Exhibit 10.30
This document incorporates handwritten
notations appearing on the signed copy.
LEASE
This Lease (this "Lease") is made on this 22nd day of October, 2001, by and
between XXXXX XXXXX, INC., a Guam corporation, whose mailing address is 000
Xxxxxx Xxxx Xxxx, Xxxxx X-0X, Xxxxxx, Xxxx 00000 ("Lessor"), and COST-U-LESS,
INC., a Washington corporation, whose mailing address is 0000 000xx Xxxxxx X.X.,
Xxxxxxxx 0, Xxxxx X, Xxxxxxx, Xxxxxxxxxx ("Lessee"), upon the following terms
and conditions:
WITNESSETH:
1. Premises:
(a) Lessor and Lessee are parties to that certain Lease, dated July 1,
1991 (the "Existing Lease"), the stated term of which expires on April 30, 2002.
For good, valuable and legally sufficient consideration, and upon the expiration
of the Existing Lease, Lessor agrees to lease to Lessee and Lessee agrees to
lease from Lessor the following described premises (the "premises"), which are
subject to the Existing Lease:
Space No. A containing an area of 32,799 square feet, as outlined in red on
Exhibit "A" attached hereto. This space is part of the Xxxxx Xxxxx, Inc.
Commercial Building, commonly known as the Cost-U-Less Center, fronting
Xxxxxx Loop Road, and is located on Lot No. 5012-1NEW-1, Dededo, Guam (the
"Center"). The premises shall include the loading docks adjacent to the
premises.
(b) Lessee and Lessee's employees, agents, contractors, guests,
invitees, licensees and customers shall have (i) the right to use with others,
any and all common areas (including without limitation common facilities and
parking areas and roadways) which are currently located in the Center and shown
on Exhibit "A" hereto, and which may be designated by Lessor after the date
hereof; and (ii) full and unimpaired access to the premises at all times.
Lessor's future designation and construction of common areas shall not interfere
with Lessee's conduct of its business at the premises. Lessor shall ensure that
the parking areas in the Center's common areas available to Lessee and its
employees, agents, contractors, guests, invitees, licensees and customers shall
be adequate for Lessee's conduct of its business at the premises throughout the
term of this Lease.
(c) Lessor covenants, represents and warrants that Lessee shall have
possession of the premises and quiet enjoyment of the premises, and reasonable
quiet, non-exclusive use and enjoyment of the common areas, along with other
tenants and
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their agents, employees, customers, licensees and sub-tenants, during the term
of this Lease.
(d) Each of Lessor and Lessee represents to the other that it has full
power and authority to enter into this Lease.
2. Term:
(a) The term of this Lease shall begin upon the expiration of the
Existing Lease (the "Commencement Date"), and end on May 31, 2012 (unless
terminated earlier or extended pursuant to the terms hereof). Lessor and Lessee
acknowledge and agree that (i) this Lease is entered into by the parties as a
new lease, in lieu of Lessee's exercise of the extension option provided under
Section 2(a) of the Existing Lease, and (ii) the Existing Lease shall terminate
and expire upon the expiration date stated therein (if not terminated earlier
pursuant to the terms thereof) for all purposes, except any obligation of the
parties thereunder which are deemed to survive the expiration of the Existing
Lease.
(b) Notwithstanding anything contained herein to the contrary, each of
Lessor and Lessee shall have the right to terminate this Lease prior to the
Commencement Date, upon written notice to the other party, if the Existing Lease
is terminated prior to its expiration date as a result of a party's default
thereunder.
(c) Prior to the Commencement Date, Lessor at Lessor's sole cost and
expense shall perform the work ("Lessor's Work") set forth in Exhibit "B"
attached hereto and made a part hereof. If Lessor's Work is not completed on or
before the Commencement Date for any reason whatsoever, Lessee shall have the
right, at its option, to terminate this Lease upon written notice to Lessor.
Lessor's Work shall be performed in a good and workmanlike manner, with new and
good quality materials and supplies, in compliance with all applicable laws,
regulations, rules and ordinances, and in a manner not to materially interfere
with Lessee's conduct of its business at the premises.
3. Rent: Lessee shall pay the following amounts to Lessor, in advance, on
the first day of each calendar month, for the term of this Lease, over and above
the common area expenses and other charges allocable to Lessee as stated herein,
without deduction, set-off, prior notice or demand (except as otherwise
specifically set forth herein):
Commencement Date to 05/31/2004 $ 1.20 s.f. ($39,359) per month
06/01/2004 to 05/31/2008 $ 1.35 s.f. ($44,279) per month
06/01/2006 to 05/31/2008 $ 1.50 s.f. ($49,199) per month
06/01/2008 to 05/31/2012 $ 1.65 s.f. ($54,118) per month
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Said rent shall be paid at Lessor's address, or such other place as may be
designated in writing by Lessor. If the date of commencement, expiration or
termination of the term of this Lease occurs on a day other than the first or
last day of a calendar month, the rent and all other amounts payable by Lessee
hereunder for that month shall be prorated.
Lessee shall have one (1) option (the "Option") to extend the term of this
Lease for ten (10) years (the "Extended Term"), on the same terms and conditions
as contained herein, except that monthly rent shall be in the following amounts
during the Extended Term:
06/01/2012 to 05/31/2015 $ 1.815 s.f. ($59,530) per month
06/01/2015 to 05/31/2018 $ 1.997 s.f. ($65,500) per month
06/01/2018 to 05/31/2021 $ 2.197 s.f. ($72,059) per month
06/01/2021 to 05/31/2022 $ 2.416 s.f. ($79,242) per month
If Lessee wishes to exercise the Option, Lessee shall give Lessor written
notice of its exercise of the Option on or before May 31, 2011. If the Option is
not so exercised, then the Option shall automatically terminate. As used herein,
the "term" or "term of this Lease" shall include both the original term stated
in Section 2 above and the Extended Term.
4. Use: The use of the premises shall be limited to, and the premises shall
be used only for, the operation of a general wholesale and retail store and uses
related therewith, including without limitation maintenance of sales and
showroom space, storage and warehouse space, office facilities, facilities for
employees and other uses reasonably or necessarily related thereto. Lessor shall
not operate, and shall not permit to be operated by any tenant or lessee or
other person, within the Center any business similar to the general merchandise
sales business which Lessee conducts upon the premises.
5. Security Deposit: Lessee and Lessor hereby acknowledge and agree that a
security deposit of $30,000 is currently held by Lessor under the Existing
Lease, and that Lessor will continue to hold the sum as the security deposit
hereunder during the term hereof, and for any extension of said term, without
interest, as security for the faithful performance by Lessee of all of the
terms, covenants and conditions hereof. Said deposit shall be returned to Lessee
in installments of $10,000 each on June 1, 2005, June 1, 2006 and June 1, 2007
(at Lessee's election by cash payment or rent set-off), provided Lessee is not
in breach of any covenant of this Lease at the time a return installment is due.
If Lessee is in breach at such time, the installment shall be paid when the
breach has been cured. If at any time during the term of this Lease, any of the
rent or charges are overdue and unpaid, or Lessor has sustained any loss or
damage due to any breach of covenant by Lessee, Lessor may, at Lessor's option,
after written notice thereof to Lessee, appropriate and apply any or all of said
deposit to the payment of such overdue rent or charges for loss or damage
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sustained by Lessor, without giving up any of Lessor's other rights; provided,
further, that if Lessor should appropriate all or any portion of said deposit
for the above purposes, Lessee shall, upon written demand from Lessor, remit to
Lessor a cash amount sufficient to restore said deposit to the amount
pre-existing such appropriation within five (5) calendar days of Lessee's
receipt of such written demand from Lessor.
6. Ownership of Improvements, Fixtures and Appliances by Lessee: Other than
Lessor's Work set forth in Exhibit B hereto, Lessee, at its own expense, shall
make all interior improvements to the premises it needs to operate its business.
All improvements made on the premises by Lessee shall remain on the premises at
the expiration of this Lease and shall become the property of Lessor, unless
Lessor instructs Lessee to remove all or a part of said improvements in the
manner provided in Section 9 below. All appliances, equipment, and lighting
fixtures, made or placed upon the premises by Lessee shall remain the property
of Lessee (free of any statutory or other landlord's liens, if any) and may be
removed by Lessee in whole, or in part, at any time before the termination of
this Lease. All fixtures added thereon at the expense of Lessee which are not
removed by Lessee at the expiration of the term of this Lease shall become part
of the premises and shall become the property of Lessor.
7. Common Area Expenses:
(a) Lessee agrees to pay for the expense of any repairs or maintenance
of the interior, non-structural portions of the premises. Lessor shall be solely
responsible for the expense of any repairs or maintenance of the structural
parts of all improvements in the Center including the common areas and other
improvements that are a part of the premises or in which the premises are
located, which structural parts include, without limitation, foundations,
bearing and exterior walls (excluding glass and doors), roof and its supporting
members; together with unexposed electrical, plumbing and sewage systems.
Subject to the exceptions set forth herein, any other maintenance or repair
expenses of the Center shall be paid for as a part of the common area expenses,
unless said maintenance or repairs are necessitated by Lessee's gross negligence
or intentional misconduct. Lessor shall maintain or cause to be maintained the
structural portions of the premises and other improvements in the Center and all
aspects of the common areas (including without limitation parking areas and
landscaped exterior areas) in the Center in good order and repair and in an
attractive, safe, clean and sanitary condition at all times.
(b) In the event Lessor leases to any third parties any other space in
the Center, Lessor shall require such third party tenant to maintain the
property leased by such third party tenant in good order and repair and in a
safe, clean and sanitary state, and, to the extent Lessor itself occupies any
other portion of the Center, Lessor shall on its part maintain its portion of
the Center in an attractive, safe, clean and sanitary state and in good order,
condition and repair.
(c) Lessee shall be obligated and shall have the direct and personal
liability to pay Lessee's proportionate share of all common area expenses.
Lessor shall provide Lessee on a monthly basis an itemized statement of common
area expenses
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incurred together with copies of all invoices and other supporting documentation
as reasonably requested by Lessee in order to verify the common area expenses,
and Lessee shall pay its proportionate share of the common area expenses on the
first day of the following month to Lessor. All checks for common area expenses
payments shall be made out to "Xxxxx Xxxxx, Inc. Trust Account," or in such
other name as Lessor shall designate.
(d) All common area expenses paid for hereunder shall be paid into a
trust fund established by Lessor for the purposes of handling the common area
expenses. This fund shall be kept in trust by Lessor for the benefit of Lessee
and Lessor is hereby designated the trustee for the payment of these expenses.
All payments into the common area expenses trust fund shall be for and on behalf
of Lessee and other lessees of the Center. In no event shall these common area
expenses payments be deemed as rental payments due Lessor. Within ninety (90)
days after the expiration of each calendar year during the term of this Lease,
Lessor shall provide Lessee with a reconciliation statement for the common area
expenses for the previous year, and Lessee shall have the right to cause an
accountant to audit Lessor's records concerning the common area expenses; and,
if such audit discloses any overcharge by Lessor, an appropriate refund shall be
made to Lessee and Lessor shall reimburse Lessee for the auditing cost and
expenses.
(e) Lessee's share of the common area expenses shall be based on
Lessee's proportionate share, which shall be determined by Lessor based on the
total leasable area within Lessee's premises as it bears to all the other
leasable areas in the Center (excluding common areas). Lessee's current
proportionate share is 86.00%.
(f) Lessor shall be the trustee of the common area expenses fund and
shall have the reasonable discretion as trustee to determine what should or
should not be included in the common area expenses; provided, however, "common
area expenses" shall not include any of the items set forth in Exhibit C
attached hereto and made a part hereof. Lessee will pay into the common area
expenses trust fund monthly its proportionate share of, and Lessor, as trustee,
shall expend the trust funds to duly and timely pay for:
(i) All real property taxes and real property assessments
assessed against the entire Center parcel and all improvements thereon, whether
assessed to or payable by Lessee or Lessor. Said taxes and assessments will be
prorated from the date this Lease commences and at the date of its expiration or
termination. Lessee shall have the right to cause Lessor to contest any
substantial increase in the real property taxes and assessments imposed on the
Center, and the cost of such protest shall be included in the common area
expenses.
(ii) All charges for water, sewer services, refuse collection,
electricity, standby generator power (if applicable) and other similar common
charges arising from the use or maintenance of the premises and common areas.
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(iii) All other general operation costs of the Center which shall
include, but not be limited to, common janitorial services, grounds maintenance
and repairs (plantings and changes in landscaping included), parking area
maintenance and repairs, insurance on all common areas, building maintenance and
repairs (repainting and other repairs included), maintenance and repairs of all
heating, ventilating and air conditioning systems, electrical, water, sewer,
plumbing, gas and other utility lines and equipment servicing the premises and
other parts of the Center, auditing fees, accounting fees, and related overhead
and the like.
(iv) All costs of insurance for public liability (minimum of
$100,000 for property, $1,000,000 for injuries to more than one person, and
$500,000 for injury to one person), surplus liability insurance, insuring the
fair market value of the entire Center, for comprehensive damage to the
buildings and plate glass windows on the exterior as a result of earthquake,
fire, typhoon, flooding, and other hazards, for vandalism, for burglary and
other damages. Both Lessor and Lessee shall be additional named insureds under
all of the insurance policies procured with the use of common area expenses
trust fund. All insurance procured with the use of common area expenses trust
fund under this Lease shall contain a provision that the policy will not be
canceled or changed without first giving Lessor and Lessee thirty (30) days
prior written notice. Copies of the insurance policies shall be delivered to
Lessor and Lessee within ten (10) days after the Commencement Date. At Lessee's
option, in lieu of paying the common area expenses therefor, Lessee may insure
the entire Center with its blanket insurance coverage against fire, earthquake,
typhoon, flooding and other hazards with extended coverage, vandalism, theft and
general public liability.
8. Insurance and Indemnification.
(a) Contents: Lessee shall procure, at Lessee's expense, insurance
coverage for Lessee's property (including without limitation personal property,
fixtures, furnishings and inventory) located at the premises against fire,
earthquake, typhoon, flooding, and other hazards and vandalism in an amount and
in form and substance acceptable to Lessee.
(b) Public Liability Insurance: Lessee shall procure, at Lessee's
expense, public liability insurance in an amount and in form and substance
acceptable to Lessee.
(c) Waiver of Subrogation. Lessor and Lessee hereby mutually waive
their respective rights of recovery against each other for any loss insured by
fire, extended coverage and other property insurance policies carried or
required to be carried by the respective parties. Both Lessee and Lessor shall
obtain from their respective insurance carriers waivers of subrogation against
the other party, its agents and employees and any special endorsements, if
required by their insurers, to evidence compliance with the aforementioned
waiver.
(d) Indemnification of Lessor. Lessee hereby indemnifies and holds
Lessor harmless from and against any and all claims, loss, proceedings, demands,
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liabilities, costs and expenses (including attorneys' fees) for personal injury
or property damage arising from negligent actions or willful misconduct of
Lessee or Lessee's agents or employees during its use of the premises, from the
existence of hazardous materials or contamination in, on or under the premises
or the Center caused by Lessee, or from any breach or default by Lessee of this
Lease, except to the extent caused by the negligence or willful misconduct of
Lessor or its agents, employees, or contractors. In the event any action or
proceeding shall be brought against Lessor by reason of any such claim, Lessee
shall defend the same at Lessee's expense by counsel reasonably satisfactory to
Lessor.
(e) Indemnification of Lessee. Lessor hereby indemnifies and holds
Lessee harmless from and against any all claims, loss, proceedings, demands,
liabilities, costs and expenses (including attorneys' fees), for personal injury
or property damage arising from the negligent actions or willful misconduct of
Lessor or Lessor's agents, employees, or contractors, from the existence of
hazardous materials or contamination in, on or under the premises or the Center
not caused by Lessee, or from any breach or default by Lessor of this Lease,
except to the extent caused by the negligence or willful misconduct of Lessee or
its agents, employees or contractors. In the event any action or proceeding
shall be brought against Lessee by reason of such claim, Lessor shall defend the
same at Lessor's expense by counsel reasonably satisfactory to Lessee.
9. Alterations, Repairs and Upkeep: Lessee shall maintain the interior,
nonstructural portions of the premises in good order, repair and condition
(subject to damage resulting from reasonable and ordinary wear and tear,
casualty and condemnation), at Lessee's expense. Lessee shall maintain the
interior, nonstructural portions of the premises in an attractive, safe, clean
and sanitary state and in good order, condition and state of repair (subject to
damage resulting from reasonable and ordinary wear and tear, casualty and
condemnation) as may be required by insurance companies, by law, ordinance or
regulations, or by Lessor pursuant to the terms of this Lease. Lessee, however,
shall not make any alternations and/or improvements in or to the capital
structure without obtaining Lessor's written consent, which shall not be
unreasonably withheld, conditioned or delayed. As a condition to granting
Lessor's consent, Lessor may require Lessee (i) to post a payment and
performance bond before any construction or improvement work is done on or in
Lessee's premises, covering the full value of the work to be done therein;
and/or (ii) to remove such alteration or improvements at or prior to the
termination of this Lease at Lessee's expense. Notwithstanding the foregoing,
Lessor shall repair at Lessor's sole cost and expense any damage to the premises
caused by Lessor, Lessor's employees, agents or contractors.
10. Surrender of Premises: Upon the expiration or earlier termination of
this Lease, or the term hereof, Lessee shall vacate and surrender the premises
in good order, condition and repair, reasonable and ordinary wear and tear,
condemnation and casualty damages excepted. Upon the expiration or earlier
termination of this Lease, Lessor shall not have any right to require Lessee to
remove from the premises any part
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of the improvements placed on or within the premises by Lessee prior to the
Commencement Date or any part of Lessor's Work except the items listed on
Exhibit D.
11. Liens: Lessee shall keep the premises free and clear of any liens
arising out of any work performed, or caused to be performed, by Lessee on or
about the premises. Further, Lessee shall indemnify and hold harmless Lessor
from any lien referenced above that is filed, and Lessee shall discharge such
lien within ten (10) days after filing. If Lessee desires to contest any such
lien, then Lessee shall deposit with Lessor, as security, a sum equal to 110% of
the amount claimed in said lien. Otherwise, Lessor shall have the right to pay
such lien after not less than ten (10) days' prior written notice to Lessee, and
all sums expended, including attorney's fees and court costs, shall be
reimbursed to Lessor by Lessee.
12. Destruction of Premises:
(a) If the partial or total damage or destruction of the premises
occurs during the last year of the original or Extended Term of this Lease (and,
in the event such damage or destruction occurs during the original term, if
Lessee has not theretofore exercised the Option), Lessor, at Lessor's option,
may terminate this Lease if Lessor determines at its sole discretion that such
repairs would be uneconomical. Further, in the event of any partial or total
damage or destruction of the premises at any time during the term of this Lease,
Lessee shall have the right to terminate this Lease, at Lessee's option, if the
repair or restoration of the premises is expected to require, or does require,
longer than six (6) months. If this Lease is not terminated pursuant to the
foregoing, Lessor must diligently repair the damage and restore the premises to
their previous condition at Lessor's cost, in compliance with all applicable
laws, regulations, rules and ordinances, as soon as reasonably possible, and
rent and all other amounts payable hereunder by Lessee shall xxxxx from the date
of damage or destruction until the repair and restoration are completed.
Notwithstanding the foregoing, a partial destruction of the premises which does
not interfere with Lessee's conduct of its business at the premises shall not
entitle either party to terminate this Lease, but while repairs are being made
by Lessor, Lessee shall be entitled to proportionate reduction of the rent and
other amounts payable by Lessee hereunder, based upon the extent to which the
damaged portion of the premises are not usable by Lessee, as that portion bears
to the total area of the premises. Except in the event of negligence or
intentional misconduct of Lessor, Lessor's agents, employees, and/or
contractors, Lessee hereby waives any and all claims for damages against Lessor
resulting from the destruction of the premises, or of Lessee's property.
(b) If the entire Center in which the premises are situated is
destroyed to the extent of one-third (1/3) or more of the then-replacement cost
of the entire Center, Lessor may elect to terminate this Lease upon written
notice to Lessee without any other liability on Lessor's part for such
termination (except in the event of negligence or intentional misconduct of
Lessor, Lessor's agents, employees, and/or contractors).
13. Subordination: This Lease shall automatically be subordinated to any
mortgage, encumbrance or deed of trust, which is placed after the Commencement
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Date on the Center by Lessor resulting from any and all financing of any
buildings or improvements on the Center, so long as the mortgage, encumbrance or
deed of trust includes non-disturbance provisions reasonably acceptable to
Lessee, which provide that as long as Lessee is not in default hereunder, the
holder thereof shall not disturb Lessee's interest under this Lease and
possession of the premises regardless of whether Lessor is in default under its
mortgage, encumbrance or deed of trust. Prior to the Commencement Date, Lessor
shall deliver to Lessee similar non-disturbance agreements in form and substance
reasonably acceptable to Lessee from the holders of all mortgages, encumbrances
and deeds of trust encumbering the Center on the Commencement Date. Lessee
agrees to execute any and all instruments that Lessor deems necessary and
expedient to carry out the foregoing including but not limited to the Attornment
Agreement, Subordination Agreement, and Estoppel Certificates, so long as such
instruments are acceptable to Lessee in form and substance, and the holder of
the mortgage, encumbrance or deed of trust executes and delivers to Lessee a
non-disturbance agreement acceptable to Lessee. If there is any foreclosure of
any mortgage or deed of trust, or exercise of the power of sale thereunder,
Lessee shall attorn to the purchaser at such foreclosure sale, and recognize the
purchaser as landlord or Lessor under this Lease, if so requested by such
purchaser, and if the purchaser agrees in writing to perform all of Lessor's
obligations hereunder.
14. Condemnation:
(a) This Lease shall be subject to the Government's right of eminent
domain. If a material portion of the premises or the common areas in the Center
necessary for Lessee's conduct of its business at the premises should be taken
during the term of this Lease by the Government of Guam, or by any other lawful
governing authority, or private person or persons, in whom the laws of Guam vest
the right to take property under the power of eminent domain, then either Lessor
or Lessee may terminate this Lease by giving the other party sixty (60) days'
written notice.
(b) If a part of the premises or the common areas is taken, and if
this Lease is not terminated, (i) Lessor shall, at its sole cost and expense,
diligently restore the premises (including any alterations or improvements
installed by Lessor or Lessee) and the common areas as soon as practicably
possible, and the rent, common area expenses and other amounts payable by Lessee
hereunder shall equitably xxxxx until such restoration is completed, and (ii)
after the completion of the restoration, the rent, common area expenses and
other amounts payable by Lessee hereunder shall be equitably reduced based upon
the area of the premises taken, as that bears to the original total area of the
premises.
(c) Lessee shall be entitled to recover from the Government or any
other person taking the premises under the power of eminent domain its damages
including without limitation damages for any alternations or improvements paid
for and installed by Lessee, moving expenses, loss of goodwill, business
interruption, decrease in value, as a result of such taking of Lessee's
fixtures, equipment and inventory, and the value of the leasehold of which it is
deprived for the remainder of the term of this Lease.
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15. Delinquent Payments: If any payment due hereunder is not within three
(3) days following the due date, Lessor shall have the right, without waiving
any breach or default by Lessee, to demand and receive the unpaid sum, together
with interest thereon from the date of delinquency at the rate of one and
one-half percent (1-1/2%) per month on the declining balance due.
16. Payments, Accord and Satisfaction: No payment by Lessee or receipt by
Lessor of an amount less than the monthly rent or payments herein due shall be
deemed to be other than on account of the rents, interest or amounts past due;
nor shall any endorsement of any check or any other document accompanying any
check or payment of rent or other payments be deemed an accord or satisfaction,
and Lessor may accept the same without prejudice to Lessor's right to recover
the balance of such rent or payments due, or pursue any other remedy under this
Lease. The acceptance of any payments due herein shall not be deemed the waiver
of any right of Lessor to collect other amounts due Lessor hereunder. Lessor
shall have the right to apply all sums received from Lessee first to any
interest or expenditures by Lessor for which Lessee must reimburse Lessor
pursuant to this Lease, then to the rentals due.
17. Assignment or Sublease: Lessee shall not have the right to assign this
Lease or sublet its space in whole or in part without the written consent of
Lessor, which consent shall not be unreasonably withheld, conditioned or
delayed. Notwithstanding the foregoing, without Lessor's consent, Lessee may
assign this Lease or sublease the premises, or any part thereof, to (i) a parent
or subsidiary of Lessee; (ii) any corporation controlling, controlled by or
under common control with, Lessee; (iii) a successor corporation related to
Lessee by merger, consolidation, non-bankruptcy reorganization or government
action; or (iv) a purchaser of substantially all of Lessee's assets located at
the premises. Further, no assignment of this Lease is deemed to occur upon the
sale or other transfer of Lessee's capital stock including, without limitation,
(1) any transfer in connection with the merger, consolidation or non-bankruptcy
reorganization; (2) any transaction related to a private placement, initial or
subsequent public offering, or other public sale; (3) any transfer or sale of
stock among existing shareholder of Lessee; or (4) any activity in any stock
option programs.
18. Successors: All terms and conditions of this Lease shall be binding
upon Lessor and Lessee, and their heirs, executors, administrators, successors
and assigns. Time is of the essence of this Lease.
19. Remedies:
(a) If Lessee shall, at any time, be in default in the payment of rent
or common area expenses herein reserved, or in the performance of any of the
covenants, terms, conditions or provisions of this Lease, and Lessee shall fail
to remedy such default within thirty (30) days after written notice thereof from
Lessor, Lessor lawfully may, immediately, or at any time thereafter, and without
demand or notice, enter into and upon the premises, or any part thereof, and
lock out and repossess the same and expel Lessee and those claiming through or
under Lessee, and remove their effects, in compliance with all applicable laws
and regulations, without being guilty of any manner
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of conversion, trespass or tort, and without prejudice to any remedies of Lessor
which might otherwise be used for arrears of rent or default by Lessee, and upon
entry as aforesaid, this Lease shall terminate. Lessee covenants that in case of
such termination, Lessee will indemnify Lessor, and Lessor's successors and
assigns, against all loss of rent and any other payments which they may incur by
reason of such termination for the remainder of the term of this Lease;
provided, however, Lessor shall have the obligation to undertake commercially
reasonable action to mitigate its losses.
(b) Should Lessor be in default in performance of any of its
obligations under this Lease, which default continues for a period of more than
thirty (30) days after receipt of written notice from Lessee specifying such
default, Lessee may, in addition to any other remedy available at law or in
equity.
20. Ground Lease: This Lease shall be subject to the terms and conditions
of the lease (the "Ground Lease") between Chamorro Equities, Inc., as lessor
("Ground Lessor"), and Xxxxx Xxxxx, Inc., as lessee, dated December 1, 1994, and
recorded in the Department of Land Management, as Document No. 520455. Lessor
represents and warrants that (i) Lessor has obtained Ground Lessor's consent to
this Lease, if such consent is required under the Ground Lease, (ii) neither
Lessor nor Ground Lessor is in default under the Ground Lease, (iii) the Center
is zoned for commercial use, and (iv) Lessee is entitled to use the premises
without any disturbance or interruption for the purposes stated in this Lease
during the full stated term of this Lease (including the Extended Term). Lessor
covenants that (a) Lessor shall duly and timely perform all of its obligations
under the Ground Lease; and (b) Lessor shall provide Lessee with simultaneous
copies of any and all default notices issued by Lessor or Ground Lessor under
the Ground Lease.
21. Acceptance of Premises: By entering into this Lease and occupying the
premises on the Commencement Date, Lessee shall be deemed to have accepted the
premises "as is" (except for Lessor's Work which must be performed by Lessor,
any latent defect, and any other defect identified by Lessee before the end of
the first month after the Commencement Date). Lessee shall be deemed to have
waived any claim or claims against Lessor arising out of any patent defect in
the premises, excepting such as may appear and as to which Lessor has been
notified by Lessee in writing prior to the end of the first month after the
Commencement Date.
22. Signs and Advertising: Lessee shall not, without the prior written
approval of Lessor, which consent shall not be unreasonably withheld,
conditioned or delayed:
(a) display, erect, install or place any signs or other advertisement
whatsoever on or about the exterior of the premises or any other portion of the
Center;
(b) display, erect, install, paint or place any sign or other
advertising on any common areas in the Center; and
(c) use audible advertising.
11
23. Lessor's Right to Make Alterations and Additions: Lessor hereby
reserves the right at any time to make alterations or additions to the Center or
the building in which the premises are contained (excluding the premises), to
build additional improvements on the Center, and to change, alter or modify the
parking areas, roadways, ramps, and landscaping within the common areas of the
Center, all in a manner which shall not interfere with Lessee's conduct of its
business at, or its use and enjoyment of, the premises, and Lessee hereby agrees
to this provision with the understanding that Lessee shall not in any way
prevent, interfere with or obstruct the undertaking of any such alterations or
additions by Lessor.
24. Utilities: Lessor shall supply all necessary water, sewer, gas, phone
and electricity services to the premises. Lessee shall pay for its own power,
water, electricity and other utilities to the extent such items are separately
metered to the premises, and Lessee shall not be responsible for paying for such
items allocable to other lessees in the Center as a part of common area
expenses.
25. Rules and Regulations: Lessee agrees to comply with all reasonable,
non-discriminatory parking and common area rules as may be established and
promulgated by Lessor from time to time as deemed necessary by Lessor.
26. Attorneys' Fees: In the event of any litigation regarding this Lease,
the losing party shall pay to the prevailing party reasonable attorneys' fees,
including fees on appeal or for bankruptcy proceedings, together with costs and
disbursements incurred.
27. Brokers: Lessor and Lessee hereby warrant to each other that they have
had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease. Each party agrees to indemnify and defend the other
party against and hold the other party harmless from any and all claims,
demands, losses, liabilities, lawsuits, judgments and costs and expenses
(including, without limitation, reasonable attorneys' fees) with respect to any
leasing commission or equivalent compensation alleged to be owing on account of
the indemnifying party's dealings with any real estate broker or agent.
28. Entire Agreement: This Lease contains all of the agreements of the
parties hereto with respect to the matters covered or mentioned in this Lease
and no prior agreement, letters, representations, warranties, promises or
understandings pertaining to any such matters shall be effective for any
purpose. This Lease may be amended only by an agreement in writing signed by the
parties hereto. Lessor and Lessee agree, at Lessee's expense, to record a
memorandum of this Lease in the form attached hereto as Exhibit E at the
Department of Land Management, Government of Guam. Captions used in this Lease
are for the convenience of the parties and shall have no affect on the
interpretation of this Lease.
12
IN WITNESS WHEREOF, this Lease has been executed on the day and year first above
written.
LESSOR: XXXXX XXXXX, INC. LESSEE: COST-U-LESS, INC.
By:[SIGNED] By:[SIGNED]
------------------------- -----------------------------
Xxxxx X. Xxxxxx J. Xxxxxxx Xxxxx
President President
AGANA, GUAM ) ss.
I certify that I know or have satisfactory evidence that Xxxxx X. Xxxxxx is
the person who appeared before me, and said person acknowledged that he signed
this instrument, on oath stated that he was authorized to execute the instrument
and acknowledged it as the President of Xxxxx Xxxxx, Inc., to be the free and
voluntary act of such party(ies) for the uses and purposes mentioned in the
instrument.
DATED this 22nd day of October, 2001.
(Seal or stamp) [SIGNED]
--------------------------------
Notary Signature
[SEAL] a Notary Public in and for the Territory
of Guam
My Commission Expires [STAMPED]
13
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
I certify that I know or have satisfactory evidence that J. Xxxxxxx Xxxxx
is/are the person(s) who appeared before me, and said person(s) acknowledged
that he/she/they signed this instrument, on oath stated that he/she/they
was/were authorized to execute the instrument and acknowledged it as the
President of COST-U-LESS, INC., to be the free and voluntary act of such
party(ies) for the uses and purposes mentioned in the instrument.
DATED this 1st day of Nov, 2001.
(Seal or stamp) [SIGNED]
--------------------------------
Notary Signature
[STAMP] Xxxxxx Xxxxxx
----------------------------------------
Print/Type Name
Notary Public in and for the State of
Washington, residing at Bellevue
My appointment expires 3-9-02
14
List of Exhibits:
Exhibit A: Premises and Common Areas Site Plan
Exhibit B: Lessor's Work
Exhibit C: Items Excluded from Common Area Expenses
Exhibit D: Items to be Removed
Exhibit E: Memorandum of Lease
15
Exhibit A: Premises and Common Areas Site Plan
[ATTACHED]
16
Exhibit B: Lessor's Work
Improve or restore interior and exterior of the premises per the following
specifications as described more fully in the proposals submitted by Yong Fa
Construction Co., dated __________ (No. __________), and Super-Krete, dated
__________ (No. __________):
o Outside:
a. Repaint or restore roof.
b. Replace or restore skylights.
c. Remove ventilation and add six (6) skylights to area next to meat
department.
d. Enclose and extend loading dock area and add four (4) roll-up
doors.
e. Reconfigure trash compactor to allow for a direct connection (via
a chute) to the loading dock area.
f. Install or place sign on western wall and stand-alone sign along
Xxxxxx Loop Road.
g. Upgrade existing parking lights (may be deferred until after
installation of signal light).
h. Restore with Super-Krete product the sidewalks (optional) and
foyer.
o Inside:
a. Replace existing lighting fixtures with and install 00 XX-000
xxxxx low bay fixtures.
b. Repaint and restore ceiling and walls including metal beams,
piping, etc. and a/c ducts.
c. Restore and repair area next to meat department including
enclosing all exposed a/c piping, install metal sheet on back
wall and move back wall back if feasible.
d. Change sewer line from 2" to 4" in meat department.
e. Restore and refurbish offices and bathrooms (including back
bathroom).
f. Repair and restore floor using Super-Krete product.
g. Repair main entrance roll-up door.
h. Repair all damaged insulation.
17
Exhibit C: Items Excluded from Common Area Expenses
In no event shall common area expenses payable by Lessee include any of the
following: (i) repairs or other work occasioned by fire, windstorm, earthquake
or other casualty whether or not Lessor maintains insurance relating thereto;
(ii) any Capital Expenditures (as defined below); (iii) costs of constructing
the common areas or any improvements or correcting any defects in construction
of the common areas or improvements; (iv) expenses in the nature of interest,
fines or penalties; (v) replacement costs arising from changes in laws,
statutes, regulations and ordinances; (vi) the cost of any special service
provided to a tenant of the Center which is not provided generally to the
tenants of the Center; (vii) costs and expenses incurred in connection with
leasing space in the Center including, but not limited to, leasing commissions,
advertising and promotional expenses, tenant improvement costs and legal fees
for the preparation of leases; (viii) court costs and legal fees incurred to
enforce the obligations of tenants in the Center or otherwise; (ix) costs
resulting from defects in design, construction or workmanship relating to the
Center; (x) costs due to Lessor's default under this Lease or other leases in
the Center; (xi) costs arising from Lessor's failure to comply with applicable
laws, statutes, regulations and ordinances; (xii) Lessor's general corporate
overhead and general administrative expenses including the management and
operation of the Center; (xiii) costs incurred by Lessor in connection with
removal of any asbestos, PCB's, or other hazardous materials (which were not
placed by Lessee) from the premises or the Center; (xiv) costs arising from the
presence in or about the Center (including groundwater or soil) of hazardous
materials (which were not placed by Lessee); (xv) ground lease payments; (xvi)
expenses resulting directly from the negligence or willful misconduct of Lessor
or its employees, agents or contractors; (xvii) depreciation or amortization on
any improvements; (xiii) financing costs relating to the Center; (xix) reserves
for Capital Expenditures or any other reserves; (xx) security services, unless
requested by Lessee; (xxi) total costs of supervision, administration and
management (including third party property management) to the extent they exceed
in any calendar year five percent (5%) of the total of all other common area
expenses for such calendar year; and (xxii) the items set forth in Section 7(a)
for which Lessor is solely responsible. "Capital Expenditures" means those
expenditures which, in accordance with generally accepted accounting principals,
are not fully chargeable to current expense in the year the expenditure is
incurred.
18
Exhibit D: Items to be Removed
o Trade Fixtures
o Refrigeration Equipment
o Chiller Boxes
Any and all other fixtures installed or placed on the premises by lessee
Once removed, Lessee shall restore the premises to match existing
19
Exhibit E: Memorandum of Lease
[to be attached]
(COMPARISON OF HEADERS and other document information appearing on the signed
copy omitted.)
20
--------------------------------------------------------------------------------
(Space above for Recorder's use only)
MEMORANDUM OF LEASE
This Lease (this "Lease") is made on this 22nd day of October, 2001, by and
between XXXXX XXXXX, INC., a Guam corporation, whose mailing address is 000
Xxxxxx Xxxx Xxxx, Xxxxx X-0X, Xxxxxx, Xxxx 00000, ("Lessor"), and COST-U-LESS
INC., a Washington corporation, whose mailing address is 8160 304th Avenue S.E.,
Building 3, Suite A, Preston, Washington, ("Lessee"), the following described
premises ("premises"):
Space No. A, containing an area of 32,799 square feet, as outlined in
Exhibit A, attached hereto. This space is part of the Xxxxx Xxxxx, Inc.
Commercial Building, commonly known as the Cost-U-Less Center, fronting Xxxxxx
Loop Road, and is located on Lot. No. 5012NEW-1, Dededo, Guam. The premises
shall include the loading docks adjacent to the premises.
The lease of said premises shall be subject to all the terms and conditions
stated in that certain "Lease" executed by Lessor and Lessee dated October 22,
2001.
Executed this 22nd day of October 2001.
LESSOR: XXXXX XXXXX, INC. LESSEE: COST-U-LESS, INC.
[SIGNED] [SIGNED]
---------------------------- --------------------------------
By: Xxxxx X. Xxxxxx by: J. Xxxxxxx Xxxxx
President President
21
AGANA, Guam ) ss.:
On this 22nd day of October 2001, before me, a Notary Public in and for the
Territory of Guam, personally appeared XXXXX X. XXXXXX, known to me to be the
person whose name is subscribed to the foregoing Memorandum of Lease, and
acknowledged to me that he has executed the same on behalf of said corporation.
IN WITNESS WHEREOF, I hereby affix my official seal the day and year first
above written.
[SEAL] [SIGNED]
--------------------------------
Notary Public for Guam
My appointment expires: [STAMPED]
State of Washington )
) ss.:
County of King )
On this 1st day of Nov 2001, before me, a Notary Public personally appeared
J. XXXXXXX XXXXX, known to me to be the person whose name is subscribed to the
foregoing Memorandum of Lease, and acknowledged to me that he has executed the
same on behalf of said corporation.
IN WITNESS WHEREOF, I hereby affix my official seal the day and year first
above written.
[STAMP] [SIGNED]
--------------------------------
Notary Public in and for the State of
Washington, residing at Bellevue
My appointment expires: 3/9/02
22
EXHIBIT A: Premises and Common Areas Site Plan
[ATTACHED]
23
