LEASE
By this Lease, made in multiple copies the 21 day of
April, 1999, between CAP II, a New Mexico General
Partnership, hereinafter called "Landlord," and WALGREEN CO., an Illinois
corporation, hereinafter called "Tenant";
Landlord hereby leases to Tenant, and Tenant hereby rents from
Landlord, for the term commencing June l' 2000, and continuing to and
including May 31, 2060, subject to adjustment pursuant to Article 3 herein and
subject to prior commencement and to prior termination as hereinafter provided,
the premises to include both a building and other improvements and certain real
estate located at the northeast corner of Avenue of the Americas (Loop 375) and
Alameda Avenue in the City of El Paso, County of El Paso, State of Texas,
together with all improvements, appurtenances, easements and privileges
belonging thereto. The building to be erected and completed by Landlord shall
include not less than 112 feet of frontage facing Alameda Avenue and not less
than 135 feet of depth, being an area containing approximately 15,120 square
feet of first floor area (the "Building"). All of the foregoing shall be as
shown onthe plan attached hereto and made apart hereof as Exhibit "A," and as
legallydescribed in Exhibit "8" attached hereto and made apart hereof and the
Building, real estate and other improvements to be constructed thereon are
hereinafter collectively referred to as the "Leased Premises."
The Adjoining Property is shown on Exhibit "A" and is legally described
on Exhibit "8-1" attached hereto (hereinafter called "Adjoining Property").
THE TERMS, COVENANTS AND CONDITIONS OF SAID LETTING ARE AS FOLLOWS:
USE
1. Subject to Article 13 of this Lease and so long as Tenant shall operate in
the Leased Promises, Tenant shall operate a store similar in nature to a
majority of its other stores in the State of Texas, with the right to sell such
merchandise and provide such services, as Tenant may, from time to time, sell
and provide in a majority of its other stores in the State of Texas. Nothing
contained herein shall be construed so as to prohibit Tenant from expanding or
eliminating any department(s) or from expanding or eliminating any line(s) of
merchandise in the Leased Premises.
RENT
2. Tenant shall pay rent for the Leased Premises, as follows:
(a) A fixed rent of $28,166.66 per month, commencing on the Rent Commencement
Date (as defined in Article 6 hereof and continuing thereafter for the remainder
of the Term (as defined in Article 3[b] hereof). Fixed rent shall be payable on
the first day of each and every month in advance and shall be properly
apportioned for any period less then a full calendar month.
(b) If a sum equal to ----
2.0% of the Gross Sales, as hereinbelow defined, except from the sale of food
items and prescription items, if any, 0.5% of the Gross Sales from the sale of
food items and prescription items. if any, except prescriptions filled pursuant
to third party prescriptions plans defined below made by Tenant in the operation
of Tenant's store in the Leased Premises in any lease year (as defined in
Section [c] of Article 3) shall exceed the total fixed rent for such lease year,
then and in such event, and within forty-five (45) days after the end of each
lease year, Tenant shall pay to Landlord the amount of such excess as additional
percentage rent, However, in no event shall the total of fixed rent plus
additional percentage rent (if any) payable by Tenant in any lease year exceed
$676,000.00, which amount shall be proportionately decreased for any lease year
that is not comprised of a full twelve (12) months. Within forty- five (45) days
after the end of each lease year Tenant shall furnish to Landlord a statement of
the total amount of such Gross Sales for such lease year. The aforesaid
amount(s) shall be proportionately adjusted in the case of a lease year of more
or less than a full twelve (12) calendar months.
(c) The term "Gross Sales" as used herein is defined as the total amount of all
receipts, whether for cash or on credit (loss returns and refunds) from sales of
drugs, food, drinks, goods, wares and merchandise of every sort whatsoever, made
by Tenant in the operation of Tenant's store on the Leased Premises, or made by
any concessionaire on the Leased @remises. The following shall be specifically
excluded from Gross Sale": receipts' from sales of milk and all other
non-alcoholic beverages-, receipts from sales of tobacco products: receipts from
the sale of prescription items pursuant to third party
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prescription plans, as defined below; receipts and commissions from the
operation of public telephones; license and transaction fees received from the
operation of automatic teller machines and any other electronic consumer service
apparatus to the extent such fees do not exceed five percent (5%) of fixed rent
paid in any lease year; credit card processing fees; intercorporate and
interstore sales or transfers; sales of government bonds, savings stamps and
other government securities; sales of postage stamps and ready stamped postcards
and envelopes; sales of government lottery tickets; sales at a discount to
employees', sales at a discount to doctors, dentists, hospitals, nurses, drug
stores or wholesale drug or supply houses; accounts receivable written off as
uncollectible, Tenant shall also have the right to deduct and exclude from Gross
Sales a sum equal to any approximate amounts which may be paid by Tenant or
which Tenant may add to or include in its selling prices of various articles by
reason of any sales taxes, use taxes, retailers' occupation taxes, excise taxes
at the retail level and the like, now or hereafter imposed and however entitled,
and which are based upon the amounts of sales or the units of sales.
Third party prescription plans shall be deemed to be those health benefit plans
wherein all or any portion of the cost of pharmaceuticals and any other items
obtained by a prescription are paid or reimbursed by an organization such as a
governmental agency, an entity created by state or federal law, an insurance
carrier, a health maintenance organization, a union, a trust or benefit
organization or an employer or employer group pursuant to an agreement between
Tenant (or Tenant's parent or any other corporation or entity that is a
subsidiary of or affiliated with Tenant or Tenant's parent) and such
organization.
(d) Tenant shall cause to be kept, in accordance with its customary accounting
procedure, records of the Gross Sales made by Tenant in the operation of
Tenant's store on the Leased Premises, Landlord and Landlord's duly authorized
representative, at reasonable times during business hours, shall have access to
such records at the place where the same are kept, for the purpose of inspecting
and auditing the same, provided that any such inspection and audit be made by
Landlord within six (6) months after the expiration of any lease year. If
Landlord does not object in writing to an statement above mentioned within said
time period, such statement shall be conclusively presumed to be correct and
final, and thereafter Tenant shall not be required to preserve the records from
which such statement was compiled. Landlord agrees not to divulge to any person
or entity Information obtained by Landlord and Landlord's representative from
such records or from the statements above mentioned, except to any mortgages or
prospective purchaser of the Leased Premises and except as may be necessary to
enforce of Landlord's rights under this Lease. Nothing herein contained,
however, shall be deemed to confer upon Landlord any interest in the business of
Tenant on the Leased Premises.
(e) Until further notice by Landlord to Tenant, rent checks shall be payable to
and mailed to:
CAP 11
c/o Peterson Properties
0000 Xxx Xxxxx, X.X., Xxxxx 0-X
Xxxxxxxxxxx, Xxx Xxxxxx IB71 10 Attention.- Xxxxx A, Xxxxxxxx
(f) Landlord shell, prior to the Rent Commencement Date, provide Tenant (Attn.
Fixed Assets Department, 000 Xxxxxx Xxxx, Xxxxxxxxx, XX
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6001 5) with a completed IRS Form W-9, Any successor to Landlord shall likewise
provide Tenant with such completed IRS Form W-9 as a condition precedent to any
rent or other payment from Tenant, however rent and other required payments
shall accrue and shall be paid by Tenant upon receipt of the completed IRS Form
W-9.
INITIAL TERM, TERM, LEASE YEAR, OPTIONS
3. (a) The initial term of this Lease shall commence an the date that Tenant
accepts possession of the Leased Promises and shall continue to and include the
day immediately preceding the date that the term of this Lease commences as
below provided (the "Initial Term'). Tenant shall have no obligation to pay
rents or other charges during the Initial Term nor shall any of the same
accrue-, all rents and other charges specified in this Lease shall commence as
of the date that the term commences, unless otherwise expressly provided herein.
(b) The term shall commence on the Rent Commencement Date (as defined in Article
6) and shall continue for sixty (60) years thereafter (the "Term"); provided,
however, that if the Rent Commencement Date be other than the first day of the
calendar month, then the Term shall continue to and include the last day of the
same calendar month of the sixtieth (60th) year thereafter,
(c) The first lease year shall commence on the Rent Commencement Date and, if
such data be on the first day of a calendar month, shall end twelve (12) months
thereafter, or, if such date be other than the first day of the calendar month,
shall and on the last day of the same calendar month of the first year
thereafter, and each succeeding loses year shall be each succeeding twelve (12)
month period.
(d) Tenant shall have the right and option, at Tenants election, to terminate
this Lease effective as of the last day of the two hundred fortieth (240th) full
calendar month of the Term, effective as of the last day of the three hundredth
(300th) full calendar month of the Term, effective as of the last day of the
three hundred sixtieth (360th) full calendar month of the Term, effective as of
the last day of the four hundred twentieth (420th) full calendar month of the
Term, effective as of the last day of the four hundred eightieth (480th) full
calendar month of the Term, effective as of the last day of the five hundred
fortieth (540th) full calendar month of the Term, effective as of the last day
of the six hundredth (600th) full calendar month of the Term and effective as of
the last day of the six hundred sixtieth (660th) full calendar month of the
Term. if Tenant shall elect to exercise arty such option, Tenant shall send
notice thereof to Landlord, at least six (6) months prior to the date this Lease
shall so terminate, but no notice shall be required to terminate this Lease upon
the expiration of the Term.
DELIVERY OF POSSESSIC)N
-------------------------
4. (a) Landlord shall put Tenant Into exclusive physical possession of the
Leased Premises on or before April 1, 2000 or as soon as possible thereafter,
and in any case not later than November 1. 2001, and at the same time deliver to
Tenant a full set of keys to the Building. Tenant may, but shall not be required
to accept possession of the Leased Promises between November I and January 1. If
Tenant accepts physical possession of the Leased Premises during this period
Rent Commencement shall occur as set forth in Article 6.
4.
Landlord shall send written notice to Tenant, Attention: Director of
Construction, with a copy to the Law Department, at least forty-five (45) days
(but not more than sixty (60) days) before such possession is to be delivered.
Such notice shall set forth the date of delivery of possession, which shall be
an a Monday (unless such date is a legal holiday, in which case possession shall
be delivered the next business day), Additionally, as a condition precedent to
'the delivery of possession of the Leased Promises to Tenant, Landlord shall
send written notice to Tenant which shall be certified by Landlord's architect,
at least seven (7) but not more than twenty-one (21) days prior to the date of
delivery of possession, which notice shall confirm the date that possession
shall be delivered and that the Leased Promises is (or in the architect's
judgment will be as of the date of delivery of possession) substantially
complete and ready for occupancy- If possession is not delivered by November 1,
2001, Tenant, in addition to Tenant's remedies at law, equity or under this
Lease, may cancel this Lease by notice to Landlord. The Leased Promises upon
delivery shall be In good condition and repair, free of Hazardous Substances (as
defined below) whether or not disclosed by the study and report referred to in
Section (b) below, and shall fully comply with all lawful requirements and shall
be constructed in accordance with Article 5 hereof. In the event that there are
punchlist Items as of the date of delivery of possession of the Leased Premises
to Tenant, Landlord shall promptly and properly complete, the same. For purposes
hereof "punchlist items" shall be those minor item, the lncompletion of which
shall not impair Tenant's ability to fixture and/or merchandise and operate the
Leased Premises in the normal course. None of the items listed on Exhibit "D'
(Walgreens Now Store Requirements), shall be considered punchlist items and all
of the same must be satisfactorily completed prior to-the date of delivery of
possession of the Leased Premises to Tenant. Tenant shall have the right,
without being deemed to have accepted possession, to enter upon the Leased
Premises as soon hereafter as practical, to take measurements and install its
fixtures and exterior signs (including, but not limited to, the installation of
permanent and temporary signs), but such entry or the opening for business shall
not constitute a waiver as to the condition of the Leased Promises or as to any
work to be done or changes to be made by Landlord, or as to any other
obligations of Landlord hereunder. If available from appropriate governmental
authorities, Landlord shall secure from the appropriate governmental authority
and provide to Tenant prior to the delivery of possession of the Leased
Premises, a Certificate of Occupancy (or a Temporary Certificate of Occupancy
permitting occupancy pending the issuance of a Certificate of Occupancy in which
event the delivery to Tenant of a Certificate of Occupancy shall be deemed a
condition subsequent) subject only to those items to be completed by Tenant.
(b) (1) Landlord represents that other than as disclosed in that certain report
dated November 17, 1998 prepared by Sunbelt Laboratories, Inc. and entitled
"Phase I Environmental Site Assessment for Commercial Property, Northeast xxxxx
of Intersection of Americas Avenue & Alameda Avenue, El Paso, El Paso County,
Texas 798313" (the "Report"), Landlord has no knowledge concerning any current
or previous use of the land and/or Building comprising the Leased Premises which
would lead a reasonable person to suspect that Hazardous Substances (as defined
below) were deposited, stored, disposed of or placed upon, about or under the
Leased Premises. The Report shall be certified to Tenant prior to delivery of
possession of the Leased Premises. In order to make the foregoing
representation, Landlord states that it has made due inquiry or Investigation as
appropriate. Landlord has provided to Tenant, at Landlord's solo cost and
expense, a copy of a Phase 1. Environmental Report. In the event the Report
discloses the existence of any Hazardous Substances in, on or under the Leased
Premises, Including, but not limited to,
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the existence of any underground storage tanks and/or petroleum or petroleum
by-products, Landlord, at Landlord's sole cost and expense, prior to the date
Landlord delivers possession of the Leased Premises to Tenant, as provided in
Article 4, shall properly remove, and dispose of any such underground storage
tanks and shall properly remove and dispose of any Hazardous Substances and/or
petroleum or petroleum by-products. All such disposal and removal shall be
conducted in accordance with all federal, state and local laws, ordinances, and
rules or regulations, or other binding determinations of any federal, state,
local, or other governmental entity exercising executive, legislative, judicial,
regulatory, or administrative functions (whether now or hereafter existing). In
the event of any such removal and disposal by Landlord hereunder, upon
completion of the same the Leased Premises shall again be tested by the
environmental engineer and/or contractor and the results delivered to Tenant;
Landlord shall also deliver in such event all necessary governmental inspections
and approvals with respect to the removal, remediation and disposal work. Tenant
shall have no obligation to accept delivery of possession of the Leased Premises
until Landlord has complied with the provisions of this Section; provided,
however, that Tenant may, at Tenant's option, accept possession of the Leased
Premises prior to the completion of any remediation if Landlord provides Tenant
with final remediation plans and Tenant determines that the effectuation of said
remediation will not adversely Impact Tenants full use and enjoyment of the
Leased Premises.
(ii) "Hazardous Substances" shall mean any hazardous or toxic chemical, waste,
byproduct, pollutant, contaminant, compound, product or substance, including,
without limitation, asbestos, polychlorinated byphenyls, petroleum (including
crude oil or any fraction or byproduct thereof, and any material the exposure
to, or manufacture, possession, presence, use, generation, storage,
transportation, treatment, release, disposal, abatement, cleanup, removal,
remediation or handling of which Is prohibited, controlled or regulated by any
Environmental Law.
(iii) "Environmental Law" shall mean any federal, state, regional, county or
local governmental statute, low, regulation, ordinance, order or code or any
consent decree, judgment, permit, license, code, covenant, deed restriction,
common law, or other requirement pertaining to protection of the environment,
health or safety of persons, natural resources, conservation, wildlife, waste
management, and pollution (including, without limitation, regulation of releases
and disposals to air, land, water and ground water), including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1 980, as amended by the Superfund Amendments and Reauthorization Act of
1986, 42 U.S.C. 9601 et seq., Solid Waste Disposal Act, as amended by the
Resource Conservation and Recovery Act of 1976 and Solid and Hazardous Waste
Amendments of 1954, 42 U.S.C. 6901 et seq., Federal Water Pollution Control Act,
as amended by the Clean Water Act of 1977, 33 U.S.C. 1251 et seq., Clean Air Act
of I 965, as amended, 42 U.S.C. 7401 et seq., Toxic Substances Control Act of
1976, 15 U.S.C. 2601 et seq., Occupational Safety and Health Act of 1970, as
amended, 29 U.S.C. 651 et seq., Emergency Planning and Community Right-to-Know
Act of 1986, 42 U,S.C. 11001 et seq., National Environrnental Policy Act of
1976, 42 U-S,C. 300(f) et seq., and all amendments as well as any similar state
or local statute or code and replacements of any of the same and rules,
regulations, guidance documents and publications promulgated thereunder.
(c) It shall be a condition precedent to the delivery of possession of the
Leased Premises, to Tenant that Landlord shall have first
6.
delivered to Tenant not later then seven (7) business days prior to the date for
delivery of possession as described in Section (a) of this Article 4
satisfactory evidence of Landlord's title together with each instrument, if any,
required by Section (b) of Article I 8. Tenants acceptance of possession of the
Leased Premises in the absence of full satisfaction of said condition precedent
shall in no manner be doomed a waiver thereof or of any of the requirements of
Article 18.
(d) Landlord shall, prior to the delivery of possession of the Leased Premises
to Tenant, cause Landlord's architect to certify to Tenant the square foot floor
area contained in the Building.
CONSTRUCTION BY LANDLORD
5. (a) Before delivering possession of the Leased Premises to Tenant, Landlord
shall obtain all required zoning and permits (other than Tenant's business
licenses) for the construction and operation of the Leased Premises. The
Building shall be of such exterior and structural design and character as is
acceptable to Tenant and as will also meet Tenant's requirements for its
permanent exterior signs, which may extend above the Building and shall be at
locations and of a size permitted by appropriate governmental authorities and
reasonably acceptable to Tenant. If local statute, ordinance, rule or regulation
prohibits or requires modifications to Tenant's sign drawings, as set forth in
the below described Plans, Landlord or its architect shall (i) so advise Tenant
(ii) revise the Plans as necessary to comply with governmental requirements and
(iii) submit the revised Plans to Tenant for its review and approval. The Leased
Premises and Building shall be erected and completed by Landlord, in accordance
with the plans and specifications described below, and shall contain Tenant's
specific requirements for the operation of Tenant's business, which requirements
will Include, among other things, the items and installations listed in the
Criteria Specifications for Self- Serve Walgreen Store prepared by Walgreen Co.,
revised July 1998, and Criteria Plans, including the drawings referenced on
Exhibit "C" attached hereto, heretofore delivered to Landlord and incorporated
herein by reference and made a part hereof (including but not limited to a
double lane drive-through window with a canopy). All such work by Landlord shall
be done by contractors selected by Landlord and acceptable to Tenant. Such work
shall comply with the requirements of public authorities and shall be done in a
first-class, good, and workmanlike manner, free and clear of all liens and
encumbrances for labor and materials furnished to Landlord. Except as otherwise
shown on Exhibit "A" or in the Plans, the Leased Premises shall contain no grade
elevation changes in excess of five percent (5%); them shall be no steps or
ramps (excepting ramps to serve the handicapped) in any exterior portion of the
Leased Promises. Landlord shall secure the manufacturer's warranties as required
by the Criteria Specifications described above and shall assign to Tenant each
such warranty that pertains to any item or component thereof which Tenant is
responsible to maintain or repair under this Lease.
(b) Within one (1) month after the execution and delivery of this Lease,
Tenant shall furnish to Landlord a fixture plan and base sheets relative
to the Building, so that Landlord may be enabled to prepare and furnish to
Tenant plans and specifications covering Tenant's specific requirements,
The plans (which shall be on mylar or vellum) and specifications
(collectively the "Plans") prepared by Landlord shall be furnished to
Tenant for Tenant's approval within forty-five (45) days after the
execution and delivery of this Lease or the receipt of said fixture plan
and bass sheets from Tenant, whichever is later. All areas of
7.
design and engineering must be certified by and under the direct supervision of
architects and engineers licensed and registered in the State of Texas, Tenant
agrees to approve or reject said Plans, within thirty (30) days of Tenant's
receipt thereof, and if not approved or rejected within said period, said Plans
shall be deemed approved, In the event Tenant shall reject such Plans within the
period provided above, Tenant shall return said Plans to Landlord indicating the
items so rejected. Landlord shall then have thirty (30) days to resubmit the
Plans to Tenant, and Tenant shall have thirty (30) days after resubmittal to
approve or reject the same. If not approved or rejected within said period, saw
Plans shall be deemed approved-, provided, however, that in no event shall the
standards of quality of approved Plans, or of those deemed approved, be less
than those required by the Criteria Plans and Criteria Specifications above
described, which shall control. If said Plans are rejected after being
resubmitted to Tenant, and the parties are unable to agree on approved Plans
within thirty (30) days thereafter, then either party may cancel this Lease upon
thirty (30) days written notice to the other. Any such cancellation notice shall
be null and void if the plans are approved during the thirty (30) day notice
period.
After approval of Plans, Tenant, at Tenants sole cost and expense, shall have
the right to make changes, substitutions and eliminations in said Plans
provided, however, that Tenant shall pay all costs and expenses an account of
any such changes, substitutions and eliminations, In addition, Tenant shall be
solely responsible for paying all costs and expenses for changes, substitutions
and additional requirements in the Plans which deviate from the Criteria Plans
dated July 1998 and further detailed on Exhibit "C" attached hereto. Landlord
and Tenant agree to cooperate with each other and to diligently and in good
faith make all reasonable modifications to keep the cost of the Building and
improvements as economical as is reasonably practicable. Landlord shall, at
Landlord's sole cost and expense, obtain all of the necessary approvals required
under the Declaration required to construct the Leased Premises in accordance
with the terms and provisions of this Lease,
(c) As soon as the final Plans are available to Landlord from Architect after
Tenant has returned the final set of Plans to Landlord stamped "approved as
noted" pursuant to Section (b) of this Article but in any event prior to the
delivery of possession of the Leased Promises to Tenant. Landlord shall provide
to Tenant a mylar sepia of the final Plans prepared by Landlord as provided
above.
(d) All Plans shall be deemed to be owned by Tenant regardless of by whom
prepared,, Landlord shall take all actions as may be appropriate or necessary at
any time and from time to time in order to evidence such ownership in Tenant.
Such Plans may be used by Tenant in their approved form or as modified by Tenant
In connection with any alteration or renovation of the Leased Premises. Landlord
may use the Plans only in connection with a Walgreens Drug State.
(e) Should a survey or title commitment reveal any utility easements or setback
lines that must be released or relocated in order for Landlord to construct the
Leased Premises, it shall be an express condition of this Lease that such
utility easements or setback lines be released or relocated in a manner
reasonably acceptable to Tenant. Landlord shall provide to Tenant copies of all
documents relative thereto, and Tenant shall have no obligation to accept
delivery of possession of the Leased Promises until Landlord shall have complied
with the provisions of this Section.
8.
RENT COMMENCEMENT
6. Tenant shall commence paying fixed rents pursuant to Article 2 hereof as of
the date that is two (2) months after Landlord has completed all construction
and has delivered possession as above provided (the "Rent Commencement Date").
The Rent Commencement Onto shall be subject to extension equal to any delays
occasioned by strikes, casualties, governmental restrictions, priorities or
allocations, inability to obtain materials or labor, denial of licenses to
operate a pharmacy and/or to conduct ft business. any cause the fault of
Landlord or other causes beyond Tenant's control. Anything to the contrary in
this Lease notwithstanding, Tenant shall have no obligation to pay rent or other
charges until Landlord has provided all of the information and instruments
required by Article 18 of this Lease and after such event, Tenant shall remit to
Landlord all monies withheld. Nothing contained in this Lease shall be construed
to obligate Tenant to open for business nor to obligate Tenant (or its
successors or assigns) to continue to operate its business in the Leased
Premises.
PARKING
7. (a) During the Term of this Lease, Tenant, at Tenant's cost and expense,
shall maintain the landscaping at the Leased Premises and the contiguous right
of way area shown on Exhibit 'A' between the Leased Premises and Alameda Avenue
and Loop 375, if any, and only If the Landlord is obligated by the public
authorities to maintain and repair said right of way area, and maintain and
repair the parking areas located within the Leased Premises. During the Term of
this Lease, Tenant, at Tenant's cost and expense, shall maintain and repair the
Access Driveway Area shown on Exhibit "A' located on the Adjoining Property
until the commencement of construction of improvements on the Adjoining
Property. However, Tenant shall have no obligation to perform nor pay any costs
in connection with the following. (I) any replacements of the landscaping, light
poles, parking areas or other improvements thereon,, (II) any other item which
under generally accepted accounting principles are classified as a capital
expense; (iii) any repair for which the need for repair is a result of the acts
or negligence of Landlord or b agents, employees or licensees; (iv) any items
for which Landlord is reimbursed by insurance, warranty or otherwise; (v) any
item which is Landlord's obligation under Article 5, 10, and/or 14 hereof; and
(vi) any defects in the construction of the Leased Promises by Landlord
discovered during the first twelve (12) months of the Lease Term.! The foregoing
items (i) through (vi) shall remain Landlord's responsibility to perform. The
parking spaces located on the Leased Promises shall be for the exclusive use of
Tenant and Tenant's customers, employees, invitees, successors, assigns and
sublessees. Upon the commencement of construction of Improvements on the
Adjoining Property, Tenant shag no longer be responsible to maintain and repair
the Access Driveway Area.
(b) Prior to delivering possession of the Leased Premises to Tenant, Landlord
shall enter into a certain Declaration of Covenants, Conditions and Restrictions
and Reservation of Easements (in form approved by tenant, hereinafter referred
to as "the Declaration" in which Tenant, its customers, employees, agents,
invitees, successors and assigns have been granted the non-exclusive easement
and right to use the driveway partially located on the Adjoining Property (as
defined below) within the area striped on the attached Exhibit 'A' (hereinafter
called 'Access Driveway Area). Tenant acknowledges that the Leased Premises and
that certain property (the "Adjoining Property") located adjacent to the Leased
Premises which Is legally described on Exhibit
9.
"X-x' attached hereto and incorporated herein shall be subject to the provisions
of the Declaration. The Declaration shall provide for reciprocal ingress and
egress rights over and across the Leased Premises and the Adjoining Property all
as more particularly described in the Declaration, Landlord hereby agrees that
It shall not enter into any agreement or modification of the Declaration which
interferes with Tenant's use and enjoyment of the Access Driveway Area and the
Leased Promises without Tenant's prior written consent thereto. Landlord
covenants that Landlord will, upon Tenant's request, cooperate with Tenant who
shall have the right, at Tenant's cost and expense, to enforce all rights,
covenants and agreements granted Landlord and Tenant pursuant to the
Declaration.
(c) Tenant hereby indemnifies and holds harmless Landlord from any claim, damage
or liability arising out of Tenant's use of the ingress and egress rights
provided for in the Declaration over the Adjoining Property.
(d) Tenant shall be responsible for any maintenance or repairs of the Adjoining
Property resulting from the use of the Adjoining Property by Tenant.
(e) That portion of the Access Driveway Area located on the Adjoining Property
shall be improved by Landlord concurrently with the construction of the Leased
Premises, and shall be completed prior to Landlord's delivery of possession of
the Leased Premises to Tenant.
EXCLUSIVES
8. (a) Landlord covenants and agrees that, during the Term and any extensions or
renewals thereof no additional property which Landlord, directly or indirectly,
may now or hereafter own or control, and which is contiguous to, or within five
hundred (500) feet of any boundary of the Leased Premises will be used for any
one or combination of the following: (i) the operation of a drug store -or a
so-called prescription pharmacy or for any other purpose requiring a qualified
pharmacist or other person authorized by law to dispense medicinal drugs,
directly or indirectly, for a fee or remuneration of any kind; (ii) the
operation of a medical diagnostic tab and/or the provision of treatment
services; (iii) the sale of so called health and/or beauty aids and/or drug
sundries; (iv) the operation of a business in which photofinishing services
and/or photographic film are offered for sale, (v) the operation of a business
in which food items are sold for consumption off the premises (other than a
restaurant selling take-out food items) and/or (vi) the operation of a business
in which greeting cards or wrapping paper are offered for sale.. For purposes
hereof "contiguous' shall mean property that is either adjoining the Leased
Promises or separated from the Leased Promises only by a public or private
street, alley or right-of-way. In the event that Tenant files suit against any
party to enforce the foregoing restrictions Landlord agrees to cooperate fully
with Tenant in the prosecution of any such suit.
Notwithstanding ft foregoing, if Tenant closes its store to the public for six
(6) months or more, then all of the foregoing exclusive use restrictions shall
terminate, except in the event that Tenant discontinues business as a result of
fire or other casually beyond Tenant's control so long as Tenant reopens its
business within sixty (60) days after the Leased Promises have been restored or
the cause for such discontinuance has ceased. In no event shall said
restrictions terminate in the event that Tenant discontinues business and a
permitted assignee or subleases of Tenant commences business operations in
10.
the Leased Premises within six (6) months after taking possession of the Leased
Premises, selling any such Item or items so restricted as a material part of
such assignee's or sublessee's business.
(b) Unless otherwise restricted by the documents set forth in Exhibit "E'
(Permitted Title Exceptions), in the event that any action, claim or suit is
brought by any party against Tenant alleging that Tenant's operations in the
Leased Premises are in violation of any use restriction contained in any
instrument executed by Landlord or recorded against the Leased Premises prior to
the delivery of possession of the Leased Premises to Tenant and in the event
that a court of competent jurisdiction shall hold that Tenant's operations in
the Leased Premises are in violation of any use restriction. Tenant, at Tenant's
option shall have the right to terminate this Lease upon thirty (30) days
written notice thereof to Landlord.
UTILITIES
9. Tenant shall pay when due all bills for water, trash removal, sewer rents,
sewer charges, heat, gas and electricity and other utilities and services used
in or serving the Building or the Leased Premises from the commencement of the
Initial Term and until the expiration of the Term. The source of supply and
vendor of each such commodity shall be the local public utility company or
municipality commonly serving the area, provided that If more than one utility
vendor serves the area Landlord shall cause the vendor selected by Tenant to
serve the Leased Promises. Landlord shall furnish to said Building and to the
Leased Premises at all times sufficient gas and water service lines, also sewer
lines and sewer connections, all of the capacity Initially specified by Tenant,
and electric service lines of the voltage and amperage initially specified by
Tenant, all connected to an adequate source of supply or disposal. In addition,
Landlord shall furnish to said Building conduit for telephone lines of a
capacity specified by Tenant. If Tenant shall require additional service line
capacity of any of such utilities and if same are available on the Leased
Premises, Tenant, at Tenant's expense, shall have the right to the use of the
some.
REPAIRS, CONFORMITY WITH THE LAW
10. (a) Except as provided below, Tenant, at Tenants sole cost and expense,
shall, (i) repair and replace heating and cooling equipment and doors and door
equipment serving the Building, (ii) make plate glass replacements unless
required by fault of Landlord or its agents, and (iii) make repairs to the
interior of the Building. Tenant shall also paint the exterior of the Building
and make minor repairs (i.e. patching) to the exterior. Landlord,. at Landlord's
sole cost and expense, shall maintain and make all repairs to the exterior and
structural portions of the Building, root, and all utility lines, including but
not limited to sewers, sewer connections, pipes, ducts, wires and conduits
leading to and from the Leased Premises and/or the Building. Landlord shall make
all repairs required by the fault of Landlord or its agents, or by fire or other
insured casualty (as provided in Paragraph 14 below unless Tenant, at Tenant's
sole option, chooses to make repairs necessitated by casualty) or the elements.
In the event that any Hazardous Substance or any underground storage tank is
discovered at any time in, under or about the Leased Promises and/or the
Building (unless introduced by Tenant, or Tenants agents, employees or licensees
acting within the scope of their respective agency, employment or license),
Landlord shall, at Landlord's expense, remove and dispose of the same in the
manner described In and provide all documentation required by Section (b) of
Article 4. Landlord hereby indemnifies and saves and holds Tenant harmless
11.
from and against any liability, obligation, damage or cost, including, without
limitations attorneys' fees and costs, resulting directly or indirectly from the
presence, removal or disposal of any such Hazardous Substance (unless introduced
by Tenant, or Tenants agents, employees or licensees acting within the scope of
their respective agency, employment or license) or any underground storage tank,
Tenant hereby indemnifies and saves and holds Landlord harmless from and against
any liability, obligation, damage or cost, including, without limitation,
attorneys' fees and costs, resulting directly or indirectly from the presence,
removal or disposal of any such Hazardous Substance introduced on, in or under
the Leased Premises by Tenant, or Tenant's agents, employees or licensees acting
within the scope of their respective agency, employment or license. These
Indemnification's shall survive the termination or expiration of this Lease for
any reason. The provisions of this Section shall be complied with as required
from time to time.
(b) If in an emergency situation, a repair to the Leased Promises and/or the
Building which Landlord is obligated to perform is required, Tenant shall make
all reasonable efforts to contact Landlord or Landlord's managing agent by
telephone and for facsimile to advise Landlord of the need for the repair. If
after making reasonable efforts to contact Landlord, either Tenant is unable to
contact Landlord or Landlord's managing agent, or Tenant succeeds in contacting
Landlord or Landlord's managing agent and Landlord fails to undertake action to
correct the emergency situation within one business day, Tenant may perform the
repair, in such manner as Tenant deems reasonably necessary, on account of
Landlord. Upon completion of the repair, Landlord shall be required to reimburse
Tenant for the actual cost of the repair. Landlord's payment shall be due Within
thirty (30) days after receipt of Tenant's xxxx accompanied by reasonable
evidence that Tenant has paid for the repair, In the event Landlord fails to
make payment to Tenant for said repair within said thirty (30) days, such
failure shall be deemed a default under this Lease and Tenant shall have all
remedies set forth In Article 17 and those available at law or in equity,
provided however, Tenant shall not have the right to cancel this Lease as a
result of Landlord's failure to make such payment as herein provided.
For the purpose of this Section, an emergency situation means a condition or
state of facts which if not corrected would result in further damage to the
Leased Premises, the Building or its contents or which would prevent Tenant from
conducting its business at the Leased Premises in a reasonable manner.
(c) Tenant shall make all changes and installations necessary to comply with the
valid requirements of public authorities regarding the conduct of Tenant's
particular business in the Building and the Leased Premises. Except as required
above, Landlord shall make all changes and/or installations and pay the cost, if
any, of all inspections required to comply with valid requirements of public
authorities as they apply to the Leased Premises or the Building.
SIGNS. TENANTS FIXTURES
------------------------
11. (a) Subject to the provisions of the Declaration, Tenant may, at Tenant's
sole cost and expense, Install and operate interior and exterior electric and
other signs, and in so doing shall comply with all lawful requirements. Subject
to governmental regulations and any other restrictions which apply to the Leased
Premises, Tenant shall have the right to install mechanical equipment, including
satellite dishes or other antennae for telecommunications affixed to the roof or
other portions of the Build[N or other portions of the Leased Premises, but
shall indemnify Landlord from any costs and expenses (including without
12.
limitation the costs for repairs and improvements) relating thereto. Subject to
compliance with any and all lawful requirements or restrictions, Tenant may, at
Tenant's option install within the Leased Premises pay telephones, automatic
teller machines and other electronic consumer service apparatus.
(b) Tenant shall at all times have the right to remove all fixtures, machinery,
equipment, appurtenances and other property furnished or installed by Tenant or
by Landlord at Tenants expense, It being expressly understood and agreed that
said property shall not become part of the Building or the Leased Premises but
shall at all times be and remain the personal property of Tenant and shall not
be subject to any Landlord's lion.
(c) If permitted by applicable governmental rules and regulations, Landlord
shall, as soon as is possible after the date hereof, install a sign foundation
with conduit (per A5.1 as shown on Exhibit "C') at the location shown on Exhibit
'A", upon which Tenant may Install its readerboard and sign panel. Such pylon
sign shall be electrified by Landlord as soon as is practical. Tenant may
install the same prior to the date that it accepts possession of the Leased
Premises and such Installation of said readerboard and sign panel shall be
deemed neither acceptance of possession of the Leased Premises nor a waiver of
any condition precedent to the delivery of possession of the Leased Premises,
ALTERATIONS
12. (a) Subject to governmental rules and regulations and any restrictions which
apply to the Leased Premises, including without limitation the Declaration, at
any time and from time to time, Tenant, at Tenant's cost and expense, may make
alterations and additions to the Building including, but not limited to,
structural changes necessary to conform the Leased Promises to Tenant's then
current prototype (provided that the structural integrity of the Building is not
thereby impaired). Tenant shall obtain Landlord's consent, which shall not be
unreasonably withheld or delayed, before making any other structural changes to
the Building. Tenant may, without Landlord's consent, however, make changes to
storefronts, partitions, floors, electric, plumbing and heating, ventilating and
cooling systems or components thereof. Tenant, at Tenant's sole cost, in
compliance with applicable restrictions and governmental requirements, if any,
shall have the right to reconfigure or otherwise modify the parking areas on the
Leased Promises (including without limitation, curb cuts, entrances arid exits)
as Tenant deems necessary or desirable. Landlord shall cooperate in securing
necessary permits and approvals. Tenant shall not permit any mechanics' or other
liens to stand against the Leased Promises for work or material furnished Tenant
and shall Indemnify Landlord from any costs or expenses relating to any repairs
or alterations completed by Tenant.
(b) Landlord covenants and agrees that Landlord shall not, without Tenant's
written consent, make any alterations or additions to the Leased Premises,
including, but not limited to, any modifications to the storefront, signband or
fascia of the Building or to the Parking Areas. Landlord shall not permit any
mechanics' or other liens to stand against the property for work or material
furnished by or on behalf of Landlord and shall Indemnify Tenant from any costs
or expenses relating to any repairs or alterations completed by Landlord.
13.
AS51GNMENT AND SUBLETTING
13. (a) At any time and from time to time, Tenant may discontinue the
operation of its store in the Leased Premises and/or Building.
(b) At any time and from time to time, Tenant's interest under this Lease may be
assigned and re-assigned, without Landlord's consent, provided that any such
assignment or reassignment be only to a corporation which is subsidiary to or
affiliated with Tenant, or to a corporation resulting from any consolidation,
reorganization or merger to which Tenant, or any of its subsidiaries, parent or
affiliates, may be a party. At any time and from time to time, Tenant may also
sublet or license or permit a portion or portions of the Building to be used for
concessions, leased or licensed departments and demonstrations in connection
with and as part of the operation of Tenant's store, the Gross Sales therefrom
to be included in the Gross Sales of Tenant. Tenant shall deliver written notice
to Landlord in the event of. any assignment or subletting under this Section
(b).
(e) At any time and from time to time, without Landlord's consent, Tenant may
sublet a portion of the Leased Promises and/or Building, to any person, firm or
corporation, other than a corporation described in Section (b) hereof, for any
lawful purpose. In such case, the Gross Sales of such subtenant (but not the
subrentals paid by such subtenant) shall be included in the Gross Sales of
Tenant.
(d) (1) At any time and from time to time, without Landlord's consent except as
set forth below, Tenant may assign this Lease or Tenant may sublet all of the
Leased Premises and/or Building to any person, firm or corporation, other than a
corporation described in Section (b) above, for any lawful purpose which does
not violate the provisions of this Lease. In the event of any subletting, Tenant
shall pay to Landlord the rent provided in Article 2 of this Lease. Tenant shall
notify Landlord in writing of any proposed sublease or assignment, together with
the name, address, phone number, any financial information regarding the
proposed subleases or assignee that Tenant may have in its possession, and the
nature of the business of the proposed subleases or assignee. Within forty-five
(45) days after Landlord's receipt of Tenant's notice of a proposed assignee or
subleases, Landlord may terminate this Lease by written notice to Tenant. Such
termination shall be effective as of the earlier of the following to occur; (x)
thirty (30) days after Tenant closes Its store on the Leased Premises, or (y)
two (2) years after the date Landlord delivers the termination notice required
by this Section In any event, Tenant shall deliver to Landlord at least ninety
(90) days' prior written notice of the date on which possession of the Leased
Premises will be delivered to Landlord. If Landlord so elects to terminate this
I-ease, neither party shall have any further or unaccrued obligation or
liability to the other as of the termination date of the Lease. If Landlord
fails to notify Tenant of termination within said forty-five (45) day period,
such termination right shall be deemed waived but only as to such subletting or
assignment- Notwithstanding the above, if such sublease or assignment is in
connection with Tenant's sublease or assignment of three (3) or more of Tenant's
other stores in the State of Arizona to a single or related entity, Landlord
shall have no such right to terminate.
(ii) In the event of a subletting pursuant to Section (c)(i) above, then at
any time thereafter, Landlord may, by written notice to Tenant,
terminate this Lease provided, however, Landlord shall concurrently
with such termination agree to attorn to and be bound by the terms of
any such sublease.
14.
Upon such termination, neither Landlord nor Tenant shall have any further or
unaccrued obligation or liability to the other. Prior to such termination,
Landlord shall reimburse Tenant the unamortized cost of any leasehold
improvements made by Tenant to the Leased Premises in connection with said
subletting, together with all third party out-of-pocket costs and all brokerage
fees incurred by Tenant as a result of such subletting, prorated over the
unexpired sublease term.
(e) If Tenant shall cease the conduct of business on the Leased Premises for a
continuous period in excess of six (6) months (except by reason of strikes,
fire, casualty or other causes beyond reasonable control of Tenant, except by
reason of repairs or remodeling and except by reason of assignment or subletting
as above provided) and the Leased Premises; remain continuously vacant during
such period, Landlord shall have the right and option to terminate this Lease
upon written notice to Tenant, effective on the last day of the next succeeding
calendar month following receipt of such notice; provided, however, that if
Tenant shall send written notice to Landlord of Tenant's intent to sublet the
Leased Premises during such period when Landlord shall have the option, pursuant
to this Section to terminate this Lease, Landlord shall have the right within
thirty (30) days after receipt of such notice from Tenant to terminate this
Lease upon written notice to Tenant effective on the last day of the next
succeeding calendar month following Tenant's receipt of such notice and from and
after such date, neither party shall have any liability or further obligation to
the other under this Lease. If Landlord shall not so notify Tenant within thirty
(30) days of receipt of Tenant's notice that Landlord has exercised its option
to cancel this Lease, the termination options contained in this Section shall be
void and of no further force and effect.
Notwithstanding any assignment of this Lease, Walgreen Co., an Illinois
corporation shall not be released from liability, However, in the event of a
default by any such assignee, Landlord shall give Walgreen Co. notice of such
default, shall accept cure of such default by Walgreen Co. within thirty (30)
days after such notice and shall permit Walgreen Co. to re-enter and repossess
the Leased Premises for the then unalapsed portion of the Term of this Lease
upon all of the provisions of this Lease.
CASUALTY
14. (a) If the Building and/or Leased Premises and/or any improvements thereon
shall be damaged or destroyed by fire or other casualty, then Tenant, shall,
within thirty (30) days after such casualty, elect to either (i) repair and
restore the Building and/or Leased Premises and/or improvements thereon to their
condition immediately prior to such damage or destruction or (ii) notify
Landlord that Landlord shall effectuate such repair and restoration but only to
the extent possible based upon the insurance proceeds available to Landlord. If
Landlord is effectuating such repair and restoration, unless the Building and/or
Leased Premises is completely restored to such condition within twelve (I 2)
months of the date of such casualty, the rent and all other charges shall xxxxx
proportionately according to the extent of such damage or destruction from and
after the first day of the thirteenth (13th) month after such casualty until
such restoration is completed. Landlord shall commence such restoration as soon
as is possible after Tenants election to require Landlord to do so, but in any
event not later than sixty (60) days thereafter and shall diligently pursue such
repair or restoration to completion. In the event that such repair or
restoration by Landlord is not completed within two hundred seventy (270) days
after such occurrence Tenant may, at Tenant's option, cancel this Lease, Subject
to the payment of proceeds by Tenant as expressly sot forth in Section (b)
below,
15.
under no circumstances shall Tenant be liable for any loss or damage including,
but not limited to, damage to the Building or Leased Promises resulting from
fire or other casualty.
(b) In the event the Building and/or improvements on the Leased Premises are
damaged to. the extent of twenty-five percent (25%) or more thereof, or
destroyed by fire or other casualty, and such casualty occurs after the first
day of the 216th month of the Term, Tenant may, cancel this Lease by notice to
Landlord. If Tenant has so canceled this Lease and the fire or other casualty is
an insurable casualty under Tenant's special form coverage insurance, Tenant
shall provide Landlord with the proceeds of such insurance in an amount required
by Article 20 of this Lease and such other proceeds which are necessary to
enable Landlord to reconstruct or repair the building and improvements as
required herein. Any proceeds payable by Tenant to Landlord under this Section
(b) shall be exclusive of the cost of improvements made on or an behalf of
Tenant to the Leased Premises and/or Building.
(c) In the event Tenant shall elect not to cancel this Lease under this Article
14 and Landlord is effectuating such reconstruction or repair, Landlord and
Tenant shall enter into a construction escrow agreement satisfactory to Tenant
and Landlord appointing either Tenant or third party as escrow agent to disburse
such proceeds as Landlord's repair and reconstruction work progresses and to
monitor repair and reconstruction of the Building and improvements by Landlord.
(d) If the fire or casualty is not an insurable casualty under Tenant's fire and
extended coverage Insurance, Landlord or Tenant may cancel this Lease upon
notice to the other. Tenant may void Landlord's notice of termination by
notifying Landlord within thirty (30) days after receipt of such notice of
termination that Tenant shall provide Landlord with a sufficient amount of money
necessary for Landlord to reconstruct or repair the Building and/or improvements
on the Leased Promises, as required by this Article 14. Landlord may void
Tenants notice of termination by notifying Tenant within thirty (30) days after
receipt of such notice of termination that Landlord intends to reconstruct or
repair the Building and/or L2ndiord's improvements on the Leased Premises as
required by this Article 14, at Landlord's own cost and expense.
(e) Landlord, at Landlord's expense, shall install a fire alarm system and/or
sprinkler system to serve the Leased Promises and if required by statute,
ordinance, governmental rule or regulation, cause the fire alarm and sprinkler
system serving the Building to be monitored and maintained by a reputable alarm
service company and/or the local fire department. Landlord shall (i) provide
Tenant with a copy of the above service contract, and (ii) notify Tenant's
Construction Department that such monitoring Is required (as of the date that
Landlord notifies Tenant of delivery of possession pursuant to Article 4 of this
Lease). Provided that Tenant has approved alarm service company selected by
Landlord, and provided that Landlord arranges to have the approved alarm service
company xxxx Tenant directly, Tenant shall pay for governmentally required
monitoring and maintenance services. Landlord shall be responsible for any costs
incurred for permits, inspections and false alarms (if caused by the fault of
the Landlord). Tenant shall, at Tenant's expense, install and maintain any phone
line(s) required in connection with such fire alarm and sprinkler system.
16.
LANDLORD'S RIGHT TO INSPECT
15. Landlord may at reasonable times during Tenant's business hours, and after
so advising Tenant, enter the Building for the purpose of examining and of
making repairs required of Landlord under this Lease and during the last six (6)
months of the Term may place the usual "For Rent" signs in the Leased Premises,
but not so as to interfere with Tenant's business.
SURRENDER
16. At the expiration or termination of this Lease, Tenant shall surrender
immediate possession of the Leased Premises In good condition, subject to
reasonable wear and tear, changes and alteration, damage by fire, casualty and
the elements, and other repairs which are Landlord's obligation. Any holding
over by Tenant shall not operate, except by written agreement, to extend or
renew this Lease or to imply or create a new lease, but in such case Landlord's
rights shall be limited to either the immediate termination of Tenant's
occupancy or the treatment of Tenant's occupancy as a month to month tenancy,
any custom or law to the contrary notwithstanding. Tenant shall repair damage
caused by the removal of Tenant's fixtures and equipment.
DEFAULT AND REMEDIES
17. (a) If any rent is due and remains unpaid for ten (I 0) days after receipt
of notice from Landlord, or if Tenant breaches any of the other covenants of
this Lease and if such other breach continues for thirty (30) days after receipt
of notice from Landlord, Landlord shall then but not until then, as its sole
legal remedies but in addition to ft remedies In equity, if available, have the
tight (a) to xxx for rent, (b) to re-enter without terminating this Lease,
provided that Landlord shall use its best efforts to relet the Leased Premises
for Tenant's account and otherwise to mitigate its damaged (it being expressly
understood that Tenant shall remain liable on a monthly basis for the difference
between what Tenant's obligations under this Lease are and what Landlord
actually collects, and further provided that if Landlord elects to re-enter
without terminating this Lease, this Lease shall nonetheless expire as of the
next optional termination date as set forth in Article 3(d)), or (c) to
terminate this Lease and re-enter the Leased Premises; but if Tenant shall pay
said rent within said ten (10) days, or in good faith within said thirty (30)
days commence to correct such other breach, and diligently proceed therewith,
then Tenant shall not be considered in default (b) If Landlord shall from time
to time fail to pay any sum or sums due to Tenant and If such failure continues
for thirty (30) days after receipt of notice from Tenant, Tenant shall have the
right and Is hereby irrevocably authorized and directed to deduct such sum or
sums from fixed and percentage rent and other sums due Landlord, together with
interest thereon at the so-called prime rate charged from time to time by The
First National Bank of Chicago, or its successor, plus two per cent until fully
reimbursed. If Landlord shall from time to time fail to perform any act or acts
required of Landlord by this Lease and if such failure continues for thirty (30)
days after receipt of notice from Tenant, Tenant shall then have the right, at
Tenant's option, to perform such act or acts, in such manner as Tenant deems
reasonably necessary, and the full amount of the cost and expense so Incurred
shall Immediately be owing by Landlord to Tenant, and Tenant shall have the
right and is hereby irrevocably authorized and directed to deduct such amount
from fixed and percentage rent and other sums due Landlord, together with
interest thereon at the so-called prime rate charged
17.
from time to time by The First National Bank of Chicago, or its successor, plus
two per cent until fully reimbursed, If Landlord shall in good faith within said
thirty (30) days commence to correct such breach, and diligently proceed
therewith to completion, then Landlord shall not he considered in default
(c) No delay on the part of either party enforcing any of the provisions of this
Lease shall be considered as a waiver thereof. Any consent or approval granted
by either party under this Lease must be in writing and shall not be deemed to
waive or render unnecessary the obtaining of consent or approval with respect to
any subsequent not or omission for which consent is required or sought.
TITLE AND POSSESSION
18. (a) Landlord covenants, represents and warrants that Landlord has entered
into a contract to acquire fee simple legal title to the Leased Premises and has
the right to enter into this Lease, that said entire property is now and shall
be as of ft date of Tenant's recording of a Memorandum of this Lease and a
Ratification Agreement as below defined free and clear of all liens.
encumbrances and restrictions, except for those items set forth on Exhibit "E"
attached hereto and made a part hereof, none of which shall interfere with any
of Tenant's rights under this Lease, and that upon paying the rents and keeping
the agreements of this Lease on its part to be kept and performed, Tenant shall
have peaceful and uninterrupted possession during the continuance of this Lease.
Upon acquisition of fee xxxxxx, Landlord shall execute an agreement in the form
attached hereto as Exhibit 'F", ratifying and adopting this Lease ("Ratification
Agreement'). Landlord shall deliver to Tenant, at Landlord's cost and expense,
not later than fourteen (14) days prior to the Initial Term, a current ALTA
leasehold policy of title insurance, together with such endorsements that Tenant
may reasonably require, issued by a title insurance company of Tenant's choice
insuring Landlord's fee ownership, Tenant's leasehold estate and the easements
referenced in Article 7 hereof, in an amount not less then $1,000,000.00, unless
the title insurance guidelines for the State of Texas require a higher amount in
the Leased Premises, subject only to this Lease and such other covenants,
restrictions and encumbrances as Tenant may approve. Such title insurance policy
shall be effective as of the recordation date of a Memorandum of Lease and
Ratification Agreement. Landlord shall also provide Tenant with an as-built
survey of the Leased Premises drawn per ALTA standards and certified to Tenant.
(b) If at the date of the recording of the Memorandum of this Lease or the
Ratification Agreement, whichever is later, the Leased Premises, or any part
thereof is subject to any mortgage, deed of trust or other encumbrance in the
nature of a mortgage, which is prior and superior to this Lease, ft is a further
express condition hereof that Landlord shall thereupon furnish and deliver to
Tenant, in form and substance reasonably acceptable to Tenant, an agreement
executed by such mortgages or trustee, either (i) making such mortgage, dead of
trust or other encumbrance In the nature of a mortgage subject and subordinate
to this Lease and to the leasehold estate created hereby and to all of Tenant's
rights hereunder, or (ii) obligating such mortgagee or trustee and any successor
thereto to be bound by this Lease and by all of Tenant's rights hereunder,
provided that Tenant Is not then in continued default, after notice, in the
payment of rents or otherwise under the terms of this Lease.
(c) If as of the date of the recordation of the Declaration, the Leased
Premises, or the Adjoining Property, or any part thereof is I subject to any
18.
mortgage, dead of trust or other encumbrance in the nature of a mortgage, which
is prior and superior to the Declaration, it is a further express condition
hereof that Landlord shall thereupon furnish and deliver to Tenant, in form and
substance acceptable to Tenant, an agreement executed by such mortgagee or
trustee, either (i) making such mortgage, deed of trust or other encumbrance in
the nature of a mortgage subject and subordinate to the Declaration and to all
of Tenant's rights thereunder, or (ii) obligating such mortgagee or trustee and
any successor thereto to be bound by the Declaration and by all of Tenant's
Lights thereunder.
(d) (I) If required by Landlord's institutional lender, Tenant shall subordinate
the lien of this Lease to the lien of such mortgage encumbering the Leased
Premises. so long as such lender simultaneously with such subordination and as a
condition of the same, executes In recordable form a Subordination,
Non-Disturbance and Attornment Agreement in form and substance acceptable to
Tenant and agrees to be bound by all of the terms and conditions of this Lease.
In the event of a conflict between the terms of such mortgage and the terms of
this Lease, the terms of this Lease shall prevail.
(ii) Landlord and Tenant agree to execute and deliver to the other within twenty
(20) days from receipt of either party's written request, estoppel certificates
in a form acceptable to the party to whom such request is made, which
certificates shall include information as to any modification of this Lease, and
to the best of Tenant's or Landlord's knowledge, whether or not the other party
is in default of this Lease,
(e) It is understood and agreed that Tenant shall, in no event,
be obligated to accept possession of the Leased Promises until the Landlord has
complied with the provisions of this Article.
REAL ESTATE TAXES
19. (a) Landlord, prior to the Rent Commencement Date, shall make a mailing
address change on the property flex records so that as of the Rent Commencement
Date the tax xxxx and tax notices for only the Leased Premises will be mailed to
Tenant at the following address: Walgreen Co., 000 Xxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxx 00000, Attention: Tax Department. Prior to the date that the tax xxxx
is mailed directly to Tenant pursuant hereto, Landlord, prior to delinquency,
shall send to Tenant a copy of the tax xxxx for the Leased Premises if Tenant is
obligated to pay for such taxes, In no event shall Tenant be required to pay
real estate taxes pertaining to any period prior to the Rent Commencement Date
or subsequent to the expiration or earlier termination of the Lease,
(b) Upon receipt of the aforesaid tax bills, Tenant shall pay, when due and
before delinquency, the ad valorem real estate taxes (including all special
benefit taxes and special assessments but excluding so.-Called impact fees)
levied and assessed against the Leased Premises, commencing with the Rent
Commencement Date and continuing for the remainder of the Term. However, the ad
valorem taxes levied or assessed for the year in which Tenant commences paying
fixed rent shall be prorated between Landlord and Tenant so that Tenant shall
pay only such part thereof as pertains to the period commencing on the Rent
Commencement Date and ending December 31st bears to such entire tax year, and
the ad valorem taxes levied or assessed for the year during which this Lease
expires or is terminated shall be prorated between Landlord and Tenant so that
Tenant shall pay only such part thereof as
19.
the period commencing on January 1st and ending on the date this Lease expires
or is terminated. Within thirty (30) days after payment of any such taxes, or as
soon thereafter as receipt bills are available, Tenant shall furnish to Landlord
photocopies of bills indicating such payments.
If Landlord is required to pay to its lender a monthly escrow for taxes levied
and assessed against the Leased Premises, Tenant shall pay to Landlord its pro
rata share of such taxes on a monthly basis. At the end of each tax year for
which said taxes are levied, Landlord shall furnish to Tenant a statement from
its lender and a copy of the paid tax xxxx as furnished to Landlord by its
lender, and any overage paid by Tenant to Landlord shall be reimbursed to Tenant
and any shortage shall be paid to Landlord.
(c) Tenant shall have the right, and is hereby irrevocably authorized and
directed to deduct and retain amounts payable under the provisions of this
Article from additional percentage rents payable under Section (b) of Article 2
for such tax year, or in the alternative, if such taxes for any tax year are
payable after percentage rents under Section (b) of Article 2 for such tax year
are payable, then Tenant shall have no liability under this Article to the
extent of such percentage rents paid for such tax year. In such event, Landlord
shall refund to Tenant the amount of such overpayment of percentage rent.
(d) All special benefit taxes and special assessments shall be spread over the
longest time permitted and Tenant's liability for installments of such special
benefit taxes and special assessments not yet due shall cease upon the
expiration or termination of this Lease. In no event shall Tenant be obligated
to pay any impact fees whether or not billed by the taxing authority as a
special benefit tax or a special assessment.
(e) (i) Tenant shall have the right to contest the validity or the amount of any
tax or assessment levied against the Leased Premises or any improvements
thereon, provided that Tenant shall not take any action which will cause or
allow the institution of foreclosure proceedings against the Leased Premises,
Landlord shall cooperate in the institution of any such proceedings to contest
the validity or amount of real estate taxes and will execute any documents
required therefore
(II) Landlord covenants and agrees that if there shall be any refunds or rebates
on account of any tax, governmental imposition or levy paid by Tenant under the
provisions of this Lease, such refund or rebate shall belong to Tenant. Any such
refunds or rebates which shall be received by Landlord shall be held in trust
for the benefit of Tenant and shall be forthwith paid to Tenant, Landlord shall,
on request of Tenant, sign any receipt which may be necessary to secure the
payment of any such refund or rebate, and shall pay over to Tenant such refund
or rebate *is received by Landlord.
INSURANCE
20. Commencing with the Initial Term and continuing until the last day of the
240th month of the Term, Tenant shall carry " an all risk fire and
extended special form coverage insurance (which shall include all risk
and extended coverage) covering the Building and the other improvements
on the Leased Premises to the extent of not less than I 00% of
replacement value, less foundations with companies which are authorized
to do business in the State of Texas and are governed by the regulatory
authority which establishes maximum rates in the vicinity. Tenant, if
requested by Landiord'5 lender, shall also carry (or
20.
reimburse Landlord for the cost thereof) earthquake and/or flood insurance to
the extent as may be reasonably required and as customary for like projects.
Commencing with the first day of the 241st month of the Term, such coverage
shall be on an actual cash value basis. Tenant shall also procure and continue
in effect public liability and property damage Insurance with respect to the
operation of the Leased Premises. Such public liability insurance shall cover
liability for death or bodily injury in any one accident, mishap or casualty in
a sum of not less than $1,000,000.00, and shall cover liability for property
damage in one accident, mishap or casualty in the amount of not less than
$100,000.00. The proceeds from Tenant's casualty insurance hereunder shall be
paid and applied only as set forth in Article 14 hereof. Any insurance carried
or required to be carried by Tenant pursuant to this Lease . at Tenant's option
may, be carried under an insurance policy(ies), self-insurance (provided that
Tenant or Tenant's parent company maintains a not worth of $300,000,000.00) or
pursuant to a master policy of insurance or so-called blanket policy of
insurance covering other locations of Tenant or its corporate affiliates, or any
combination thereof; provided, however, that in the event Tenant carries any of
such insurance under any policy, Tenant shall have the right and Is hereby
Irrevocably authorized and directed to deduct and retain the amounts of said
premiums in any lease year from percentage rents payable under Section (b) of
Article 2 for such lease year. Any requests for insurance certificates shall be
sent to Tenant at 000 Xxxxxx Xxxx, Insurance Department, Deerfield, IL 6001 S.
MUTUAL INDEMNITY
21. Except for loss, cost and expense caused by fire or other casualty, Landlord
and Tenant shall each indemnify and hold harmless the other against and from any
and all loss, cost and expense resulting from their own respective negligent
acts and omissions or the negligent acts and omissions of their respective
employees in the course of their employment.
CONDEMNATION
22. If the entire Leased Premises shall be taken by reason of condemnation or
under eminent domain proceedings, Landlord or Tenant may terminate this Lease as
of the date when possession of the Leased Promises is taken. If a portion of the
Leased Premises shall be taken under eminent domain or by reason of condemnation
and if in the opinion of Tenant, reasonably exercised, the remainder of the
Leased Premises are no longer suitable for Tenant's business, this Lease, at
Tenant's option, to be exercised by notice to Landlord within sixty (60) clays
of such taking, shall terminate; any unearned rents paid or credited in advance
shall be refunded to Tenant, If this Lease is not so terminated, Landlord
forthwith and with due diligence, shall restore the Leased Premises. Until so
restored, fixed rent shall xxxxx to the extent that Tenant shall not be able to
conduct business, and thereafter fixed rent for the remaining portion of the
Term shall be proportionately reduced.
Tenant shall be entitled to the award in connection with any condemnation
insofar as the same represents compensation for or damage to Tenant's fixtures,
equipment, leasehold improvements or other property, moving expenses as well as
the loss of leasehold (i.e. the unexpired balance of the lease Term immediately
prior to such taking), Landlord shall be entitled to the award insofar as same
represents compensation for or damage to the fee remainder. Any mortgagee of
Landlord shall be compensated out of Landlord's award.
21.
For the purposes of this Article, the term "condemnation or under eminent domain
proceedings" shall include conveyances and grants made in anticipation of or in
lieu of such proceedings.
BROKERAGE .
23. Landlord and Tenant represent that they have dealt with no broker or agent
with respect to this Lease, Landlord hereby indemnities and saves and holds
Tenant harmless against any claims for brokerage commissions or compensation or
other claims of any kind (including reasonable attorney's fees and costs)
arising out of the negotiation and execution of this Lease or Tenant's interest
or involvement with respect to the Leased Promises.
PREVAILING PARTY
24. In the event of litigation between Landlord and Tenant in connection with
this Lease, the reasonable attorneys' fees and court costs incurred by the party
prevailing in such litigation shall be borne by the non- prevailing party.
NOTICES
25. All notices hereunder shall be in writing and sent by United States
certified or registered mail, postage prepaid, or by overnight delivery service
providing proof of receipt, addressed if to Landlord, to the place where rent
checks are to be mailed, and if to Tenant, to 000 Xxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxx 00000, Attention: Law Department, and a duplicate to the Leased
Premises, provided that each party by like notice may designate any future or
different addresses to which subsequent notices shall be sent. Notices shall be
deemed given upon receipt or upon refusal to accept delivery.
RIGHT OF FIRST REFUSAL
26, (a) From and after the date that is two (2) years after the date of this
Lease, in the event that Landlord shall receive a Bona Fide Offer to purchase
the Leased Promises at any time and from time to time during the Term of this
Lease or any extensions thereof from any person or entity, Landlord shall so
notify Tenant (Attn.:. Law Department with a duplicate notice to the Real Estate
Department) together with a true and correct copy of said Bona Fide Offer- For
purposes hereof, a "Bona Fide Offer" shall be deemed to be one made in writing
by a person or entity that is not related or affiliated with Landlord (or any of
Landlord's Partners or principal owners) in which Landlord intends to accept
(subject to this Article) otherwise known as a letter of intent. Tenant may, at
Tenant's option and within ten (10) working days after receipt of Landlord's
notice of said Bona Fide Offer and receipt of a copy thereof, offer to purchase
the Leased Premises at the price and upon the terms and conditions as are
contained in said Bona Fide Offer. In which event, Landlord shall sell the
Leased Premises to Tenant upon said terms and conditions and that said price;
furthermore, in such event, Landlord shall convey the Lofted Premises to Tenant
by warranty deed. Notwithstanding the foregoing, the price that Tenant shall pay
for the Leased Premises shall be reduced by an amount equal to broker's fees or
commissions (if any) that would have been payable by either the purchaser or
Landlord if the Leased Promises were sold pursuant to the said Bona Fide Offer.
Landlord shall provide Tenant evidence of the amount of broker's fees or
commissions payable in connection with any such Bona Fide Offer. Landlord
covenants that it shall accept no such Bona Fide Offer or convey
22.
the premises until h has complied with the terms of this Article, Any conveyance
of the Leased Promises mode in the absence of full satisfaction of this Article
shall be void. Tenant may enforce this Article, without limitation, by
injunction, specific performance or other equitable relief,
(b) Tenants election not to exercise any right of first refusal as provided for
in this Article 26 shall not prejudice Tenants rights hereunder as to any future
Bona Fide Offer. The terms and conditions contained in this Article 26 shall be
binding upon the heirs, successors and/or assigns of Landlord.
TRANSFER OF TITLE
27. (a) In the event that Landlord convoys b interest in the Leased Premises to
any other person or entity, Tenant shall have no obligation to pay rents or any
other charges under this Lease to any such transferee until Tenant has been
notified of such conveyance and has received satisfactory evidence of such
conveyance together with a written direction from such transferee as to the name
and address of the now payee of rents and other charges. It is understood and
agreed that Tenant's withholding of rent and other charges until its receipt of
such satisfactory evidence shall not be deemed a default under this Lease.
(b) In the event Landlord sells Its interest In the Leased Premises, Landlord
shall be relieved of any and all liability under any of Landlord's covenants and
obligations contained In or derived from this Lease arising out of any art,
occurrence, or omission occurring thereafter, and the assignee or purchaser at
any such sale or any subsequent sale of the Leased Premises or assignment of
this Lease, shall be deemed without any further agreement between the parties
and any such assignee or purchaser, to have assumed and agreed to carry out any
and all of the covenants and obligations of Landlord under this Lease.
RENT TAX
28. In the event that any governmental authority imposes a tax, charge,
assessment or other Imposition upon tenants in general which is based upon the
rents payable under this Lease, Tenant shall pay the same to said governmental
authority or to Landlord If Landlord is responsible to collect the same (in
which case Landlord shall remit the same in a timely manner and, upon request of
Tenant, evidence to Tenant said remittance). Tenant is hereby authorized and
directed to deduct the amount of such taxes, charges, assessments or impositions
from additional percentage rents payable under Section (b) of Article 2 for such
lease year or, in the alternative, in the event that such imposition or a
portion thereof is due after percentage rents, payable under Section (b) of
Article 2 have been paid, Tenant shall have no liability under this Article to
the extent that percentage rents for said lease year have been paid, Nothing
contained herein shall be deemed to obligate Tenant with respect to any income,
inheritance or successor tax or Imposition.
MISCELLANEOUS
29. (a) Captions of the several Articles contained in this Lease are for
convenience only and do not constitute a part of this Lease and do not limit,
affect or construe the contents of such Articles.
23.
(b) If any provision of this Lease shall be held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall in no way be affected or impaired thereby.
(c) If the Landlord is comprised of more than one person or entity, the
obligations imposed on Landlord under this Lease shall be joint and several.
(d) All provisions of this Lease have been negotiated by both parties at arm's
length and neither party shall be deemed the scrivener of this Lease. This Lease
shall not be construed for or against either party by reason of the authorship
or alleged authorship of any provision hereof.
(e) This instrument shall merge all undertakings, representations,
understandings, and agreements whether oral or written, between the par-ties
hereto with respect to the Leased Premises and the provisions of this Lease and
shall constitute the entire Lease unless otherwise hereafter modified by both
parties in writing.
(f) This instrument shall also bind and benefit, as the case may require, the
heirs, legal representatives, assigns and successors of the respective parties,
and all covenants, conditions and agreements herein contained shall be construed
as covenants running with the land. This instrument shall not become binding
upon the parties until it shall have been executed and delivered by both
Landlord and Tenant.
(g) Landlord has been afforded a full and fair opportunity to seek advice from
legal counsel and Landlord acknowledges that Tenant's attorney represents Tenant
and not Landlord.
(h) Notwithstanding any provision of this Lease to the contrary, the Term shall
commence, if at all, not later than twenty-one (21) years after the date of this
Lease,
24.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease, under seal, as
of the day and year first above written.
WALGREEN CO. CAP 11,
an Illinois corporation a New Mexico General Partnership
By: Xxxxxxxx Properties Real
Estate Services, Inc.,
managing General Partner
Xxxxx X. Xxxxxxx Xxxxx X. Xxxxxxxx
------------------ -------------------
Xxxxx X. Xxxxxxx Xxxxx X. Xxxxxxxx,
Vice President President
By: Xxxxxx Xxxxxxx Development
Ltd. Liability Co., General Partner
Xxxxxx X. Xxxxxxx
--------------------
Xxxxxx X. Xxxxxxx
General Partner
Witnesses: Witnesses:
Xxxxx Xxxxxx Xxxxx Xxxxxxxx
------------ --------------
Xxxxx X. Ments Xxxxxxx XxXxxxx
-------------- ---------------
STATE OF ILLINOIS )
)SS
COUNTY OF LAKE )
On this 22nd day of April, 1999, before me appeared Xxxxx X. Xxxxxxx, to me
personally known, who, being by me duly sworn, did say that he is the Vice
President of WALGREEN GO., an Illinois corporation, and that the seal affixed to
said Instrument is the corporate seal of said corporation, and that said
instrument was signed and sealed in behalf of said corporation by authority of
its board of directors and said corporation, acknowledged said instrument to be
the free act and deed of said corporation.
SEAL
Xxxxxx Xxxxx
------------
(Signature)
(My commission expires: September 5, 2002)
(Notary Seal)
25.
STATE OF NEW MEXICO )
)SS
COUNTY OF BERNALILLO )
On this 3rd day of April, 1999, before me appeared Xxxxx X. Xxxxxxxx, President
of Xxxxxxxx Properties Real Estate Services, Inc., Managing General Partner of
CAP 11, a New Mexico General Partnership, and signed said Instrument on behalf
of said General Partnership and said General Partner acknowledged said
instrument to be the free act and deed of said General Partnership.
Xxxxx X. Xxxxxxxx
-----------------
Seal (Signature)
Official Seal
Xxxxx X. Xxxxxxxx
Notary Public - New Mexico
Notary Bond filed with Secretary of State
(My commission expires 2-16-2001)
STATE OF NEW MEXICO )
)SS
COUNTY OF BERNALILLO )
On this 3rd day of April, 1999, before me appeared Xxxxxx X. Xxxxxxx, Managing
Member of Xxxxx Xxxxxxx Development Ltd. Liability Co., General Partner of CAP
II, a New Mexico General Partnership, and signed said Instrument on behalf of
said General Partnership and said General Partner acknowledged said instrument
to be the free act and deed of said General Partnership.
Xxxxx X. Xxxxxxxx
-----------------
Seal (Signature)
Official Seal
Xxxxx X. Xxxxxxxx
Notary Public - New Mexico
Notary Bond filed with Secretary of State
(My commission expires 2-16-2001)
26.
