ARTICLE 1 -- BASIC LEASE TERMS EXHIBIT 10.46
THIS LEASE is dated for reference purposes only September 1, 1994.
1.1
(a) Location:
0000 Xxxx Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx
(Section 2.1(r))
(b) Size: 59,571 square feet
1.2 Parties and Notice Addresses:
Landlord: American National Bank and Trust Company
of Chicago, not personally but solely
as Trustee under Trust Agreement dated
March 13, 1978 and known as Trust No. 42371
c/o Xxxxx X. Xxxxxxxx
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
Tenant: SPORTMART, INC., a Delaware corporation
Attn: Legal Department
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
(Sections 3.1 and 31.1)
With copies of all notices to be sent to:
SPORTMART, INC., a Delaware corporation
Attn: Vice President, Real Estate
0000 Xxxx Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
1.3 Size of Store: T h e Store ("Mart") shall have frontage of
approximately 317 feet and maximum depth of
approximately 218 feet (total of 59,571 sq.ft.)
(Sections 2.1(s) and 3.2)
1.4 Intentionally Omitted
1.5 Term: Initial Termination Date: May 31, 2000
1.6 Options: Two (2) additional five (5) year periods.
(Section 6.1)
1.7 Minimum Rent: Commencement Date through November 30, 1994:
$360,000 per year ($30,000 per month)
December 1, 1994 through May 31, 2000: $508,740
per year ($42,395 per month).
First Option Period: $595,710 per year ($49,642.50
per month).
Second Option Period: $670,176 per year
($55,848.00 per month).
(Article 7)
1.8 Intentionally Omitted.
1.9 Brokers: None
(Section 36.10)
1.10 Contents of Lease:
This lease (the "Lease") consists of:
Pages 1 through
Sections 1.1 through
EXHIBITS
A. Legal Description
B. Site Plan
C. Memorandum of Lease
ARTICLE 2 -- DEFINITIONS
2.1 The terms defined in this Article 2 shall for all purposes
of this Lease and all agreements supplemental hereto have the meanings
herein specified unless expressly stated otherwise.
(a) All Risk Policy: A policy of fire and other property
insurance in the form commonly referred to in the industry as "all
risk" with extended endorsement (false arrest, libel, slander,
assault, battery, invasion of privacy, theft, vandalism and malicious
mischief coverage) and including broad form water damage, or if such
policy is no longer issued, such other policy as would cover the same
risks and perils. Landlord may elect to include coverage for flood
and earthquake but Tenant shall not be required to pay any part of the
premium allocable to such coverages.
(b) Commencement Date: September 1, 1994.
(c) Intentionally Omitted
(d) Common Areas: Those portions of, and facilities
within, the Shopping Center or greater land area of which the Store
forms a part, which are intended for the common non-exclusive use of
the occupants, their customers, agents and employees including,
without limitation, parking areas, driveways, malls, walkways, loading
zones and landscaping.
(e) Intentionally Omitted
(f) Intentionally Omitted
(g) Gross Sales: The selling price of all merchandise sold
in or from the Store by Tenant, its subtenants, licensees and
concessionaires, whether for cash or for credit, excluding, however,
the following: (i) the sales price of all merchandise returned and
accepted for full credit or the amount of the cash refund or allowance
made thereon; (ii) the sums and credits received in settlement of
claims for loss or damage to merchandise; (iii) the consideration
received in connection with a sale of inventory which occurs other
than in the ordinary course of Tenant's business; (iv) sales taxes, so
called luxury taxes, excise taxes, gross receipt taxes, and other
taxes now or hereafter imposed upon the sale or value of merchandise
or services, whether added separately to the selling price of the
merchandise or services and collected from customers or included in
the retail selling price; (v) receipts from public telephones, vending
machines, sales of tickets and passes, sales of money orders, fees for
fishing/hunting licenses and the collection of public utility bills;
(vi) interest, carrying charges, or other finance charges in respect
of sales made on credit; (vii) sales of fixtures, trade fixtures, or
personal property that are not merchandise held for sale at retail;
(viii) sales to employees at discount, not exceeding three percent
(3%) of total Gross Sales: (ix) labor charges or fees for bowling
ball drilling, racquet restringing, ice skate sharpening, bicycle
assembly, golf club regripping and installation of ski bindings, ski
tuning (including sharpening and waxing) and other similar customer
services; (x) Tenant's accounts receivable, not to exceed two percent
(2%) of Gross Sales, which have been determined to be uncollectible
for federal income tax purposes during the Lease Year provided,
however, that if such accounts are actually collected in a later year,
the amount shall be included in the Gross Sales for such later Lease
Year; (xi) rents, subrents or other consideration received in
connection with an assignment, sublet, license, concession or other
transfer of any portion of the store (however Gross Sales of any such
transferee shall be included); (xii) sales of merchandise ordered by
catalogue regardless of place of order or delivery; (xiii) delivery
charges on merchandise sold; and (xiv) receipts in respect of
instructional programs (but not including merchandise sold in respect
thereto).
(h) Intentionally Omitted
(i) Landlord's Parcel: That certain parcel of land
described in Exhibit "A", together with all appurtenances thereunto
belonging.
(j) Leasable Floor Area: All areas available, or held for
the exclusive use and occupancy of occupants or future occupants of
the Shopping Center, measured from the interior surface of exterior
walls (and from extensions thereof in the case of openings) and from
the center of interior demising partitions. For purposes of computing
Tenant's obligations based upon Leasable Floor Area, the Leasable
Floor Area of the Shopping Center shall be not less than the size
specified in Section 1.1(b). Mezzanines, if any, shall not be
included within the definition of Leasable Floor Area.
(k) Lease Year: The first Lease Year shall extend from the
Commencement Date to the first May 31st following commencement.
Subsequent Lease Years (other than the final Lease Year) shall
commence on June 1st and terminate the following May 31st. The final
Lease Year shall commence on June 1st and terminate on the expiration
or earlier termination of this Lease.
(l) Minimum Rent: The amounts specified in Section 1.7.
(m) Percentage Rent: The term Percentage Rent is defined
in Section 8.1.
(n) Intentionally Omitted
(o) Intentionally Omitted
(p) Redelivery Date: The date, following a casualty, on
which the Landlord's architect, or contractor having charge of the
restoration certifies the same as having been substantially completed
and Tenant receives notice thereof along with written approvals which
may be required from any governmental agency (provided the work has in
fact been completed).
(q) Shopping Center: Those certain premises with all
appurtenances located as set forth in Section 1.1(a) hereof and
described with particularity in Part I of Exhibit "A".
(r) Store: That portion of the Shopping Center as so
delineated on the site plan attached to this Lease as Exhibit "B"
having the dimensions and containing the Leasable Floor Area specified
in Section 1.3 hereof. Tenant refers to the Store as "Mart" for
internal operation purposes.
(s) Term: References to "Term" of this Lease shall include
the original term and any extension of such Term. The original Term
of this Lease shall start on the Commencement Date and, unless earlier
terminated expire on the Initial Termination Date specified by Section
1.5.
ARTICLE 3 -- PREMISES
3.1 The landlord identified in Section 1.2 ("the Landlord")
hereby leases to the tenant identified in Section 1.2 (the "Tenant")
and the Tenant hires from the Landlord, the Shopping Center,
including, without limitation, the Store and the Common Areas,
together with all appurtenances. Tenant has entered into this Lease
in reliance upon the agreement of the Landlord that the Shopping
Center is and will remain retail in character, and, further, no part
of which shall be used as a nightclub, bar, theater, auditorium,
meeting hall, school, or other place of public assembly, gymnasium
(excluding aerobics studios and weight clinics of less than 3,000
square feet), dance hall, billiard or pool hall, massage parlor, video
game arcade, bowling alley, skating rink, car wash, night club or
adult book or adult video tape store, (which are defined as stores a
substantial portion of the inventory of which is not available for
sale or rental to children under 15 years old because it explicitly
deals with or depicts human sexuality). No restaurant shall be
permitted in the Shopping Center without prior Tenant consent.
3.2 Intentionally Omitted.
3.3 Landlord warrants that the site plan attached hereto as
Exhibit "B" (the "Site Plan") depicts the land described in Exhibit
"A" Part I and the improvements thereon. No change, alteration, or
addition shall be made to the Site Plan, including but not limited to
the configuration of the Common Areas, methods of ingress and egress,
direction of traffic, lighting, curbing and building heights and
stories, without the express written consent of the Tenant.
3.4 No construction initiated by Landlord shall be permitted in
the Shopping Center, except for emergency repairs diligently pursued,
during the period from October 1st to December 31st of any year,
without the prior written consent of the Tenant, which consent may
include conditions designed to eliminate interference with the
operation of the Shopping Center or the effect of such construction
upon the Tenant's business.
3.5 Upon the Commencement Date, that certain Lease dated
September 8, 1978, between Landlord and Tenant, as amended and
extended from time to time, will be cancelled, terminated, discharged
and superseded by this Lease.
ARTICLE 4 -- INTENTIONALLY OMITTED
ARTICLE 5 -- LEASE TERM
5.1 The Term of this Lease shall commence on the Commencement
Date and, unless earlier terminated, shall expire as specified in
Section 1.5(a), subject to the Tenant options to extend the term as
provided in the following Article 6.
ARTICLE 6 -- OPTION PERIODS
6.1 The Tenant may extend the original term of this Lease for
the number of separate, consecutive additional periods of five (5)
years each, as designated in Section 1.6 hereof, on the terms and
conditions set forth herein, except that the number of option periods
remaining to be exercised under Section 1.6 shall, in each case, be
reduced by one, by notifying the Landlord, in writing, not less than
ninety (90) days prior to the expiration of the original term, or each
extended term, as the case may be. Should Tenant neglect to exercise
any option by the dates specified above, Tenant's right to exercise
shall not expire until thirty (30) days after notice from Landlord of
Tenant's failure to exercise the option.
ARTICLE 7 -- MINIMUM RENT
7.1 During the Term of this Lease, the Minimum Rent shall be as
specified in Section 1.7. Each monthly installment of rental shall be
payable in advance on or before the tenth (10th) day of each calendar
month during the Term. All rent and other payments to be made by
Tenant to Landlord shall be sent to the place to which notices are
required to be sent, unless otherwise directed by the Landlord in
writing.
ARTICLE 8 -- PERCENTAGE RENT
8.1 (a) Percentage Rent for each Lease Year during the Term (as
the same may beextended pursuant to Article 6, above) which contains
twelve (12) full calendar months shall be three percent (3%) of the
amount by which (a) Tenant's Gross Sales made during such Lease Year,
less any and all amounts paid by Tenant to Landlord or any third party
under the provisions of Articles 10, 11 and 12 hereof, exceeds (b)
either (i) $12,000,000.00 during the primary Term of this Lease or
(ii) a dollar amount or amounts to be determined by the parties for
each option period at the time of Tenant's exercise of each of the
Options pursuant to Article 6 hereof..
(b) The Percentage Rent for any Lease Year having less than
twelve (12) full months shall be based upon Gross Sales for the twelve
(12) months immediately succeeding the Commencement Date (as to the
first Lease Year) and for the twelve (12) month period immediately
preceding the expiration or earlier termination of the Lease (as to
the final Lease Year). The Percentage Rent due for such period shall
be established by multiplying the Percentage Rent which would have
been due for such twelve (12) month period by a fraction, the
numerator of which is the number of days in such Lease Year and the
denominator or which is 365.
8.2 Within seventy-five (75) days after the close of each Lease
Year, Tenant shall submit to Landlord a statement indicating the
amount of its Gross Sales for the previous Lease Year and the amount
expended for the above mentioned expenses which are to be deducted and
which relate to the Lease Year in question. Percentage Rent due, if
any, shall accompany such statement.
8.3 (a) Tenant shall maintain adequate records for a period of
one year after the close of each Lease Year for the purpose of
allowing Landlord to verify the reported Gross Sales for such year.
At any time within said one year, Landlord or its agents may audit
such records during normal business hours at Tenant's records center
after not less than fifteen (15) days' prior written notice to Tenant.
Audit shall be conducted in manner least apt to interfere with
Tenant's business operations and audit or inspection of records other
than pertaining to Premises is prohibited. Landlord shall not conduct
such an audit of Tenant's records more than once in any given Lease
Year. Failure of Landlord to conduct audit within one (1) year
following provision to Landlord of annual Gross Sales statement shall
constitute waiver by Landlord of right to dispute Tenant's Gross Sales
as specified within such annual Gross Sales statement.
(b) In the event an inaccuracy is disclosed after any audit
of Tenant's Gross Sales, an adjustment shall thereupon be made.
(c) Any information obtained by Landlord as a result of any
audit shall be held in strict confidence by Landlord excepting such
may be disclosed by Landlord to proposed lender or purchaser with
respect to a prospective sale, mortgage, lease or sale-leaseback of
the Shopping Center or when Landlord is required to comply with lawful
orders of a court or governmental agency.
8.4 The Minimum Rent provided for in this Lease is acknowledged
by the parties to be sufficient consideration for the leasehold
granted hereby and the Percentage Rent specified herein is in addition
to such adequate consideration.
ARTICLE 9 -- USE
9.1 The Store may be used for any lawful retail use including
but not limited to the following specific uses: the retail sale of
sporting goods, sports apparel and active wear (including without
limitation athletic footwear and athletic uniforms of all kinds) and,
such other merchandise as may be sold from time to time in Tenant's
similarly merchandised stores. Tenant agrees to comply with all
applicable laws and ordinances in its operations at the Premises; not
to create hazardous or noxious conditions that would constitute a
nuisance or would increase the premiums payable for casualty insurance
coverage of the Shopping Center.
9.2 Landlord warrants to Tenant that Tenant, while operating a
store for the above use(s), will not be in violation of (a) any
exclusives or other agreements which Landlord may have with other
occupants, lessees, lenders, governmental authorities or any others,
or (b) restrictions imposed by any governmental authority or body.
Landlord shall hold Tenant harmless from any claims to the contrary
including loss suffered by reason thereof.
9.3 Landlord agrees that Landlord shall not suffer any Leasable
Floor Area within the Shopping Center (other than the Store) to be
used for the sale of sporting goods, sports apparel and/or athletic
footwear.
ARTICLE 10 -- REAL ESTATE TAXES
10.1 (a) Tenant shall pay, on or before the due date, all taxes
and assessments levied against the Shopping Center.
(b) Should the Tenant be in occupancy during only a portion
of the first or final tax year, Landlord and Tenant shall pro-rate
taxes for such tax year based on the portion of such tax year included
in the Term of this Lease. This Article includes the Tenant's total
responsibility for taxes for the Shopping Center.
10.2 There shall be excluded from the tax xxxx which Tenant shall
be obligated to pay (a) income, excess profits, estate, single
business, inheritance, succession, transfer, franchise, capital or
other tax or assessment upon Landlord or the rentals payable under
this Lease; (b) any charge, such as a water meter charge and the
sewer rent based thereon, which is measured by the consumption of the
actual user of the item or service for which such charge is made; and
(c) any increase in taxes caused by a "change of ownership," such as
defined in Section 60, California Revenue and Taxation Code. Any and
all such charges and amounts shall be paid by Landlord when and as
they become due.
10.3 Any rebates, refunds, or abatements of real estate taxes
received by the Landlord subsequent to payment of taxes by the Tenant
shall be refunded to Tenant within ten (10) days of receipt thereof by
Landlord. If any such rebate, refund or abatement is realized by the
Landlord prior to payment of the taxes by the Tenant, Landlord shall
promptly so notify Tenant.
10.4 Tenant shall have such rights to contest the validity or
amount of real estate taxes as are permitted by law, either in its own
name or in the name of the Landlord, in either case with the
Landlord's full cooperation. Any resultant refund, rebate or
reduction shall be used first to repay the expenses of obtaining such
relief. Landlord shall provide Tenant with government notices of
assessment (or reassessment) in time sufficient to reasonably permit
Tenant, at Tenant's election, to make contest; and if Landlord fails
to do so, then there shall be excluded from the tax xxxx to which
Tenant contributes, any increased taxes resulting from such assessment
(or reassessment). The term "contest" as used in this Section 10.4
means contest, appeal, abatement or other proceeding prescribed by
applicable law to obtain tax reduction or tax refund, howsoever
denominated.
ARTICLE 11 -- FIRE INSURANCE
11.1 Landlord shall maintain at all times during the Term an All
Risk Policy insuring against damage to any portion of the Shopping
Center including the store front, and appurtenances thereto. Such
insurance shall be in the full amount of replacement value, without
deduction for physical depreciation and shall provide that the
proceeds of any loss shall be payable in the manner provided for in
this Lease. Landlord shall, upon request of Tenant, provide Tenant
with a certification of such insurance coverage from an insurer
licensed to do business within the state in which the Shopping Center
is located, and which insurer is rated A and XII or better in Best's
Insurance Guide, which certificate shall indicate, among other things,
that the Tenant is an additional insured along with the Landlord and
that the Shopping Center and all the improvements and Landlord's
fixtures appurtenant thereto, have been insured to their full
replacement value, without deduction for physical depreciation.
11.2 Upon submission by Landlord to Tenant of paid receipts for
the premiums for the insurance described in Section 11.1, above,
Tenant shall reimburse the Landlord for such premium costs.
11.3 Intentionally omitted.
11.4 In lieu of Landlord's assuming the obligation specified in
Section 11.1 above, subject to Tenant's reimbursement all as described
in Sections 11.1 and 11.2 hereof, Tenant may, at its option, elect to
carry such insurance on the Shopping Center including such other
endorsements as the Tenant in its judgment deems prudent under the
circumstances, all at Tenant's sole costs and expense in which event
Tenant shall not be responsible for reimbursement under Section 11.2.
11.5 (a) As used in this Section, the term "Lender" means the
holder of indebtedness secured by a first lien upon the Exhibit "A"
Part I real property, whether the interest creating such lien be
denominated as mortgage, deed of trust, security agreement, vendor's
lien or otherwise, but only if Lender (a) is a financial institution,
such as a bank, savings and loan, insurance company, or other entity
regularly engaged in making loans secured by real property, and (b)
has fifty million dollars ($50,000,000) of such loans outstanding.
(b) Insurance proceeds for damage or destruction to the
Shopping Center ("Proceeds"), if under one dollar ($1.00) per square
foot of Leasable Floor Area in the Shopping Center shall be paid
directly to Tenant. If in excess of such amount, the Proceeds shall
be deposited with Lender provided Lender agrees to apply the Proceeds
in the manner described herein. If Lender does not so agree, or there
is no Lender, then the Proceeds shall be deposited with a bank, trust
company, or title insurance company (collectively with Lender referred
to as "Stakeholder") designated by Tenant and approved by Landlord,
for use as provided in Article 20. Stakeholder shall disburse the
same to the party performing restoration upon certification by the
architect in charge of restoration that the amounts requested have
been paid in connection with such restoration or shall be due to
contractor, subcontractors, materialmen, architects or other persons
who have rendered services or have furnished materials for such
restoration and upon the completion of such restoration the remaining
balance of any of such proceeds shall be paid to Tenant upon demand.
ARTICLE 12 -- LIABILITY INSURANCE
12.1 Tenant shall at all times during the Term keep in force a
policy or policies of public liability insurance, or an endorsement on
a blanket liability insurance policy or policies, against claims for
personal injuries, death or property damage, occurring on, in or about
the Shopping Center, with a combined single limit of not less than ONE
MILLION DOLLARS ($1,000,000). Said policy or policies shall contain
Contractual Liability Insurance recognizing the liability assumed in
Sections 23.1 and 23.2 hereof, shall name Landlord as an additional
insured, shall include a cross-liability endorsement providing that
Landlord and Tenant, although named/additional insureds, may recover
on account of the negligence of the other, and shall be with an
insurer with a policy holder's rating of at least A and a financial
rating of not less than VII in Best's Insurance Reports.
12.2 The policy of insurance herein maintained by the Tenant
shall provide that: (a) the same is not contributory with the
coverage which Landlord may carry and is primary insurance coverage
and not excess insurance coverage or overage insurance coverage; and
(b) the company writing said policy will give at least twenty (20)
days' notice in writing of any cancellation, lapse, or failure to
renew, to the party designated on the insurance certificate as the
holder thereof.
12.3 Tenant agrees to deliver to Landlord a certificate of
insurance evidencing the existence in force of the policy of insurance
described in this Article. The certificate shall provide that such
insurance shall not be canceled or materially amended unless ten (10)
days' prior written notice of such cancellation or amendment is given
to the Landlord.
ARTICLE 13 -- WAIVER OF SUBROGATION
13.1 Tenant and Landlord hereby waive and release any and all
right of recovery against the other, including employees and agents,
arising during the Term for any and all loss or damage to any property
located within or constituting a part of the Shopping Center which
loss or damage arises from the perils covered by an All Risk Policy or
which right of recovery arises from loss of earnings or rents
resulting from damage caused by such a peril. This mutual waiver is
in addition to any other waiver or release contained in this Lease.
Landlord and Tenant shall give written notice to its insurers of the
provisions of this waiver and release and have its insurance policies
endorsed, if required, to prevent invalidation of insurance coverage
by reason of this waiver and release.
ARTICLE 14 -- MAINTENANCE & REPAIR BY TENANT
14.1 Subject to Article 20, Tenant shall maintain the entire
Shopping Center, including the Store and all Common Areas, in good
repair and good condition, reasonable wear and tear excepted, and will
so deliver the Shopping Center to the Landlord at the termination of
this Lease.
ARTICLE 15 -- INTENTIONALLY OMITTED
ARTICLE 16 -- REPAIRS REQUIRED BY GOVERNMENTAL AUTHORITIES
16.1 Any repairs, alterations or other improvements required by
governmental authority which results from the particular retail use of
the Tenant shall be done by the Tenant at its sole cost and expense.
Any such work, however, which is required of the Shopping Center in
general, or of all similar buildings in the area of the Shopping
Center, shall be done at the sole cost and expense of the Landlord.
ARTICLE 17 -- ALTERATIONS
17.1 The Tenant may make non-structural alterations and
improvements to the Shopping Center in a good and workmanlike manner,
in conformity with all law, ordinances and regulations of public
a u t horities having jurisdiction. Tenant shall not make any
alterations to the foundation, roof, or any structural portions of the
Store without first obtaining the written approval of the Landlord.
Such approval may not be unreasonably withheld and shall be deemed
granted if Tenant is not notified in writing of a reasonable basis for
withholding such approval within ten (10) days of notifying Landlord
thereof. It is further agreed that upon termination of this Lease,
Tenant may, provided no structural damage to the Store will be caused
thereby, remove its furniture, fixtures and equipment and the Landlord
will accept the Store as altered without any obligation upon the
Tenant to restore the Store to its former condition.
17.2 Tenant may place on and about the Premises, and on the
s h opping center roof, equipage used in its ordinary business
operations, such as without limitation HVAC, dumpster, and devices
used for the reception and transmission of signals through the
atmosphere, such as satellite dish.
17.3 Landlord shall cooperate with Tenant efforts to obtain such
government permits, licenses, variances, authorizations and approvals
as may be required so as conduct retail business within the Store, and
from time to time perform the alterations contemplated by this
Article, as well as to construct the signage authorized by the Article
32 of this Lease. To the extent necessary or convenient for such
p u rpose, Tenant may prosecute such efforts, including signing
applications, in the name of Landlord.
ARTICLE 18 -- COMMON AREAS
18.1 Tenant, as well as its agents, employees and customers
(collectively, "Customers"), shall have and is granted complete,
nonexclusive and undisturbed access to, and use of all Common Areas.
Landlord shall use best efforts to prevent Common Area use by other
than Tenant and its Customers. In no event shall Customer use of
Common Areas be conditioned upon payment of parking or other charge by
Tenant or Tenant's customers. Tenant shall, at its sole cost and
expense, maintain all Common Areas in good condition, repair and
cleanliness, including ice and snow removal, and free of any
impediments to easy and safe movement within the Common Areas.
ARTICLE 19 -- UTILITIES
19.1 Landlord agrees to provide that the Tenant's Store shall at
all times have available to it necessary utilities services including
electric, water, gas, telephone and other necessary utility lines, as
well as refuse collection service and sewerage lines capable of
adequately providing for Tenant's needs. Tenant agrees to pay all use
charges for all utilities serving the Store during the Term.
ARTICLE 20 -- CASUALTY
20.1 Except as hereinafter provided, damage to or destruction of
any portion or all the Shopping Center by fire, the elements or any
other cause whatsoever shall not terminate this Lease or entitle
Tenant to surrender the leased premises or to any abatement of or
reduction in Minimum Rent payable by Tenant hereunder or otherwise
affect the respective obligations of the parties. In such event, the
Landlord shall proceed with due diligence to collect the proceeds of
any available insurance, and Tenant, at its own expense, shall
promptly restore the buildings to substantially as good condition and
of not less value and utility than immediately prior to the casualty.
All plans for restoration shall first be submitted to the Landlord for
approval, which approval shall not be unreasonably withheld, and the
failure by the Landlord to notify the Tenant of its objections to such
plans within fifteen (15) days of receipt thereof shall be deemed
approval by Landlord.
20.2 Tenant shall be reimbursed by the Landlord for its cost of
restoring the Shopping Center from the proceeds of insurance received
by Landlord, it being understood that Landlord shall not be required
to repair or rebuild any such building or improvements, or to pay any
of the expenses or costs thereof in excess of the insurance proceeds
paid to it. Such reimbursement shall be made as work by Tenant
progresses, but only upon the furnishing to Landlord of assurance
satisfactory to the Landlord against mechanics' liens or similar
claims and provided that the insurance proceeds in the hands of the
Landlord shall at all times be sufficient to pay for the completion of
such restoration. Payments by the Landlord to Tenant shall be made
upon architect's certificates as to payments and expenditures or
amounts then payable for restoration and waivers of lien. Any
insurance proceeds not required for the restoration of the leased
premises shall be retained by Landlord.
20.3 Anything herein to the contrary notwithstanding, in the
event of substantial damage to or destruction of the Store by fire or
other casualty within the last two (2) years of the Term hereof, the
Tenant may terminate this Lease and all its obligations hereunder in
which event, all insurance monies paid under any insurance policies
with respect to such loss of Landlord's property shall be payable to
and remain the property of Landlord, and Minimum Rent shall xxxxx as
of the date of such loss or destruction. The election to terminate
hereunder shall be made by notice in writing given to Landlord within
twenty (20) days of the date of such loss or destruction. For the
purpose of this Article, the phrase "substantial damage to or
destruction of the Store" shall mean if more than 50% of the principal
building above the foundations is destroyed and cannot be used for the
conduct of the principal business conducted by Tenant therein.
20.4 The parties waive such rights of Lease termination as are
granted to them under the laws of the state wherein the Store is
located, it being their agreement that the rights of termination in
the event of casualty, as set forth herein, shall be exclusive.
ARTICLE 21 -- CONDEMNATION
21.1 In the event the Shopping Center or any part hereof shall be
condemned and taken for a public or quasi-public use, any award made
to compensate either Landlord or Tenant for their respective damage or
loss shall be paid to Landlord. In the event only a part of the
Shopping Center is condemned and taken, Tenant, in accordance with
plans and specifications approved by the Landlord, shall promptly
restore the remaining portion of the Shopping Center so that it will
constitute a complete architectural unit, and upon completion of such
work and upon payment of the award or compensation, the Landlord shall
reimburse Tenant for costs so expended, and there shall be such
abatement in Minimum Rent and such other adjustments as the parties
m a y agree upon as being just and equitable under all the
circumstances. If the parties are unable to agree upon all such
n e cessary adjustments, resort shall be had to arbitration as
hereinafter provided. Upon any total taking, Tenant's obligation to
pay Minimum Rent or to discharge any other obligation hereunder, other
than the payment of money then due and damages arising out of any
breach on the part of Tenant, shall cease.
21.2 In the event of a condemnation of the Shopping Center as
above provided, if the parties are unable to agree upon the adjustment
to be made within thirty (30) days after the taking, the question
shall be determined by three disinterested arbitrators, one of whom
shall be chosen by each of the parties and the third by the two so
chosen. The decision of any two of the arbitrators shall be final and
conclusive upon the parties. The decision shall be in writing, signed
in duplicate by any two arbitrators, and one copy shall be delivered
to each of the parties. The party desiring arbitration shall given
written notice to the other party, naming therein the arbitrator
selected by it. In the event the other party shall fail, within a
fifteen (15) day period after the giving of such notice, to notify the
other in writing of the arbitrator selected by it, or in the event
that the two arbitrators chosen shall fail, within fifteen (15) days
after their selection, to agree upon the third, then any judge of any
court of general equity jurisdiction in the county in which the
Shopping Center situated may, on request of the party not in default,
or upon the request of either party if neither is in default, appoint
an arbitrator or arbitrators to fill any places remaining vacant
within fifteen (15) days after such request.
ARTICLE 22 -- MECHANIC LIENS
22.1 Neither Tenant nor Landlord shall permit any mechanic's,
materialman's or other lien against the Store or the Shopping Center
in connection with any labor, materials or services furnished or
claimed to have been furnished. If any such lien shall be filed
against the Store or Shopping Center, the party charged with causing
the lien will cause the same to be discharged, provided, however, that
either party may contest any such lien, so long as the enforcement
thereof is stayed.
ARTICLE 23 -- INDEMNIFICATION
23.1 With respect to its use and occupancy of the Store, Tenant
agrees to save Landlord harmless from and indemnify and defend
Landlord against any and all injury, loss, damage, liability (or any
c l a ims in respect of the aforementioned), costs or expenses
(including, without limitation, attorney's fees, reasonable
investigative and discovery costs), of whatever nature, to any person
or property caused or claimed to be caused by or resulting from any
act, omission or negligence of Tenant or agent of Tenant, provided
that the Landlord shall, upon becoming aware of such claim or damage,
promptly notify Tenant. Tenant's obligation hereunder shall be
limited to the amount in excess of any insurance proceeds in event of
casualty damage.
23.2 With respect to its maintenance of the Store, its operation
and maintenance of the Common Areas, the manner of design and
construction of the Shopping Center, and the manner of construction
and design of the Common Areas, Landlord agrees at Tenant's option, to
save Tenant harmless from and indemnify and defend Tenant against any
and all injury, loss, damage, liability (or any claims in respect of
the aforementioned), costs or expenses (including, without limitation,
attorney's fees, reasonable investigation and discovery costs), of
whatever nature, to any person or property caused or claimed to be
caused by or resulting from any act, omission or negligence of the
Landlord or its employees or agents, provided that Tenant, upon
becoming aware of such claim or damage, shall promptly notify Landlord
as soon as reasonably possible.
23.3 The provisions of this Article as to property damage shall
be subject to the provisions of Article 13 regarding Waiver of
Subrogation.
ARTICLE 24 -- QUIET ENJOYMENT & NONDISTURBANCE
24.1 Landlord agrees to promptly place Tenant in possession of
the Store in accordance with the time provisions of this Lease as a
condition to Tenant's obligation to pay rent hereunder. Landlord
further represents and warrants that it has full authority to execute
and perform this Lease and to grant the subject leasehold estate to
Tenant. Additionally, it is agreed that Tenant shall peaceably and
quietly have, hold and enjoy the Store with all appurtenances during
the Term and without any manner of hindrance or interference with its
quiet enjoyment, possession and use.
24.2 Landlord may, at reasonable times and upon notice to Tenant,
conduct reasonable inspections of the Store.
24.3 Nondisturbance - Existing Loans. Landlord covenants to
obtain from each lender, each lessor ("Overlessor") and each Litigant
Claimant whose interest in the Shopping Center is paramount to
Landlord's at the time of execution hereof, or at any time prior to
the recordation of the Memorandum of Lease specified herein, an
executed nondisturbance agreement assuring Tenant that notwithstanding
any default by the Landlord to the lender or Overlessor, or any
foreclosure or deed in lieu thereof (or Overlessor's termination
proceedings), or any exercise of right by Litigant Claimant, Tenant's
rights under this Lease shall continue in full force and effect and
its possession of the Store shall remain undisturbed except in
accordance with the provisions of this Lease so long as Tenant is not
in default hereunder so as to permit Lease termination. Such
agreement(s) must be satisfactory in form and content to counsel for
Tenant. As used in this Article the term "lender" means each holder
of indebtedness secured by a lien upon the Exhibit "A" real property,
whether the interest creating such lien be denominated as mortgage,
deed of trust, security agreement, vendor's lien or otherwise. As
used herein the term "Litigant Claimant" means each entity which has
established or at any time prior to recordation of the Memorandum of
Lease specified herein establishes actual or constructive notice that
it claims an interest in the Shopping Center and/or the Store which is
paramount to Landlord's at the time of execution hereof, or at any
time prior to the recordation of the Memorandum of Lease specified
herein whether notice of such interest be established by Lis Pendens,
Notice of Mechanics Lien or otherwise.
24.4 Tenant shall upon Landlord's request, subordinate this Lease
in future to any first lien placed by Landlord upon the Store, or the
Shopping Center or building of which the Store forms a part, with an
insurance company, bank or any other institutional lender, provided
that such lender executes a Nondisturbance Agreement providing that if
Tenant is not then in default under this Lease so as to justify Lease
termination, this Lease shall not terminate as a result of the
foreclosure of such lien, or conveyance in lien thereof, and the
Tenant's rights under this Lease shall continue in full force and
effect and its possession be undisturbed except in accordance with the
provisions of this Lease. Tenant will, upon request of the
lienholder, be a party to such an agreement, and will agree that if
such lienholder succeeds to the interest of the Landlord, Tenant will
recognize said lienholder (or successor in interest of the lienholder)
as its Landlord under the terms of this Lease. Such agreement must be
satisfactory in form and content to counsel for Tenant.
24.5 Within ten (10) days of a written request therefor by either
party hereto, the party receiving such request shall provide to the
requesting party a written statement acknowledging the commencement
date of this Lease, that this Lease is in full force and effect (if
the same be true), that this Lease has not been modified (or, if it
has, stating such modifications) and providing such other information
as requesting party reasonably requests.
ARTICLE 25 -- TENANT DEFAULT
25.1 The occurrence of either of the following shall constitute a
default by Tenant pursuant to this Lease: (i) a failure by Tenant to
pay rent within ten (10) business days of Tenant's receipt of written
notice from Landlord specifying such failure; or (ii) a failure by
Tenant to perform obligations pursuant to this Lease other than as
specified in (i) above, within thirty (30) days of Tenant's receipt of
written notice from Landlord specifying such failure or, if it
reasonably would require more than thirty (30) days to cure such
failure, within a time reasonably necessary to cure such failure after
Tenant's receipt of such written notice. Upon Tenant's default,
Landlord may, in addition to any other remedy available at law, upon
written notice, terminate this Lease and retake possession of the
Store and remove all persons and property therefrom. Landlord shall
be entitled to charge and collect from Tenant interest on any payments
of rent and other charges overdue for a period in excess of ten (10)
days at the rate of 10% per annum.
25.2 It is expressly understood and agreed in the event Tenant
makes an assignment for the benefit of creditors, or if any
proceedings are commenced under the provisions of the Bankruptcy Act
whereby Tenant seeks to be, or would be, discharged of its debts, or
the payment of its debts are sought to be delayed, this Lease shall
not become an asset in such proceedings, however, the commencement of
such proceedings shall not affect this Lease or permit its termination
so long as all covenants on the part of the Tenant to be performed
shall be performed by Tenant or a party claiming under Tenant.
25.3 Landlord waives such liens, if any, to which it may have a
right with respect to the merchandise, furniture, trade fixtures and
other personal property of Tenant located on or about the Store and
shall from time to time execute such documents as Tenant may
reasonably request to acknowledge such waiver.
ARTICLE 26 -- LANDLORD DEFAULT
26.1 If Landlord should be in default in the performance of any
of its obligations under this Lease, which default continues for a
period of more than thirty (30) days after receipt of written notice
from Tenant specifying such default, or if such default is of a nature
to require more than thirty (30) days for remedy and continues beyond
the time reasonably necessary to cure (provided Landlord shall
undertake action to cure such default within such 30 day period and
diligently pursue such efforts to completion within a period not to
exceed a total of ninety (90) days), then Tenant shall have the right
to exercise any of the following rights (which shall be in addition to
any other rights or remedies available by law):
(a) To terminate this Lease and surrender possession of the
Store, whereupon Tenant's obligation for the payment of rent and all
other charges hereunder shall cease upon the date of surrender.
(b) To perform any act or contract for the performance
t h ereof and incur any expense reasonably related thereto and
thereafter deduct the same from the next installment or installments
of rent accruing hereunder.
ARTICLE 27 -- ATTORNEYS FEES
27.1 If either party becomes a party to any litigation concerning
this Lease, the Store or the Shopping Center by reason of any act or
omission of the other party or its authorized representatives, and not
by any act or omission of the party that becomes a party to that
litigation or any act or omission of its authorized representatives,
the party that causes the other party to become involved in the
litigation shall be liable to that party for reasonable attorney's
fees, court costs, investigation expenses, discovery costs and costs
of appeal incurred by it in the litigation.
27.2 If either party commences an action against the other party
arising out of or in connection with this Lease, the prevailing party
shall be entitled to have and recover from the losing party,
reasonable attorney's fees, costs of suit, investigation costs and
discovery costs, including costs of appeal. When this Lease imposes
upon a party an obligation to indemnify the other, the indemnification
obligation shall include the obligation to pay the indemnitees
reasonable attorney's fees, costs and disbursements, whether the
indemnitee be the plaintiff or defendant.
ARTICLE 28 -- ASSIGNMENT
28.1 Tenant may not assign this Lease, or sublet the Shopping
Center, or any portion thereof, without Landlord's prior, written
consent, which Landlord shall not unreasonably withhold. Upon any
assignment or sublease, Tenant shall remain principally obligated
under the terms of this Lease unless Tenant is specifically released
f r o m its obligations hereunder by a written instrument duly
authorized, executed and delivered by Landlord.
ARTICLE 29 -- HOLDING OVER
29.1 If the Tenant shall remain in possession of the Store or any
portion thereof after the expiration of the Term in the absence of an
agreement in writing between the Landlord and Tenant, the party
remaining in possession shall be deemed a Tenant at sufferance, until
acceptance of rent by Landlord, at which time the person in possession
shall be come a Tenant from month-to-month at the same rental and
under the same terms and conditions as existed immediately prior to
the expiration of the Lease.
ARTICLE 30 -- SUCCESSORS IN INTEREST
30.1 The terms, conditions and covenants herein contained shall
inure to the benefit of and be binding upon the heirs, assigns and
other successors in interest to the parties hereto.
ARTICLE 31 -- NOTICES
31.1 Any notice to be given or served in connection with this
Lease shall be in writing and shall be served by certified mail or by
reputable air courier service which provides written evidence of
delivery, addressed as specified in Section 1.2 hereof, or to such
other address as requested by either party in writing. Service shall
be deemed effective seven (7) days after deposit in the U.S. mail in
accordance herewith or on the business day following deposit air
courier service in accordance herewith. Either party by written
notice to the other may designate two additional parties to receive
copies of notices sent to it. Such designees may be changed by
written notice.
ARTICLE 32 -- SIGNS
32.1 Tenant has erected and may maintain upon the exterior of the
Store and upon each pylon serving the Shopping Center a sign or signs
which are deemed appropriate to the conduct of its business. Landlord
is deemed to have consented to Tenant's standard signage plans and
specifications and Tenant's existing signage upon execution of this
Lease. Additionally, Tenant may display in the windows of the Store,
from time to time, signs of a temporary nature advertising business
trtansacted by Tenant in the Store, so long as those window signs are
professionally prepared. Landlord shall not alter the pylon signage
at the Shopping Center without Tenant's prior written consent.
ARTICLE 33 -- MEMORANDUM OF LEASE
33.1 This Lease shall not be recorded. However, a Memorandum
thereof in the form attached hereto as Exhibit "C" shall be executed,
in recordable form, by both parties concurrently herewith and recorded
by Landlord with the official charged with recordation duties for the
county in which the Shopping Center is located, with directions that
it be returned to Tenant. Upon expiration or earlier termination of
this Lease, Tenant shall cooperate with Landlord in executing a
Memorandum, in recordable form, acknowledging Tenant's release of its
leasehold interest in the Shopping Center.
ARTICLE 34 -- TENANT RIGHT OF FIRST OFFER
34.1 Tenant's Right of First Offer. If during the Term of this
Lease, Landlord intends to offer for sale the Store, the legal parcel
upon which the Store is located or the Shopping Center (collectively
referred to herein as the "subject property"), Landlord shall so
notify Tenant of that intention in writing, which notice shall contain
the terms and conditions (collectively "terms") that would be
acceptable to Landlord. If within ten (10) business days after
receipt of such notice, Tenant does not notify Landlord that Tenant
will purchase the subject property under the terms, Landlord, within
the ensuing six (6) month period shall be free to sell the subject
property to any third party named in the Third Party Offer on the
terms; provided, however, that a failure or refusal by Tenant to
purchase the subject property on the terms shall not relieve Landlord
(or any successor in interest to Landlord) of its obligations under
this Article in respect of subsequent instances of Landlord's (or its
successor's) desire to sell the subject property or any portion
thereof; and provided further that if Landlord shall, during the
aforsesaid six (6) month period, materially alter the terms to the
benefit of purchaser, or materially alter the description of the
subject property, Landlord shall so notify Tenant and afford Tenant an
additional five (5) business days within which Tenant may, by notice
to Landlord, elect to purchase the subject property on the terms as so
modified. If Tenant elects to purchase the subject property on the
terms, the terms shall constitute a binding agreement of purchase and
s a le between Landlord and Tenant and govern their subsequent
performance, provided however, time of performance shall be suitably
extended to take into account time elapsed between presentation to
Tenant of the terms and Tenant's acceptance.
ARTICLE 35 -- ACCORD AND SATISFACTION
35.1 No payment by Tenant or receipt by Landlord of a lesser
amount of Minimum Rent or Percentage Rent due hereunder shall be
deemed to be other than on account of the earliest rent due, nor shall
any endorsement or statement on any check or letter accompanying such
check or payment be deemed an accord and satisfaction, and Landlord
may accept such check without prejudice to Landlord's rights to
recover the balance of such rent or payment or pursue any other remedy
available in this Lease, at law or in equity.
ARTICLE 36 -- GENERAL CONDITIONS
36.1 Any sum accruing to the Landlord or Tenant under the
provisions of this Lease which shall not be paid within ten (10) days
following written notice that such sum is due ("Notice Period") shall
bear interest from the expiration of the Notice Period, at the rate of
ten percent (10%) per annum until paid.
36.2 If any term, covenant, condition or restriction of this
Lease is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the provisions hereof shall remain
in full force and effect and shall in no way be affected, impaired, or
invalidated thereby.
36.3 Nothing contained in this Lease shall be deemed or construed
by the parties hereto or by any third person to create the
relationship of principal and agent, or of partnership, or of joint
venture, or of any other association between the parties other than
Landlord and Tenant, or to prevent Landlord or Tenant from entering
into ventures in direct competition with the Shopping Center, or the
Store.
36.4 Time is of the essence of the performance of each provision
of this Lease.
36.5 The waiver of performance of any covenant, term or condition
of this Lease by Landlord or Tenant shall not be construed as a waiver
of any subsequent breach of the same covenant, term or condition. The
various rights, options, elections, powers and remedies of the parties
contained in this Lease shall be construed as cumulative and no one of
them exclusive of any other or of any legal or equitable remedy which
either party might otherwise have in the event of a breach by the
other, and the exercise of one right or remedy by a party shall not in
anyway impair its right to any other right or remedy.
36.6 For purposes of computing dates for expirations, options,
rental adjustments or cancellations (except for those specifically
designated in Article 5 hereof), any partial month at the commencement
of the Term shall be disregarded.
36.7 Wherever in this Lease the Landlord or the Tenant is
required to give its consent or approval to any action on the part of
the other, such consent or approval shall not be unreasonably
withheld.
36.8 Except for corrections to Annual Statements required in
Section 18.4 hereof, all charges due from Tenant to Landlord for which
the Tenant must be billed by the Landlord, must be billed within one
(1) year of the date the charge is incurred by the Landlord or the
Landlord will have waived its right to reimbursement which may have
been established in any paragraph of this Lease.
36.9 Words of gender used in this Lease shall be deemed to
include other genders, and singular and plural words shall be deemed
to include the other, as the context may require.
36.10 Landlord and Tenant shall and do hereby indemnify,
defend, and hold the other harmless from all claims of brokerage
commission or finders fee arising through them. This covenant shall
survive the expiration, or earlier termination of the term of this
Lease.
36.11 Each of the covenants of this Lease shall be deemed
dependent upon each other covenant hereof.
36.12 Paragraph headings in this Lease are for convenience
only, are not a part of the agreement of the parties, and shall not
constitute an aid in interpreting this Lease.
36.13 This Lease shall be construed in accordance with and
governed by the laws of the state wherein the Store is located, except
as otherwise required by mandatory provisions of law.
36.14 In the event Landlord furnishes materials or services,
or contracts with another for materials or services to be furnished,
and Tenant under this lease must reimburse Landlord for all or part of
the cost thereof, Tenant payment obligations shall be no greater than
if the materials or services had been purchased or furnished at a
reasonable and customary price.
36.15 If Landlord is other than a natural person, each
individual executing this Lease on behalf of the named Landlord
represents and warrants that he is duly authorized to execute this
Lease on behalf of the named Landlord in accordance with a duly
adopted resolution of Landlord's board of directors and Landlord's
bylaws (if Landlord is a corporation) and in accordance with the
agreement of partnership (if Landlord is a partnership) and by
delivery hereof warrant that execution by no other signatory is
required and will hold Tenant harmless from any claim to the contrary
(and loss suffered by reason thereon.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this
Lease as of this first day of September, 1994.
LANDLORD
American National Bank and Trust Company of
Chicago, not personally but solely as Trustee
as aforesaid.
By: /S/ XXXXXX XXXXXXXX
TENANT
Sportmart, Inc.
By: /S/ XXXXXXXX XXXX
