EXHIBIT 10.60
LEASE AGREEMENT
THIS LEASE AGREEMENT ("Lease") is made effective as of this 18 day of
MARCH, 2005, by and between SCHOTTENSTEIN STORES CORPORATION, a Delaware
Corporation having its principal offices located at 0000 Xxxxx Xxxx, Xxxxxxxx,
Xxxx 00000 ("Landlord"), and VALUE CITY OF MICHIGAN, INC., a Michigan
corporation having its principal offices located at 0000 Xxxxxxxxxxx Xxxx,
Xxxxxxxx, Xxxx 00000 ("Tenant").
WITNESSETH:
SECTION 1. PREMISES
Landlord, in consideration of the rents to be paid and covenants and
agreements to be performed by Tenant, does hereby lease unto Tenant
approximately 95,040 square feet of space in a building located at 0000 Xxxxxx
Xxxx, Xxxxx, Xxxxxxxx 00000 (the "Demised Premises").
SECTION 2. TERM
The initial term of this Lease shall be for a period of five (5) years,
beginning effective as of August 1, 2001 (the "Commencement Date") and ending on
July 31, 2006.
SECTION 3. INTENTIONALLY DELETED
SECTION 4. RENEWAL OPTIONS
Provided that Tenant has fully complied with all of the terms and
conditions on its part to be performed under this Lease, Tenant may, by giving
notice to the Landlord six (6) months before the expiration of the initial term
or current renewal term of this Lease, extend the lease term for up to three (3)
additional periods of five (5) years each, upon the same terms and conditions as
are set forth herein.
SECTION 5. RENT
(a) Tenant hereby agrees to pay Landlord or Landlord's designee, at
Landlord's offices or at such other place as Landlord may from time to time
designate, as rent for the Demised Premises during the term of this Lease, the
following amounts ("Rent"):
(i) $186,700 annually, payable in equal consecutive monthly
installments in the amount of $15,558.33; plus
(ii) the greater of:
(A) three percent (3%) of gross receipts (as hereinafter
defined) from the Demised Premises exceeding $6,223,333.33 in any
fiscal year (ending July 31) ("Percentage Rent") and
(B) the following amounts per square foot of space in the
Demised Premises during the periods indicated:
MINIMUM PERCENTAGE
APPLICABLE PERIOD RENT PER SQUARE FOOT
----------------- --------------------
8/01/01-7/31/06 $1.50
8/01/06-7/31/11 $2.00
8/01/11-7/31/16 $2.50
8/01/16-7/31/21 $3.00
(b) For purposes of this Lease, the term "gross receipts" shall mean the
total of all sales or rental of merchandise and of all services, all income, and
other receipts whatsoever of all business conducted in, at, or from the Demised
Premises, whether for cash, credit, check, charge account, gift, or merchandise
certificate purchased, or for other disposition of value regardless of
collection. Should any departments, divisions, or parts of Tenant's business be
conducted by any sublessees, concessionaires, licensees, assignees or others,
then there shall be included in Tenant's "gross receipts" all "gross receipts"
of such departments, divisions, or parts, whether the receipts be obtained at
the Demised Premises or elsewhere, in the same manner as if such business had
been conducted by Tenant. "Gross receipts" shall exclude the following: (i) any
amount representing sales, use, excise, or similar taxes; (ii) the amount of
refunds, exchanges, returns by customers, or allowances to customers.
(c) During the initial term of this Lease, the Base Rent shall be
payable in twelve (12) equal monthly installments, in advance, on the first day
of each month. If the initial term commences on a day other than the first day
of a month, the installment for such first month shall be adjusted by
multiplying the full amount of the monthly installment times a fraction, the
numerator of which is the number of days in such first month during which this
Lease is in effect, and the denominator of which is the total number of days in
such month. During any period for which minimum Percentage Rent is payable,
pursuant to subparagraph (a)(ii) above, the Base Rent plus the minimum
Percentage Rent shall be payable in twelve equal monthly installments, in
advance, on the first day of each month.
(d) The Percentage Rent, if any shall be owing, shall be paid within
sixty (60) days after the end of each fiscal year ending on July 31, and shall
be accompanied by a statement in writing signed by Tenant setting forth its
gross receipts from the sale of all items for such period. Tenant shall keep at
its principal executive offices, where now or hereafter located, true and
accurate accounts of all receipts from the Demised Premises. Landlord, its
agents, and its accountants shall have access to such records at any and all
times during regular business hours for the purpose of examining or auditing the
same, without expense to Tenant. Tenant also shall furnish to Landlord any and
all supporting data in its possession relating to gross sales and any deductions
therefrom as Landlord reasonably may require. Landlord agrees to keep any
information obtained therefrom confidential, except as may be required for
Landlord's tax returns, or in the event of litigation or arbitration where such
matters are material.
(i) Tenant shall at all times maintain at its store located at the
Demised Premises continuous tape or "locked-in" cash registers which shall
be available for Landlord's inspection at any reasonable time.
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(ii) If Landlord, for any reason, questions or disputes any
statements regarding Percentage Rent, then Landlord, at its own expense,
shall employ such Certified Public Accountants as Landlord may select to
audit and determine the amount of gross receipts for the period or periods
covered by such statements. If the report of the Certified Public
Accountants employed by Landlord shows any additional Percentage Rent
payable by Tenant, then Tenant shall pay to Landlord such additional
Percentage Rent within thirty (30) days after the report has been
forwarded to Tenant unless Tenant shall, within said thirty (30) day
period, notify Landlord that Tenant questions or disputes the correctness
of such report. If Tenant questions or disputes the correctness of the
report, the accountants employed by Tenant and the accountants employed by
Landlord shall endeavor to reconcile the question or dispute within thirty
(30) days after the notice from Tenant questioning or disputing the report
of Landlord's accountants. If it is finally determined by the parties that
Tenant has understated Percentage Rent for any period by three percent
(3%) or more, then Tenant shall reimburse Landlord for the cost of the
audit within thirty (30) days of receiving notice of the cost thereof.
(e) In the event that this Lease is terminated or expires on any day
other than July 31, then the rent payable hereunder for the final partial year
of this Lease shall be prorated as follows:
(i) the Base Rent payable hereunder for such period shall be
determined by multiplying the total amount of the Base Rent by a fraction,
the numerator of which is the actual number of days in such period before
the date of such termination or expiration, and the denominator of which
is 365;
(ii) for the purpose of calculating the Percentage Rent payable
hereunder for such period, the amount $6,223,333.33 in subparagraph
(5)(a)(ii) above, shall be replaced with the amount equal to the product
of $6,223,333.33 multiplied by the fraction described in subparagraph (i)
above; and
(iii) for the purpose of calculating the minimum Percentage Rent
payable hereunder for such period, the number of square feet in the
Demised Premises shall be equal to the product of the total number of
square feet in the Demised Premises multiplied by the fraction described
in subparagraph (i) above.
(f) Taxes and Insurance Costs:
The Demised Premises are part of a shopping center owned by Landlord,
located in Flint, Michigan and commonly known as "South Flint Plaza" (the
"Shopping Center").
(i) As used herein "Taxes and Insurance Costs" shall mean all of
the following described costs incurred or to be incurred in connection
with Landlord's operation of the Shopping Center and all appurtenances
thereto: expenditures for taxes, assessments, and governmental charges
(including real and personal property ad valorem taxes, special
assessments, and any taxes levied by any federal, state or local
government authority in lieu of, in substitution for, or in addition to
existing real property taxes on the Shopping Center, or the ownership,
operation, or maintenance of all or any part thereof,
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and taxes on rents or services); and insurance premiums. The following
expenses shall not be deemed Taxes and Insurance Costs: income, franchise,
and similar taxes personal to the Landlord; Landlord's legal and
accounting fees; and any costs, fines, or penalties imposed on Landlord by
any governmental authority having jurisdiction over the Shopping Center
unless caused by Tenant's default hereunder.
(ii) Tenant shall pay its proportionate share of all Taxes and
Insurance Costs. Tenant's proportionate share shall be equal to the
product obtained by multiplying all of the Taxes and Insurance Costs by a
fraction, the numerator of which shall be the number of square feet of
Tenant's space and the denominator of which shall be the total number of
square feet of leasable space in the Shopping Center.
(g) Common Areas:
(i) "Common Areas" means all areas and facilities in the Shopping
Center provided and so designated by Landlord or otherwise made available
by the owner or Tenant thereof, for the common use and benefit of tenants
of the Shopping Center and their customers, employees and invitees. Common
Areas shall include (to the extent the same are constructed), but not be
limited to, the parking areas, sidewalks, landscaped areas, corridors,
stairways, boundary walls and fences, incinerators, truckways, service
roads, and service areas.
(ii) Landlord shall, throughout the terms hereof, operate and
maintain the Common Areas, including the parking areas, for the use and
benefit of the tenants of the Shopping Center and their customers and
invitees. Landlord shall at all times have exclusive control of the Common
Areas and may at any time and from time to time, so long as not adversely
impacting Tenant: (a) promulgate, modify and amend reasonable rules and
regulations for the use of the Common Areas, which rules and regulations
shall be binding upon Tenant upon a delivery of a copy thereof to Tenant;
(b) temporarily close any part of the Common Areas, including but not
limited to closing the streets, sidewalks, road or other facilities to the
extent necessary to prevent a dedication thereof or the accrual of rights
of any person or of the public therein; (c) exclude and restrain anyone
from the use or occupancy of the Common Areas or any part thereof except
bona fide customers and suppliers of the tenants of the Shopping Center
who use said areas in accordance with the rules and regulations
established by Landlord; (d) engage others to operate and maintain all or
any part of the Common Areas, on such terms and conditions as Landlord
shall, in its sole judgment, deem reasonable and proper; and (e) make such
changes in the Common Areas as in its opinion are in the best interest of
the Shopping Center, including but not limited to changing the location of
walkways, service areas, driveways, entrances, existing automobile parking
spaces and other facilities, changing the direction and flow of traffic
and establishing prohibited areas.
(iii) Tenant shall keep all Common Areas free of obstructions
created or permitted by Tenant. Tenant shall permit the use of the Common
Areas only for normal parking and ingress and egress by its customers and
suppliers to and from the Demised Premises. If in Landlord's opinion
unauthorized persons are using any of the Common Areas by reason of
Tenant's occupancy of the Demised Premises, Tenant shall, upon
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Landlord's demand, enforce Landlord's rights against all such unauthorized
persons. Landlord shall nonetheless have the right at any time to remove
any such unauthorized persons from said areas or to restrain unauthorized
persons from said areas. Landlord, Tenant, and others constructing
improvements or making repairs or alterations in the Shopping Center shall
have the right to make reasonable use of portions of the Common Areas.
(iv) Tenant will pay, as additional rent, its proportionate share
of the "Maintenance Costs," as hereinafter defined, for the operation and
maintenance of the Common Areas. Such Maintenance Costs will be payable
annually, within 30 days after Tenant's receipt of the statement of such
Maintenance Costs required under subparagraph (f)(vii) below.
(v) The "Maintenance Costs" for the Common Areas shall be computed
on an accrual basis, under generally accepted accounting principles, and
shall, by way of example but not limitation, include: (a) cost of labor
(including workmen's compensation insurance and payroll taxes); (b)
materials, and supplies used or consumed in the maintenance or operation
of the Common Areas; (c) the cost of operating, and repairing of the
lighting; (d) cleaning, painting, removing of rubbish or debris, snow and
ice, policing, and inspecting the Common Areas; (e) the cost of repairing
and/or replacing paving, curbs, walkways, markings, directional or other
signs; landscaping, and drainage and lighting facilities; (f) rental paid
for maintenance machinery and equipment; and (g) a reasonable allowance to
Landlord for Landlord's supervision, which allowance shall not in an
accounting year exceed fifteen percent (15%) of the total of all
Maintenance Costs for such accounting year. Maintenance Costs shall not
include depreciation or any costs properly chargeable to a capital account
under generally accepted accounting principles.
(vi) Landlord shall maintain accurate and detailed records of all
Maintenance Costs for the Common Areas in accordance with generally
accepted accounting principles. Tenant's proportionate share of the
Maintenance Costs of the Common Areas shall be a fraction, the numerator
of which shall be the floor area of the Demised Premises, and the
denominator of which shall be the gross leasable area (in square feet) of
all buildings in the Shopping Center.
(vii) Tenant's proportionate shall of all Maintenance Costs shall be
computed by Landlord within sixty (60) days after the end of each
accounting year (which Landlord may change from time to time). At that
time Landlord shall furnish to Tenant a statement showing in reasonable
detail the actual Maintenance Costs incurred during such accounting year
and Tenant's proportionate share thereof (prorated for any partial year,
with appropriate adjustments to reflect any change in the floor area of
the Demised Premises or the gross leasable area of a building occurring
during such accounting year).
SECTION 6. RIGHT TO REMODEL
Tenant may, with Landlord's approval, which approval shall not be
unreasonably withheld, conditioned or delayed, and at Tenant's expense, repair,
alter, and remodel the Demised Premises, excepting structural changes, in any
manner and to any extent that Tenant may from
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time to time deem necessary for adapting the Demised Premises to the
requirements and uses of Tenant and for the installation of its fixtures,
appliances and equipment. All plans for such remodeling shall be submitted to
Landlord for endorsement of its approval prior to commencement of work. Upon
Landlord's request, Tenant shall be obligated, if it remodels and/or alters the
Demised Premises, to restore the Demised Premises upon vacating the same. Tenant
will indemnify and save harmless the Landlord from and against all mechanics'
liens or claims by reason of repairs, alterations or improvements which may be
made by Tenant on the Demised Premises.
SECTION 7. GLASS
Tenant shall maintain the glass part of the Demised Premises, promptly
replacing any breakage and fully saving the Landlord harmless from any loss,
cost, or damage resulting from such breakage or the replacement thereof.
SECTION 8. PERSONAL PROPERTY
Tenant further agrees that all personal property of every kind or
description that may at any time be in or on the Demised Premises shall be at
Tenant's sole risk, or at the risk of those claiming under Tenant, and that
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.
SECTION 9. RIGHT TO MORTGAGE
(a) Landlord reserves the right to subject and subordinate this Lease at
all times to the lien of any deed of trust, mortgage, or mortgages now or
hereafter placed upon Landlord's interest in the Demised Premises; provided,
however, that no default by Landlord, under any deed of trust, mortgage, or
mortgages, shall affect Tenant's rights under this Lease so long as Tenant
substantially performs the obligations imposed upon it hereunder. Tenant shall
execute any commercially reasonable subordination, non-disturbance and
attornment agreement for the purpose of effecting such subordination. It is a
condition, however, to these subordination and lien provisions that Landlord
shall procure from any mortgagee and agreement in writing, which shall be
delivered to Tenant or contained in the subordination agreement, providing in
substance that so long as Tenant faithfully discharges its obligations under
this Lease, its tenancy will not be disturbed nor this Lease affected by any
default under such mortgage.
(b) Whenever notice is required to be given to Landlord pursuant to the
terms of this Lease, Tenant likewise will give such notice to any first
mortgagee of which it has received legal notice. Furthermore, such mortgagee
shall have the same rights to cure any default on the part of Landlord that
Landlord would have had.
SECTION 10. SUBLEASE OR ASSIGNMENT
Tenant shall not sublease or assign this Lease without the prior written
consent of Landlord, which consent shall not be unreasonably withheld,
conditioned or delayed, except that Tenant shall be permitted without Landlord's
consent (a) to sublease space to the subtenants currently occupying such space
on the Commencement Date of this Lease and (b) to assign this Lease or sublet
all or any portion of the Demised Premises to a parent, subsidiary or affiliate
of
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Tenant provided that (i) such assignee or sublessee has the same or greater net
worth as Tenant or (ii) Tenant remains fully liable for its obligations under
this Lease.
SECTION 11. EMINENT DOMAIN
(a) If any of the Demised Premises or any part of any of the buildings
thereon shall be taken or condemned either permanently or temporarily for any
public or quasipublic use or purpose by a competent authority, in appropriation
proceedings or by any right of eminent domain, the entire compensation or award
therefore, including leasehold, reversion, and fee, shall belong to Landlord.
(b) If not more than twenty percent (20%) of the Demised Premises is
taken or condemned, and if the portion of the Demised Premises not taken can be
repaired so as to be commercially fit for the operation of Tenant's business
within ninety (90) days from the date on which possession is taken for public
use, Landlord at its own expense shall repair the portion of the Demised
Premises not taken and there shall be an "Equitable Abatement of Rent," as
hereinafter defined, for the remainder of the Lease term and for any renewal
terms. If the portion of the Demised Premises not taken cannot be repaired
within ninety (90) days from the date on which possession is taken so as to be
commercially fit for the operation of Tenant's business, then such property
shall be released from the provisions of this Lease and there shall be an
Equitable Abatement of Rent for the remainder of the Lease term. Except as
stated herein, no other taking or condemnation shall cause this Lease to be
terminated. No appropriation or condemnation proceedings shall operate as or be
deemed an eviction of Tenant or a breach of Landlord's covenant of quiet
enjoyment.
(c) As used herein, the term "Equitable Abatement of Rent" is defined to
mean a reduction in the amount of Rent calculated as follows:
(i) Base Rent shall be adjusted in the manner provided in
paragraph 5(e) above, based upon the number of square feet taken by
condemnation or which cannot be repaired as provided above; and
(ii) Operating Costs, as applicable, shall be reduced by the actual
decrease in taxes and insurance due and payable by Landlord and reimbursed
by Tenant as Maintenance Costs.
(d) If more than 20% of all of the Demised Premises shall at any time
after the execution of this Lease be taken by public or quasipublic use or
condemned under eminent domain, then at the option of the Landlord or Tenant
upon giving of thirty (30) days written notice (after notice of condemnation),
this Lease shall terminate as of the date of the taking and any prepaid Rent
shall be prorated as of the effective date of termination.
SECTION 12. TENANT'S TAXES
Tenant agrees to pay promptly when due all taxes assessed against Tenant's
fixtures, furnishings, equipment, and stock in trade placed in or on the Demised
Premises during the term of this Lease.
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SECTION 13. RISK OF LOSS
All personal property, goods, machinery, and merchandise in the Demised
Premises shall be at Tenant's risk if damaged by water, fire, explosion, wind,
or accident of any kind.
SECTION 14. USE AND OCCUPANCY
During the term of this Lease the Demised Premises shall be occupied for
the operation of a full line "off-price" department store. Tenant may change its
use of the Demised Premises with Landlord's prior written consent, which consent
shall not be unreasonably withheld, conditioned or delayed, and subject to any
use exclusives or restrictions then in effect. Tenant shall at all times conduct
its operations on the Demised Premises in a lawful manner and in compliance with
all governmental laws, rules, regulations, and orders applicable to the Landlord
hereunder. Tenant covenants and agrees that none of the Demised Premises shall
be abandoned or left vacant and all of the Demised Premises shall be
continuously used, occupied and open for business at least five days per week,
except with the written consent of Landlord.
SECTION 15. NUISANCES
Tenant shall not perform any acts or carry on any practice which may
injure the Demised Premises. Landlord shall not perform any acts or carry on any
practices which would injure the Demised Premises or be a nuisance or menace to
Tenant or which would interfere with the right of quiet enjoyment granted to
Tenant under Section 20 of this Lease.
SECTION 16. WASTE
Tenant covenants that it will use, maintain, and occupy the Demised
Premises in a careful, safe, lawful, and proper manner and will not commit waste
therein. Landlord shall have access to the Demised Premises at all reasonable
times for purposes of inspecting and examining the condition and maintenance of
the premises.
SECTION 17. FIRE, REBUILDING AND ALTERING
(a) At all times during the term of this Lease, Tenant shall either
maintain or, at Landlord's option, reimburse Landlord for fire, casualty, and
extended coverage insurance on all the buildings and permanent improvements in
all of the Demised Premises.
(b) If the Demised Premises or any permanent additions or leasehold
improvements thereto shall be damaged, destroyed, or rendered untenantable, in
whole or in part, by or as the result or consequence of fire or other casualty
during the term thereof, Landlord shall repair and restore the same to a good
tenantable condition with reasonable dispatch. During any period of repair, the
Rent herein provided for in this Lease shall xxxxx: (i) entirely in case all of
the Demised Premises are untenantable and if Tenant determines in good faith
that it cannot economically conduct business from any of the undamaged portions
of the remaining Demised Premises; and (ii) equitably if only a portion of the
Demised Premises are untenantable and Tenant is able to conduct its business
from the undamaged portion of such Demised Premises. The Equitable Abatement of
Rent shall be calculated pursuant to Section 11(c) hereof. Equitable Abatement
of Rent shall cease when the Demised Premises is restored to a tenantable
condition.
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(c) If the Demised Premises is partially damaged or destroyed has not
been repaired and restored to tenantable condition within one hundred fifty
(150) days from the date of receipt of insurance proceeds for such damage or
destruction, either Tenant or Landlord may release such property from this Lease
by giving sixty (60) days prior written notice to the other party and thereupon
Landlord and Tenant shall be released from all future liability and obligations
with regard to such property under this Lease and there shall be an Equitable
Abatement of Rent for the remaining property covered under this Lease for the
remaining Lease term.
(d) If one or more Parcels are damaged or destroyed during the last two
(2) years of the original or any extended term of this Lease to the extent of
more than one-third (1/3) of the ground floor area thereof, Landlord shall have
the right to terminate this Lease with respect to such damaged or destroyed
property by written notice to Tenant within sixty (60) days following the damage
or destruction, unless within thirty (30) days following receipt of such notice
Tenant offers to extend the term of this Lease for an additional period of five
(5) years from the date the damage or destruction is repaired or restored. If
Tenant makes an offer to extend, Landlord and Tenant shall determine the terms
and conditions of the extension within thirty (30) days thereafter or Tenant's
offer shall not estop Landlord from so modifying this Lease. If the terms and
conditions have been mutually agreed to by the parties, then Landlord shall
accept Tenant's offer and shall repair and restore the Parcels within the time
and in the manner set forth above.
(e) All policies of fire and extended coverage insurance required to be
maintained by Tenant shall name Landlord and Landlord's mortgagee as the named
insured, as their respective interests may appear. Tenant agrees to furnish
Landlord with copies of such policies or certificates of such coverage. All such
policies shall provide that any loss shall be payable to Landlord or to
Landlord's mortgagee as their interests may appear. All proceeds recovered by
Tenant under fire and extended coverage insurance shall be immediately payable,
upon receipt, if any, by Tenant to Landlord.
SECTION 18. REPAIRS
(a) Landlord shall keep in good order, condition, and repair the
following: (i) structural parts; (ii) exterior foundations; (iii) exterior walls
(except for interior faces); (iv) downspouts; (v) gutters; and (vi) the roof of
the building of which the Demised Premises forms a part, and the plumbing and
sewage system outside the building, except (as to all items) for damage caused
by any negligent act or omission of Tenant or its customers, employees, agents,
invitees, licensees, or contractors. "Structural parts" shall mean only the
following: (i) foundations; (ii) exterior walls; (iii) concrete slabs; (iv) the
beams and columns bearing the main load of the roof; and (v) the floors (but not
floor coverings).
(b) Notwithstanding the provisions of Paragraph A above, Landlord shall
not be obligated to repair the following: (i) the exterior or interior of any
doors, windows, plate glass, or showcases surrounding the Demised Premises or
store fronts; (ii) heating, ventilating or air-conditioning equipment in the
Demised Premises; (iii) damage caused by any casualty, burglary, break-in,
vandalism, war, or act of God; and (iv) in any case until after ten (10) days'
notice from Tenant stating the need for repairs. Tenant hereby expressly waives
the provisions of any law permitting repairs by a tenant at the landlord's
expense.
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(c) Tenant shall maintain, at Tenant's expense, all and every other part
of the Demised Premises in good order, condition and repair, including, by way
of example but not limitation: (i) all leasehold improvements; (ii) all heating,
ventilating, and air-conditioning; (iii) interior plumbing and sewage
facilities; (iv) all interior lighting; (v) electric signs; (vi) all interior
walls; (vii) floor coverings; (viii) ceilings; (ix) appliances and equipment;
(x) all doors, exterior entrances, windows, and window mouldings; (xi) plate
glass; (xii) store fronts; and (xiv) any damages occasioned or caused by the
actions of Tenant, its agents, invitees, or employees as a result of Tenant's
repair obligation hereunder.
(d) If Landlord deems any repair which Tenant is required to make
hereunder to be necessary, Landlord may demand that Tenant make that repair
immediately. If Tenant refuses or neglects to make the demanded repair and to
complete it with reasonable dispatch, Landlord may make the repair and Tenant
shall, on demand, immediately pay to Landlord the cost of the repair together
with interest at ten percent (10%) per annum. Landlord shall not be liable to
Tenant for any loss or damage that may accrue to Tenant's stock or business by
reason of such work or its results, except with respect to any such loss or
damage caused by the negligence or willful acts of Landlord or Landlord's
employees, agents, or independent contractors.
SECTION 19. INTENTIONALLY DELETED
SECTION 20. COVENANT OF TITLE AND PEACEFUL POSSESSION
Subject to the provisions of Section 11 hereof, on or before the
Commencement Date Landlord shall have good and marketable title in fee simple to
the Demised Premises and the right to make this Lease for the specified term. On
or before the Commencement Date, Landlord shall put Tenant into complete and
exclusive possession of the Demised Premises, and if Tenant pays all Rent and
performs all covenants and provisions of this Lease to be performed by Tenant,
Tenant shall, during the term hereby demised, freely, peaceably, and quietly
enjoy and occupy the full possession of the Demised Premises and the tenements,
hereditaments, and appurtenances thereunto belonging without molestation or
hindrance by any person.
SECTION 21. LIABILITY INSURANCE
Tenant agrees to carry at its own expense, throughout this Lease, public
liability insurance covering all of the Demised Premises and Tenant's use
thereof, which insurance shall include Landlord as an additional named insured,
in companies and in a form satisfactory to Landlord, with minimums of the
following for each parcel of real property: (i) Three Hundred Thousand Dollars
($300,000.00) on account of bodily injuries to or death of one person; (ii) Five
Hundred thousand Dollars ($500,000.00) on account of bodily injuries to or death
of more than one person as a result of any one accident or disaster; and (iii)
One Hundred Thousand Dollars ($100,000.00) coverage for property damaged in an
accident. Tenant shall deposit the policy or policies or certificates thereof
with Landlord prior to the date of occupancy by Tenant. All liability insurance
policies and certificates shall bear endorsements to the effect that the insurer
agrees to notify Landlord not less than ten (10) days in advance of modification
or cancellation thereof.
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SECTION 22. FIXTURES
Provided that Tenant repairs any damage caused by removal of its property
and provided that the Tenant is not in default under this Lease, Tenant shall
have the right to remove from the Demised Premises all of its signs, shelving,
electrical, and other fixtures and equipment, window reflectors and backgrounds,
and any and all other trade fixtures which it has installed in and upon the
Demised Premises.
SECTION 23. SURRENDER
Tenant covenants and agrees to deliver up and surrender to Landlord the
physical possession of the Demised Premises upon the expiration of this Lease,
or upon its termination as herein provided, in as good condition and repair as
the same shall be at the commencement of the original term, loss by fire and/or
ordinary wear and tear expected, and to deliver all of the keys to Landlord or
Landlord's agents.
SECTION 24. HOLDING OVER
There shall be no privilege of renewal hereunder except as specifically
set forth in this Lease, and any holding over by Tenant after the expiration
shall be from day to day on the terms and conditions set forth in this Lease
(prorated on a daily basis) at Landlord's option; no acceptance of Rent by or
act or statement whatsoever on the part of Landlord or its duly authorized
agents shall be construed as an extension of the term or as a consent to any
further occupancy in the absence of a written contract signed by Landlord.
SECTION 25. NOTICE
Whenever under this Lease provisions are made for notice of any kind to
Landlord, it shall be deemed sufficient notice and sufficient service thereof if
such notice to Landlord is in writing, addressed to Landlord at 0000 Xxxxx Xxxx,
Xxxxxxxx, Xxxx 00000, or at such other address as Landlord may specify in
writing, and deposited in the United States mail by registered or certified
mail, return receipt requested, with postage prepaid. Notice to Tenant shall be
sent in like manner to the Demised Premises and to 0000 Xxxxxxxxxxx Xxxx,
Xxxxxxxx, Xxxx 00000.
SECTION 26. DEFAULT
If Rent or any part thereof shall at any time be in arrears and unpaid for
thirty (30) days or if the Tenant or its successors shall fail to perform any of
the covenants, agreements, or conditions of this Lease, and the breach is not
cured within thirty (30) days after written notice from Landlord, or if Tenant
shall abandon or vacate the Demised Premises during the term thereof, or shall
make an assignment for the benefit of creditors, or if a receiver for Tenant be
appointed in any action or proceeding by or against Tenant or if a petition
(voluntary or involuntary) under the Federal Bankruptcy Act or acts amendatory
thereof or supplemental thereto shall be filed by or against Tenant, or if
Tenant should be adjudicated bankrupt, or if the interest of Tenant in the
Demised Premises be sold under execution or other legal process, Landlord may
enter in and upon the Demised Premises and again have and repossess and enjoy
the Demised Premises as if this Lease had not been made and thereupon this Lease
and everything contained herein on the part of Landlord to be kept and performed
shall cease and
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determine and be utterly void, without prejudice, however, to the right of
Landlord to recover from Tenant or its successors all Rent due up to the time of
entry. The commencement of a proceeding or suit in forcible entry and detainer
or in ejectment or otherwise, after any default by Tenant, shall be equivalent
in every respect to actual entry by Landlord. In case of any default by Tenant
and entry by Landlord, Landlord may relet the premises at Tenant's cost
(including but not limited to brokers and attorneys fees) for the remainder of
the Lease term for the highest rent obtainable, and may recover from Tenant any
deficiency between the amount so obtained and the amount of Rent hereinbefore
reserved.
SECTION 27. WAIVER OF SUBROGATION
Landlord and Tenant hereby release each other from any and all liability
or responsibility (to the other or to any one claiming through or under them by
way of subrogation or otherwise) for any loss or damage to property caused by
fire or by any other casualty covered by extended coverage or supplementary
insurance contract, even if such fire or other casualty is caused by the fault
or negligence of the other party or any one for whom that party may be
responsible; provided, however, that this release shall be applicable and in
force and effect only with respect to loss or damage occurring while the
releasor's policies contain a clause or endorsement to the effect that any
release shall not adversely affect, impair, or prejudice the right of the
releaser to recover thereunder. Landlord and Tenant each agree that their
policies will include such a clause or endorsement so long as the same is
obtainable and that if not obtainable, each shall so advise the other in
writing, which notice shall release both parties from the obligation to obtain
such a clause or endorsement.
SECTION 28. EXCULPATION
If the Tenant obtains a money judgment against Landlord, or against any of
its successors or assigns, under any provisions of or with respect to this Lease
or on account of any matter, condition, or circumstance arising out of the
relationship of the parties under this Lease, Tenant's occupancy of the
buildings, or Landlord's ownership of the Demised Premises, Tenant shall be
entitled to have execution upon such judgment only upon Landlord's fee simple
interest in the Demised Premises and not out of any other assets of Landlord or
of any of its successors or assigns. Landlord shall be entitled to have any such
judgment so qualified as to constitute a lien only on said fee simple estate.
SECTION 29. RIGHTS CUMULATIVE
Unless expressly provided to the contrary in this Lease, each and every
one of the rights, remedies, and benefits provided by this Lease shall be
cumulative and shall not be exclusive of any other right, remedy, or benefit
allowed by law; provided, however, that this Lease shall not be cancelable for
default of Tenant except as specifically provided in this Lease.
SECTION 30. MITIGATION OF DAMAGES
Notwithstanding any of the terms and provisions to the contrary contained
in this Lease, Landlord and Tenant each shall have the duty and obligation to
mitigate, in every reasonable manner, any and all damages that may be caused or
suffered by virtue of defaults under or violation of any of the terms and
provisions of this Lease committed by the other.
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SECTION 31. SIGNS
No building, free-standing, pylon, or other sign, shall be placed upon the
Demised Premises unless it complies with reasonable sign criteria established by
Landlord. Notwithstanding any sign criteria that Landlord may hereafter
establish, Landlord acknowledges and agrees that Tenant's existing signage at
the Demised Premises is acceptable and will not be affected by any such
criteria.
SECTION 32. ENTIRE AGREEMENT
This Lease constitutes the entire agreement of the parties; all prior
agreements between the parties, whether written or oral, are merged herein and
shall be of no force and effect. This Lease cannot be changed, modified, or
discharged other than by an agreement in writing signed by the party against
whom enforcement of the change, modification, or discharge is sought.
SECTION 33. LANDLORD'S LIEN
By the execution of this Lease, Landlord shall have a lien for the
performance of any and all obligations of Tenant upon Tenant's fixtures,
equipment, machinery, goods, wares, merchandise, and other personal property of
Tenant.
SECTION 34. BINDING UPON SUCCESSORS
The covenants, conditions, and agreements made and entered into by the
parties shall be binding upon and inure to the benefit of their respective
heirs, representatives, successors, and assigns.
SECTION 35. TRANSFER OF INTEREST
If Landlord should sell or otherwise transfer its interest in the
premises, upon agreement by the purchaser or transferee to be responsible for
all the covenants and undertakings of Landlord, Tenant agrees that Landlord
thereafter shall have no liability to Tenant under this Lease or under any
modifications, amendments, or extensions thereof, except for such liabilities
which might have accrued prior to the date of the transfer of Landlord's
interest.
SECTION 36. ACCESS TO PREMISES
Landlord and its representatives shall have free access to all of the
Demised Premises at all reasonable times for the purpose of: (i) examining the
same or making any alterations or repairs to the Demised Premises that Landlord
may deem necessary for safety or for preservation of the Demised Premises; (ii)
exhibiting the Demised Premises for sale or mortgage financing; (iii) during the
last three (3) months of the Lease term, for the purpose of exhibiting the
Demised Premises and putting up the usual notice "to rent," which notice shall
not be removed, obliterated, or hidden by Tenant; provided, however, that any
such action by Landlord shall cause as little inconvenience to Tenant as
reasonably practicable. Such action shall not be deemed an eviction or
disturbance of Tenant nor shall Tenant be allowed any abatement of Rent or
damages for an injury or inconvenience occasioned thereby.
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SECTION 37. SECTION TITLES
The titles at the beginning of each section of this Lease are inserted
only as a matter of convenience and for reference and in no way define, limit,
or describe the scope or intent of this Lease.
SECTION 38. NON-WAIVER
No payment by Tenant or receipt by Landlord or its agents of a lesser
amount than the Rent stipulated in this Lease shall be deemed to be other than
on account of the stipulated Rent, nor shall an endorsement or statement on any
check or any letter accompanying any check or payment of Rent be deemed an
accord and satisfaction. Landlord or its agents may accept such a check or
payment without prejudice to Landlord's right to recover the balance of such
rent or to pursue any other remedy.
SECTION 39. SHORT FORM LEASE
This Lease shall not be recorded, but upon demand of either party the
parties shall execute a Short Form Lease that describes the property herein
demised, gives the term of this Lease, and refers to this Lease, which may be
recorded at any time that either Landlord or Tenant considers it appropriate to
do so.
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IN WITNESS WHEREOF, the parties have executed this Lease as of this 18,
day of MARCH, 2005.
LANDLORD: TENANT:
SCHOTTENSTEIN STORES CORPORATION, VALUE CITY OF MICHIGAN, INC.,
a Delaware corporation a Michigan corporation
By: Xxxxxx X. Xxxxx By: Xxxxx X. XxXxxxx
-------------------------- -------------------------
Name: Xxxxxx X. Xxxxx Name: XXXXX X. XXXXXXX
Title: Sr.V.P., Real Estate Title: CFO
STATE OF OHIO :
: ss:
COUNTY OF FRANKLIN :
BE IT REMEMBERED, that on the 18th day of March, 2005, before me, a
Notary Public, in and for the State of Ohio, personally appeared Xxxxxx X.
Xxxxx, Xx.V.P., Real Estate of Schottenstein Stores Corporation, Landlord in the
foregoing Lease, who acknowledged that the signing thereof was his/her free act
and deed and the free act and deed of the corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed by
official seal on the day and year aforesaid.
[SEAL] XXXXXXX X. XXXXXXX /s/ Xxxxxxx X. Xxxxxxx
Notary Public, State of Ohio -----------------------------
My Commission Expires Notary Public
08/21/06
STATE OF OHIO :
: ss:
COUNTY OF FRANKLIN :
BE IT REMEMBERED, that on the 14th day of March, 2005, before me, a
Notary Public, in and for the State of Ohio, personally appeared Xxxxx x.
XxXxxxx, CFO of Value City of Michigan, Inc., Tenant in the foregoing Lease, who
acknowledged that the signing thereof was his/her free act and deed and the free
act and deed of the corporation.
IN TESTIMONY WHEREOF, I have hereunto/subscribed my name and affixed by
official seal on the day and year aforesaid.
[SEAL] XXXX XXXXXXX /s/ Xxxx Xxxxxxx
Notary Public, State of Ohio --------------------------------
My Commission Expires 10-13-08 Notary Public
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