10/20/97
GROUND LEASE
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AGREEMENT made this 20th day of October, 1997, effective as of October 1,
1997, between MARKET SQUARE EAST, INC., a U.S. Virgin Islands corporation, with
a mailing address of ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇,
hereinafter referred to as Lessor, and CULUSVI, INC., a U.S. Virgin Islands
corporation, with a mailing address of ▇▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, hereinafter referred to as Lessee.
SECTION ONE
DEMISE, DESCRIPTION, AND USE OF DEMISED PREMISES
Lessor leases to Lessee, for the purpose of constructing and operating a
facility, which shall consist of a floor space of not less than Thirty Six
Thousand (36,000) square feet, for the following use (the "Permitted Use"):
1. A discount retail supermarket and general merchandiser with
loading dock area; and for no other purpose, those certain premises with the
appurtenances, generally known and described as Lease Area A of Parcel ▇▇. ▇-▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇. ▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, U.S. Virgin Islands consisting of
46,538 square feet for all purposes of this Lease, more or less, (36,000 square
feet, more or less, for the building (the "Building Area") and 10,538 square
feet, more or less, for the loading dock area and perimeter space around the
building to be constructed (the "Dock Area")), as more particularly shown and
described on the survey plan drawing and metes and bounds description attached
hereto as Exhibit A and made a part hereof (the "Demised Premises") in the
property known as Market Square East which is comprised of Parcel ▇▇. ▇-▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇. ▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇, U.S. Virgin Islands as shown on P.W.D.
Drawing No. A9-369-T89 (the "Property"). As used herein, the term "Demised
Premises" refers to the real property above described and to any improvements
located thereon from time to time during the term hereof.
SECTION TWO
TERM
The initial term of this Lease shall be for twenty (20) years, commencing
on October 1, 1997, and ending on September 30, 2017. As used herein the
expression "term hereof" refers to such initial term and to any renewal thereof
as hereinafter provided.
SECTION THREE
RENT
(a) Basic Rent. Subject to adjustment as provided below, the rent for the
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initial term for the Building Area shall be THREE and 90/100 DOLLARS ($3.90) per
square foot of land and for the Dock Area shall be TWO and 25/100 DOLLARS
($2.25) per square foot of land of which the Demised Premises are comprised per
annum (the "Basic Rent") payable in equal monthly installments of THIRTEEN
THOUSAND SIX HUNDRED SEVENTY FIVE and 88/100
DOLLARS ($13,675.88) per month commencing on the Rent Commencement Date as
hereafter defined.
(b) Rent Commencement Date. Lessee shall be liable for Basic Rent
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commencing October 1, 1997 (the "Rent Commencement Date").
(c) Rent Adjustments. During the term hereof, Additional Rent shall be
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computed as follows:
If on the first day of a Lease Year the Consumer Price Index of the United
States Bureau of Labor Statistics for All Urban Consumers (CPI-U), 1982-84 Base,
All Items, U.S. City Average, as published by the Bureau of Labor Statistics of
the United States Department of Labor ("Index") for the last month of the Lease
Year (September), shall be greater than the level of the Index for the last
month of the previous Lease Year (September) ("Base Level"), Lessee shall pay to
Lessor the Basic Rent plus the Additional Rent computed as follows:
(i) After each Lease Year, the Index for the final month of such
Lease Year ("Annual Level") shall be determined.
(ii) If the Annual Level for such Lease Year shall exceed the Base
Level, the percentage by which the Annual Level exceeds the Base Level
shall constitute the Percentage of Increase ("Percentage of Increase").
(iii) The Basic Rent shall be multiplied by the Percentage of
Increase; the resulting amount thereof shall be deemed the Additional Rent
for the next succeeding Lease Year.
(iv) The Additional Rent for a Lease Year shall be payable in equal
monthly installments, in advance, on the first day of each calendar month
during such Lease Year.
(v) For each succeeding Lease Year, the Basic Rent for purposes of
computing any Additional Rent for the ensuing Lease Year shall be the sum
of Basic Rent plus Additional Rent from the previous Lease Year.
(vi) If the compilation or publication of the Index shall be revised
or discontinued, there shall be substituted therefor its successor, or, if
no successor is designated, any other index acceptable to Lessor and
Lessee, it being understood that such an index shall be utilized at all
times so that, in the event of a failure of Lessor and Lessee to agree upon
a mutually acceptable index, Lessor may designate the same. It is the
intent of the parties that any such successor index should accurately
reflect as nearly as reasonably possible the compilations and figures
formerly set forth in the Index.
Nothing contained in any provision of this Lease dealing with the
adjustments of the Base Rent or Additional Rent shall be construed so as to
reduce the rent due and payable for any Lease Year below the rental paid by
Tenant during the preceding Lease Year. If during the Lease Term, the Index
declines so as to cause the Additional Rent computed in accordance with the
terms of this Section Three (c) hereof to be less than the Additional Rent for
the preceding Lease Year, the
Additional Rent for the current Lease Year shall be the same as the preceding
Lease Year.
The term "Lease Year" is defined to mean a period of twelve (12)
consecutive calendar months, the first Lease Year ("First lease Year") to
commence on October 1, 1997, the Rent Commencement Date, and each succeeding
Lease Year to commence on the first day of October. Any portion of the Lease
Term which is less than a Lease Year as hereinbefore defined shall be deemed a
"Partial Lease Year". Any reference in this Lease to a "Lease Year" shall,
unless the context clearly indicates otherwise, be deemed to be a reference to a
"Partial Lease Year" if the period in question involves less than a period of
twelve (12) consecutive calendar months.
(d) Additional Rent. Additional rent may also be due and payable to Lessor
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in accordance with other terms and provisions of this Lease.
(e) Construction Period Rent. For a period not to exceed eight and one
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half (8 1\2) months after the Rent Commencement Date, Basic Rent shall be
abated, and commencing on the sooner of the date of substantial completion of
the improvements to be built on the Demised Premises or May 15, 1998, rents
shall be payable in the amount set forth in Section Three (a) above prorated for
the partial month.
(f) Interest. Interest ("Interest") shall accrue at the rate of EIGHTEEN
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(18%) percent per annum, from and after five (5) days following the due date of
any payment of Basic Rent or Additional Rent.
(g) No Waiver by Lessor. Any delay or failure by Lessor for any Lease Year
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in computing or billing Lessee for the adjustment in the Additional Rent as
herein provided shall not constitute a waiver of or in any way impair the
continuing obligation of Lessee to pay the Additional Rent. Notwithstanding any
expiration or termination of this Lease prior to the Expiration Date, Lessee's
obligation to pay rent as determined under this Article shall continue and shall
cover the period up to the Expiration Date, and shall survive any expiration or
termination of this Lease.
(h) Late Fees and Returned Check Charges. In addition to the Interest
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provisions set forth above, any payment of Basic Rent or Additional Rent not
received by the Lessor within ten (10) days from the date on which said payment
is due shall be assessed a late charge of five (5%) percent of the amount due
(the "Late Charge"); provided, however, that the late charge provided herein
shall not apply so long as Lessee arranges for a direct debit from its U.S.
Virgin Islands bank account for the benefit of the Lessor and such direct debit
clear's Lessee's account, is actually paid to Lessor and represents all Basic
Rent, Additional Rent, Common Area Charges and all other amounts due and owing
to Lessor.
Any checks tendered as payment of Basic Rent or Additional Rent which are
returned by the Lessor's bank for any reason whatsoever, except deficiencies in
the Lessor's endorsement of the check, shall result in a charge to the Lessee in
the amount of Twenty Five Dollars ($25.00) or such amount as may be charged by
Lessor's Bank, whichever is greater (the "Returned Check
Charge").
Both the Late Charge and the Returned Check Charge are hereby deemed to be
added to the Basic Rent or Additional Rent, when applicable.
(i) Rent Increase in the Last Option Term. In addition to Basic Rent and
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Additional Rent to be computed pursuant to Section 3(c) hereof, the Lessee shall
pay to the Lessor during the final Option Term, if exercised, an additional
seven and one half percent (7.5%) of the sum of Basic Rent and Additional Rent
computed during the final Option Term. Said Option Term rental increase shall be
paid in equal monthly installments on the same dates as Basic Rent and
Additional Rent are due.
SECTION FOUR
WARRANTIES OF TITLE AND QUIET POSSESSION
Lessor covenants that Lessor is seized of the Demised Premises in fee
simple and has full right to make this Lease and that, provided Lessee is not in
default hereunder and, subject to the terms and conditions of this Lease, Lessee
shall have quiet and peaceable possession of the Demised Premises during the
term hereof, subject to any easements, covenants or other encumbrances of
record.
SECTION FIVE
DELIVERY OF POSSESSION
On or before December 22, 1997, Lessor shall have completed grading of the
Property sufficient for the Lessee to gain access to the Demised Premises and to
commence construction of the improvements thereon in accordance with Section
Thirteen hereof.
Prior to substantial completion as defined in Section Thirteen (e), Lessor
shall ensure that:
(a) there is adequate access to the Demised Premises from a public way and
the parking area is available for use; and
(b) sewer, power and telephone lines are available at or near the boundary
lines of the Demised Premises.
Lessor agrees to commence construction of the infrastructure for Market
Square East within five (5) business days of the date of execution hereof by the
Tenant. Lessor further agrees to substantially complete the infrastructure for
Market Square East in accordance with the plans and specifications by June 15,
1998 (the "Delivery Date").
If Lessor fails to substantially complete the infrastructure for Market
Square East in accordance with the plans and specifications by the Delivery
Date, and no casualty has occurred at the Demised Premises, no unforseen site
conditions and no adverse Acts of God have struck the
Virgin Islands, then Lessee shall be entitled to a credit towards future rent in
the amount of one thirtieth 1/30th) of the monthly rental for each day of delay
including weekends and holidays. Additionally, in the event that Lessee is in a
position to open for business on June 15, 1998, but is precluded from doing so
due to Lessor's failure to complete the infrastructure for Market Square East,
Lessor shall pay to Lessee the difference between the Basic Rent and $15,000.00
prorated for each day of delay, including weekends and holidays. For purposes of
the preceding sentence, the phase "in a position to open for business" shall be
construed in the most comprehensive sense including the Lessee being fully
stocked and prepared to sell inventory to the retail public.
In the event an Act of God or other casualty destroys more than fifty percent
(50%) of the infrastructural development of Market Square East then constructed
prior to the Delivery Date, the Delivery Date shall be extended an additional
one hundred eighty (180) days. In such event, if the infrastructure of Market
Square East is not substantially completed by the extended Delivery Date, then
Lessee shall be entitled to a credit towards future rent in the amount of one
thirtieth (1/30th) of the monthly rental for each day of delay. Notwithstanding
anything in this Lease to the contrary, if, despite its diligent efforts, Lessor
cannot deliver possession of the Demised Premises to Lessee on or before
February 22, 1998, this Lease shall be voidable by Lessee upon written notice to
Lessor unless Lessor has substantially completed the access to and grading of
the Property as provided above, in which case the rent credit provisions shall
control and this Lease shall remain in effect.
SECTION SIX
USES PROHIBITED
Lessee shall not use, or permit the Demised Premises, or any part thereof, to
be used, for any purpose other than the purpose or purposes for which the
Demised Premises are hereby leased; and no use shall be made or permitted to be
made of the Demised Premises, or acts done, which will cause a cancellation of
any insurance policy covering buildings to be located on the Demised Premises,
or any part thereof, nor shall Lessee sell, or permit to be kept, used, or sold,
in or about the Demised Premises, any article which may be prohibited by the
standard form of fire insurance policies. Lessee shall, at its sole cost, comply
with all requirements, pertaining to the Demised Premises, of any insurance
organization or company, necessary for the maintenance of insurance, as herein
provided, covering any building and appurtenances at any time located on the
Demised Premises.
SECTION SEVEN
WASTE AND NUISANCE PROHIBITED
During the term of this Lease, Lessee shall comply with all applicable laws
affecting the Demised Premises, the breach of which might result in any penalty
on Lessor or forfeiture of Lessor's title to the Demised Premises. Lessee shall
not commit, or suffer to be committed, any waste on the Demised Premises, or any
nuisance.
SECTION EIGHT
ABANDONMENT OF DEMISED PREMISES
Lessee shall not vacate or abandon the Demised Premises at any time during the
term hereof; if Lessee shall abandon, vacate or surrender the Demised Premises,
or be dispossessed by process of
law, or otherwise, any personal property belonging to Lessee and left on the
Demised Premises shall be deemed to be abandoned, at the option of the Lessor,
except such property as may be encumbered to Lessor.
SECTION NINE
LESSOR'S RIGHT OF ENTRY
Lessee shall permit Lessor and the agents and employees of Lessor to enter
into and upon the Demised Premises at all reasonable times for the purposes of
inspecting the same, or for the purpose of posting notices of non-responsibility
for alterations, additions, or repairs, without any rebate of rent and without
any liability to Lessee for any loss of occupation or quiet enjoyment of the
Demised Premises thereby occasioned (so long as such activities do not
substantially interfere with Lessee's business operations), and shall permit
Lessor and its agents and employees, at any time within the last one year prior
to the expiration of this Lease, to place on the Demised Premises any usual or
ordinary "To Let" or "To Lease" signs and exhibit the Demised Premises to
prospective lessees at reasonable hours.
SECTION TEN
SUBLETTING
(a) Lessor's Written Consent Required. Lessee may not sublet the improvements
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located on the Demised Premises in whole or in part without Lessor's prior
written consent and a consent to a sublease shall not be deemed a consent to any
subsequent sublet. The making of any such sublease shall not release Lessee
from, or otherwise affect in any manner, any of Lessee's obligations hereunder.
Any such sublet without such consent shall be void, and shall, at the option of
Lessor, terminate this Lease.
(b) Additional Rent to Lessor for Subleases. In the event that Lessee
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subleases, licenses or otherwise permits any use or occupancy (collectively,
"Subleases") of all or any portion(s) of the improvements located on the Demised
Premises during the term hereof after obtaining Lessor's written consent in
accordance with paragraph (a) of this Section Ten, then Lessee shall pay to
Lessor additional rent in the amount of fifteen percent (15%) of the gross rent
received from such sublessee(s) (the "Sublease Rent"). Said additional rent
shall be due and payable to Lessor according to the same schedule for payment of
rent applicable to the sublessee under the Sublease(s), but in no event less
than once every month. Any failure to make said additional rent payments to
Lessor shall be deemed a default hereunder. Notwithstanding the foregoing,
Lessee shall not be liable for Sublease Rent unless and until a total of THREE
THOUSAND SIX HUNDRED (3,600) square feet of the building located on the Demised
Premises is subleased at which time Sublease Rent shall be due for all
subleases.
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SECTION ELEVEN
NOTICES
All notices, demands, or other writings in this Lease provided to be given or
made or sent, or which may be given or made or sent, by either party hereto to
the other, shall be deemed to have been fully given or made or sent when made in
writing and deposited in the United States mail, registered and postage prepaid,
and addressed as follows:
TO LESSOR: Market Square East, Inc.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇▇, ▇.▇.▇.▇. ▇▇▇▇▇
with a copy to: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Law Offices of ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇-▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
Charlotte Amaile
St. ▇▇▇▇▇▇, U.S. Virgin Islands 00804
TO LESSEE: CULUSVI, Inc.
▇▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
with a copy to: A. ▇▇▇▇▇ ▇▇▇▇▇▇ III, Esq.
▇▇▇▇▇▇, Topper and Feuerzeig
▇.▇. ▇▇▇ ▇▇▇
No. lA Frederiksberg ▇▇▇▇
▇▇▇▇▇▇▇▇▇ Amalie
St. ▇▇▇▇▇▇, U.S. Virgin Islands 00804
The address to which any notice, demand, or other writing may be given or made
or sent to any party as above provided may be changed by written notice given by
such party as above provided. Provided, however, that the failure to provide a
copy of any notice to the counsel named above shall not affect the efficacy of
such notice.
SECTION TWELVE
TAXES AND ASSESSMENTS
During the Lease Term and any Option Term, Lessee shall pay to Lessor, as
Additional Rent, the amount determined in accordance with this Section for real
estate taxes assessed against that portion of the Property which comprises the
Common Areas of Market Square East and the Demised Premises. The amount payable
by Lessee shall be such amount determined as follows: the total sum assessed for
the land and improvements comprising the Demised Premises, plus an amount
determined
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by multiplying the assessed real estate tax on the land comprising the Property
on which the Common Areas are located by a fraction, the numerator of which
shall be the Floor Space of the improvements located on the Demised Premises and
the denominator of which shall be the net square footage of lease space located
in Market Square East. As soon as practical after Lessor's receipt of the real
estate tax assessment each year, Lessor will submit to Lessee a statement
showing the real estate tax assessment, and the calculation for determining the
amount due from Lessee. The amount so determined shall be paid by Lessee within
thirty (30) days of receipt of such statement from Lessor.
Lessee agrees throughout the term of this Lease and any applicable Option Term
to pay as Additional Rent Gross Receipts Taxes levied by the Government but only
in excess of 4.00% of such levy which shall or may during the term of this Lease
and Option Term be levied, assessed, imposed, become due and payable out of, or
for, the Demised Premises or any part thereof or any land, buildings or other
improvements now or at any time hereafter constituting a part of the Demised
Premises, including interest on installment payments and all costs and fees
(excluding attorneys' fees) incurred by the Lessor in contesting the same and\or
negotiating with the public authorities as to the same.
SECTION TWELVE A
COMMON AREA CHARGES AND ASSESSMENTS
(a) Common Areas. Lessor shall make available within the Property within
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one (1) year of the Rent Commencement Date such areas and facilities ("Common
Areas") including, but not limited to a parking area containing not less than
235 parking spaces, walkways, entrances, directory signs, and other like public
facilities used by Lessor for the operation, maintenance and management of the
Property, as Lessor shall deem appropriate. Lessor shall operate, manage, equip,
light, repair replace and maintain the Common Areas for their intended purposes,
all in such manner as Lessor shall in its sole discretion determine. Lessee
agrees that Lessor may, at any time and from time to time, increase, reduce or
change the number, type, size, location, elevation, nature and use of any of the
Common Areas, make installations therein, move and remove the same. If the
Common Areas, be changed, altered or diminished, Lessor shall not be subject to
any liability to Lessee and Lessee shall not be entitled to any compensation or
diminution or abatement of rent, nor shall any such change, alteration or
diminution be deemed to be a constructive or action eviction. Notwithstanding
the foregoing, the total number of parking spaces shall not fall below 235, nor
shall the ratio of under roof square footage to available parking spaces as of
the date of execution of this Lease change without the Lessor providing such
additional parking spaces as may be required to maintain the foregoing ratio.
(b) Use of Common Areas. Lessee and its concessionaires, offices, employees,
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agents, customers and invitees shall have the nonexclusive right, in common with
Lessor and all others to whom Lessor has granted or may hereafter grant rights,
to use the Common Areas, subject to such reasonable rules and regulations as
Lessor may from time to time impose. Lessee further agrees, after notice
thereof, to abide by such rules and regulations and to use its best efforts to
cause its concessionaires, officers, employees, agents, customers and invitees
to abide thereby. Lessor may, at any time and from time to time, close any
Common Areas to make repairs or changes therein or to effect construction,
repairs or changes within Market Square East, to prevent the acquisition of
public
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rights in such areas, and may do such other acts in and to the Common Areas as
in its judgment may be desirable to improve the convenience thereof.
(c) Common Area Charges. As used herein:
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(i) The term "Common Area Charges" shall mean an amount equal to the
sum of the actual cost for Market Square East of operating, managing, equipping,
cleaning, lighting, landscaping, repairing, replacing and otherwise maintaining
order and security therein, including, but not limited to, all costs of
liability and casualty insurance relating thereto, all taxes allocable thereto
(other than those payable by Lessee pursuant to Section Twelve), the costs of
security, supervision and traffic control of the Common Areas if deemed
advisable by the Lessor from time to time, including without limitation, the
costs of installation and monitoring of security devices in and around Market
Square East, the costs for maintenance, repair and replacement of the sewage
treatment plant servicing Market Square East.
(ii) The term "Lessee's Proportionate Share of Common Area Charges"
shall mean an amount equal to the Common Area Charges multiplied by a fraction,
the numerator of which shall be the Floor Space of the improvements located on
the Demised Premises and the denominator of which shall be the net square
footage of the lease space located in Market Square East.
Lessee shall pay to Lessor, as Additional Rent, Lessee's Proportionate
Share of Common Area Charges in equal monthly installments in advance on the
first day of each calendar month. Lessor shall furnish to Lessee, for each lease
year, a statement of (i) the actual Common Area Charges for the prior lease year
(or partial lease year), (ii) Lessee's Proportionate Share of Common Area
Charges for the prior lease year (or partial lease year), (iii) the amount paid
by Lessee during the prior lease year (or partial lease year) in respect of such
Common Area Charges, (iv) either the deficiency or overage in such payments and
(v) Lessor's estimate of Lessee's Proportionate Share of Common Area Charges for
the then current lease year. Any deficiency in payment by Lessee shown on any
statement for the prior lease year (or partial lease year) shall be due and
payable within thirty (30) days after the receipt of such statement and any
overage in payment will be credited against the next succeeding payments of
Lessee's Proportionate Share of Common Area Charges. After receipt of a
statement, Lessee shall pay to Lessor on the first day of each succeeding
calendar month an amount equal to one-twelfth (1/12) of Lessor's estimate of
Lessee's Proportionate Share of Common Area Charges as shown on such statement
until receipt of a new statement. If a statement is furnished to Lessee after
the commencement of a lease year, Lessee shall pay to Lessor, within thirty (30)
days after the receipt of such statement or Lessor shall credit against the next
succeeding payments of Lessee's Proportionate Share of Common Area Charges, an
amount equal to the deficiency or overpayment allocable to the part of the lease
year which shall have elapsed prior to the first day of the calendar month next
succeeding the calendar month in which the statement is furnished to Lessee.
Each statement shall be conclusive and binding upon Lessee unless within thirty
(30) days after receipt of such statement Lessee shall notify Lessor that it
disputes the correctness of the statement, specifying the respect in which the
statement is claimed to be incorrect. Pending the determination of such dispute
by agreement or otherwise, Lessee shall pay Lessor's then current statement and
such payment shall be
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without prejudice to Lessee's position. If the dispute shall be determined in
Lessee's favor, the amount of Lessee's overpayment of Lessee's Proportionate
Share of Common Area Charges resulting from compliance with Lessor's estimate
will be credited against the next succeeding payments of Lessee's Proportionate
Share of Common Area Charges.
Lessor agrees to consult with Lessee with respect to any single item costing
in excess of $50,000.00 which will constitute a Common Area Charge for which
Lessee is required to pay its Proportionate Share; provided, however, that
Lessor shall retain the right to incur and charge the expense as a Common Area
Charge if it determines in its reasonable discretion that the cost or expense is
in the best interests of Market Square East.
SECTION THIRTEEN
CONSTRUCTION OF BUILDINGS
(a) Plans and Specifications. All plans and specifications for any building to
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be erected on the Demised Premises shall be submitted to Lessor for Lessor's
written approval or any revisions required by Lessor. Said right of approval
shall include, without limitation, size and general design of the building,
construction materials to be used, exterior paint colors, all to be (i)
compatible with existing and future improvements located or to be located on
adjacent land owned by the Lessor and (ii) in compliance with the development
guidelines attached hereto as Exhibit ▇. ▇▇▇▇▇▇ shall not unreasonably withhold
such approval, and in the event of disapproval, Lessor shall give to Lessee an
itemized statement of reasons therefor within thirty (30) days after the same
are submitted to Lessor. If such plans and specifications are not approved and
agreed to by Lessor and Lessee in writing within sixty (60) days after the same
are first submitted to Lessor, then Lessor and Lessee shall select a mutually
agreeable arbitrator, and the arbitrator so selected shall hear and determine
the controversy and its decision as to the final plans and specifications shall
be final and binding on both Lessor and Lessee, who shall bear the cost of such
arbitration equally between them. Such arbitrator shall determine the
controversy and notify Lessor and Lessee in writing of its determination within
thirty (30) days after the controversy has first been submitted to such
arbitrator. Within sixty (60) days after final approval of the plans, Lessee
shall, at Lessee's sole expense, commence, and shall thereafter diligently
prosecute to completion the construction of the proposed improvements in
accordance with such plans and specifications. Prior to the commencement of any
such work, Lessee shall furnish Lessor with a good and sufficient surety bond
guaranteeing the completion of such building and the payment of all bills
therefor or waivers of construction liens from all contractors and
subcontractors to be utilized on the project.
(b) Alterations Improvements and Changes Permitted. Lessee shall have the
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right to make such alterations, improvements, and changes to any building which
may from time to time be on the Demised Premises as Lessee may deem necessary,
or to replace any such building with a new one of at least equal value, provided
that prior to making any structural alterations, improvements, or changes, or to
replacing any such building, Lessee shall obtain Lessor's written approval of
plans and specifications therefor, which approval Lessor shall not unreasonably
withhold, provided that the value of the building shall not be diminished and
the structural integrity of the building shall not be adversely
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affected by any such alterations, improvements, or changes, or that any proposed
new building is at least equal in value to the one which it is to replace, as
the case may be. In the event of disapproval, Lessor shall give to Lessee an
itemized statement of reasons therefor. If Lessor does not disapprove the plans
and specifications provided for in this section within thirty (30) days after
the same have been submitted to Lessor, such plans and specifications shall be
deemed to have been approved by Lessor. Lessee will in no event make any
alterations, improvements, or other changes of any kind to any building on the
Demised Premises that will decrease the value of such building, or that will
adversely affect the structural integrity of the building. Prior to commencing
any work that will cost in excess of TWO HUNDRED THOUSAND DOLLARS ($200,000.00),
Lessee shall furnish Lessor with a good and sufficient surety bond insuring the
completion of such work and the payment of all bills therefor.
(c) Landscaping Improvements. After construction on the Demised Premises,
------------------------
Lessee shall make landscaping improvements to any portion of the Demised
Premises not otherwise paved or improved. All landscaping improvements shall be
installed in a good and sufficient workmanlike manner so as to enhance the
aesthetics of the Demised Premises and meet with the reasonable satisfaction of
the Lessor.
(d) Disposition of New Improvements. Any new building or improvements
-------------------------------
constructed by Lessee on the Demised Premises, and all alterations,
improvements, changes, or additions made in or to such Demised Premises shall
upon the termination of this Lease become the property of Lessor, excluding,
however, inventory, removable shelving and business equipment required for the
permitted use of the Demised Premsies, and Lessee shall at all times have no
more than a leasehold interest therein, subject to the terms hereof.
(e) Completion of Construction. All improvements to be constructed on the
--------------------------
Demised Premises shall be substantially complete by April 1, 1998. For purposes
of this Section Thirteen (e) "substantially complete" shall mean the following:
1. issuance of Certificates of Occupancy for all buildings;
2. completion of the landscaping improvements, if any, required by
Section Thirteen (c); and
3. the delivery of an As-built survey to the Lessor showing that all
improvements constructed on the Demised Premises are in accordance
with the plans and specifications previously approved by Lessor.
(f) Compliance with Laws. Lessee will perform and complete all construction of
--------------------
improvements on the Demised Premises in compliance with (i) the terms of this
Lease, (ii) such reasonable rules and regulations as Lessor and its architect,
or agents, may make including, without limitation, the development guidelines
attached hereto as Exhibit B and (iii) all applicable laws, orders, regulations
and requirements of all governmental authorities having jurisdiction thereof.
Lessor shall
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not be subject to, and Lessee hereby agrees to indemnify and hold harmless from
and against any claim, action or any liability with respect with such statutes,
ordinances, regulations and codes. Lessee acknowledges that constructions of
improvements on the Demised Premises may be subject to various federal laws
governing new construction, including, without limitation, the Americans with
Disabilities Act of 1990 (Public Law 101-336). Lessee agrees to assume
responsibility for compliance with all such laws which may apply to it or any
construction which may take place on the Demised Premises.
(g) Construction on Adjacent Premises. If any excavation or other building
------------------------ --------
operation shall be about to be made or shall be made on any premises adjoining
the Demised Premises, the Lessee shall permit the Lessor, its agents, employees,
licensees and contractors, to enter the Demised Premises and to shore-up the
foundations and/or walls thereof, and to erect scaffolding and/or protective
barricades around and about the Demised Premises (but not so as to preclude
entry thereto or to materially interfere with the Lessee's use or quiet
enjoyment thereof) and to do any act or thing necessary for the safety or
preservation of the Demised Premises. The Lessee's obligations under this lease
shall not be affected by any such construction or excavation work or any such
shoring-up provided that such work does not materially interfere with the
Lessee's use or quiet enjoyment of the Demised Premises. The Lessor shall not be
liable in any such case for any inconvenience, disturbance, loss of business
(except as provided below) or any other annoyance arising from any such
construction, excavation, shoring-up scaffolding or barricades, but the Lessor
shall use its best efforts so that such work will cause as little inconvenience,
annoyance and disturbance to the Lessee as possible consistent with accepted
construction practice and so that such work shall be expeditiously completed.
Notwithstanding the foregoing, if the Lessors excavation or other building
operation on any premises adjoining the Demised Premises results in verifiable
loss of business to Lessee, Lessor and Lessee shall negotiate in good faith an
agreeable settlement of Lessor's responsibility.
SECTION FOURTEEN
REPAIRS AND DESTRUCTION OF IMPROVEMENTS
(a) Maintenance of Improvements. Lessee shall, throughout the term of this
---------------------------
Lease, at its own cost, and without any expense to Lessor, keep and maintain the
Demised Premises, including all building and improvements of every kind which
may be a part thereof, and all appurtenances thereto, including sidewalks
adjacent thereto, in good, sanitary, and neat order, condition and repair, and,
except as specifically provided herein, restore and rehabilitate any
improvements of any kind which may be destroyed or damaged by fire, casualty, or
any other cause whatsoever. Lessor shall not be obligated to make any repairs,
replacements, or renewals of any kind, nature, or description, whatsoever to the
Demised Premises or any buildings or improvements thereon. Lessee shall also
comply with and abide by all federal, territorial and other governmental
statutes, ordinances, laws, and regulations affecting the Demised Premises, the
improvements thereon or any activity or condition on or in such Demised
Premises.
(b) Damage to and Destruction of Improvements. The damage, destruction, or
-----------------------------------------
partial destruction of any building or other improvement which is a part of the
Demised Premises shall not release Lessee from any obligation hereunder, except
as hereinafter expressly provided, and in case
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of damage to or destruction of any such building or improvement, Lessee shall at
its own expense promptly repair and restore the same to a condition as good or
better than that which existed prior to such damage or destruction. Without
limiting such obligations of Lessee, it is agreed that, so long as Lessee is not
in default hereunder, the proceeds of any insurance covering such damage or
destruction shall be made available to Lessee for such repair or replacement.
All such maintenance, repairs, restorations and replacements of any building or
other improvement which is a part of the Demised Premises shall be performed in
accordance with the procedures set forth in Section Thirteen of this Lease.
(c) Damage or Destruction Occurring Toward End of Term. Anything to the
--------------------------------------------------
contrary in the immediately preceding paragraphs of this section
notwithstanding, in case of destruction of the building on the Demised Premises
or damage thereto from any cause so as to make it unuseable occurring during the
last three (3) years of the last option term available to Lessee, if not then in
default hereunder, Lessee may elect to terminate this Lease by written notice
served on Lessor within sixty (60) days after the occurrence of such damage or
destruction. In the event of such termination, there shall be no obligation on
the part of Lessee to repair or restore the building or improvements nor any
right on the part of Lessee to receive any proceeds collected under any
insurance policies covering such building or any part thereof, all of which
shall be paid to Lessor. On such termination, rent, taxes, assessments, and any
other sums payable by Lessee to Lessor hereunder shall be prorated as of the
termination date, and in the event any rent, taxes, or assessments shall have
been paid in advance, Lessor shall rebate the same for the unexpired period for
which payment shall have been made.
(d) Election Not to Terminate. If, in the event of such destruction or damage
-------------------------
during the last three (3) years of the term hereof, Lessee does not elect to
terminate this lease, so long as Lessee is not in default hereunder, the
proceeds of all insurance covering such damage or destruction shall be made
available to Lessee for such repair or replacement, and Lessee shall be
obligated to repair or rebuild the building as above provided.
SECTION FIFTEEN
UTILITIES
Lessee shall fully and promptly pay for all water, light, power, telephone
service, and other utilities of every kind applicable to the Demised Premises
throughout the term hereof, and all other costs and expenses of every kind
whatsoever of or in connection with the use, operation, and maintenance of the
Demised Premises and all activities conducted thereon, and Lessor shall have no
responsibility of any kind for any thereof. In the event that Lessor provides to
Lessee any utilities necessary or useful in connection with the use and
occupancy of the Demised Premises, then Lessee shall, within ten (10) days of
receipt of a ▇▇▇▇ therefor, pay to Lessor the amount due; provided, however,
that Lessor, at no expense to the Lessee, shall ensure that connections to the
Market Square East sewer system and public electrical distribution system are
available at or near the property line of the Demised Premises. Failure of
Lessee to pay said bills within the time period set forth herein shall be a
default under Sections Twenty Four and Twenty Five hereof.
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Lessee shall obtain for itself from Lessors approved contractors and shall
pay all charges for utilities, including but not limited to, gas, fuel,
telephone, water, electricity, sewage treatment and other like utilities used or
consumed upon the Demised Premises. Lessee expressly agrees that, in order to
coordinate with Lessors need for standardized, consistent, adequately recorded
and well coordinated maintenance of its property, any and all electrical
improvements, installations and repairs to the Demised Premises undertaken by
Lessee shall be performed by such electrical contractor as the Lessor may from
time to time approve in its sole discretion, and any and all conditioning
installations and repairs shall be performed by such air conditioning contractor
as the Lessor may from time to time approve in its sole discretion. Lessor
further reserves the right to approve the installation and repair contractor for
all telephone service to the Demised Premises. All such work shall be performed
in accordance with plans submitted to and approved by Lessor which approval
shall not be unreasonably withheld.
Lessor shall not be responsible for the supply of publicly provided
electricity to the Demised Premises, provided, however, Lessor shall be
responsible for the maintenance of electrical wiring from the point said service
enters Market Square East to the point where the Lessee's electrical utility
meters are located. Lessee shall have the Demised Premises wired for connection
to the standby electrical generator to be installed by Lessee for Lessee's use
at Market Square East. Lessee shall have the right to draw emergency power from
the standby electrical generator at Lessee's sole risk. Lessee shall be
responsible for the upkeep, maintenance, repair, replacement and fueling of the
standby electrical generator. Lessor shall have the right to conduct annual
inspections of the standby electrical generator and to provide the Lessee with a
schedule of required maintenance and repairs required as a result of such
inspection which maintenance and repairs Lessee will immediately undertake at
its sole cost and expense.
Any damage sustained to pipes or wiring which result from Lessee's use
thereof shall be repaired at Lessee's expense. Lessor shall not be responsible
for any injury or loss sustained by Lessee by any interruption in said services.
SECTION SIXTEEN
LESSEE'S ADDITIONAL COVENANTS
Lessee covenants, at its expense, at all times during the Lease Term:
(a) To perform promptly all of the obligations of Lessee set forth in this
Lease; and to pay when due the Basic Rent and Additional Rent.
(b) Except when and to the extent that the Demised Premises may be
unleaseable by reason of damage by fire or other casualty, continuously and
uninterruptedly to use, occupy and operate only for Permitted Uses and for no
other purpose all of the Demised Premises other than such minor portions thereof
as are reasonably required for storage and office purposes; to use such storage
and office space only in connection with the business conducted by Lessee in the
Demised Premises; to
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furnish, install and maintain all trade fixtures and permitted signs; and to
open for business and remain open during the entire Lease Term.
(c) To store in the Demised Premises only such goods as are to be offered for
sale or are necessary or useful for the Permitted Use of the Demised Premises;
and to receive and deliver goods and merchandise only in the manner and areas
and at times reasonably designated by Lessor; to store all trash and refuse in
appropriate containers within the Demised Premises so as not to be visible to
the public and to attend to regular disposal thereof in the manner and by an
agency approved by Lessor, which approval shall not be unreasonably withheld;
Lessee shall comply with all local and federal guidelines, statutes and
regulations that may apply to the Lessee's use of the Demised Premises,
including those guidelines promulgated by the U.S. Environmental Protection
Agency and the V.I. Department of Planning and Natural Resources.
(d) To keep and maintain the Demised Premises, including equipment, facilities
and fixtures therein and the entire Demised Premises clean, neat, landscaped and
in good order, repair and condition (including all necessary exterior and
interior painting and decorating) and free of vermin; and to keep all glass,
including that in windows and doors, clean and in good condition, and to replace
any glass which may be damaged or broken by Lessee, its invitees, its agents or
employees, with glass of the same quality.
(e) To make all repairs, alterations, additions or replacements to the Demised
Premises, equipment, facilities and fixtures therein as required by any federal
or local law or ordinance or any order or regulation of any governmental
authority having jurisdiction thereof or of any insurance company providing
coverage on any part of the Property, which is occasioned by Lessee's use of the
Demised Premises; and otherwise to comply with the orders and regulations of all
such governmental authorities and insurance companies.
(f) To pay promptly when due the entire cost of any work done in or with
respect to the Demised Premises or the installation of any equipment, facilities
and fixtures therein, undertaken by Lessee so that the Demised Premises shall at
all times be free of liens for labor and materials; to procure all necessary
permits before undertaking such work and the prior written consent of Lessor,
which shall not be unreasonably withheld; to maintain or cause to be maintained
throughout the course of the performance of such work, Workmen's Compensation
Insurance in statutory limits; to do all such work in a good and workmanlike
manner acceptable to Lessor, employing materials of good quality; to comply with
all governmental requirements relating thereto; and to save Lessor harmless and
indemnified from all injury, loss, claims or damage to any person or property
occasioned by or growing out of such work, which is performed by the Lessee, its
employees or contractors.
(g) To defend, indemnify and hold Lessor harmless from all injury, loss,
claims, demands, actions or damage (including attorney's fees and disbursements)
to any person or property, arising from the negligence, contractual or criminal
liability of Lessee or any of Lessee's employees or agents related to, or in
connection with work performed on or about the Demised Premises by Lessee, its
agents, servants, employees or contractors or the use or occupancy of the
Demised Premises or
-15-
conduct or operation of Lessee's business caused, suffered or permitted by
Lessee or Lessee's concessionaires or by any of their respective officers,
agents, servants, employees or contractors.
Lessor shall indemnify and hold Lessee harmless from and against all
liabilities , damages, losses, claims and expenses including attorneys' fees
arising from any act or omission or negligence of Lessor or its officers,
contractors, licensees, agents or employees in or about the Demised Premises or
from any breach or default under this Lease by Lessor. Lessor shall not be
liable for any loss or damage to persons or property sustained by Lessee or
other persons which may be caused by theft or by any act or neglect of Lessee or
any other lessee or occupant of Market Square East or any third parties.
(h) That neither Lessor nor Lessor's agents shall be liable for, and
Lessee waives all claims for any and all loss, cost, liability, damage and
expense (including attorney's fees and disbursements), penalties and fines
incurred in connection with or arising from any injury to Lessee or to any other
person or for any damage to, or loss (by theft or otherwise) of, any of Lessee's
property and/or of the property of any other person, irrespective of the cause
of such injury, damage or loss arising from the acts or negligence of any lessee
or occupant of the Property or of any owners or occupants of adjacent or
contiguous property or any other persons or entities, excluding Lessor, and
whether occasioned by or from explosion, falling plaster, broken glass,
electricity, smoke, wind, water, being upon or coming through or from the
street, roof, subsurface, skylight, trapdoor or other pipes or sewage, or from
any other cause whatsoever.
(i) That Lessor and Lessor's agents, servants and employees shall have the
right to enter upon the Demised Premises at all reasonable times during normal
business hours or at such other times as Lessee and Lessor shall agree (a) to
examine the Demised Premises or exercising any right or remedy reserved to
Lessor in this Lease; and (b) to exhibit the Demised Premises to prospective
purchasers, mortgagees or lessees. Nothing herein contained however, shall be
deemed or construed to impose upon Lessor any additional obligation,
responsibility or liability whatsoever for the care, supervision or repair of
the Property or of the Demised Premises, other than as in this Lease otherwise
provided.
(j) To pay upon demand Lessor's expenses (including reasonable attorney's
fees and disbursements incurred in enforcing any obligation of the Lessee under
this Lease or in curing any default by Lessee under this Lease.
(k) To cause promptly to be discharged of record (by payment, bond, order
of a court of competent jurisdiction or otherwise) any mechanic's lien at any
time filed against the Demised Premises, or the Property, for any work, labor,
services or materials claimed to have been performed at, or furnished to, the
Demised Premises, for or on behalf of Lessee, or any one holding the Demised
Premises through or under Lessee by anyone hired by Lessee or hired by anyone
holding the Demised Premises through or under Lessee. If Lessee shall fall to
cause such lien to be discharged upon demand, then, in addition to any other
right or remedy of Lessor, Lessor may, but shall not be obligated to, discharge
the same by paying the amount claimed to be due or by bonding or other
proceeding deemed appropriate by Lessor, and the amount so paid by Lessor and/or
all costs and expenses (including attorney's fees and disbursements) incurred by
Lessor in procuring the discharge
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of such lien, together with interest on the amount of costs and expenses so
incurred at the rate of eighteen percent (18%) per annum, shall be paid to
Lessor on demand and shall be recoverable as Additional Rent.
(l) Upon the expiration date to quit and surrender to Lessor the Demised
Premises broom clean, in good order, condition and repair except for ordinary
wear and tear and damage by fire or other insured casualty and free of all
property of Lessee. Lessee shall repair all damage to the Demised Premises
caused by removal of any of Lessee's property.
(m) To provide a suitable identification sign or signs of such size, design
and character as Lessor shall approve, which approval Lessor shall not
unreasonably withhold, and pursuant to all legal requirements and guidelines,
and to install such sign or signs at a place or places designated or approved by
Lessor. Such sign or signs shall be substantially the same as those shown on the
preliminary sign designs attached hereto as Exhibit D. Lessee shall maintain any
such sign or other installation in good condition and repair and shall pay any
and all fees assessed by the Government of the U.S. Virgin Islands and its
agencies for such sign permits or for any other exterior work performed by
Lessee which requires U.S. Virgin Islands governmental approval.
(n) To keep all ingress and egress usable and free of obstruction to all
invitees to the Demised Premises, as well as to the Lessor.
(o) During the term of this Lease, Lessee shall comply with all applicable
laws affecting the Demised Premises, the breach of which might result in any
penalty on Lessor or forfeiture of Lessor's title to the Demised Premises.
Lessee shall not commit, or suffer to be committed, any waste on the Demised
Premises, or any nuisance.
(p) Lessee shall duly comply with, and the Demised Premises and Lessee's
business operations, assets, equipment, property, and other facilities thereon
shall comply with the provisions of all federal and territorial environmental,
health, and safety laws, codes and ordinances, and all rules and regulations
promulgated thereunder. The Lessee shall obtain and maintain all required
federal and territorial permits, licenses, certificates, and approvals relating
to (1) air emissions, (2) discharges to surface water or groundwater, (3) noise
emissions, (4) solid or liquid waste disposal, (5) the use, generation, storage,
transportation or disposal of toxic or hazardous substances or wastes (intended
hereby and hereafter to include any and all such materials listed in any federal
or territorial law, code or ordinance, and all rules and regulations promulgated
thereunder, as hazardous or potentially hazardous), or (6) other environmental,
health, or safety matters. The Lessee shall not commit or permit on the Demised
Premises any violations of any federal or territorial environmental, health, or
safety laws, codes or ordinances, and any rules or regulations promulgated
thereunder with respect to the Demised Premises or Lessee's business,
operations, assets, equipment, property, leasehold, or other facilities thereon.
Except in accordance with a valid governmental permit, license, certificate or
approval, Lessee shall not commit or permit on the Demised Premises any
emission, spill, release, or discharge into or upon (1) the air, (2) soils or
any improvements located thereon, (3) surface water or groundwater, or (4) the
sewer, septic system or waste treatment, storage or disposal system
-17-
servicing the Demised Premises, of any toxic or hazardous substances or wastes
at or from the Demised Premises; and accordingly, except for inventory of raw
materials, supplies, work in progress and finished, that are to be used in the
ordinary course of business, the Demised Premises shall be kept free of all such
toxic or hazardous substances or wastes. Lessee shall not commit or permit any
act which would result in a complaint, order, directive, claim, citation, or
notice by any governmental authority or any person or entity with respect to (1)
air emissions, (2) spills, releases, or discharges to soils or improvements
located thereon, surface water, groundwater or the sewer, septic system or waste
treatment, storage or disposal systems servicing the Demised Premises, (3) noise
emissions, (4) solid or liquid waste disposal, (5) the use, generation, storage,
transportation, or disposal of toxic or hazardous substances or waste, or (6)
other environmental, health, or safety matters affecting the Lessee, the Demised
Premises or Lessee's business, operations, assets, equipment, property,
leasehold, or other facilities thereon; provided, however, that Lessee shall not
be deemed to be in default so long as Lessee complies with the provisions of
Section Twenty Four (b) in its response to any such complaint, order, directive,
claim, citation, or notice by any governmental authority or any person or
entity. The Lessee shall not commit or permit on the Demised Premises any act
which could result in an indebtedness, obligation or liability, absolute or
contingent, matured or not matured, with respect to the storage treatment,
cleanup, or disposal of any solid wastes, hazardous wastes, or other toxic or
hazardous substances (including without limitation any such indebtedness,
obligation or liability with respect to any current regulation, law or statute
regarding such storage, treatment, cleanup, or disposal). Prior to the
expiration or earlier termination of this Lease, Lessee shall remove from the
Demised Premises and lawfully dispose of all waste oil, contaminated dirt and
any other toxic or hazardous substance which may now or hereafter affect or be
located on the Demised Premises. Lessee shall and hereby does agree to hold
harmless, indemnify and defend the Lessor from and against any and all claims
relating to any of the environmental matters set forth above.
Lessor represents that there are no pre-existing environmental, health or
safety hazards or violations at the Demised Premises and agrees to indemnify and
hold Lessee harmless from all claims and demands arising from any such hazards
or violations that are in existence prior to the Commencement Date.
(q) Rules and Regulations. To abide by and act in compliance with all rules
and regulations consistent with the provisions of this Lease that Lessor may
make in connection with the use of the Demised Premises and the common areas and
facilities of Market Square East. It is understood and agreed that Lessor may,
from time to time, make changes to such rules and regulations or may adopt new
rules and regulations.
(r) Control of Lessee. To provide to the Lessor prior to the execution of this
lease and thereafter, on demand a list containing the following information:
(1) names of all shareholders holding 10% or more of the
outstanding shares of the Lessee;
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(2) the number of shares held by each shareholder holding 10% or more
the outstanding shares of the Lessee; and
(3) the total number of shares outstanding.
SECTION SEVENTEEN
LESSEE'S NEGATIVE COVENANTS
Lessee covenants at all times during the lease term and such further time as
Lessee occupies the Demised Premises or any part thereof:
(a) Not to overload, deface or otherwise damage the Demised Premises or any
part thereof or any equipment or installation therein; or commit any nuisance;
or permit the emission of any objectionable noise or odor; or use or permit the
use of any advertising medium, including, without limitation, flashing lights,
search lights, loudspeakers, televisions, phonographs, radios, sound amplifiers
or other devices in a manner so as to constitute a nuisance or be heard or
experienced outside the Demised Premises; or burn any trash or refuse within the
Demised Premises; or install or cause to be installed any automatic garbage
disposal equipment; or conduct business at, in, on, about or from all or any
part of the Demised Premises on any day when the conduct of business is
prohibited by any statutes, laws, regulations, or ordinances of the U.S. Virgin
Islands or any governmental authority having jurisdiction over the Demised
Premises, or make any use of the Demised Premises or of any part thereof or
equipment therein which is improper, offensive or contrary to any law or
ordinance, or which will invalidate or increase the cost of any of Lessor's
insurance over a standard mercantile rating, notwithstanding the permitted uses;
or use any advertising medium or sound producing mechanism that may constitute a
nuisance , such as radios, television sets, loudspeakers, sound amplifiers or
phonographs in a manner to be heard outside the Demised Premises; or conduct any
auction, fire, "going out of business", "close out" or bankruptcy sales, or do
any act tending to injure the reputation of Lessor or Market Square East; or
otherwise obstruct the driveways, walks, parking areas and other Common Areas in
the Property; or use the walks for any purpose other than pedestrian traffic; or
suffer or commit any nuisance or other act or thing which may disturb the quiet
enjoyment of any lessee in Market Square East or which would disturb the quiet
enjoyment of any persons within five-hundred (500) feet of the boundaries of the
Demised Premises.
(b) Except as provided in Section Thirty Two hereof, not to assign, by
operation of laws or otherwise, sell, mortgage, pledge or in any manner transfer
this Lease or any interest herein, or sublet the Demised Premises or any part or
parts thereof, or grant any concession or license or otherwise permit occupancy
of all or any part thereof by any person, firm or corporation without the
Lessor's express written consent which Lessor may not unreasonably withhold.
Lessee acknowledges that Lessor's right to prohibit the transfer of Lessee's
interest in the Lease would be reasonable if Lessee's proposed assignee is not
in substantially the same financial condition as Lessee and its Guarantor were
as of December 31, 1996, adjusted by CPI annually using December of 1996 as the
base level. At any time Lessee proposes to assign this Lease pursuant to a firm
and binding written offer from a third party ("Third Party Offer"), Lessor
shall have a right of first refusal to acquire the Lessee's interest
-19-
in the Lease under the same terms and conditions as set forth in the Third Party
Offer. Lessor shall exercise such right of first refusal within fifteen (15)
business days of receipt of a copy of the same from Lessee failing which, the
Lessee shall have the right to complete the transaction contemplated by the
Third Party Offer, subject, however, to all of the other terms and conditions of
this Section Seventeen (b). Notwithstanding any provisions of the such Third
Party Offer, Lessor shall have sixty (60) days from the date of exercise of the
first refusal right to consummate the transaction. The provisions of this
Section have been freely negotiated and constitute an integral part of this
lease agreement between Lessee and Lessor. Neither the consent by Lessor to an
assignment, subletting, concession or license, nor the references in this Lease
to concessionaires and licensees shall in any wise be construed to relieve
Lessee from obtaining the express consent of Lessor to any further assignment or
subletting or the granting of any concession or license for the use of any part
of the Demised Premises, nor shall the collection of Basic Rent or Additional
Rent by Lessor from any assignee, sublessee or other occupant be deemed a waiver
of this covenant or the acceptance of the assignee, sublessee or occupant as
Lessee or a release of Lessee or the Guarantor from the further performance by
Lessee and the Guarantor of the terms, covenants and conditions in this Lease
and the Guaranty on Lessee's and Guarantor's parts to be performed.
(c) Not to change the exterior color or architectural treatment of the Demised
Premises or any part thereof or install any exterior lighting without the
Lessor's prior written consent.
(d) Not to place, install or maintain or suffer to be placed or installed or
maintained any sign upon or outside the Demised Premises or on the Property
unless approved by Lessor; or any awning, canopy, banner, flag, pennant, aerial,
antenna or the like in or on the Demised Premises or the Property; or place in
the windows or display windows any sign, decoration, lettering, advertising
matter, colored shade or blind, without first obtaining Lessor's written
approval and consent.
(e) Not to file this Lease in the Office of the Recorder of Deeds for the
District of St. ▇▇▇▇▇▇ and St. ▇▇▇▇ or for the District of St. Croix without the
express written consent of Lessor which consent the Lessor may withhold in its
sole discretion; provided, however, that Lessee may record a memorandum of Lease
setting forth the durational term of the Lease, the identity of Lessee and such
other terms and provisions (except Basic Rent) which Lessee's lender may require
to ensure a valid leasehold mortgage over the Demised Premises.
(f) Not to engage or hire or permit any ▇▇▇▇▇▇ on or about the Demised
Premises or Market Square East.
(g) Not to operate any coin or token operated video games, pinball machines or
similar device within the Demised Premises without Lessor's written consent
which Lessor may withhold in its sole discretion.
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SECTION EIGHTEEN
ATTORNEYS' FEES
If any action at law or in equity shall be brought to recover any rent under
this Lease, or for or on account of any breach of, or to enforce or interpret
any of the covenants, terms or conditions of this Lease, or for the recovery of
the possession of the Demised Premises, the prevailing party shall be entitled
to recover from the other party, as part of the prevailing party's costs,
reasonable attorneys' fees, the amount of which shall be fixed by the court and
shall be made a part of any judgment or decree rendered.
SECTION NINETEEN
OPTION TO EXTEND
Lessor grants to Lessee, subject to the conditions set forth below, the right
and option to extend this Lease for three (3) additional terms of ten (10) years
each at a rental determined as provided above, and otherwise subject to and on
all of the terms and conditions herein contained, except that there shall be no
further option to extend the Lease. These options must be exercised by the
giving to Lessor, six (6) months before the expiration of the preceding term, a
written notice of the exercise thereof by Lessee, but Lessee shall in no event
be entitled to extend the term hereof, even though such notice be timely given,
unless Lessee shall have timely performed all of its obligations hereunder, and
shall not be in default in the performance of any thereof, on the date of the
expiration of the initial and each subsequent term hereof.
SECTION TWENTY
REDELIVERY OF DEMISED PREMISES
Lessee shall pay the rent and all other sums required to be paid by Lessee
hereunder in the amounts, at the times, and in the manner herein provided, and
shall keep and perform all the terms and conditions hereof on its part to be
kept and performed, and, at the expiration or sooner termination of this Lease,
peaceably and quietly quit and surrender to Lessor the Demised Premises in good
order and condition subject to the other provisions of this Lease. In the event
of the non-performance by Lessee of any of the covenants of Lessee undertaken
herein, this Lease may be terminated as herein provided.
SECTION TWENTY-ONE
REMEDIES CUMULATIVE
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All remedies hereinbefore and hereafter conferred on Lessor shall be deemed
cumulative and no one exclusive of the other, or of any other remedy conferred
by law.
SECTION TWENTY-TWO
INSURANCE AND INDEMNIFICATION OF LESSOR
(a) Insurance Coverage of Improvements on the Demised Premises. Lessee shall,
----------------------------------------------------------
at all times during the term of this Lease and at Lessee's sole expense, keep
all improvements which are now or hereafter a part of the Demised Premises
insured against loss or damage by fire and the extended coverage hazards,
including, without limitation, earthquake and windstorm coverage, for the full
replacement value of such improvements, with loss payable to Lessor and Lessee
as their interests may appear. Any loss adjustment shall require the written
consent of both Lessor and Lessee.
(b) Personal Injury Liability Insurance. Lessee shall maintain in effect
-----------------------------------
throughout the term of this Lease personal injury liability insurance covering
the Demised Premises and its appurtenances and the sidewalks fronting thereon in
the amount of TWO MILLION DOLLARS ($2,000,000.00) for injury to or death of any
one person, and TWO MILLION DOLLARS ($2,000,000.00) for injury to or death of
any number of persons in one occurrence, and property damage liability insurance
in the amount of TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000.00). Such
insurance shall specifically insure Lessee against all liability assumed by it
hereunder, as well as liability imposed by law, and shall insure both Lessor and
Lessee but shall be so endorsed as to create the same liability on the part of
the insurer as though separate policies had been written for Lessor and Lessee.
(c) Lessor's Right to Pay Premiums on Behalf of Lessee. All of the policies of
--------------------------------------------------
insurance referred to in this section shall be written in form satisfactory to
Lessor and by insurance companies satisfactory to Lessor. Lessee shall pay all
of the premiums therefor and deliver such policies, or certificates thereof, to
Lessor, and in the event of the failure of Lessee, either to effect such
insurance in the names herein called for or to pay the premiums therefor or to
deliver such policies, or certificates thereof, to Lessor, Lessor shall be
entitled, but shall have no obligation, to effect such insurance and pay the
premiums therefor, which premiums shall be repayable to Lessor with the next
installment of rent, and failure to repay the same shall carry with it the same
consequence as failure to pay any installment of rent. Each insurer mentioned in
this section shall agree, by endorsement on the policy or policies issued by it,
or by independent instrument furnished to Lessor, that it will give to Lessor
thirty (30) days' written notice before the policy or policies in question shall
be altered or canceled. Lessor agrees that it will not unreasonably withhold its
approval as to the form or to the insurance companies selected by Lessee.
(d) Adjustment of Coverage. In the event that either party shall at any time
----------------------
deem the limits of the personal injury or property damage public liability
insurance then carried to be either excessive or insufficient, the parties shall
endeavor to agree on the proper and reasonable limits for such insurance then to
be carried and such insurance shall thereafter be carried with the limits thus
agreed on until further change pursuant to the provisions of this section, but,
if the parties shall be unable to agree thereon, the proper and reasonable
limits for such insurance then to be carried shall be
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determined by an impartial third person selected by the parties, or should they
be unable to agree on a selection, by an impartial third person chosen by the
Commissioner of Insurance for the Virgin Islands or his successor, and the
decision of such impartial third person as to the proper and reasonable limits
for such insurance then to be carried shall be binding on the parties and such
insurance shall be carried with the limits as thus determined until such limits
shall again be changed pursuant to the provisions of this section. The expenses
of such determination shall be borne equally by the parties.
(e) Blanket Insurance Policies. Notwithstanding anything to the contrary
--------------------------
contained in this section, Lessee's obligations to carry the insurance provided
for herein may be brought within the coverage of a so-called blanket policy or
policies of insurance carried and maintained by Lessee provided, however, that
the coverage afforded Lessor will not be reduced or diminished or otherwise be
different from that which would exist under a separate policy meeting all other
requirements of this Lease by reason of the use of such blanket policy of
insurance, and provided further that the requirements of the foregoing
Paragraphs (a) and (b) of this section are otherwise satisfied.
(f) Cost of Insurance Deemed Additional Rental. The cost of insurance required
------------------------------------------
to be carried by Lessee in this section shall be deemed to be additional rental
hereunder. All of said insurance shall be in form satisfactory to Lessor and
with companies rated A5 or better by A.M. Best.
(g) Indemnification of Lessor. Lessor shall not be liable for any loss,
-------------------------
injury, death, or damage to persons or property which at any time may be
suffered or sustained by Lessee or by any person whosoever may at any time be
using or occupying or visiting the Demised Premises or be in, on, or about the
same, whether such loss, injury, death, or damage shall be caused by or in any
way result from or arise out of any act, omission, or negligence of Lessee or of
any occupant, sublessee, visitor, or user of any portion of the Demised
Premises, or shall result from or be caused by any other matter or thing whether
of the same kind as or of a different kind than the matters or things above set
forth, and Lessee shall indemnify Lessor against all claims, liability, loss, or
damage whatsoever on account of any such loss, injury, death, or damage. Lessee
hereby waives all claims against Lessor for damages to the building and
improvements that are now on or hereafter placed or built on the Demised
Premises and to the property of Lessee in, on, or about the Demised Premises,
and for injuries to persons or property in or about the Demised Premises, from
any cause arising at any time. The two preceding sentences shall not apply to
loss, injury, death, or damage arising by reason of the gross negligence or
misconduct of Lessor, its agents, or employees.
Lessor, its agents, servants and employees and lessees and occupants of the
Property shall not be liable for any damage by fire or other casualty covered by
Lessee's insurance, no matter how caused, it being understood that the Lessee
will look solely to its insurer for reimbursement. If Lessee fails to comply
with the requirements of this Subsection, Lessor may, but shall not be obligated
to, obtain such insurance and keep the same in effect, and Lessee shall pay
Lessor as Additional Rent upon demand the premium therefor.
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(h) Waiver of Subrogation. Whether the loss or damage is due to the
---------------------
negligence of either Lessor or Lessee, or any other cause, Lessor and Lessee
each hereby release and relieve the other, its agents or employees, from
responsibility for, and waive its entire claim of recovery for (i) any loss or
damage to its real or property located anywhere in the Demised Premises, arising
out of or incident to the occurrence of any of the perils which are covered by
its property and related insurance policies and (ii) any loss resulting from
business interruption at the Demised Premises or loss of rental income from the
Demised Premises, arising out of or incident to the occurrence of any of the
perils covered by any business interruption or loss of rental income insurance
policy held by it. Each party shall use best efforts to cause its insurance
carriers to consent to the foregoing waiver of rights of subrogation against the
other party. Notwithstanding the foregoing, no such release shall be effective
except to the extent the applicable insurance policy or policies shall cover
such loss and expressly permit such a release or contain a waiver of the
carrier's right to be subrogated.
SECTION TWENTY-THREE
PROHIBITION OF INVOLUNTARY ASSIGNMENT:
EFFECT OF BANKRUPTCY OR INSOLVENCY
(a) Prohibition of Involuntary Assignment. Neither this Lease nor the
-------------------------------------
leasehold estate of Lessee nor any interest of Lessee hereunder in the Demised
Premises or in the building or improvements thereon shall be subject to
involuntary assignment, transfer, or sale, or to assignment, transfer, or sale
by operation of law in any manner whatsoever (except through statutory merger or
consolidation, or devise, or intestate succession) and any such attempt at
involuntary assignment, transfer, or sale shall be void and of no effect.
(b) Effect of Bankruptcy. Without limiting the generality of the provisions of
--------------------
the preceding Paragraph (a) of this section, Lessee agrees that in the event any
proceedings under the Bankruptcy Act or any amendment thereto be commenced by or
against Lessee, and, if against Lessee, such proceedings shall not be dismissed
before either an adjudication in bankruptcy or the confirmation of a
composition, arrangement, or plan or reorganization, or in the event Lessee is
adjudged insolvent or makes an assignment for the benefit of its creditors, or
if a receiver is appointed in any proceeding or action to which Lessee is a
party, with authority to take possession or control of the Demised Premises or
the business conducted thereon by Lessee, and such receiver is not discharged
within a period of sixty (60) days after his appointment, any such event or any
involuntary assignment prohibited by the provisions of the preceding Paragraph
(a) of this section shall be deemed to constitute a breach of this Lease by
Lessee and shall, at the election of Lessor, but not otherwise, without notice
or entry or other action of Lessor terminate this Lease and also all rights of
Lessee under this Lease and in and to the Demised Premises and also all rights
of any and all persons claiming under Lessee.
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SECTION TWENTY-FOUR
NOTICE OF DEFAULT
This Lease and the term and estate hereby granted are subject to the
limitation that:
(a) if Lessee shall default in the payment when due of any installment
of Basic Rent or in the payment when due of any Additional Rent, and such
default shall continue for a period of ten (10) business days after notice
from Lessor of such default; or
(b) if Lessee shall default in the observance or performance of any
term, covenant or condition of this Lease on Lessee's part to be observed or
performed (other than the covenants for the payment of Basic Rent and
Additional Rent) and Lessee shall fail to remedy such default within ten (10)
days after notice by Lessor to Lessee of such default, or if such default is
of such a nature that it cannot be completely remedied within said period
of ten (10) days if Lessee (a) shall not within ten (10) days after the giving
of such notice, advise Lessor in writing of Lessee's intention duly to
institute all steps necessary to remedy such situation, (b) shall not within
ten (10) days institute and thereafter diligently prosecute to completion all
steps necessary to remedy the same, and (c) shall not remedy the same within a
reasonable time after the date of the giving of said notice by Lessor;
then in any of said events Lessor may give to Lessee notice of intention to end
the Lease Term at the expiration of three (3) days from the date of the giving
of such notice, and, in the event such notice is given, this Lease and the term
and estate hereby granted shall terminate upon the expiration of said three (3)
days with the same effect as if that day were the Expiration Date, and Lessee
shall then quit and surrender the Demised Premises to Lessor but Lessee shall
remain liable as hereinafter set forth, provided, however, that if Lessee shall
default in the timely payment of Basic Rent or Additional Rent and any such
default shall continue for two (2) successive occasions or more for a total of
four (4) months in any period of twelve (12) months, or in performance of any
other term, covenant or condition of this Lease more than three (3) times in any
period of six (6) months, then, notwithstanding that such defaults shall have
each been cured by Lessee within the period after notice as above provided or by
Lessor pursuant to Section 10.6, any further similar default shall be deemed to
be deliberate and Lessor thereafter may serve the said written three (3) days
notice of termination without affording to Lessee an opportunity to cure such
further default.
If the notice provided for above in this Section Twenty Four shall have been
given and this Lease shall be terminated, or if any execution or attachment
shall be issued against Lessee with respect to the Demised Premises; then, in
any of such events Lessor may, without notice, terminate all services, and
pursuant to summary or other proceedings dispossess Lessee and the legal
representative of Lessee or other occupant of the Demised Premises as if this
Lease had not been made.
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SECTION TWENTY-FIVE
DEFAULT
If this Lease and the Lease Term shall terminate as provided in Section
Twenty Four, or by or under any summary proceeding or any other action or
proceeding, then, in any of said events:
(a) Lessee shall pay to Lessor all Basic Rent and Additional Rent due to
the date upon which this Lease and the Lease Term shall have terminated or to
the date of re-entry upon the Demised Premises by Lessor, as the case may be;
(b) Lessor shall be entitled to retain all monies, if any, paid by
Lessee to Lessor, whether as Basic Rent, Additional Rent, Security or
otherwise, but such monies shall be credited by Lessor against any Basic Rent
or Additional Rent due at the time of such termination or re-entry or, at
Lessor's option, against any other damages set forth herein;
(c) Lessor shall use reasonable efforts to mitigate its damages by
reletting the Demised Premises including the improvements thereon which shall
belong to Lessor as provided in Section Twenty-Nine. Lessee shall be liable
for and shall pay to Lessor, as damages, any deficiency between the Basic Rent
and Additional Rent payable hereunder for the period which otherwise would
have constituted the unexpired portion of the Lease Term and the net amount,
if any, of rents ("Net Rent") collected under any reletting for any part of
such period (first deducting from the rents collected under any such reletting
all of Lessor's documented expenses in connection with the termination of this
Lease or Lessor's re-entry upon the Demised Premises and in connection with
such reletting including all repossession costs, brokerage commissions, legal
expenses, and reasonable attorneys' fees;
(d) Any such deficiency shall be paid in monthly installments by Lessee
on the days specified in this Lease for the payment of installments of Basic
Rent. Lessor shall be entitled to recover from Lessee each monthly deficiency
as the same shall arise and no suit to collect the amount of the deficiency
for any month shall prejudice Lessor's right to collect the deficiency for any
subsequent month by a similar proceeding. Alternatively, suit or suits for the
recovery of such deficiencies may be brought by Lessor from time to time at
its election;
(e) (i) In no event shall Lessee be entitled to receive any excess of
such Net Rent over the sums payable by Lessee to Lessor hereunder, (ii) in no
event shall Lessee be entitled in any suit for the collection of damages
pursuant to this Section to a credit in respect of any Net Rent from a
reletting except to the extent that such Net Rent is actually received by
Lessor prior to the commencement of such suit, and (iii) if the Demised
Premises or any part thereof shall be relet in combination with other space,
then proper apportionment on a square foot area basis shall be made of the
rent received from such reletting and of the expenses of reletting;
(f) Lessor and Lessor's agents may immediately re-enter the Demised
Premises or any part thereof, without notice, either pursuant to summary
proceedings or by any other
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applicable action or proceeding (without being liable to indictment,
prosecution or damages therefor), and may repossess the Demised Premises and
dispossess Lessee and any other persons from the Demised Premises and remove
any and all of its or their property and effects from the Demised Premises and
in no event shall re-entry be deemed an acceptance of surrender of this Lease,
and in the event that the Lessee has abandoned the Demised Premises, title to
any property of the Lessee left in the Demised Premises shall immediately pass
to the Lessor, and the Lessor shall be entitled to dispose of, use or
otherwise own such property of Lessee, with the value thereof being credited
to the account of the Lessee; and
In the event of any breach or threatened breach by Lessee or any persons
claiming through or under Lessee of any of the agreements, terms, covenants or
conditions contained in this Lease, Lessor shall be entitled to enjoin such
breach or threatened breach and shall have the right to invoke any right and
remedy allowed at law or in equity or by statute or otherwise as if re-entry,
summary proceedings or other specific remedies were not provided for in this
Lease.
SECTION TWENTY-SIX
LESSOR'S RIGHT TO PERFORM
In the event that Lessee by failing or neglecting to do or perform any act or
thing herein provided by it to be done or performed, shall be in default
hereunder and such failure shall continue for a period of ten (10) days after
written notice from Lessor specifying the nature of the act or thing to be done
or performed, then Lessor may, but shall not be required to, do or perform or
cause to be done or performed such act or thing (entering on the Demised
Premises for such purposes, if Lessor shall so elect), and Lessor shall not be
or be held liable or in any way responsible for any loss, inconvenience,
annoyance, or damage resulting to Lessee on account thereof, and Lessee shall
repay to Lessor on demand the entire expense thereof, including compensation to
the agents and employees of Lessor. Any act or thing done by Lessor pursuant to
the provisions of this section shall not be or be construed as a waiver of any
such default by Lessee, or as a waiver of any covenant, term, or condition
herein contained or the performance thereof, or of any other right or remedy of
Lessor, hereunder or otherwise. All amounts payable by Lessee to Lessor under
any of the provisions of this Lease, if not paid when the same become due as in
this Lease provided, shall bear interest from the date they become due until
paid at the rate of eighteen percent (18%) per annum, compounded annually.
SECTION TWENTY-SEVEN
EFFECT OF EMINENT DOMAIN
(a) Effect of Total Condemnation. In the event the entire Demised Premises
----------------------------
shall be appropriated or taken under the power of eminent domain by any public
or quasi-public authority, this Lease shall terminate and expire as of the date
of such taking, and Lessee shall thereupon be released from any liability
thereafter accruing hereunder.
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(b) Effect of Partial Condemnation. In the event a portion of the Demised
------------------------------
Premises shall be so appropriated or taken and the remainder of the property
shall not be suitable for the use then being made of the property by Lessee, or
if the remainder of the property is not one undivided parcel of property, Lessee
shall have the right to terminate this Lease as of the date of such taking on
giving to Lessor written notice of such termination within thirty (30) days
after Lessor has notified Lessee in writing that the property has been so
appropriated or taken.
In the event of such partial taking and Lessee does not so terminate this
Lease, then this Lease shall continue in full force and effect as to the part
not taken, and the rental to be paid by Lessee during the remainder of the
term, subject to adjustment as provided in the rental adjustment provisions of
Section Three hereof, shall be renegotiated but in no event reduced to less than
seventy-five percent (75%) of the rent then being paid and any such adjustment
shall not affect or change the times at which Lessor may require an adjustment
in rent under the rental adjustment provisions of Section Three hereof.
(c) Condemnation Award. In the event of the termination of this Lease by
------------ -----
reason of the total or partial taking of the Demised Premises by eminent domain,
then in any such condemnation proceedings Lessor and Lessee shall be free to
make claim against the condemnation proceedings and Lessor and Lessee shall be
free to make claim against the condemning or taking authority for the amount of
any damage done to them, respectively, as a result thereof.
In the event of a partial taking of the Demised Premises and this Lease is not
terminated, then Lessee shall have the right to make claim against the
condemning or taking authority for only the unamortized cost of the improvements
placed on the Demised Premises by Lessee and located thereon at the time of the
taking or appropriation, which improvements shall be deemed to amortize in equal
monthly amounts over the period commencing with the date of completion of such
improvements and ending at the expiration of the initial term of this Lease.
SECTION TWENTY-EIGHT
SURRENDER OF LEASE
The voluntary or other surrender of this Lease by Lessee, or a mutual
cancellation thereof, shall not work a merger, and shall, at the option of
Lessor, terminate all or any existing subleases or subtenancies, or may, at the
option of Lessor, operate as an assignment to it of any or all such subleases or
subtenancies.
SECTION TWENTY-NINE
DISPOSITION OF IMPROVEMENTS ON TERMINATION OR EXPIRATION OF LEASE
On termination or expiration of this Lease for any cause, Lessor shall become
the owner of any building or improvements on the Demised Premises.
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SECTION THIRTY
WAIVER
The waiver of, or the failure of the Lessor to take action with respect to any
breach of any term, covenant, or condition herein contained shall not be deemed
to be a waiver of such term, covenant, or condition, or subsequent breach of the
same, or any other term, covenant, or condition therein contained. The
subsequent acceptance of rent hereunder by Lessor shall not be deemed to be a
waiver of any preceding breach by Lessee of any term, covenant, or condition of
this Lease, other than the failure of Lessee to pay the particular rental so
accepted, regardless of Lessor's knowledge of such preceding breach at the time
of acceptance of such rent.
SECTION THIRTY-ONE
EFFECT OF LESSEE'S HOLDING OVER
Any holding over after the expiration of the term of this Lease, with consent
of Lessor, shall be construed to be a tenancy from month to month, at twice the
monthly rental as required to be paid by Lessee for the period immediately prior
to the expiration of the term hereof, and shall otherwise be on the terms and
conditions herein specified, so far as applicable.
SECTION THIRTY-TWO
ENCUMBRANCE OF LESSEE'S LEASEHOLD INTEREST
Lessee may encumber by mortgage or other proper instrument, its leasehold
interest in the Demised Premises, together with all buildings and improvements
placed by Lessee thereon, as security for any indebtedness undertaken by Lessee
solely for the purpose of erecting such buildings and improvements. The
execution of any such mortgage or other instrument, or the foreclosure thereof,
or any sale thereunder, either by judicial proceedings or by virtue of any power
reserved in such mortgage, or conveyance by Lessee to the holder of such
indebtedness, or the exercising of any right, power, or privilege reserved in
any mortgage, shall not be held as a violation of any of the terms or conditions
hereof, or as an assumption by the holder of such indebtedness personally of the
obligations hereof except to the extent that such holder voluntarily assumes
said obligations in order to avoid termination of this Lease. No such
encumbrance, foreclosure, conveyance, or exercise of right shall relieve Lessee
from its liability hereunder.
If Lessee shall encumber his leasehold interest and estate in the Demised
Premises and if Lessee or the holder of the indebtedness secured by such
encumbrance shall give notice to Lessor of the existence thereof and the address
of such holder, then Lessor will mail or deliver to such holder, at such
address, a duplicate copy of all notices in writing which Lessor may, from time
to time, give to or serve on Lessee under and pursuant to the terms and
provisions hereof; such copies shall be mailed or delivered to such holder, at,
or as near as possible to, the same time such notices are given to or served on
Lessee. Such holder may, at its option, at any time before the rights of Lessee
shall be terminated as provided herein, pay any of the rents due hereunder, or
pay any taxes and assessments, or do any act or thing required of Lessee by the
terms hereof, or do any act or thing that may be
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necessary and proper to be done in the observance of the covenants and
conditions hereof, or to prevent the termination hereof, all payments so made,
and all things so done and performed by such holder shall be as effective to
prevent a foreclosure of the rights of Lessee thereunder as the same would have
been if done and performed by Lessee.
SECTION THIRTY-THREE
PARTIES BOUND
The covenants and conditions herein contained shall, subject to the provisions
as to assignment, transfer, and subletting, apply to and bind the heirs,
successors, executors, administrators, and assigns of all of the parties hereto;
and all of the parties hereto shall be jointly and severally liable hereunder.
SECTION THIRTY-FOUR
TIME IS OF THE ESSENCE
Time is of the essence of this Lease, and of each and every covenant, term,
condition, and provision hereof
SECTION THIRTY-FIVE
SURVEY
Prior to the Rent Commencement Date, Lessor, at Lessor's sole expense, shall
cause to be prepared and furnished to Lessee a current on the ground plat survey
of the Demised Premises. The survey shall be staked on the ground and shall be
in such form and content as to permit the deletion from the title insurance
policy the standard printed "survey exception". The survey shall include the
following, all of which must be acceptable to the Lessee:
a) The total acreage and net acreage of the Demised Premises, as well as the
acreage of all easements, roads, rights of way, etc. within the Demised
Premises;
b) The location of all existing and proposed easements, building set-back
lines, existing ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇ courses, water
flood zones, and fences on or adjacent to the Demised Premises. The location of
all adjoining dedicated streets and the name of the nearest intersecting
dedicated streets shall be shown on the survey. The survey shall also show all
places where access to and egress from the Demised Premises to public streets
has been provided for;
c) All other natural monuments, improvements or other object on the Demised
Premises;
d) Metes and bounds or other appropriate legal description of the Demised
Premises; and
e) The current zoning classification of the Demised Premises.
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SECTION THIRTY-SIX
SUBORDINATION
This lease shall become subject and subordinate to any mortgage affecting the
Property or the Demised Premises, made to a bank, trust company, savings and
loan association, title company, college, university, insurance company, or
federal or state pension or retirement fund, any and renewals, modifications,
replacements or extensions thereof, if and when a non~disturbance and attornment
agreement substantially in the form attached to this Lease as Exhibit C is
entered into in respect of such mortgage. In the event of such mortgage of the
Property by Lessor, Lessor shall obtain and Lessee shall execute a
non~disturbance and attornment agreement from the Lessor's mortgagee.
SECTION THIRTY~SEVEN
SECURITY DEPOSIT
Lessee has deposited TWENTY SEVEN THOUSAND ONE HUNDRED FIFTY DOLLARS
($27,150.00) with Lessor as security for Lessee's payment of rent and
performance of his other obligations under this Lease, and any renewals or
extensions of the Lease. If Lessee defaults in his payment of rent or
performance of his other obligations under this Lease, Lessor may use all or
part of the security deposit for the payment of rent or any other amount in
default or for the payment of any other amount which Lessor may spend or become
obligated to spend by reason of Lessee's default, or for the payment to Lessor
of any other loss or damage which Lessor may suffer by reason of Lessee's
default. If Lessor so uses any portion of the security deposit, Lessee will
restore the security deposit to its original amount within five (5) days after
written demand from Lessor. Lessor will not be required to keep the security
deposit separate from its general funds and Lessee will not be entitled to
interest on the security deposit. The security deposit will not be a limitation
on Lessor's damages or other rights under this Lease, or a payment of liquidated
damages, or an advance payment of the rent. If Lessor has evidence that the
security deposit has been assigned to an assignee of the Lease, Lessor will
return the security deposit to the assignee.
In the event that the Basic Rent plus any Additional Rent for any Lease Year
during the Lease Term is increased from the amount payable in the preceding
Lease Year pursuant to terms hereof, Lessee shall pay to Lessor as an Additional
Security Deposit held by Lessor equal to two (2) times the amount of the monthly
rental due hereunder for such Lease Year.
In the event that Lessee shall fully and faithfully comply with all of the
terms, covenants and conditions of this Lease, the Security Deposit shall be
returned to Lessee after the Expiration Date and after delivery of exclusive
possession of the Demised Premises to Lessor. In the event of a sale or leasing
of Market Square East or any part thereof which includes the Demised Premises,
Lessor shall have the right to transfer the Security Deposit to the vendee and
lessee and Lessor shall ipso facto be released by Lessee from all liability for
---- -----
the return of such Security Deposit, and Lessee agrees to look solely to the new
Lessor for the return of the Security Deposit. The provisions hereof shall apply
to every transfer or assignment made of the Security Deposit to a new Lessor.
Lessee further covenants
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that it will not assign or encumber or attempt to assign or encumber the monies
deposited as security and that neither Lessor nor its successors or assigns
shall be bound by any such assignment, encumbrance, attempted assignment or
attempted encumbrance. If Lessor has evidence that the security deposit has been
assigned to an assignee of the Lease, Lessor will return the security deposit to
the assignee.
If at any time during the period of time the Lessee is given possession of the
Demised Premises or throughout the Lease Term or at the Expiration Date or other
termination of the Lease Term the Lessee is in default under any covenant or
obligation contained in this Lease, the Lessor shall have a lien on all
stock-in-trade, inventory and fixtures, equipment and facilities of the Lessee,
as security against loss or damage resulting from any such default by the Lessee
and the said stock-in-trade, inventory, fixtures, equipment or facilities shall
not be removed by the Lessee until such default is cured, unless otherwise
permitted in writing by the Lessor. The provisions of this Section Thirty Seven
shall survive the Lease Term or earlier termination of this Lease. Consistent
with the provisions of 11A V.I.C. (S)1-102(3) and notwithstanding the provisions
11A V.I.C. (S)9-104(b), Lessee hereby acknowledges and agrees that the
provisions of Article 9 of the Uniform Commercial Code as codified in 11A V.I.C.
(S)9-101 et seq. shall govern the Lessor's rights and remedies under this
Section Thirty Seven.
SECTION THIRTY-EIGHT
MISCELLANEOUS PROVISIONS
(a) Nothing contained herein shall be deemed or construed by the parties
hereto, or by any third party, as creating the relationship of principal and
agent or of partnership or of joint venture between the parties hereto.
(b) Lessee hereby agrees that it will, at any time and from time to time,
within fifteen (15) calendar days following written notice by the other party
hereto specifying that it is given pursuant to this Section, execute,
acknowledge and deliver to the party who gave such notice a statement in writing
certifying that this Lease is unmodified and in full force and effect (or if
there have been modifications that the same is in full force and effect as
modified and stating the modifications), and the dates to which the Basic Rent
and Additional Rent and any other payments due hereunder from Lessee have been
paid and stating whether or not to the best of the knowledge of the signer of
such certificate the other party is in default in performance of any term,
covenant or condition contained in this Lease, and, if so, specifying each such
default of which the signer may have knowledge.
(c) Lessee hereby certifies that it has not dealt with any broker with regard
to the Demised Premises or this Lease. Lessee will indemnify, hold harmless and
defend Lessor against any loss, liability and expense (including attorneys' fees
and court costs) arising out of claims for fees or commissions from anyone
claiming to have brought Lessee to the Demised Premises, to have assisted Lessee
with this Lease or negotiations connected with this Lease.
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(d) The laws of the U.S. Virgin Islands shall govern the validity,
performance and enforcement of this Lease. The invalidity or unenforceability of
any provision of this Lease shall not affect or impair any other provision. All
negotiations, considerations, representations and understandings between the
parties are incorporated in this Lease. The computation of any time period in
this Lease shall not include the day of the act, event or default from which the
designated time period begins to run, all other calendar days shall be included
in the computation; provided, however, that where this Lease refers to business
days, Saturdays, Sundays and federal holidays shall not be included. The
captions as to contents or particular paragraphs herein are inserted only for
convenience, and are in no way to be construed as a part of this Lease or as a
limitation on the scope of the particular paragraphs to which they refer.
Whenever herein the singular number is used, the same shall include the plural;
and the neuter gender shall include the masculine and feminine gender.
(e) The terms, covenants and conditions herein contained, except as herein
otherwise specifically provided, shall extend to, bind and inure to the benefit
of the parties hereto and their respective personal representatives, heirs,
successors and permitted assigns. Each term, covenant and condition herein
contained shall be deemed and construed as a separate and independent covenant
of the party bound by, undertaking or making the same, not dependent on any
other provision of this Lease unless otherwise expressly provided.
(f) All negotiations, representations, considerations, undertakings,
understandings and agreements heretofore made between the parties hereto are
merged in this Lease, which alone fully and completely expresses the agreement
between Lessor and Lessee and any executory agreement hereafter made shall be
ineffective to change, modify discharge or effect and abandonment of it in whole
or part, unless such executory agreement is in writing and signed by the party
against whom enforcement of the change, modification, discharge or abandonment
is sought.
(g) If Lessee is a corporation or partnership and if at any time during the
Lease Term the Person(s) or entity who, at the time of the execution of this
Lease, own(s) a majority of such corporation's shares or the general partners'
interests in such partnership, as the case may be, cease(s) to own a majority of
such shares or general partners' interests, as the case may be (including as the
result of transfers by phantom stock or stapled stock but expressly excluding
transfers by bequest or inheritance), such transfer of ownership shall be deemed
an assignment of Lessee's interest in this Lease, which transfer shall be
subject to the provisions of hereof regarding assignment of the Lessee's
interest.
(h) If the Lessee is a corporation, simultaneously with execution of this
Lease, the principal shareholders of the Lessee shall execute a Guaranty of
Lease, in the form attached hereto as Exhibit E, in which the principals, as
guarantor, shall jointly and severally, personally guaranty the obligations of
the Lessee under this Lease. If the Guarantor is a corporation or partnership
and if at any time during the Lease Term the Person(s) or entity who, at the
time of the execution of the Guaranty, own(s) a majority of such corporation's
shares or the general partners' interests in such partnership, as the case may
be, cease(s) to own a majority of such shares or general partners' interests, as
the case may be (including as the result of transfers by phantom stock or
stapled stock but expressly excluding
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transfers by bequest or inheritance), such transfer of ownership shall entitle
the Lessor to require new Guaranties from guarantors whose financial condition
is as good or better than the financial condition of the Guarantor at the
inception of this Lease. Failure to provide such new Guaranties shall be deemed
a default hereunder.
The Guarantor agrees to provide to the Lessor prior to the execution of this
lease and thereafter, on demand a list containing the following information:
(1) names of all shareholders holding 10% or more of the outstanding
shares of the Guarantor;
(2) the number of shares held by each shareholder holding 10% or more the
outstanding shares of the Guarantor; and
(3) the total number of shares outstanding.
Annually, within ninety (90) days of the end of each fiscal year, the Lessee
and any guarantor of Lessee's obligations hereunder shall provide to the Lessor
audited financial statements as of the close of such fiscal year.
(i) Nothing contained herein shall be deemed or construed by the parties
hereto, or by any third party, as creating the relationship of principal and
agent or of partnership or of joint venture between the parties hereto.
(j) Lessee hereby agrees that it will, at any time and from time to time,
within fifteen (15) calendar days following written notice by the other party
hereto specifying that it is given pursuant to this Section, execute,
acknowledge and deliver to the party who gave such notice a statement in writing
certifying that this Lease is unmodified and in full force and effect (or if
there have been modifications, that the same is in full force and effect as
modified and stating the modifications), and the dates to which the Basic Rent
and Additional Rent and any other payments due hereunder from Lessee have been
paid and stating whether or not to the best of the knowledge of the signer of
such certificate the other party is in default in performance of any term,
covenant or condition contained in this Lease, and, if so, specifying each such
default of which the signer may have knowledge.
(k) Lessee hereby certifies that it has not dealt with any broker with regard
to the Demised Premises or this Lease. Lessee will indemnify, hold harmless and
defend Lessor against any loss, liability and expense (including attorneys' fees
and court costs) arising out of claims for fees or commissions from anyone
claiming to have brought Lessee to the Demised Premises, to have assisted Lessee
with this Lease or negotiations connected with this Lease.
-34-
IN WITNESS WHEREOF, the parties have executed this Lease on the day and
year first above written.
LESSOR:
------
WITNESSES: MARKET SQUARE EAST, INC.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
------------------------- ----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇., President
[SEAL]
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------
ATTEST: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary
LESSEE:
------
CULUSVI, INC.
/s/ ▇▇▇▇▇ ▇. BY: /s/ ▇▇▇▇▇▇▇
------------------------- ----------------------------------
, President
------------------------- [SEAL]
ATTEST: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------
, Secretary
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EXHIBIT A
SURVEY PLAN AND
PROPERTY DESCRIPTION
[▇▇▇▇▇ ▇▇▇▇▇▇▇ AND ASSOCIATES, INC. LAND SURVEY OF LEASE AREA 'A']
[LETTERHEAD OF ▇▇▇▇▇ ▇▇▇▇▇▇▇ AND ASSOCIATES, INC.]
DWG. NO. 3267-3A
August 27, 1997
Lease Area A of Parcel 1-2
Estate Donoe
No. 2 New Quarter
St. ▇▇▇▇▇▇, US Virgin Islands
BOUNDARY DESCRIPTION:
Beginning at a point identified as N 185399.56 E 1030407.07, based on Puerto
Rico/US Virgin Islands ▇▇▇▇▇▇▇ Grid projection and common to parcel 1-2, the
line runs;
N 90 00' W a distance of 182.0' on parcel 1-2 to a point, thence
N 00 00' E a distance of 162.7' on parcel 1-2 to a point, thence
N 90 00' W a distance of 17.0' on parcel 1-2 to a point, thence
N 00 00' E a distance of 52.3' on parcel 1-2 to a point, thence
Northerly an arc distance of 24.8' on a right curve whose radius is 40.0' on
parcel 1-2 to a point, thence
Easterly an arc distance of 100.0' on a right curve whose radius is 492.6' on
parcel 1-2 to a point, thence
N 85 22' E a distance of 78.6' on parcel 1-2 to a point, thence
S 00 00' E a distance of 75.5' on parcel 1-2 to a point, thence
N 90 00' E a distance of 15.0' on parcel 1-2 to a point, thence
S 00 00' E a distance of 187.2' on parcel 1-2 to the point of origin.
Bearings are correlated to ▇▇▇▇▇▇▇ Grid.
The area is 46,538 sq. ft./1.068 acre.
▇▇▇▇▇ ▇▇▇▇▇▇▇ and Associates, Inc.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, RLS #502
EXHIBIT B
DEVELOPMENT GUIDELINES
EXHIBIT - B
DESIGN REQUIREMENTS
MARKET SQUARE EAST
The following are the design requirements for Market Square East.
A. BUILDING PLANS & SPECIFICATIONS
All plans at the preliminary stage and at the final stage must be approved
by Market Square East, Inc. (MSE). Drawings required for preliminary
approval include but are not limited to the following:
1. Site Plan
2. Floor Plan(s)
3. Elevations
4. Section(s)
5. Landscape Plan
6. Sign Design and Location
7. Samples of Colors of Exterior Buildings
8. List of Exterior Building Materials
B. FLOOR AREA RATIO
The maximum floor area ratio for all structures shall be one (1) for any
leased lot.
C. OFF-STREET PARKING
1. A common parking lot designed to accomodate 235 parking spaces will be
provided by the Lessor (MSE). Per Lessor's approved site plan.
2. A minimum of one (1) off-street loading space shall be provided per
building by Lessee.
D. BUILDING SETBACKS FROM LEASE LINES/PROPERTY LINES
Per Lessor's approved site plan.
E. MAXIMUM BUILDING HEIGHT
The maximum building height measured from the lowest useable floor
elevation shall be per Lessor's design guidelines (see Exh. B illustrations
for design intent)
F. BUILDING MASS
Where there are no set formulas for calculating allowable building mass,
Lessor has the right to reject any design that is not in reasonable
compliance with Lessor's design guidelines as illustrated and noted in Exh.
B.
Market Square East
Design Requirements
Page 2
G. SERVICE/DELIVERY AREAS
All service/delivery areas are to be screened from neighboring lots and the
street, by means of fences, vegetation and/or decorative walls.
H. TRASH CONTAINMENT
All trash shall be stored in a screened area on each tenant's site. Unless
otherwise agreed upon, trash, refuse, garbage shall be removed a minimum of
once every forty-eight hours, or when the containers are full (Restaurants
and other food operations shall haul daily.)
I. BUILDING MATERIALS
See Lessor's design guidelines in Exh. B for approved material
recommendations.
J. SITE/UTILITIES
1. Electrical service is supplied at or near the corner of the lots via
conventional pad mounted transformers fed from above ground utility poles.
Lessee will need to contact WAPA directly with anticipated load
requirements, service dates and meter location. Lessor will want to review
the location of any other utility requirements including telephone, cable
T.V., antennas and satellite dish installations to verify that they are
coordinated with existing utility easements, height clearances, the design
guidelines and underground utility installations.
2. Lessee is required to provide cisterns for rain water collection of usable
water.
3. Lessor will provide sanitary sewer lines, manholes and individual
connection points to the boundary line of each lease area as shown on
Lessor's site utility plan.
4. Lessor will deliver the site clear of vegetation, compacted and graded to
a specified elevation within the boundaries of the leased area.
K. BUILDING COLORS
See Lessor's design guidelines in Exh. B for approved color recommendations.
L. SIGNAGE
See Lessor's design guideline illustrations and notes in Exh. B for approved
signage size and placement recommendations. ALL SIGNAGE MUST BE PRE-APPROVED
BY MSE.
M. SITE AND SIGN LIGHTING
Each tenant is expected as part of the design of each plot to include
exterior
Market Square East
Design Requirements
Page 3
M. SITE AND SIGN LIGHTING (cont.):
lighting for walkways and landscaping. MSE will supply street and parking
lot lighting, but all areas to be leased shall be lighted. MSE reserves the
right to reject all glaring lights, flashing or rotating lights, or badly
designed lighting.
O. LANDSCAPING
See Lease Agreement for requirements.
EXHIBIT 'B'
--------------------------------------------------------------------------------
INTENT OF DESIGN GUIDElINES:
To allow individual tenant
[DRAWING APPEARS HERE] expression and design
flexibility while maintaining a
certain level of design
consistency to assure a uniform
development image for all
phases of the Market Square
View from parking lot looking West East development.
DESIGN FORMS:
Buildings should evoke the local
architecture. For the larger
structures this could be achieved by
keeping the "big box" as a simple,
flat roof building with the addition
[DRAWING APPEARS HERE] of a pedestrian arcade or entrance
structure that uses the local
architectural vocabulary. Sloped
roofs, covered arcades, windows,
shutters and similar elements are
encouraged. Prominent corners and
facades will required additional
design attention. Rooftop mechanical
equipment should be located to
minimize views of the equipment from
Phase I Site Plan the main parking lots and main access
roads. All building elevations should
have the same exterior wall treatment
to assure a consistent image on every
side of the building.
COLORS:
A palette of owner approved colors
[DRAWING APPEARS HERE] needs to be matched to assure design
consistency for the project.
EXTERIOR WALL SYSTEMS:
Approved systems: 1. Smooth metal
panel system that allows horizontal
banding.
View from Route 38 looking North 2. EIFS or plaster type finishes with
horizontal banding in multiple
colors. Reveal details are required
at every color change.
ENTRANCE SIGN:
[DRAWING APPEARS HERE] Landlord will provide externally lit
entrance signs with tenant directory
identification.
Any proposed design will require full
View from Route 38 looking West review and approval by Landlord and
it's masterplanning consultant.
--------------------------------------------------------------------------------
MARKET SQUARE EAST
St. ▇▇▇▇▇▇, USVI
Design Guidelines
Prepared for: Market Square East. Inc.
Prepared by: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇, master planners and architects
[DRAWING APPEARS HERE]
VIEW FROM PARKING LOT LOOKING WEST
MARKET SQUARE EAST
Design Guidelines
Exh. B.
[DRAWING APPEARS HERE]
VIEW FROM ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
Design Guidelines
Exh. B.
[DRAWING APPEARS HERE]
VIEW FROM ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
Design Guidelines
Exh. B.
EXHIBIT C
AGREEMENT OF SUBORDINATION, NON-DISTURBER AND ATTORNMENT
AGREEMENT OF SUBORDINATION, NON-DISTURBER
AND ATTORNMENT
THIS AGREEMENT is made this 6th day of November, 1997 by and among MARKET
SQUARE EAST, INC., a U.S. Virgin Islands corporation (the "Lessor") whose
mailing address is ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, BANCO
POPULAR de PUERTO RICO ("Banco Popular") whose mailing address is ▇.▇. ▇▇▇ ▇▇▇▇,
▇▇. ▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, and CULUSVI, INC., a U.S. Virgin Islands
corporation (the "Lessee") whose mailing address is ▇▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
WITNESSETH:
WHEREAS, Lessor is the owner in fee simple of the following described real
property:
Parcel ▇▇. ▇-▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇, U.S. Virgin Islands
WHEREAS, under the terms of a certain Ground Lease dated October 20,
1997 between the Lessor and the Lessee, as amended (collectively, the "Lease")
Lessor did lease, let and demise to Lessee a portion of the above-described real
property described in the Lease as Lease Area A of Parcel No. 1-2 Estate Donoe
(the "Premises"); and
WHEREAS, the Lessor has or will mortgage the real property described above
by First Priority Mortgage Construction Security Interest dated November 6, 1997
(the "BP Mortgage") to Banco Popular as security for a loan to Lessor (the
"Loan"); and
WHEREAS, the Lessor has conditionally assigned the Lease and the rents to
be derived therefrom to Banco Popular as security for the Loan (the
"Assignment"); and
WHEREAS by this Agreement of Subordination, Non-Disturber and Attornment
the parties hereto desire to establish their rights and obligations with respect
to the Lease, the BP Mortgage and the Assignment;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Lessor, the Lessee, and Banco
Popular, intending to be legally bound, hereby consent and agree as follows:
l. This Agreement shall control notwithstanding any contrary provisions in
the Lease.
2. As provided in Section Thirty Six of the Lease, the Lessee hereby
agrees that the Lease and any and all liens, estates, rights, options and
charges created thereby are subject to and subordinate to the lien created by
the BP Mortgage.
3. Except as set forth herein, and provided that the Lessee is not in
default under the terms of the Lease and the Lessee is then in possession of the
Premises the following shall apply:
(a) The right of possession of the Lessee to the Premises and Lessee's
rights arising out of the Lease shall not be affected or disturbed by Banco
Popular in the exercise of any of its rights under the BP Mortgage or the
Assignment; and
(b) Notwithstanding the exercise by Banco Popular of all or any of its
rights and remedies under the BP Mortgage or the Assignment, the Lease shall
continue in full force and effect, and Banco Popular shall recognize the Lease
and the Lessee's rights thereunder, including any extension options provided
therein, and will thereby establish direct privity of contract as between Banco
Popular and the Lessee with the same force and effect and with the same relative
-2-
priority in time and right as though the Lease were originally made directly
from Banco Popular in favor of the Lessee.
4. Except as set forth herein, in the event Banco Popular obtains title to the
real property described above through foreclosure or deed in lieu of foreclosure
under the BP Mortgage, the Lessee agrees to continue occupancy of the Premises
and to make full and complete attornment to Banco Popular, its successors and
assigns, for the balance of the term of the Lease, including any extensions and
renewals thereof, upon the same terms, covenants and conditions as provided in
the Lease subject, however, in all events to the terms, covenants and conditions
of this Agreement, so as to establish direct privity of estate and contract as
between Banco Popular, its successors and assigns, and the Lessee with the same
force and effect and relative priority in time as though the Lease were
originally made directly from Banco Popular, or such successors or assigns, to
Lessee.
5. Banco Popular shall not, by virtue of the BP Mortgage, the Assignment or
this Agreement, or by virtue of its exercise of all or any rights and remedies
thereunder, be liable to Lessee in any way or to any extent:
(a) For any past act or default on the part of the Lessor under the Lease
occurring at any time prior to Banco Popular succeeding to the rights of the
Lessor, and Lessee shall have no right to assert same or any damages arising
therefrom as an offset or defense against Banco Popular; or
(b) For any prepayment of rent or security deposit given to or held by the
Lessor under the Lease, except to the extent that Banco Popular has actually
received such prepaid rent or security deposit out of accounts of the Lessor
specifically designated for such
-3-
diligently pursued. Lessee expressly acknowledges that Banco Popular shall
have no obligation to cure such default of Lessor.
9. This Agreement shall inure to the benefit of and shall be binding upon
Lessee, Lessor, and Banco Popular, and their respective heirs, personal
representatives, successors and assigns. In the event any one or more of the
provisions contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect, the remaining provisions of
this Agreement shall not be affected thereby, and in the place of such invalid
illegal or unenforceable provisions there shall be substituted a like, but
valid, legal and enforceable provision which most nearly accomplishes the
original intention of the parties, as evidenced by this Agreement. This
Agreement shall be governed by and construed according to the laws of the U.S.
Virgin Islands.
IN WITNESS WHEREOF, the parties hereto have caused this writing to be
signed, sealed and delivered on the day and year first above written.
LESSOR:
WITNESSES:
MARKET SQUARE EAST, INC., a U.S. Virgin
Islands corporation
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------
/s/▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------
By: /s/ ▇▇▇▇ ▇. de Jongh
-----------------------------
▇▇▇▇ ▇. de Jongh, Jr., President
[SEAL]
Attest: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Secretary
-5-
BANCO POPULAR de PUERTO RICO
By: /s/ J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------
J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
Senior Vice President
LESSEE:
CULUSVI, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------- ----------------------
Vice President duly authorized
/s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------
TERRITORY OF THE U.S. VIRGIN ISLANDS )
)SS.:
JUDICIAL DISTRICT OF ST. ▇▇▇▇▇▇ AND ST. ▇▇▇▇)
The foregoing instrument was acknowledged before me this 14th day of
November, 199 by ▇▇▇▇ ▇. de Jongh, Jr., as President of Market Square East,
Inc., on behalf of said corporation.
/s/
-------------------
NOTARY PUBLIC
-6-
TERRITORY OF THE U.S. VIRGIN ISLANDS )
)SS.:
JUDICIAL DISTRICT OF ST. ▇▇▇▇▇▇ AND ST. ▇▇▇▇ )
The foregoing instrument was acknowledged before me this 14th day of
November, 1997 by J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Senior Vice President of Banco Popular
de Puerto Rico.
/s/ J. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------
NOTARY PUBLIC
STATE OF WASHINGTON )
)SS.:
COUNTY OF KING )
The foregoing instrument was acknowledged before me this 19th day of
September, 1997 by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ as Vice President of CULUSVI, INC. on
behalf of said corporation.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------
NOTARY PUBLIC
-7-
EXHIBIT D
PRELIMINARY SIGN DESIGNS
PLEASE SEE EXHIBIT B DESIGN GUIDELINES FOR PRELIMINARY SIGN
DESIGNS AND LESSOR SIGN REQUIREMENTS
EXHIBIT E
GUARANTY
GUARANTY OF LEASE
THIS GUARANTY OF LEASE (the "Guaranty") is dated as of the 20th day of
October, 1997, by COST-U-LESS, INC., a Washington corporation with an address of
▇▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Guarantor").
WHEREAS, MARKET SQUARE EAST, INC. ("Lessor") and CULUSVI, INC., a Virgin
Islands corporation ("Lessee") are parties to a lease dated October 1, 1997 (as
may hereafter from time to time be amended, the "Lease") for premises (the
"Premises") located at Lease Area A of Parcel No.1-2 Estate Donoe, St. ▇▇▇▇▇▇,
U.S. Virgin Islands; and
WHEREAS, as a condition to obtaining Lessor's agreement to enter into the
Lease with Lessee, Lessor requires Guarantor as the sole shareholder of all of
the stock of the Lessee to guarantee all obligations of Lessee under the Lease;
NOW THEREFORE, in consideration of Lessor's entering into the Lease with
Lessee, Guarantor, intending to be legally bound, hereby agrees as follows:
Section 1. GUARANTY. Guarantor, jointly and severally, hereby guarantees
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to Lessor the full performance of Lessee's obligations under the Lease. This
Guaranty extends to payment of basic rent (as adjusted from time to time),
additional rent and all other charges required to be paid under the Lease,
including Lessee's indemnification of Lessor.
Section 2. Waiver. Guarantor waives all notices or demands given or
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required to be given to Lessee under the Lease. This waiver extends to any
notice of default under the Lease and to any notice of modification, extension
or indulgence granted to Lessee. Guarantor waives all right to trial by jury in
any action or proceeding hereinafter instituted by Lessor with respect to the
Lease or the relationship between Lessor and Lessee.
Section 3. Term of Guaranty.
3.1 Duration. This Guaranty shall commence on the date of the Lease
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and remain in effect during the entire term of the Lease, including any option,
renewal or extension terms, and thereafter until Lessee has discharged all of
its obligations under the Lease.
3.2 No Termination. This Guaranty shall not be terminated, modified,
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or impaired because of any of the following actions: (a) the extension,
modification or amendment of the Lease; (b) any action Lessor may take or fail
to take against Lessee; (c) any waiver or failure to enforce any of the rights
or remedies available to Lessor or to which Lessor may be entitled under law or
in equity; (d) any assignment by Lessee of Lessee's leasehold interest in the
Premises or any sublease of the Premises; (e) any use or change in use of the
Premises; (f) damage to, destruction of or taking by power of eminent domain of
all or any part of the Premises; (g) any other dealings between Lessor and
Lessee; or (h) any bankruptcy, insolvency, dissolution, liquidation,
receivership, trusteeship,
reorganization, assignment for the benefit of creditors, bankruptcy or rejection
of the Lease in any bankruptcy, or other similar proceeding affecting Lessee,
whether voluntary or involuntary.
Section 4. Enforcement of this Guaranty.
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4.1 Action of Proceeding. At Lessor's option, (a) Guarantor may be
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joined in any action or proceeding against Lessee in connection with the Lease,
or (b) Lessor may recover against Guarantor in any action or proceeding even
if Lessor does not pursue or exhaust its remedies against Lessee.
4.2 Judgment Binding. Guarantor shall be conclusively bound by the
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judgment in any action or proceeding brought by Lessor against Lessee in
connection with the Lease as if Guarantor were a party to the action or
proceeding, even if Guarantor is not joined in the action or proceeding as a
party, and regardless of the jurisdiction in which the action or proceeding is
brought.
4.3 Proceedings. Guarantor irrevocably consents to the jurisdiction
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of any court in the U.S. Virgin Islands for any proceedings arising out of this
Guaranty or the enforcement hereof, and waives the right to trial by jury in any
such proceeding. In the event of a default by Lessee under the Lease where
Lessor shall employ attorneys or incur other expenses for the enforcement of
performance or observance of any obligation or agreement on the part of the
Guarantor contained in this Guaranty, the Guarantor shall on demand reimburse
the reasonable fees of such attorneys and such other expenses so incurred.
Section 5. Miscellaneous. This Guaranty shall apply to and bind the
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successors and assigns of Guarantor. If any provision of this Guaranty shall be
determined to be illegal or unenforceable, such determination shall not affect
any other provision of this Guaranty and all such other provisions shall remain
in full force and effect.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date and
year first above written.
WITNESSES:
GUARANTOR:
COST-U-LESS, INC., a Washington
corporation
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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STATE OF WASHINGTON )
)SS.:
COUNTY OF KING )
The foregoing instrument was acknowledged before me this 19 day of
September, 1997 by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ as Vice President of COST-U-LESS, a
Washington corporation on behalf of said corporation.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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NOTARY PUBLIC
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