessor by a written request therefor, setting forth such
information as Lessor may deem necessary. Lessee shall, by
notice in writing, advise Lessor of its desire from, on and after
a stated date (which shall not be less than thirty (30) days
after date of Lessee's notice) to assign this Lease or to sublet
any part or all of the Premises for the balance or any part of
the Term. Lessee's notice shall include the identity of the
proposed assignee or sublessee and a true and correct copy of the
proposed assignment or sublease shall be delivered to Lessor with
Lessee's notice. In such event, Lessor shall have the right, to
be exercised by giving written notice to Lessee within thirty
(30) days after receipt of Lessee's notice, to recapture the
space described in Lessee's notice and such recapture notice
shall, if given, cancel and terminate this Lease with respect to
the space therein described as of the date stated by Lessor in
its notice of recapture, which date shall in no event be earlier
than or more than thirty (30) days later than the date stated in
Lessee's notice. If Lessee's notice shall cover all of the
Premises and Lessor shall have exercised its foregoing recapture
right, the Term of this Lease shall expire and end on the date
stated in Lessor's notice as fully and completely as if that date
had been herein definitely fixed for the expiration of the Term.
If, however, this Lease be canceled with respect to less than the
entire Premises, the Annual Minimum Rent, Percentage Rent
Breakpoint and Additional Rent shall be equitably adjusted by
Lessor with due consideration of the size of the portion of the
Premises so remaining after the "recapture" and such rent shall
be reduced accordingly from and after the termination date for
said portion, and this Lease, as so amended, shall continue
thereafter in full force and effect. The adjustments provided
for herein shall be evidenced by an amendment to Lease executed
by Lessor and Lessee. If this Lease shall be terminated in the
manner aforesaid, either as to the entire Premises or only a
portion thereof, to such extent that the Term of this Lease shall
end upon the appropriate effective date of such recapture by
Lessor as if that date had been originally fixed in this Lease
for such expiration, and in the event of a termination affecting
less than the entire Premises, Lessee shall comply with Article
XVII of this Lease with respect to such portion of the Premises
affected thereby.
In the event of any termination pursuant to this Article,
Lessee shall, at its sole cost and expense, discharge in full any
outstanding commission obligation on the part of Lessor with
respect to that part of this Lease so terminated, whether or not
the subject portion of the Premises is "recaptured" pursuant
thereto and rented by Lessor to the proposed tenant or any other
tenant.
If Lessor, upon receiving Lessee's notice with respect to
any such space, shall not exercise its right to recapture as
aforesaid, Lessee may undertake to negotiate such a sublease or
assignment, provided that before entering into any agreement to
assign this Lease or sublet any part or all of the Premises for
the balance of the term, Lessee shall obtain the prior written
consent of Lessor and Lessee shall notify Lessor in writing of
its intent to so assign or sublease which notice shall state all
the terms of the proposed sublease or assignment, the
consideration therefor, the name and address of the proposed
assignee or sublessee, and shall include a true and correct copy
of the proposed assignment or sublease. Notwithstanding the
foregoing, in the event Lessor consents to any such assignment or
subletting, as a condition thereto, Lessee shall pay to Lessor
ninety percent (90%) of all profit (other than profit from the
sale of the business) derived by Lessee from such assignment or
subletting. For purposes of the foregoing, profit shall be
deemed to include, but shall not be limited to, the amount of all
rent payable by such assignee or sublessee in excess of the
Annual Minimum Rent payable by Lessee under this Lease. If a
part of the consideration for such assignment or subletting shall
be payable other than in cash, the payment to Lessor shall be in
cash for its share of any non-cash consideration based upon the
fair market value thereof.
Lessee shall, and hereby agrees that it will, furnish to
Lessor, upon request from Lessor, a complete statement, certified
by an independent certified public accountant, setting forth in
detail the computation of all profit derived and to be derived
from such assignment or subletting, such computation to be made
in accordance with generally accepted accounting principles.
Lessee shall, and hereby agrees that it will, keep in the
Premises, or in another location in the metropolitan area in
which the Shopping Center is located, the books, records and
papers of Lessee relating to any such assignment or subletting,
and Lessee further agrees that Lessor or its authorized
representatives shall be given access at all reasonable times to
such books, records and papers at said location, and Lessor shall
have the right to make copies thereof. The percentage of
Lessee's profit due Lessor hereunder shall be paid to Lessor
within five (5) days of receipt by Lessee of all payments made
from time to time by such assignee or sublessee to Lessee.
In determining whether or not to grant its consent to the
Lessee's sublet or assignment request, Lessor may consider any
reasonable factor. Lessor and Lessee agree that failure to
satisfy any one of the following factors, or any other reasonable
factor, will be reasonable grounds for denying Lessee's request:
(a) financial strength of the proposed
subtenant/assignee, as evidenced by audited financial statements
certified by an independent public accountant, must be at least
equal to that of the existing Lessee as of the date hereof and as
of the date of assignment;
(b) business reputation of the proposed
subtenant/assignee must be satisfactory to Lessor;
(c) use of the Premises by the proposed
subtenant/assignee (i) will not violate or create any potential
violation of any laws and will be for only the Permitted Use;
(ii) will not violate any other agreements affecting the
Premises, Lessor or other tenants at the Shopping Center
including but not limited to exclusive agreements entered into
between Lessor and other tenants or owners at the Shopping Center
and the CC&Rs; (iii) will complement Lessor's tenant mix at the
Shopping Center; and (iv) will not constitute a nuisance or would
disturb or endanger other tenants of the Shopping Center or
interfere with their use of their respective premises, or which
would tend to injure the reputation of the Shopping Center;
(d) percentage rents of the proposed
subtenant/assignee, or the prospect of percentage rents, must be
at least equal to those as the existing Lessee; and
(e) managerial and operational skills of the proposed
subtenant/assignee must be at least equal to those of the
existing Lessee.
Lessee agrees that its personal business skills and
philosophy were an important inducement to Lessor for entering
into this Lease and that Lessor may reasonably object to the
transfer of the Premises to another tenant whose proposed use,
while permitted by this Lease, would involve a different quality,
manner or type of business skill than that of Lessee.
For purposes of the foregoing, any change in the partners of
Lessee, if Lessee is a partnership, or, if Lessee is a
corporation, any transfer of any or all of the shares of stock of
Lessee by sale, assignment, operation of law or otherwise
resulting in a change in the present control of such corporation
by the person or persons owning a majority of such shares as of
the date of this Lease, shall be deemed to be an assignment
within the meaning of this Article; provided, however, in the
event Lessee is a corporation whose stock is traded on a
nationally recognized stock exchange, such public trading shall
not constitute an assignment within the meaning of this Article.
Any subletting or assignment hereunder shall not release or
discharge Lessee of or from any liability, whether past, present
or future, under this Lease, and Lessee shall continue fully
liable thereunder. The sublessee or assignee shall agree in a
form satisfactory to Lessor to comply with and be bound by all of
the terms, covenants, conditions, provisions and agreements of
this Lease to the extent of the space sublet or assigned, and
Lessee shall deliver to Lessor promptly after execution an
executed copy of each such sublease or assignment and an
agreement of compliance by each such sublessee or assignee.
Consent by Lessor to any assignment of this Lease or to any
subletting of the Premises shall not be a waiver of Lessor's
rights under this Article as to any subsequent assignment or
subletting.
Notwithstanding anything to the contrary in this Lease,
Lessee shall not assign its rights under this Lease or sublet all
or any part of the Premises to a person, firm or corporation
which is (or, immediately prior to such subletting or assignment,
was) a tenant or occupant of the Shopping Center.
Any sale, assignment, mortgage, transfer or subletting of
this Lease which is not in compliance with the provisions of this
Article shall be of no effect and void. Lessor's right to assign
its interest in this Lease shall remain unqualified. Lessor may
make a reasonable charge to Lessee for any reasonable attorneys'
fees or expenses incident to a review of any documentation
related to any proposed assignment or subletting by Lessee.
ARTICLE XV. DAMAGE BY FIRE OR OTHER CASUALTY: If fire or
other casualty insurable under a standard fire and extended risk
policy of insurance as issued in the State of Arizona from time
to time shall render the whole or any material portion of the
Premises untenantable, and if the Premises can reasonably be
expected to be repairable within one hundred eighty (180) days
from the date of such event, then Lessor shall repair and restore
the Premises and the Shopping Center Tract to as near their
condition prior to the fire or other casualty as is reasonably
possible within such one hundred eighty (180) day period (subject
to delays for causes beyond Lessor's reasonable control) and
notify Lessee that it will be doing so, such notice to be mailed
within ninety (90) days from the date of such damage or
destruction, and this Lease shall remain in full force and
effect, but the Annual Minimum Rent and other charges for the
period during which the Premises are untenantable shall be abated
pro rata (based upon the portion of the Premises which is
untenantable).
If fire or other casualty insurable under a standard fire
and extended policy issued from time to time in the State of
Arizona shall render the whole or any material part of the
Premises untenantable and the Premises cannot reasonably be
expected to be repairable within one hundred eighty (180) days
from the date of such event, or if an uninsurable casualty shall
render the whole or any portion of the Premises untenantable,
then Lessor, by notice in writing to Lessee mailed within ninety
(90) days from the date of such damage or destruction may
terminate this Lease effective upon a date within thirty (30)
days from the date of such notice.
In the event that more than fifty percent (50%) of the value
of the Shopping Center Tract is damaged or destroyed by fire or
other casualty, and irrespective of whether such damage or
destruction can be repaired within one hundred eighty (180) days
thereafter, then at Lessor's option, by written notice to Lessee
mailed within ninety (90) days from the date of such damage or
destruction, Lessor may terminate this Lease effective upon a
date within ninety (90) days from the date of such notice to
Lessee.
If fire or other casualty, whether or not insurable under a
standard fire and extended risk policy, shall render the whole or
any material part of the Premises untenantable and the Premises
cannot reasonably be expected to be repairable within one hundred
eighty (180) days from the date of such event and Lessor does not
terminate this Lease pursuant to its rights herein, or in the
event that more than fifty percent (50%) of the value of the
Shopping Center Tract is damaged or destroyed by fire or other
casualty and Lessor does not terminate this Lease pursuant to its
option granted herein, or in the event that fifty percent (50%)
or less of the value of the Shopping Center Tract is damaged or
destroyed by fire or other casualty and neither the whole nor any
material portion of the Premises is rendered untenantable, then
Lessor shall repair and restore the Premises and the Shopping
Center Tract to as near their condition prior to the fire or
other casualty as is reasonably possible within that time period
reasonably necessary for such repair and restoration (subject to
delays for causes of the type described in Article XXIII.V) and
the Annual Minimum Rent and other charges for the period during
which the Premises are untenantable shall be abated pro rata
(based upon the portion of the Premises which is untenantable).
In no event shall Lessor be obligated to repair or restore any
special equipment or improvements installed by Lessee. Lessor's
obligation to rebuild and repair under this Article shall in all
events be limited to the extent of the insurance proceeds
available to Lessor for such restoration, and Lessee agrees that
promptly after completion of such work by Lessor, it will proceed
with reasonable diligence and at its sole cost and expense to
rebuild, repair and/or replace its signs, fixtures and equipment.
In the event of a termination of this Lease pursuant to this
Article, Rent and other charges shall be apportioned on a per
diem basis and paid to the date of such termination.
Notwithstanding anything to the contrary herein contained,
in the event the Premises shall be damaged or destroyed by fire
or otherwise in excess of thirty percent (30%) of the full
replacement cost of the Premises, during the last year of the
Term, either party shall have the option to terminate this Lease
as of the date of such damage or destruction by giving written
notice to the other party within ninety (90) days following the
date of such damage or destruction.
ARTICLE XVI. EMINENT DOMAIN: If the whole of or any
substantial part of the Premises is taken by any public authority
under the power of eminent domain, or taken in any manner for any
public or quasi-public use, so as to render the remaining portion
of the Premises unsuitable for the purposes intended hereunder,
then the Term shall cease as of the day possession shall be taken
by such public authority and Lessor shall make a pro rata refund
of any prepaid rent. All damages awarded for such taking under
the power of eminent domain or any like proceedings shall belong
to and be the property of Lessor, Lessee hereby assigning to
Lessor its interest, if any, in said award. In the event that
twenty-five percent (25%) or more of the building area of the
Shopping Center Tract or twenty-five percent (25%) or more of the
value of the Shopping Center Tract or twenty-five percent (25%)
of the Common Area is taken by public authority under the power
of eminent domain, then, at Lessor's option, by written notice to
Lessee, mailed within sixty (60) days from the date possession
shall be taken by such public authority, Lessor may terminate
this Lease effective upon a date within ninety (90) days from the
date of such notice to Lessee. Any notice of termination shall
specify the date no more than sixty (60) days after the giving of
such notice as the date for such termination. Further, if the
whole of or any material part of the Premises is taken by public
authority or quasi-public use, so as to render the remaining
portion of the Premises unsuitable for the purposes intended
hereunder, upon delivery of possession to the condemning
authority pursuant to the proceedings, Lessee may, at its option,
terminate this Lease as to the remainder of the Premises by
written notice to Lessor, such notice to be given to Lessor
within thirty (30) days after Lessee receives notice of the
taking. Lessee shall not have the right to terminate this Lease
pursuant to the preceding sentence unless (i) the business of
Lessee conducted in the portion of the Premises taken cannot be
carried on with substantially the same utility and efficiency in
the remainder of the Premises (or any substitute space securable
by Lessee pursuant to clause (ii) hereof); and (ii) Lessee cannot
secure substantially similar alternate space upon the same terms
and conditions as set forth in this Lease (including rental) from
Lessor in the Shopping Center Tract. Any notice of termination
shall specify the date no more than sixty (60) days after the
giving of such notice as the date for such termination.
Anything in this Article to the contrary notwithstanding,
Lessee shall have the right to prove in any condemnation
proceedings and to receive any separate award which may be made
for damages to or condemnation of Lessee's movable trade fixtures
and equipment and for moving expenses; provided, however, Lessee
shall in no event have any right to receive any award for its
interest in this Lease or for loss of leasehold. Anything in
this Article to the contrary notwithstanding, in the event of a
partial condemnation of the Shopping Center Tract or the Premises
and this Lease is not terminated, Lessor shall, at its sole cost
and expense, restore the Premises and Shopping Center Tract to a
complete architectural unit (but Lessor shall not be required to
restore or improve the Premises with improvements in excess of
the Leasehold Improvements (as herein defined)), and the Annual
Minimum Rent and all other charges provided for herein during the
period from and after the date of delivery of possession pursuant
to such proceedings to the termination of this Lease shall be
reduced based upon the portion of the Premises remaining
following such condemnation. Notwithstanding the foregoing
provisions of this Article, Lessor may terminate this Lease with
no further liability to Lessee whatsoever in the event that
following any taking of any part of the Shopping Center Tract by
condemnation or right of eminent domain, or any conveyance in
lieu thereof, any party holding a mortgage, trust deed or similar
lien on Lessor's interest in the Shopping Center Tract elects to
require the application of an award or payment for the taking or
conveyance in lieu thereof to reduce the indebtedness secured by
such mortgage, trust deed or similar lien. Lessor's obligation
to rebuild, repair or restore under this Article shall in all
events be limited to the extent of the net condemnation proceeds
available to Lessor therefor.
ARTICLE XVII. SURRENDER OF PREMISES: On the last day of the
Term of this Lease, or on the sooner termination thereof, Lessee
shall peaceably surrender the Premises in good condition and
repair, ordinary wear and tear excepted, consistent with Lessee's
duty to make repairs as herein provided. Prior to the last day
of the Term or the date of sooner termination thereof, Lessee and
Lessor shall arrange for a joint inspection of the Premises. On
or before the last day of the Term of this Lease, or the date of
sooner termination thereof, Lessee shall, at its sole cost and
expense, remove all of its merchandise and trade fixtures and
equipment from the Premises, and all property not removed shall
be deemed abandoned. In such event, Lessee hereby appoints Lessor
its agent to remove all property of Lessee from the Premises upon
termination of this Lease and to cause its transportation and
storage for Lessee's benefit, all at the sole cost and risk of
Lessee, and Lessor shall not be liable for damage, theft,
misappropriation or loss thereof, nor shall Lessor be liable in
any manner in respect thereto. Lessee shall pay all costs and
expenses of such removal, transportation and storage. Lessee
shall leave the Premises in good order, condition and repair,
reasonable wear and tear and damage from fire and other casualty
not caused by Lessee excepted. Lessee shall reimburse Lessor
upon demand for any expenses incurred by Lessor with respect to
removal, transportation or storage of abandoned property and with
respect to restoring said Premises to good order, condition and
repair. All modifications, improvements, alterations, additions
and fixtures, other than Lessee's trade fixtures and equipment,
which have been made or installed by either Lessor or Lessee upon
the Premises shall remain the property of Lessor and shall be
surrendered with the Premises as a part thereof. If the Premises
shall not be surrendered promptly at the end of the Term or
sooner termination thereof, Lessee shall indemnify Lessor against
loss or liability resulting from delay by Lessee in so
surrendering the Premises, including, without limitation, claims
made by any succeeding tenants founded on such delay and any
attorneys' fees resulting therefrom. Lessee shall promptly
surrender all keys for the Premises to Lessor at the place then
fixed for the payment of rent and shall inform Lessor of
combinations on any vaults, locks and safes left on the Premises.
In the event Lessee remains in possession of the Premises
after expiration of this Lease and without the execution of a new
lease, but with Lessor's written consent, Lessee shall be deemed
to be occupying the Premises as a tenant from month-to-month,
subject to all the provisions, conditions and obligations of this
Lease insofar as the same can be applicable to a month-to-month
tenancy, except that the Annual Minimum Rent, Percentage Rent and
Additional Rent shall be escalated to the greater of (i) one
hundred fifty percent (150%) of the Annual Minimum Rent,
Percentage Rent and Additional Rent payable by Lessee immediately
prior to the expiration of this Lease, or (ii) Lessor's then
current rent for the Premises according to Lessor's then current
rental rate schedule for prospective tenants. In the event
Lessee remains in possession of the Premises after expiration of
this Lease and without the execution of a new Lease and without
Lessor's written consent, Lessee shall be deemed to be occupying
the Premises without claim of right, and Lessee shall pay Lessor
for all costs arising out of loss or liability resulting from
delay by Lessee in so surrendering the Premises as above provided
and shall pay a charge for each day of occupancy in an amount
equal the greater of (i) double the Annual Minimum Rent,
Percentage Rent and Additional Rent (on a daily basis) then
currently being charged by Lessor on new leases in the Shopping
Center for space similar to the Premises or (ii) double the
Annual Minimum Rent, Percentage Rent and Additional Rent (on a
daily basis) payable by Lessee under this Lease immediately prior
to the expiration of this Lease.
ARTICLE XVIII. DEFAULT OF LESSEE: The occurrence of any one or
more of the following events (in this Article sometimes called
"Event of Default") shall constitute a default and breach of this
Lease by Lessee:
A. If Lessee fails to pay any Annual Minimum Rent,
Percentage Rent or Additional Rent payable under this Lease or
fails to pay any obligation required to be paid by Lessee when
and as the same shall become due and payable, and such default
continues for a period of ten (10) days after written notice
thereof given by Lessor to Lessee.
B. If Lessee fails to perform any of Lessee's nonmonetary
obligations under this Lease for a period of thirty (30) days
after written notice from Lessor; provided that if more time is
required to complete such performance, Lessee shall not be in
default if Lessee commences such performance within the thirty-
day period and thereafter diligently pursues its completion.
However, Lessor shall not be required to give such notice if
Lessee's failure to perform constitutes a non-curable breach of
this Lease. The notice required by this subsection is intended
to satisfy any and all notice requirements imposed by law on
Lessor and is not in addition to any such requirement.
C. If Lessee, by operation of law or otherwise, violates
the provisions of Article XIV hereof relating to assignment,
sublease, mortgage or other transfer of Lessee's interest in this
Lease or in the Premises or in the income arising therefrom, and
such default continues for a period of thirty (30) days after
written notice thereof by Lessor to Lessee.
D. Lessee, by operation of law or otherwise, violates the
provisions of Article XXII relating to compliance with
environmental laws, and such default continues for a period of
thirty (30) days after written notice thereof by Lessor to
Lessee.
E. If (i) Lessee makes a general assignment or general
arrangement for the benefit of creditors; (ii) a petition for
adjudication of bankruptcy or for reorganization or rearrangement
is filed by or against Lessee and is not dismissed within thirty
(30) days; (iii) if a trustee or receiver is appointed to take
possession of substantially all of Lessee's assets located at the
Premises or of Lessee's interest in this Lease and possession is
not restored to Lessee within thirty (30) days; or (iv) if
substantially all of Lessee's assets located at the Premises or
of Lessee's interest in this Lease is subjected to attachment,
execution or other judicial or non-judicial seizure which is not
discharged within thirty (30) days. If a court of competent
jurisdiction determines that any of the acts described in this
subsection does not constitute an Event of Default and a trustee
is appointed to take possession (or if Lessee remains a debtor in
possession) and such trustee or Lessee transfers Lessee's
interest hereunder, then Lessor shall receive, as Additional
Rent, the difference between the rent (or any other
consideration) paid in connection with such assignment or
sublease and the rent payable by Lessee hereunder. As used in
this subsection, the term "Lessee" shall also mean any guarantor
of Lessee's obligations under this Lease. If any such Event of
Default shall occur, Lessor, at any time during the continuance
of any such Event of Default, may give written notice to Lessee
stating that this Lease shall expire and terminate on the date
specified in such notice, and upon the date specified in such
notice this Lease, and all rights of Lessee under this Lease,
including all rights of renewal whether exercised or not, shall
expire and terminate, or in the alternative or in addition to the
foregoing remedy, Lessor may assert and have the benefit of any
other remedy allowed herein, at law, or in equity.
Upon the occurrence of an Event of Default by Lessee, and at
any time thereafter, with or without notice or demand and without
limiting Lessor in the exercise of any right or remedy which
Lessor may have, Lessor shall be entitled to the rights and
remedies set forth below:
A. Terminate Lessee's right to possession of the Premises
by any lawful means, in which case this Lease shall not terminate
unless Lessor gives written notice to Lessee of its intention to
terminate this Lease and Lessee shall immediately surrender
possession of the Premises to Lessor. In such event, Lessor
shall have the immediate right to reenter and remove all persons
and property, and such property may be removed and stored in a
public warehouse or elsewhere at the cost of, and for the account
of Lessee, all without service of notice or resort to legal
process and without being deemed guilty of trespass, or becoming
liable for any loss or damage which may be occasioned thereby.
In the event that Lessor shall elect to so terminate this Lease,
then Lessor shall be entitled to recover from Lessee all damages
incurred by Lessor by reason of Lessee's default, including:
1. The equivalent of the amount of the Annual Minimum
Rent, Percentage Rent and Additional Rent which would be payable
under this Lease by Lessee if this Lease were still in effect,
less
2. The net proceeds of any reletting affected
pursuant to the provisions of this Article hereof after deducting
all of Lessor's reasonable expenses in connection with such
reletting, including, without limitation, all repossession costs,
brokerage commissions, legal expenses, reasonable attorneys'
fees, alteration costs, and expenses of preparation of the
Premises, or any portion thereof, for such reletting.
Lessee shall pay such current damages in the amount
determined in accordance with the terms of this Article as set
forth in a written statement thereof from Lessor to Lessee
(hereinafter called the "Deficiency"), to Lessor in monthly
installments on the days on which the rent would have been
payable under this Lease if this Lease were still in effect, and
Lessor shall be entitled to recover from Lessee each monthly
installment of the Deficiency as the same shall arise.
B. At any time after an Event of Default, whether or not
Lessor shall have collected any monthly Deficiency as set forth
in this Article, Lessor shall be entitled to recover from Lessee,
and Lessee shall pay to Lessor, on demand, as and for final
damages for Lessee's default, an amount equal to the then present
worth of the aggregate of the Annual Minimum Rent, Additional
Rent, Percentage Rent and any other charges to be paid by Lessee
hereunder for the unexpired portion of the term of this Lease
(assuming this Lease had not been so terminated). In the
computation of present worth, a discount at the rate of 6% per
annum shall be employed. If the Premises, or any portion
thereof, shall be relet by Lessor for the unexpired term of this
Lease, or any part thereof, before presentation of proof of such
damages to any court, commission or tribunal, the amount of rent
received upon such reletting shall be offset against any monies
claimed pursuant to this subsection. Nothing herein contained or
contained in this Article shall limit or prejudice the right of
Lessor to prove for and obtain, as damages, an amount equal to
the maximum allowed by any statute or rule of law in effect at
the time when, and governing the proceedings in which, such
damages are to be proved, whether or not such amount be greater,
equal to or less than the amount of the difference referred to
above.
C. Upon the occurrence of an Event of Default by Lessee,
Lessor shall also have the right, with or without terminating
this Lease, to reenter the Premises to remove all persons and
property from the Premises. Such property may be removed and
stored in a public warehouse or elsewhere at the cost of and for
the account of Lessee. If Lessor shall elect to reenter the
Premises, Lessor shall not be liable for damages by reason of
such reentry.
D. If Lessor does not elect to terminate this Lease as
provided in this Article then Lessor may, from time to time,
recover all rent as it becomes due under this Lease. At any time
thereafter, Lessor may elect to terminate this Lease and to
recover damages to which Lessor is entitled.
E. In the event that Lessor should elect to terminate this
Lease and to relet the Premises, it may execute any new lease in
its own name. In the event that Lessor should not elect to
terminate this Lease, it may re-let the premises to a substitute
tenant. Lessee hereunder shall have no right or authority
whatsoever to collect any rent from such substitute tenant. The
proceeds of any such reletting shall be applied as follows:
1. First, to the payment of any indebtedness other
than rent due hereunder from Lessee to Lessor, including but not
limited to storage charges or brokerage commissions owing from
Lessee to Lessor as the result of such reletting;
2. Second, to the payment of the costs and expenses
of reletting the Premises, including alterations and repairs
which Lessor, in its sole discretion, deems reasonably necessary
and advisable and reasonable attorneys' fees incurred by Lessor
in connection with the retaking of the Premises and such
reletting;
3. Third, to the payment of rent and other charges
due and unpaid hereunder; and
4. Fourth, to the payment of future rent and other
damages payable by Lessee under this Lease.
Lessor shall not be deemed to have terminated this Lease and
the Lessee's right to possession of the leasehold or the
liability of Lessee to pay rent thereafter to accrue or its
liability for damages under any of the provisions hereof, unless
Lessor shall have notified Lessee in writing that it has so
elected to terminate this Lease. Lessee covenants that the
retaking of possession by Lessor or the service by Lessor of any
notice pursuant to the applicable unlawful detainer statutes of
the state in which the Shopping Center is located and Lessee's
surrender of possession pursuant to such notice shall not (unless
Lessor elects to the contrary at the time of, or at any time
subsequent to the service of, such notice, and such election be
evidenced by a written notice to Lessee) be deemed to be a
termination of this Lease or of Lessee's right to possession
thereof.
All rights, options and remedies of Lessor contained in this
Lease shall be construed and held to be cumulative, and no one of
them shall be exclusive of the other, and Lessor shall have the
right to pursue any one or all of such remedies or any other
remedy or relief which may be provided by law whether or not
stated in this Lease. In the event of a default by Lessee
hereunder, Lessor shall exercise commercially reasonable efforts
to mitigate its damages to the extent required by Arizona law.
No waiver by Lessor of a breach of any of the terms, covenants or
conditions of this Lease by Lessee shall be construed or held to
be a waiver of any succeeding or preceding breach of the same or
any other term, covenant or condition therein contained. No
waiver of any default of Lessee hereunder shall be implied from
any omission by Lessor to take any action on account of such
default if such default persists or is repeated, and no express
waiver shall affect default other than as specified in said
waiver. The consent or approval by Lessor to or of any act by
Lessee requiring Lessor's consent or approval shall not be deemed
to waive or render unnecessary Lessor's consent to or approval of
any subsequent similar acts by Lessee.
Lessee shall reimburse Lessor, upon demand, for any costs or
expenses incurred by Lessor in connection with any breach or
default of Lessee under this Lease, whether or not suit is
commenced or judgment entered. Such costs shall include, but not
be limited to: legal fees and costs incurred for the negotiation
of a settlement, enforcement of rights or otherwise.
Furthermore, if any action for breach of or to enforce the
provisions of this Lease is commenced, the court in such action
shall award to the party in whose favor a judgment is entered a
reasonable sum as attorneys' fees and costs. Such attorneys'
fees and costs shall be paid by the losing party in such action.
Lessee shall also indemnify Lessor against and hold Lessor
harmless from all costs, expenses, demands and liability incurred
by Lessor if Lessor becomes or is made a party to any claim or
action (a) instituted by Lessee, or by any third party against
Lessee; (b) for foreclosure of any lien for labor or material
furnished to or for Lessee or such other person; (c) otherwise
arising out of or resulting from any act or transaction of Lessee
or such other person; or (d) necessary to protect Lessor's
interest under this Lease in a bankruptcy proceeding or other
proceeding under Title 11 of the United States Code, as amended.
Lessee shall defend Lessor against any such claim or action at
Lessee's expense with counsel reasonably acceptable to Lessor or,
at Lessor's election, Lessee shall reimburse Lessor for any legal
fees or costs incurred by Lessor in any such claim or action.
In addition, Lessee shall pay Lessor's reasonable attorneys'
fees incurred in connection with Lessee's request for Lessor's
consent in connection with any act which Lessee proposed to do
and which requires Lessor's consent.
Lessee hereby waives all claims by Lessor's reentering and
taking possession of the Premises or removing and storing the
property of Lessee as permitted under this Lease and will save
Lessor harmless from all losses, costs or damages occasioned
Lessor thereby. No such reentry shall be considered or construed
to be a forcible entry by Lessor.
ARTICLE XIX. SUBORDINATION: This Lease shall be subject and
subordinate to any mortgage, deed of trust or ground lease now or
hereafter placed upon the Premises or the Shopping Center Tract,
or any portion thereof, by Lessor or its successors or assigns,
and to amendments, replacements, renewals and extensions thereof.
Lessee agrees at any time hereafter, upon demand, to execute and
deliver any instruments, releases or other documents that may be
reasonably required for the purpose of subjecting and
subordinating this Lease, as above provided, to the lien of any
such mortgage, deed of trust or ground lease. It is agreed,
nevertheless, that as long as Lessee is not in default after
expiration of any applicable grace or cure period, if any, in the
payment of Annual Minimum Rent, Percentage Rent and Additional
Rent, Lessee's share of Common Area costs and expenses and Taxes,
and the payment of other charges to be paid by Lessee under this
Lease, and the performance of all covenants, agreements and
conditions to be performed by Lessee under this Lease, then
neither Lessee's right to quiet enjoyment under this Lease, nor
the right of Lessee to continue to occupy the Premises and to
conduct its business thereon, in accordance with the terms of
this Lease as against any lessor, lessee, mortgagee, or trustee
shall be interfered with. This Lease shall be subject to all
easements, restrictions and covenants presently existing or
hereafter created upon the Shopping Center.
The above subordination shall be effective without the
necessity of the execution and delivery of any further
instruments on the part of Lessee to effectuate such
subordination. Notwithstanding anything hereinabove contained in
this Article, in the event the holder of any mortgage, deed of
trust or ground lease shall at any time elect to have this Lease
constitute a prior and superior lien to its mortgage, deed of
trust or ground lease, then, and in such event, upon any such
holder or Lessor notifying Lessee to that effect in writing, this
Lease shall be deemed prior and superior in lien to such
mortgage, deed of trust or ground lease, whether this Lease is
dated prior to or subsequent to the date of such mortgage, deed
of trust or ground lease, and Lessee shall execute such
attornment agreement as may be reasonably requested by said
holder.
Lessee agrees, provided that the mortgagee, ground lessor,
trust deed holder or other secured party under any mortgage,
ground lease, deed of trust or other security instrument, shall
have notified Lessee in writing (by the way of a notice of
assignment of lease or otherwise) of its address, that Lessee
shall give such mortgagee, ground lessor, trust deed holder or
other secured party ("Mortgagee"), simultaneously with delivery
of notice to Lessor, by registered or certified mail, a copy of
any such notice of default served upon Lessor. Lessee further
agrees that said Mortgagee shall have the right to cure any
alleged default during the same period that Lessor has to cure
said default.
ARTICLE XX. BANKRUPTCY OR INSOLVENCY: Lessee or Lessee's
guarantor, if any, shall not cause or give cause for the
appointment of a trustee or a receiver of the assets of Lessee or
Lessee's guarantor, if any, and shall not make any assignment for
the benefit of creditors, or be adjudicated insolvent. The
allowance of any petition under any insolvency law except under
the Bankruptcy Code or the appointment of a trustee or receiver
of Lessee or Lessee's guarantor, if any, or of the assets of
either of them, shall be conclusive evidence of the petition,
unless the appointment of a trustee or receiver is vacated within
thirty days after such an allowance or appointment. Lessor does,
in addition, reserve any and all other remedies provided in this
Lease or in the law.
A. Upon the filing of a petition by or against Lessee
under the Bankruptcy Code, Lessee, as debtor and as debtor in
possession, and any trustee who may be appointed, agree as
follows: (i) to perform each and every obligation of Lessee
under this Lease, including, but not limited to, the manner of
"operations" as provided in Article VII of this Lease until such
time as this Lease is either rejected or assumed by order of the
United States Bankruptcy Court; (ii) to pay monthly in advance on
the first day of each month as reasonable compensation for use
and occupancy of the Premises an amount equal to all Annual
Minimum Rent and other charges otherwise due pursuant to this
Lease and to pay Percentage Rent monthly at the percentage set
forth in this Lease on all sales during such month less Annual
Minimum Rent actually paid in such month; payment of all such
Percentage Rent to be made by the 10th of the succeeding month;
(iii) to reject or assume this Lease within sixty (60) days of
the filing of such petition under Chapter 7 of the Bankruptcy
Code or within one hundred twenty (120) days (or such shorter
term as Lessor, in its sole discretion, may deem reasonable so
long as notice of such period is given) of the filing of a
petition under any other Chapter; (iv) to give Lessor at least
forty-five (45) days prior written notice of any proceeding
relating to any assumption of this Lease; (v) to give at least
thirty (30) days prior written notice of any abandonment of the
Premises; any such abandonment to be deemed a rejection of this
Lease; (vi) to do all other things of benefit to Lessor otherwise
required under the Bankruptcy Code; (vii) to be deemed to have
rejected this Lease in the event of the failure to comply with
any of the above; and (viii) to have consented to the entry of an
order by an appropriate United States Bankruptcy Court providing
all of the above, waiving notice and hearing of the entry of
same.
B. No default of this Lease by Lessee, either prior to or
subsequent to the filing of such a petition, shall be deemed to
have been waived unless expressly done so in writing by Lessor.
C. It is understood and agreed that this is a lease of
real property in a shopping center as such a lease is described
in Section 365(b)(3) of the Bankruptcy Code.
D. Included within and in addition to any other conditions
or obligations imposed upon Lessee or its successor in the event
of assumption and/or assignment are the following: (i) the cure
of any monetary defaults and the reimbursement of pecuniary loss
within not more than thirty (30) days of assumption and/or
assignment; (ii) the deposit of an additional sum equal to three
(3) months' rent to be held as security or such lesser additional
security as a United States Bankruptcy Court may deem
appropriate; (iii) the use of the Premises as set forth in
Article VII of this Lease with the quality, quantity and/or lines
of merchandise of any goods or services required to be offered
for sale unchanged; (iv) the reorganized debtor or assignee of
such debtor in possession or Lessee's trustee demonstrates in
writing that it has retailing experience in shopping centers of
comparable size and financial ability to operate a retail
establishment out of the Premises in the manner contemplated in
this Lease and meets all other reasonable criteria of Lessor as
did Lessee upon execution of this Lease; (v) the prior written
consent of any mortgagee to which this Lease has been assigned as
collateral security; and (vi) the Premises, at all times, remains
a single store and no physical changes of any kind may be made to
the Premises unless in compliance with the applicable provisions
of this Lease.
ARTICLE XXI. OTHER OPERATIONS: If, during the Term, Lessee or
any person, firm or corporation which directly or indirectly
controls or is controlled by Lessee shall directly or indirectly,
either individually or as a partner or stockholder or otherwise,
own, operate or become financially interested in any similar or
competing business operating under the trade name used by Lessee
hereunder within a radius of three (3) miles from the Shopping
Center, measured from the outside boundary of the Shopping
Center, then Lessor shall have the option to increase the Annual
Minimum Rent by an amount equal to the sum of Two Dollars ($2.00)
times the number of square feet in the Premises.
This Article XXI shall not apply to any such business of
Lessee or such related party in operation within said radius on
the date of this Lease.
ARTICLE XXII. HAZARDOUS SUBSTANCES:
A. For purposes of this Article, "Hazardous Substance"
means any matter giving rise to liability under the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section 6901 et
seq., the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C. Sections 9601 et seq.
(including the so-called "Superfund" amendments thereto), all
Arizona environmental protection laws, any other applicable,
federal, state or local statute, law, ordinance, rule or
regulation governing or pertaining to any hazardous substances,
hazardous wastes, chemicals or other materials, including without
limitation asbestos, polychlorinated biphenyls, radon, petroleum
and any derivative thereof ("ENVLAW") or any common law theory
based on nuisance or strict liability.
B. Lessee shall not allow Hazardous Substances to be
located on the Premises or the Shopping Center and shall not
conduct or authorize the use, generation, transportation,
storage, treatment or disposal at the Premises or the Shopping
Center of any Hazardous Substances other than the incidental use
of certain Hazardous Substances required in the ordinary course
of conducting the Permitted Use so long as such incidental use
complies in all respects with all applicable laws, rules,
statutes, ordinances and regulations.
If, as a result of Lessee's use and occupancy of the
Premises, the presence, release, threat or release, placement on
or in the Premises or the Shopping Center, or the use,
generation, transportation, storage, treatment, or disposal at
the Premises or the Shopping Center of any Hazardous Substances:
(i) gives rise to liability (including, but not limited to, a
response action, remedial action, or removal action) under RCRA,
CERCLA, ENVLAW, or any common law theory based on nuisance or
strict liability, (ii) causes a significant public health effect,
or (iii) pollutes or threatens to pollute the environment, Lessee
shall promptly take any and all remedial and removal action of
other action necessary to clean up the Premises and/or the
Shopping Center and mitigate exposure to liability arising from
the Hazardous Substances, whether or not required by law.
Lessee shall indemnify, defend and hold harmless Lessor from
and against all damages, costs, losses, expenses (including, but
not limited to, actual attorneys' fees and engineering fees)
arising from or attributable to (i) the existence of any
Hazardous Substances at the Premises and/or the Shopping Center
as a result of Lessee's use and occupancy of the Premises, and
(ii) any breach by Lessee of any of its covenants contained in
this Article. The covenants, representations and warranties of
Lessee contained in this Article shall survive expiration or
earlier termination of this Lease.
ARTICLE XXIII. MISCELLANEOUS:
A. Lessee represents that Lessee has dealt directly only
with Phoenix Commercial Advisors (Xxxx Xxxxx, Xxxxxxx Xxxx, and
Xxx Xxxxxxxx) and Staubach Commercial (Xxxxx Xxxxxxx) (the
"Brokers"), as brokers, in connection with this Lease and that
insofar as Lessee knows, no other broker negotiated or
participated in negotiations of this Lease or submitted or showed
the Premises or is entitled to any commission in connection
therewith. Lessor and Lessee agree that no broker shall be
entitled to any commission in connection with either the First
Renewal Term or the Second Renewal Term, as such terms are
hereinafter defined, or any expansion of the Premises. Lessee
shall defend, indemnify and hold harmless Lessor from and against
any and all claims of brokers, finders or any like third party
claiming any right to commission or compensation by or through
acts of Lessee in connection herewith other than the Brokers.
Lessor shall be responsible for payment of the brokers'
commission to the Brokers and shall defend, indemnify and hold
harmless Lessee from and against any and all claims of brokers,
finders or any like third party claiming any right to commission
or compensation by or through acts of Lessor in connection
herewith.
B. Lessee agrees, from time to time, upon not Less than
ten (10) days prior written request by Lessor, to deliver to
Lessor a statement in writing certifying (i) this Lease is
unmodified and in full force and effect (or if there have been
modifications, that the Lease as modified is in full force and
effect and stating the modifications); (ii) the dates to which
the rent and other charges have been paid; (iii) Lessor is not in
default in any provision of this Lease or, if in default, the
nature thereof specified in detail; (iv) the amount of monthly
rental currently payable by Lessee; (v) the amount of any prepaid
rent; and (vi) such other matters as may be reasonably requested
by Lessor or any mortgagee or prospective purchaser of the
Shopping Center Tract. Lessee agrees to give any mortgagees,
ground lessors and/or trust deed holders, by registered or
certified mail, a copy of any notice of default served upon
Lessor simultaneously with the delivery of notice to Lessor,
provided that prior to such notice Lessee has been notified, in
writing of the address of such mortgagees, ground lessors and/or
trust deed holders. Lessee further agrees that if Lessor shall
have failed to cure said default within the time period
prescribed in this Lease, then said mortgagees, ground lessors,
and/or trust deed holders shall have an additional twenty (20)
day period to cure such default or if such default cannot be
cured within that time, then such additional time as may be
necessary if within said 20-day period such mortgagee, ground
lessor and/or trust deed has commenced and is diligently pursuing
remedies to cure such default (including but not limited to
commencement of foreclosure proceedings, if necessary to effect
such cure), in which event this Lease shall not be terminated
while such remedies are being so diligently pursued.
If Lessee fails to deliver such statement to Lessor within
such ten (10) day period, Lessor and any prospective purchaser or
encumbrancer of the Premises or the Shopping Center may
conclusively presume and rely upon the following facts: (i) the
terms and provisions of this Lease have not been changed except
as otherwise represented by Lessor; (ii) this Lease has not been
cancelled or terminated and is in full force and effect, except
as otherwise represented by Lessor; (iii) the current amounts of
the Annual Minimum Rent, Percentage Rent and Additional Rent are
as represented by Lessor; (iv) there have been no subleases or
assignments of the Lease; (v) not more than one month's Annual
Minimum Rent, Percentage Rent or Additional Rent or other charges
have been paid in advance; and (vi) Lessor is not in default
under the Lease. In such event, Lessor is entitled to sign a
statement of such facts and Lessee shall be estopped from denying
the truth of such facts.
C. All notices, demands and requests shall be in writing,
and shall be effectively served in any of the following manners:
(i) If addressed to Lessee:
By forwarding such notice, demand or request by
certified or registered mail, postage prepaid, addressed to
Lessee at:
Xx. Xxxxxx X. XxXxxxxx
00000 Xxxxx Xxxx Xxxx, #00
Xxxxxxxxxx, Xxxxxxx 00000
with a copy to:
Xx. Xxxxx XxXxxxxx
0 Xx Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxx
or at such other address or addresses as Lessee
may hereafter designate by written notice to Lessor, in which
case said notice shall be effective at the time of mailing such
notice so long as Lessor shall thereafter timely receive the
notice.
(ii) If addressed to Lessor:
By forwarding such notice, demand or request by
certified or registered mail, postage prepaid, addressed to
Lessor at:
Opus West Corporation
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Director, Real Estate Development
Chandler Pavilions II
with a copy to:
Opus Corporation
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Legal Department
with a copy to:
Opus West Management Corporation
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Property Manager
with a copy to:
Xxxxxxxxx & Xxxxxxx, P.A.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xx. Xxxxxxx X. Xxxx
or at such other address or addresses as Lessor may
hereafter designate by written notice to Lessee, in which case
said notice shall be effective at the time of mailing such notice
so long as Lessee shall thereafter timely receive the notice.
D. All rights and remedies of Lessor under this Lease or
that may be provided by law may be executed by Lessor in its own
name, individually, or in the name of its agent, and all legal
proceedings for the enforcement of any such rights or remedies,
including those set forth in Article XVIII, may be commenced and
prosecuted to final judgment and execution by Lessor in its own
name or in the name of its agent.
X. Xxxxxx covenants and agrees that Lessee, upon paying
the Annual Minimum Rent, Percentage Rent, Additional Rent and
other charges herein provided for and observing and keeping the
covenants, agreements and conditions of this Lease on its part to
be kept and performed, shall lawfully and quietly hold, occupy
and enjoy the Premises during the Term in accordance with and
subject to the terms of this Lease free from molestation or
hindrance by Lessor or any party claiming by, through or under
Lessor. Time is of the essence of this Lease.
F. The covenants and agreements herein contained shall
bind and inure to the benefit of Lessor and its successors and
assigns, and Lessee and its permitted successors and assigns.
All obligations of each party constituting Lessee hereunder shall
be the joint and several obligations of each such party.
G. If any term or provision of this Lease shall to any
extent be held invalid or unenforceable, the remaining terms and
provisions of this Lease shall not be affected thereby, but each
term and provision of this Lease shall be valid and enforced to
the fullest extent permitted by law. This Lease shall be
construed and enforced in accordance with the laws of the State
of Arizona.
H. Lessee covenants not to do or suffer any waste or
damage or disfigurement or injury to the Premises or Shopping
Center and Lessee further covenants that it will not vacate other
than in connection with any restoration of the Premises by Lessor
upon the occurrence of (i) a fire or other casualty as more
particularly described in Article XV or (ii) an eminent domain
proceeding as more particularly described in Article XVI, or
abandon the Premises during the Term of this Lease.
I. The term "Lessor" as used in this Lease, so far as
covenants or obligations on the part of Lessor are concerned,
shall be limited to mean and include only the owner or owners of
the Shopping Center Tract at the time in question, and in the
event of any transfer or conveyance, the then grantor shall be
automatically freed and released from all personal liability
accruing from and after the date of such transfer or conveyance
as respects the performance of any covenant or obligation on the
part of Lessor contained in this Lease to be performed, it being
intended hereby that the covenants and obligations contained in
this Lease on the part of Lessor shall be binding on the then
Lessor only during and in respect to its period of ownership.
In the event of a sale or conveyance by Lessor of the
Shopping Center Tract or any part of the Shopping Center Tract,
the same shall operate to release Lessor from any future
liability upon any of the covenants or conditions herein
contained and in such event Lessee agrees to look solely to the
responsibility of the successor in interest of Lessor in and to
this Lease. This Lease shall not be affected by any such sale or
conveyance, and Lessee agrees to attorn to the purchaser or
grantee, which shall be personally obligated on this Lease only
so long as it is the owner of Lessor's interest in and to this
Lease.
J. The marginal or topical headings of the several
Articles are for convenience only and do not define, limit or
construe the contents of said Articles.
K. All preliminary negotiations are merged into and
incorporated in this Lease.
L. This Lease can only be modified or amended by an
agreement in writing signed by the parties hereto. No receipt of
money by Lessor from Lessee or any other person after termination
of this Lease or after the service of any notice or after the
commencement of any suit, or after final judgment for possession
of the Premises, shall reinstate, continue or extend the Term of
this Lease or affect any such notice, demand or suit, or imply
consent for any action for which Lessor's consent is required,
unless specifically agreed to in writing by Lessor. Any amounts
received by Lessor may be allocated to any specific amounts due
from Lessee to Lessor as Lessor determines.
X. Xxxxxx shall have the right to close any portion of the
building area or land area to the extent as may, in Lessor's
reasonable opinion, be necessary to prevent a dedication thereof
or the accrual of any rights to any person or the public therein.
Lessor shall at all times have full control, management and
direction of the Shopping Center Tract, subject to the rights of
Lessee in the Premises, and Lessor reserves the right at any time
and from time to time to reduce, increase, enclose or otherwise
change the size, number and location of buildings, layout and
nature of the Shopping Center, the Shopping Center Tract and the
other tenancies, premises and buildings included in the Shopping
Center Tract, to construct additional buildings and additions to
any building, to create additional rentable areas through use,
withdrawal of, and/or enclosure of the Common Area, or otherwise,
to place signs on the Shopping Center Tract, to increase the land
size of the Shopping Center Tract, and to change the name,
address, number or designation by which the Shopping Center is
commonly known. No implied easements are granted by this Lease.
Lessor shall in no event be liable for any lack of security in
respect to the Shopping Center.
N. Lessee shall permit Lessor (or its designees) to erect,
use, maintain, replace and repair pipes, cables, conduits,
plumbing, vents and telephone, electric and other wires or other
items, in, to and through the Premises, as and to the extent that
Lessor may now or hereafter deem necessary or appropriate for the
proper operation and maintenance of the Shopping Center.
O. Employees or agents of Lessor have no authority to make
or agree to make a lease or other agreement or undertaking in
connection herewith. The submission of this document for
examination does not constitute an offer to lease, or a
reservation of, or option for, the Premises. This document
becomes effective and binding only upon the execution and
delivery hereof by the proper officers of Lessor and by Lessee.
Lessee confirms that Lessor and its agents have made no
representations or promises with respect to the Premises or the
making of or entry into this Lease except as in this Lease
expressly set forth, and agrees that no claim or liability shall
be asserted by Lessee against Lessor for, and Lessor shall not be
liable by reason of, breach of any representations or promises
not expressly stated in this Lease. This Lease, except for the
Building Rules and Regulations of the Shopping Center Tract, in
respect to which subparagraph P of this Article shall prevail,
can be modified or altered only by agreement in writing between
Lessor and Lessee, and no act or omission of any employee or
agent of Lessor shall alter, change or modify any of the
provisions hereof.
P. Lessee shall perform, observe and comply with the
Building Rules and Regulations of the Shopping Center Tract as
set forth in Exhibit "D" attached hereto and incorporated herein
by reference, and, upon written notice thereof to Lessee, Lessee
shall perform, observe and comply with any changes, amendments or
additions thereto as from time to time shall be established and
deemed advisable by Lessor for tenants of the Shopping Center
Tract provided Lessee has received written notice thereof as
provided above. Lessor shall not be liable to Lessee for any
failure of any other tenant or tenants of the Shopping Center
Tract to comply with such Building Rules and Regulations.
Q. All rights and occupancy of Lessee herein shall be
subject to all governmental laws, ordinances and regulations, and
Lessee shall comply with the same, including without limitation
compliance with the Act, and shall comply with the requirements
of any fire insurance underwriters or other similar body now or
hereafter constituted relating to or affecting the condition, use
or occupancy of the Premises. Lessee shall use the Premises and
comply with any recorded covenants, conditions, and restrictions
affecting the Premises in the Shopping Center Tract as of the
commencement of the Lease or which are recorded during the Term.
R. All obligations of Lessee hereunder not fully performed
as of the expiration or earlier termination of the Term of this
Lease shall survive the expiration or earlier termination of the
Term hereof, including, without limitation, all payment
obligations with respect to Common Area expenses and Taxes and
all obligations concerning the condition of the Premises.
S. Any claim which Lessee may have against Lessor for
default in performance of any of the obligations herein contained
to be kept and performed by Lessor shall be deemed waived unless
such claim is asserted by written notice thereof to Lessor within
ten (10) days following the date Lessee becomes aware of the
alleged default and unless suit be brought thereon within six (6)
months subsequent to the date Lessee becomes aware of the alleged
default. Furthermore, Lessee agrees to look solely to Lessor's
interest in the Shopping Center Tract for the recovery of any
judgment from Lessor, it being agreed that Lessor, and if Lessor
is a partnership, its partners whether general or limited, and if
Lessor is a corporation, its directors, officers or shareholders,
shall never be personally liable for any such judgment.
Notwithstanding anything to the contrary contained in this Lease,
Lessee shall have no claim, and hereby waives the right to any
claim, against Lessor for damages by reason of any refusal,
withholding or delaying by Lessor of any consent or approval, and
in such event, Lessee's only remedies shall be an action for
specific performance or injunction to enforce any such
requirement for consent or approval.
T. Lessee represents and warrants to Lessor that this
Lease has been duly authorized, executed and delivered by Lessee
and that this Lease constitutes the valid and binding obligation
of Lessee enforceable against Lessee in accordance with its
terms.
U. This Lease shall not be deemed or construed to create
or establish any relationship or partnership or joint venture or
similar relationship or arrangement between Lessor and Lessee
hereunder.
V. Whenever a period of time is herein prescribed for
action to be taken by either party, said party 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 said party; provided, however, this Section shall not
apply to the payment of any sums of money required to be paid by
Lessee hereunder.
W. No more frequently than annually, but within 15 days
after request therefor, Lessee shall deliver to Lessor a copy of
Lessee's financial statements (including, but not limited to, an
audited balance sheet, if available, and an income statement) for
the prior fiscal year certified by an executive officer of
Lessee, together with the annual shareholders' report of any then
parent of Lessee, along with, if available, consolidated
financial statements of the parent and its subsidiaries.
ARTICLE XXIV. OTHER PROVISIONS: The following are made a part
hereof, with the same force and effect as if specifically set
forth herein:
A. Site Plan - Exhibit "A".
B. Operating Hours - Exhibit "B".
C. Shopping Center Use Restrictions - Exhibit "C".
D. Rules and Regulations - Exhibit "D".
X. Xxxxx - Exhibit "E".
X. Xxxxx Box Enhancement Drawings, dated March 21, 2001,
and Qualifications and Clarifications, dated February
28, 2001 Space Plan - Exhibit "F".
G. [Intentionally deleted.]
H. Freeway Pylon Signage - Exhibit "H".
ARTICLE XXV. AMERICANS WITH DISABILITIES ACT: In the event
that any alteration or repair to the Premises is undertaken by
Lessee with or without Lessor's consent, or is undertaken by
Lessor at Lessee's request during the term of this Lease or any
extended term, such alteration or repair shall (i) be designed
and constructed in full compliance with the American's With
Disabilities Act, as amended from time to time (the "Act") if
such alteration is undertaken by Lessee, and (ii) shall be
designed by Lessee in full compliance with the Act if such
alteration or repair is undertaken by Lessor at Lessee's request,
and the cost of any such design, alteration or repair to the
Premises or the Shopping Center shall be borne by Lessee,
including without limitation (a) the cost of any such design,
alteration or repair required as a result of (i) Lessee or an
assignee or subtenant being deemed a "Public Accommodation" or
the Premises being deemed a "Place of Public Accommodation" or
(ii) such alteration or repair being deemed to affect an "Area of
Primary Function" (as such terms are defined in the Act); and (b)
the cost of the installation or implementation of any "Auxiliary
Aid" required under the Act as a result of the operation of
Lessee's (or any assignee's or subtenant's) business within the
Premises. In addition, Lessee shall be responsible for all costs
and expenses incurred or to be incurred in order to cause the
Premises and the operation of Lessee's business within the
Premises to comply with the Act, and, if Lessee fails to keep and
maintain the Premises in compliance with the Act, Lessor shall
have the right but not the obligation, at Lessee's sole cost and
expense, to enter the Premises and cause the Premises to be put
into compliance with the Act; and Lessee shall indemnify, defend
and hold Lessor harmless from and against any and all costs,
claims and liabilities, including but not limited to the fees of
counsel, arising out of or resulting from Lessee's failure to
maintain and keep the Premises in compliance with the Act.
IN WITNESS WHEREOF, the parties have executed this Lease as
of the day and year first above written.
LESSOR: LESSEE:
OPUS WEST CORPORATION, a ARIZONA FURNITURE COMPANY, a
Minnesota Nevada corporation d/b/a Xxxxxxx
Corporation Home Furnishings
By By
Name: Name:
Title: Title:
EXHIBIT "A"
SITE PLAN
[Note: The attached Site Plan of the Shopping Center is attached
at this time for illustration purposes only. It has not been
finalized or finally approved and is subject to change from time
to time at Lessor's sole discretion; in addition, certain pad
sites will be sold from time to time by Lessor.]
EXHIBIT "B"
OPERATING HOURS
Operating Hours are subject to change by Lessor upon notice to
Lessee.
Day Time
Monday 10:00 a.m. to 9:00 p.m.
Tuesday 10:00 a.m. to 9:00 p.m.
Wednesday 10:00 a.m. to 9:00 p.m.
Thursday 10:00 a.m. to 9:00 p.m.
Friday 10:00 a.m. to 9:00 p.m.
Saturday 10:00 a.m. to 9:00 p.m.
Sunday 11:00 a.m. to 5:00 p.m.
EXHIBIT "C"
SHOPPING CENTER USE RESTRICTION
Neither Lessee nor any successor, assign, concessionaire,
sublessee or assignee shall use the Premises, or any part
thereof, for any of the following uses:
1. Any use prohibited within the Shopping Center, or on any
portion thereof, by (i) the Declaration of Covenants, Conditions
and Restrictions and Grant of Easements for Xxxxxxxx Pavilions II
recorded in the official records of Maricopa County, Arizona, on
June 9, 2000 in Instrument No. 2000-0441208, as such Declaration
may be amended from time to time, including without limitation
Sections 2.2 and 2.4 thereof; the restrictions contained in
Section 2.4 shall apply to Lessee and the Premises even though
such restrictions would otherwise apply only to Pad Sites or
certain specified Pads by the terms and provisions of said
section (as is now or hereafter may be amended, the
"Declaration"), and (ii) the Maintenance Agreement for Chandler
Marketplace recorded in the Official Records of Maricopa County,
Arizona, on January 29, 1998, in Instrument No. 00-0000000, as
such Maintenance Agreement may be amended from time to time (as
is now or hereafter may be amended, the "Maintenance Agreement")
(the Declaration and the Maintenance Agreement are hereinafter
collectively called the "CC&Rs");
2. General warehouse not associated with retail activities and
reasonably necessary or incidental to sales at Premises, or for
any assembling, manufacturing, distilling, refining, smelting,
agricultural or mining operation;
3. "Second-hand" store whose principal business is selling used
merchandise, thrift shops, salvation army type stores, "goodwill"
type stores, and similar businesses;
4. Mobile home park, trailer court, labor camp, junk yard, or
stock yard (except that this provision shall not prohibit the
temporary use of construction trailers during any periods of
construction, reconstruction or maintenance);
5. Dumping, disposing, incinerating, or reducing of garbage
(exclusive of dumpsters for the temporary storage of garbage and
any garbage compactors, in each case which are regularly emptied
so as to minimize offensive odors);
6. Fire, going out of business, relocation, bankruptcy or
similar sales (unless pursuant to court order);
7. Central laundry, dry cleaning plant, or laundromat;
provided, however, this restriction shall not apply to any dry
cleaning facility providing on-site service oriented to pickup
and delivery by the ultimate consumer, including, nominal
supporting facilities;
8. Selling or leasing automobiles, trucks, trailers, or
recreational vehicles;
9. Any bowling alley, skating rink or bar (unless part of a sit
down restaurant), dance hall, discotheque, video game room, night
club, amusement gallery, or gymnasium;
10. Veterinary hospital or animal raising or boarding facilities
(except that this restriction shall not be deemed to preclude the
operation of pet shops);
11. Funeral home or mortuary;
12. Selling, renting or exhibiting pornographic material or
other sexually explicit material;
13. Flea market;
14. Car wash;
15. Operation whose principal use is a massage parlor; provided
this shall not prohibit massages in connection with a beauty
salon or health club or athletic facility;
16. Living quarters, sleeping apartments or lodging rooms;
17. Tattoo parlor;
18. Church, school, day care center or related religious or
education facility;
19. Automotive service and repair;
20. The display and/or sale of gourmet foods (excluding
delicatessen items), beer and wine for off-premises consumption
and/or products made from wicker and/or rattan [from an area in
excess of 2,000 square feet of the floor area of the Premises];
21. The retail and wholesale distribution, installation and
repair of television, video (excluding computer Cathode Ray
Tubes) and home audio equipment;
22. The operation of a restaurant selling Asian (including
Chinese) food;
23. The operation of a supermarket, general foods store, grocery
store or other convenience store; and
EXHIBIT "D"
RULES AND REGULATIONS
1. Lessee shall advise and cause its vendors to deliver all
merchandise to the rear of the Premises (i.e. the non-public
area) during the hours reasonably established therefor from time
to time by Lessor.
2. All deliveries are to be made to designated service or
receiving areas and Lessee shall request delivery trucks to
approach their service or receiving areas by designated service
routes and drives. Exterior lights, including security lights,
located within the loading dock areas and along the exterior
building faces, shall be directed downward and shielded
appropriately so as not to directly cast light onto any adjacent
property.
3. Tractor trailers which must be unhooked or parked must use
steel plates under dolly wheels to prevent damage to the asphalt
paving surface. In addition, wheel blocking must be available
for use. Tractor trailers are to be removed from the loading
areas after unloading. No parking or storing of such trailers by
Lessee will be permitted in the Shopping Center.
4. Lessee shall not dispose of the following items in sinks or
commodes: plastic products (plastic bags, straws, boxes);
sanitary napkins; tea bags, cooking fats, cooking oils; any meat
scraps or cutting residue; petroleum products (gasoline, naphtha,
kerosene, lubricating oils); paint products (thinner, brushes);
or any other item which the same are not designed to receive.
All store floor area of Lessee, including vestibules, entrances
and returns, doors, fixtures, windows and plate glass, shall be
maintained in a safe, neat and clean condition.
5. Lessee shall not permit or suffer any advertising medium to
be placed on the exterior of exterior walls or exterior side of
windows, on the sidewalks or on the parking lot areas or light
poles. No permission, expressed or implied, is granted to
exhibit or display any banner, pennant, sign and trade or
seasonal decoration of any size, style or material within the
Shopping Center, outside the Premises.
6. Lessee shall not permit or suffer the use of any flashing
lights, searchlights, loud speakers, phonographs, radios, or
television. No radio, television, or other communication antenna
equipment or device is to be mounted, attached, or secured to any
part of the roof, exterior surface, or anywhere outside the
Premises, unless Lessor has previously given its written consent.
7. Lessee shall not permit or suffer merchandise of any kind at
any time to be placed, exhibited or displayed outside its
Premises, nor shall Lessee use the exterior sidewalks or exterior
walkways of its Premises to display, store or place any
merchandise except as permitted by Article VII. No sale of
merchandise by tent sale, truck load sale or the like shall be
permitted on the parking lot or other Common Areas.
8. Lessee shall not permit or suffer any portion of the
Premises to be used for lodging purposes.
9. Lessee shall not, in or on any part of the Common Area:
a. Vend, peddle or solicit orders for sale or distribution of
any merchandise, device, service, periodical, book pamphlet or
other matter whatsoever.
b. Exhibit any sign, placard, banner, notice or other written
material, except for activities as approved in writing by Lessor.
c. Distribute any circular, booklet, handbill, placard or other
material, except for activities as approved in writing by Lessor.
d. Solicit membership in any organization, group or association
or contribution for any purpose.
e. Create a nuisance.
f. Throw, discard or deposit any paper, glass or extraneous
matter of any kind except in designated receptacles, or create
litter or hazards of any kind.
g. Deface, damage or demolish any sign, light standard or
fixture, landscaping materials or other improvement within the
Shopping Center, or the property of customers, business invitees
or employees situated within the Shopping Center.
10. Lessee will not locate furnishings or cabinets adjacent to
mechanical or electrical access panels or over air conditioning
outlets so as to prevent operating personnel from servicing such
units as routine or emergency access may require. Cost of moving
such furnishings for Lessor's access will be at Lessee's cost.
The lighting and air conditioning equipment of the Shopping
Center will remain in the exclusive control of the Building
designated personnel.
11. Lessee shall comply with all reasonable parking rules and
regulations as may be posted and distributed from time to time.
12. Lessor's prior written approval, which shall be at Lessor's
sole discretion, must be obtained for installation of window
shades, blinds, drapes or any other window treatment of any kind
whatsoever.
13. Lessee shall keep the Premises at a temperature compatible
with comfortable occupancy during business hours and at all times
sufficiently high to prevent freezing of water in pipes and
fixtures.
14. Lessee shall keep the signs, exterior lights and display
window lights of the Premises lighted each and every day of the
lease term during the hours reasonably designated by Lessor.
15. No animals shall be brought into or kept in or about the
Shopping Center by Lessee.
16. Lessee shall comply with the CC&Rs.
17. In the event any violation of any of the above rules and
regulations continues after five (5) days following receipt of
notice by Lessee of such violation, beginning on such sixth day
Lessee shall, in addition to all other remedies of Lessor
provided in the Lease for default by Lessee, pay liquidated
damages of One Hundred Dollars ($100.00) per day for each day
such violation continues.
18. Lessor reserves the right to modify or rescind any of these
rules and regulations (as to some or all Lessees of the Shopping
Center) and to make such other and further rules and regulations
as it deems in its sole judgment shall from time to time be
necessary or advisable for the operation of the Shopping Center,
which rules and regulations shall be binding upon each tenant in
the Shopping Center upon their notification of said rules and
regulations.
EXHIBIT "E"
RIDER TO SHOPPING CENTER LEASE
ARTICLE XXVI. CONSTRUCTION OF LEASEHOLD IMPROVEMENTS: Lessor
shall construct and install interior improvements in the Premises
(hereinafter referred to as "Leasehold Improvements") for the use
and benefit of Lessee, subject to the following terms and
conditions:
A. The parties acknowledge that the base building that
comprises the Premises has been completed as of the date of this
Lease. Lessor agrees to construct the Leasehold Improvements in
substantial accordance with the White Box Enhancement Drawings,
dated March 21, 2001, and the Qualifications and Clarifications,
dated February 28, 2001, space plan attached hereto and made a
part hereof as Exhibit "F" (the "Space Plan")("White Box
Enhancement Drawings and Qualifications and Clarifications").
Lessor agrees to cause final plans and specifications for the
Leasehold Improvements to be prepared substantially in accordance
with the White Box Enhancement Drawings and Qualifications and
Clarifications and the applicable building code as interpreted
and enforced at the time of such preparation by the governmental
bodies having jurisdiction thereof. When Lessor requests Lessee
to specify details or layouts, Lessee shall specify same, subject
to the provisions of the White Box Enhancement Drawings and
Qualifications and Clarifications, so as not to delay completion
of the Leasehold Improvements. Lessee shall pay to Lessor all
increased costs or damages incurred by Lessor attributable to
delays caused by Lessee, and Lessee shall be responsible for lost
rent arising out of delay in completion of the Leasehold
Improvements caused by Lessee.
B. If Lessee requests changes to the Leasehold Improvements
(or the White Box Enhancement Drawings and Qualifications and
Clarifications) Space Plan that increase the cost of constructing
the Leasehold Improvements, such excess price shall be paid by
Lessee to Lessor in cash within thirty (30) days from the date
the Leasehold Improvements are substantially completed and Lessor
has submitted a written statement to Lessee requesting such
payment. In the event any portion of the Leasehold Improvements
for which an allowance is provided is less than the amount
allowed, there shall be no cash or other refund.
ARTICLE XXVII. OPTION TO RENEW: Lessee shall have the right,
subject to the provisions hereinafter provided, to extend the
term of this Lease for two (2) consecutive and successive periods
of five (5) years (the first such five (5) year period is
sometimes hereinafter referred to as the "First Renewal Term" and
the second such five (5) year period is sometimes hereinafter
referred to as the "Second Renewal Term"; the First Renewal Term
and the Second Renewal Term are sometimes hereinafter
collectively referred to as the "Renewal Terms"), on the terms
and provisions of this Article provided:
A. This Lease is in full force and effect and Lessee is
not in default in the performance of any of the terms, covenants
and conditions herein contained, subject to any notice required
hereunder, if any, and any applicable grace or cure period, if
any, at the time of exercise of the right of renewal and at the
time set for commencement of the First Renewal Term or the Second
Renewal Term, as the case may be.
B. Each of the Renewal Terms shall be upon the same terms,
covenants and conditions as provided in this Lease; provided,
however, the Annual Minimum Rent for the First Renewal Term and
Second Renewal Term will be the fair market basic rent rate(s) of
the Premises for the applicable Renewal Term, as reasonably
determined by Lessor in relation to comparable (in quality,
location and size) space located in the Shopping Center and/or in
the City of Xxxxxxxx.
The Annual Minimum Rent set forth in this Article shall be
subject to adjustment pursuant to the first paragraph of this
Lease. Lessee shall pay the monthly installments of Annual
Minimum Rent on or before the first day of each month, in
advance.
C. That Lessee shall exercise its right to each of the
Renewal Terms provided herein, if at all, by notifying Lessor in
writing of its election to exercise the right to renew the terms
of this Lease at least twelve (12) months, but not more than
fifteen (15), prior to the expiration of the initial term hereof
or of the First Renewal Term, as the case may be].
ARTICLE XXVIII. [Intentionally deleted.]
ARTICLE XXIX. DEFAULT OF LESSOR: In the event of any alleged
breach by Lessor of its covenants contained in this Lease, Lessee
shall have available all rights and remedies provided at law or
in equity, subject to the terms and conditions of this Lease;
provided, however, Lessee may not exercise any such right or
remedy unless Lessee has notified Lessor and any party having a
recorded mortgage or bond indenture lien against the property by
written notice of such alleged default, and the notified party or
parties have not cured such default within the thirty (30) day
period sub-sequent to receipt of such notice or, in the event
such alleged default is of such a nature that it cannot
reasonably be cured within such thirty-day period, such notified
party or parties have failed to cure such alleged default with
all due diligence.
ARTICLE XXX. SIGNAGE: Provided that Lessee obtains all
necessary governmental and other approvals therefor, Lessee shall
have the right, at Lessee's sole cost and expense, to a sign
panel on the freeway pylon sign located adjacent to Interstate 10
in the location shown on Exhibit "H" attached hereto and
incorporated herein. Lessee's sign panel shall be located in the
area cross-hatched on said Exhibit "H". Lessee shall pay to
Lessor, within ten (10) days following written demand therefor,
Lessee's pro rata share (based on sign panel area) of the cost of
construction of such sign, which will in no event exceed $13,500.
Any costs of maintenance and repair of Lessee's name thereon, and
all reasonably prorated costs of lighting, maintenance and repair
of the sign, shall be paid by Lessee from time to time within ten
(10) days following written request by Lessor therefor. It is
understood that the display of Lessee's name on any such sign
shall be subject to the reasonable approval of Lessor. Any such
sign, and the display of Lessee's name thereon, shall also be
subject to the terms of any restrictive covenants applicable
thereto and all applicable laws, ordinances and regulations.
EXHIBIT "F"
WHITE BOX ENHANCEMENT DRAWINGS,
DATED MARCH 21, 2001,
AND QUALIFICATIONS AND CLARIFICATIONS,
DATED FEBRUARY 28, 2001 SPACE PLAN
[SEE ATTACHED]
EXHIBIT "G"
[INTENTIONALLY DELETED.]
EXHIBIT "H"
FREEWAY PYLON SIGNAGE
