FIRST AMENDMENT TO LEASE
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THIS FIRST AMENDMENT TO LEASE (this "First Amendment") is made and entered into
as of the ____ day of January 2000 by and between AMERICAN NATIONAL BANK AND
TRUST COMPANY OF CHICAGO, not personally, but solely as Trustee under Trust
Agreement dated March 13, 1978 and known as Trust No.42371 ("Landlord"), and
SPORTMART, INC., a Delaware corporation ("Tenant").
RECITALS
A. Landlord and Tenant have entered into that certain Lease dated as of
September 1, 1994 (the "Lease"), demising certain premises commonly known as
0000 Xxxx Xxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx (the "Premises"). All capitalized
words used but not otherwise defined herein shall have the meanings ascribed
thereto in the Lease.
B. The Lease provides for an Initial Termination Date of May 31, 2000.
C. By letter dated November 29, 1999 (the "Extension Letter"), Tenant
notified Landlord of its election to extend the Term of the Lease to May 31,
2005, at Minimum Rent of Five Hundred Ninety-Five Thousand Seven Hundred Ten and
No/100ths Dollars ($595,710.00) per year.
D. Landlord and Tenant have agreed to further modify the terms and
provisions of the Lease, as supplemented by the Extension Letter, on the terms
and conditions hereinafter set forth.
NOW, THEREFORE, in consideration for the foregoing recitals, the covenants
and agreements hereinafter set forth, and other good and valuable consideration,
the receipt, sufficiency and adequacy of which are hereby acknowledged, the
undersigned hereby agree as follows:
1. Effective as of the date hereof, Section 1.2 of the Lease is hereby
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deleted in its entirety, and inserted in lieu thereof is the following:
Parties and Notice Addresses:
Landlord: American National Bank and Trust Company of
Chicago, not personally but solely as Trustee under
Trust Agreement dated March 13, 1978 and known as Trust
No. 42371
c/o Xxxxxx Xxxxxxxx
Xxx Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Tenant: Sportmart, Inc.
Mail: X.X. Xxx 00000
Xxxxxx, XX 00000-0000
Street: 0000 Xxxxxxxx
Xxxxxx, XX 00000
Attn: VP/General Counsel
copy to: Sportmart, Inc.
Mail: X.X. Xxx 00000
Xxxxxx, XX 00000-0000
Street: 0000 Xxxxxxxx
Xxxxxx, XX 00000
Attn: VP/Real Estate
and copy to: Xxxx X. Xxxx, Esq.
Laff Xxxxx Xxxxxxxx Xxxxxx & Xxxxxxx
0000 X. Xxxxxxxxx Xxx., Xxxxx 000
Xxxxxxxxx, XX 00000-0000
Address for
payment of
Rent: Schaumburg Associates L.P.
0 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
2. Effective as of the date hereof, Section 1.5 of the Lease is hereby
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deleted in its entirety, and inserted in lieu thereof is the following:
Term: Initial Termination Date: May 31, 2015.
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3. Effective as of the date hereof, Section 1.6 of the Lease is hereby
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deleted in its entirety, and inserted in lieu thereof is the following:
Options: Two (2) additional five (5) year periods, the first of
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which, if exercised, shall commence on June 1, 2015, and the second of
which, if exercised, shall commence on June 1, 2020. (Section 6.1)
4. Effective as of the date hereof, Section 1.7 of the Lease is hereby
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deleted in its entirety, and inserted in lieu thereof is the following:
Annual Minimum
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Rent: Commencement Date through November 30, 1994: $360,000 per
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year ($30,000 per month/$6.04 per square foot per year);
December 1, 1994 through May 31, 2000: $508,561.92 per year
($42,380.16 per month/$8.54 per square foot per year);
June 1, 2000 through May 31, 2005: [$580,817.25] per year
([$48,401.44] per month/[$9.75] per square foot per year);
June 1, 2005 through May 31, 2010: the lesser of (i)
[$639,196.83] per year ([$53,266.40] per month/[$10.73] per
square foot per year) and (ii) the Adjusted CPI increase;
June 1, 2010 through May 31, 2015: the lesser of (i)
[$702,937.80] ([$58,578.15] per month/[$11.80] per square
foot per year) and (ii) the Adjusted CPI increase;
First Option Period: the lesser of (i) [$774,423.00] per
year ([$64,535.25] per month/[$13.00] per square foot per
year) and (ii) the Adjusted CPI increase; and
Second Option Period: the lesser of (i) [$850,673.88] per
year ([$70,889.49] per month/[$14.28] per square foot per
year) and (ii) the Adjusted CPI increase.
For purposes of this subsection, the "Adjusted CPI Increase" shall be
an amount that is determined on a cumulative basis for the five year period
ending in the year in which the Annual Minimum Rent is to be adjusted. The
Adjusted CPI Increase shall be calculated as follows: (a) in each year of
the five-year period ending in the year in which the Annual Minimum Rent is
to be adjusted, the CPI for the month of May (commencing with May 2001)
shall be compared to the CPI for the month of May in the immediately
preceding year; (b) the percentage change in CPI shall be multiplied by
five and the product will be the percentage annual adjustment (which shall
not be less than zero) (the "Annual Adjustment"); (c) the Annual Adjustment
for each of the years in the five-year period shall be cumulated, i.e.,
added to the prior Annual Adjustment in such five (5) year period, (the
"Cumulative Adjustment"); and (d) the final Cumulative Adjustment shall be
the percentage (which percentage shall be capped at 10%) by which the prior
year's
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Annual Minimum Rent shall be increased to determine the Adjusted CPI
Increase. It is the intent of the parties hereto that the Annual Minimum
Rent shall adjust only on June 1, 2005 and on June 1/st/ of each of the
five year periods thereafter as set forth above. Therefore, the Annual
Minimum Rent on June 1/st/ of each such five year period shall continue to
be the Annual Minimum Rent until June 1/st/ of the next five year period
set forth above. See Exhibit B for an illustration of the calculation to
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determine the Adjusted CPI Increase.
"CPI" is defined as the Consumer Price Index-United States All Items for
All Urban Consumers (1982-1984=100) published by the Bureau of Labor
Statistics of the Department of Labor. If the manner in which the Consumer
Price Index as determined by the Bureau of Labor Statistics shall be
substantially revised, an adjustment shall be made in such revised index,
which would produce results equivalent, as nearly as possible, to those
which would have been obtained if the Consumer Price Index had not been so
revised. If the Consumer Price Index shall become unavailable to the
public, Landlord will substitute therefor a comparable index based upon
changes in the cost of living or purchasing power of the consumer dollar
published by any other governmental agency, a major bank or other financial
institution, a university or a recognized financial publication.
In addition to the foregoing Annual Minimum Rent, Tenant shall pay to
Landlord as additional annual rent an amount sufficient to amortize the
amount of the Tenant Allowance (as hereinafter defined) actually
contributed by Landlord to Tenant pursuant to the terms and provisions
hereof, at an interest rate of ten percent (10%) over the remaining Term of
the Lease (excluding any renewal term pursuant to the exercise of the
Options) from the date of the last contribution with payments to be made
monthly with payments of Annual Minimum Rent. Following determination of
the additional annual rent, Landlord and Tenant will enter into an
amendment to this Lease memorializing the amount of additional annual rent.
5. Effective as of the date hereof, the following is added to the end of
Section 6.1 of the Lease:
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Notwithstanding the foregoing, if Tenant shall fail to give any such notice
of exercise within the aforesaid time limit, Tenant's right to exercise its
option shall nevertheless continue until 30 days after Landlord shall have
given Tenant written notice of Landlord's election to terminate such option
and Tenant may exercise its option at any time until the expiration of said
30 day period.
6. Effective as of the date hereof, the following new Section 9.3 to the
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Lease is hereby added following Section 9.2:
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Landlord covenants and agrees that it will not lease any other space in the
Shopping Center of which the Leased Premises are a part to any person nor
will Landlord allow any person to use any of such space for purposes of the
general sale of sporting goods or for other purposes which directly compete
with Tenant's use of the Leased Premises.
7. Effective as of the date hereof, the following new Section 10.5 to the
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Lease is hereby added following Section 10.4:
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10.5 Notwithstanding the foregoing, in the event of a Recapture (as
hereinafter defined), from and after the effective date of such event,
Landlord shall be responsible for all real estate taxes and assessments
levied against the Shopping Center, and Tenant shall be responsible to pay
Landlord its pro rata share of all such real estate taxes and assessments.
Tenant's pro rata share shall be determined by dividing the Leaseable Floor
Area of the Store, after Recapture, by the Leaseable Floor Area of the
Store prior to the Recapture. Landlord may estimate (which estimate may be
revised from time to time, but not more than once per year, upon thirty
(30) days written notice to Tenant) the annual amount of such real estate
taxes and assessments based upon [one hundred five percent (105%)] of the
most recent tax xxxx for the Shopping Center or the amount required by
Landlord's lender and Tenant shall pay to Landlord monthly on or before the
first day of
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each month, with and as part of the minimum monthly rent, its pro rata
share of such annual real estate taxes and assessments divided by twelve
(12). Within thirty (30) days following delivery by Landlord of the final
real estate tax xxxx for any calendar year, Tenant will pay to Landlord or
Landlord will reimburse to Tenant, as appropriate, any overage or
deficiency versus the estimated payments made to Landlord. Landlord will
provide Tenant with a copy of the real estate tax xxxx for the Shopping
Center not later than 30 days following the date payment of the real estate
taxes is due each year.
Provided that Tenant is not in default in the payment of real estate taxes
due and payable under this Lease, then, throughout the term of this Lease,
Landlord shall pay, or cause to be paid, all real estate taxes, assessments
and other taxes, duties and charges in the same category imposed by any
governmental or public authority which shall be assessed or levied against
the Shopping Center or any part thereof or any buildings or other
improvements thereon or any appurtenances thereto or fixtures therein or
any tax, charge or duty which may be imposed, levied or be or become a
charge in lieu of any such present tax, charge or duty (herein collectively
called "taxes"). All such taxes shall be paid before they become delinquent
and Landlord agrees to provide to Tenant receipted bills or other evidence
of payment of such taxes from time to time as such taxes are paid.
Provided, however, that if Tenant pays any real estate taxes directly to
the taxing authority imposing such real estate taxes as provided in Section
10.1, Landlord shall not have the obligations imposed under this Section
10.5 as to any real estate taxes paid by Tenant directly to the taxing
authority imposing such real estate taxes.
8. Effective as of the date hereof, the following new Section 11.6 to the
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Lease is hereby added following Section 11.5:
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11.6 Notwithstanding the provisions of Section 11.4 to the contrary,
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in the event of a Recapture, from and after the effective date of such
event, Landlord shall be responsible for maintaining the insurance policies
as provided in Section 11.1 hereof and tenant shall be responsible to pay
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Landlord its pro rata share of all costs and expenses incurred by Landlord
in connection therewith. Tenant's pro rata share shall be determined by
dividing the Leaseable Floor Area of the Store after Recapture, by the
Leaseable Floor Area of the Store Prior to Recapture.
9. Effective as of the date hereof, the following new Section 12.4 to the
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Lease is hereby added following Section 12.3:
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12.4 Landlord shall at all times during the Term keep in force a
policy or policies of public liability insurance, or an endorsement on a
blanket liability insurance policy or policies, against claims for personal
injuries, death or property damage, occurring on, in or about the Shopping
Center, with a combined single limit of not less than TWO MILLION DOLLARS
($2,000,000). Said policy or policies shall contain Contractual Liability
Insurance recognizing the liability assumed in Section 23.2 hereof, shall
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name Tenant as an additional insured, shall include a cross-liability
endorsement providing that Landlord and Tenant, although named/additional
insured, may recover on account of the negligence of the other, and shall
be with an insurer with a policy holder's rating of at least A and a
financial rating of not less than VII in Best's Insurance Reports.
10. Effective as of the date hereof, Section 13.1 of the Lease is hereby
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deleted in its entirety, and inserted in lieu thereof is the following:
13.1 Anything in this Lease to the contrary notwithstanding, Landlord
and Tenant each hereby waives any and all rights of recovery, claim, action
or cause of action, against the other, its agents (including partners, both
general and limited), officers, directors, shareholders or employees, for
any loss or damage that may occur to the Shopping Center, or any
improvements thereto, or any property of such party thereon, by reason of
fire, the elements, or any other cause which could be insured against under
the terms of the All Risk Policy to be carried pursuant to Section 11.1 of
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this Lease, regardless of cause or origin, including negligence of the
other party hereto, its agents, officers or employees and covenants that no
insurer shall hold any right of subrogation against such other party. This
mutual waiver is in addition to any other waiver or release contained in
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this Lease. Landlord and Tenant shall give written notice to their
insurers of the provisions of this waiver and release and have their
insurance policies endorsed, if required, to prevent invalidation of
insurance coverage by reason of this waiver and release.
11. Effective as of the date hereof, Section 14.1 of the Lease is hereby
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deleted in its entirety, and inserted in lieu thereof is the following:
14.1 Subject to the terms and provisions of Article 20 below, during
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the Term, Tenant agrees, at no cost or expense to Landlord, to police and
maintain the Shopping Center in good operating condition, order and repair
at all times, and to make all replacements and repairs to the Shopping
Center as and when necessary, including, but without limitation, repairing
and replacing any surface paving whenever necessary, repairing, replacing
and maintaining landscaping in the Shopping Center, keeping the same
properly drained and reasonably free of snow, ice, water and rubbish and in
a neat, clean orderly and sanitary condition, providing security as
necessary to protect the property and persons of those properly using the
Shopping Center, maintaining suitable and adequate lighting in exterior
portions of the Shopping Center (and keeping same lighted during, and for
at least one-half hour after, Tenant's business hours), maintaining such
directional signs, markers and painted lines as may from time to time be
necessary or proper for the control of parking and traffic in the Shopping
Center, maintaining adequate access ways connecting all parking areas with
the public streets abutting the Shopping Center. Notwithstanding the
foregoing, in the event of a Recapture, from and after the effective date
of such event, Landlord shall be responsible for maintaining the Common
Areas and exterior portions of the Store, including but not limited to
exterior walls, roof, canopy, and HVAC units which do not exclusively serve
the Store, and all repairs and replacements thereof, all pursuant to this
Section 14.1 and Tenant shall be responsible to pay Landlord its pro rata
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share of all costs and expenses incurred by Landlord in connection
therewith, including, without limitation, a management fee equal to ten
percent (10%) multiplied by said costs and expenses (excluding taxes). No
other administrative or management fee or expense shall be allowed.
Tenant's pro rata share shall be determined by dividing the Leaseable Floor
Area of the Store, after Recapture, by the Leaseable Floor Area of the
Store prior to the Recapture. Landlord may estimate (which estimate may be
revised from time to time, upon thirty (30) days written notice to Tenant)
the annual cost of such maintenance and Tenant shall pay to Landlord
monthly on or before the first day of each month, with and as part of the
minimum monthly rent, its pro rata share of such annual cost divided by
twelve (12). Within ninety (90) days following the end of each Lease Year
Landlord will endeavor to provide Tenant with a statement of the cost of
maintenance of the Shopping Center pursuant to this Section 14.1, with such
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supporting materials as may be reasonably requested by Tenant. Within
thirty (30) days of receipt of such annual statement and reasonable
supporting materials, Tenant will pay to Landlord or Landlord will
reimburse to Tenant, as appropriate, any overage or deficiency versus the
estimated payments made to Landlord.
The parties acknowledge that currently the parking lot lights are metered
as part of Tenant's premises and Landlord reimburses Tenant for a portion
of Tenant's electrical charges attributable thereto as determined by a
prior electrical study. In the event of Recapture, a new electrical study
regarding the parking lot lights which are currently metered as part of
Tenant's premises will be conducted. Thereafter, Landlord shall reimburse
Tenant for the portion of the electrical attributable to the parking lot
lights as determined by such study not less than monthly.
12. Effective as of the date hereof, the following new Sections 17.4 and
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17.5 to the Lease are hereby added following Section 17.3:
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17.4 Upon completion of any alterations, Tenant shall provide Landlord
with such documents as Landlord may reasonably require (including, without
limitation, sworn contractors statements and supporting lien waivers)
evidencing full or partial payment for such work, and "as built" working
drawings, if available.
17.5 Tenant may make alterations in connection with its remodeling and
updating
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of the Store ("Remodel Alterations"). Tenant shall cause to be prepared
plans and specifications (the "Plans") for the Remodel Alterations and
shall submit the Plans to Landlord for its approval. Landlord shall have
fourteen (14) days after Tenant's submission thereof to deliver any
objections to the Plans to Tenant or, if Tenant delivers a second notice to
Landlord after said fourteen (14) day period (the "Reminder Notice"),
Landlord shall be deemed to have approved the Plans. Landlord agrees not to
unreasonably withhold or condition its approval of the Plans. In the event
Landlord
provides Tenant with written objections to the Plans, Tenant shall promptly
revise the Plans and the approval process shall continue until the parties
have reached agreement. Fifteen (15) days after Landlord's review and
approval of the "Tenant Allowance Documents" (hereinafter defined) to be
submitted by Tenant to Landlord after completion of portions of the Remodel
Alterations, Landlord shall disburse to Tenant the cost of Tenant's
improvements up to the aggregate sum of Three Hundred Thousand and
No/100ths Dollars ($300,000)(the "Tenant Allowance"). Notwithstanding the
foregoing, Landlord and Tenant acknowledge and agree that (i) disbursements
of the Tenant Allowance shall be in incremental amounts of not less than
Fifty Thousand and No/100ths Dollars ($50,000) based upon the status of
completion of the Remodel Alterations; (ii) Tenant shall not be entitled to
more than one request for funding of a portion of the Tenant Allowance each
calendar month; and (iii) Landlord's obligation to fund the Tenant
Allowance shall terminate on the earlier of the date on which the aggregate
sum of the Tenant Allowance has been funded; or [June 1, 2003]. Tenant may
do alterations in stages and there is no requirement that Tenant complete
all planned alterations prior to receiving any Tenant Allowance.
As used herein, the "Tenant Allowance Documents" shall consist of the
following:
(i) a current dated, sworn owner's statement disclosing all of
the contracts entered into by Tenant relating to the construction of
the Remodel Alterations and specifying, at a minimum, the name and
address of each party, the trade of each party, the total contract
amount for each party, and disclosing no remaining balance to be paid
to any party for that portion of the Remodel Alterations for which
reimbursement is sought by Tenant;
(ii) a sworn statement/affidavit from the Tenant's general
contractor specifying at a minimum the names and addresses of all
contractors, subcontractors, suppliers and materialmen supplying
labor, service and/or materials in connection with the Remodel
Alterations to the Store, the total contract amount for each party,
the amounts previously paid to each party, and disclosing no remaining
balance to be paid to any party for that portion of the Remodel
Alterations for which reimbursement is sought by Tenant;
(iii) original notarized partial or final lien waivers as the
case may be from the general contractor for all lienable work done and
materials delivered for that portion of the Remodel Alterations for
which reimbursement is sought by Tenant;
(iv) a certificate from Tenant's architect certifying that the
portion of the Remodel Alterations for which reimbursement is sought
by Tenant have been finally completed in accordance with all
applicable provisions of the Lease and in accordance with the plans
and specifications approved by Landlord, and no asbestos-containing
materials have been used in the construction thereof; and
(v) an estoppel certificate executed by Tenant in the form
attached hereto as Exhibit A.
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13. Effective as of the date hereof, Section 18.1 of the Lease is hereby
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deleted in its entirety, and inserted in lieu thereof is the following:
18.1 Tenant, as well as its agents, employees and customers
(collectively, the "Customers") shall have and hereby are granted complete,
nonexclusive and undisturbed access to, and use of, all Common Areas.
Landlord shall use its reasonable best efforts to
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prevent the Common Areas from being used by other than Tenant and its
Customers, or, in the event of a Recapture, the Customers of other
tenant(s) of the Shopping Center. Tenant shall maintain all Common Areas in
good condition, repair and cleanliness, including ice and snow removal, and
free of any impediments to easy and safe movement within the Common Areas,
subject to the terms and provisions of Section 14.1 above. Should any other
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tenant or its Customers use parking such that Tenant or its Customers
regularly experience a lack of adequate parking for use in conjunction with
the Store,
Landlord shall designate no less than fifty (50) parking spaces in close
proximity to the entrance of the Store for the exclusive use of Tenant and
its Customers and shall use commercially reasonable efforts to prevent the
use of such parking by other tenants or their Customers. Tenant shall be
permitted from time to time to conduct special events and/or tent sales in
the parking lot and sidewalk sales on the sidewalks of the Shopping Center.
14. Effective as of the date hereof, the following shall be inserted at
the end of Section 22.1 of the Lease:
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In the event a lien is filed, the party receiving notice of such filing
shall provide notice to the other party within fifteen (15) days and shall
cause such lien to be discharged within thirty (30) days unless the lien is
being contested and enforcement thereof is stayed during such contest. If
a party shall fail to cause such lien to be so discharged, then in addition
to any other right or remedy which the other party may have, the other
party may, but shall not be obligated to, discharge the same either by
paying the amount claimed to be due or by procuring the discharge of such
lien by deposit or by bonding proceedings, and in any such event such party
shall be entitled, if such party so elects, to compel the prosecution of
any action for the foreclosure of such lien by the lienor and to pay the
amount of the judgment in favor of the lienor with interest, costs and
allowances. Any amount so paid and all costs and expenses (including
reasonable counsel fees) incurred in connection therewith, together with
interest thereon at the lesser of (i) twelve percent (12%) per annum, or
(ii) the maximum rate permitted by law from the date of making of the
payment or incurring of the cost or expense, shall be promptly paid upon
demand to the party incurring such costs within fifteen (15) days of
written demand. If Landlord does not pay such amounts to Tenant within
fifteen (15) days of written demand, Tenant may offset any amounts due from
Rent next coming due.
15. Effective as of the date hereof, the following shall be inserted as
Section 26.1 of the Lease:
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LANDLORD'S DEFAULT: If Landlord fails to pay any installment of taxes or
assessment or any interest, principal, costs or other charges upon any
lease, mortgage or deed of trust or other lien or encumbrance affecting the
Store or Shopping Center and to which this Lease may be subordinate when
any of the same become due or if Landlord fails to make any repairs or do
any work required of Landlord by the provisions of this Lease, or in any
other respect fails to perform any obligation under this Lease to be
performed by Landlord, and such failure continues for 30 days after written
notice thereof is sent by Tenant to Landlord informing Landlord of such
failure, then Landlord shall be deemed to be in default under this Lease;
provided, however, that if the failure set forth in Tenant's notice is such
that it requires more than 30 days to correct, Landlord shall not be deemed
to be in default hereunder if Landlord (i) promptly and diligently
commences curing the failure within 30 days after written notice is sent by
Tenant to Landlord informing Landlord of such failure, and (ii) diligently
prosecutes the cure to completion following the expiration of the original
30 day period set forth herein. However, if Landlord desires to contest the
validity or correctness of any lien or encumbrance, it may do so, provided
that it shall first furnish Tenant with a good and sufficient bond
indemnifying Tenant against any loss, liability or damage on account
thereof.
16. Effective as of the date hereof, the following shall be inserted as
Section 26.2 of the Lease:
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TENANT'S REMEDIES: (a) Upon any default by Landlord, Tenant may (but this
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shall not be deemed to impose an obligation upon Tenant to do so), in
addition to any remedies available to it at law or in equity pay such
taxes, assessments, interest, principal, costs and other charges and cure
such defaults on behalf of and at the expense of Landlord, and do all
necessary work and make all necessary payments in connection therewith
including but not limited to the payment of any fees, costs and charges of
or in connection with any legal action which may have been brought, the
cost of which performance, upon the proper payment thereof, together with
all interest and penalties
necessarily paid in connection therewith and any and all other damages
incurred by Tenant as a result of any such default, shall be paid to Tenant
by Landlord within 30 days after written demand, with interest thereon at
the lesser of (i) twelve percent (12%) per annum, or (ii) the maximum rate
then permitted by law, from the date of each expenditure and/or occurrence
or, at the continuing option of Tenant, the same may (in whole or in part),
with interest as aforesaid, be deducted from minimum rent and/or percentage
rent and any other payments required by Tenant to Landlord hereunder which
may be due or become due thereafter. Nothing herein contained shall
preclude Tenant from proceeding to collect the amount so paid by it as
aforesaid without waiting for rental offsets to accrue. In no event shall
such deduction be the basis of forfeiture of this Lease nor constitute a
default in the payment of rent unless Tenant shall fail to pay the amount
of such deduction within thirty (30) days after Tenant's receipt of notice
of a final adjudication that such amount is owing the Landlord. If at the
expiration of this Lease there shall be any sums owing by Landlord to
Tenant, this Lease may at the election of Tenant be extended and continue
in full force and effect until the next January 31st following the date
when the indebtedness of Landlord to Tenant shall have been fully paid.
Tenant may exercise said right of extension by giving Landlord notice at
least fifteen (15) days prior to the expiration of this Lease of its intent
to so extend the term. Notwithstanding the foregoing provisions of this
Section and regardless of whether an event of Landlord's default shall have
occurred, such curative action by Tenant may be taken without any notice if
the condition constitutes an emergency provided that Tenant immediately
notifies Landlord of any such action taken. If a court finally determines
that Tenant has improperly exercised its self-help and/or offset rights,
Tenant shall have 30 days after receipt of notice of such final judgment to
pay to Landlord any sums found by such court to be due from Tenant to
Landlord before Landlord shall have the right to declare a termination of
this Lease.
17. Effective as of the date hereof, Section 28.1 of the Lease is hereby
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deleted in its entirety, and inserted in lieu thereof is the following:
28.1 Tenant Assignment/Subletting.
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28.1.1 Provided that Tenant is not in default under this Lease,
Tenant shall have the right, at any time, to assign this Lease or sublet
all or any part of the Store to any entity; provided that (i) Tenant
continues to remain primarily liable on its obligations set forth herein;
(ii) any such subtenant and/or assignee shall assume and be bound by all
obligations of Tenant for payment of all amounts of rental and other sums
and the performance of all covenants required by Tenant pursuant to this
Lease; (iii) any such subtenant and/or assignee intends to operate the
Shopping Center in accordance with the usage restrictions of this Lease;
and (iv) not less than ten (10) days prior to the effective date of such
transaction, Tenant provides Landlord with copies of the documents
evidencing such transaction and such evidence as Landlord may reasonably
required to establish that such transaction falls within the terms and
provisions of this paragraph.
28.1.2 A sale by Tenant of all or substantially all of its assets or
all or substantially all of its stock if Tenant is a publicly traded
corporation, a merger of Tenant with another corporation, the transfer of
twenty-five percent (25%) or more of the stock if Tenant is not a publicly
traded corporation, or transfer of twenty-five (25%) or more of the
beneficial ownership interests in a non-corporate tenant shall constitute
an assignment hereunder.
28.1.3 Notwithstanding anything contained in this Section 28.1 to the
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contrary, thirty (30) days prior to any assignment or subletting, or
amendment or extension to any existing assignment or subletting, Tenant
shall notify Landlord (the "Tenant Notice"),
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provide Landlord with a copy of said assignment or subletting, and
Landlord, within ten (10) days thereafter, shall have the right to reduce
the square footage of the Store as to the portion of the Store to be
assigned or sublet (a "Recapture") by delivering Tenant with written notice
thereof (a "Recapture Notice"). In the event Landlord provides the
Recapture Notice: (i) such reduction shall be effective as of the date set
forth in a written notice from Landlord to Tenant which date shall in no
event be more than thirty (30) days following the Tenant Notice; (ii)
Tenant's minimum annual rent shall be proportionately
reduced; and (iii) at Landlord's option, if set forth in the Recapture
Notice, Tenant shall assign Landlord the assignment or sublet agreement. If
Landlord does not deliver the Recapture Notice, the square footage of the
Store shall not be reduced, Tenant shall remain liable for the entire Store
and minimum annual rent, and Tenant shall be free to enter into said
assignment or recapture within ten (10) days thereafter. Landlord's
exercise or failure to exercise a Recapture shall not eliminate Tenant's
obligation to obtain the consent of Landlord or re-notice Landlord in
respect of any future sublettings or assignments, or amendments thereto. In
the event of a Recapture, Tenant shall have the right to have the Store
measured after such Recapture and thereafter, the Size of the Store as set
forth in Section 1.3 shall be as determined by such measurement and
Tenant's pro rata share shall be appropriately adjusted as provided in
Sections 10.5, 11.6 and 14.1 hereof. Any measurement shall be based on the
actual number of square feet of floor space within the exterior walls of
all floors, measured to the center lines of all common walls, including any
basements, and including stairs, interior elevators, escalators, air
conditioning and other interior equipment rooms; but excluding loading
docks and platforms, transformer vaults, utility penthouses or utility
enclosures and any mezzanine space.
All documents utilized by Tenant to evidence any subletting or
assignment to which Landlord has consented shall be subject to prior
approval by Landlord or its counsel. Tenant shall pay on demand all of
Landlord's costs and expenses, including reasonable attorneys' fees,
incurred in determining whether or not to consent to any requested sublease
or Assignment and in reviewing and approving such documentation, provided,
in no event shall Tenant be liable for costs in excess of Five Hundred and
No/100ths Dollars ($500.00) per request.
18. Effective as of the date hereof, the following new Section 28.2 to the
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Lease is hereby inserted following the replacement Section 28.1 set forth above:
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28.2 Landlord Assignment. Landlord shall have the right to sell,
-------------------
transfer or assign in whole or in part, its rights and obligations under
this Lease and in the Store. Notwithstanding anything in this Lease to the
contrary, any such sale, transfer or assignment shall operate to release
Landlord from any and all subsequent liabilities under this Lease and shall
result automatically in the purchaser or assignee assuming and agreeing to
carry out all the covenants and obligations of Landlord herein.
19. Except as expressly modified by this First Amendment, the terms and
provisions of the Lease shall remain in full force and effect, and Landlord and
Tenant hereby ratify, confirm and affirm each and every term and provision
thereof.
20. The Lease, as amended by this First Amendment, constitutes the entire
agreement between Landlord and Tenant, supersedes any prior agreement or
understanding between Landlord and Tenant (including, without limitation, the
Extension Letter), and may not be further modified or amended in any manner
other than in a writing signed by each of Landlord and Tenant.
21. This First Amendment may be executed in one or more counterparts, each
of which shall be deemed an original, and all of which, when taken together,
shall constitute one and the same instrument.
22. This First Amendment is executed by the undersigned Land Trustee as
Landlord, not personally, but solely as Trustee in the exercise of the power and
authority conferred upon and vested in it as such Trustee. It is expressly
understood and agreed that all of the warranties,
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indemnities, representations, covenants, undertakings and agreements herein made
on the part of the Trustee are undertaken by it solely in its capacity as
Trustee, and not personally. No personal liability or personal responsibility is
assumed by or shall at any time be asserted or enforceable against the Trustee
on account of any warranty, indemnity, representation, covenant, undertaking or
agreement of the Trustee in the Lease, as modified and amended by this First
Amendment.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the undersigned have caused this First Amendment to be
executed by their duly authorized representatives as of the day and year first
above written.
LANDLORD:
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AMERICAN NATIONAL BANK AND TRUST COMPANY
OF CHICAGO, not personally, but solely
as Trustee as aforesaid
A T T E S T:
By:________________________________ By:__________________________________
Name:______________________________ Name:________________________________
Its:_______________________________ Its:_________________________________
TENANT:
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SPORTMART, INC., a Delaware corporation
A T T E S T:
By:________________________________ By:__________________________________
Name: Xxxxxxx X. Xxxxxxx Name: Xxxx X. Xxxxxxxxx
----------------------------- ------------------------------
Its: Director of Real Estate Its: Vice President & General Counsel
------------------------------ --------------------------------
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EXHIBIT A
TENANT ALLOWANCE ESTOPPEL
_____________, 2000
Re: Lease dated as of September 1, 1994, as amended by that certain First
Amendment to Lease dated as of January 28, 2000 (as amended, the
----------------
"Lease"), demising certain premises commonly known as 0000 Xxxx Xxxx Xxxx,
Xxxxxxxxxx, Xxxxxxxx (the "Premises")
Gentlemen:
We are the Tenant under the Lease. All capitalized terms used but not
otherwise defined herein shall have the meanings ascribed thereto in the Lease.
We hereby certify, for your benefit and for the benefit of your respective
successors and assigns, that as of the date of this estoppel certificate:
1. The Lease is in full force and effect and, except as set forth above,
has not been assigned, supplemented, modified or amended, and there do not exist
any other agreements concerning the Shopping Center between the Landlord and us.
2. The term of the Lease commenced on September 1, 1994 and will expire
on May 31, 2015, subject to the exercise of the Options set forth in the Lease.
3. We are not in default under the Lease, and to the best of our
knowledge, (i) the Landlord is not in default under the Lease, and (ii) no state
of fact exists which with the passage of time, the giving of notice, or both,
would constitute a default by the Landlord under the Lease.
4. To the best of our knowledge, we have no outstanding defenses,
offsets, liens, claims or credits under the Lease against the Landlord or
against the enforcement of any provision of the Lease by the Landlord.
5. There is no rent concession by Landlord under the Lease which has not
yet been fully paid.
6. The minimum rent payable under the Lease is at the rate of $________
per month.
7. In addition to minimum rent, we, as Tenant, are required to pay all
real estate taxes and assessments which are assessed, levied,
confirmed, imposed upon, or become due and payable out of, or in
respect of, or become a lien on the Shopping Center, or any part
thereof or any appurtenance thereto.
8. We certify that Landlord has paid the sum of $_________ as a portion
of the Tenant Allowance. The remaining balance of the Tenant Allowance yet to be
funded is $__________.
Very truly yours,
SPORTMART, INC.
By:_________________________
Name:_______________________
Title:______________________
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Schedule B
The rent is only adjusted every 5 year period. This is the formula. The
percentage change in CPI is multiplied by 5. The difference cannot be less than
0 and the total difference is capped at 10
Here is an example:
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Year 2000 2001 2002 2003 2004 2005
----------------------------------------------------------------------------------------------------------
CPI 2 3 4 4 3 4
----------------------------------------------------------------------------------------------------------
Difference 1 1 0 -1 1
----------------------------------------------------------------------------------------------------------
Times 5 5 5 5 5
----------------------------------------------------------------------------------------------------------
Annual
Adjustment 5 5 0 0 5
----------------------------------------------------------------------------------------------------------
Annual
Cumulative 5 10 10 10 15
Adjustment
----------------------------------------------------------------------------------------------------------
Total Cumulative Adjustment is 15%, however, capped at 10%
May 31, 2005 Rent: $580,817.25
Plus
Cumulative Adjustment
Capped at 10%: 10%
Adjusted CPI Increase $638,898.98
New Rent Payments
06/01/05-5/31/10: $638,898.98
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