EXHIBIT 10.48
SHOPPING CENTER LEASE
BETWEEN
OPRY XXXXX LIMITED PARTNERSHIP
LANDLORD
AND
BIG BUCK BREWERY AND STEAKHOUSE, INC.
TENANT
FOR
OPRY XXXXX SHOPPING CENTER
NASHVILLE, TENNESSEE
Dated: November 9, 2000
TABLE OF CONTENTS
ARTICLE PAGE
------- ----
I INTRODUCTORY PROVISIONS.......................................................................................3
II GRANT AND TERM...............................................................................................5
III RENT........................................................................................................7
IV PREPARATION OF LEASED PREMISES...............................................................................9
V CONDUCT OF BUSINESS..........................................................................................12
VI COMMON AREAS................................................................................................15
VII REPAIRS AND MAINTENANCE....................................................................................16
VIII TAXES.....................................................................................................17
IX INSURANCE, INDEMNITY AND LIABILITY..........................................................................19
X DESTRUCTION OF LEASED PREMISES...............................................................................21
XI CONDEMNATION................................................................................................22
XII ASSIGNMENT, SUBLETTING AND ENCUMBERING LEASE...............................................................23
XIII SUBORDINATION, ATTORNMENT, FINANCING AND ESTOPPEL.........................................................25
XIV ADVERTISING AND PROMOTION..................................................................................27
XV DEFAULT AND REMEDIES........................................................................................28
XVI RIGHT OF ACCESS............................................................................................31
XVII FORCE MAJEURE.............................................................................................31
XVIII END OF TERM..............................................................................................32
XIX COVENANT OF QUIET ENJOYMENT................................................................................32
XX UTILITIES...................................................................................................32
XXI MISCELLANEOUS..............................................................................................33
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EXHIBITS
--------
Exhibit A - Site Plan and Premises Plan
Exhibit B - Description of Landlord's Work
Exhibit C - Description of Tenant's Work
Exhibit D - Reserved Uses
Exhibit E - Signage Criteria
Exhibit F - Prohibited Uses
Exhibit G - Commencement and Expiration Date Declaration
Exhibit H - Nondisturbance Agreement
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SHOPPING CENTER LEASE
OPRY XXXXX
THIS SHOPPING CENTER LEASE (this "Lease") dated as of this 9th day of
November, 2000, by and between OPRY XXXXX LIMITED PARTNERSHIP, a Delaware
limited partnership ("Landlord"), and BIG BUCK BREWERY & STEAKHOUSE, INC., a
Michigan corporation ("Tenant").
DATA SHEET
The following references furnish data to be incorporated in the
specified Sections of this Lease and shall be construed to incorporate all of
the terms of the entire Section as stated in this Lease:
(1) Section 2.1: LEASED PREMISES:
a one-level store building known as Space R-4, containing approximately
20,046 square feet of GLA, consisting of approximately 16,757 square
feet of restaurant space (the "Restaurant Space") and approximately
3,289 square feet of storage space (the "Storage Space"), as depicted
on the site plan attached hereto as Exhibit "A," subject to minor
deviations mutually agreed to by Landlord and Tenant.
(2) Section 2.1: SHOPPING CENTER:
the Shopping Center designated as Opry Xxxxx or by such other name as
Landlord may from time to time hereafter designate, which is a certain
tract of land owned by Landlord located in Nashville, Tennessee (the
"State").
(3) Section 2.2: TERM:
FIXTURING PERIOD: the one hundred eighty (180) day fixturing period
following the delivery of possession of the Leased Premises.
ORIGINAL TERM: ten (10) full years.
OPTION PERIOD: one (1) renewal option of five (5) full years.
(4) Section 3.1(a): RESTAURANT SPACE MINIMUM RENT:
ANNUAL RESTAURANT
SPACE MINIMUM ANNUAL RESTAURANT MONTHLY RESTAURANT
RENT SPACE SPACE
PERIOD PER SQUARE FOOT MINIMUM RENT MINIMUM RENT
------ --------------- ------------ ------------
From the $28.00 $469,196.00 $39,099.67
Commencement Date to
the day before the 2nd
Anniversary Date
From the 2nd $28.50 $477,574.50 $39,797.87
Anniversary Date to the
day before the 4th
Anniversary Date
From the 4th Anniversary $29.00 $485,953.00 $40,496.08
Date to the day before the
ANNUAL RESTAURANT
SPACE MINIMUM ANNUAL RESTAURANT MONTHLY RESTAURANT
RENT SPACE SPACE
PERIOD PER SQUARE FOOT MINIMUM RENT MINIMUM RENT
------ --------------- ------------ ------------
6th Anniversary Date
From the 6th Anniversary $29.50 $494,331.50 $41,195.29
Date to the day before the
8th Anniversary Date
From the 8th Anniversary $30.00 $502,710.00 $41,892.50
Date to the Expiration
Date
Years 11 - 12 (portion of $31.50 $527,845.50 $43,987.13
Option Period)
Years 13 - 15 (portion of $34.40 $576,440.80 $48,036.73
Option Period)
STORAGE SPACE RENT:
ANNUAL STORAGE
SPACE RENT ANNUAL STORAGE MONTHLY STORAGE
PERIOD PER SQUARE FOOT SPACE RENT SPACE RENT
------ --------------- ---------- ----------
From the $15.00 $49,335.00 $4,111.25
Commencement Date to
the day before the 2nd
Anniversary Date
From the 2nd $15.50 $50,979.50 $4,248.29
Anniversary Date to the
day before the 4th
Anniversary Date
From the 4th Anniversary $16.00 $52,624.00 $4,385.33
Date to the day before the
6th Anniversary Date
From the 6th Anniversary $16.50 $54,268.50 $4,522.38
Date to the day before the
8th Anniversary Date
From the 8th Anniversary $17.00 $55,913.00 $4,659.42
Date to the Expiration
Date
Years 11 - 12 (portion of $20.40 $67,095.60 $5,591.30
Option Period)
Years 13 - 15 (portion of $22.28 $73,278.92 $6,106.58
Option Period)
Restaurant Space Minimum Rent and Storage Space Rent are collectively referred
to in this Lease as "Minimum Rent." The amounts of annual Restaurant Space
Minimum Rent and monthly Restaurant Space Minimum Rent and the amounts of annual
Storage Space Rent and monthly Storage Space Rent set forth in the foregoing
tables are based on a GLA of Restaurant Space within the Leased Premises equal
to 16,757 square feet and a GLA of Storage Space within the Leased Premises
equal to 3,289 square feet. As more fully provided hereafter, upon substantial
completion of Landlord's Work, the actual GLA of the Leased Premises shall be
determined by Landlord's architect or engineer, subject to reasonable
confirmation by Tenant, and the
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Minimum Rent, computed at the rates set forth in the foregoing tables, shall be
determined and confirmed prior to the Commencement Date. It is expressly
understood that in no event shall the GLA dedicated to Storage Space exceed
3,300 square feet for the purpose of the calculation of Storage Space Rent and
any GLA in excess of 3,300 square feet dedicated to Storage Space shall be
deemed to be Restaurant Space for the purpose of the calculation of Restaurant
Space Minimum Rent.
(5) Section 3.2: PERCENTAGE RENT:
six percent (6%) (the "percentage factor") of Gross Sales (as defined
in Section 3.2 below) made during each Lease Year (as defined in
Section 2.2 below) of the Term hereof in excess of $8,500,000 (the
"Sales Break Point").
(6) Section 3.3: RENT PAYMENT ADDRESS: c/o The Xxxxx Corporation, 0000
Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000, or such other
place as Landlord may notify Tenant in writing from time to time.
(7) Section 4.3: ALLOWANCE: an amount equal to Ninety-eight and 52/100ths
Dollars ($98.52) per square foot of GLA but not to exceed One Million
Nine Hundred Seventy-five Thousand and 00/100 dollars ($1,975,000.00).
(8) Section 5.1: USE AND TRADE NAME:
PERMITTED USE: Tenant shall use the Leased Premises for the use set
forth below, and for no other purpose:
Operation of a full-service restaurant having a steakhouse and brewpub
theme, including the sale of alcoholic beverages for on-premises
consumption (subject to applicable licensing requirements) and the
manufacture of beer, root beer and other beverages (subject to
applicable licensing requirements).
TRADE NAME: Big Buck Brewery & Steakhouse
(9) Section 5.7: RADIUS AREA: the area falling within a radius of fifteen
(15) miles measured from the outside boundary of the Shopping Center.
(10) Section 5.8: OPERATING COVENANT PERIOD: a period of ten (10) years
following the Commencement Date.
(11) Section 6.2: CAM CONTRIBUTION: $2.00 per square foot of GLA in the
Leased Premises per annum, subject to upward adjustment only pursuant
to Section 6.2 below.
(12) Section 8.2: TENANT'S PROPORTIONATE SHARE: a percentage equal to the
GLA Fraction (as defined in Section 1.3 (c)).
(13) Section 14.2: PROMOTION FUND CONTRIBUTION: $0.50 per square foot of
GLA in the Leased Premises per annum, subject to upward adjustment only
pursuant to Section 14.2 below.
ARTICLE I
INTRODUCTORY PROVISIONS
Section 1.1. REFERENCES AND CONFLICTS. References appearing in the Data
Sheet are to designate some of the other places in this Lease where additional
provisions applicable to the particular items within the Data Sheet appear. Each
reference in this Lease to any item within the Data Sheet shall be construed to
incorporate all of the terms provided for under such provision and shall be read
in conjunction with all other
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provisions of this Lease applicable thereto. If there is any conflict between
the terms contained in the Data Sheet and any other provisions of this Lease,
the latter shall control.
Section 1.2. EXHIBITS. The following drawings and special provisions
are attached to this Lease as exhibits and are hereby made a part of this Lease:
Exhibit A - Site Plan and Premises Plan
Exhibit B - Description of Landlord's Work
Exhibit C - Description of Tenant's Work
Exhibit D - Reserved Uses
Exhibit E - Signage Criteria
Exhibit F - Prohibited Uses
Exhibit G - Commencement and Expiration Date Declaration
Exhibit H - Nondisturbance Agreement
Section 1.3. GENERAL DEFINITIONS. In addition to the terms defined in
the Data Sheet, the following terms, whenever used in this Lease with the first
letter of each word capitalized, shall have only the meanings set forth in this
Section, unless such meanings are expressly modified, limited or expanded
elsewhere in this Lease:
(a) "COMMON AREAS" means all areas, facilities and
improvements (as the same may be enlarged, reduced, replaced, removed
or otherwise altered by Landlord) from time to time made available in
the Shopping Center by Landlord for the non-exclusive common use of
occupants of the Shopping Center, including Tenant, its agents,
employees and customers. The Common Areas shall include, but shall not
be limited to, the interior of the enclosed mall, parking areas and
facilities, sidewalks, stairways, escalators, elevators, service
corridors, fire corridors, seating areas, truckways, ramps, loading
docks, delivery areas, landscaped areas, package pickup stations,
public restrooms and comfort stations, access and interior roads,
retaining walls, drainage systems, bus stops and lighting facilities.
Notwithstanding anything in the foregoing to the contrary, the Common
Areas shall not include any stairways, escalators, elevators, ramps,
loading docks or delivery areas included in the Leased Premises or in
the store premises of any occupant of the Shopping Center and intended
for such occupant's exclusive use.
(b) "GLA" means the number of square feet of enclosed
floor area within the Leased Premises or the Shopping Center, as the
case may be, intended for the exclusive use by the occupant thereof and
its customers, whether or not actually leased or occupied. GLA shall
not include: (i) outside selling areas which are not heated or air
conditioned, (ii) loading docks and truck ramps, (iii) upper levels of
multi-deck storage areas, (iv) management offices of the Shopping
Center, and (v) community rooms, if any. GLA shall be measured from the
exterior face of the exterior walls and from the centerline of interior
or party walls. No deduction from GLA shall be made for columns,
stairs, or any interior construction or equipment.
Upon substantial completion of construction of Landlord's Work
(as defined in Section 4.1 below), the GLA of the Leased Premises shall
be determined by Landlord's architect or engineer, subject to
reasonable confirmation by Tenant, and the Minimum Rent, computed at
the rates set forth in the Data Sheet, shall be recalculated based upon
such measurement prior to the Commencement Date (as defined in Section
2.2 below). Promptly after the Commencement Date, Landlord and Tenant
shall execute and deliver a written declaration, in the form attached
hereto as Exhibit G, setting forth the Commencement Date, the GLA of
the Leased Premises and the Shopping Center as of the Commencement
Date, and the amount of the Minimum Rent payable by Tenant. In addition
the Sales Break Point(s) set forth in the Data Sheet shall be increased
or decreased in direct proportion to any increase or decrease in the
Minimum Rent relative to the Minimum Rent set forth in the Data Sheet.
From time to time during the Term of this Lease, Landlord shall give
Tenant notice of the GLA in the Shopping Center, at a given time or for
a given period of time, as such GLA may be revised because
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of additions or reductions to the Shopping Center, and appropriate
adjustment shall be made to the GLA Fraction (as defined in Section
1.3(c) below).
(c) "GLA FRACTION" means a fraction, the numerator of
which is the GLA of the Leased Premises and the denominator of which is
the GLA of the Shopping Center (averaged over the course of the year)
(excluding the GLA of buildings not owned by Landlord).
ARTICLE II
GRANT AND TERM
Section 2.1. LEASED PREMISES. Landlord, in consideration of the rent to
be paid and the covenants to be performed by Tenant, does hereby lease and
demise to Tenant, and Tenant hereby rents and hires from Landlord, for the Term
herein set forth, the Leased Premises which are described as set forth in the
Data Sheet attached hereto, in the Shopping Center. Landlord does not warrant or
represent that the Shopping Center is or will be constructed exactly as shown on
the Site Plan. Notwithstanding anything contained in this Lease to the contrary,
Landlord shall have the right, at any time and from time to time, without notice
to or consent of Tenant, and without in any manner diminishing Tenant's
obligations under this Lease, to make alterations or additions to, and build
additional stories on, the building in which the Leased Premises are to be
located, and to build adjoining the same, to construct other buildings and
improvements of any type in the Shopping Center or the Common Areas, or any part
thereof, including the right to locate and/or erect thereon permanent or
temporary kiosks and structures, to enlarge the Shopping Center, and to make
alterations therein or additions thereto, to build additional stories on any
building or buildings within the Shopping Center, and to build adjoining
thereto, to construct decks or elevated parking facilities and free standing
buildings within the parking lot areas of the Shopping Center, and to change the
size, location, elevation and nature of any of the stores in the Shopping Center
or of the Common Areas, or any part thereof; provided that in no event shall
Landlord do anything hereunder which will materially adversely affect Tenant's
use of the Leased Premises. In the event Landlord elects to enlarge the Shopping
Center, or any part thereof, any additional area may be included by Landlord in
the definition of the Shopping Center for purposes of this Lease. Landlord shall
also have the general right from time to time to include within and/or to
exclude from the defined Shopping Center any existing or future areas, and the
floor areas of the Shopping Center shall be accordingly adjusted. For purposes
of determining the GLA Fraction, the term "Shopping Center" shall exclude
buildings not owned by Landlord. This Lease of the Leased Premises is subject to
all applicable building restrictions, planning and zoning ordinances,
governmental rules and regulations, existing underlying leases, and all other
encumbrances, covenants, restrictions and easements affecting the Shopping
Center, and to the terms and provisions of certain reciprocal easement and
operating agreements now or hereafter entered into by Landlord. Landlord
represents that no encumbrances, covenants, restrictions or easements affecting
the Shopping Center prevent or prohibit the use of the Leased Premises for the
Permitted Use.
Notwithstanding any other provision of this Lease, the Storage Space
shall be utilized solely for storage purposes, and for no other purpose
whatsoever (such prohibited uses to include food preparation, food refrigeration
and freezing, customer seating, customer waiting, merchandise sales, memorabilia
display, employee changing or break area, or any other use that is not
exclusively limited to storage).
Landlord hereby grants to Tenant the right, during the Term of this
Lease, to use the area(s) adjacent to the Leased Premises denoted "Patio Area"
on Exhibit "A" for outdoor seating in connection with Tenant's food and beverage
service, provided Tenant shall pay all costs related to the use and clean-up
thereof. The number, height, color, size, design, material and placement of any
tables, chairs and other furniture and food service equipment installed by
Tenant in the Patio Area shall be subject to Landlord's reasonable approval and
to all applicable legal requirements. Tenant agrees that the use of the outdoor
seating area, or noise therefrom, shall not unreasonably interfere with other
tenants in the Shopping Center, and Tenant may forfeit its right to use the
Patio Area in the event such interference occurs and is not cured by Tenant
within thirty (30) days following its receipt of written notice thereof. The
rights of Tenant described in this paragraph are further subject to the
following conditions: (a) for purposes of (i) Tenant's indemnity of Landlord,
pursuant to Section 9.4(a) of this Lease, (ii) Tenant's obligation to insure,
pursuant to Section 9.2 of this Lease, and (iii) Tenant's
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obligation to maintain the Leased Premises, pursuant to Section 7.2 of this
Lease, the Patio Area shall be deemed included as a part of the Leased Premises,
and (b) for purposes of (i) Landlord's indemnity of Tenant, pursuant to Section
9.4(b) of this Lease, and (ii) Landlord's obligation to maintain the Common
Areas, pursuant to Section 6.1 of this Lease, the Patio Area shall be deemed to
be excluded from the Common Areas.
Section 2.2. TERM.
(a) The term of this Lease (the "Term") shall be for a
period commencing on the date (the "Commencement Date") which is the
earlier of (i) the expiration of the Fixturing Period or (ii) the date
on which Tenant shall open the Leased Premises for business to the
public, and expiring at 11:59 p.m. local time on the day before the
tenth (10th) Anniversary Date (as hereinbelow defined), unless extended
or sooner terminated in accordance with the provisions hereof (the
"Expiration Date"). If the Commencement Date occurs on the first day of
a calendar month, the term "Anniversary Date" shall mean an anniversary
of the Commencement Date. If the Commencement Date occurs on a day that
is not the first day of a calendar month, the term "Anniversary Date"
shall mean an anniversary of the first day of the calendar month
immediately following the calendar month in which the Commencement Date
occurs. For all purposes of this Lease, the term "Lease Year" shall
have the following meaning: the first Lease Year shall be a period
beginning with the Commencement Date and ending on the 31st of December
next following the Commencement Date; and after the first Lease Year,
the term "Lease Year" shall mean a period of twelve (12) consecutive
calendar months commencing on January 1 of each calendar year, except
that the last Lease Year shall terminate on the Expiration Date. Any
Lease Year which is less than a full twelve (12) consecutive calendar
months is sometimes referred to herein as a "Partial Lease Year."
(b) Provided Tenant is not then in default hereof (beyond
any applicable notice and cure periods), Tenant shall have the option
to extend the Term hereof for the Option Period described in the Data
Sheet. Said option shall be exercised, if at all, by written notice to
Landlord at least twelve (12) months prior to the expiration of the
Initial Term of this Lease. All terms and conditions contained herein
shall apply during the Option Period. In the event that Tenant does not
exercise the foregoing option to renew this Lease within the required
time period, then such option shall, upon expiration of the applicable
period, become null and void and be of no further force or effect. The
foregoing option to renew this Lease shall, if not theretofore
exercised, become null and void and be of no further force and effect
upon any assignment of this Lease by the original Tenant hereunder
(other than an assignment pursuant to Section 12.1(c) below). As more
fully provided in Section 4.3(d) below, in the event Tenant exercises
an extension option, Tenant may be required to refurbish the Leased
Premises.
Section 2.3. OPENING. Tenant covenants and agrees to complete its
construction within the Leased Premises in accordance with the provisions of
this Lease, and to open its store for business with the public not later than
the expiration of the Fixturing Period (subject to delays of the sort described
in Article XVII below, and subject to the grace period set forth in Section
15.1(a)).
Section 2.4. LATE OPENING. In the event Tenant shall fail to open its
store for business with the public within thirty (30) days following the
Commencement Date, then, except to the extent such failure is due to delays of
the sort described in Article XVII below, in order to compensate Landlord for
its loss, Tenant shall pay to Landlord as additional rent (as defined in Section
3.3 below), over and above the Minimum Rent and all other charges to be paid by
Tenant to Landlord pursuant to this Lease, a sum equal to $400 per day for each
day after the Commencement Date that Tenant shall have failed to open its store
for business. This remedy shall be in addition to any and all other remedies
provided for in this Lease in the event of such failure to open. Such additional
late opening rent shall be deemed to be in lieu of any Percentage Rent that
might have been earned during the period of Tenant's failure to open.
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ARTICLE III
RENT
Section 3.1. MINIMUM RENT. During the entire Term of this Lease, Tenant
shall pay annual minimum rental ("Minimum Rent") for the Leased Premises in the
amount set forth in the Data Sheet, which sum shall be payable by Tenant in
equal consecutive monthly installments in the amount set forth in the Data
Sheet, on or before the first day of each month, in advance. The Minimum Rent
and each of the monthly installments of rent called for hereunder shall be
payable to Landlord, without demand, deduction, set-off or counterclaim. The
first installment of Minimum Rent shall be paid in advance on the Commencement
Date. If the Commencement Date occurs on a day other than the first day of a
month, the second installment of Minimum Rent shall be prorated at a daily rate
on the basis of a thirty (30) day month.
Section 3.2. PERCENTAGE RENT.
(a) During and for each Lease Year, Tenant shall pay
annual percentage rent ("Percentage Rent") equal to the product of the
Percentage Factor multiplied by all Gross Sales resulting from business
conducted in, on or from the Leased Premises during such Lease Year in
excess of the Sales Break Point (see Data Sheet). "Gross Sales" is
defined to mean the total amount of the total price charged, whether
for cash or otherwise, for all goods, merchandise, tickets, trade-ins,
beverages and food sold, leased or licensed, and all services or other
operations or items sold or rendered at, in, on, or from the Leased
Premises by or on account of Tenant or any sublessee, assignee or
concessionaire of Tenant, for cash or on a charge, credit, or time
basis or otherwise, including all orders for merchandise taken from or
filled at or from the Leased Premises (which may include internet
orders placed by means of computer terminals located in the Leased
Premises), including all deposits not refunded to customers. A "sale"
shall be deemed to have been consummated for purposes of this Lease,
and the entire amount of the sale price shall be included in Gross
Sales, at such time as (i) the transaction is initially reflected in
the books or records of Tenant, or any sublessee, assignee or
concessionaire of Tenant, or any other person or entity operating in
the Leased Premises, or (ii) Tenant or such other entity receives all
or any portion of the sales price, or (iii) the applicable goods or
services are delivered to the customer, whichever first occurs,
irrespective of whether payment is made in installments, the sale is
for cash or credit, or otherwise, or all or any portion of the sales
price has actually been paid at the time of inclusion in Gross Sales or
at any other time. Tenant and the other persons and entities occupying
the Leased Premises shall record each sale or transaction, whether for
cash, credit or otherwise, in a cash register or cash registers having
a cumulative total, which shall be approved by Landlord and which shall
possess such other features as shall be required by Landlord. Gross
Sales shall exclude, however, proceeds from any sales tax, gross
receipts tax, excise tax or similar tax, by whatever name called, which
are separately stated and in addition to the purchase price; refunds
given to customers for merchandise purchased at the Leased Premises and
returned or exchanged; sales of Tenant's furniture, fixtures and
equipment, or other bulk sakes, not in the ordinary course of Tenant's
business; discounted sales to employees working in the Leased Premises
(not to exceed two percent (2%) of Gross Sales); transfers of food or
beverages between the stores of Tenant, where such transfer of food or
beverages is made for the convenient operation of Tenant's business and
not for the purpose of consummating elsewhere a sale which has
theretofore been made at, in, from or upon the Leased Premises; returns
to shippers or manufacturers; the amount of any complimentary food,
beverages or merchandise given out without charge at the Leased
Premises for promotional or other purposes; receipts from vending
machines and pay phones provided solely for the benefit of Tenant's
employees; and credit card fees payable by Tenant.
(b) Tenant shall keep at the Leased Premises or at
Tenant's executive offices within the continental United States a full
and accurate set of books and records documenting the amount of Gross
Sales in each Lease Year or Partial Lease Year. The books and records
to be kept by Tenant shall include (without limitation): (i) cash
register tapes or electronic recording medium, including tapes (or
electronic recording medium) from temporary registers; (ii) detailed
original records of any exclusions or deductions from Gross Sales;
(iii) sales tax records; and (iv) such other records, if any,
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which would normally be examined by an independent accountant pursuant
to accepted auditing standards in performing an audit of Tenant's
sales. Such books and records shall be kept in accordance with
generally accepted accounting principles and practices and shall be
retained by Tenant for a period of not less than three (3) years
following the end of the Lease Year or Partial Lease Year to which they
have reference. If the documentation Tenant is required to maintain
pursuant to this Section 3.2(b) is insufficient to permit Landlord to
verify Gross Sales and exclusions therefrom, Tenant shall pay to
Landlord, upon demand, the cost of an examination or audit performed
pursuant to this Section 3.2(b) including (without limitation) all
reasonable travel expenses incurred by Landlord in conducting such
examination and/or audit. If any audit is required or a controversy
arises regarding Percentage Rent, Tenant shall retain its books and
records until such audit is terminated or controversy is resolved,
notwithstanding the expiration of the Term of this Lease. When and as
Landlord may reasonably require, Tenant shall also furnish to Landlord
any and all statements, information and copies of sales and income tax
reports and returns which separately show financial data for the Leased
Premises, and inventory records and other data evidencing Gross Sales.
Within fifteen (15) days following the end of each calendar month of
the Term hereof, Tenant shall submit to Landlord an unaudited statement
of Gross Sales for such calendar month. All Gross Sales statements to
be supplied by Tenant to Landlord shall be in such form and with such
detail as Landlord shall deem necessary or desirable. Within fifteen
(15) days following the end of the month in which Tenant's Gross Sales
for the Lease Year or Partial Lease Year to date exceed the Sales Break
Point, and each month thereafter, Tenant shall pay to Landlord
Percentage Rent and shall submit to Landlord a statement certified by
Tenant setting forth the Gross Sales for each such period. Within
forty-five (45) days after the close of each Lease Year or Partial
Lease Year, Tenant shall furnish to Landlord a statement certified by
Tenant (acting through its chief financial officer, if Tenant is a
corporation) setting forth the amount of Gross Sales during such Lease
Year or Partial Lease Year and showing the amount of Percentage Rent
required to be paid by Tenant for such Lease Year or Partial Lease
Year. The full amount of the Percentage Rent due shall be paid to
Landlord no later than sixty (60) days after the end of each Lease Year
or Partial Lease Year. Upon not less than ten (10) business days prior
notice, Landlord and/or Landlord's auditor shall have the right to
inspect and/or to audit the records of Tenant relating to Gross Sales.
If the Gross Sales exceed those reported, Tenant shall immediately pay
any deficiency in Percentage Rent owing to Landlord. If Gross Sales
exceed those reported by three percent (3%) or more, Tenant shall pay
to Landlord as additional rent, upon demand, the cost of the audit or
examination including (without limitation) all reasonable travel
expenses incurred by Landlord in conducting such audit. If Gross Sales
exceed those reported by (A) six percent (6%) or more in any one (1)
Lease Year, or (B) five percent (5%) or more for any two (2) Lease
Years out of any four (4) Lease Year period, then Landlord shall have
the remedies specified in Section 15.2 below for a default by Tenant
under this Lease. Tenant agrees in the event Tenant shall fail to
timely submit a Gross Sales statement as required by this Section
3.2(b) that Tenant shall pay on demand a late fee of One Hundred
Dollars ($100.00) per day for each day such statement is overdue, as
additional rent.
(c) In the event that any Lease Year during the Term
hereof is less than exactly twelve (12) full calendar months, or if
Tenant shall fail to operate its business in the Leased Premises in the
manner and on each day as required pursuant to Article V hereof, then,
for the purpose of computing the Percentage Rent for any such short
Lease Year, or such Lease Year affected by Tenant's failure to operate,
the Sales Break Point for such Lease Year shall be adjusted by
multiplying the Sales Break Point otherwise applicable for such Lease
Year by a fraction, the numerator of which shall be the actual number
of days in such short Lease Year or the actual number of days in such
Lease Year during which Tenant was open for business and operating in
accordance with Article V, and the denominator of which shall be three
hundred sixty (360).
Section 3.3. PAYMENTS BY TENANT. Throughout the Term of this Lease,
Tenant shall pay to Landlord, without demand, deductions, set-offs or
counterclaims, the rent, which is hereby defined as the sum of the Minimum Rent,
Percentage Rent and all additional rent, when and as the same shall be due and
payable hereunder. Unless otherwise stated, all sums of money or charges of any
kind or nature, in addition to Minimum Rent and Percentage Rent, payable by
Tenant to Landlord pursuant to this Lease or the exhibits
8
attached hereto are defined as "additional rent" and are due thirty (30) days
after the rendering of an invoice therefor, without any deductions, set-offs or
counterclaims, and failure to pay such sums of money or charges shall carry the
same consequences as Tenant's failure to pay Minimum Rent. All payments and
charges required to be made by Tenant to Landlord hereunder shall be payable in
United States funds, at the address indicated on the Data Sheet (unless
otherwise specified by written notice from Landlord to Tenant). No payment by
Tenant or receipt by Landlord of a lesser amount than the correct rent shall be
deemed to be other than a payment on account, and no endorsement or statement on
any check or other communication accompanying a check for payment of any amounts
payable hereunder shall be deemed an accord and satisfaction, and Landlord may
accept such check as partial payment without prejudice to Landlord's right to
recover the balance of any sums owed by Tenant hereunder or to pursue against
Tenant any additional remedies available under this Lease or provided at law or
in equity. Without limitation of any other obligations of Tenant which shall
survive the expiration of the Term, the obligations of Tenant to pay Minimum
Rent, Percentage Rent and additional rent which have accrued as of the date of
expiration or sooner termination of the Term of this Lease shall survive such
expiration or earlier termination.
Section 3.4. LATE CHARGE. In the event any rent or other sums required
hereunder to be paid are not received within seven (7) days following the date
the same are due, then, for each full or partial month that such payment is not
received by Landlord following the due date thereof, Tenant shall immediately
pay, as additional rent, a service charge equal to five percent (5%) of the
amount of the overdue payment. The provisions herein for late payment service
charges shall not be construed to extend the date for payment of any sums
required to be paid by Tenant hereunder or to relieve Tenant of its obligation
to pay all such sums at the time or times herein stipulated. Notwithstanding the
imposition of such service charges pursuant to this Section 3.4, neither the
demand for, nor collection by, Landlord of such late payment service charges
shall be construed as a cure of any default on the part of Tenant for failure to
make a payment when due under this Lease. The late payment service charge shall
be deemed additional rent, and the right to require it shall be in addition to
all of Landlord's other rights and remedies hereunder or at law and shall not be
construed as limiting Landlord's remedies in any manner. It is agreed that the
said service charge is a fair and reasonable charge under the circumstances, and
shall not be construed as interest on a debt payment. In the event any charge
imposed hereunder or under any other section of this Lease is either stated to
be or construed as interest, then no such interest charge shall be calculated at
a rate which is higher than the maximum rate which is allowed under the usury
laws of the State, which maximum rate of interest shall be substituted for the
rate in excess thereof, if any, computed pursuant to this Lease.
ARTICLE IV
PREPARATION OF LEASED PREMISES
Section 4.1. TENANT'S WORK.
(a) Landlord shall deliver possession of the Leased
Premises to Tenant, and Tenant shall accept delivery of the Leased
Premises, in their "as is" "where is" condition promptly following the
Effective Date of this Lease, except that, prior to delivering
possession of the Leased Premises to Tenant, Landlord shall complete
therein those items of work described in Exhibit "B" attached hereto.
Tenant agrees, prior to the commencement of the Term of this Lease, to
diligently perform all work of whatever nature in accordance with this
Lease and Tenant's obligations set forth in Exhibit "C" ("Tenant's
Work") and all other related work necessary to prepare for the opening
to the public of Tenant's store in the Leased Premises. Tenant's Work
shall be performed (i) by Tenant at Tenant's sole cost and expense,
subject to Landlord's obligation to grant the Allowance described
below, (ii) in a first-class workmanlike manner with first-class
materials, and (iii) by duly qualified or licensed persons. Landlord
hereby agrees to grant Tenant the Allowance described in the Data
Sheet, to be applied toward the cost of Tenant's Work. Disbursements
shall be made to Tenant out of the Allowance in the following manner:
(I) one-third (1/3) within thirty (30) days after the date possession
of the Leased Premises is delivered to Tenant and Tenant has commenced
the performance of Tenant's Work, (II) one-third (1/3) within thirty
(30) days after Tenant's Work has been two-thirds (2/3) completed (as
certified by Tenant's independent architect) and Landlord has been
furnished with
9
partial lien waivers with respect to all such work, and (III) one-third
(1/3) within thirty (30) days after the Commencement Date, Tenant's
opening for business in the Leased Premises, and the furnishing to
Landlord of final lien waivers relating to all of Tenant's Work. Upon
Landlord's request, Tenant shall cause its general contractor to
furnish an affidavit to Landlord setting forth the names of all
subcontractors employed in connection with Tenant's Work.
(b) Prior to commencement of any of Tenant's Work, Tenant
agrees to furnish to Landlord store design drawings and working
drawings and specifications with respect to the Leased Premises for
approval by Landlord. Any material deviations from the final plans and
specifications, once approved by Landlord, shall require the further
approval of Landlord. Landlord's approval of Tenant's plans and
specifications shall not constitute the assumption of such items.
Notwithstanding anything to the contrary contained herein, Landlord's
approval of any plans and specifications submitted by Tenant pursuant
to this Section 4.3 or otherwise is not intended and shall not be
deemed to constitute a representation, warranty or assurance of any
kind that such plans and specifications and Tenant's Work shown thereon
comply with any applicable building or zoning codes or that the same
are structurally sound. Tenant shall be solely responsible for causing
such compliance and for the quality and structural integrity of any
Tenant's Work, and Tenant acknowledges that it is not relying on
Landlord or its agents, employees or contractors for the same. Tenant's
Work shall include (without limitation) the installation of new
interior fixtures and equipment and the stocking of the Leased Premises
with suitable merchandise. Tenant covenants that all such fixtures and
equipment visible to customers shall be new and otherwise acceptable to
Landlord in appearance. In addition to conforming to the final plans
and specifications as approved by Landlord, all work performed by
Tenant shall be performed diligently and in a good and workmanlike
manner and in compliance with such rules and regulations as Landlord
and its representatives may make, provided that such rules and
regulations are uniformly applied to all similarly situated Shopping
Center tenants under construction, and in accordance with all
applicable laws, ordinances, codes and insurance company requirements.
Unless Landlord otherwise directs in writing, Tenant shall not open the
Leased Premises for business until all construction has been
substantially completed in accordance with the final plans and
specifications as approved by Landlord and a certificate of occupancy
(or other legal authorization to open the Leased Premises for business)
has been issued. It is further understood and agreed that: (i) Landlord
shall have no responsibility or liability whatsoever for any loss of,
or damage to, any fixtures, equipment, merchandise or other property
belonging to Tenant installed or left in the Leased Premises; and (ii)
Tenant's entry upon and occupancy of the Leased Premises prior to the
Commencement Date shall be governed by and subject to all the
provisions, covenants and conditions of this Lease, other than the
requirement that Tenant pay any rent. Tenant shall obtain at its sole
cost, and promptly thereafter furnish to Landlord, all certificates and
approvals with respect to work done and installations made by Tenant
that may be required for the issuance of a certificate of occupancy (or
other legal authorization to open the Leased Premises for business) for
the Leased Premises, so that such certificate of occupancy (or other
legal authorization to open the Leased Premises for business) shall be
issued and the Leased Premises shall be ready for the opening of
Tenant's business on the Commencement Date. Unless already obtained by
Landlord, upon the issuance of the certificate of occupancy, a copy
thereof shall be promptly delivered to Landlord. Promptly upon the
completion of Tenant's Work, Tenant shall repair, clean and restore all
portions of the Shopping Center affected by Tenant's Work to their
prior condition.
(c) Tenant shall at all times keep and maintain the Leased
Premises and all other parts of the Shopping Center free from any and
all liens arising out of any work performed, materials furnished or
obligations incurred by or for the benefit of Tenant in connection with
the Leased Premises. The interest of Landlord in the Leased Premises
and the Shopping Center shall not be subject to liens for improvements
made by or on behalf of Tenant, and nothing contained in this Lease
shall be construed as a consent on the part of Landlord to subject
Landlord's estate in the Leased Premises or the Shopping Center to any
lien or liability under applicable law. In the event that any
mechanic's, materialman's or other lien or any notice of claim,
including (without limitation) any stop notice (each, a "lien"), is
filed against the Leased Premises or the Shopping Center as a result of
any work, labor, services or materials performed or furnished, or
alleged to have been performed or
10
furnished, to or for the benefit of Tenant or to anyone holding the
Leased Premises by, through or under Tenant, Tenant, at its expense,
shall cause the lien to be discharged of record or fully bonded to the
satisfaction of Landlord within thirty (30) days after notice of the
filing thereof. If Tenant fails to discharge or bond against said lien
within thirty (30) days after notice of the filing thereof, Landlord
may, in addition to any other rights or remedies Landlord may have, but
without obligation to do so, bond against or pay the lien without
inquiring into the validity or merits of such lien, and all sums so
advanced, including reasonable attorneys' fees incurred by Landlord in
defending against such lien, procuring the bond or discharging such
lien, shall be paid by Tenant on demand as additional rent. In
addition, Tenant shall replace any bonds posted by Landlord pursuant
hereto with a suitable bond of equivalent amount within twenty (20)
days after Landlord's demand therefor.
(d) Throughout the Term of this Lease (including any
Option Period), Tenant shall at all times keep the Leased Premises in a
condition that is neat, clean, fresh and aesthetically pleasing. The
items required to be thus maintained by Tenant hereunder shall
specifically include (without limitation) the following: the
furnishings, wall covering, floor covering, ceiling, fixtures and
equipment, storefront sign, and surfaces visible to customers in the
interior of the Leased Premises.
Section 4.2. ALTERATIONS BY TENANT. Tenant shall not make or cause to
be made any alterations, repairs, additions or improvements in or to the Leased
Premises without the prior written consent thereto by Landlord, which consent
shall not be unreasonably withheld, conditioned or delayed with respect to
interior alterations that do not adversely affect the structure or systems of
the Leased Premises. Tenant shall, at its sole expense, submit to Landlord plans
and specifications prepared by an architect or other duly qualified person for
such work at the time consent is sought, in accordance with Landlord's design
criteria for the Shopping Center and the plans and specifications for the Leased
Premises originally approved by Landlord. In the event Landlord grants such
consent, such alterations, additions or improvements shall be performed in good
and workmanlike manner and in accordance with all applicable legal and insurance
requirements and all drawings or specifications approved by Landlord, and in
accordance with the provisions of this Lease, including the provisions of
Section 4.3 governing construction of the Leased Premises. Any work performed by
Tenant shall be subject to Landlord's inspection and approval after completion
to determine whether the same complies with the requirements of this Lease.
Tenant agrees that Landlord shall have the right, at no expense to Landlord, to
require Tenant to furnish Landlord with payment and performance bonds
guaranteeing the completion of any repairs, alterations, additions or
improvements (structural or otherwise) required or permitted to be performed by
Tenant under any provision of this Lease.
Section 4.3. REMOVAL BY TENANT. All present and future repairs,
alterations, additions and improvements made in, on or to the Leased Premises by
either party shall be deemed to be attached to the leasehold and to have become
the property of Landlord upon such attachment. Upon the expiration or sooner
termination of this Lease, Tenant shall not remove any of such alterations,
additions and improvements; provided that trade fixtures installed by Tenant may
be removed, and Tenant shall promptly remove the same and repair any damage to
the Leased Premises caused by such removal.
Section 4.4. CONSTRUCTION INSURANCE. In the event that Tenant makes any
alterations, repairs, additions or improvements in or to the Leased Premises,
Tenant agrees to carry, or cause its contractor to carry, "Builder's Risk"
insurance in an amount reasonably approved by Landlord covering the performance
of the same, and workers' compensation coverage as required by law. Landlord
shall have the right to require that any contractor or subcontractor of Tenant
furnish appropriate evidence of insurance (naming Landlord as an additional
insured, if Landlord so requests) prior to performing any work in the Leased
Premises.
Section 4.5. TENANT'S FINANCING. From time to time, some or all of
Tenant's trade fixtures, equipment and/or inventory may be financed by a
third-party lender. Landlord agrees, upon Tenant's request, to enter into an
agreement with any lender providing financing that is secured by a lien upon
Tenant's trade fixtures, equipment, inventory and/or other personalty situated
upon the Leased Premises without waiving or subordinating Landlord's lien rights
in such items and granting such lender a reasonable opportunity to enforce its
lien rights with respect to Tenant's personal property upon the Leased Premises.
11
ARTICLE V
CONDUCT OF BUSINESS
Section 5.1. USE AND TRADE NAME. Tenant shall use and occupy the Leased
Premises solely for the purpose of conducting the business specifically set
forth in the Data Sheet (subject to the further limitation that the Storage
Space shall be utilized solely for storage purposes), and for no other purpose
or purposes. Tenant shall (a) operate its business in the Leased Premises under
the Trade Name specifically set forth in the Data Sheet and under no other trade
name, (b) not change the character of the business operated in the Leased
Premises, (c) refer to the Shopping Center by name in designating the location
of the Leased Premises in all newspaper and other advertising within the
Shopping Center market area and in all other references to the location of the
Leased Premises, and (d) during the period from the date of delivery of
possession of the Leased Premises through the sixtieth (60th) day following the
Commencement Date, include in all of Tenant's newspaper advertising within the
Shopping Center market area the designation that Tenant is opening for business
in the Shopping Center. If any governmental license(s) or permit(s) shall be
required for the proper and lawful conduct of Tenant's business or other
activity carried on in the Leased Premises, or if a failure to procure such a
license or permit might or would in any way adversely affect Landlord or the
Shopping Center, then Tenant, at Tenant's expense, shall duly procure and
thereafter maintain such license(s) or permit(s) and submit the same for
inspection by Landlord. Tenant, at Tenant's expense, shall at all times comply
with the requirements of such license(s) or permit(s).
Section 5.2. OPERATION OF BUSINESS. Tenant shall conduct its business
in a first-class and reputable manner, maintaining at all times a full staff of
employees and a complete stock of merchandise. Tenant shall install and maintain
at all times a display of merchandise which is appropriate for the season in the
display windows (if any) of the Leased Premises and shall keep the same well
lighted during all hours that the Shopping Center is open to the public and
during such other hours as may be reasonably designated by Landlord (which shall
in no event be more than one (1) hour after the close of business). In no event
shall Tenant conduct or advertise any auction, fire, going out of business, or
bankruptcy sale in, on or about the Leased Premises without Landlord's prior
written consent in each instance, which consent may be withheld by Landlord in
its sole and absolute discretion. Tenant shall conduct its business in the
Leased Premises in a lawful manner and in good faith during all days and hours
specified by Landlord as the normal hours of operation of the Shopping Center.
In the event Tenant is open for business beyond 2:00 a.m. (or 12:00 midnight on
a Sunday), then in order to compensate Landlord for lighting, security and
administration costs resulting from such extra-hours operation, Tenant shall pay
Landlord the sum of Seventy-Five Dollars ($75) for each hour beyond 2:00 a.m.
(or midnight, as applicable) that Tenant is open for business. Tenant shall not
use or allow the Leased Premises to be used for any improper, immoral or
objectionable purposes, and Tenant shall not do any act tending to injure the
reputation of the Shopping Center. Tenant shall not use, or permit to be used,
the Leased Premises in a manner that would constitute a nuisance or would
increase the premium rates of, or make inoperative, any policy of insurance
covering the Leased Premises or the Shopping Center.
Section 5.3. SIGNAGE. Tenant shall install, maintain and insure, at its
sole cost and expense, signage affixed to the interior storefront and (if
applicable) the exterior storefront of the Leased Premises, subject to the prior
written approval of Landlord as to design and location and conforming to all
applicable legal and insurance requirements. Tenant's signage shall conform to
Landlord's signage criteria for the Shopping Center attached hereto as Exhibit
"E." Tenant shall keep its approved storefront signage lighted during all hours
that the Shopping Center is open to the public and during such other hours as
may be reasonably designated by Landlord (which shall in no event be more than
one (1) hour after the close of business for the Shopping Center). Tenant shall
pay for all costs in connection with such signage and shall be responsible for
the cost of proper installation and removal thereof and any damage caused to the
Leased Premises thereby. [In addition, and notwithstanding anything in this
Section 5.3 or Exhibit "E" to the contrary, Tenant shall have the right to
install and maintain upon the Leased Premises the design elements depicted on
Exhibit "E-1" attached hereto.] Except as mentioned above, Tenant shall not
place, erect or maintain any sign on any exterior door, wall or window of the
Leased Premises, or on the glass of any window or door of the Leased Premises,
or on any sidewalk, or within any display window space in the Leased Premises,
or within five (5) feet of the front of the storefront leaseline or opening, or
within any entrance to the Leased Premises. Furthermore, Tenant shall not
12
place, erect or maintain, in any place visible from the exterior of the Leased
Premises, any flashing, moving, hanging or handwritten sign, decal or placard,
or any flashing, moving or hanging lights, lettering or other advertising matter
of any kind or description. No symbol, design, name, xxxx or insignia adopted by
Landlord for the Shopping Center, other than the name of the Shopping Center,
shall be used on any of Tenant's signage without the prior written approval of
Landlord. Any interior signs must be in good taste and prepared professionally
(not hand-lettered) so as not to detract from the appearance of the Leased
Premises or the Shopping Center. Any sign or display visible from the exterior
of the Leased Premises which does not meet the above criteria, or which differs
from the signage design approved by Landlord hereunder, may be removed at any
time by Landlord without Landlord incurring any liability therefor, and without
such removal constituting a breach of this Lease or entitling Tenant to claim
damages on account thereof.
Section 5.4. TENANT'S COVENANTS. Tenant covenants and agrees that, in
the operation of its business within the Leased Premises, Tenant shall: (a) pay
before delinquency any and all taxes, assessments and public charges levied,
assessed or imposed upon Tenant's business, or upon Tenant's fixtures,
furnishings or equipment in the Leased Premises, or upon any leasehold interest
or personal property of any kind, owned by or placed in, on or about the Leased
Premises by Tenant, including (without limitation) any transfer taxes and
service payments in lieu of taxes, and pay when and as due all license fees,
permit fees and charges of a similar nature relating to the conduct by Tenant or
any subtenant or concessionaire of any business or undertaking authorized
hereunder to be conducted in, on or from the Leased Premises; (b) observe all
reasonable requirements promulgated by Landlord at any time and from time to
time relating to delivery vehicles, the delivery of merchandise, and the storage
and removal of trash and garbage; (c) not use any space outside the Leased
Premises for sale, storage or any other undertaking; (d) not use the plumbing
facilities in the Leased Premises for any purpose other than that for which they
were constructed, nor dispose of any foreign substances therein; (e) not use any
advertising medium or sound devices inside or adjacent to the Leased Premises
which produce or transmit sounds which are audible beyond the interior of the
Leased Premises, except as otherwise approved by Landlord in writing; (f) not
permit any odor to emanate from the Leased Premises which is reasonably objected
to by Landlord (and, upon written notice from Landlord, Tenant shall immediately
cease and desist from causing such odor, failing which Landlord may deem the
same a material breach of this Lease); (g) keep the Leased Premises and any
platform, loading dock or service area used by Tenant in a neat, clean, safe and
sanitary condition; (h) promptly comply in all material respects with all
present and future laws, ordinances, orders, rules, regulations and requirements
of all governmental authorities having jurisdiction, and observe and comply with
all covenants and restrictions of record, affecting or applicable to the
Shopping Center or affecting or applicable to the Leased Premises or the
cleanliness, safety, occupancy and use of the same, whether or not any such law,
ordinance, order, rule, regulation, covenant, restriction or other requirement
is substantial, or foreseen or unforeseen, or ordinary or extraordinary, or
shall necessitate structural changes or improvements, shall interfere with the
use or enjoyment of the Leased Premises, or shall be directed to or imposed upon
Tenant or Landlord, and Tenant shall hold Landlord harmless from any and all
cost or expense on account thereof (as used in this Lease, the term "legal
requirements" shall include the requirements set forth in this subparagraph);
(i) not use the parking areas or sidewalks, Common Areas or any space on or
about the Shopping Center (outside the Leased Premises) for display, sale,
handbilling, advertising, solicitation or any other similar undertaking; (j)
maintain and operate the heating, ventilating and air conditioning system and
equipment servicing the Leased Premises so as to adequately heat and cool the
same and to maintain at all times, whether or not Tenant is open for business,
temperatures in the Leased Premises which will not drain heat or ventilation or
air conditioning from interior areas of the Shopping Center into the Leased
Premises and shall not discharge heat, ventilation or air conditioning from the
Leased Premises into the interior areas of the Shopping Center; (k) be
authorized to do business in the State; (l) contract for and utilize pest
extermination services for the Leased Premises as necessary; (m) not store,
display, sell or distribute any dangerous materials without the prior written
consent of Landlord; (n) not operate or permit to be operated on the Leased
Premises any coin or token operated vending machine or similar device, including
(without limitation) telephones, amusement devices and machines for sale of
beverages, foods, candy, cigarettes or other goods, but Tenant shall have the
right to operate vending machines located in non-sales areas of the Leased
Premises for the exclusive use of Tenant's employees; (o) not permit any "adult"
entertainment or nudity in the Leased Premises, and not sell, distribute or
display any paraphernalia commonly used in the use or ingestion of illicit
drugs, or any x-rated, pornographic or so-called "adult" newspaper, book,
magazine, film, picture, video tape, video disk or other similar representation
or
13
merchandise of any kind; (p) permit Landlord to install and maintain an
unobtrusive people-counting device at each entrance to the Leased Premises; (q)
use good faith efforts to avoid any action which would cause any work stoppage,
picketing, labor disruption or dispute, or any interference with the business or
rights and privileges of Landlord or any other tenant, occupant or other person
lawfully in the Shopping Center; and (r) not interfere with the transmission or
reception of microwave, television, or radio communications signals by antennae
located on the roof of any building in the Shopping Center or elsewhere in the
Shopping Center.
Section 5.5. STORAGE AND OFFICE SPACE. Tenant shall store or stock in
the Leased Premises only such goods, wares and merchandise as Tenant intends to
offer for sale at, in, from, or upon the Leased Premises. Tenant shall use for
office, clerical or other non-selling purposes only such space in the Leased
Premises as is from time to time reasonably required for Tenant's business
therein, and Tenant shall not perform any office or clerical function in the
Leased Premises for any store located elsewhere.
Section 5.6. NOTICE BY TENANT. Tenant shall give immediate notice to
Landlord in case of fire or accidents in the Leased Premises, or in the building
of which the Leased Premises are a part, or of defects therein or in any
fixtures or equipment.
Section 5.7. RADIUS. During the Term of this Lease, in the event Tenant
or any guarantor of this Lease, or any person, firm, entity or corporation who
or which controls or is controlled by, or is under common control with Tenant or
any guarantor of this Lease (an "Affiliate") shall directly or indirectly,
either individually or as a partner, officer, director or stockholder or
otherwise, own, operate, or become financially interested in any business
similar to or in competition with the business of Tenant described in Article V
("competing business"), which competing business is conducted within the Radius
Area, then the gross sales of any such competing business within said Radius
Area shall be included in Tenant's Gross Sales made from the Leased Premises and
the Percentage Rent hereunder shall be computed upon the aggregate of Tenant's
Gross Sales made from the Leased Premises and Tenant's (or Tenant's Affiliate's)
gross sales made from each such competing business then conducted within said
Radius Area. Tenant shall be obligated to provide Landlord with full and
complete gross sales information and reports with respect to any competing
business within the Radius Area in accordance with the requirements of Article
III of this Lease, and Tenant shall be obligated to include the gross sales of
such competing business in with the Gross Sales of the Leased Premises and to
pay Percentage Rent thereon in accordance with the terms of this Lease.
Section 5.8. OBLIGATION TO CONTINUOUSLY OPERATE. Notwithstanding
anything to the contrary contained in this Lease, Tenant shall be obligated to
initially open the Leased Premises for business with the public and to
continuously operate its business open to the public in accordance with this
Lease for the Operating Covenant Period, whereafter Tenant shall have no
obligation to have its store open for business with the public; provided,
however, that Tenant shall nonetheless be obligated to comply with all of the
provisions of this Lease. In the event that Tenant elects to close its store for
business with the public at any time after the Operating Covenant Period, then
Landlord shall have the right to terminate this Lease. Notwithstanding the
foregoing, in the event that, at any time during the Term, the Co-Tenancy
Standard (as defined below) is not satisfied, then Tenant shall be relieved of
the obligation to continuously operate its business in the Leased Premises (but
shall otherwise continue to perform all the obligations of Tenant under this
Lease) for as long as the Co-Tenancy Standard remains unsatisfied. For purposes
hereof, the term "Co-Tenancy Standard" shall mean that both of the following
requirements are satisfied: (i) that at least seven (7) tenants occupying at
least 20,000 square feet of GLA apiece (including Tenant) are open for business;
and (ii) that at least sixty-five percent (65%) of the GLA in the Shopping
Center dedicated to store premises of less than 20,000 square feet is open for
business.
Section 5.9. PROHIBITED USES. Tenant covenants and agrees that under no
circumstances shall the Leased Premises be used for any of the "Reserved Uses"
identified in Exhibit "D" attached hereto and incorporated herein by this
reference. Tenant further covenants and agrees the Leased Premises shall not be
used for any of the "Prohibited Uses" listed on Exhibit "F" attached hereto.
Section 5.10. EXCLUSIVE USE. So long as Tenant is not in default under
this Lease (beyond any applicable cure period) and is open and operating in the
entirety of the Leased Premises for the permitted use
14
set forth in the Data Sheet, Landlord shall not after the date of this Lease
enter into a lease for any portion of the Shopping Center that grants to the
tenant thereunder the right to operate a "steakhouse," which shall be defined as
any restaurant that uses the word "steakhouse" or "chophouse" in its name or
which serves more than six (6) different cuts of beef steak (excluding
hamburger, and similar items) as their primary entree menu items; provided that
this restriction shall not apply to a hibachi grill restaurant, Mongolian
barbeque restaurant or other ethnically-themed or nontraditional steak
restaurant. Without limitation, the foregoing restriction shall apply to the
following restaurants: Outback Steakhouse, Morton's, Roadhouse Grill, Sizzler,
Xxxxxx Steakhouse, Xxxxxxxx Prime, Sagebrush, Ponderosa, Long Horn Steakhouse,
Lone Star Steakhouse, Capital Grill, Xxxx'x Xxxxx, Bugaboo Creek, Saltgrass
Steakhouse, Sullivans, Xxx Xxxxx'x, Rodizio Grill, and Xxxxxx Xxxxxxxx'x. In the
event the Landlord violates the terms of this Section 5.10, Tenant shall have
the right to invoke any remedy allowed at law or in equity.
ARTICLE VI
COMMON AREAS
Section 6.1. USE OF COMMON AREAS. Landlord agrees to cause to be
operated, managed and maintained during the Term of this Lease all of the Common
Areas of the Shopping Center. Landlord agrees to maintain the Common Areas of
the Shopping Center in good order, condition and repair and in a safe, clean,
sightly and sanitary condition in accordance with good and accepted shopping
center practices. The maintenance obligations of Landlord shall include (without
limitation) the re-striping of parking areas when required, repairing of the
Common Areas and adequate lighting of all exterior Common Areas. The use and
occupancy by Tenant of the Leased Premises shall include the non-exclusive use,
in common with all others to whom Landlord has granted or may hereafter grant
rights to use the same (including, but not limited to, the owners, tenants and
occupants of the Shopping Center), of the Common Areas and of such other
facilities as may be designated by Landlord from time to time; subject, however,
to rules and regulations for the use thereof which will be uniformly applicable
to all Shopping Center tenants as prescribed from time to time by Landlord. In
particular, Tenant and its employees shall park their cars only in the areas
specifically designated from time to time by Landlord for that purpose. Tenant
covenants that it will enforce the parking by its employees in such designated
areas. Automobile license numbers of employees' cars shall be furnished by
Tenant to Landlord within five (5) days after Landlord's request. In the event
any vehicle is parked by an employee of Tenant in a non-employee parking area,
Landlord shall have the right to cause the vehicle to be towed to a location
designated by Landlord, and Tenant shall be obligated to reimburse Landlord for
all towing charges. Tenant further agrees to hold harmless Landlord and defend
Landlord, its agents and employees against any and all claims of the employee
and/or owner of the vehicle towed. Landlord may at any time close temporarily
any portion of the Common Areas to make repairs or changes, to prevent the
acquisition of public rights in the Common Areas and to discourage non-customer
use, provided the same shall not materially adversely affect access to or
visibility of the Leased Premises. In addition, Landlord may modify, from time
to time, the traffic flow pattern and layout of parking spaces and the
entrances-exits to adjoining public streets or walkways, utilize portions of the
Common Areas for entertainment, displays and charitable activities, and do such
other acts in and to the Common Areas as in its judgment may be desirable to
improve the convenience or attraction thereof, provided the same shall not
materially adversely affect access to or visibility of the Leased Premises.
Section 6.2. COMMON AREA MAINTENANCE EXPENSES. Tenant agrees to pay to
Landlord from and after the Commencement Date, in the manner hereinafter
provided, during each Lease Year, a contribution toward the costs of maintaining
the Common Areas. Tenant's contribution during the first Lease Year shall be
equal to the product of the CAM Contribution MULTIPLIED BY the number of square
feet of GLA in the Leased Premises, payable in equal monthly installments, on
the first day of each and every calendar month, in advance; thereafter, during
each Lease Year, Tenant's annual payments on account of such costs and expenses
shall increase by five percent (5%) from the immediately preceding Lease Year,
on a cumulative basis, and shall be payable as aforesaid. With respect to any
Lease Year that is less than 365 days, Tenant's contribution toward the costs of
maintaining the Common Areas and all other amounts payable hereunder on the
basis of the Lease Year shall be prorated based on the number of days in such
Lease Year.
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ARTICLE VII
REPAIRS AND MAINTENANCE
Section 7.1. REPAIRS AND MAINTENANCE BY LANDLORD. Landlord agrees to
keep in good order, condition and repair the roof, foundations, exterior
(including exterior painting and finish), and all structural portions of the
Leased Premises (and of the building in which the Leased Premises are located),
with the exception of any portions of the foregoing that are installed by
Tenant, and all plumbing and utility lines not installed by Tenant or
exclusively serving the Leased Premises. Should any repairs, modifications or
alterations be required to any of the foregoing by reason of applicable law, the
same shall be made by Landlord, at Landlord's cost and expense, unless the need
for such repairs, modifications or alterations shall result from Tenant's
failure to perform its obligations under this Lease or from Tenant's use of the
Leased Premises for other than general merchandising purposes.
Section 7.2. REPAIRS AND MAINTENANCE BY TENANT.
(a) Except for the repairs and maintenance that Landlord
is specifically obligated to make or perform pursuant to Section 7.1
above, throughout the entire Term of this Lease, Tenant, at its
expense, shall promptly make all repairs and replacements and perform
all maintenance in and to the Leased Premises and all equipment and
fixtures therein or appurtenant thereto, that are necessary or
desirable in order to keep the Leased Premises in good order, condition
and repair and in safe, dry and tenantable condition. Without limiting
the generality of the foregoing, Tenant, at its expense, shall maintain
and promptly make any and all necessary repairs to or replacements of:
(i) that portion of any pipes, lines, ducts, wires or conduits which
are installed by Tenant or exclusively serve the Leased Premises; (ii)
the glass windows, plate glass doors and all fixtures or appurtenances
composed of glass that are located in, on or about the Leased Premises;
(iii) Tenant's signs; (iv) the floors and floor coverings, doors and
door frames, windows and window frames, walls, storefront, including
security gates, grilles or enclosures, locks and closing devices,
partitions and ceilings in the Leased Premises; (v) heating,
ventilating, air conditioning, electrical and plumbing system(s),
equipment and fixtures (whether contained within or outside the Leased
Premises) which are installed by Tenant or which exclusively serve the
Leased Premises; and (vi) the Leased Premises or any part of the
Shopping Center when repairs thereto are necessitated by any act or
omission of Tenant or any of Tenant's agents, employees, contractors or
invitees, or by the failure of Tenant to perform any of its obligations
under this Lease. Further, in the event any act of Tenant or any of its
agents or contractors causes the warranty on the roof of the building
in which the Leased Premises are situated to be voided or limited,
Tenant shall be responsible for the cost of any roof maintenance or
repairs that would have been covered by the roof warranty but for the
act by Tenant or its agent or contractor that caused the roof warranty
to be thus voided or limited. Notwithstanding the foregoing, Landlord
shall be responsible for repairs and maintenance necessitated by the
negligence or intentional acts of Landlord, its agents or employees.
Notwithstanding any contrary provision of this Article VII, Tenant, at
its expense, shall make any and all repairs to the Leased Premises as
may be necessitated by any break-in, forcible entry or other trespass
into or upon the Leased Premises, regardless of whether or not such
entry and damage is caused by the negligence or fault of Tenant or
occurs during or after business hours. Tenant, at its expense, shall
change all HVAC filters at least every second month and shall have the
HVAC system professionally inspected and generally serviced at least
twice per year pursuant to a maintenance contract with a professional
HVAC engineering firm (a copy of which contract shall be furnished to
Landlord).
(b) Tenant shall keep and maintain the Leased Premises in
a clean, sanitary and safe condition in accordance with the laws of the
State and in accordance with all directions, rules and regulations of
the health officer, the building inspector, the National Fire
Protection Association and any other officials of the governmental or
quasi-governmental agencies having jurisdiction, at the sole cost and
expense of Tenant, and Tenant shall comply with all requirements of
laws, ordinances, rules, regulations and orders of any lawful authority
having jurisdiction affecting the Leased Premises or Tenant's use
thereof. Tenant, at its expense, shall install and maintain fire
extinguishers and other fire
16
protection devices as may be required by reason of the conduct of
Tenant's business from time to time by any agency having jurisdiction
or the underwriters insuring the building in which the Leased Premises
are located. If any bureau, department or official of the Federal or
State government requires or recommends the installation of any
changes, modifications or alterations in the sprinkler system or
additional sprinkler heads or other equipment (collectively, "changes")
by reason of Tenant's business, or the location of partitions, trade
fixtures, or other contents of the Leased Premises, or for any other
reason, or if any such changes become necessary to prevent the
imposition of a penalty or charge against the full allowance for a
sprinkler system in the fire insurance rates set by any fire insurance
company, Tenant, at Tenant's expense, shall promptly make such changes
as required.
(c) Tenant agrees that Tenant's use of electrical current
will at no time exceed the capacity of the electric distribution system
and that Tenant will not make any alteration or addition to Tenant's
electrical system without Landlord's prior written consent. If Tenant
installs any electrical equipment that overloads the electrical lines
in the Leased Premises or the Shopping Center, Tenant shall, at
Tenant's sole cost and expense, be required to make (but only after
obtaining Landlord's written approval) whatever changes to such
electrical equipment and to the electric wiring in the Leased Premises
may be necessary in order to remedy such overloading.
(d) If Tenant fails, refuses or neglects to properly
maintain the Leased Premises, or to commence or to complete repairs
promptly and adequately, or if Landlord finds it necessary to make any
repairs or replacements otherwise required to be made by Tenant, then
Landlord may, after reasonable prior notice to Tenant, in addition to
all other remedies, but without obligation to do so, enter the Leased
Premises and proceed forthwith to have such maintenance, repairs or
replacements made, and Tenant shall pay to Landlord, on demand, the
cost and expenses therefor plus a charge of fifteen percent (15%) of
such costs and expenses to compensate Landlord for its administrative
and overhead costs.
ARTICLE VIII
TAXES
Section 8.1. TAX LIABILITY. Tenant agrees to pay to Landlord Tenant's
Proportionate Share of all Taxes (including interest thereon whenever the same
may be payable in installments) which may be levied or assessed by, or are
payable to, any lawful authority during or with respect to each tax year falling
in whole or in part during the Term of this Lease, whether the same are payable
in advance or in arrears. "Taxes" shall mean and include all federal, state,
county, or local governmental or municipal taxes, fees, charges or other
impositions of every kind and nature (whether ordinary or extraordinary) levied
against or with respect to the ownership, leasing and operation of the land,
buildings and improvements comprising the Shopping Center or levied with respect
to the possession, leasing, alteration, or use by Tenant of the Leased Premises,
or any portion thereof (including, without limitation, real estate taxes,
general and special assessments, transit taxes, leasehold taxes or taxes based
upon the receipt of rent, including gross receipts or sales taxes applicable to
the receipt of rent, and personal property taxes imposed upon the fixtures,
machinery, equipment, systems and other personal property used in connection
with the Shopping Center). Taxes shall also include any assessment, tax, fee,
levy or charge in addition to, or in substitution, partially or totally, for any
assessment, tax, fee, levy or charge previously included within the definition
of Taxes, it being acknowledged by Tenant and Landlord that assessments, taxes,
fees, levies and charges may be imposed by governmental agencies for such
services as fire protection, street, sidewalk and road maintenance, refuse
removal and for other governmental services formerly provided without charge to
property owners or occupants; and, in further recognition of the decrease in the
level and quality of governmental services and amenities, Taxes shall also
include any governmental or private assessments or the Shopping Center
contribution toward a governmental or private cost-sharing agreement for the
purpose of augmenting or improving the quality of services and amenities
normally provided by governmental agencies.
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Except as may be expressly set forth above in this Section 8.1, Taxes,
as used herein, shall not include: (a) any net income, excise, profits (other
than a tax on gross profits), estate, inheritance, succession, gift, transfer,
succession, franchise, or capital stock tax or assessment upon Landlord; and (b)
any fine, penalty, cost or interest for any tax or assessment, or part thereof,
which Landlord failed to timely pay (except if same are imposed by reason of
Tenant's default hereunder). Notwithstanding the foregoing, if due to a future
change in the method of taxation, any tax, excise or assessment shall be levied
or assessed against Landlord or the Shopping Center, directly or indirectly, in
lieu of, in substitution for or as a supplement to any present Taxes or future
(real estate or personal property) tax, then such substitute and supplemental
taxes, assessments, levies, impositions, or charges, to the extent so levied,
assessed, or imposed, shall be deemed to be Taxes for the purpose of this Lease.
If any Taxes are contested by Landlord, then Tenant's Proportionate Share of
Taxes shall also include Tenant's Proportionate Share of the cost and expense
incurred by Landlord in contesting such Taxes; furthermore, Tenant shall receive
Tenant's Proportionate Share of any refund or rebate of Taxes received by
Landlord with respect to any Taxes as to which Tenant has paid its share as
required hereunder.
Section 8.2. METHOD OF PAYMENT. Tenant's Proportionate Share of Taxes
shall be paid, in advance, in monthly installments on or before the first day of
each calendar month, in an amount reasonably estimated by Landlord. Tenant's
Proportionate Share shall be computed by multiplying the total amount of the
Taxes by the GLA Fraction (the denominator of which excludes the GLA of any
buildings within the Shopping Center not owned by Landlord). Following receipt
of all tax bills and assessment bills attributable to any calendar or fiscal
year during the Term hereof, Landlord shall furnish Tenant with a written
statement of the actual amount of Tenant's Proportionate Share of Taxes for such
year. In the event no tax xxxx is available, Landlord will estimate the amount
of such tax. If the total amount paid by Tenant hereunder for any calendar or
fiscal year during the Term of this Lease shall be less than the actual amount
due from Tenant for such year, as shown on such statement, Tenant shall pay to
Landlord the difference between the amount paid by Tenant and the actual amount
due, such deficiency to be paid within thirty (30) days after demand therefor by
Landlord; and if the total amount paid by Tenant hereunder for any such calendar
or fiscal year shall exceed such actual amount due from Tenant for such year,
such excess shall be credited against the next installment of Taxes due from
Tenant to Landlord hereunder (except that any overpayment in the final year
within the Term shall be refunded to Tenant). For the calendar or fiscal years
in which this Lease commences and terminates, Tenant's liability for its
Proportionate Share of any Taxes for such years shall be subject to a pro rata
adjustment based on the number of days of said calendar or fiscal years during
which the Term of this Lease is in effect. Prior to or at the commencement of
the Term of this Lease and from time to time thereafter throughout the Term
hereof, Landlord shall notify Tenant in writing of Landlord's estimate of
Tenant's monthly installments due hereunder. Tenant's obligations under this
Article VIII shall survive the expiration or sooner termination of this Lease.
Section 8.3. SALES TAX REBATE. Landlord may determine that financial
assistance from the City of Nashville and/or the State of Tennessee in the form
of a sales tax rebate will better enable Landlord to develop the Shopping Center
in a manner beneficial to both Landlord and Tenant. Therefore, in order to
provide Landlord with the sales tax information from the State of Tennessee
Comptroller of Public Accounts (or equivalent officer) ("Comptroller")
pertaining to Tenant's sales at the Leased Premises, Tenant agrees to provide
Landlord, within thirty (30) days following Landlord's written request, with
certified copies of all sales tax returns filed with the Comptroller for
Tenant's retail operations at the Leased Premises during the Term of this Lease.
In addition thereto, Tenant shall provide Landlord with a letter addressed to,
and in a form satisfactory to, the Comptroller authorizing the Comptroller to
release to Landlord all sales tax information for Tenant's retail operations at
the Leased Premises during the Term of this Lease. Such letter shall be in the
form required from time to time by the Comptroller in order to release such
information to Landlord. Landlord agrees to maintain the confidentiality of any
proprietary information received by Landlord pursuant to this Section 8.3.
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ARTICLE IX
INSURANCE, INDEMNITY AND LIABILITY
Section 9.1. LANDLORD'S INSURANCE OBLIGATIONS. Landlord agrees to
obtain and maintain during the Term hereof, to the extent the same is available,
fire and extended coverage insurance, in amounts and coverages and with such
special endorsements as Landlord shall determine from time to time, insuring the
building in which the Leased Premises are located and the improvements to the
Leased Premises provided by Landlord pursuant to this Lease (exclusive of
Tenant's merchandise, trade fixtures, furnishings, equipment, plate glass, signs
and personal property). Landlord shall have the right to carry its insurance
under "blanket policies" covering the Shopping Center and other properties.
Section 9.2. TENANT'S INSURANCE OBLIGATIONS.
(a) Tenant, at Tenant's sole cost and expense, shall
obtain and maintain in effect, commencing with the delivery of
possession date and continuing throughout the Term of this Lease,
insurance policies providing for the following coverage: (i) standard
"all risk" property insurance against fire, theft, vandalism, malicious
mischief, sprinkler leakage and such additional perils as now are or
hereafter may be included in a standard extended coverage endorsement
from time to time in general use in the State, insuring Tenant's
merchandise, trade fixtures, furnishings, equipment and all items of
personal property of Tenant located in, on or about the Leased
Premises, and the amount of such insurance will be set forth in an
"agreed value endorsement" to the policy of such insurance, not less
than one hundred percent (100%) of the full replacement value thereof
without deduction for depreciation, and with a deductible amount of not
more than Fifty Thousand Dollars ($50,000.00); (ii) a commercial
general liability policy, naming Landlord and any mortgagee of the
Shopping Center as additional insureds, protecting against any and all
claims for injury to persons or property occurring in the Leased
Premises and protecting against assumed or contractual liability under
this Lease with respect to the Leased Premises and the operations of
Tenant and any subtenant of Tenant in, on or about the Leased Premises,
with such policy to be in the minimum amount of Five Million Dollars
($5,000,000.00) per occurrence, and with an aggregate limit of at least
Five Million Dollars ($5,000,000.00); (iii) products liability
insurance for merchandise offered for sale or lease from the Leased
Premises, including (if this Lease covers leased premises in which food
and/or beverages are sold and/or consumed) liquor liability coverage
(if applicable to Tenant's business) and coverage for liability arising
out of the consumption of food and/or alcoholic beverages on or
obtained at the Leased Premises, of not less than Two Million Dollars
($2,000,000.00) per occurrence for physical injury and death and
property damage; (iv) workers' compensation coverage as required by
law; and (v) with respect to alterations, improvements and the like
required or permitted to be made by Tenant hereunder, contingent
liability and builders risk insurance in amounts satisfactory to
Landlord.
(b) All insurance policies herein to be procured by
Tenant shall: (i) be issued by insurance companies reasonably
satisfactory to Landlord and authorized to do business in the State;
(ii) be written as primary policy coverage and non-contributing with
respect to any coverage which Landlord may carry; (iii) insure and name
Landlord, Landlord's managing agent, and any mortgagee of the Shopping
Center as additional insureds, as their respective interests may appear
(except with respect to workers' compensation insurance); and (iv)
contain, in the case of Tenant's property insurance coverage, an
express waiver of any right of subrogation by the insurance company
against Landlord, Landlord's managing agent and their respective
agents, employees and representatives which arises or might arise by
reason of any payment under such policy or by reason of any act or
omission of Landlord, its agents, employees or representatives. Neither
the issuance of any insurance policy required hereunder nor the minimum
limits specified herein with respect to Tenant's insurance coverage
shall be deemed to limit or restrict in any way Tenant's liability
arising under or out of this Lease. With respect to each and every one
of the insurance policies herein required to be procured by Tenant, on
or before the Commencement Date (or, if earlier, the date on which
possession of the Leased Premises is delivered to Tenant), and at least
thirty (30) days before any such insurance policy shall expire, Tenant
shall deliver to Landlord a duplicate original or certified copy of
each such policy,
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or a certificate of the insurer certifying that such policy has been
issued, providing the coverage required by this Lease and containing
the provisions specified herein, together with evidence of payment of
all applicable premiums. Each and every insurance policy required to be
carried hereunder by or on behalf of Tenant shall provide (and any
certificate evidencing the existence of each such insurance policy
shall certify) that, unless Landlord shall first have been given thirty
(30) days' prior written notice thereof, the insurer will not cancel,
materially change or fail to renew the coverage provided by such
insurance policy. The term "insurance policy" as used herein shall be
deemed to include any extensions or renewals of such insurance policy.
In the event that Tenant shall fail to promptly furnish any insurance
coverage hereunder required to be procured by Tenant, Landlord, at its
sole option, shall have the right after ten (10) days prior written
notice to Tenant to obtain the same and pay the premium therefor for a
period not exceeding one (1) year in each instance, and the premium so
paid by Landlord shall be immediately due and payable by Tenant to
Landlord as additional rent.
(c) Tenant shall not do or permit to be done any act or
thing upon the Leased Premises that will invalidate or be in conflict
with any fire insurance policies covering the building containing the
Leased Premises or any part thereof, including the Common Areas, or
fixtures and property therein, or any other insurance policies or
coverage referred to above in this Article IX; and Tenant shall
promptly comply with all rules, orders, regulations or requirements
relating to such insurance policies, and shall not do anything, or
permit anything to be done, in, on or about the Leased Premises, or
bring or keep anything therein, which shall increase the rate of fire
insurance on the building in which the Leased Premises are located or
on any property, including the Common Areas, located therein, or
increase the rate or rates of any other insurance referred to
hereinabove. If any act or omission of Tenant, its agents, employees or
contractors shall result in any increase in the premium rates
applicable to any such insurance policies carried by Landlord, or other
increased costs to Landlord in connection therewith, then Tenant shall
reimburse Landlord on demand as additional rent for the amount of any
such increased rates or costs.
SECTION 9.3. WAIVER OF SUBROGATION. LANDLORD AND TENANT HEREBY WAIVE
AND RELEASE ANY CLAIM THAT EITHER OF THEM MAY HEREAFTER HAVE AGAINST THE OTHER
ON ACCOUNT OF ANY DAMAGE TO THE PROPERTY OF THE WAIVING PARTY, EVEN IF SUCH
DAMAGE SHALL BE DUE TO THE NEGLIGENT ACT OR OMISSION OF THE OTHER PARTY.
LANDLORD AND TENANT SHALL EACH CAUSE THEIR RESPECTIVE PROPERTY INSURANCE
POLICIES TO CONTAIN EITHER A WAIVER OF ANY RIGHT OF SUBROGATION THE INSURER OF
ONE PARTY HERETO MAY ACQUIRE AGAINST THE OTHER PARTY HERETO BY VIRTUE OF PAYMENT
OF ANY LOSS UNDER ANY SUCH INSURANCE OR AN ACKNOWLEDGMENT BY THE INSURER THAT
THE FOREGOING WAIVER OF CLAIMS DOES NOT IMPAIR OR INVALIDATE SUCH POLICY OF
INSURANCE.
SECTION 9.4. COVENANT TO HOLD HARMLESS.
(a) UNLESS CAUSED BY THE NEGLIGENT OR INTENTIONAL ACT OR
OMISSION OF LANDLORD OR ANY AGENT, EMPLOYEE OR CONTRACTOR OF LANDLORD,
TENANT HEREBY INDEMNIFIES AND AGREES TO SAVE HARMLESS LANDLORD, ITS
OFFICERS, DIRECTORS, PARTNERS, EMPLOYEES AND AGENTS AND ANY MORTGAGEE
OR MASTER LESSOR OF THE SHOPPING CENTER, FROM AND AGAINST ANY AND ALL
CLAIMS, ACTIONS, DAMAGES, LIABILITIES, COSTS AND EXPENSES, INCLUDING
REASONABLE ATTORNEYS' FEES, THAT (A) ARISE FROM OR ARE IN CONNECTION
WITH THE POSSESSION, USE, OCCUPANCY, MANAGEMENT, REPAIR, MAINTENANCE OR
CONTROL OF THE LEASED PREMISES, OR ANY PORTION THEREOF, OR (B) ARISE
FROM OR ARE IN CONNECTION WITH ANY ACT OR OMISSION OF TENANT OR
TENANT'S AGENTS, EMPLOYEES, CONTRACTORS, LICENSEES OR INVITEES, OR (C)
RESULT FROM ANY DEFAULT, BREACH, VIOLATION OR NONPERFORMANCE OF THIS
LEASE OR ANY PROVISION HEREOF BY TENANT, OR (D) RESULT FROM INJURY TO
PERSON OR PROPERTY OR LOSS OF LIFE SUSTAINED IN
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THE LEASED PREMISES. TENANT SHALL, AT ITS OWN COST AND EXPENSE, DEFEND
ANY AND ALL ACTIONS, SUITS AND PROCEEDINGS WHICH MAY BE BROUGHT AGAINST
LANDLORD OR ANY MORTGAGEE OR MASTER LESSOR OF THE SHOPPING CENTER WITH
RESPECT TO THE FOREGOING. TENANT SHALL PAY, SATISFY AND DISCHARGE ANY
AND ALL JUDGMENTS, ORDERS AND DECREES WHICH MAY BE RECEIVED AGAINST
LANDLORD OR ANY SUCH MORTGAGEE OR MASTER LESSOR IN CONNECTION WITH THE
FOREGOING. IN THE EVENT LANDLORD OR ANY OTHER PARTY SO INDEMNIFIED
SHALL, WITHOUT FAULT, BE MADE A PARTY TO ANY LITIGATION COMMENCED BY OR
AGAINST TENANT, OR IF LANDLORD OR ANY SUCH PARTY SHALL, IN ITS SOLE
DISCRETION, INTERVENE IN SUCH LITIGATION TO PROTECT ITS INTEREST
HEREUNDER, THEN TENANT SHALL PROTECT AND HOLD THEM HARMLESS AND SHALL
PAY ALL COSTS, EXPENSES AND REASONABLE ATTORNEYS' FEES INCURRED OR PAID
BY SUCH PARTY(IES) IN CONNECTION WITH SUCH LITIGATION.
(b) UNLESS CAUSED BY THE NEGLIGENT OR INTENTIONAL ACT OR
OMISSION OF TENANT OR ANY AGENT, EMPLOYEE OR CONTRACTOR OF TENANT,
LANDLORD HEREBY INDEMNIFIES AND AGREES TO SAVE HARMLESS TENANT, ITS
OFFICERS, DIRECTORS, PARTNERS, EMPLOYEES AND AGENTS, FROM AND AGAINST
ANY AND ALL CLAIMS, ACTIONS, DAMAGES, LIABILITIES, COSTS AND EXPENSES,
INCLUDING REASONABLE ATTORNEYS' FEES, THAT ARISE FROM OR ARE IN
CONNECTION WITH THE USE, MANAGEMENT, REPAIR OR MAINTENANCE OF THE
COMMON AREAS, OR ANY PORTION THEREOF.
SECTION 9.5. CONSEQUENTIAL DAMAGES. LANDLORD SHALL NOT BE LIABLE
UNDER ANY CIRCUMSTANCES FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES OR FOR CLAIMS
RELATING TO ANY INTERRUPTION OF TENANT'S BUSINESS.
ARTICLE X
DESTRUCTION OF LEASED PREMISES
Section 10.1. CONTINUANCE OF LEASE. In the event of any damage to the
Leased Premises by fire or other casualty, this Lease shall not be terminated or
otherwise affected; except that, if more than fifty percent (50%) of the square
footage of the Leased Premises shall be damaged by any such fire or other
casualty during the last three (3) years of the Term of this Lease (not
including any option or renewal periods) or during any renewal or extension of
the Term hereof, or if Landlord is unable to rebuild any portion of the building
in which the Leased Premises are located or of the Shopping Center due to any
inability to obtain any required governmental approval in connection therewith,
or if more than twenty-five percent (25%) of the floor area of the building in
which the Leased Premises are located or of the Shopping Center shall be damaged
or destroyed by fire or other casualty, or if all or any part of the building in
which the Leased Premises are located or of the Shopping Center or the Leased
Premises shall be damaged or destroyed at any time by the occurrence of any risk
not insured under the insurance required to be carried under Article IX above,
or if for any reason whatsoever sufficient insurance proceeds are not available,
then Landlord shall have the option to terminate this Lease within ninety (90)
days following the occurrence of such fire or other casualty by giving written
notice to Tenant during such period. In the event Landlord exercises any of the
foregoing options to terminate, this Lease shall immediately terminate upon
Landlord's written notice to Tenant and (a) the entire proceeds of the insurance
provided for in Section 9.1 above shall be paid by the insurance company or
companies directly to Landlord, and shall belong to, and be the sole property
of, Landlord; (b) the portion of the proceeds of the insurance provided for in
Section 9.2 which is allocable to equipment, fixtures and other items which, by
the terms of this Lease, rightfully belong to Landlord upon the termination of
this Lease by whatever cause, shall be paid by the insurance company or
companies directly to Landlord, and shall belong to, and be the sole property
of, Landlord; and (c) Landlord and Tenant shall be relieved from any and all
further liability or obligation accruing under this Lease from and after the
date of such termination. Tenant hereby waives any and all rights which it may
have to terminate this Lease by reason of damage to the Leased
21
Premises by fire or other casualty pursuant to any presently existing or
hereafter enacted statute or pursuant to any other law.
Section 10.2. RECONSTRUCTION. If the Leased Premises are damaged by
fire or other casualty and this Lease is not terminated in accordance with
Section 10.1 above, then the damage to the Leased Premises shall be promptly
repaired by Landlord, and the Minimum Rent and other charges payable by Tenant
to Landlord shall be abated in proportion to the GLA of the Leased Premises
rendered untenantable. In the event Landlord has not commenced restoration or
rebuilding of the Leased Premises within one hundred twenty (120) days of the
date of such fire or casualty loss, or does not diligently proceed to complete
such restoration or rebuilding so that the Leased Premises are restored or
rebuilt to its former condition within three hundred sixty (360) days of the
date following such fire or casualty loss, Tenant will have the right, in either
case, to terminate this Lease by providing Landlord notice of such election, in
which event Tenant will vacate and surrender the Leased Premises pursuant to
Section 18.1 below. Payment of full rent and all other charges so abated shall
re-commence and Tenant shall be obligated to reopen for business on the
ninetieth (90th) day following the date that Landlord advises Tenant that the
Leased Premises are tenantable and Landlord has substantially completed
Landlord's work related thereto, unless Tenant opens at an earlier time in the
damaged area or remains open in such area following destruction or damage, in
which event there shall be no abatement or any such abatement shall terminate as
of the date of Tenant's earlier reopening. Landlord shall be obligated to
diligently pursue the completion of its work and shall cause the same to be
completed as soon as reasonably possible under the circumstances. In no event
shall Landlord be required to repair or replace Tenant's merchandise, trade
fixtures, furnishings or equipment. If Landlord repairs or rebuilds, Tenant, at
Tenant's sole cost, shall repair or replace Tenant's merchandise, trade
fixtures, furnishings and equipment in a manner and to at least a condition
equal to that prior to the damage or destruction thereof. Any and all proceeds
of the property insurance required hereunder to be maintained by Tenant, so long
as this Lease shall remain in effect, shall be used only to repair or replace or
pay for the items so insured. After Landlord has completed Landlord's work,
Tenant shall commence such Tenant's work, at its expense. Tenant shall be
obligated to diligently pursue the completion of its work and shall cause the
same to be completed as soon as reasonably possible under the circumstances.
Tenant shall comply with all laws, ordinances and governmental rules or
regulations, and shall perform all work or cause such work to be performed with
due diligence and in a first-class manner. All permits required in connection
with said repairs, restoration and reconstruction to be performed by Tenant
shall be obtained by Tenant at Tenant's sole cost and expense. Any amount
expended by Tenant in excess of any insurance proceeds received by Tenant shall
be the sole obligation of Tenant. The Leased Premises shall be reconstructed in
accordance with the working drawings originally approved by Landlord or with new
drawings prepared by Tenant and acceptable to Landlord and Tenant. Except as may
be specifically set forth in this Article X, Landlord shall not be liable or
obligated to Tenant to any extent whatsoever by reason of any fire or other
casualty damage to the Leased Premises, or any damages suffered by Tenant by
reason thereof, or the deprivation of Tenant's possession of all or any part of
the Leased Premises.
ARTICLE XI
CONDEMNATION
Section 11.1. EMINENT DOMAIN. If fifty percent (50%) or more of the
floor area of the Leased Premises shall be taken or condemned by any
governmental authority (including, for purposes of this Article, any purchase by
such governmental authority in lieu of a taking), then either party may elect to
terminate this Lease by giving notice to the other party not more than sixty
(60) days after the date on which such title shall vest in the authority. If the
parking facilities are reduced below the minimum parking requirements imposed by
the applicable authorities, Landlord may elect to terminate this Lease by giving
Tenant notice within one hundred twenty (120) days after such taking. In the
case of any taking or condemnation, whether or not the Term of this Lease shall
cease and terminate, the entire award shall be the property of Landlord;
provided, however, Tenant shall be entitled to any award as may be made for
trade fixtures and other equipment which under the terms of this Lease would not
have become the property of Landlord; further provided, that any such award to
Tenant shall not be in diminution of any award otherwise to be made to Landlord
in the absence of such award to Tenant.
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Section 11.2. RENT APPORTIONMENT. In the event of any taking or
condemnation, the then current Minimum Rent and the GLA in the Leased Premises
as determined pursuant to Section 2.1 shall be apportioned as of the date when
possession of the Leased Premises is required to be delivered to the condemning
authority or termination of this Lease, as the case may be, and, if the Term of
this Lease shall not have ceased and have been terminated as of said date,
Tenant shall be entitled to a pro rata reduction in the Minimum Rent payable or,
if Tenant has prepaid Minimum Rent, Tenant shall be entitled to a pro rata
credit for the Minimum Rent paid hereunder, based on the proportion which the
GLA taken from the Leased Premises bears to the entire GLA of the Leased
Premises immediately prior to such taking.
Section 11.3. TEMPORARY TAKING. Notwithstanding anything to the
contrary in this Article XI, the requisitioning of the Leased Premises or any
part thereof by military or other public authority for purposes arising out of a
temporary emergency or other temporary situation or circumstances shall
constitute a taking of the Leased Premises by eminent domain when the use or
occupancy by the requisitioning authority is expressly provided to continue, or
shall in fact have continued, for a period of one hundred eighty (180) days or
more, and if this Lease is not thereafter terminated under the foregoing
provisions of this Article XI, then for the duration of any period of use and
occupancy of the Leased Premises by the requisitioning authority, all the terms
and provisions of this Lease and obligations of Tenant hereunder shall remain in
full force and effect, except that the Minimum Rent shall be reduced in the same
proportion that the GLA of the Leased Premises so requisitioned bears to the
total GLA of the Leased Premises, and Landlord shall be entitled to whatever
compensation may be payable from the requisitioning authority for the use and
occupation of the Leased Premises for the period involved.
ARTICLE XII
ASSIGNMENT, SUBLETTING AND ENCUMBERING LEASE
Section 12.1. NO ASSIGNMENT, SUBLETTING OR ENCUMBERING OF LEASE.
(a) Notwithstanding any references to assignees,
subtenants, concessionaires or other similar entities in this Lease,
Tenant shall not (i) assign or otherwise transfer, or mortgage or
otherwise encumber, this Lease or any of its rights hereunder, or (ii)
sublet the Leased Premises or any part thereof, or permit the use of
the Leased Premises or any part thereof by any persons other than
Tenant, without the prior written consent of Landlord in each case. Any
such attempted or purported transfer, assignment, mortgaging or
encumbering of this Lease or any of Tenant's interest hereunder, and
any attempted or purported subletting or grant of a right to use or
occupy all or a portion of the Leased Premises in violation of the
foregoing sentence, whether voluntary or involuntary or by operation of
law or otherwise, shall be null and void and shall not confer any
rights upon any purported transferee, assignee, mortgagee or occupant
and shall, at Landlord's option, terminate this Lease without relieving
Tenant of any of its obligations hereunder for the balance of the
stated Term. Nothing contained elsewhere in this Lease shall authorize
Tenant to enter into any franchise, concession, license, permit,
subtenancy, departmental operation arrangements or the like, except
pursuant to the provisions of this Article XII.
(b) If Tenant is a corporation, the sale, issuance or
transfer of any voting capital stock of Tenant or of any corporate
entity which directly or indirectly controls Tenant (unless Tenant--or
such controlling entity, as applicable--is a corporation whose stock is
publicly traded on a national exchange) which shall result in a change
in the voting control of Tenant or the corporate entity which controls
Tenant shall be deemed to be a prohibited assignment of this Lease
within the meaning of this Article XII. If Tenant is a partnership, an
unincorporated association or a limited liability company, then the
sale, issuance or transfer of a majority interest therein, or the
transfer of a majority interest in or a change in the voting control of
any partnership, unincorporated association, limited liability company
or corporation which directly or indirectly controls Tenant, or the
transfer of any portion or all of any general partnership, managing
partnership or managing member interest, shall be deemed to be a
prohibited assignment of this Lease within the meaning of this Article
XII. Notwithstanding
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anything herein to the contrary, if Tenant is a publicly-traded
company, the transfer of Tenant's shares in a "going private"
transaction shall not be deemed an assignment of this Lease.
(c) Notwithstanding the provisions of Section 12.1(a)
above, Tenant shall have the right, without the consent of Landlord, to
assign or sublet the Leased Premises, or any portion thereof, to any
corporation that controls, is controlled by or is under common control
with Tenant, or to any corporation resulting from the merger or
consolidation with Tenant, or to any person or business entity that
acquires all or substantially all the assets of Tenant as a going
concern of the business that is being conducted in the Leased Premises,
provided that said assignee assumes in full the obligations of Tenant
under this Lease, and further provided that no such assignment shall
release the original Tenant from any of its obligations or liabilities
under this Lease. The provisions of Section 12.1(d) & (e) and Section
12.3 below shall not apply to any assignment or sublease pursuant to
this Section 12.1(c) or to those corporate transactions that are
permitted without Landlord's consent pursuant to Section 12.1(b) above.
(d) Without conferring any rights upon Tenant not
otherwise provided in this Article XII, should Tenant desire to enter
into an assignment, sublease or transfer of this Lease or Tenant's
rights hereunder, Tenant shall request in writing Landlord's consent to
the assignment, sublease or transfer at least thirty (30) days before
the proposed effective date of the assignment, sublease or transfer,
providing the following: (i) the full particulars of the proposed
assignment, sublease or transfer of this Lease or Tenant's rights
hereunder, including its nature, effective date, terms and conditions,
and copies of any offers, draft agreements, subleases, letters of
commitment or intent and other documents pertaining to the proposed
transfer; (ii) a description of the identity, net worth and previous
business experience of the proposed transferee, including (without
limitation) copies of the proposed transferee's latest income, balance
sheet and changes in financial position statements (with accompanying
notes and disclosures of all material changes thereto) in audited form,
if available, and certified as accurate by the proposed transferee; and
(iii) any further information relevant to the proposed transfer which
Landlord shall request after receipt of Tenant's request for consent.
Tenant shall, concurrently with any request for Landlord's consent, pay
to Landlord a fee in the sum of One Thousand Dollars ($1,000.00) for
Landlord's review and processing of such request, and Landlord shall
not be obligated to review such request prior to Landlord's receipt of
such fee.
(e) Without conferring any rights upon Tenant not
otherwise provided in this Article XII, in the event of an assignment
or transfer of Tenant's interest in this Lease, or a sublease of all or
a portion of the Leased Premises, to a third party, in the event any
monthly rent or other payment accruing to Tenant as the result of any
such assignment, transfer, or sublease, including any lump sum or
periodic payment in any manner relating to such assignment, transfer or
sublease, is in excess of the rent then payable by Tenant under this
Lease, then one-half of such excess shall be paid by Tenant to Landlord
monthly as additional rent. Landlord may require a certificate from
Tenant specifying the full amount of any such payment of whatsoever
nature.
(f) It is understood and agreed that the restrictions set
forth in this Article XII are of primary importance in enabling
Landlord to control the mix of tenants in the Shopping Center.
(g) Neither Tenant's assignment of this Lease or
subletting of the Leased Premises, nor the consent by Landlord to any
proposed assignment or sublease, shall release Tenant from any covenant
or obligation under this Lease, or be deemed a waiver or release of the
non-assignability covenants in their future application, nor shall the
collection or acceptance of rent from any such assignee, transferee,
subtenant or occupant constitute a waiver of or a release of Tenant
from any covenant or obligation contained in this Lease.
Section 12.2. ASSIGNMENT OF SUBRENTALS. If the Leased Premises or any
part thereof shall be sublet or occupied by any person or entity other than
Tenant, whether as a result of any act or omission by Tenant, or operation of
law, or otherwise, then Landlord, after default by Tenant, may, in addition to,
and not in diminution of or substitution for, any other rights and remedies
under this Lease or pursuant to law to which
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Landlord may be entitled as a result thereof, collect rent from the subtenant or
occupant and apply the net amount collected to the rent herein reserved, but no
such subletting, occupancy or collection shall be deemed a waiver of the
covenants contained herein, or the acceptance of the transferee, assignee,
subtenant or occupant as the tenant hereunder, or a release of Tenant from the
further performance by Tenant of covenants on the part of Tenant set forth in
this Lease. Unless and until Landlord exercises its right pursuant to the
immediately-preceding sentence, Tenant shall be entitled to collect rentals
payable under approved subleases.
Section 12.3. RECAPTURE OF LEASED PREMISES. In the event Tenant
proposes to assign its interest in this Lease or sublet the whole of the Leased
Premises, it shall first give notice thereof (hereinafter called the
"Assignment/Subletting Notice") to Landlord together with all other information
requested by Landlord with respect to the subject assignment or subletting.
Within forty-five (45) days after Landlord's receipt of an Assignment/Subletting
Notice and such required and/or requested information from Tenant, and provided
the subject assignment or sublease is not one permitted without the prior
consent of Landlord, Landlord may elect by notice (hereinafter called the
"Termination Notice") in writing to Tenant to terminate this Lease and recapture
the Leased Premises, in which event this Lease shall automatically terminate on
the ninetieth (90th) day (hereinafter called the "Termination Date") following
Tenant's receipt of the Termination Notice with the same force and effect as if
said Termination Date had been designated as the expiration date of this Lease,
and Landlord and Tenant shall upon such Termination Date be released from any
and all liabilities thereafter accruing hereunder. All Minimum Rent, Percentage
Rent and additional rent payable by Tenant hereunder shall be apportioned as of
the Termination Date and Tenant shall promptly pay to Landlord any amounts so
determined to be due and owing by Tenant to Landlord, and conversely Landlord
shall promptly reimburse Tenant for any amounts prepaid by Tenant for periods
subsequent to the Termination Date. Notwithstanding any Termination Notice given
to Tenant by Landlord within the aforesaid forty-five (45) day period, Tenant
shall have the right within ten (10) days after its receipt of the Termination
Notice to give Landlord notice (hereinafter called the "Recission Notice") of
its recission of the Assignment/Subletting Notice, and upon Landlord's receipt
of the Recission Notice the Termination Notice previously given by Landlord
shall be deemed null and void; in such event, Tenant shall not assign this Lease
or sublet the Leased Premises as proposed in its Assignment/Subletting Notice.
Section 12.4. CONTINUING LIABILITY. No assignment, subletting or
other transfer or encumbrance of Tenant's interest under this Lease shall
reduce, diminish or otherwise affect the liability of Tenant hereunder.
Section 12.5. TRANSFER OF LANDLORD'S INTEREST. In the event of any
transfer of Landlord's interest in the Leased Premises, including a sale or
lease, the transferor shall be automatically relieved of any and all obligations
on the part of Landlord accruing from and after the date of such transfer,
provided that notice of such sale, transfer or lease shall be delivered to
Tenant.
ARTICLE XIII
SUBORDINATION, ATTORNMENT, FINANCING AND ESTOPPEL
Section 13.1. SUBORDINATION. Tenant agrees that this Lease shall, at
the request of Landlord, be subordinate to any mortgages or deeds of trust that
are now, or may hereafter be, placed upon the Shopping Center or any portion
thereof and to any and all advances to be made thereunder, and to the interest
thereon, and all renewals, replacements and extensions thereof, provided that
the mortgagees or beneficiaries named in said mortgages or trust deeds shall
agree to recognize the interest of Tenant under this Lease in the event of
foreclosure, if Tenant is not then in default. Tenant also agrees that any
mortgagee or beneficiary may elect to have this Lease constitute a prior lien to
its mortgage or deed of trust, and in the event of such election and upon
notification by such mortgagee or beneficiary to Tenant to that effect, this
Lease shall be deemed prior in lien to such mortgage or deed of trust, whether
this Lease is dated prior to or subsequent to the date of said mortgage or deed
of trust. Tenant's acknowledgment and agreement of subordination provided for in
this Section 13.1 is self-operative, and no further instrument of subordination
shall be required; however, Tenant agrees that upon the request of Landlord,
from time to time, or any mortgagee or beneficiary, Tenant shall execute
whatever reasonable instruments may be required to carry out the intent of this
Section. In accordance
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with the provisions of this Section 13.1, Tenant agrees to execute the Agreement
of Subordination, Non-Disturbance and Attornment attached hereto as EXHIBIT H
and the estoppel certificate attached hereto as EXHIBIT H-1 at the time this
Lease is executed by Tenant.
Section 13.2. ATTORNMENT. In the event any proceedings are brought for
the foreclosure of, or in the event of the conveyance by deed in lieu of
foreclosure of, or in the event of exercise of the power of sale under, any
mortgage and/or deed of trust or other security instrument made by Landlord
affecting the Shopping Center or any portion thereof, or in the event Landlord
sells, conveys or otherwise transfers its interest in the Shopping Center or any
portion thereof, this Lease shall remain in full force and effect and Tenant
hereby attorns to, and covenants and agrees to execute an instrument in writing
reasonably satisfactory to the new owner whereby Tenant attorns to, such
successor-in-interest and recognizes such successor-in-interest as the Landlord
under this Lease. Payment by or performance of this Lease by any person, firm or
corporation claiming an interest in this Lease or the Leased Premises by,
through or under Tenant without Landlord's consent in writing shall not
constitute an attornment or create any interest in this Lease or the Leased
Premises.
Section 13.3. FINANCING. In the event any current or prospective
mortgagee or a mortgagee or beneficiary of a deed of trust encumbering all or
any portion of the Shopping Center requires, as a condition to financing,
modifications to this Lease, then, provided such modifications do not materially
alter the approved working plans and do not increase the rent to be paid
hereunder, Landlord shall submit to Tenant a written amendment with such
required modifications and if Tenant fails to execute and return the same within
thirty (30) days after the amendment has been submitted Landlord shall be
entitled to its remedies as specified in Section 13.5. Nothing herein shall
require Tenant to execute an amendment or amendments to accomplish changes which
would change (a) the Minimum Rent, Percentage Rent or additional rent payable by
Tenant; (b) the permitted use; (c) the size, dimensions or location of the
Leased Premises; (d) the length of the Lease Term; (e) Landlord's construction
obligations; or (f) the conditions precedent as to Tenant's initial opening
requirements, or which would place a lien on Tenant's assets. Upon the request
of Landlord, Tenant shall give prompt written notice to any mortgagee of any
default of Landlord under this Lease, and Tenant shall allow such mortgagee a
reasonable length of time (in any event, not less than sixty (60) days from the
date of such notice) in which to cure any such default.
Section 13.4. ESTOPPEL CERTIFICATE. Tenant shall, without charge
therefor, at any time and from time to time, within twenty (20) days after
request therefor by Landlord, execute, acknowledge and deliver to Landlord a
written estoppel certificate, in reasonable form, certifying to Landlord, any
mortgagee, or any purchaser of the Shopping Center or any other person
designated by Landlord, as of the date of such estoppel certificate: (a) that
Tenant is in possession of the Leased Premises and has unconditionally accepted
the same; (b) that this Lease is unmodified and in full force and effect (or if
there have been modifications, that the same is in full force and effect as
modified and setting forth such modifications); (c) whether or not there are
then existing any set-offs or defenses against the enforcement of any right or
remedy of Landlord, or any duty or obligation of Tenant, hereunder (and, if so,
specifying the same in detail); (d) that rent is paid currently without any
offset or defense thereto; (e) the dates, if any, to which any rent has been
paid in advance; (f) whether or not there is then existing any claim of
Landlord's default under this Lease and, if so, specifying the same in detail;
(g) that Tenant has no knowledge of any event having occurred that authorized
the termination of this Lease by Tenant (or if Tenant has such knowledge,
specifying the same in detail); and (h) any other matters relating to the status
of this Lease that Landlord or its mortgagee may reasonably request be
confirmed, provided that such facts are accurate and ascertainable.
Section 13.5. REMEDIES. Any failure by Tenant to execute any
certificate, statement or instrument in accordance with the foregoing provisions
of this Article, within the time period provided, shall constitute an
irrevocable power of attorney appointing and designating Landlord or its
successors or assigns as attorney-in-fact for Tenant to execute and deliver any
such certificate, statement or instrument.
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ARTICLE XIV
ADVERTISING AND PROMOTION
Section 14.1. PROMOTION FUND. Landlord has established an advertising
and promotion fund (the "Fund"). The object of the Fund is to advertise the
Shopping Center and to provide a program of events, all of which shall, in
Landlord's judgment, serve to enhance and promote the Shopping Center and its
occupants. Such program of events may include the promotion of coach traffic to
the Shopping Center and the development of a mall video network within the
Shopping Center offering a program of information, entertainment and
advertisements. The Fund shall be administered by Landlord and the costs and
expenses of such administration shall be charged to the Fund. Landlord shall
expend all amounts paid to the Fund by the tenants in the Shopping Center for
the purposes herein set forth.
Section 14.2. PROMOTION FUND CONTRIBUTION. Tenant's annual contribution
to the Fund shall be the amount set forth in the Data Sheet (the "Fund
Contribution") (as adjusted at the time and in the manner provided below). Any
Fund Contribution payable for a Partial Lease Year shall be appropriately
prorated. The Fund Contribution payable by Tenant for each Lease Year shall be
increased, commencing with the second Lease Year, and each Lease Year
thereafter, by five percent (5%). The Fund Contribution shall be payable by
Tenant to Landlord, or as Landlord may direct, in twelve (12) equal monthly
installments, commencing on the Commencement Date, in the same manner and at the
same time as the monthly installments of Minimum Rent are payable.
Section 14.3. NETWORK. Landlord may cause to be developed a mall video
network within the Shopping Center (the "Network"). The object of the Network
shall be to provide a program of information, entertainment and advertisements,
which shall, in Landlord's judgment, serve to enhance or promote the Shopping
Center and its occupants. The Network shall have the right to sell available
time and access on the Network for advertisements or other uses. The Network
shall be under the sole and exclusive direction of Landlord and shall be
administered by Landlord. The costs and expenses paid or incurred by Landlord
for administering, operating, equipping, staffing, protecting, insuring,
repairing, replacing and maintaining the Network shall be charged to the Fund.
Tenant may produce, or cause to be produced, a videotaped advertising message of
the business conducted, or to be conducted, in the Leased Premises (the "Tenant
Video") in accordance with the terms of this Section. The Tenant Video shall (a)
identify Tenant's type of business in the Leased Premises, Tenant's Trade Name
and the address/location of the Leased Premises within the Shopping Center; (b)
be approximately thirty (30) seconds in duration; (c) be produced in the Leased
Premises, Landlord's studio or both; (d) utilize one from a select group of
advertising message formats as mutually selected by Landlord and Tenant; and (e)
not contain any lewd, obscene or offensive content or material. Any air time on
or access to the Network is subject to availability, as determined solely by
Landlord. Landlord shall have the right to reject, remove or discontinue showing
any Tenant Video or advertising message on the Network the content of which, in
the opinion of Landlord, is unethical, misleading, or in bad taste, or shall
tend to injure the reputation of the Shopping Center or its occupants, or shall
be deemed to be detrimental to the Shopping Center, or is in violation of any
applicable rule, law or existing agreement with occupant(s) of the Shopping
Center. Tenant acknowledges that Tenant shall be solely responsible for the
content of its Tenant Video and Tenant agrees to save harmless Landlord, its
officers, directors, partners, employees and agents from and against any and all
claims, actions, damages, liabilities, costs or expenses, including reasonable
attorneys' fees, that arise from or with respect to the content of such
advertising message, including (without limitation) any claims for infringement
of the intellectual property rights of others or actions for unfair competition.
Landlord reserves the right at any time to dissolve the Network and cease
providing its promotional services as well as Tenant Videos and in lieu thereof
to provide, or cause to be provided, a program of advertising and promotional
events which, in Landlord's sole judgment, will serve to promote the Shopping
Center and its occupants.
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ARTICLE XV
DEFAULT AND REMEDIES
Section 15.1. ELEMENTS OF DEFAULT. If any one or more of the following
events occur, said event or events shall constitute a "default": (a) Tenant's
failure to take possession of the Leased Premises within thirty (30) days
following the delivery of possession date, or Tenant's failure to open its doors
for business within thirty (30) days following the date specified in Section 2.3
above, or Tenant's abandonment of the Leased Premises, or Tenant's failure
during the Operating Covenant Period to maintain normal inventory levels and
employee staff for the conduct of its normal business activities in the Leased
Premises, or Tenant's failure during the Operating Covenant Period to
continuously operate its business in compliance with Section 5.2 for the
purposes specified in Section 5.1; (b) the failure of Tenant to pay any rent or
other charges required to be paid by Tenant when same shall become due and
payable hereunder, if such failure continues for a period of ten (10) days after
written notice; (c) the failure of Tenant to perform or observe any term or
condition of this Lease (other than as set forth in subparagraphs (a), (b), (e)
and (f) of this Section 15.1), if such failure shall continue for thirty (30)
days after written notice; (d) if Tenant shall be given two (2) notices of
default under Section 15.1(b) or 15.1(c) within any period of twelve (12)
consecutive months, notwithstanding any subsequent cure of the failure to
perform or observe the terms or conditions of this Lease as identified in such
notices, and shall thereafter again commit a breach of this Lease within said
twelve (12) month period of the sort described in Section 15.1(b) or 15.1(c)
respectively; (e) if any writ of execution, levy, attachment or other legal
process of law shall occur with respect to Tenant's assets, merchandise or
fixtures or Tenant's estate or interest in the Leased Premises and shall not be
discharged or bonded against within thirty (30) days; or (f) if Tenant shall be
liquidated or dissolved or shall begin proceedings toward such liquidation or
dissolution, or shall in any manner permit the divestiture of all or any
substantial part of Tenant's assets.
Section 15.2. LANDLORD'S REMEDIES. In the event of any such default
or breach by Tenant, at any time thereafter, with or without notice or demand
and without limiting Landlord in the exercise of any right or remedy which
Landlord may have by reason of such default or breach:
(a) Landlord, in addition to other rights or remedies it
may have, shall have the right, by written notice to Tenant, to declare
this Lease terminated and the Term ended, in which event this Lease and
the Term hereof shall expire, cease and terminate with the same force
and effect as though the date set forth in the notice of termination
were the date originally set forth herein and fixed for the expiration
of the then-current Term, and Tenant shall immediately vacate and
surrender the Leased Premises in accordance with Section 18.1, but
shall remain liable for all obligations arising during the balance of
the then-current Term as if this Lease had remained in full force and
effect. If Tenant fails to so vacate the Leased Premises, Landlord may,
without prejudice to any other remedy which it may have for possession
or arrearages in rent, enter upon and take possession of the Leased
Premises and expel or remove Tenant and any other person who may be
occupying the Leased Premises or any part thereof, without being liable
for prosecution or any claim or damage therefor; and Landlord may
recover from Tenant the following:
(i) The worth at the time of award of any unpaid
rent which has been earned at the time of such termination;
plus
(ii) The worth at the time of award of the amount
by which the unpaid rent which would have been earned after
termination until the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably
avoided; plus
(iii) The worth at the time of award of the amount
by which the unpaid rent for the balance of the Lease Term
after the time of award exceeds the amount of such rental loss
that Tenant proves could have been reasonably avoided; plus
(iv) Any other amount necessary to compensate
Landlord for all the detriment proximately caused by Tenant's
failure to perform its obligations under this Lease or which
in
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the ordinary course of things would be likely to result
therefrom, specifically including but not limited to,
brokerage commissions and advertising expenses incurred,
expenses of remodeling the Leased Premises or any portion
thereof for a new tenant, whether for the same or a different
use, and any special concessions made to obtain a new tenant;
and
(v) At Landlord's election, such other amounts
in addition to or in lieu of the foregoing as may be permitted
from time to time by applicable law.
The term "rent" as used in this Subsection 15.2(a) shall be deemed to
be and to mean all sums of every nature required to be paid by Tenant
pursuant to the terms of this Lease, whether to Landlord or to others.
As used in Subsections 15.2(a)(i) and (ii) above, the "worth at the
time of award" shall be computed by allowing interest at the rate
specified in Section 21.13 hereof, but in no case greater than the
maximum amount of such interest permitted by law. As used in Subsection
15.2(a)(iii) above, the "worth at the time of award" shall be computed
by discounting such amount at the discount rate of the Federal Reserve
Bank of New York at the time of award plus one percent (1%).
(b) Landlord shall have the right to bring a special
proceeding to recover possession from Tenant and/or Landlord may,
without notice, re-enter the Leased Premises and dispossess, by summary
proceedings or otherwise, Tenant and the legal representatives of
Tenant or other occupant(s) of the Leased Premises and remove their
effects, and Tenant shall have no further claim or right hereunder. To
the extent permitted by law, Tenant waives notice of re-entry or
institution of legal proceedings to that end and any right of
redemption, re-entry or repossession. No re-entry or commencement of
any action for re-entry shall be construed as an election to terminate
this Lease, nor shall it absolve or release Tenant from any of its
obligations for the remainder of the Term of this Lease. In the event
of re-entry, Landlord may remove all persons and property from the
Leased Premises, and such property may be removed and stored in a
public warehouse or elsewhere at the expense and risk of Tenant,
without notice or resort to legal process and without Landlord being
deemed guilty of trespass or becoming liable for any loss or damage
which may be occasioned thereby.
(c) If Landlord re-enters, or takes possession pursuant
to legal proceedings or otherwise, or if Tenant shall abandon, vacate
or surrender the Leased Premises before the expiration of the Term of
this Lease without having paid the full rental for the remainder of the
Term, Landlord may either terminate this Lease or from time to time,
without terminating this Lease, make such alterations and repairs as
necessary in order to relet the Leased Premises, and relet the Leased
Premises or any part thereof for such term or terms and for such rent
and upon such other terms and conditions as Landlord may deem advisable
in its sole discretion. Upon each such reletting, all rentals and other
sums received by Landlord from such reletting shall be applied, first,
to the payment of any indebtedness other than rent due hereunder from
Tenant to Landlord; second, to the payment of any costs and expenses of
such reletting, including reasonable brokerage fees and attorneys' fees
and the costs of any alterations and repairs; third, to the payment of
rent and other charges due and unpaid hereunder; and the residue, if
any, shall be held by Landlord and applied in payment of future rent as
the same may become due and payable hereunder. If such rentals and
other sums received from such reletting during any month be less than
the amount payable to Landlord by Tenant hereunder for the subject
month, it being agreed that Tenant shall reimburse Landlord for all
costs and expenses of such re-letting within thirty (30) days after
Landlord's written request, Tenant shall pay such deficiency to
Landlord; if such rentals and other sums shall be more, Tenant shall
have no right to, and shall receive no credit for, the excess. Such
deficiency shall be calculated and paid monthly. Landlord's failure to
relet the Leased Premises shall not affect Tenant's liability.
Notwithstanding any such reletting without termination, Landlord may at
any time elect to terminate this Lease for such previous event of
default.
(d) In determining the rent which would be payable by Tenant
hereunder subsequent to default, the annual Minimum Rent for each year
of the unexpired Term shall be equal to the applicable annual Minimum
Rent for such years as provided for in Section 3.1 plus an amount equal
to the
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average annual Percentage Rent which Tenant was obligated to pay
from the commencement of the Term to the time of default, or during the
preceding three (3) full calendar years, whichever period is shorter.
(e) Any damage or loss of rent sustained by Landlord may
be recovered by Landlord, at Landlord's option, at the time of the
reletting or termination, in a single action or in separate actions
from time to time as said loss of rents or damages shall accrue, or in
a single proceeding deferred by Landlord or with jurisdiction reserved
by the court until the expiration of the Term of this Lease (in which
event Tenant hereby agrees that, at Landlord's option, the cause of
action shall not be deemed to have accrued until the date of expiration
of the Term). In case suit shall be brought for recovery of the Leased
Premises, or for the recovery of rent or any other amount due under the
provisions of this Lease, Tenant shall pay to Landlord all expenses
incurred therefor, including reasonable attorneys' fees.
(f) Nothing contained herein shall prevent the
enforcement of any claim Landlord may have against Tenant for
anticipatory breach of the unexpired Term of this Lease. In the event
of an anticipatory breach by Tenant of any of the covenants or
provisions hereof or in the event of Tenant's default, Landlord shall
have the right of injunction and the right to invoke any remedy allowed
at law or in equity as if re-entry, summary proceedings and other
remedies were not provided for herein. Mention in this Lease of any
particular remedy shall not preclude Landlord from any other remedy, in
law or in equity. Tenant hereby expressly waives for itself and all
persons claiming by or through Tenant, any and all rights to redeem,
reinstate, restore, or obtain relief from forfeiture of this Lease
granted by or under any present or future law in the event of Tenant
being evicted or dispossessed for any cause, or in the event of
Landlord obtaining possession of the Leased Premises by reason of the
violation by Tenant of any of the covenants and conditions of this
Lease.
Section 15.3. BANKRUPTCY.
(a) Neither Tenant's interest in this Lease, nor any
estate hereby created in Tenant, nor any interest herein or therein,
shall pass to any trustee or receiver or assignee for the benefit of
creditors or otherwise by operation of law, except as may specifically
be provided pursuant to the Bankruptcy Code (11 USC Section 101 ET.
SEQ.), as the same may be amended from time to time.
(b) It is understood and agreed that this Lease is a
lease of real property in a shopping center as such lease is described
in Section 365 of the Bankruptcy Code, as the same may be amended from
time to time. Upon the filing of a petition by or against Tenant or any
guarantor of this Lease under the Bankruptcy Code, Tenant or any
guarantor of this Lease, as debtor and as debtor-in-possession, and any
trustee who may be appointed with respect to the assets of or estate in
bankruptcy of Tenant or any guarantor of this Lease, agree to pay
monthly in advance on the first day of each month, as reasonable
compensation for the use and occupancy of the Leased Premises, an
amount equal to all Minimum Rent, additional rent and other charges
otherwise due pursuant to this Lease, and to pay Percentage Rent
monthly, at the percentage factor set forth in this Lease for the Lease
Year in which such month falls, on all of the Gross Sales during such
month in excess of one-twelfth (1/12th) of the Sales Break Point for
such Lease Year, payment of all such Percentage Rent to be made by the
tenth (10th) day of the succeeding month. Included within and in
addition to any other conditions or obligations imposed upon Tenant or
its successor in the event of the assumption and/or assignment of this
Lease are the following: (1) the cure of any monetary defaults and
reimbursement of pecuniary loss within not more than thirty (30) days
of assumption and/or assignment; (2) the deposit of a sum equal to not
less than three (3) months' Minimum Rent and additional rent, which sum
shall be determined by Landlord, in its sole discretion, to be a
necessary deposit to secure the future performance under this Lease of
Tenant or its assignee; (3) the use of the Leased Premises as set forth
in Section 5.1 of this Lease, and the quality, quantity and/or lines of
merchandise, goods or services required to be offered for sale being
unchanged; and (4) the prior written consent of any mortgagee to which
this Lease has been assigned as collateral security.
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Section 15.4. ADDITIONAL REMEDIES AND WAIVERS. The rights and remedies
of Landlord set forth herein shall be in addition to any other right and remedy
now or hereafter provided by law or in equity, and all such rights and remedies
shall be cumulative. No action or inaction by Landlord shall constitute a waiver
of a default or termination, and no waiver of default or termination shall be
effective unless it is in writing signed by Landlord. No waiver by Landlord of
any violation or breach of any of the terms, provisions or covenants herein
contained shall be deemed or construed to constitute a waiver of any other or
later violation or breach of the same or any other of the terms, provisions and
covenants herein contained.
Section 15.5. LANDLORD'S CURE OF DEFAULT. In addition to Landlord's
right of self-help set forth elsewhere in this Lease or as provided by law or in
equity, if Tenant shall be in default hereunder, Landlord shall have the option,
but not the obligation, upon three (3) days written notice to Tenant (except in
the event of any dangerous condition or emergency, in which event no notice
shall be required), to cure the act or failure constituting said default for the
account of and at the expense of Tenant. Landlord's cure of, or attempt to cure,
any act or failure constituting the default by Tenant shall not result in a
waiver or release of Tenant's obligations under this Lease. Tenant agrees to pay
Landlord Interest, in accordance with Section 21.13 below, on all sums expended
by Landlord pursuant to this Section 15.5 from the date of such expenditure, and
Tenant agrees to pay the costs incurred by Landlord pursuant to this Section
15.5, plus a charge of fifteen percent (15%) of such costs, to Landlord upon
demand, as additional rent.
ARTICLE XVI
RIGHT OF ACCESS
Landlord, its agents and employees may, at any reasonable time or
times, upon prior notice to Tenant (except in the event of an emergency, in
which event no notice shall be required), before and after the Commencement
Date, enter upon the Leased Premises, any portion thereof and any appurtenance
thereto (with men and materials, if required) for the purpose of: (a) inspecting
the same; (b) making such repairs, replacements or alterations which Landlord
may be required to perform as herein provided or which it may deem desirable for
the Leased Premises; and (c) showing the Leased Premises to prospective
purchasers, lenders or lessees. Landlord hereby expressly reserves the right,
exercisable at any time and from time to time, to erect, use, maintain and
repair pipes, conduits, plumbing, vents, ducts and wires in, to, under and
through the Leased Premises (provided the same are concealed within ceilings or
walls or beneath the slab and do not interfere with Tenant's usable space and/or
utilities) as and to the extent that Landlord may now or hereafter deem to be
necessary or appropriate for the proper operation and maintenance of the
Shopping Center. Any redecorating or repair necessitated by reason of location
of same within the Leased Premises shall be the responsibility of Landlord.
Landlord agrees to hold Tenant harmless from any damage or injury to person or
property to the extent resulting from Landlord exercising its rights under this
Article XVI. In the exercise of its rights under this Article XVI, Landlord
shall use reasonable efforts to avoid material interference with the operation
of Tenant's business within the Leased Premises. Landlord agrees that, except in
the event of an emergency, and provided Tenant shall make an employee of Tenant
available to accompany Landlord following Landlord's notice to Tenant of the
necessity therefor, Landlord shall not enter the Leased Premises without an
employee of Tenant accompanying Landlord's representative.
ARTICLE XVII
FORCE MAJEURE
If Landlord or Tenant is delayed or prevented from performing any of
their respective obligations during the Term of this Lease because of strikes,
lockouts, labor troubles, inability to procure materials, failure of power,
governmental restrictions or reasons of a like nature not the fault of the party
delayed in performing such obligation, then the period of such delays shall be
deemed added to the time herein provided for the performance of any such
obligation, and the defaulting party shall not be liable for losses or damages
caused by such delays; provided, however, that this Article shall not apply to
the payment of any sums of money required to be paid by Tenant hereunder.
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ARTICLE XVIII
END OF TERM
Section 18.1. RETURN OF LEASED PREMISES. Upon the expiration or sooner
termination of the Term of this Lease, Tenant shall quit and surrender to
Landlord the Leased Premises in accordance with the terms of this Lease and in a
broom-clean condition, in good order, condition and repair, ordinary wear and
tear excepted, and shall surrender to Landlord all keys to or for the Leased
Premises and inform Landlord of all combinations of locks, safes and vaults, if
any, in the Leased Premises. Tenant, at its expense, shall promptly remove all
personal property of Tenant, repair all damage to the Leased Premises caused by
such removal and restore the Leased Premises to the condition which existed
prior to the installation of the property so removed. Any personal property of
Tenant not removed within ten (10) days following the expiration or earlier
termination of this Lease shall be deemed to have been abandoned by Tenant and
shall, at Landlord's option, become the property of Landlord, and may be
retained or disposed of by Landlord, as Landlord shall desire. Tenant's
obligation to observe or perform the covenants set forth in this Section shall
survive the termination of this Lease.
Section 18.2. HOLDING OVER. If Tenant shall hold possession of the
Leased Premises after the expiration or termination of this Lease, at Landlord's
option (a) Tenant shall be deemed to be occupying the Leased Premises as a
tenant from month-to-month, at one hundred fifty percent (150%) of the Minimum
Rent and other charges in effect during the last Lease Year immediately
preceding such holdover and otherwise subject to all of the terms, covenants and
conditions of this Lease; or (b) Landlord may exercise any other remedies it has
under this Lease or at law or in equity including an action for wrongfully
holding over. No extension or renewal of this Lease shall be deemed to have
occurred by any holding over.
ARTICLE XIX
COVENANT OF QUIET ENJOYMENT
Landlord covenants that, if and so long as Tenant pays the rent and all
other charges provided for herein, and performs all of its obligations provided
for herein, Tenant shall at all times during the Term hereof peaceably have,
hold and enjoy the Leased Premises, without any interruption or disturbance from
Landlord or anyone lawfully or equitably claiming through or under Landlord,
subject to the terms hereof and any mortgage or deed of trust to which this
Lease shall be subordinate and all other restrictions and encumbrances to which
this Lease may be or become subject and subordinate from time to time.
ARTICLE XX
UTILITIES
Section 20.1. UTILITIES. Tenant agrees to connect to and use the
utilities (including electricity, water, gas (which, if Landlord elects to make
the same available at the Shopping Center, shall be for cooking purposes only),
heat, condenser water, telephone and any other utility) supplied to the Leased
Premises in accordance with Landlord's mechanical and electrical design
criteria, Landlord's reasonable rules and regulations, and the rules and
regulations of the utility companies supplying the service. Tenant shall be
solely responsible for and promptly pay all costs and charges, including
installation thereof where applicable, for all water, gas, heat, electricity,
sewer and other utilities provided or used in or at the Leased Premises,
commencing with the delivery of possession date and continuing throughout the
Term of this Lease. In the event Landlord designates a supplier (or if Landlord
itself elects to act as the supplier) for any of the utilities used upon or
furnished to the Leased Premises, Tenant agrees to use only the supplier
designated by Landlord, provided the cost to Tenant thereof is no greater than
the cost Tenant would incur if Tenant contracted directly with an alternative
supplier (including any costs of connecting such alternative supplier to the
Leased Premises). Landlord shall not be liable to Tenant for any loss, damage or
expense which Tenant may sustain if the utilities or the quality or character of
utilities used upon or furnished to the Leased Premises are no longer available
or suitable for Tenant's requirements, or if the supply of any such utility
ceases or is interrupted as a
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result of any cause, and no such change, interruption or cessation of service
shall constitute an eviction of Tenant. Any furnishing by Landlord of light,
condenser water, heat, air conditioning or power shall be conditioned upon the
availability of adequate energy sources. Landlord shall have the right to reduce
heat, condenser water, lighting and air conditioning within the Shopping Center,
including (without limitation) the Leased Premises and the Common Areas, as
required by any mandatory or voluntary fuel or energy saving allocation, or any
similar statute, regulation, order or program.
Section 20.2. TRASH AND GARBAGE REMOVAL. Tenant shall be solely
responsible for trash and garbage removal from the Leased Premises, including
the placing of all trash and garbage in appropriate containers for pickup and
removal. In the event Landlord designates a contractor to furnish trash removal
service to the tenants in the Shopping Center (or if Landlord elects to provide
such service itself), Tenant agrees to use only the contractor designated by
Landlord, so long as the cost to Tenant thereof is no greater than the cost
Tenant would incur if Tenant contracted directly with an alternative contractor
(including costs of leasing space from Landlord for its trash receptacles).
Section 20.3. WATER AND SEWER. Landlord reserves the right to install a
water meter in the Leased Premises at any time or from time to time to measure
Tenant's consumption of water therein, in which event Tenant shall pay for all
water consumed within the Leased Premises promptly upon being billed therefor by
Landlord.
ARTICLE XXI
MISCELLANEOUS
Section 21.1. ENTIRE AGREEMENT. This Lease contains the entire
agreement between the parties hereto, and there are no promises, agreements,
conditions, undertakings, warranties, or representations, oral or written,
express or implied, between them other than as herein set forth. No change or
modification of this Lease or of any of the provisions hereof shall be valid or
effective unless the same is in writing and signed by the parties hereto. No
alleged or contended waiver of any of the provisions of this Lease shall be
valid or effective unless in writing signed by the party against whom it is
sought to be enforced.
Section 21.2. NOTICES. No notice or other communication given under
this Lease shall be effective unless the same is in writing and is delivered in
person or mailed by registered or certified mail, return receipt requested,
first-class, postage prepaid, or delivered by Federal Express or a comparably
reliable national air courier service (i.e., one which delivers service in at
least forty-eight (48) states) provided that any such courier service provides
written evidence of delivery. Any such notice or communication shall be
addressed:
(a) If to Landlord, at 0000 Xxxxxx Xxxxxxxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxxx 00000, Attention: General Counsel, or to such other
address as Landlord shall designate by giving notice thereof to Tenant.
(b) If to Tenant, at 000 X. Xxxxxxxxx, Xxxxxxx, XX 00000,
with a copy to Xxxxxxxx Xxxxxx Xxxxxxxx and Xxxx, 0000 Xxxxx Xxxxxxxx
Xxxxxxxx, Xxxxxxx, XX 00000, Attention: Xxxxxxx X. XxXxxx, Esq., or to
such other address as Tenant shall designate by giving notice thereof
to Landlord.
The date of service of any notice or other communication given by mail shall be
two (2) business days after the date on which such notice is deposited in the
U.S. mail. The date of service of any notice given by courier service (as
described above) shall be one (1) business day after deposit with such courier
service.
Section 21.3. GOVERNING LAW. It is the intent of the parties hereto
that all questions with respect to the construction of this Lease and the rights
and the liabilities of the parties hereto shall be determined in accordance with
the laws of the State (as defined in the Data Sheet), and that all disputes
arising hereunder shall be heard and decided in the local jurisdiction where the
Shopping Center is located.
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Section 21.4. SUCCESSORS. This Lease and all rights and liabilities
herein given to, or imposed upon, the respective parties hereto shall extend to
and bind the several respective heirs, executors, administrators, successors,
and assigns of the said parties; and if there shall be more than one Tenant, or
more than one person or entity acting collectively as Tenant, they shall all be
bound jointly and severally by the terms, covenants and agreements contained
herein. Any restriction on or requirement imposed upon Tenant hereunder shall be
deemed to extend to Tenant's guarantor, Tenant's sublessees, Tenant's assignees
and Tenant's invitees, and it shall be Tenant's obligation to cause the
foregoing persons to comply with such restrictions or requirements. No rights,
however, shall inure to the benefit of any assignee or other transferee of
Tenant, and no rights or benefits shall be conferred upon any such assignee or
transferee by reason of this Section 21.4, unless such rights or benefits shall
be expressly otherwise set forth in this Lease.
Section 21.5. LIABILITY OF LANDLORD. Neither Landlord, any persons or
entities comprising Landlord, nor any successor-in-interest to Landlord (or to
such persons or entities) shall have any personal liability for any failure by
Landlord to perform any term, covenant or condition of this Lease. If Landlord
shall fail to perform any covenant, term or condition of this Lease upon
Landlord's part to be performed, and if as a consequence of such default Tenant
shall recover a money judgment against Landlord, such judgment shall be
satisfied only out of the proceeds of sale received upon execution of such
judgment and levied thereon against the right, title and interest of Landlord in
the Shopping Center and out of rents or other income from such property
receivable by Landlord, or out of the consideration received by Landlord from
the sale or other disposition of all or any part of Landlord's right, title and
interest in the Shopping Center, subject, nevertheless, to the rights of
Landlord's mortgagee, and neither Landlord nor any of the persons or entities
comprising Landlord shall be liable for any deficiency. The foregoing limitation
of liability shall be noted in any judgment secured against Landlord. The
limitations of Tenant's right of recovery against Landlord and any Landlord
related parties set forth in this Section 21.5 shall survive the expiration of
the Term of this Lease (whether by lapse of time or otherwise).
Section 21.6. BROKERS. Tenant warrants and represents that there was
no broker or agent instrumental in consummating this Lease. Tenant agrees to
indemnify and hold Landlord harmless against any claims for brokerage or other
commissions arising (directly or indirectly) by reason of a breach by Tenant of
this representation and warranty.
Section 21.7. TRANSFER BY LANDLORD. Landlord hereunder shall have the
right to freely assign this Lease without notice to or the consent of Tenant.
Section 21.8. NO PARTNERSHIP. Notwithstanding the fact that a portion
of the rent reserved hereunder may be a percentage of Tenant's Gross Sales, and
notwithstanding anything else to the contrary, Landlord shall not be deemed to
be a partner of Tenant or a joint venturer with Tenant.
SECTION 21.9. WAIVER OF COUNTERCLAIMS. TENANT SHALL NOT IMPOSE ANY
COUNTERCLAIM OR COUNTERCLAIMS (WITH THE EXCEPTION OF MANDATORY COUNTERCLAIMS
THAT TENANT WOULD BE BARRED OR ESTOPPED FROM RAISING IN A SEPARATE ACTION) IN A
SUMMARY PROCEEDING OR OTHER ACTION BASED ON TERMINATION OR HOLDOVER, IT BEING
THE INTENT OF THE PARTIES HERETO THAT TENANT BE STRICTLY LIMITED IN SUCH
INSTANCE TO BRINGING A SEPARATE ACTION IN THE COURT OF APPROPRIATE JURISDICTION.
TENANT FURTHER AGREES NOT TO SEEK THE CONSOLIDATION OF ANY SUCH SEPARATE ACTION
BROUGHT BY TENANT WITH ANY TERMINATION OR HOLDOVER ACTION BROUGHT BY LANDLORD.
THE FOREGOING WAIVER IS A MATERIAL INDUCEMENT TO LANDLORD MAKING, EXECUTING AND
DELIVERING THIS LEASE, AND TENANT'S WAIVER OF ITS RIGHT TO COUNTERCLAIM OR TO
SEEK CONSOLIDATION IN ANY SUMMARY PROCEEDING OR OTHER ACTION BASED ON
TERMINATION OR HOLDOVER IS DONE KNOWINGLY, INTELLIGENTLY AND VOLUNTARILY.
SECTION 21.10. WAIVER OF JURY TRIAL. LANDLORD AND TENANT HEREBY WAIVE
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE
PARTIES HERETO AGAINST THE OTHER ON, OR IN RESPECT OF, ANY MATTER
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WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, THE
RELATIONSHIP OF LANDLORD AND TENANT HEREUNDER, TENANT'S USE OR OCCUPANCY OF THE
LEASED PREMISES AND/OR ANY CLAIM OF INJURY OR DAMAGE.
Section 21.11. SEVERABILITY. If any term or provision of this Lease,
or the application thereof to any person or circumstances, shall, to any extent,
be invalid or unenforceable, the remainder of this Lease, or the application of
such term or provision to persons or circumstances other than those as to which
it is invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Lease shall be valid and shall be enforced to the fullest
extent permitted by law.
Section 21.12. NO WAIVER. No failure by Landlord to insist upon the
strict performance of any term, covenant, agreement, provision, condition or
limitation of this Lease to be kept, observed or performed by Tenant, and no
failure by Landlord to exercise any right or remedy available upon a breach of
any such term, covenant, agreement, provision, condition or limitation of this
Lease, shall constitute a waiver of any such breach or of any such term,
covenant, agreement, provision, condition or limitation of this Lease.
Section 21.13. INTEREST. Any amount due from Tenant to Landlord which
is not paid within seven (7) days following the date due shall bear interest at
the Prime Rate reported in the Money Rates section of The Wall Street Journal on
the twenty-fifth (25th) day of the month preceding the date upon which the
obligation is incurred plus five percent (5%) ("Interest") from the date due
until paid, unless otherwise specifically provided herein, but the payment of
such Interest shall not excuse or cure any default by Tenant under this Lease.
In no event shall any Interest calculated hereunder be at a rate which is higher
than the maximum rate which is allowed under the usury laws of the State, which
maximum rate of interest shall be substituted for the rate in excess thereof, if
any, computed pursuant to this provision.
Section 21.14. EXCAVATION. If an excavation shall be made upon land
adjacent to the Leased Premises, or shall be authorized to be made, Tenant shall
afford to the person causing or authorized to cause such excavation license to
enter upon the Leased Premises for the purpose of doing such work as said person
shall deem necessary to preserve the wall or the building of which the Leased
Premises form a part from injury or damage and to support the same by proper
foundation, without any claim for damages or indemnity from Landlord or
diminution or abatement of rent.
Section 21.15. RULES AND REGULATIONS. Tenant agrees to comply with
and observe all reasonable rules and regulations established by Landlord for the
Shopping Center from time to time. Tenant's failure to keep and observe such
rules and regulations shall constitute a default under this Lease.
Section 21.16. FINANCIAL STATEMENTS. Upon Landlord's written request
from time to time, Tenant shall, within ten (10) days after Landlord's request
therefor, furnish Landlord financial statements outlining Tenant's then-current
financial condition as well as financial statements outlining the then-current
financial condition of any guarantor of this Lease. Landlord may request
financial statement(s) not more than once per Lease Year, and shall maintain all
financial information provided in a confidential manner.
Section 21.17. GENERAL RULES OF CONSTRUCTION. (a) This Lease may be
executed in several counterparts, and the counterparts shall constitute one and
the same instrument; (b) Landlord may act under this Lease by its attorney or
agent; (c) wherever a requirement is imposed on Tenant hereunder, Tenant shall
be required to perform such requirement at its sole cost and expense unless it
is specifically otherwise provided herein; (d) (i) wherever appropriate herein,
the singular includes the plural and the plural includes the singular; (ii)
whenever the word "including" is used herein, it shall be deemed to mean
"including, but not limited to"; and (iii) the words "re-enter" and "re-entry"
as used herein shall not be restricted to their technical legal meaning; (e)
anything in this Lease to the contrary notwithstanding: (i) any provision hereof
which permits or requires a party to take any particular action shall be deemed
to permit or require, as the case may be, such party to cause such action to be
taken; and (ii) any provision hereof which requires any party not to take any
particular action shall be deemed to require such party to prevent such action
to be taken by any person or by operation of law.
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Section 21.18. RECORDING. Neither this Lease nor any memorandum hereof
may be recorded without the express written consent of Landlord. Landlord
agrees, at Tenant's request, to execute and deliver a memorandum of lease that
does not recite any of the economic terms of this Lease, and Tenant may record
such memorandum, at Tenant's sole cost, in the land records for the jurisdiction
in which the Shopping Center is located.
Section 21.19. EFFECTIVE DATE. For all purposes hereof, the "Effective
Date" of this Lease shall be the date upon which this Lease shall have been
executed by both parties and physically delivered by Landlord to Tenant or its
attorney. Prior to the Effective Date, neither this Lease nor anything hereunder
contained shall be legally binding on either Landlord or Tenant, and the
submission of this Lease by Landlord to Tenant prior to such Effective Date for
examination or consideration by Tenant or discussion between Landlord and Tenant
shall not constitute a reservation of or option for the Leased Premises or
create any legal obligation or liability whatsoever on Landlord.
Section 21.20. HEADINGS. The captions, section numbers, article
numbers and index appearing in this Lease are inserted only as a matter of
convenience and in no way define, limit, construe, or describe the scope or
intent of such sections or articles of this Lease nor in any way affect this
Lease.
Section 21.21. TENANT LIABILITY. If two or more individuals,
corporations, partnerships or other persons (or any combination of two or more
thereof) shall sign this Lease as Tenant, the liability of each such individual,
corporation, partnership or other persons to pay rent and perform all other
obligations hereunder shall be deemed to be joint and several, and all notices,
payments and agreements given or made by, with or to any one of such
individuals, corporations, partnerships or other persons shall be deemed to have
been given or made by, with or to all of them.
Section 21.22. OTHER TENANTS. Landlord reserves the absolute right to
effect other tenancies in the Shopping Center as Landlord shall determine in the
exercise of its sole business judgment. Tenant does not rely on the fact, nor
does Landlord represent, that any specific stores or occupants, or any
particular number of stores or occupants, shall occupy any space in the Shopping
Center during the Term of this Lease. A vacation of premises or cessation of
operations by any other tenant(s) in the Shopping Center shall not in any way
release Tenant from its obligations under this Lease.
Section 21.23. DUE AUTHORIZATION. If Tenant is a corporation, a limited
liability company or a partnership, the person(s) executing this Lease on behalf
of Tenant hereby covenant and warrant that: Tenant is a duly formed corporation
or a duly formed limited liability company or a duly created partnership (as the
case may be) in good standing, qualified to do business in the state in which
the Shopping Center is located; such persons are duly authorized by such
corporation or limited liability company or partnership to execute and deliver
this Lease on behalf of such corporation, limited liability company or
partnership; and this Lease constitutes a valid and binding agreement of Tenant
in accordance with the terms hereof.
Section 21.24. CONFIDENTIALITY. It is agreed and understood that Tenant
may acknowledge only the existence of this Lease by and between Landlord and
Tenant, and that Tenant may not disclose any of the terms and provisions
contained in this Lease to any other tenant or occupant in the Shopping Center
or to any agent, employee, subtenant or assignee of such tenant or occupant.
Tenant acknowledges that any breach by Tenant of the agreements set forth in
this Section shall cause Landlord irreparable harm. The terms and provisions of
this Section shall survive the termination of this Lease (whether by lapse of
time or otherwise).
Section 21.25. ATTORNEYS' FEES. In any action or proceeding hereunder,
the prevailing party shall be entitled to recover from the other party the
prevailing party's reasonable costs and expenses in such action or proceeding,
including reasonable attorneys' fees, costs and expenses. If either party is
sued by a third party as a result of a violation of a covenant or warranty
herein contained by the other party hereto, then the party who has violated the
covenant or warranty shall be responsible for the reasonable costs and expenses
in such action or proceeding incurred by the other party, including reasonable
attorneys' fees, costs and expenses.
36
SECTION 21.26. WAIVER OF REDEMPTION BY TENANT. TENANT HEREBY WAIVES FOR
TENANT AND FOR ALL THOSE CLAIMING UNDER TENANT ALL RIGHT NOW OR HEREAFTER
EXISTING TO REDEEM BY ORDER OR JUDGMENT OF ANY COURT OR BY ANY LEGAL PROCESS OR
WRIT, TENANT'S RIGHT OF OCCUPANCY OF THE LEASED PREMISES AFTER ANY TERMINATION
OF THIS LEASE.
Section 21.27. RULE AGAINST PERPETUITIES SAVINGS CLAUSE. If the "Rule
Against Perpetuities" would invalidate this Lease or any portion hereof, or
would limit the time during which this Lease shall be effective, due to the
potential failure of an interest in property created herein to vest within a
particular time, then notwithstanding anything to the contrary contained herein,
each such interest in property must vest, if at all, before the passing of
twenty-one (21) years from the date of this Lease, or this Lease shall become
null and void on the expiration of such twenty-one (21) year period and the
parties hereto shall have no further liability under this Lease to the other
accruing thereafter.
Section 21.28. GROUND LEASE. Notwithstanding anything else contained in
this Lease, Tenant acknowledges that Landlord's interest in the land upon which
the Shopping Center is to be or has been constructed is that of a ground lessee
under a ground lease between Landlord and the owner of such land (the "Ground
Lease"). Tenant agrees that (i) this Lease is and shall be subordinate to the
Ground Lease, as the same may from time to time be modified, extended, restated
or replaced, (ii) upon any termination of the Ground Lease, Tenant shall attorn
to the ground lessor and recognize said ground lessor as its lessor under this
Lease, and (iii) said ground lessor shall be named as an additional insured
under Tenant's liability insurance described in Section 9.2 above (provided
Tenant has been furnished with the name of such ground lessor). Landlord
represents and warrants that the Ground Lease contains (and any restatement or
replacement thereof will contain) provisions pursuant to which the ground lessor
irrevocably agrees to recognize this Lease and Tenant's interest hereunder in
the event of any termination of the Ground Lease (unless such termination is
caused by a casualty or condemnation that also results in a termination of this
Lease), so long as Tenant is not then in default under this Lease beyond any
applicable cure period; provided that, upon such recognition, the ground lessor
shall not (i) have any obligation to Tenant with respect to any portion of the
term of this Lease extending beyond the scheduled expiration date of the Ground
Lease (which shall be no earlier than February 28, 2049); (ii) be liable for the
acts or defaults of any prior landlord (including Landlord); (iii) have any
liability to complete any initial construction of the Leased Premises or to fund
any allowance granted by any prior landlord (including Landlord) with respect
thereto; (iv) be bound by any payments of rent made by Tenant more than thirty
(30) days in advance; or (v) be liable for the return of any security deposit
not actually received by the ground lessor.
Section 21.29. CONTINGENCY. This Lease is contingent and conditioned
upon the securing by Tenant of financing for the Leased Premises on terms and
conditions, and at a rate of interest and in a loan amount, satisfactory to
Tenant in its sole, but reasonable discretion (said condition being herein
referred to as the "Lease Contingency"). In the event the foregoing Lease
Contingency has not been satisfied on or before December 31, 2000, then Tenant
shall so notify Landlord on or before January 15, 2001 and Landlord and Tenant
shall thereafter have the right for thirty (30) days after Landlord's receipt of
the notice to terminate and cancel this Lease upon thirty (30) days prior
written notice to the other party. In the event Tenant does not provide the
notice on or before January 15, 2001 it shall have no further right to terminate
this Lease for reason of the Lease Contingency not being met. In the event of
termination of this Lease as herein provided, this Lease shall cease and come to
an end, Landlord shall reimburse Tenant for any advance Rent paid, and there
shall thereupon be no further liability or obligations upon either party under
or with respect to this Lease. Each party will, at the other's request, execute
an instrument in recordable form containing a release and surrender of all
right, title and interest in and to this Lease.
37
IN WITNESS WHEREOF, Landlord and Tenant have signed this Lease as of
the day and year first above written.
LANDLORD:
OPRY XXXXX LIMITED PARTNERSHIP,
By: Opry Xxxxx, L.L.C.,
Its General Partner
By: The Xxxxx Limited Partnership
Its Manager
ATTEST: By: The Xxxxx Corporation
Its General Partner
/s/ [ILLEGIBLE} By: /s/ Xxxxxx Xxxxxxx [Seal]
--------------------------- -------------------------------
Asst. Secretary Xxxxxx Xxxxxx
Executive Vice President
TENANT:
BIG BUCK BREWERY & STEAKHOUSE, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Its: President
38
ACKNOWLEDGMENT OF LANDLORD
STATE OF VIRGINIA )
) SS
COUNTY OF ARLINGTON )
On this 8th day of January, 2001, before me, a Notary Public in and for
said county and state, personally appeared Xxxxxx Xxxxxx, personally known to me
to be the person who executed the foregoing Shopping Center Lease, and
acknowledged before me that she was duly authorized and did execute same on
behalf of The Xxxxx Corporation, as general partner of The Xxxxx Limited
Partnership, the manager of Opry Xxxxx LLC, the general partner of Opry Xxxxx
Limited Partnership.
GIVEN under my hand and Notarial Seal, this 8th day of January, 2001.
/s/ [ILLEGIBLE]
-------------------------------------------
Notary Public
My Commission expires: 8/31/03
---------------------
ACKNOWLEDGMENT OF TENANT
STATE OF MICHIGAN )
) SS
COUNTY OF OTSEGO )
On this 9th day of November, 2000, before me, a Notary Public in and
for said county and state, personally appeared Xxxxxxx X. Xxxxxxxx, personally
known to me to be the person who executed the foregoing Shopping Center Lease,
and acknowledged before me that (s)he was duly authorized and did execute same
on behalf of Big Buck Brewery & Steakhouse, Inc.
GIVEN under my hand and Notarial Seal, this 9th day of November, 2000.
/s/ Xxxxx X. House
-------------------------------------------
Notary Public
My Commission Expires: 1/7/2004
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