LEASE
-----
This LEASE, made this 12 day of January, 1987, between XXXXX XXXXXX,
hereinafter called the OWNER, and XXXXXX'X, !NC., a New Mexico corporation,
hereinafter called the LESSEE.
I.
DESCRIPTION OF PROPERTY AND RENTS
----------- -- -------- --- -----
A. The OWNER does hereby lease to the LESSEE for commercial and/or
retail purposes, the premises described below:
Township 15 South, Range 22 East
-------- -- ------ ----- -- ----
That portion of Lots 5, 6, 7, 8, and the Sl/2 NW1/4 SEl/4,
Section 36, Township 15 South, Range 22 East, G&SRB&M, all
more precisely described as follows: "Beginning at the
Southeast corner of said Section, thence West and along the
South line of said Section approximately 3168.73 feet to a
point of intersection with the East-bound construction center
line of the Xxxxxx-Xxxxxx Pass Interstate Highway as shown on
Arizona Highway Department Right-of-Way Map A-2T-366; thence
North-Easterly and along said East-bound construction center
line to a point of intersection with the East line of said
Section thence South and along the East line of said Section,
1802.96 feet to the point of beginning, and containing 64.84
acres, more or less."
The property includes the four buildings which constitute the business
and museum premises and any museum items and fixtures having not been previously
returned to the OWNER. The OWNER and LESSEE acknowledge that the property is
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currently being surveyed and further agree that a legal description from the
survey currently underway will be the proper description of the property for the
purposes of this lease and will be attached to the lease as Amendment A when
said survey is complete.
B. The OWNER does hereby acknowledge that the land on the opposite side
of the above described interchange (North) is under State Lease Number C-24961,
dated February 16, 1978, for future development into a Recreational Vehicle
Park. OWNER acknowledges and LESSEE agrees to pay OWNER the exact amount due the
State of Arizona under this lease each year for OWNER and LESSEE'S mutual
benefit by having no competition across the interchange. State Lease Number
C-24961 is to be attached and made a part hereof as Exhibit A.
C. OWNER hereby acknowledges and grants LESSEE the permission and right
to construct a new fifth building on the above described premises. OWNER hereby
acknowledges that LESSEE has been granted a Dairy Queen franchise for the above
described location and that said new building will be for the specific purpose
of operating a Dairy Queen-Brazier Restaurant. LESSEE agrees to construct said
new building according to all pertinent and controlling building codes and
ordinances of the State of Arizona and Cochise County and to specifications,
approved by International Dairy Queen. Hereinafter in this document FOOD SALES
will refer to sales of Dairy Queen authorized products sold through this new
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facility.
II.
TERM OF LEASE
---- -- -----
The term of this lease shall be [Confidential treatment requested],
both dates inclusive, unless sooner terminated as herein provided. This lease
shall not hamper negotiation of a new lease between OWNER and LESSEE to terms
mutually agreeable for a new lease at the termination of this lease.
III.
MINIMUM RENT AND PERCENTAGE RENT
------- ---- --- ---------- ----
A. The minimum rent for the above described lease property is
[Confidential treatment requested] payable annually by LESSEE, monthly in
advance in equal installments of [Confidential treatment requested] each. The
payments are due on the first day of every month during the term. In addition to
the minimum rent, LESSEE shall pay, for each lease year, additional rent based
upon a percentage of LESSEE'S [Confidential treatment requested] from the leased
property as hereinafter set forth. The term [Confidential treatment requested]
which are subject to the sales tax imposed under Arizona State Law.
B. Total annual rental based on [Confidential treatment requested] and
subject
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to the minimum rental specified above shall be calculated as follows:
(1) [Confidential treatment requested] percent of the
first [Confidential treatment requested] of annual
[Confidential treatment requested]. This [Confidential
treatment requested] is the guaranteed annual rent
addressed in above paragraph (A) and establishes
[Confidential treatment requested] as the base above
which the following percentage rents are calculated.
(2) In addition to the minimum rent described above,
LESSEE shall pay OWNER [Confidential treatment
requested] of all [Confidential treatment requested]
made in excess of [Confidential treatment requested]
annually except as provided for in paragraph (3)
below.
(3) Food Sales: It is hereby agreed by OWNER and LESSEE to
establish 1985 as the base period year for food sales.
1985 annual food sales made by LESSEE were
[Confidential treatment requested]. Using the above
established period for food sales, and because OWNER
acknowledges that LESSEE must pay percentage rent to
International Dairy Queen for the franchise, then food
sales percentage rent shall be calculated as follows:
If total annual [Confidential treatment requested]
exceed [Confidential treatment requested] then the
percentage rent on food sales made in excess of
[Confidential treatment requested] annually shall be
[Confidential treatment requested]
Payments of estimated percentage rents in excess of the minimum rent
shall be paid on the 15th day of each month beginning with the month of
September, 1986 which shall be the
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percentage rent for August, 1986. Said payments shall be computed at the end of
each month as follows:
[Confidential treatment requested] of the amount of
[Confidential treatment requested] for that month in excess of
[Confidential treatment requested].
C. Petroleum Products Rent:
Minimum rent paid to OWNER on the existing Chevron Station
shall be [Confidential treatment requested] per month due on
the first of each month. Percentage rent shall be paid based
upon [Confidential treatment requested] per gallon of gasoline
pumped. LESSEE shall prepare a reconciliation of gallonage
pumped annually at the same time percentage rents are
reconciled and compute and pay to OWNER any percentage due
OWNER above the [Confidential treatment requested] annual
minimum rent.
D. On August 15 of each year beginning with August 15, 1987, the total
annual rent for the twelve month period, August 1 through July 31 each year,
shall be recomputed pursuant to paragraphs (A), (B), and (C) of this section. If
the LESSEE shall have paid a total of rents which are in excess of the
recomputed rents, then the OWNER shall return to the LESSEE the surplus of the
collected rents over the recomputed rents or shall allow a credit of such
surplus toward the subsequent year's percentage rent. In no event shall an
amount less than the minimum annual rental be paid. Should the LESSEE have paid
a total of rents in an amount which is less than the recomputed rents, then the
LESSEE shall
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pay to the OWNER such deficiency on September lst of the applicable year.
IV.
RENT ABATEMENT
---- ---------
If at any time the entrance to the property is closed more than three
days due to circumstances beyond LESSEE'S control. such as highway construction
or other third-party activities beyond LESSEE'S control, the rent shall xxxxx
for the period involved.
V.
PROPERTY TAXES
-------- -----
The LESSEE shall pay any increases in the taxes assessed and levied
against the leased property above the amount of [Confidential treatment
requested] during the term of this lease, whether the increase in taxation
results from a higher tax rate or an increase in the assessed valuation of the
leased property, or both.
LESSEE shall pay all property taxes levied against the LESSEE'S
personal property, merchandise, cars, trucks, service stations, and mobile
structures placed upon the premises by LESSEE.
VI.
USE AND EXCLUSIVE USE
--- --- --------- ---
The LESSEE shall use and occupy the leased premises for the purpose of
operating a business engaged in the sale of goods and services including, but
not limited to: curios, jewelry, gifts, petroleum products amusement fees, food
and
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other related activities.
The OWNER shall not lease any portion of the above described property
for any purpose whatever, without specific consent of LESSEE. The OWNER shall
not permit any person except the LESSEE, its agents, or servants to sell or
exchange on such property any article whatsoever without specific written
consent and permission from LESSEE.
VII.
REPAIRS
-------
A. OWNER shall maintain the exterior walls, foundation, and plumbing
mains outside the building, except that there shall be no responsibility to
repair damage caused to the same by the LESSEE, its agents or patrons. As a
condition precedent to any liability from the OWNER to the LESSEE for failure so
to do, the LESSEE must first notify the OWNER in writing of the alleged defect
and the OWNER shall have ten days thereafter in which to make repairs, if
necessary, to the said exterior walls, foundation and plumbing outside the
building.
B. The LESSEE shall, at its cost, keep and maintain said premises, the
appurtenances and improvements (including the plumbing inside the building and
the roof of the building) in good repair and in sanitary condition, and shall
promptly repair all damage caused to said leased premises by the LESSEE its
agents or patrons.
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VIII.
LESSEE'S RIGHT TO ALTER AND IMPROVE
-------- ----- -- ----- --- -------
LESSEE shall have the right to make changes, alterations, or additions
to the buildings located on the leased property or to construct improvements on
the leased property.
A. Any permanent improvement to the leased property or any part thereof
during the term of this lease shall at once become the absolute property of the
OWNER without payment of any kind therefor. However, any equipment, tanks and
pumps added to the OWNER's property by the third party (namely an oil company)
shall not be permanent and shall remain the property of said oil company.
B. Any permanent improvement made will be adequately insured
immediately by LESSEE once improvement or addition is completed.
C. Any mobile structures including, but not limited to, mobile homes,
fixtures, cars, trucks and personal property shall be removed by LESSEE Upon
termination of this lease and ownership of same shall remain with LESSEE.
IX.
UTILITIES
---------
LESSEE shall pay all charges for gas, electricity, water, and telephone
used or supplied in connection with the leased property, and shall indemnify the
OWNER against any liability or damages on such accounts.
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X.
DEFAULT
-------
Any one or more of the following occurrences shall be deemed a default
by LESSEE at the time of such occurrence:
(1) When LESSEE fails to pay any installment of rent when due or
fails to fulfill or perform any of the other agreements or
provisions of this lease, which are the obligation of the
LESSEE, and LESSEE'S failure to perform continues for a
period of thirty days after OWNER shall have demanded in
writing by Certified Return Receipt mail for performance
thereof;
(2) When LESSEE is adjudicated a bankrupt or makes an assignment
for benefit of creditors;
(3) When LESSEE'S interest in this lease is levied on or attached
in any action against LESSEE and such levy or attachment is
not vacated within sixty (60) days thereafter.
If any one or more of the above occurs, the OWNER may elect any of the
following remedies without prejudice to any other rights or remedies which might
otherwise be available to OWNER:
(1) Bring appropriate action against LESSEE to enforce the
agreements and provisions of this lease, and to compel the
LESSEE to abide by the same.
(2) Terminate this lease, and in such even OWNER may rightfully
re-enter the leased premises without notice or demand, and
repossess the same or recover possession thereof, as if such
premises were held by forcible detainer; or,
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(3) Pursue, in connection with the foregoing or separately, any
other right or remedy provided by law.
XI.
OWNER'S RIGHT OF ACCESS
------- ----- -- ------
The OWNER may enter the leased property, at any reasonable time, for
the purpose of inspecting the leased property or performing any work which the
OWNER deems necessary to maintain property interests.
XII.
FIRE OR OTHER DESTRUCTION OF PREMISES
---- -- ----- ----------- -- --------
A. In case of damage to or destruction of any building on the leased
property or of the machinery fixtures, and equipment (except movable trade
fixtures, furniture, and furnishings) used in the operation and maintenance
thereof, by fire or otherwise, whether or not insured under the standard fire
insurance policy with approved standard extended coverage endorsement applicable
to the leased property, the LESSEE will, at such time and upon the conditions
hereinafter set forth, restorer repair, replace, rebuild, or alter the same as
nearly as possible to the condition such property was in immediately prior to
such damage or destruction. Such restoration, repair, replacement, rebuilding,
or alteration shall be commenced as soon as practicable and, after such work has
been commenced, it shall be prosecuted with reasonable diligence.
B. All insurance money received by the OWNER on account
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of such damage or destruction, less the cost, if any, of such recovery, shall be
deposited in escrow by the OWNER and shall be applied by the OWNER to the
payment of the cost of such restoration, repair, replacement, rebuilding, or
alteration (the "work"), including expenditures made for temporary repairs or
for the protection of property pending the completion of permanent restoration,
repair, replacement, rebuilding, or alteration to the leased property, and shall
be paid out, as hereinafter provided, from time to time, as such work
progresses, upon the written request of the LESSEE which shall be accompanied by
the following:
(1) A certificate of the architect or engineer in charge of the
work (the certificate), dated not more than 30 days prior to
such request, setting forth that the sum then requested
either has been paid by the LESSEE or is justly due to
contractors, subcontractors, materialmen, engineers,
architects, or other persons (whose names and addresses
shall be stated), who have rendered services or furnished
materials for certain work. The certificate shall give a
brief description of such services and materials, shall list
the several amounts so paid or due to each of such persons,
shall state the fair value of the work at the date of the
requisition, and shall state that no part of such
expenditures has been or is being made the basis for any
other request for payment. The certificate shall state also
that except for the amounts listed therein, there is no
outstanding indebtedness known to such architect or
engineer, after due inquiry, which is then due for labor,
wages, materials, supplies,
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or services in connection with such work which, if unpaid,
might become the basis of a vendor's, mechanic's, laborer's,
materialman's, or similar lien upon such work or upon the
leased property.
(2)An affidavit sworn to by the LESSEE that all materials and
all property constituting the work described in such
certificate of the architect or engineer are free and clear
of all security interests, liens, charges, or encumbrances,
except encumbrances, if any, securing indebtedness due to
persons specified in such certificate which are to be
discharged upon payment of such indebtedness.
C. Upon compliance with the foregoing provisions of subparagraph (B),
the OWNER shall, out of such insurance money previously deposited in escrow, on
request of the LESSEE, pay to the persons named in such certificate the
respective amounts stated to be due to them, or shall pay to the LESSEE the
amount stated to have been paid by the LESSEE; provided, however, that such
payments shall not exceed in amount the fair value of the relevant work as
stated in the certificate. If the insurance money in the hands of the OWNER
exceeds the amount required to pay the cost of such work, the OWNER shall be
entitled to retain such excess. In the event that the insurance proceeds do not
satisfy the total cost of restoration, repair, replacement, rebuilding or
alteration, the LESSEE shall pay any costs in excess of the insurance proceeds
received which are necessary to satisfy such costs.
D. If there is a substantial interference with the
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operation of the LESEE'S business in the leased property requiring the LESSEE to
temporarily close its business to the public, the minimum rental shall be
equitably apportioned or abated for the duration of such repairs in proportion
to the extent to which there is interference with the operation of the LESSEE'S
business.
XIII.
INDEMNIFICATION
---------------
LESSEE agrees to indemnify and hold OWNER harmless from any loss,
damage, or liability occasioned by, or arising from any default hereunder, or
negligent act on the part of the LESSEE, its agent or employee; LESSEE further
agrees to indemnify and hold OW14ER harmless from any loss, damage or liability
occasioned by, or arising from any negligent act on the part of the OWNER, its
agent or employee.
XIV.
INSURANCE
---------
A. LESSEE agrees to provide at its cost and to keep current a standard
form of liability policy insuring the OWNER and LESSEE from public liability in
limits of THREE HUNDRED THOUSAND AND NO/100 DOLLARS ($300,000.00) / FIVE HUNDRED
THOUSAND AND NO/100 DOLLARS ($500,000.00). LESSEE shall provide the OWNER with
satisfactory proof of the existence of said policy upon request from OWNER.
LESSEE agrees to name the OWNER as additional insured on all, applicable
liability insurance policies.
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B. LESSEE agrees to carry fire/lightning insurance, extended coverage
and vandalism insurance, on the above described premises at LESSEE'S sole and
total expense. OWNER shall be the named insured on all such policies. All
building values shall be agreed upon in writing by and between OWNER and LESSEE
annually to ensure that OWNER feels adequate insurance is in effect on the
subject property. Adequate insurance coverage is contemplated being carried to
avoid invoking the eighty (80) percent co-insurance clause uniformly enforced by
insurance companies if a loss occurs on underinsured property.
XV.
EMINENT DOMAIN
------- ------
If the leased property or any part thereof, is taken by eminent domain
such that the property is rendered unusable for LESSEE'S commercial purposes,
this lease shall expire on the date when the leased property shall so be taken
and the rent shall be apportioned to that date.
XVI.
RIGHT TO SUBLET
----- -- ------
LESSEE shall have the right to sublet to a third party (oil company)
space for LESSEE'S sale of additional petroleum products if such oil company
supplier is available from time to time during the term of this lease. LESSEE
may sublet all or a portion of the leased property for the remainder of the term
with the approval of the OWNER, which approval OWNER
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shall not unreasonably withhold, provided that the business or occupation of the
sublessee is not extra-hazardous or illegal. The LESSEE shall remain primarily
liable for the payment of the rent herein reserved and for the performance of
all the terms of this lease required to be performed by the LESSEE.
XVII.
RIGHT OF FIRST REFUSAL
----- -- ----- -------
OWNER hereby grants LESSEE the Right of First Refusal as defined below:
A. This Right of First Refusal shall continue so long as LESSEE shall
be current in i ts payments of rental sums due as provided in this lease and
performing all the terms and conditions stated therein to be kept and performed.
B. LESSEE has the right to purchase the real property and personal
property described in said lease under the following terms and conditions:
(1) This right refers to all the OWNER controlled land area
and buildings occupied by "The Thing" and its signs,
including non-contiguous land east of the property on the
north side of Interstate 10.
(2) If OWNER shall receive a bona fide offer to purchase the
said area of land and buildings occupied by "The Thing",
and being that real property and improvement described
herein, OWNER shall thereupon deliver to LESSEE a copy of
said offer and the said LESSEE shall have thirty (30) days
in which to meet said offer and to make an equivalent
offer to purchase.
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(3) If OWNER shall receive a bona fide offer to purchase which
LESSEE shall not meet nor make (after receipt of notice
from OWNER) and which OWNER does not accept, then this
"First Refusal" shall continue in full force and effect
according to the provisions hereof. However, if LESSEE
does not meet nor make an offer communicated to it by
OWNER and OWNER accepts the offer made by a third party,
then this "First Refusal" shall terminate.
(4) Any sale by OWNER will be subject to this lease dated
August 1, 1986.
XVIII.
MUTUAL RELEASE OF LIABILITY TO
------ ------- -- --------- --
EXTENT OF SPECIFIC INSURANCE COVERAGE
------ -- -------- --------- --------
Except as provided in Article XII, the OWNER and the LESSEE and all
parties claiming under them hereby mutually release and discharge each other
from all claims and liabilities arising from or caused by any hazard covered by
insurance in connection with property on, or activities conducted on the leased
property, regardless of the cause of the damage or loss.
XIX.
SIGNS
-----
LESSEE shall maintain and pay for all painting, repairs and sign
rentals for the numerous signs advertising the leased premises. It is understood
that all. signs are the exclusive property of LESSEE and OWNER hereby assigns
all signs, sign locations, and any income derived therefrom during any term of
this lease to LESSEE.
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XX.
NOTICE
------
Any notice under this lease must be in writing and must be sent by
Registered or Certified, Return Receipt mail to the last address of the party to
whom the notice is to be given, as designated by such party in writing. The date
of the notice is the date of mailing same. The OWNER hereby designates her
address as 0000 Xxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx, 00000. The LESSEE hereby
designates its address as 000 Xxxxxxxxx XX, Xxxxxxxxxxx, Xxx Xxxxxx, 00000.
XXI.
TERMINATION OF PREVIOUS LEASE
----------- -- -------- -----
Upon the execution and delivery of this lease, that certain lease dated
December 18, 1978, between the parties hereto affecting the property hereby
leased, is canceled and neither party shall have any further rights or
obligations thereunder.
XXII.
ATTORNEY'S FEES AND COSTS
---------- ---- --- -----
In the event suit is brought to enforce the provisions hereof, the
prevailing party shall be entitled to recover its attorney's fees and costs
incurred therein.
XXIII.
LEASE TERM, EXECUTION DATE
----- ----- --------- ----
AND MINIMUM RENT RECEIPT
--- ------- ---- -------
OWNER and LESSEE acknowledge and agree that this lease
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term began on August 1, 1986 although executed this 12 day of January, 1987.
OWNER also acknowledges receipt of LESSEE's checks to bring minimum monthly rent
payments current from August 1, 1986 through December 31, 1986 consistent with
Article III "MINIMUM RENT AND PERCENTAGE RENT".
XXIV.
RELEASE OF SELLER UPON SALE
------- -- ------ ---- ----
The term OWNER as used in this lease, means only the owner for the time
being of the leased property, so that in the event of any sale of the leased
property, after LESSEE did not meet any bona fide offer of a third party
described in Article XVII "RIGHT OF FIRST REFUSAL", the seller shall be and
hereby is entirely relieved of all obligations of the OWNER hereunder. Without
further agreement between the parties or between either of the parties and any
purchaser of the leased property, such purchaser shall be deemed to have assumed
all obligations of the OWNER under this lease, and any sale shall be made
subject to the terms of this lease.
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XXV.
BINDING EFFECT
------- ------
This lease shall apply to and bind the heirs, executors, administrators
and assigns of the respective parties hereto.
LESSOR: /s/ Xxxxx Xxxxxx
----------------------------------
XXXXX XXXXXX/OWNER
LESSEE: /s/ X. X. Xxxx
----------------------------------
XXXXXX'X INCORPORATED by
Executive Vice President
ATTEST:
---------------------------------------
Secretary, XXXXXX'X INC.
STATE OF Maryland )
)SS.
County of Baltimore )
SUBSCRIBED AND SWORN To before me this 12 day of January, 1987, by
XXXXX XXXXXX.
My Commission Expires:
7-1-90
-----------------------
/s/ Signature Illegible
-----------------------------------------
NOTARY PUBLIC
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STATE OF NEW MEXICO )
)Ss.
County of Bernallillo )
SUBSCRIBED AND SWORN TO before me this 16th day of January, 1987, by
X.X. XXXX, Executive Vice President of XXXXXX'X, INCORPORATED.
My Commission Expires:
5/31/87 /s/ Xxxxxxx X. XxXxxx
---------------------- ------------------------------
NOTARY PUBLIC
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