LEASE
THIS LEASE is made and entered into as of the 30th day of July, 1993 and by
and between XXXXXX XXXXXX ("Landlord") having an address of X.X. Xxx 0000,
Xxxxxxxxx X.X.X.X. 00000-0000 and COST-U-LESS, a Washington corporation
("Tenant") having an address of 0000 00xx Xxxxx X.X., Xxxxx 000, Xxxxxxxx,
Xxxxxxxxxx 00000.
In consideration of the rents and mutual covenants set forth herein,
Landlord and Tenant agree as follows:
AGREEMENT
1. Premises
Landlord does hereby lease and demise to Tenant and Tenant does hereby
lease from Landlord for the term and under the terms and conditions set forth
herein that certain real property located at Xxxx 0X Xxxxxx Xxxxxxxxxx Xxxx Xxx
Quarter, more particularly described on EXHIBIT A attached hereto and
incorporated herein, together with any and all improvements thereon, including,
but not limited to, a building of approximately 26,210 square feet to be
constructed in accordance with Section 3 of this Lease ("Premises").
2. Term
The term of this Lease shall be approximately ten (10) years and shall
commence thirty (30) days from the date on which Tenant receives a permanent
Certificate of Occupancy for the Premises, referred to herein as the
"Commencement Date."
The term of this Lease shall end at 6:00 p.m. on the date which is ten (10)
years from the Commencement Date, subject to the options to extend as set forth
in Section 5 of this Lease. The parties agree that when the Commencement Date
becomes certain, they shall complete and execute a supplement to this Lease to
reflect the actual Commencement Date.
3. Construction of Premises
3.1 Landlord's Construction
Landlord shall, subject to the conditions set forth below, proceed with
all due diligence to prepare the Premises at Landlord's sole cost and expense,
substantially in accor-
dance with the plans, outlines and specifications provided to Landlord by
Tenant, copies of which are attached as EXHIBIT B to this Lease. All labor and
materials required to prepare the Premises for Tenant's use other than those
described on EXHIBIT B shall be furnished by Tenant at Tenant's sole cost and
expense. All such preparation shall be accomplished in compliance with all
applicable laws, ordinances, regulations and restrictions. Landlord shall be
responsible to obtain any construction loan financing sufficient to make timely
payments of all costs of construction of the Landlord's work in accordance with
all of the cost estimates for such work, plus related costs such as professional
fees, bond and insurance premiums, interest on and charges for borrowed money,
service and escrow fees, real estate taxes and assessments and similar costs.
Landlord shall be responsible to obtain all final administrative approvals
necessary to, and as conditions precedent for the issuance of building permits
by the appropriate jurisdiction or authority.
3.2 Commencement of Work
If Landlord's work has not been commenced by that day which is one hundred
eighty (180) days from the date of this Lease, Tenant may cancel this Lease upon
not less than ninety (90) days written notice to Landlord; provided, however,
that if Landlord shall commence such construction during the notice period,
Tenant's cancellation shall have no further force or effect and this Lease shall
remain in force between the parties. If Landlord shall not commence work or, if
at any time prior to the above date Landlord shall notify Tenant in writing that
Landlord has been unable to obtain the final approvals described in Section 3.1
above, from and after the date of such notice to Tenant, Tenant shall have the
right to terminate this Lease, and upon such termination, the parties shall have
no further rights or liabilities hereunder.
3.3 Completion of Work
Landlord shall not be held liable or responsible for delays in construction
or Landlord's work arising out of or occasioned by strikes, accidents, acts of
God, extreme weather conditions, unforeseen restrictions imposed by any
government or any governmental agency or other delays beyond Landlord's control.
Subject to the foregoing, Landlord agrees to deliver the Premises to Tenant for
commencement of Tenant's business not later than one hundred eighty (180) days
from the date of execution of this Lease. If Landlord fails to deliver the
Premises to Tenant for commencement of Tenant's business by the Completion Date,
Landlord shall pay to Tenant the amount of Five Hundred and No/100 Dollars
(US$500.00) per day for each and every day between the Completion Date and the
date
Landlord actually delivers the Premises to Tenant for commencement of Tenant's
business.
3.4 Warranty
3.4.1 Warranty of Landlord's Work
Landlord warrants that Landlord's work on the Premises under this Section 3
(i) shall be performed in a workmanlike and skillful manner, (ii) shall in all
respects be of a first class quality, free from all faults and defects in
workmanship, material, design and title, and (iii) shall be in strict compliance
with the requirements of the plans, outlines and specifications provided to
Landlord by Tenant. Landlord further warrants that all materials, equipment
and other items incorporated (or to be incorporated) in Landlord's work on the
Premises or consumed (or to be consumed) in the performance of Landlord's work
on the Premises shall be new and of the most suitable grade for the purpose
intended. Subject to any extension pursuant to Section 3.4.2 below, this
warranty shall continue until that date which is twelve (12) months after the
Completion Date ("Warranty Period").
3.4.2 Correction of Defects
If, at any time during the Warranty Period, Landlord receives from Tenant
notice of any failure to comply with the warranty set forth in this Section 3.4,
Landlord shall promptly and, at such times as Tenant directs, satisfactorily
correct such noncompliance and remedy any damage to other items of Landlord's
work or Tenant's property resulting from such noncompliance. The Warranty
Period shall then be extended as to any corrected work performed by the Landlord
until the expiration of twenty-four (24) months after acceptance by Tenant of
the corrected work. All costs incidental to such correction and remedy shall be
borne by Landlord.
3.4.3 Tenant's Right to Correct
If Landlord fails to satisfactorily correct or remedy any noncompliance or
damage in accordance with Section 3.4.2, then Tenant shall have the right, but
not the obligation, to perform, on behalf and at the expense of Landlord, any
correction or remedy which Landlord has failed to perform and of which Tenant
has given Landlord notice. Tenant shall be permitted to offset the cost of any
such correction or remedy against any rent or other sums payable to Landlord
under this Lease.
4. Rent
4.1 Payment of Rent
Commencing on the Commencement Date, Tenant shall pay rent to Landlord in
the amount of Two Hundred Twenty-Two Thousand Seven Hundred Eighty-Five and
No/100 Dollars (US$222,785.00) per year payable in equal monthly installments
of Eighteen Thousand Five Hundred Sixty-Five and 42/100 Dollars (US$18,565.42)
on or before the first day of each calendar month commencing on the Commencement
Date. All rental payments to be made hereunder shall be made to Landlord at
P.O. Box 1497, Kingshill U.S.V.I., or at such other place as Landlord may direct
in writing. If the term of this Lease does not commence on the first day of the
month, then the rental payment for such month shall be prorated. At the end of
the first five years of the lease, the rent shall increase to $19,650 per month
and remain at that rate until the end of the second five (5) years.
4.2 Security Deposit
Tenant shall pay the sum of Fifty-Five Thousand, Six Hundred Ninety-Six and
26/100 Dollars ($55,696.26) equal to three months of Basic Rent upon the
execution of this Lease, said payment to be considered Second and Last month's
rent as well as a Security Deposit. Landlord shall have no obligation
whatsoever to pay Tenant any interest of the Security Deposit.
4.3 Costs of Collection
If the tenant fails to pay rent in a timely manner, tenant shall pay all
costs incurred by Landlord to collect all Rent or other charges which Landlord
is entitled to under this Lease, including, without limitation, reasonable
collection fees, legal costs and attorney's fees.
5. Option to Extend
5.1 Option
Tenant shall have the right to extend the term of this Lease for two
(2) successive terms of five (5) years each ("Option to Extend"), such
extensions to be upon the covenants, terms and conditions as set forth in this
Lease, except that rent for each such extension shall be established as
described below. Tenant shall exercise any Option to Extend by written notice
to Landlord of Tenant's election to exercise such Option to Extend given not
less than ninety (90) days prior to the end of the then-current term.
5.2 Extension Rent
If Tenant elects to exercise its Option to Extend, Tenant shall pay rent to
Landlord in the amount of Two Hundred Forty-
Eight Thousand Nine Hundred Ninety-Five and No/100 Dollars (US$248,995.00) per
year payable in equal monthly installments of Twenty Thousand Seven Hundred
Forty-Nine and 58/100 Dollars (US$20,749.58) on or before the first day of each
calendar month during the first option period under this Lease. If, at the end
of such first option period, Tenant elects to exercise its Option to Extend for
a second option period, Tenant shall pay rent to Landlord in the amount of Two
Hundred Seventy-Five Thousand, Two Hundred Five and no/100 Dollars
(US$275,205.00) per year payable in equal monthly installments of Twenty-Two
Thousand, Nine Hundred Thirty-Three and 75/100 Dollars (US$22,933.75) on
or before the first day of each calendar month during the second option period
under this Lease.
6. Tenant's Right of First Option
Tenant shall be entitled to purchase the Premises offered by giving written
notice thereof to Landlord within thirty (30) days after receipt of the Offering
Notice. If Tenant fails to agree to purchase the Premises within the time
aforesaid, Landlord shall have the right to complete the sale of the Premises to
the proposed purchaser who shall then hold the Premises subject to the
provisions of this Lease, including the right of first option stated herein, to
the same force and effect as if purchaser had been in the original party hereto.
7. Taxes and Assessments
7.1 Tenant's Payment
Tenant covenants and agrees to bear, pay and discharge, before delinquency
thereof, all taxes and assessments, general and special, which may be taxed,
charged, levied, assessed or imposed upon or against or be payable for or in
respect of the Premises or any part thereof or the improvements at any time
thereon, except for Landlord's income and franchise taxes.
6. Tenant's Right of First Option
If at any time during the term or any extended term of this Lease Landlord
shall receive a bona fide offer for the purchase of the Premises which Landlord
desires to accept or Landlord shall decide to sell the Premises. Landlord shall
give written notice thereof (the "Offering Notice") to Tenant. The Offering
Notice shall contain a copy of the terms and conditions of the offer to sell.
Taxes and assessments for the year in which the term of this Lease commences,
and for the year in which this Lease expires or terminates, shall be prorated
between Landlord and Tenant as of such date of commencement, expiration or
termination. In the event the amount of such taxes and assessments for the year
of termination cannot be ascertained as of said date of termination, proration
shall be made on the basis of the taxes and assessments for the preceding year.
7.2 Right to Contest
Tenant shall have the right, in its or Landlord's name, to contest the
validity of any tax or assessment which Tenant is required to bear, pay and
discharge hereunder, by appropriate legal proceeding, provided that Tenant,
before instituting any such contest, gives Landlord written notice of its
intention so to do. Landlord agrees to cooperate fully with Tenant in good
faith during the course of such contest. Tenant shall diligently prosecute any
such contest, at all times effectually stay or prevent any official or judicial
sale therefor, under execution or otherwise, and pay any final judgment
enforcing the tax or assessment so contested and thereafter promptly procure
record satistfaction thereof.
8. Insurance
Tenant shall, at its sole expense, maintain in force fire and extended
coverage insurance with respect to the Premises. Landlord shall be named as an
additional insured on all such policies. The policies shall provide that they
may not be canceled or modified for any reason without fifteen (15) days' prior
written notice to Landlord. In connection with all such insurance, Tenant shall
apply to such insurer to have such insurer waive in writing all rights and
subrogations which such insurer might have otherwise acquired, if at all,
against Landlord and/or Tenant. Landlord and Tenant each herewith and hereby
releases and relieves the other and waives its entire right of recovery against
the other for loss or damage arising out of or incident to the perils described
in such policies which occur in, on or about the Premises, whether due to the
negligence of either party, their agents or employees or otherwise and whether
or not such insurance is in effect as of the date of any damage. The waivers
provided for herein shall be applicable and effective only in the event such
waivers are obtainable from the insurance carriers concerned.
The Tenant shall keep the Premises insured for the full replacement value
during the term of this Lease against all loss and damage including, without
limitation, coverage for fire, flood insurance, as required by Landlord or its
mortgagees, for the full replacement value such insurance to be
written by an insurance company or companies authorized to do business in the
U.S. Virgin Islands.
It is expressly understood and agreed that if for any reason directly
attributable to Tenant's use of the Premises it shall be impossible for Tenant
to obtain fire insurance on the Premises in an amount and in the form and with
fire insurance companies reasonably acceptable to Landlord, Landlord may, at its
option, (a) terminate this Lease upon giving Tenant not less than forty-five
(45) days notice of Landlord's intention to do so, and upon the expiration of
said forty-five (45) day period this Lease shall terminate, Tenant shall vacate
the Premises and Rent shall be apportioned as of the date of termination; or
(b) compute the additional cost for such insurance over and above the standard
cost as if the condition attributable to Tenant did not exist, and Tenant shall
be obligated to pay such additional cost or insurance as Additional Rent; or (c)
require Tenant to obtain additional specific coverage at its own cost and
expense and provide, within forty-five days, evidence of such insurance in a
form satisfactory to Landlord, and if Tenant does not, or cannot comply,
Landlord may terminate this Lease as provided in (a) above.
Tenant expressly understands it is responsible for insurance in control of
all of its property (i.e., equipment, records, inventory, furniture and
personal property), and Landlord shall not be liable to Tenant for any damage
thereto, unless such damage is due to the negligence or willful misconduct of
Landlord, its agents, contractors or employees.
During the term of this Lease, tenant shall, at its own cost and expense,
provide and keep in force general liability insurance, such insurance to be
written by an insurance company or companies authorized to do business in the
U.S. Virgin Islands and reasonably acceptable to Landlord, against claims for
death or personal injuries in or about the Premises at least in the amount of
$500,000 against loss for death or injuries to more than one person; and
$1,000,000 against loss for death or injuries to more than one person in any one
accident, together with property damage coverage in the amount of $150,000.
Certificates evidencing same shall be furnished to Landlord and, on demand,
receipts showing payment of the premium on such insurance shall be exhibited to
Landlord. Such certificate of insurance must include as additional named
insured Landlord and Landlord's mortgagee(s), if any, and a ten (10) day prior
written notice to the additional named insured or cancellation. If Tenant fails
or neglects to provide such insurance, Landlord, at its option, shall have the
right but not the obligation to cause such insurance to be issued and the cost
and expense thereof shall be Additional Rent.
Tenant shall also, at its sole cost and expense, provide and keep in force
such additional insurance as required, including, but not limited to, worker's
compensation. Certificates evidencing same shall be furnished to Landlord and,
on demand, receipts showing payment of the premium on such insurance shall be
exhibited to Landlord.
9. Maintenance - Repair or Damage - Destruction
9.1 Maintenance
Tenant covenants and agrees that it will during the term of this Lease keep
and maintain the Premises and all improvements thereon, equipment, fixtures and
appliances therein, and all appurtenances thereto in good condition and repair,
ordinary wear and tear excepted, and keep the same free from trash, nuisance or
danger of fire and in all respects and at all times use and maintain the
Premises so as to fully meet and comply with all health and policy regulations
and the ordinances and all other laws now in force or which may hereafter be
enacted which affect the Premises.
9.2 Repairs
In the event of damage to or destruction of the Premises by fire or other
casualty, Tenant, at its sole expense, shall promptly restore the Premises as
nearly as possible to the condition thereof prior to such damage or destruction.
All insurance proceeds received by Tenant pursuant to the provisions of this
Lease, less the cost of recovery, if any, shall be held in trust and applied to
the payment of such restoration as such restoration progresses; provided,
however, if Tenant determines, in its sole discretion, that restoration is not
economically feasible then Tenant shall have the right to terminate this Lease
and shall have no further obligations hereunder provided Tenant assigns to
Landlord all insurance proceeds received by Tenant as described above.
10. Alterations
Tenant shall have the right to make changes or alterations in the building
located on the Premises, or to construct improvements on the Premises; provided,
however, that Tenant shall not make any alterations, additions or deletions to
the building located on the Premises if such alteration, addition or deletion
shall (i) convert the building located on the Premises to a structure which is
not a complete, self-contained, operating unit; (ii) be a structural change in
the building; (iii) diminish or reduce the parking area of the Premises below
that required by local ordinances. Notwithstanding the foregoing, Tenant may
make such structural changes, alterations, additions or deletions as are
approved
in advance by Landlord, which approval may not be unreasonably withheld or
delayed. If Landlord fails to respond within thirty (30) days to any request
submitted by Tenant under this Section 10, such request shall be deemed approved
by Landlord.
11. Liens
Tenant shall not do or suffer anything to be done whereby the Premises or
any part thereof may be encumbered by any mechanic's or similar lien and if,
whenever and as often as any mechanic's or similar lien is filed against said
Premises, done by, for or under the authority of Tenant or anyone claiming by,
through or under Tenant, Tenant shall discharge the same of record, within
twenty (20) days after the date of filing.
12. Contest of Lien Claims
Tenant shall have the right to contest any such mechanic's or other lien
claim filed against the Premises or any part thereof, if within such twenty (20)
day period it notifies Landlord of its intention to so do, provided that Tenant
shall diligently prosecute any such contest, at all times effectually stay or
prevent any official or judicial sale of the Premises under execution or
otherwise, and pay or otherwise satisfy any final judgment adjudicating or
enforcing such contested mechanic's or other lien claim and thereafter promptly
procure record release and satisfaction thereof. Landlord agrees to cooperate
fully with Tenant in good faith during the course of such contest.
13. Utilities
13.1 Generally
All heat, light, power, water, sewerage, snow removal, trash removal, and
other utilities and utility services used in, on or about the Premises shall be
paid for by Tenant and shall be contracted for by Tenant in its own name.
13.2 Interruption of Services
It is expressly agreed that the suspension or interruption in utility
services, or any other services supplied by Landlord to the Premises for any
reason shall not constitute a default by Landlord or entitle Tenant to any
reduction or abatement of rent or otherwise entitle Tenant to not comply with
all of its obligations hereunder. There are no standby generators for the
Premises and there is no plan for Landlord to provide one.
14. Security Interest
14.1 Subordination
This Lease is subject and subordinate to any mortgage or encumbrance which
may now or hereafter encumber the Landlord's interest in the Premises or the
Property, or both, or upon any buildings placed upon the Property, and to all
renewals, modifications, consolidations, replacements and extensions thereof.
This clause shall be self-operative and no further instrument of subordination
need be required by any mortgagee. In confirmation of such subordination,
however, Tenant shall within ten (10) days of Landlord's request, execute,
acknowledge and deliver to Landlord any appropriate certificate or instrument
that Landlord may request evidencing such subordination. Tenant hereby
constitutes and appoints Landlord the Tenant's attorney-in-fact to execute any
such certificate or instrument that Landlord may request evidencing such
subordination. Tenant hereby constitutes and appoints Landlord the Tenant's
attorney-in-fact to execute any such certificate or instrument for and on behalf
of Tenant. In the event of the enforcement by the holder any such mortgage or
encumbrance of the remedies provided for by law or by such mortgage or
encumbrance, Tenant will, upon request of any person or party succeeding to the
interest of Landlord as a result of such enforcement, automatically become the
tenant of such successor in interest without change in the terms or other
provisions of such Lease, provided, however, that such successor in interest
shall not be bound by (a) any payment of rent or additional rent for more than
one (1) month in advance except prepayments in the nature of security for the
performance by Tenant of its obligations under this Lease or (b) any amendment
or modification of this Lease made without the written consent of such holder or
such successor in interest. Upon request by such successor in interest, Tenant
shall execute and deliver an instrument or instruments confirming the attornment
herein provided for.
14.2 Security Interest
In consideration of the mutual benefits arising under this Lease, Tenant
hereby grants to Landlord a lien and security interest on all property of Tenant
now or hereafter placed in or upon the Premises, and such property shall be and
remain subject to such lien and security interest of Landlord for payment of all
rent and other sums agreed to be paid by Tenant herein and the performance by
Tenant of all its obligations hereunder. The provisions of this paragraph
relating to said lien and security interest shall constitute a security
agreement under the Uniform Commercial Code as enacted by the U.S. Virgin
Islands so that Landlord shall have and may enforce a security interest on all
property of Tenant now or
hereafter placed in or on the Premises, including but not limited to all
fixtures, machinery, equipment, inventory, furnishings and other articles of
personal property now or hereafter placed in or upon the Premises by Tenant.
Tenant agrees to execute as debtor such financing statement or statements as
Landlord may now or hereafter reasonably request in order that such security
interest or interests may be perfected and protected pursuant to the Uniform
Commercial Code. Landlord may at its election at any time file a copy of this
Lease as a financing statement. Landlord, as secured party, shall be entitled
to all of the rights and remedies afforded a secured party under the Uniform
Commercial Code in addition to and cumulative of the Landlord's liens and rights
provided by law, in equity or by the other terms and provisions of this Lease.
15. Indemnity
15.1 Indemnification of Landlord
Tenant agrees to indemnify and save Landlord harmless from and against all
liability, and all loss, cost and expense, including reasonable attorneys'
fees, arising out of Tenant's operation, maintenance, management and control of
the Premises or in connection with (i) any loss, injury or damage whatsoever
caused to or by any person, including, but not limited to, Tenant, its
employees, agents or business invitees, or property, including Tenant's
property, arising out of any occurrence on the Premises, (ii) any breach of this
Lease by Tenant, (iii) any act or omission of Tenant, its employees, agents or
business invitees occurring in, on or about the Premises.
15.2 Indemnification of Tenant
Landlord agrees to indemnify and save Tenant harmless from and against all
liability and all loss, cost and expense, including reasonable attorneys' fees
arising out of Landlord's operation, management and control of the property on
which the Premises are located or in connection with (i) any loss, injury or
damage whatsoever caused to or by any person, including, but not limited to,
Landlord, its employees, agents or business invitees, or property, including
Landlord's property arising out of any occurrence on the property on which the
Premises are located, (ii) any breach of this Lease by Landlord or (iii) any act
or omission of Landlord, its employees, agents or business invitees occurring
in, on or about the property on which the Premises are located.
16. Fixtures
Tenant may install on the Premises its fixtures, improvements and/or
equipment and, at the termination of this Lease, Tenant shall have the right to
remove fixtures, improvements and/or equipment owned by Tenant.
17. Condition of Premises at End of Term
At the end of the lease term, Tenant shall leave and deliver the Premises
in as good a condition and substantial repair as they now are with the exception
of usual wear and tear, fire, the elements, acts of God, civil riot, war,
insurrection or other unavoidable casualty.
18. Use
Tenant shall not use or occupy or permit the Premises or any part thereof
to be used or occupied for any unlawful business, use or purpose.
19. Quiet Enjoyment
Landlord covenants and warrants that it has full right and lawful
authority to enter into this Lease for the full term hereof, that Tenant will be
put in possession of the Premises when Tenant desires and is entitled hereunder,
and that Tenant, upon paying the rent and performing all of the terms,
conditions and provisions of this Lease to be performed by Tenant, shall
peacefully and quietly have, hold and enjoy the Premises for the full term of
this Lease, and any extension thereto, subject to the provisions herein
contained; provided, however, that the Premises may be subject to the easements,
covenants, agreements, encumbrances and restrictions of record on the date of
this Lease.
20. Signs
Tenant may, at Tenant's own risk, lawfully erect signs concerning the
business of Tenant or displaying Tenant's name on the parking area and building
on the Premises, and the roof thereof, if permitted by local regulations, but in
doing so Tenant agrees to maintain said signs in a good state of repair, save
Landlord harmless from any loss, cost or damage as a result of the erection,
maintenance, existence or removal of the same and shall repair any damage which
may have been caused by the erection, existence, maintenance or removal of such
signs.
21. Personal Property
All personal property of every kind or description that may at any time be
in the Premises shall be at Tenant's sole risk, or at the risk of those
claiming under Tenant, and Landlord shall not be liable for any damage to said
property or loss suffered by the business or occupation of Tenant caused in any
manner whatsoever, except as may result from and be caused by the negligence of
Landlord or its agents or employees.
22. Waste
Tenant shall use and occupy the Premises in a careful, safe and lawful
manner and not commit waste therein.
23. Non-Waiver
No waiver of any breach of any covenant or condition of this Lease shall be
taken to constitute a waiver of any subsequent breach of such covenant or
condition nor to justify or authorize the nonobservance on any other occasion of
the same or of any other covenant or condition hereof.
24. Default
The following shall constitute a default under this Lease:
(i) Failure by Tenant to pay any installment of rent or other sums
required by Tenant to be paid under this Lease within ten (10) days after
written notice from Landlord;
(ii) Failure by Tenant or Landlord to perform any nonmonetary covenant
under this Lease within thirty (30) days after written notice from the non-
defaulting party stating the nature of the default, provided that if the
nature of such default, other than for nonpayment of rent or other sums, is
such that the same cannot reasonably be cured within such thirty-day
period, such shall not be deemed to be a default if, within such period, a
cure of such default is commenced and thereafter diligently prosecuted to
completion.
If default shall be made by Tenant in the payment of rent or in the
performance of any of the conditions of this Lease, Landlord shall have the
right to reenter said Premises and remove Tenant and all other persons
therefrom, and shall have the option of terminating this Lease; provided,
however, that such rights of reentry and termination may be exercised by
Landlord in accordance with law, and only in the event that
the breach or other default of Tenant shall have continued for thirty (30) days
after written notice thereof and Landlord's intention to terminate has been
furnished to Tenant in writing at the foregoing address, by registered or
certified mail. If default be made by Tenant and if Landlord exercises its
option to terminate as herein provided, then Landlord shall proceed to rerent
the Premises at the highest and best offer received by it for the unexpired
portion of this Lease and if the amount of rental herein agreed to be paid by
Tenant is more than the amount received, then Tenant shall thereupon pay said
difference to Landlord, in cash as the same becomes due on the first day of each
month, as Landlord's liquidated damages for such breach.
. If default shall be made by Landlord in the performance of the conditions of
this Lease, and shall have continued for thirty (30) days after written notice
thereof has been furnished to Landlord in writing by registered mail, then
Tenant, in addition to all other remedies now or hereafter afforded or provided
by law, may cancel this Lease or may at its election perform such condition on
behalf of Landlord, or make good any such default, and any amount Tenant shall
advance pursuant thereto shall be repaid by Landlord to Tenant on demand
together with interest at the rate of 12% per annum and if Landlord shall not
repay any such amount, Tenant may deduct the same from the next installment or
installments of rent to accrue under this Lease.
25. Condemnation
If the whole of the Premises, or if such portion of the facilities and
building improvements comprising part of the Premises as may be required for the
reasonable use of the Premises, shall be taken by virtue of any condemnation or
eminent domain proceeding, this Lease, at the option of Tenant, shall
automatically terminate as of the date of any final judgment entered under such
condemnation, or as of the date possession is taken by the condemning authority,
whichever is earlier. In the event Tenant does not exercise such right to
terminate this Lease, this Lease shall continue and Tenant shall continue in
possession of the remainder of the Premises under the terms herein provided,
except that the monthly rent payable herein shall be reduced in proportion to
the amount of land area of the Premises so taken. Tenant shall have the right
to recover from any condemning authority that portion of any award attributed to
Tenant's leasehold interest.
26. Notices
All notices required hereunder shall be in writing and may be personally
delivered or mailed by certified or registered mail, addressed to the
respective parties, and all
notices, demands or other writing to be made, given or sent hereunder, or which
may be so given or made or sent by any party to the other shall be deemed to
have been fully given or made when personally delivered or if mailed, three (3)
days following the deposit thereof in the United States mail, registered or
certified, postage prepaid, and addressed to the respective parties as follows:
Landlord: Hassan Rahmari
X.X. Xxx 0000
Xxxxxxxxx, X.X.X.X. 00000-0000
Tenant: Cost-U-Less
0000 00xx Xxxxx X.X., Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxx Xxxx
Any party may change the address to which notices are to be given by giving
notice as above provided.
27. Assignment and Sublease
Tenant shall have the right to sublease or assign all or any part of the
Premises without the consent of Landlord.
28. Successors and Assigns
This Lease shall run with the land and shall be binding upon and inure to
the benefit of the heirs, successors, administrators and assigns of the parties
hereto.
29. Non-Modification
It is mutually agreed that the covenants and conditions herein contained
are the full and complete terms of this Lease and that no alterations,
amendments or modifications of the same shall be binding unless first reduced to
writing and signed by both parties hereto.
30. Memorandum of Lease
It is mutually agreed that this Lease will not be recorded, but that the
parties will execute a written memorandum acknowledging the tenancy which may be
recorded in the records of St. Croix, U.S.V.I.
31. Attorneys' Fees
In the event of any action or proceeding to enforce any provision of this
Lease, the prevailing party shall be entitled to reasonable attorneys' fees and
all costs and expenses
expended or incurred in connection with such action or proceeding.
32. Effect of Invalidity
If any term or provision of this Lease or the application thereof to any
person or circumstance shall, to any extent, be invalid or unenforceable, the
remainder of this Lease, or the application of the terms and provisions to
persons and circumstances other than those to which it had been held invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Lease shall be valid and enforceable to the fullest extent permitted by
law.
33. Applicable Law
This Lease shall be governed by and construed in accordance with the laws
of the U.S.V.I.
34. Hold-Over
If Tenant shall, with the written consent of Landlord, hold over after the
expiration of the term of this Lease, such tenancy shall be for an indefinite
period of time on a month-to-month tenancy, which tenancy may be terminated as
provided by the laws of the U.S.V.I. During such tenancy Tenant agrees to pay
to Landlord the same rate of rental as set forth herein, unless a different rate
is agreed upon, and to be bound by all of the terms, covenants, and conditions
as herein specified, so far as applicable.
35. Agency Disclosure
At the signing of this Agreement the leasing agent represented Landlord.
Each party signing this document confirms that prior oral and/or written
disclosure of agency was provided to him/her in this transaction.
36. Environmental
36.1 Landlord's Warranties
Landlord warrants and represents that any use, storage, treatment, or
transportation of Hazardous Substances, as defined in Section 36.4 below,
which has occurred in or on the Premises prior to the date hereof has been in
compliance with all applicable federal, state and local laws, regulations and
ordinances. Landlord additionally warrants and represents that no release,
leak, discharge, spill, disposal or emission of Hazardous Substances has
occurred in, on or under the Premises, and that the Premises are free of
Hazardous Substances as of the date hereof.
36.2 Landlord's Indemnity
Landlord agrees to indemnify and hold harmless Tenant from any and all
claims, damages, fines, judgments, penalties, costs, liabilities or losses
(including, without limitation, any and all sums paid for settlement of claims,
attorneys' fees, consultant and expert fees) arising during or after the lease
term from or in connection with the presence or suspected presence of Hazardous
Substances in or on the Premises, unless the Hazardous Substances are present
solely as a result of negligence, willful misconduct or other acts of Tenant,
Tenant's agents, employees, contractors or invitees. Without limitation of the
foregoing, this indemnification shall include any and all costs incurred due to
any investigation of the site or any cleanup, removal or restoration mandated by
a federal, state or local agency or political subdivision, unless the Hazardous
Substances are present solely as a result of negligence, willful misconduct or
other acts of Tenant, Tenant's agents, employees, contractors or invitees. This
indemnification shall specifically include any and all costs due to Hazardous
Substances which flow, diffuse, migrate or percolate into, onto or under the
Premises after the lease term commences.
36.3 Tenant's Indemnity
Tenant agrees to indemnify and hold harmless Landlord from any and all
claims, damages, fines, judgments, penalties, costs, liabilities or losses
(including, without limitation any and all sums paid for settlement of claims,
attorneys' fees, consultant and expert fees) arising during or after the lease
term, from or in connection with the presence or suspected presence of Hazardous
Substances in or on the Premises as a result of the operation of Tenant's
business, unless the Hazardous Substances are present solely as a result of
negligence, willful misconduct or other acts of Landlord, Landlord's agents,
employees, contractors or invitees. Without limitation of the foregoing, this
indemnification shall include any and all costs incurred due to any
investigation of the site or any cleanup, removal or restoration mandated by a
federal, state or local agency or political subdivision, unless the Hazardous
Substances are present solely as a result of negligence, willful misconduct or
other acts of Landlord, Landlord's agents, employees, contractors or invitees.
36.4 Hazardous Substances
As used herein, "Hazardous Substances" shall mean any substance or material
defined or designated as hazardous or toxic waste, hazardous or toxic material,
a hazardous, toxic or radioactive substance or other similar term by any
federal, state or local environmental statute, regulation or ordinance
presently in effect or that may be promulgated in this future as such statutes,
regulations and ordinances may be amended from time to time.
37. Negotiation and Construction
This Agreement and each of the terms and provisions hereof are deemed to
have been explicitly negotiated between the parties, and the language in all
parts of this Agreement shall, in all cases, be construed according to its fair
meaning and not strictly for or against either party.
DATED this 20 day of August, 1993.
LANDLORD:
/s/ Fakri A. Xxxxxx Xxxxxxx
-----------------------------
For Xxxxxx Xxxxxx
TENANT:
COST-U-LESS, a Washington
corporation
By /s/ Xxxxxxx X. Xxxx
-----------------------------
Name: Xxxxxxx X. Xxxx
Title: CEO
UNITED STATES VIRGIN ISLANDS )
COUNTY OF St. Croix ) ss. VIRGIN ISLANDS
On this 20 day of August, 1993, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Fakri A. Xxxxxx Xxxxxxx, to me known to be the person who
signed as Landlord of, the corporation that executed the within and foregoing
instrument, and acknowledged said instrument to be the free and voluntary act
and deed of said corporation for the uses and purposes therein mentioned, and
on oath stated that he was duly elected, qualified and acting as said officer
of the corporation, that he was authorized to execute said instrument and that
the seal affixed, if any, is the corporate seal of said corporation.
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day
and year first above written.
XXXX XXXXXXXX
-------------------------
(Signature of Notary)
/s/ Xxxx Joahnnes
-------------------------
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the
State of U.S.V.I., residing at
-----------------------------
My Appointment Expires: Ex-
Officio.
STATE OF WASHINGTON )
) ss. VIRGIN ISLANDS
COUNTY OF KING )
On this 26th day of July, 1993, before me, the undersigned, a Notary Public
in and for the State of Washington, duly commissioned and sworn, personally
appeared Xxxxxxx X. Xxxx, to me known to be the person who signed as C.E.O. of
COST-U-LESS, the corporation that executed the within and foregoing instrument,
and acknowledged said instrument to be the free and voluntary act and deed of
said corporation for the uses and purposes therein mentioned, and on oath
stated that he was duly elected, qualified and acting as said officer of the
corporation, that he was authorized to execute said instrument and that the
seal affixed, if any, is the corporate seal of said corporation.
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day
and year first above written.
/s/ Xxxx X. Xxxxxxx
-------------------------------
[NOTARY SEAL APPEARS HERE] (Signature of Notary)
XXXX X. XXXXXXX
-------------------------------
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State of
Washington, residing at Puyallup, WA
My Appointment Expires: 2-17-96.
EXHIBIT A
[Legal Description]
TENANT ESTOPPEL CERTIFICATE AND NOTICE OF
ASSIGNMENT OF RENTS AND LEASES
TO: BANK OF NOVA SCOTIA and/or its affiliates
1. The undersigned is the Lessee (Tenant) under that certain Lease dated July
30, 1993, by and between XXXXXX XXXXXX, as Lessor (Landlord) and CULW
CORPORATION (successor by merger to COST-U-LESS, INC.), a Washington
corporation, as Lessee (Tenant), covering those certain premises commonly known
and designated as Xxxx Xx. 0X, xxxxxxxxxx 0.0 X.X. xxxxx, Xxxxxx Hogensborg,
West End Quarter, St. Croix, U.S. Virgin Islands as shown on PWD 1883, dated
March 25, 1966 revised August 27, 1992.
2. The Lease has not been modified, changed, altered or amended in any respect
(except as indicated following this sentence) and is the only Lease or agreement
between the undersigned and the Lessor affecting said premises. In none, state
"none".
-------------------------------------------------------------------------
First Amendment dated November 22, 1993
--------------------------------------------------------------------------------
3. The undersigned has made no agreements with Lessor or its agents or
employees concerning free rent, partial rent, rebate of rental payments of any
other type of rental concession (except as indicated following this sentence).
If none state "none".
-----------------------------------------------------------
NONE
--------------------------------------------------------------------------------
4. The fixed minimum rent to be paid is $18,565.42 per month for the first
five (5) years. Tenant has paid a security deposit, second month's rent and last
month's rent in the total amount of $55,696.26.
5. To Lessee's best knowledge and belief after inquiry, the Lease is not in
default and is in full force and effect. To Lessee's best knowledge and belief,
as of the date hereof, the undersigned is entitled to no credit, no free rent
and no offset or deduction in rent. The Tenant acknowledges that construction of
the improvements has commenced within the meaning of Section 3.2 of the
Lease.
6. The undersigned has received or will receive payment or credit for tenant
improvement work in the total amount of $0.00 (or if other than cash, describe
-----
below). If none, state "none".
--------------------------------------------------
NONE
--------------------------------------------------------------------------------
7. The Lease does not contain and the undersigned does not have any outstanding
options or rights of first refusal to purchase the premises or any part thereof
or the real property of which the premises are a part except as set forth in
Section 6 of the Lease.
8. No actions, whether voluntary or otherwise, are pending against the
undersigned under the bankruptcy laws of the United States or any state thereof.
9. The undersigned acknowledges that all the interest of Lessor in and to the
above-mentioned Lease is being duly assigned to Bank of Nova Scotia or one of
its affiliates (hereinafter "Bank") and that pursuant to the terms thereof all
rental payments under said Lease shall continue to be paid to Lessor in
accordance with the terms of the Lease unless and until you are otherwise
notified in writing by Bank, or its successors or assigns.
TENANT ESTOPPEL CERTIFICATE AND NOTICE
OF ASSIGNMENT OF RENTS AND LEASES
PAGE 2
It is particularly noted:
(a) That under the provisions of said assignment said Lease cannot be
terminated (either directly or by the exercise of any option which could lead
to termination) or modified in any of its terms, or consent be given to the
release of any party having liability thereon, without the prior written consent
of Bank, or its successor and assigns, which consent cannot be unreasonably
withheld or delayed, and without such consent no rent may be collected or
accepted more than two months in advance, except as may be required pursuant to
the terms of the Lease.
(b) That the interest of the Lessor in said Lease has been assigned to Bank,
for the purposes specified in the assignment and Bank, or its successors and
assigns, assumes no duty, liability or obligation whatever under said Lease or
any extension or renewal thereof.
(c) Any notices sent to Bank or its affiliates should be sent by Registered
Mail/Certified Mail and addressed to:
Bank of Nova Scotia
Sunny Isle Branch
Attn: Senior Account Manager
4500 Estate Diamond
Christiansted, St. Croix
U.S. Virgin Islands 00820-4451
10. The Lessee has not sublet the leased premises, or any part thereof, to any
sublessee and has not assigned any of its rights under the Lease. No one other
than the Lessee and its employees will occupy the leased premises upon
completion of construction of the improvements and Tenant taking possession of
the leased premises.
11. Lessee agrees to give Bank, by registered mail, a copy of any notice of
default served upon the Landlord. Lessee further agrees that if Landlord shall
have failed to cure such default within the time provided for in this Lease,
then Bank shall have an additional thirty (30) days within which to cure such
default or if such default cannot be cured within that time, then such
additional time as may be necessary if within such thirty (30) days, Bank has
commenced and is diligently pursuing the remedies necessary to cure such default
(including, but not limited to, commencement of foreclosure proceedings, if
necessary to effect such cure) in which event this Lease shall not be terminated
while such remedies are being so diligently pursued. Lessee expressly
acknowledges that Bank shall have no obligation to cure such default of
Landlord.
12. The Lessee hereby agrees that if the Bank forecloses on its mortgage
encumbering the leased premises, and if the Landlord's interest in the leased
premises is sold at a foreclosure sale, then the Lessee's right of first option
to purchase the property as set forth in Section 6 of the Lease shall be deemed
to permit it only to purchase the property at the foreclosure sale and Lessee
shall have no other right to purchase the leased
TENANT ESTOPPEL CERTIFICATE AND NOTICE
OF ASSIGNMENT OF RENTS AND LEASES
PAGE 3
premises in connection with such foreclosure sale. If the leased premises is
sold at the foreclosure sale to someone other than the Lessee, then such sale
shall be subject to the provisions of the Lease (including the Tenant's right of
first option) as provided in the Subordination, Nondisturbance and Attornment
Agreement entered into between the Bank and Lessee concurrently with the
execution of this Estoppel Certificiate.
13. This certification is made to induce Bank or one of its affiliates to
make certain findings, knowing that Bank relied upon the truth of this
certification in disbursing such funds.
Dated this 14th day of January, 1994.
---- -------
CULW CORPORATION
Lessee
By: /s/ Xxxxxxx X. Xxxx
--------------------------------------
Print Name: Xxxxxxx X. Xxxx
------------------------------
Print Title: CEO
-----------------------------
[LETTERHEAD OF XXXXX & XXXXX]
January 13, 1994
Te1ecopy
--------
Xxxxx X. Xxxxxxxxx
Chief Financial Officer
Cost-U-Less
00000 XX 00xx Xxxxxx
Xxxxxxxx, XX 00000
RE: Lease Between Xxxxxx Xxxxxx and Cost-U-Less, dated July 30, 1993
Dear Xx. Xxxxxxxxx:
I received your letter to Xxxxxx Xxxxxx, dated December 28, 1993 and
the requested additional paragraph. This additional language was approved by
the Bank of Nova Scotia's counsel and has been included as Paragraph No. 5
in the Subordination, Nondisturbance and Attornment Agreement. The revised
document is included herewith.
In concluding his review of this loan closing, the Bank's counsel has
requested several additional changes to the Tenant Estoppel Certificate. The
revised Certificate is enclosed with this letter.
We expect to be able to close this loan upon receipt of your signed
documents. Accordingly, your prompt attention to this matter is greatly
appreciated.
If you have any questions, please do not hesitate to contact me.
Very Truly Yours,
XXXXX & XXXXX
/s/ G. Xxxxxx Xxxxx, Xx.
G. Xxxxxx Xxxxx, Xx.
GHL/pcd
Encl.
cc: Hassan Xxxxxx
Xxxxx Silverlight, Esq.
SUBORDINATION, NONDISTURBANCE, AND
ATTORNMENT AGREEMENT
THIS AGREEMENT dated the ______________ day of________________________,
000__, xxxxxxx XXXX XX XXXX XXXXXX, hereinafter the "Mortgagee" and CULW
CORPORATION (successor by merger to COST-U-LESS, INC.) 00000 XX 00xx Xxxxxx,
Xxxxxxxx, XX 00000, hereinafter called "Lessee/Tenant".
WITNESSETH:
(a) Lessee/Tenant entered into a certain Lease dated July 30, 1993 with
XXXXXX XXXXXX, hereinafter called "Lessor/Landlord", covering premises known as
Xxxx Xx. 0X, Xxxxxx Xxxxxxxxxx, Xxxx Xxx Quarter, St. Croix, U.S. Virgin
Islands, as shown on PWD No 1883, dated March 25, 1966, revised August 27, 1992.
(b) Mortgagee has agreed to make a mortgage loan of $1,200,000.00 (the
"Mortgage") to the Lessor/Landlord and the parties desire to set forth their
agreement as hereinafter set forth.
NOW THEREFORE, in consideration of the premises and of the sum of One
Dollar ($1.00) by each party in hand paid to the other, the receipt of which
is hereby acknowledged, it is hereby agreed as follows:
1. The Lease is and shall be subject and subordinate to the Mortgage
insofar as it affects the real property of which the demised premises form a
part, and to all renewals, modifications, consolidations, replacements and
extensions thereof, to the full extent of the principal sum secured thereby and
interest thereon.
2. Lessee/Tenant agrees that it will attorn to and recognize any purchaser
at a foreclosure sale under the Mortgage, any transferee which acquires the
demised premises by deed in lieu of foreclosure, and the successors and assigns
of such purchasers, as its Lessor/Landlord for the unexpired balance (and any
extensions, if exercised) of the term of said Lease upon the same terms and
conditions set forth in said Lease.
3. In the event that Mortgagee shall succeed to the interest of
Lessor/Landlord under such Lease, Mortgagee shall not be:
(a) liable for any act or omission of any prior lessor/landlord
(including Lessor/Landlord); or
(b) subject to any offsets or defenses which Lessee/Tenant might have
against any prior lessor/landlord (including Lessor/Landlord); or
(c) bound by any rent or additional rent which Lessee/Tenant might
have paid for more than the current month and last month's rent to any prior
lessor/landlord (including Lessor/Landlord); or
(d) bound by any amendment or modification of the Lease made without
its consent, which consent shall not be unreasonably withheld or delayed.
SUBORDINATION AND ATTORNMENT AGREEMENT
PAGE 2
4. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto, and their respective successors and assigns.
5. In the event that Mortgagee shall succeed to the interest of
Lessor/Landlord under such Lease, Mortgagee agrees that if Tenant is not in
default under the terms of the Lease, then Mortgagee shall not disturb Tenant's
possession under the Lease, and the Lease will be recognized as a direct Lease
from Mortgagee, or any other party acquiring the premises upon the foreclosure
sale, except as specifically provided herein.
IN WITNESS WHEREOF, the parties hereto have executed these presents the day
and year first above written.
MORTGAGEE:
BANK OF NOVA SCOTIA
By:
-------------------------------------
Print Name:
-----------------------------
Print Title:
----------------------------
TENANT:
CULW CORPORATION
By: /s/ Xxxxxxx X. Xxxx
-------------------------------------
Print Name: Xxxxxxx X. Xxxx
-----------------------------
Print Title: C.E.O.
----------------------------
