STORE LEASE AGREEMENT
by and between
EL CORTE INGLES, S.A.,
as "Landlord"
and
GOTTSCHALKS INC.,
as "Tenant"
Dated as of August 20, 0000
Xxxxxxxx Xxxx
Xxx Xxxxxxxxxx, Xxxxxxxxxx
TABLE OF CONTENTS
Page
ARTICLE I 2
Section 1.1 Definitions 2
Section 1.2 Effect of Basic Terms 5
ARTICLE II 6
Section 2.1 Grant and Term of Lease 6
Section 2.2 Acceptance of Premises; Quiet
Enjoyment. 6
Section 2.3 Surrender of Premises. 6
Section 2.4 Holding Over. 7
ARTICLE III 7
Section 3.1 Lease Controls Over REA. 7
Section 3.2 Covenants Regarding REA. 7
ARTICLE IV 8
Section 4.2 Percentage Rent 8
Section 4.3 Utilities Charge 10
Section 4.4 Common Area Maintenance Costs 10
Section 4.5 Taxes 10
Section 4.6 Late Payment Charges 11
Section 4.7 Rent Payments 12
ARTICLE V 12
Section 5.1 Permitted Use 12
Section 5.2 Signs 12
Section 5.3 Alterations of Premises 12
Section 5.4 Use of Common Areas 14
Section 5.5 Compliance with REA 15
Section 5.6 Compliance with Requirements 15
Section 5.7 Liens 15
ARTICLE VI 16
Section 6.1 Tenant's Obligations 16
Section 6.2 Landlord's Obligations 16
ARTICLE VII 17
Section 7.1 Damage or Destruction 17
Section 7.2 Condemnation 18
ARTICLE VIII 19
Section 8.1 Tenant's Insurance 19
Section 8.2 Landlord's Insurance 21
Section 8.3 Waiver of Subrogation 21
Section 8.4 Governmental and Insurance
Requirements 21
Section 8.5 Indemnification 22
Section 8.6 Landlord Exculpation 22
ARTICLE IX 23
Section 9.1 Notice to Landlord 23
ARTICLE X 23
Section 10.1 Events of Default 23
Section 10.2 Remedies 24
Section 10.3 Attorneys' Fees 26
Section 10.4 Agreement to Arbitrate 26
Section 10.5 No Set-off/Counterclaims 27
Section 10.6 Right of Redemption 27
Section 10.7 No Waiver 27
Section 10.8 Unperformed Covenants of
Landlord May Be Performed
By Tenant 28
ARTICLE XI 28
ARTICLE XII 28
ARTICLE XIII 28
Section 13.1 Notices 28
Section 13.2 Brokers 29
Section 13.3 Subordination of Lease 29
Section 13.4 Unavoidable Delays 30
Section 13.5 Estoppel Certificates 30
Section 13.6 Relationship of Parties 30
Section 13.7 Governing Law; Jurisdiction 30
Section 13.8 Interpretation 31
Section 13.9 Captions 31
Section 13.10 Partial Invalidity 31
Section 13.11 Waivers 31
Section 13.12 Accord and Satisfaction 32
Section 13.13 Counterparts 32
Section 13.14 Entire Agreement 32
Section 13.15 Successors and Assigns 32
Section 13.16 Survival of Obligations 32
Section 13.17 Submission of Lease 32
Section 13.18 Memorandum of Lease 32
Section 13.19 Attachments 33
EXHIBITS
EXHIBIT A LEGAL DESCRIPTION OF SHOPPING CENTER A-1
EXHIBIT B SITE PLAN OF SHOPPING CENTER B-1
EXHIBIT C LEGAL DESCRIPTION OF PREMISES C-1
EXHIBIT D SCHEDULE OF REA AND RELATED AGREEMENTS D-1
EXHIBIT E [INTENTIONALLY OMITTED] E-1
EXHIBIT F FORM OF MEMORANDUM OF LEASE G-1
EXHIBIT G SCHEDULE OF EXISTING MORTGAGES H-1
STORE LEASE AGREEMENT
Carousel Mall
San Bernardino, California
THIS STORE LEASE AGREEMENT (this "Lease"), made as of
this 20th day of August, 1998, by and between EL CORTE
INGLES, S.A., a Spanish corporation, having an address
at Xxxxxxxxxx, 000, 00000 Xxxxxx XXXXX, Attention: Xx.
Xxxxx Xxxx ("Landlord"), and GOTTSCHALKS INC., a
Delaware corporation, having an address at 0 Xxxxx Xxxx
Xxxxx Xxxx, Xxxxxx, Xxxxxxxxxx 00000, Attention:
General Counsel ("Tenant").
R E C I T A L S
A. Landlord, Tenant and Xxxxxx (defined below) are
parties to that certain Asset Purchase Agreement
(defined below). Prior to the date hereof, Xxxxxx
leased the Premises (defined below) from Landlord.
Pursuant to the Asset Purchase Agreement, Tenant is to
purchase certain assets of Xxxxxx. The Asset Purchase
Agreement requires Landlord to terminate Xxxxxx' lease
and enter into this Lease with Tenant.
B. Concurrently with execution of this Lease,
Landlord has terminated Xxxxxx' lease. Landlord now
desires to lease to Tenant, and Tenant desires to lease
from Landlord, the Premises on the terms and conditions
hereafter set forth.
NOW, THEREFORE, in consideration of the foregoing
Recitals, the receipt and sufficiency of which is
hereby acknowledged by each party as of the time of
execution and delivery hereof, and in further
consideration of the rents reserved and the covenants
and conditions set forth herein, Landlord and Tenant
agree as follows:
ARTICLE I
DEFINITIONS AND BASIC PROVISIONS
Section 1.1 Definitions. As used in this Lease, the
following Terms shall have the meanings set forth
below:
"Alterations" shall have the meaning
ascribed thereto in Section 5.3.
"Annual Report" shall have the
meaning ascribed thereto in Section 4.2(b).
"Asset Purchase Agreement": That
certain Asset Purchase Agreement dated as of July 21,
1998, by and among Tenant, as Buyer, Xxxxxx, as Seller,
and Landlord, in its capacity as the sole shareholder
of Xxxxxx, together with all other agreements and
documents entered into by Landlord and Tenant in
connection therewith.
"Common Areas": The parking areas,
sidewalks, landscaped areas, courts, malls, roofs,
streets, roadways, loading platforms, service area,
curbs, corridors, stairways, elevators, escalators,
comfort stations, lounges and shelters and all other
facilities designated as "Common Areas" under the REA.
"Default" shall have the meaning
ascribed thereto in Section 10.1.
"Developer" shall mean the Person
responsible for managing and maintaining the Common
Areas under the REA.
"Floor Area" shall have the meaning
given such term in the REA.
"Gross Sales" shall mean the gross
selling price of all merchandise or services sold in or
from the Premises by Tenant, its subtenants, licensees
or concessionaires, whether for cash or on credit,
adjusted by excluding the following:
(i) Any exchange of merchandise between stores owned
by or affiliated with Tenant where such exchange is
made solely for the convenient operation of Tenant's
business and not for the purpose of consummating a sale
made in, at or from the Premises, or for the purpose of
depriving Landlord of the benefit of a sale which would
otherwise be made in or at the Premises;
(ii) Returns to shippers or manufacturers;
(iii) Cash or credit refunds to customers on
transactions (not to exceed the actual selling price of
the item returned) otherwise included in Monthly Gross
Sales, including, without limitation, (a) sums and
credits received in the settlement of claims for loss
of or damage to merchandise, to the extent previously
reported as part of Gross Sales and (b) the price
allowed on all merchandise traded in by customers for
credit or the amount of credit for discounts and
allowances made in lieu of acceptance thereof, but not
including any amount paid or payable for what are
commonly referred to as trading stamps;
(iv) Sales of fixtures, machinery, equipment or
property which are not stock in trade;
(v) Amounts collected and paid by Tenant to any
government for any sales, excise, luxury, gross
receipts taxes or other similar taxes now or hereafter
imposed upon the sales of merchandise or services;
(vi) The amount of any discount on sales to employees;
(vii) Interest, service or sales carrying charges or
other charges, however denominated, paid by customers
for extension of credit on sales and where not included
in the merchandise sales price;
(viii) Receipts from public telephones, stamp
machines, public toilet locks or vending machines
installed solely for use by Tenant's employees; and
(ix) Gift certificates, or like vouchers, until such
time as the same shall have been converted into a sale
by redemption.
"Xxxxxx" means The Xxxxxx Company, a
California corporation, a wholly-owned subsidiary of
Landlord.
"Imposition" shall have the meaning
ascribed thereto in Section 4.5.
"Interest Rate": The rate of
interest per annum equal to the lesser of: (i) the
highest lawful rate of interest that Tenant may be
charged; or (ii) the "prime rate" announced from time
to time by Chase Manhattan Bank, N.A., New York, New
York, for short-term, unsecured loans to its most
credit-worthy customers. In the event Chase Manhattan
Bank, N.A. shall discontinue reporting its "prime rate"
or shall cease to exist, Landlord shall select a
substitute bank, and the "prime rate" reported by such
bank shall be used for computing interest payable
hereunder.
"Major" shall mean each of the
parties to the REA, as more particularly set forth in
Exhibit D attached hereto and made a part hereof.
"Mortgages" shall have the meaning
ascribed thereto in Section 13.3.
"Notice" shall have the meaning
ascribed thereto in Section 13.1(a).
"Percentage Rent" shall have the
meaning ascribed thereto in Section 4.2(a).
"Permitted Use" shall mean any lawful
use which complies with the REA and is not prohibited
for the Premises by the REA.
"Person" means any individual,
partnership, corporation, business trust, joint stock
company, trust, unincorporated association, joint
venture, governmental authority or other entity of
whatever nature.
"Premises": That certain real
property and improvements thereon described in Exhibit
C attached hereto and made a part hereof.
"Prohibited Use" shall mean any use
which is prohibited for the Premises by the REA.
"REA" shall mean that certain
Declaration of Restrictions, Construction, Operation,
Restriction and Easement Agreement, and each of the
other documents related thereto, as more particularly
described in Exhibit D attached hereto and made a part
hereof, all as the same may be amended or modified from
time to time.
"Rent": Percentage Rent, utilities
charges, Impositions, insurance costs and all other
amounts and charges payable by Tenant under any
provision of this Lease.
"Requirements" shall mean all
federal, state and local statutes, laws, ordinances,
rules, regulations, authorizations and requirements
relating to the Premises or the use thereof, including,
without limitation, planning, zoning, subdivision,
environmental, toxic and hazardous waste, health, fire
safety and handicap access and all encumbrances,
covenants, conditions and restrictions, violation of
which encumbrances, covenants, conditions and
restrictions could either create a lien or result in a
termination of any agreement beneficial to the use or
manner of use of the Premises or any portion thereof.
"Shopping Center": The land and
improvements known as "Carousel Mall", with a street
address of 000 Xxxxx "X" Street, in the City of San
Bernardino, County of San Bernardino, and State of
California, more particularly described in Exhibit A
attached hereto and made a part hereof and depicted on
the site plan attached hereto as Exhibit B and made a
part hereof.
"Taking" shall have the meaning
ascribed thereto in Section 7.2(a).
"Tenant's Employees and Invitees"
shall have the meaning ascribed thereto in Section 5.4.
"Term": The period commencing on the
Term Commencement Date and expiring on January 30,
1999, as such term may be extended or shortened
pursuant to the terms hereof.
"Term Commencement Date": August 20,
1998.
"Unavoidable Delays" shall have the
meaning ascribed thereto in Section 13.4.
Section 1.2 Effect of Basic Terms. Each of the
foregoing definitions and basic provisions is set forth
in this Article I for convenient reference only and
shall be construed in conjunction with, and limited by,
references thereto in other provisions of this Lease.
ARTICLE II
GRANT AND TERM
Section 2.1 Grant and Term of Lease.
(a) Landlord does hereby let and
lease to Tenant the Premises, together with all right
to use the Common Areas for the Term, subject to the
terms and conditions set forth in this Lease.
(b) Landlord reserves the right to
enter the Premises at any time in case of emergency and
at all other reasonable times and upon reasonable
advance notice (i) to inspect the condition of the
Premises; and (ii) to make repairs to the building in
which the Premises are located, to the extent Landlord
is required to do so, or is otherwise permitted to do
so, pursuant to the terms of this Lease.
Section 2.2 Acceptance of Premises; Quiet Enjoyment.
(a) Acceptance of Premises. Tenant
accepts the Premises "as-is," but subject to the
express representations, warranties and covenants of
Landlord set forth in the Asset Purchase Agreement and
in this Lease.
(b) Quiet Enjoyment. Landlord
covenants that Tenant, upon paying the Rent and
performing and observing all other terms and conditions
of this Lease to be performed or observed by Tenant,
shall peacefully and quietly have, hold and enjoy the
Premises and the appurtenances thereto throughout the
Term without hindrance, ejection or molestation by
Landlord or any other person or entity lawfully
claiming through Landlord or claiming paramount title
to Landlord, subject only to the terms of this Lease,
the REA and any Mortgage or ground lease to which this
Lease is subordinate.
Section 2.3 Surrender of Premises. Upon the expiration
or earlier termination of the Term, Tenant shall
deliver up and surrender to Landlord possession of the
Premises, including all alterations, additions,
improvements and fixtures, other than Tenant's trade
fixtures, in good order, condition and state of repair,
ordinary wear and tear excepted, and shall deliver all
keys to the Premises to the office of Landlord at the
Shopping Center or as otherwise directed by Landlord.
Tenant shall have fifteen (15) days after the date the
Term of this Lease expires or earlier terminates to
remove its personal property and trade fixtures;
provided, however, that (a) Tenant shall repair all
damage to the Premises resulting from or arising out of
such removal, (b) during such period Tenant shall
perform and be liable for all obligations and
conditions imposed on Tenant hereunder except for the
payment of Rent, including, without limitation,
maintenance, repair, apportionment of taxes,
maintenance of insurance, compliance with Requirements
and assumption of liability for the Premises. The
obligations set forth in the preceding sentence shall
survive the termination of this Lease. Any property of
Tenant not removed from the Premises within such
fifteen (15) day period shall be deemed abandoned. In
addition to all other remedies available, Landlord may,
but shall not be obligated to, retain or dispose of any
or all such property without liability to Tenant. In
the event that Landlord elects to dispose of such
property, Landlord shall so notify Tenant, and Tenant
shall, no later than ten (10) days after such notice,
remove all such property from the Premises; provided,
however, that if Tenant fails to so remove such
property, then Landlord may do so, and Tenant shall pay
to Landlord, on demand, all costs and expenses incurred
by Landlord in disposing of such property, including,
without limitation, reasonable attorneys' fees and
disbursements, together with interest thereon,
calculated at the Interest Rate, from the date Landlord
expended such amounts.
Section 2.4 Holding Over. If not sooner terminated,
this Lease shall end on the date set forth in the
definition of "Term" in Section 1.1 without the
necessity of notice from either Landlord or Tenant to
terminate this Lease, Tenant hereby waiving notice to
vacate the Premises. If Tenant, or any party claiming
under Tenant, including, without limitation,
subtenants, licensees or concessionaires, remains in
possession of the Premises or any part thereof after
the expiration or termination of this Lease, no tenancy
or interest in the Premises shall result therefrom but
such holding over shall, at Landlord's option, be
deemed a month-to-month tenancy and, otherwise, shall
be an unlawful detainer and all such parties shall be
subject to immediate eviction and removal. As
Landlord's sole remedy for such holding over, Tenant
shall pay to Landlord for any full or partial month
Tenant holds over in the Premises after the expiration
or termination of this Lease a sum equal to one hundred
fifty percent (150%) of the Percentage Rent paid or
payable by Tenant under this Lease with respect to the
last full month of the Lease Term.
ARTICLE III
MATTERS RELATED TO RECIPROCAL EASEMENT AGREEMENT
Section 3.1 Lease Controls Over REA. As between
Landlord and Tenant, the terms and provisions of this
Lease shall control notwithstanding any conflict with
the provisions of the REA. Tenant shall be fully
liable for the performance of all obligations under the
REA in accordance with all of the terms and provisions
thereof, to the extent that Tenant has expressly
assumed responsibility for the performance of any such
obligations under the terms of this Lease. Landlord is
and shall remain fully liable for the performance of
all of Landlord's obligations under the REA in
accordance with all of the terms and provisions
thereof, to the extent that Tenant has not expressly
assumed responsibility for the performance of any such
obligations under the terms of this Lease.
Section 3.2 Covenants Regarding REA. Landlord will
fully and faithfully carry out and perform the terms,
covenants, provisions and conditions of the REA to be
performed by the Landlord. Tenant will fully and
faithfully carry out and perform the terms, covenants,
provisions and conditions of the REA which, under the
express terms of this Lease, are to be performed by the
Tenant. Landlord will exert its best efforts in
exercising all of Landlord's rights and remedies under
the REA to enforce performance of all terms, covenants,
provisions, and conditions of the REA; and Landlord
will not take any of the actions requiring Landlord's
approval thereunder, without first having delivered to
Tenant a copy of the request for approval and any
documentation or material as to which such approval is
requested or required and thereafter obtained Tenant's
written approval thereof, which approval shall not be
unreasonably withheld, conditioned or delayed.
Landlord will not enter into any agreement amending,
supplementing or cancelling the REA without first
obtaining Tenant's prior written approval thereto,
which approval shall not be unreasonably withheld,
conditioned or delayed. Landlord hereby appoints
Tenant as Landlord's true and lawful attorney-in-fact
to take in Landlord's name whatever reasonable action
Tenant may deem appropriate to enforce performance of
the terms of the REA and to avail itself on Landlord's
behalf of any remedy therein granted Landlord in the
event (i) Tenant shall notify Landlord that the
obligations under the REA are not being properly
performed and (ii) Landlord shall fail to take action
to Tenant's reasonable satisfaction within a reasonable
time after receiving notice thereof.
It is the intent of the parties to this Lease that this
Lease and the REA are and shall remain mutually
dependent and co-existent documents. Tenant shall have
the right (in its sole and absolute discretion) to
terminate this Lease by giving Landlord notice to such
effect within ninety (90) days after the REA shall,
under its express terms and conditions, expire or
terminate or be cancelled, and this Lease shall
terminate on the last day of the month next succeeding
the month in which such notice is given.
ARTICLE IV
RENT AND OTHER CHARGES
Section 4.1 [Intentionally Omitted].
Section 4.2 Percentage Rent.
(a) Formula for Calculation.
Tenant covenants and agrees to pay to Landlord as rent
for each Term the sum of Three percent (3.0%) of the
amount of Tenant's Gross Sales for the Term
("Percentage Rent"), provided, however, that the
Percentage Rent payable hereunder shall be reduced by
the amount of any Operating Loss, as defined below.
Percentage Rent shall be payable, in arrears, on or
before March 10, 1999. "Operating Loss" means the
excess, if any, of Fully Allocated Costs, as defined
below, over Gross Sales. "Fully Allocated Costs" means
the sum of all costs and expenses of every kind and
nature incurred by Tenant in connection with the
Premises or the business conducted thereon, including,
without limitation:
(i) Sums payable by the Tenant
under the terms of this Lease (including Percentage
Rent).
(ii) Other costs incurred by
Tenant in performing or complying under this Lease.
(iii) Other costs incurred by
Tenant in maintaining and repairing the Premises and
any and all fixtures, equipment or property therein.
(iv) Tenant's cost of all
merchandise sold in or from the Premises.
(v) Compensation and benefits
to Tenant's employees working at the Premises.
"Compensation and benefits" include, without
limitation, (A) wages, salaries, and bonuses, (B) all
contributions made and taxes paid with respect to
employees (such as social security contributions, and
employment taxes and workers' compensation payments)
and (C) health insurance, 401K matching contributions,
sick leave, vacations and pensions.
(vi) Sums payable by Tenant
pursuant to that certain Third Amendment to Lease dated
July 8, 1998 by and between Tenant and Mano Management
Company, Inc., a Delaware corporation (relating to
Tenant's existing Downtown San Bernardino store).
(vii) The prorated portion of
the following items of Tenant's corporate overhead for
Tenant's fiscal year 1998 allocable to the Premises:
(A) inventory carrying charges (i.e., interest paid on
inventory financing); (B) distribution costs (including
the cost of operating distribution centers); and (C)
advertising and marketing expenses. Such corporate
overhead items shall be prorated by multiplying such
corporate overhead by the fraction which is the number
of days in the Term divided by 365. Such corporate
overhead items shall be allocable to the Premises based
on the ratio that the Gross Sales in or from the
Premises bears to the Gross Sales of all stores
operated by Tenant.
(b) Report. On or before March 10,
1999, Tenant shall furnish Landlord with a written
statement (the "Report"), certified by Tenant's chief
financial officer or comptroller, of total Gross Sales
made from the Premises during the Term, which Report
shall contain Tenant's computation of Percentage Rent.
The Report shall be in form reasonably satisfactory to
Landlord and shall contain such details and breakdown
as may accurately depict Gross Sales.
(c) Records. Tenant shall maintain
at the Premises or at its principal record keeping
office within the continental United States at all
times during the Term, full, complete and accurate
books of account and records in accordance with
generally accepted accounting practices consistently
applied for all operations of the business conducted in
or from the Premises, including the recording of Gross
Sales and the receipt of all merchandise into, and the
delivery of all merchandise from, the Premises during
the Term, and shall retain such books and records,
copies of all tax reports and tax returns submitted to
taxing authorities, as well as copies of contracts,
vouchers, checks, inventory records, electronic data
recordings and other documents, recordings, and papers
in any way related to the operation of such business
for at least one (1) year from the end of the Term, or,
if any audit is required or a controversy should arise
between the parties hereto regarding the Rent payable
hereunder, until such audit or controversy is
terminated, even though such retention period may
extend beyond the expiration of the Term or earlier
termination of this Lease.
(d) Review of Books and Records.
The acceptance by Landlord of payments of Percentage
Rent or any Report pursuant to Section 4.2(b) above
shall not prejudice Landlord's right to examine
Tenant's books, records and accounts in order to verify
the amounts set forth thereon. Landlord may at any
reasonable time during the Term, or within one (1) year
after the Term (but not more than once) cause a
complete or partial audit to be made of Tenant's books,
records and other documents relating to the Premises,
including the books and records of any subtenant,
licensee or concessionaire. Landlord or its duly
authorized representatives shall have full and free
access to such books and records and the right to
require of Tenant, its agents and employees, such
information or explanation with respect to such books
and records as may be necessary for a proper
examination and audit thereof. If such audit discloses
an understatement in a Report of Gross Sales, Tenant
shall pay the deficiency in Percentage Rent with,
interest thereon calculated at the Interest Rate, and,
if Gross Sales have been understated in any Report by
four percent (4%) or more, Tenant shall pay to
Landlord, as Rent, the cost of said audit, upon demand.
(e) Confidentiality. Any
information regarding Tenant's business operations
delivered to or made available to Landlord, or
otherwise obtained by Landlord in the exercise of its
rights under subsection (d), above, shall be held in
strictest confidence by Landlord. Landlord shall
disclose such information only to its accountants,
attorneys and other consultants and shall require all
such parties to keep all information regarding Tenant
strictly confidential. Nothing in this subsection (e)
prohibits Landlord from disclosing such material when
ordered to do so by a court of competent jurisdiction,
or when necessary to properly plead or prosecute a
legal action brought by Landlord against Tenant for
nonpayment of Percentage Rent.
Section 4.3 Utilities Charge.
(a) Tenant shall apply to the
municipality or respective utilities companies for all
required utility services to the Premises. Tenant
shall pay all required deposits and meter charges for
utilities to the Premises to the respective utility
supplier(s).
(b) Tenant shall pay promptly, as
and when same shall become due, all water rents, rates
and charges, all sewer rents, rates and charges and all
charges for electricity, gas, heat, steam, hot and/or
chilled water, air conditioning, ventilating, lighting
systems, sprinkler systems and all other utilities
supplied to the Premises.
Section 4.4 Common Area Maintenance Costs. Tenant
shall pay, as Rent, Common Area Maintenance charges as
specified in the REA or any lesser amount specified in
a separate agreement thereunder. Tenant shall pay
Common Area Maintenance charges as referenced herein
within thirty (30) days after Tenant has received a
xxxx therefor.
Section 4.5 Taxes.
(a) Tenant shall pay before
delinquency all real and personal property taxes,
general and special assessments, and other public
charges levied upon or assessed against the Premises,
the land thereunder, or any of the building structures,
fixtures, equipment, or improvements thereon
(collectively, "Impositions"). Tenant shall deliver to
Landlord reasonable evidence of payment prior to the
time said Impositions have become delinquent.
(b) Any Imposition relating to a
fiscal period of the taxing authority, a part of which
period is included within the Term of this Lease and a
part of which is included prior to the beginning of the
Term of this Lease or after the termination of this
Lease shall (whether or not such Imposition shall be
paid, assessed, levied or imposed upon or become due
and payable and a lien upon the Premises or a part
thereof during the term of this Lease) be adjusted as
between Landlord and Tenant as of the Term Commencement
Date or as of the date of the termination of the Term
of this Lease, as the case shall require, so that
Landlord shall pay that proportion of such Imposition
which that part of such fiscal period included in the
period of time prior to the commencement or after the
termination of the Term, as the case may be, bears to
such fiscal period, and Tenant shall pay the remainder
thereof.
(c) In the event Landlord is unable
to secure separate tax bills for Tenant as herein
described, then Tenant shall pay to Landlord, prior to
such time as said Impositions would be due and payable,
all Impositions attributable to the Premises. Personal
property taxes shall be allocated directly to Tenant's
personal property. Real property taxes will be
allocated by virtue of the ratio of the Floor Area of
the Premises to the total gross leasable area in the
Shopping Center, which said gross leasable area shall
not include any part of the Common Area in the Shopping
Center, being assessed on the tax xxxx which relates to
the Premises.
(d) If Tenant fails to pay any such
taxes, assessments or other public charges which it is
obligated to pay as provided in this section before the
same become delinquent, then and in such event,
Landlord may pay the same together with any interest
and penalties thereon, and the amount so paid shall be
deemed additional Rent immediately due and payable by
Tenant to Landlord on demand, together with interest
thereon at the Interest Rate.
(e) Anything in this section to the
contrary notwithstanding, Landlord agrees that Tenant
shall have the right, at Tenant's sole cost and
expense, to contest the legality or validity of any
Impositions payable by Tenant, but no such contest
shall be carried on or maintained by Tenant after such
Impositions become delinquent unless Tenant shall have
duly paid the amount involved under protest or shall
procure and maintain a stay of all proceedings to
enforce any collection thereof and any forfeiture or
sale of the leased property, and shall also provide for
payment thereof together with all penalties, interest,
costs and expenses by deposit of a sufficient sum of
money or by a good and sufficient undertaking as may be
required by law to accomplish such stay. Landlord
shall, at the request of Tenant and at Tenant's sole
expense, execute or join in the execution of any
instrument of documents necessary in connection with
any such contest except bonds of undertakings. In the
event of any such contest made by Tenant, Tenant shall
promptly, upon final determination thereof, pay and
discharge the amount indicated or resulting from said
contest, together with any penalties, fines, interest,
costs and expenses that may have accrued thereon.
Section 4.6 Late Payment Charges. Late payments of
Rent or any other sum due from Tenant hereunder,
including all amounts paid by Landlord on behalf of
Tenant to satisfy any condition or covenant of this
Lease and all costs incurred by Landlord in enforcing
the terms of this Lease, shall bear interest from the
date Tenant receives written notice of such late
payment or default (as applicable) until paid at the
Interest Rate.
Section 4.7 Rent Payments. All Rent payable by Tenant
under this lease shall be paid in United States Dollars
without prior demand therefor and without any
deductions, offsets or counterclaims except those
expressly permitted under the terms of this Lease, to
Landlord and shall be delivered on or before the due
date thereof via wire transfer to
Bank of America, S.A.
Principal Office: Xxxxxx
0 Xxxxxxx Xxxx Xx.
00000 Xxxxxx XXXXX
For Credit To:
El Corte Ingles, S.A.
Account number 00000000
or to such other payee and at such other place as
Landlord may hereafter designate from time to time by
written notice to Tenant. Notwithstanding anything to
the contrary in this Lease, Tenant may withhold any
portion of Rent which Tenant is required to withhold by
virtue of Landlord's status as a foreign person under
Section 1445 of the Internal Revenue Code or other
applicable law.
ARTICLE V
OPERATION OF PREMISES AND COMMON AREAS
Section 5.1 Permitted Use.
(a) Tenant shall use the Premises
only for the Permitted Use and for no other purpose
whatsoever.
(b) Tenant covenants that Tenant
shall not use or allow the Premises or any part thereof
to be used or occupied for any Prohibited Use or any
immoral or unlawful purpose or in violation of any
certificate of occupancy or certificate of compliance
for the Premises.
Section 5.2 Signs. Tenant shall have the right,
without Landlord's consent, to erect any and all signs
on or about the Premises it elects, provided that such
signage complies with the REA and all Requirements.
From time to time upon Tenant's request, Landlord
covenants to assist Tenant (at no cost or expense to
Landlord) in processing any and all approvals necessary
for Tenant to erect such signage.
Section 5.3 Alterations of Premises.
(a) All changes, alterations or modifications to
the Premises (collectively, "Alterations") shall be
made in accordance with this Section 5.3. Tenant shall
have the right to perform non-structural modifications
to, remodel and redecorate, retexturize, recarpet and
repaint the Premises without obtaining the prior
written consent of Landlord; provided (i) the proposed
Alteration does not affect the exterior appearance of
the Premises, including, without limitation, the
storefront or the storefront sign of the Premises, or
the roof, foundation, supports or structural integrity
of the building of which the Premises is a part; (ii)
Tenant submits an information copy of all remodeling
plans to Landlord at least thirty (30) days prior to
the date any such work is scheduled to commence; (iii)
the total cost of all work involved in the Alteration
does not exceed Three Hundred Thousand Dollars
($300,000) in any one project or an aggregate amount of
Six Hundred Thousand Dollars ($600,000); and (iv) such
work does not violate any code, ordinance or
Requirement and does not cause Landlord's insurance
rates to increase. Except for the foregoing, Tenant
shall not make any Alterations to any portion of the
Premises without, in each instance, obtaining
Landlord's prior written consent.
(b) All work ("Work") pertaining to
any Alteration to the Premises, including, without
limitation, Tenant's Work, shall comply with the
following:
(i) No Work shall be
undertaken until Tenant shall have procured and paid
for, so far as the same may be required, from time to
time, all permits and authorizations of all municipal
departments and governmental subdivisions having
jurisdiction. Provided no default exists hereunder,
Landlord shall join in the application for such permits
and authorizations whenever such action is necessary;
provided, however, that Landlord shall not incur any
expense or be subject to any liability as a result of
joining in any such application. Within ten (10) days
after completion of the Work, Tenant shall deliver to
Landlord a certificate of occupancy or such similar
certificates as may be required or customary by
applicable laws and legal requirements.
(ii) All Work shall be
performed promptly and in a good and workmanlike manner
and in compliance with all applicable permits and laws,
and in accordance with the orders, rules and
regulations of the National Board of Fire Underwriters
or any other body hereafter exercising similar
functions.
(iii) The cost of any Work
shall be paid promptly by Tenant so that the Premises
shall at all times be free and clear of liens for labor
and materials supplied or claimed to have been supplied
in connection therewith.
(iv) Tenant shall carry, or
shall cause to be carried, worker's compensation
insurance covering all persons employed in connection
with any Work and with respect to whom death or bodily
injury claims could be asserted against Landlord,
Tenant or the Premises, and, without duplication of any
insurance required by Article VIII hereof, adequate
all-risk and builders risk insurance for the mutual
benefit of Tenant and Landlord in amounts satisfactory
to Landlord and, at Landlord's request, such other
insurance in favor of Landlord in types and amounts as
are reasonable and customary, all at Tenant's expense,
at all times when any such Work is in progress;
provided, however, that Tenant shall be fully liable
for any failure to maintain such insurance, including,
without limitation, Tenant's obligation to indemnify
Landlord for the failure to maintain insurance in
accordance with the provisions of this Lease. All such
insurance shall be provided by a company or companies
of recognized responsibility and reasonably
satisfactory to Landlord, and all policies or certified
copies of policies issued by the respective insurers,
bearing notations evidencing the payment of premiums or
accompanied by other evidence satisfactory to Landlord
of such payment, shall be delivered to Landlord prior
to the commencement of any Work.
Section 5.4 Use of Common Areas.
(a) All Common Areas shall be
subject to the exclusive control and management of
Developer as set forth in the REA. Tenant and Tenant's
officers, directors, employees, agents, subtenants,
contractors, subcontractors, concessionaires and
licensees, and the officers, directors, employees and
agents of Tenant's subtenants, concessionaires and
licensees, and the customers, patrons and business
invitees of Tenant and of Tenant's subtenants,
concessionaires and licensees (hereinafter,
collectively, "Tenant's Employees and Invitees") shall
have the non-exclusive right to use (without cost or
expense to Tenant or Tenant's Employees or Invitees
other than as expressly provided in this Lease) the
Common Areas for the purpose of gaining ingress to and
egress from the Premises, for the passage and parking
of vehicles, and for the passage and accommodation of
pedestrians, such right to be in common with Landlord
and those occupants (and the employees and invitees of
such occupants) of the Shopping Center from time to
time authorized to use said common areas for such
purposes.
(b) Notwithstanding anything to the
contrary contained in Section 5.4(a) hereof, Landlord
shall exercise best efforts to cause Developer to
maintain, manage and operate the Common Areas
(including, but not by way of limitation, the parking
area) in good order, condition and repair in conformity
with the REA so as to at all times maintain an
appearance and attractiveness reasonably equivalent to
the level of same existing as of the date hereof.
Developer's obligations to be enforced by Landlord
pursuant to the preceding sentence in respect of the
maintenance, management and operation of the Common
Areas shall include, but not be limited to, the
following:
(i) Undertaking such
maintenance and construction work (including
replacements as required) as is necessary to preserve
and maintain the utility of the Common Areas;
(ii) The care and maintenance
of all identification signs and all planters (including
those adjacent to the Premises but excluding any signs
and planters of Tenant) and landscaping at the Shopping
Center;
(iii) The adequate illumination
of the Common Areas at all times of darkness that
Tenant is open for business (plus a period of one-half
hour after Tenant closes for business);
(iv) The payment prior to
delinquency of all real estate and personal property
taxes and assessments levied on the Common Areas;
(v) The removal of dirt and
debris and rubbish (including the regular sweeping of
the parking area and all sidewalks); and
(vi) The operation, management
and maintenance of the enclosed mall, including the
heating, ventilating, air-conditioning, lighting and
housekeeping of the same and the maintenance (and
replacement as required) of landscaping therein.
Section 5.5 Compliance with REA. Tenant shall abide by
the terms of the REA. Landlord agrees that it will not
change, amend or alter (or agree or consent to change,
amend or alter) any term or condition of the REA
without the prior written consent of Tenant, which
consent shall not be unreasonably withheld.
Section 5.6 Compliance with Requirements.
(a) Insofar as the same relate to
or are caused by Tenant's occupancy and use of the
Premises, and Tenant's other activities under this
Lease, throughout the Term, Tenant shall, at Tenant's
sole cost and expense, promptly comply with all present
and future Requirements applicable to the Premises,
subject, however, to Tenant's rights to contest any
such Requirements, as set forth in clause (b) below.
Tenant shall likewise comply with the provisions of all
of Tenant's insurance policies required to be
maintained hereunder or otherwise carried by Tenant
with respect to the Premises from time to time.
(b) Tenant shall have the right,
after prior notice to Landlord, at Tenant's sole cost
and expense, to contest by appropriate legal
proceedings diligently prosecuted in good faith, in the
name of Tenant, the validity or application of any
Requirements; provided, however, that Tenant may delay
compliance therewith until the final determination of
such proceeding only if by the terms of any such
Requirements, compliance therewith pending the
prosecution of any such proceeding may legally be
delayed without subjecting Landlord to the risk of any
criminal liability, or imminent forfeiture of its
estate, for failure so to comply therewith, and
provided further that if any fine, lien, charge or
civil liability may be incurred by reason of such
non-compliance, (i) Tenant furnishes to Landlord
security satisfactory to Landlord, against such fine,
lien, charge or civil liability in accordance with
Section 5.7, and (ii) Tenant shall be solely
responsible for payment of such fine, lien, charge or
civil liability and shall indemnify, defend and hold
Landlord harmless with respect thereto.
Section 5.7 Liens.
(a) Tenant agrees that it will pay
or cause to be paid all costs for work done by it or
caused to be done by it on the Premises of a character
which will or may result in liens on Landlord's
reversionary estate therein, and Tenant shall keep the
Premises free and clear of all mechanics' liens and
other liens on account of work done for Tenant or
persons claiming under it. If any such lien shall at
any time be filed against the Premises, Tenant shall
either cause the same to be discharged within thirty
(30) days after the recording thereof, or, if Tenant,
in Tenant's discretion and in good faith, determines
that such lien should be contested, shall furnish such
security as may be necessary or required to prevent any
foreclosure proceedings against the Premises during the
pendency of such contest. If Tenant shall fail to
furnish such security, then, in addition to any other
right or remedy of Landlord resulting from such
failure, Landlord may, but shall not be obligated to,
discharge the same either by paying the amount claimed
to be due, procuring the discharge of such lien by
giving security, or in such other manner as is, or may
be, prescribed by law. Tenant shall repay to Landlord,
as Rent, on demand, all sums disbursed or deposited by
Landlord pursuant to the provisions of this Section
5.7, including all costs, expenses and attorneys' fees
incurred by Landlord in connection therewith. Nothing
contained herein shall imply any consent or agreement
on the part of Landlord to subject Landlord's estate to
liability under any mechanics' lien or other lien law.
(b) Should any claims of lien be
filed against the Premises or any action affecting the
title to the Premises be commenced, the party receiving
notice of such lien or action shall forthwith give the
other party written notice thereof. Landlord or its
representative shall have the right to post and keep
posted upon the Premises notices of nonresponsibility
or such other notices which Landlord may deem to be
proper for the protection of Landlord's interest in the
Premises. Tenant shall, before the commencement of any
work which might result in any such lien, give to
Landlord advance written notice of its intention to do
so in reasonably sufficient time to enable the posting
of such notices.
ARTICLE VI
REPAIRS AND MAINTENANCE
Section 6.1 Tenant's Obligations. Tenant shall at all
times keep the leased Premises, including maintenance
of entrances and all partitions, doors, windows,
fixtures, equipment and appurtenances thereof
(including lighting and plumbing fixtures) in good
order, condition and repair (including reasonably
periodic interior painting), damage by casualty
excepted, except for structural portions of the
Premises, which shall be maintained by Landlord as set
forth below. It is also agreed that the Tenant will
maintain and repair the heating, ventilating, and air
conditioning units, excluding replacement of
compressors and major component parts, it being agreed
that Tenant shall only be obligated to pay for
reasonable and necessary routine repairs to such
systems and equipment to keep them in good working
condition but not for any more extensive repairs or
replacements.
Section 6.2 Landlord's Obligations. Notwithstanding
anything to the contrary herein, it is understood and
agreed that Landlord shall be responsible throughout
the Term for maintaining and repairing all structural
portions of the Building, including the roof, walls,
glass and other load-bearing portions of the structure.
Landlord shall also be responsible for any necessary
replacements of any essential building systems,
including, without limitation, heating, ventilation and
air conditioning (HVAC) systems, plumbing, electrical
and sewage systems. Landlord shall be responsible for
any necessary repairs to the heating, ventilating, and
air conditioning units, excluding replacement of
compressors and major component parts, which are more
extensive than the reasonable and necessary routine
repairs for which Tenant is responsible pursuant to
Section 6.1. Landlord shall not be required to make
repairs to the extent made necessary by reason of
Tenant's negligent or intentional acts or omissions to
act. The parties acknowledge that, in light of the
very short term of this lease, Landlord may reasonably
elect to perform temporary repairs to systems and
equipment where more permanent repairs or replacement
might be more customary or economical if the lease were
of a longer term. Tenant agrees that Landlord may
elect such temporary measures so long as the service
provided to the Premises and Tenant's business by such
equipment or system is not materially adversely
affected.
ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 7.1 Damage or Destruction.
(a) Tenant shall give Landlord
prompt notice of any damage to the Premises by fire or
other casualty.
(b) If the Premises shall be
rendered wholly untenantable by casualty, unless
terminated pursuant to Section 7.1(d) hereof, this
Lease shall remain in full force and effect except that
Rent shall fully xxxxx commencing on the date of loss
and continuing until the earlier to occur of: (i) the
date Tenant reopens the Premises for business, which
reopening Landlord and Tenant shall diligently work
together to expedite, or (ii) the date forty five (45)
days after Landlord completes the restoration, pursuant
to Section 7.1(e), of the structural elements of the
building of which the Premises form a part.
(c) If only a portion of the
Premises shall be rendered untenantable, unless
terminated pursuant to Section 7.1(d) hereof, this
Lease shall remain in full force and effect except that
Rent shall partially xxxxx commencing on the date of
loss and continuing until the earlier to occur of: (i)
the date Tenant reopens the repaired portion of the
Premises for business, which reopening Landlord and
Tenant shall diligently work together to expedite, or
(ii) the date forty five (45) days after Landlord
completes the restoration, pursuant to Section 7.1(e),
of the structural elements of the building of which the
Premises form a part. In such event, the Rent shall be
reduced to an amount computed by multiplying the Rent
applicable prior to such damage by a fraction, the
numerator of which is the Floor Area of the Premises
tenantable after such damage and the denominator of
which is the Floor Area of the Premises prior to such
damage.
(d) If any portion of the Premises
shall be rendered untenantable, or if there shall be
damage to the Shopping Center, by fire or other
casualty, whether or not the Premises is affected
thereby, either party shall have the option to
terminate this Lease. Said option shall be exercised,
if at all, by notice to the other party on or before
the ninetieth (90th) day after the date of loss and, if
exercised, shall be effective on the last day of the
first (1st) full calendar month falling at least sixty
(60) days after such notice.
(e) If there shall be damage to the
Premises by fire or other casualty and this Lease is
not terminated, Landlord shall promptly commence and
diligently prosecute the restoration and repair of the
structural elements of the building in which the
Premises are located, including all exterior walls,
roofs, floors and supports to structurally sound
condition, prepared for Tenant's restoration of the
interior portions of the Premises as set forth below.
Upon receipt of the repaired structural elements of the
building in which the Premises are located, Tenant
shall, at Tenant's sole cost and expense, promptly
commence and diligently prosecute the restoration and
repair of the nonstructural and interior portions of
the Premises, including, without limitation, all
internal partitions, fixtures, trade fixtures,
shelving, casework, furniture and furnishings used in
connection with the operation of Tenant's business in
the Premises, as nearly as practicable to their
respective conditions prior to such damage.
Section 7.2 Condemnation.
(a) The term "Taking" as used in
this Section 7.2, shall mean an appropriation or taking
under the power of eminent domain by any public or
quasi-public authority or a voluntary sale or
conveyance in lieu of condemnation but under threat of
condemnation.
(b) In the event of a Taking of the
entire Premises, this Lease shall terminate and expire
as of the date possession is delivered to the
condemning authority and Landlord and Tenant shall each
be released from any liability accruing pursuant to
this Lease after such termination.
(c) If there is a Taking of (a)
more than twenty-five percent (25%) of the Premises, or
(b) any portion of the Building and, regardless of the
amount taken, if the remainder of the Building is not
one undivided structure, either Landlord or Tenant may
terminate this Lease as of the date Tenant is required
to vacate the Premises upon giving notice in writing of
such election within thirty (30) days after receipt of
Tenant from Landlord of written notice that a portion
of the Premises has been so appropriated or taken.
(d) If this Lease is terminated as
a result of a Taking, Tenant shall be entitled to any
separate award made to Tenant for relocation costs,
good will and any of Tenant's fixtures and equipment
which are not capable of removal from the Premises;
provided such separate award does not diminish
Landlord's award. Subject to the foregoing, Landlord
shall be entitled to the entire award or compensation
in such condemnation proceedings, or settlement in lieu
thereof, irrespective of whether such award or
settlement shall be obtained as compensation for
diminution in value to the leasehold or the leasehold
improvements thereto or to the fee of the Premises, but
the Percentage Rent and any other Rent for the last
month of Tenant's occupancy shall be prorated and
Landlord shall refund to Tenant any Percentage Rent and
other Rent paid in advance. Notwithstanding the
foregoing and subject to Section 2.3, in the event this
Lease is terminated as provided above, Tenant may
remove all of its removable trade fixtures, furniture
and equipment from the Premises, provided that Tenant
immediately repairs any damage occasioned to the
Premises by reason of such removal so as to leave the
Premises in a neat and clean condition.
Notwithstanding the foregoing, in no event shall Tenant
be entitled to any portion of any award or
compensation, if following the payment of such sum to
Tenant, there would not be sufficient funds or proceeds
to pay the unpaid principal balance of any obligation
of Landlord secured by a deed(s) of trust or
mortgage(s) on the fee interest in the Premises and/or
the Building.
(e) In the event of a Taking, if
Landlord and Tenant elect not to so terminate this
Lease as provided above (or have no right to so
terminate), Tenant agrees, at Tenant's cost and expense
(subject to Tenant's rights hereunder) as soon as
reasonably possible after the Taking, to restore the
Building on the Land remaining to a complete unit of
like quality and character as existed prior to the
Taking. In such event, Tenant shall be entitled to
receive any and all award or compensation in connection
with such Taking until Tenant has received funds
sufficient to complete such restoration, and Landlord
shall be entitled to receive the remaining portion of
the total award or compensation.
ARTICLE VIII
INSURANCE
Section 8.1 Tenant's Insurance.
(a) Tenant shall carry, from and at
all times after the date hereof, at Tenant's sole cost
and expense, the following insurance:
(i) public liability and
property damage insurance covering the Premises and
Tenant's use thereof against claims for personal injury
or death and property damage occurring in, on or about
the Premises and affording protection to the limits of
not less than Three Million Dollars ($3,000,000) per
occurrence with respect to any one (1) bodily injury or
damage to property, which insurance shall, in addition,
extend to any liability of Tenant arising out of the
indemnities contained in Section 8.5 by contractual
liability endorsement. All liability policies shall
contain a so called "occurrence clause";
(ii) fire and casualty
insurance covering the Premises, in an amount equal to
ninety percent (90%) of the replacement cost thereof
(excluding foundations and footings);
(iii) fire insurance with
extended coverage, covering such items of Tenant's
merchandise, inventory, signs, furniture, trade
fixtures, equipment, leasehold improvements and other
property of Tenant, now or hereafter placed in, on or
about the Premises in an amount equal to ninety percent
(90%) of the replacement cost thereof;
(iv) in the event Tenant
installs in, adjoining or beneath the Premises any
steam boiler or similar equipment, broad form boiler
insurance;
(v) earthquake insurance in
an amount equal to one hundred percent (100%) of the
replacement cost of the Premises, to the extent the
same is available at commercially reasonable rates and
with deductibles of commercially reasonable amounts (it
being agreed that Tenant may maintain required
earthquake coverage through a blanket policy covering
several (or all) store locations owned or affiliated
with Tenant and having a maximum aggregate coverage
limit of Twenty Million Dollars ($20,000,000)); and
(vi) such other insurance as
may in Tenant's reasonable judgment be prudent to carry
from time to time.
(b) All insurance policies required
to be carried by Tenant shall be issued by companies
with a general policyholder's rating of not less than
"A" and a financial size rating of "VI" as rated in the
most current available "Best's Insurance Reports", and
qualified to do business in the State of California.
Each insurance policy shall name Landlord, Tenant and
Mortgagee as insureds as their interests may appear
and, to the extent possible, any other parties in
interest from time to time designated in writing by
notice from Landlord to Tenant. Executed copies of
each insurance policy, duplicate originals or original
certificates thereof (provided that such certificates
shall evidence all of the required coverage herein
provided) shall be delivered by Tenant to Landlord
within ten (10) days after delivery of possession of
the Premises to Tenant and thereafter within thirty
(30) days prior to the expiration of prior policies.
All insurance policies shall contain a provision that
the underwriter will give Landlord and Mortgagee at
least thirty (30) days prior written notice of any
cancellation or lapse of such insurance or the
effective date of any reduction in the amounts thereof
or increase of the deductible. All insurance policies
shall be written as primary policies which do not
contribute to, and are in excess of, any coverage which
Landlord may carry. All insurance policies shall
contain an agreement by the insurers that the coverage
afforded thereby shall not be affected by any
construction work in or about the Premises and that no
act or omission by the Tenant shall impair or affect
the rights of the Landlord to receive and collect the
proceeds under the policies.
(c) Any insurance required to be
carried by Tenant may be provided under a blanket
policy of insurance covering additional items or
locations or insureds; provided, however, that: (i)
Landlord and Mortgagee shall be named as an additional
insured thereunder (or covered by broad form Landlord
endorsement or contractual coverage); (ii) any such
blanket policy or policies shall specify total
insurance allocated to Tenant's improvements and
property; and (iii) the requirements for Tenant's
insurance set forth herein are otherwise satisfied.
Tenant agrees to use its best efforts to ensure that
the coverage afforded Landlord and any such other
parties in interest under any future blanket policy of
insurance will not be diminished by reason of the use
of such blanket policy of insurance, and Tenant shall
expend commercially reasonable amounts in connection
with obtaining such coverage.
(d) The deductibles and
self-insured retentions included in Tenant's insurance
policies shall be in amounts as may be commercially
reasonable from time to time.
(e) If Tenant refuses or neglects
to secure and maintain insurance policies complying
with the provisions of this Section 8.1, Landlord may
secure the appropriate insurance policies and Tenant
shall pay, upon demand, the costs of same to Landlord
as Rent.
Section 8.2 Landlord's Insurance. Landlord at its cost
shall carry, from and at all times after the date of
delivery of the Premises to Tenant, all insurance
required to be carried by Landlord pursuant to (i) any
Mortgages which either presently or in the future may
exist as a lien against the Premises and (ii) the REA,
to the extent that insurance required to be carried by
Tenant pursuant to this Lease is insufficient to
satisfy either of such obligations of Landlord.
Section 8.3 Waiver of Subrogation. Landlord and Tenant
each waive any rights it may have against the other on
account of any loss or damage occasioned to Landlord or
Tenant, as the case may be, their respective property,
the Premises or its contents or to other portions of
the Shopping Center arising from any liability, loss,
damage or injury caused by fire or other casualty for
which property insurance is carried or required to be
carried pursuant to this Lease. Each of the parties
hereto, on behalf of their respective insurance
companies insuring the property of either Landlord or
Tenant against any such loss, to the extent of any
recovery under such insurance, waives any right of
subrogation that it may have against the other. Each
waiver shall be expressly included in, and shall comply
with the requirements of, the respective insurance
policies.
Section 8.4 Governmental and Insurance Requirements.
(a) Tenant shall comply, at
Tenant's sole cost and expense, with all reasonable
requirements of the insurance underwriters, or any
similar public or private body, provided that any such
requirements of such insurance underwriters, or any
similar public or private body, are conditions to the
continuance of any of the insurance coverage required
hereunder, and any governmental authority having
jurisdiction over insurance rates with respect to the
use or occupancy of the Premises as a part of Shopping
Center, including, without limitation (i) installing
fire extinguishers or automatic dry chemical
extinguishing systems; (ii) making any changes,
modifications, alterations or additions in the
sprinkler system within the Premises; and (iii)
relocating partitions, trade fixtures or other contents
within the Premises.
(b) Tenant shall not commit any act
or suffer to exist on the Premises any circumstances
which will violate any reasonable restrictions
contained in any of Tenant's or Landlord's policies of
fire and casualty or public liability insurance,
prevent Landlord from continuing the coverage presently
provided in Landlord's insurance policies from
insurance companies reasonably acceptable to Landlord
or cause the rates for any such policies to increase
beyond the minimum rates from time to time applicable
to the Premises or the Shopping Center for the
Permitted Use, provided such minimum rate would have
been available to Landlord but for Tenant's actions or
use. In the event that Landlord receives any notice
from Landlord's insurance company regarding any
violation by Tenant of any of Landlord's insurance
policies, or of any proposed increase in Landlord's
premiums from the minimum rate from time to time
applicable thereunder because of any act, omission or
sufferance by Tenant in, on or under the Premises,
Landlord shall notify Tenant, and Tenant shall
reimburse Landlord as additional Rent the amount of any
such increase promptly following Landlord's written
demand therefor.
(c) In the event that Landlord
receives any notice from Landlord's insurance company
regarding any violation by Tenant of any of Landlord's
insurance policies, or of any proposed increase in
Landlord's premiums from the minimum rate from time to
time applicable thereunder because of any act, omission
or sufferance by Tenant in, on or under the Premises,
Landlord shall notify Tenant, and Tenant shall
reimburse Landlord as additional Rent the amount of any
such increase promptly following Landlord's written
demand therefor.
Section 8.5 Indemnification. To the fullest extent
permitted by law, Tenant covenants with Landlord that
Landlord shall not be liable for any damage or
liability of any kind or for any injury to or death of
persons or damage to property of Tenant or any other
person occurring from and after the date Tenant is
given access to the Premises from any cause whatsoever
related to the use, occupancy or enjoyment of the
Premises including, but not limited to, the sidewalks
and landscaped areas immediately adjacent to the
Building and Tenant's drive through area, if any, by
Tenant or any person thereon or holding under Tenant
including, without limitation, damages resulting from
any labor dispute, and Tenant shall defend (using
counsel mutually approved by Landlord and Tenant or
Tenant's insurer), indemnify and save Landlord harmless
from all liability whatsoever on account of any real or
alleged damage or injury and from liens, claims and
demands related to the use of the Premises and its
facilities, or any repairs, alterations or improvements
(including any improvements and fixtures constructed or
installed by Tenant) which Tenant may make or cause to
be made with respect to the Premises, and any loss or
interruption of business or loss of rental income
resulting therefrom. Notwithstanding anything to the
contrary in the foregoing, Tenant shall not be liable
for damage or injury occasioned by the negligence or
willful misconduct of Landlord or any ground lessor,
mortgagee or owner of all or any part of the Shopping
Center or their respective employees, agents or
contractors.
Section 8.6 Landlord Exculpation. Landlord shall
endeavor to conduct its activities with respect to the
Premises in a prudent and businesslike manner.
However, Landlord shall not be liable for any damage to
property entrusted to employees of Landlord, its
partners or agents, nor for loss of or damage to any
property damage or loss of business which may be
sustained by the person, goods, xxxx, merchandise or
property of Tenant, its employees, invitees or
customers or any other person in or about the Premises
caused by or resulting from, but not limited to, fire,
steam, electricity, gas, water or rain which may leak
or flow from or into any part of the Premises, or from
the breakage, leakage, obstruction or other defects of
the pipes, sprinklers, wires, appliances, plumbing, air
conditioning or lighting fixtures of same, whether the
injury, damage or loss of business results from
conditions arising upon the Premises, other portions of
the Shopping Center or from other sources, so long as
the same does not result from the negligence or wilful
misconduct of Landlord or its employees, agents, and
contractors or Landlord's breach of any of its express
obligations under this Lease. Landlord shall not be
liable for interference with the light or other
incorporeal hereditaments. Tenant shall give prompt
notice to Landlord in case of fire or accidents in the
Premises or in the Shopping Center or of defects
therein or in the fixtures or equipment. Landlord
shall not be liable for any damages arising from any
act or neglect of any other tenant in the Shopping
Center, except to the extent of Landlord's liability
for breach of Landlord's obligation to enforce the REA,
as provided in Section 3.2.
ARTICLE IX
ASSIGNMENT AND SUBLETTING
Section 9.1 Notice to Landlord. Tenant may not assign
its rights under this Lease or sublet all or any
portion of the Premises.
ARTICLE X
DEFAULT
Section 10.1 Events of Default. Each of the
following events shall constitute a "Default" by Tenant
under this Lease:
(a) If Tenant shall fail to pay any
Rent under this Lease when the same shall become due
and payable and the failure shall continue for five (5)
business days after written notice (it being understood
such period shall run concurrently with any statutory
notice period); or
(b) If Tenant shall transfer
Tenant's interest in this Lease in contravention of
Article IX hereof; or
(c) If Tenant shall fail to perform
or observe any of its obligations under this Lease
(including, without limitation, Tenant's failure to
perform those obligations under the REA expressly
assumed by Tenant in this Lease) other than those
specified above in this Section 10.1 and the failure
shall continue for thirty (30) days after notice,
unless a shorter period of time for such performance or
observance is otherwise expressly set forth in this
Lease; provided, however, that in the case of a Default
which cannot with reasonable diligence be remedied by
Tenant within said period of thirty (30) days, if
Tenant proceeds as promptly as may reasonably be
possible after the service of such notice and with all
reasonable diligence to remedy the Default and
thereafter prosecute the remedying of such Default with
all reasonable diligence, the period of time after the
giving of such notice within which to remedy the
Default shall be extended for such period as shall be
reasonably necessary to remedy the same with all
reasonable diligence;
(d) If the Premises are deemed
abandoned pursuant to California Civil Code Section
1951.3; or
(e) If an event of insolvency shall
occur including:
(i) Tenant's making an
assignment for the benefit of creditors;
(ii) Tenant's failure
generally to pay its debts as they become due;
(iii) A material adverse change
in the financial condition of Tenant;
(iv) Tenant's filing, or
acquiescing to the filing of, a petition seeking an
order for relief against it in any state or federal
court in any bankruptcy, reorganization, liquidation,
composition, extension, arrangement or insolvency
proceeding;
(v) Tenant's making an
application for, or acquiescing to, the appointment of
a trustee, examiner or custodian for it or all or any
portion of its property;
(vi) Any petition being filed
against Tenant in any state or federal court seeking
reorganization or liquidation or insolvency
proceedings, and the proceedings shall not be
dismissed, discontinued or vacated within ninety (90)
days; or
(vii) Any trustee, examiner or
custodian being appointed for Tenant, or for all or any
portion of Tenant's property, and the trustee,
examiner, or custodian shall not be set aside within
ninety (90) days after such appointment.
Section 10.2 Remedies. Upon the occurrence of a
Default, and in addition to any other rights or
remedies available to Landlord at law or in equity,
Landlord shall have the right to:
(a) terminate this Lease and all rights of Tenant by
giving Tenant written notice that this Lease is
terminated, in which case Landlord may recover from
Tenant the sum of :
(i) the worth at the time of award
of any unpaid Rent that had been earned at the time of
termination.
(ii) the worth at the time of award
of the amount by which (A) the unpaid Rent that would
have been earned after termination until the time of
award exceeds (B) the amount of rental loss, if any, as
Tenant affirmatively proves could have been reasonably
avoided;
(iii) the worth at the time of award
of the amount by which (A) the unpaid Rent for the
balance of the Term after the time of award exceeds (B)
the amount of rental loss, if any, as Tenant
affirmatively proves could be reasonably avoided;
(iv) any other amount necessary to
compensate Landlord for all the detriment proximately
caused by Tenant's failure to perform Tenant's
obligations or that, in the ordinary course of things,
would be likely to result; and
(v) all other amounts in addition
to or in lieu of those previously stated as may be
provided from time to time by California law; or
(b) continue this Lease, and from time to time,
without terminating this Lease, either (i) recover all
Rent and other amounts payable as they become due or
(ii) relet the Premises or any part of the Premises on
behalf of Tenant for any term, at any rent, and
pursuant to any other provisions as Landlord deems
advisable, all with the right, at Tenant's cost, to
make alterations and repairs to the Premises.
As used in clauses 10.2(a)(i) and 10.2(a)(ii) of this
Section, the worth at the time of award is computed by
allowing interest at the Interest Rate. As used in
clause 10.2(a)(iii) of this Section, the worth at the
time of award is computed by discounting that amount at
the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).
(c) Upon the occurrence of a Default, Landlord shall
also have the right, with or without terminating this
Lease, to re-enter the Premises and remove all persons
and property from the Premises. Landlord may cause
property so removed from the Premises to be stored in a
public warehouse or elsewhere at the expense and for
the account of Tenant.
(d) None of the following remedial actions, singly or
in combination, shall be construed as an election by
Landlord to terminate this Lease unless Landlord has in
fact given Tenant written notice that this Lease is
terminated or unless a court of competent jurisdiction
decrees termination of this Lease; any act by Landlord
to maintain or preserve the Premises; any efforts by
Landlord to relet the Premises; any re-entry,
repossession, or reletting of the Premises; or any
reentry, repossession, or reletting of the Premises by
Landlord pursuant to this Section. If Landlord takes
any of the previous remedial actions without
terminating this Lease, landlord may nevertheless at
any time after taking any remedial action terminate
this lease by written notice to Tenant.
(e) If Landlord relets the Premises, Landlord shall
apply the revenue as follows: first, to the payment of
any reasonable cost of reletting, including without
limitation finder's fees and leasing commissions; and
second, to the payment of Rent and other amounts due
and unpaid under this Lease. Landlord shall hold and
apply the residue, if any, to payment of future amounts
payable as they become due and, to the extent the
residue exceeds such amounts, shall remit such excess
to Tenant. Should revenue from reletting during any
month, after application pursuant to the foregoing
provisions, be less than the reasonable cost of
reletting and the Rent and other amounts due and unpaid
under this Lease, Tenant shall pay the deficiency to
Landlord promptly upon demand.
(f) After the occurrence of a Default, Landlord, in
addition to or in lieu of exercising other remedies,
may, but without any obligation to do so, cure the
breach underlying the Default for the account and at
the expense of Tenant; provided that Landlord by prior
notice shall first allow Tenant a reasonable
opportunity to cure, except in cases of emergency,
where Landlord may proceed without prior notice to
Tenant. Tenant shall, upon demand, immediately
reimburse Landlord for all costs, including costs of
settlements, defense court costs, and attorney fees,
that Landlord may incur in the course of any such cure.
(g) No security, guaranty or security interest
granted for the performance of Tenant's obligations,
which Landlord may now or hereafter hold, shall in any
way constitute a bar or defense to any action initiated
by Landlord for unlawful detainer or for the recovery
of the Premises, for enforcement of any obligation of
Tenant, or for the recovery of damages caused by a
breach of this Lease by Tenant or by a Default.
(h) Except as expressly provided in this Lease to the
contrary, no right or remedy conferred upon or reserved
to either party is intended to be exclusive of any
other right or remedy given now or later or existing at
law or in equity or by statute. Except to the extent
that either party may have otherwise agreed in writing,
no waiver by that party of any violation or
nonperformance by the other party of any obligations,
agreements, or covenants shall be deemed to be a waiver
of any subsequent violation or nonperformance of the
same or any other covenant, agreement, or obligation,
nor shall any forbearance by either party to exercise a
remedy for any violation or nonperformance by the other
party be deemed a waiver by that party of rights or
remedies with respect to that violation or
nonperformance.
(i) Landlord may require Tenant or any trustee for
Tenant under the United States Bankruptcy Code (as
amended, the "Bankruptcy Code") to cure Tenant's
Default and to provide adequate assurances of future
performance of this Lease as provided in Section
365(b)(3) of the Bankruptcy Code, including, without
limitation, adequate assurance that; (i) Rent will be
paid when due; (ii) there shall be no substantive
breach in the provisions of this Lease relating to the
Shopping Center including, without limitation, the
Permitted Use; and (iii) that there shall be no
disruption in any Tenant mix or Tenant balance in the
Shopping Center. If Tenant or the trustee does not
cure existing Defaults and provide such assurances of
future performance within sixty (60) days after there
has been an order for relief pursuant to the Bankruptcy
Code, this Lease shall be deemed rejected, and Landlord
shall have no further liability hereunder to Tenant or
any person claiming through or under Tenant and, if
Tenant or any such person is in possession. Tenant or
any such person shall forthwith quit and surrender the
premises to Landlord.
Section 10.3 Attorneys' Fees. In the event that
either party hereto commences an action related to this
Lease, the prevailing party shall be entitled to
recover from the other party all of its costs and
expenses incurred therein, including, without
limitation, reasonable attorneys' fees and
disbursements. If either party hereto is, without
fault on its own part, made a party to any action
instituted by or against the other party to this Lease
due to such other party's fault, such other party shall
indemnify the party innocently involved and defend and
hold it harmless against and from all such costs and
expenses incurred therein including, without
limitation, reasonable attorneys' fees and
disbursements.
Section 10.4 Agreement to Arbitrate. Any
controversy, dispute or claim under, arising out of, in
connection with or in relation to this Lease, including
but not limited to the negotiation, execution,
interpretation, construction, coverage, scope,
performance, non-performance, breach, termination,
validity or enforceability of this Lease or any
provision hereof shall be determined by arbitration
conducted in accordance with the Commercial Arbitration
Rules or then existing rules for commercial arbitration
of the American Arbitration Association. The
arbitration shall additionally be governed by the
California Arbitration Act. The arbitration shall be
conducted in a location in San Bernardino County and
shall be before a single arbitrator who shall be
selected by mutual agreement of the parties from among
a list of seven potential arbitrators provided by the
American Arbitration Association. If the parties
cannot agree on an arbitrator from this first list, the
parties hereto shall select an arbitrator for such
arbitration from a second list of seven potential
arbitrators provided by the American Arbitration
Association with each party alternately striking names,
with the last name remaining to be the arbitrator so
selected. In the event that either party seeks a
temporary restraining order, preliminary injunction or
other provisional relief, the provisions of Section
1281.8 of the California Code of Civil Procedure shall
apply. The arbitration of such issues, including the
determination of any amount of damages suffered by any
party hereto by reason of the acts or omissions of any
party, shall be final and binding upon the parties to
the maximum extent permitted by law. Judgment upon any
award rendered by the arbitrator(s) may be entered by
any court having jurisdiction thereof. The parties
intend that this Article shall be valid, binding,
enforceable and irrevocable and shall survive the
termination of this Agreement.
Section 10.5 No Set-off/Counterclaims. Tenant
shall pay all Rent due hereunder, free of any charges,
assessments, impositions or deductions and without
abatement, deferral, reduction, set-off, counterclaim,
defense or deduction except as permitted under the
express terms of this Lease or the Asset Purchase
Agreement. Tenant shall not interpose any
counterclaim(s) in any action brought by Landlord
based, in whole or in part, on Tenant's failure to pay
Rent; provided, however, that, the foregoing to the
contrary notwithstanding: (i) Tenant may interpose any
counterclaim deemed "compulsory" under applicable court
rules of civil procedure; (ii) Tenant shall be
permitted to bring a separate action against Landlord
based on any claim which Tenant is prohibited by this
Lease from asserting as a set-off or counterclaim; and
(iii) Tenant may bring actions and assert defenses,
setoffs and counterclaims permitted to be brought or
asserted against Landlord in accordance with the terms
of the Asset Purchase Agreement.
Section 10.6 Right of Redemption. Tenant hereby
waives, for itself and all persons claiming by, through
or under Tenant, any right of redemption or for the
restoration of the operation of this Lease under any
present or future law in the event Landlord shall
obtain possession of the Premises.
Section 10.7 No Waiver. No receipt of monies by
Landlord from Tenant after the termination or
cancellation of this Lease in any lawful manner shall
reinstate the Term of this Lease, or operate as a
waiver of the right of Landlord to enforce the payment
of Rent then due, or operate as a waiver of the right
of Landlord to recover possession of the Premises by
proper suit, action, proceeding or remedy; it being
agreed that, after the termination or cancellation of
this Lease, or after a final order or judgment for the
possession of the Premises, Landlord may demand,
receive and collect any monies due, without in any
manner affecting such notice, proceeding, suit, action,
order or judgment; and any and all such monies
collected shall be deemed to be payment on account of
the use and occupation or Tenant's liability hereunder.
Section 10.8 Unperformed Covenants of Landlord May
Be Performed By Tenant. If Landlord shall fail to
perform any of the terms, provisions, covenants or
conditions to be performed or complied with by Landlord
pursuant to this Lease, or if Landlord should fail to
make any payment which Landlord agrees to make, and any
such failure shall, if it relates to a matter which is
not of any emergency nature, remain uncured for a
period of thirty (30) days after Tenant shall have
served upon Landlord notice of such failure, or for a
period of twenty-four (24) hours after service of such
notice, if in Tenant's judgment reasonably exercised
such failure related to a matter which is of an
emergency nature, then Tenant may at Tenant's option,
at any time prior to commencement of Landlord's acting
to cure such failure and thereafter if Landlord fails
to diligently perform the curing of such failure,
perform any such term, provision, covenant or condition
or to make any such payment, as Landlord's agent, and
in Tenant's sole discretion as to the necessity
therefor, and Tenant shall not be liable or responsible
for any loss or damage resulting to Landlord or anyone
holding under Landlord on account thereof. The full
amount of the cost and expense entailed, or payment so
made, shall immediately be owing and payable by
Landlord to Tenant. The option given in this Section
is for the sole protection of Tenant, and its existence
shall not release Landlord from the obligation to
perform the terms, provisions, covenants and conditions
herein provided to be performed by Landlord or deprive
Tenant of any legal rights which it may have by reason
of any such default by Landlord.
ARTICLE XI
[INTENTIONALLY OMITTED]
ARTICLE XII
STORE CLOSING
Landlord acknowledges Tenant's intent to close the
department store to be operated on the Premises during
the month of January, 1999. The "Permitted Use"
includes the right to operate the Premises as a
discount or outlet store, and to conduct "close-out"
and "going out of business" sales on the Premises (so
long as such use complies with applicable law).
Landlord hereby agrees to indemnify, defend (using
counsel mutually approved by Tenant and Landlord or
Landlord's insurer) and hold Tenant harmless from and
against any loss, liability, suit, claim or demand
whatsoever arising out of any party's contention that
closing of the store violates any agreement or
obligation binding on Landlord or Tenant, including,
without limitation, any such claim brought under the
REA or any covenants, conditions or restrictions
applicable to the Premises.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.1 Notices.
(a) Any notice, demand, request,
approval, consent or other instrument (collectively, a
"Notice") which may be, or is required to be, given
under this Lease shall be in writing and given by hand
or sent by United States certified or registered mail,
return receipt requested, postage prepaid, or by an
overnight nationally recognized courier service,
addressed to Landlord at the address herein first given
with a copy to: XxXxxxxx McAlearny Shimoff & Xxxx, 0
Xxxx Xxxxxxxx Xxxxxxxxx, X.X. Xxx 0000, Xxxxxxxx, XX
00000-0000 Attn: Xxxxxx X. XxXxxxxx, Esq., or to such
other address as Landlord may from time to time
designate to Tenant by notice in accordance with this
Section, and to Tenant at the Premises and to Tenant's
address herein first given Attention: Law Department,
or to such other address as Tenant may from time to
time designate to Landlord by notice in accordance with
this Section. All Notices shall be deemed given or
served three (3) business days after the date of
registration or certification by the postal
authorities, if mailed, or upon receipt, if sent by
overnight courier or delivered in person.
(b) Any notice which may or shall
be given under this Lease by Landlord may be given by
Landlord, by any employee of Landlord, by any attorney
representing Landlord, by any management company
operating the Shopping Center on behalf of Landlord or
any employee of, or attorney retained by, said
management company, and all notices from any of the
foregoing shall be as effective as if given by Landlord
itself.
(c) Any Notice with respect to any
assignment, alleged default, termination or other
material issue given to Landlord shall also be given to
each mortgagee of Landlord's interest in the Shopping
Center, the name and address of which mortgagee
Landlord has previously given Tenant written notice.
Section 13.2 Brokers. Landlord and Tenant each
warrants and represents to the other party hereto that
it has not dealt with any broker in negotiating or
consummating this Lease, and Landlord and Tenant each
hereby agrees to indemnify, defend and hold harmless
the other party hereto against and from any and all
claims losses or liabilities as a result of any
inaccuracy in the foregoing representation. This
Section shall survive the Term of this Lease.
Section 13.3 Subordination of Lease.
(a) This Lease is subordinate to
the lien of all mortgages, deeds of trust and security
instruments (collectively, "Mortgages"), and to all
ground leases, easement agreements and operating
agreements now covering or affecting all or any part of
the Shopping Center, including, without limitation, the
REA, and to all modifications, consolidations,
renewals, replacements and extensions of any of the
foregoing. Landlord hereby represents and warrants
that there are no Mortgages in effect with respect to
the Shopping Center or the Premises except as
specifically set forth in Exhibit G attached hereto and
made a part hereof, nor are there any REAs affecting
the Shopping Center or Tenant's rights under this Lease
except as set forth in Exhibit D attached hereto and
made a part hereof. Landlord shall exercise best
efforts to obtain from each mortgagee under a Mortgage
listed on Exhibit G a nondisturbance agreement in the
form of the "SNDA" attached to the Asset Purchase
Agreement.
(b) Subject to the terms of any
nondisturbance agreement entered into by Tenant, should
any mortgagee under a Mortgage succeed to Landlord's
interest in this Lease, Tenant shall, upon demand,
attorn to and recognize such mortgagee as Landlord
under this Lease. In the event of a sale or assignment
of Landlord's interest in this Lease or the Premises,
Tenant shall attorn to and recognize such purchaser or
assignee as Landlord under this Lease without further
act by Landlord or such purchaser or assignee.
Section 13.4 Unavoidable Delays. In the event
that either party shall be delayed or hindered in, or
prevented from, the performance of any work, service or
other act required under this Lease to be performed by
such party and such delay or hindrance is due to: (i)
strikes, lockouts, or other labor disputes; (ii)
inability to obtain labor or materials or reasonable
substitutes therefor; or, (iii) acts of God,
governmental restrictions, enemy act, civil commotion,
unavoidable fire or other casualty, or other causes of
a like nature beyond the control of the party so
delayed or hindered (collectively, "Unavoidable
Delays"), then performance of such work, service or
other act shall be excused for the period of such delay
and the period for the performance of such work,
service or other act shall be extended by a period
equivalent to the period of such delay. In no event
shall any such delay constitute a termination or
extension of this Lease. The provisions of this
Section shall not operate to excuse Tenant from the
timely payment of Rent.
Section 13.5 Estoppel Certificates. Upon ten (10)
business days prior written request therefor by
Landlord or Tenant from time to time, each party agrees
to execute and to deliver to the requesting party, or
to such other addressee or addressees as the requesting
party may designate, a written statement certifying
that: (i) this Lease is in full force and effect and
unmodified, or describing any modification; (ii) that
there are no defenses or offsets against the
enforcement of this Lease, or stating with
particularity defenses or offsets claimed; stating the
date to which Rent has been paid; and (iv) stating the
Term Commencement Date and the date this Lease expires.
Section 13.6 Relationship of Parties. Nothing
contained in this Lease shall be deemed or construed as
creating the relationship of principal and agent or of
partnership or of joint venture between the parties
hereto, it being understood and agreed that neither the
method of computing Rent nor any other provision
contained herein nor any acts of the parties hereto
shall be deemed to create any relationship between the
parties other than that of Landlord and Tenant.
Section 13.7 Governing Law; Jurisdiction.
(a) Governing Law. This Lease, the
legal relations between the parties and any Action
(defined below), whether contractual or
non-contractual, instituted by any party with respect
to matters arising under or growing out of or in
connection with or in respect of this Lease, including
but not limited to the negotiation, execution,
interpretation, coverage, scope, performance, breach,
termination, validity, or enforceability of this Lease,
shall be governed by and construed in accordance with
the laws of the State of California applicable to
contracts made and performed in such State and without
regard to conflicts of law doctrines, except to the
extent that certain matters are preempted by federal
law or are governed as a matter of controlling law by
the law of the jurisdiction of incorporation of the
Tenant.
(b) Jurisdiction. Each party
hereby irrevocably submits to and accepts for itself
and its properties, generally and unconditionally, the
exclusive jurisdiction of and service of process
pursuant to the laws of the State of California and the
rules of its courts, waives any defense of forum non
conveniens and agrees to be bound by any judgment
rendered thereby arising under or out of in respect of
or in connection with this Lease or any related
document or obligation. Each party further irrevocably
designates and appoints the individual identified in or
pursuant to Section 13.1 hereof to receive notices on
its behalf, as its agent to receive on its behalf
service of all process in any such Action before any
body, such service being hereby acknowledged to be
effective and binding service in every respect. A copy
of any such process so served shall be mailed by
registered mail to each party at its address provided
in Section 13.1; provided that, unless otherwise
provided by applicable law, any failure to mail such
copy shall not affect the validity of the service of
such process. If any agent so appointed refuses to
accept service, the designating party hereby agrees
that service of process sufficient for personal
jurisdiction in any action against it in the applicable
jurisdiction may be made by registered or certified
mail, return receipt requested, to its address provided
in Section 13.1. Each party hereby acknowledges that
such service shall be effective and binding in every
respect. Nothing herein shall affect the right to
serve process in any other manner permitted by
applicable law.
(c) As used in this Section 13.7,
"Action" shall mean any action, complaint, petition,
investigation suit or other proceeding before any
arbitrator or any other governing body or entity having
appropriate jurisdiction.
Section 13.8 Interpretation. The neuter, feminine
or masculine pronoun when used herein shall each
include each of the other genders and the use of the
singular shall include the plural. In the event of any
conflict between the terms of this Lease, and the terms
of the Asset Purchase Agreement (including any related
agreements entered into by Landlord and Tenant), the
terms of the Asset Purchase Agreement shall prevail
over any contrary term of this Lease.
Section 13.9 Captions. The captions of Articles
and Sections contained in this Lease are for convenient
reference only and shall not be deemed or construed as
in any manner limiting or amplifying the terms and
provisions hereof.
Section 13.10 Partial Invalidity. If any term or
provision of this Lease, or the application thereof to
any person or circumstance, shall to any extent be
determined to be invalid or unenforceable by a court of
competent jurisdiction, then 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 held invalid or unenforceable, shall not be
affected thereby.
Section 13.11 Waivers. The waiver by Landlord of
any breach of any term, covenant or condition contained
in this Lease shall not be deemed to be a waiver of
such term, covenant or condition or of any subsequent
breach of the same or any other term, covenant or
condition contained in this Lease. The subsequent
acceptance of Rent hereunder by Landlord shall not be
deemed to be a waiver of any preceding breach by Tenant
of any term, covenant or condition of this Lease or of
any right of Landlord to a forfeiture of the Lease by
reason of such breach, regardless of Landlord's
knowledge of such preceding breach at the time of
acceptance of such Rent. No term, covenant or
condition of this Lease shall be deemed to have been
waived by Landlord unless such waiver be in writing and
signed by Landlord.
Section 13.12 Accord and Satisfaction. No payment
by Tenant, or receipt by Landlord, of a lesser amount
than the Rent payment due under this Lease shall be
deemed or construed to be other than a payment or
receipt on account of the earliest Rent due. Neither
the endorsement or statement on any check nor the
receipt or negotiation of any such check by Landlord,
shall be deemed or construed to be an accord and
satisfaction.
Section 13.13 Counterparts. This Lease may be
executed in several counterparts, each of which shall
be deemed an original and all of which shall together
constitute one and the same instrument.
Section 13.14 Entire Agreement. This Lease and the
Asset Purchase Agreement incorporate all undertakings
between the parties hereto with respect to Tenant's
lease of the Premises. Tenant hereby acknowledges that
neither Landlord nor Landlord's employees, agents or
contractors have made any representations or promises
to Tenant with regard to the Premises or the Shopping
Center or this Lease that have not been expressly
stated in this Lease and, therefore, Tenant hereby
waives any and all claims against, or liability of,
Landlord and Landlord's employees, agents, and
contractors based thereon. Landlord hereby
acknowledges that Tenant and its employees and officers
have made no representations or promises with regard to
Tenant's operations, sales figures or methods of doing
business or any other matter except as expressly
contained in this Lease, and Landlord, therefore,
hereby waives any claim with respect thereto or based
thereon.
Section 13.15 Successors and Assigns. This Lease
and each of the terms and conditions hereof shall inure
to the benefit of, and be binding upon, Landlord, and
Landlord's heirs, executors, administrators, successors
and assigns. This Lease and each of the terms and
conditions hereof shall also be binding upon Tenant,
and Tenant's heirs, executors, administrators,
successors and assigns and shall inure to the benefit
of Tenant and only such assigns of Tenant to whom the
assignment by Tenant has been made and consented to in
accordance with the provisions of Article IX of this
Lease.
Section 13.16 Survival of Obligations. All
obligations of each party which by their nature involve
performance after the end of the Term, or which cannot
be ascertained or have been fully performed until after
the end of the Term, shall survive the expiration or
earlier termination of this Lease.
Section 13.17 Submission of Lease. Submission of
this Lease by one party to the other for examination or
execution does not constitute an offer made, or an
option granted, to enter into this Lease.
Section 13.18 Memorandum of Lease. Landlord and
Tenant agree to execute a memorandum of this Lease,
which memorandum shall be substantially in the form
attached hereto as Exhibit F and shall be recorded in
the applicable real property records as soon as
possible after the date of this Lease.
Section 13.19 Attachments. Attached hereto and
made a part of this Lease are the following: Exhibits
A-G, inclusive.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
IN WITNESS WHEREOF, Landlord and Tenant have caused
their duly authorized representatives to execute this
Lease as of the date first above written.
LANDLORD:
EL CORTE INGLES, S.A.
By: /s/ XXXXX XXXX
Its: INTERNATIONAL DIVISION DIRECTOR
TENANT:
GOTTSCHALKS INC.
By: /s/ XXXXX XXXXXXXXX
Its: PRESIDENT
EXHIBIT A
LEGAL DESCRIPTION OF SHOPPING CENTER
EXHIBIT B
SITE PLAN OF SHOPPING CENTER
EXHIBIT C
LEGAL DESCRIPTION OF PREMISES
EXHIBIT D
SCHEDULE OF REA AND RELATED AGREEMENTS
EXHIBIT E
[INTENTIONALLY OMITTED]
EXHIBIT F
FORM OF MEMORANDUM OF LEASE
Recording Requested By And
When Recorded Return To:
Gottschalks Inc.
0 Xxxxx Xxxx Xxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
________________________________________________________________
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE (this "Memorandum"), dated as
of August 20, 1998, is entered into by and between El
Corte Ingles, S.A., a Spanish corporation ("Landlord"),
and Gottschalks Inc., a Delaware corporation
("Tenant"). Landlord and Tenant have entered into that
certain Store Lease Agreement dated as of
Augus 20, 1998 (the "Store Lease"), pursuant to
which Landlord demised and leased to Tenant and Tenant
hired from Landlord the Premises as more particularly
described in the Lease (the "Premises"), which Premises
are located on the real property described in Exhibit A
attached hereto and made a part hereof.
LANDLORD AND TENANT AGREE AS FOLLOWS:
1. For and in consideration of the rental reserved
and of the mutual covenants, agreements and conditions
set forth in that certain Store Lease, Landlord does
hereby lease to Tenant and Tenant does hereby lease
from Landlord, upon all terms and conditions set forth
in the Store Lease, the Premises. The term of the
Lease commences on August 20, 1998 and expires on
January 30, 1999.
2. This Memorandum has been prepared to provide
notice that the Premises are subject to the terms and
conditions of the Store Lease, which terms are hereby
incorporated into this Memorandum by this reference.
In no event shall the terms of this Memorandum be
deemed to modify, amend, limit or otherwise affect the
terms and conditions of the Store Lease. In the event
of any inconsistency between the terms of this
Memorandum and the terms of the Store Lease, the terms
of the Store Lease shall control.
IN WITNESS WHEREOF, Landlord and Tenant have caused
their duly authorized representatives to execute this
Memorandum as of the date first written above.
LANDLORD:
EL CORTE INGLES, S.A.
By: /s/ XXXXX XXXX
Its: INTERNATIONAL DIVISION DIRECTOR
TENANT:
GOTTSCHALKS INC.
By: /s/ XXXXX XXXXXXXXX
Its: PRESIDENT
EXHIBIT A
Description of Real Property
EXHIBIT G
SCHEDULE OF EXISTING MORTGAGES
A. Current preliminary title report:
Title Company:
Date of report:
Order No.:
B. Existing Mortgages:
