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EXHIBIT 10.3
EASTPORT PLAZA LEASE
THIS LEASE, made and entered into this 21 day of April, 1978 by and between
EASTPORT PLAZA SHOPPING CENTER, a partnership, herein called "Landlord" and G.I.
JOE'S, INC., an Oregon corporation herein called "Tenant"
WITNESSETH:
ARTICLE I
PREMISES AND TERM
See pages 1(a), 1(b), 1(c), 1(d), 1(e), 1(f), 1(g)
ARTICLE III
RENT
SECTION 1. See pages 1(g), 1(h) and 1(i).
SECTION 2. The term "gross sales", as used herein, shall mean the total
amount in dollars of the actual sales price, whether for cash or on credit or
partly for cash and partly on credit, of all sales of merchandise and services
and all other receipts of business conducted in or from the premises, including
all mail or telephone orders received or filled at the premises, and including
all deposits not refunded to purchasers, orders taken, although said orders may
be filled elsewhere, and sales by any sublessee, concessionaire or licensee or
otherwise in said premises. No deduction shall be allowed for uncollected or
uncollectible credit accounts. Gross sales shall not, however, include any sums
collected and paid out for any sales or excise tax imposed by any duly
constituted governmental authority, nor shall it include the exchange of
merchandise between the store of Tenant, if any, where such exchange of goods or
merchandise is made solely for the convenient operation of the business of
Tenant and not for the purpose of consummating a sale which has theretofore been
made at, originated in or from the premises, or for the purpose of depriving
Landlord of the benefit of a sale which otherwise would be made at, in or from
the premises, nor the amount of returns to shippers or manufacturers, nor the
amount of any cash or credit refunds made upon any sale where the merchandise
sold, or some part thereof, is thereafter returned by the purchaser and accepted
by Tenant, nor sales of fixtures, which are not a part of Tenant's stock in
trade. Each sale upon installment or credit shall be treated as a sale for the
full price in the month during which such sale shall be made, irrespective of
the time when Tenant shall receive payment from its customers.
SECTION 3. Tenant shall keep in the premises or some other location in
Portland, Oregon, notice in writing of which shall have theretofore been
furnished to Landlord, a permanent accurate set of books and records of all
sales of merchandise and all revenue
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derived from business conducted in the premises during each day of the term
hereof, and all supporting records, including excise tax reports and state sales
tax, business and occupation tax and gross income tax reports; and such
pertinent records will be kept, retained and preserved for at least three (3)
years after the expiration of each lease year. Tenant shall keep, retain and
preserve for at least two (2) years after the expiration of each lease year all
original sales records and sales slips or sales checks and any other pertinent
original sales records. All such records, including sales tax reports, state
gross income tax reports, business and occupation tax reports and excise tax
reports, shall be open to inspection and audit of Landlord and its agents at all
reasonable times during ordinary business hours.
SECTION 4. On or before the 15th day of the calendar month following the
month in which the term of this lease commences, and on or before the 15th day
of each calendar month thereafter, to and including the calendar month following
the termination of the term of this lease, Tenant shall prepare and deliver to
Landlord, at the place where rent is payable, a monthly statement of gross sales
during the calendar month preceding the due date of said respective statement,
certified by Tenant, if Tenant is an individual or partnership, or by an
authorized officer of Tenant, if Tenant is a corporation.
SECTION 5. Tenant agrees, within sixty (60) days after the end of each
lease year, to cause a statement of the gross sales and business transacted in,
at, on or from the premises for such year to be prepared and certified to by the
Tenant, and a copy of such statement so certified shall be delivered to Landlord
within such sixty (60) day period. If it is determined by any audit or otherwise
that any such statement previously delivered by Tenant to Landlord was
inaccurate, then there shall be an adjustment, and one party shall pay to the
other, upon demand, such sums as may be necessary so that the correct amount of
percentage and fixed rent will have been paid. Each party agrees to pay to the
other, on demand, such amount as may be necessary to effectuate any such
adjustments.
SECTION 6. In the event Landlord is not satisfied with any such statement
submitted by Tenant, Landlord shall have the right to make a special audit, by
auditors selected by Landlord, of the books and records of Tenant, its
subtenants, concessionaires and licensees, hereinbefore required to be made and
preserved. Landlord's right to examine Tenant's books and records and those of
its subtenants, concessionaires and licensees, as hereinbefore set forth, or to
make an audit thereof in respect to any annual statement for such lease year
period, shall be available to Landlord only for a period of two (2) years after
the applicable annual statements for such periods shall have been furnished to
Landlord. If such audit shall show a deficiency in percentage rent for the
period covered, the amount thereof shall be paid promptly by Tenant; if such
audit shall show percentage rent to have been overpaid, the excess shall be
applied on any amounts then due to Landlord by Tenant, and the balance, if any,
refunded promptly to Tenant. The provisions of Section 2 and 3 of this Article
III shall apply in all respects to partial lease years. If any such statement is
found to be incorrect to an extent of more than three percent (3 %) over the
figures submitted by Tenant, Tenant shall pay for such special audit, and if
such special audit verifies Tenant's statements to be correct or to vary not
more than three percent (3%) over the figures submitted by Tenant, the expense
of such audit shall be borne by Landlord.
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ARTICLE IV
TAXES
SECTION 1. Tenant shall pay, before delinquency, all property taxes and
assessments on the furniture, fixtures, equipment and other property of Tenant
at any time situated on or installed in the premises, and in addition, on
improvements in the premises made or installed by Tenant. If at any time during
the term of this lease, any of the foregoing are assessed as a part of the real
property of which the premises are a part, Tenant shall pay to Landlord, upon
demand, the amount of such additional taxes as may be levied against said real
property by reason thereof. For the purpose of determining said amount, figures
supplied by the County Assessor as to the amount so assessed shall be
conclusive.
SECTION 2. Section 2 is set forth in the attached Exhibit E.
SECTION 3. If at any time during the term of this lease, under the laws of
the State of Oregon or of any political subdivision thereof in which the
premises are situated, a tax or excise on rents, or other tax however described,
is levied or assessed by the state of Oregon, or by any such political
subdivision against Landlord on account of the guaranteed minimum monthly rental
or the percentage rental, or any other rentals accruing under this lease, as a
substitute in whole or in part for real property taxes on the premises or any
part thereof, or in addition thereto, such tax or excise on rents shall, to the
extent of the amount thereof which is lawfully assessed or imposed upon Landlord
and which was so assessed or imposed as a direct result of Landlord's ownership
of the premises or of this lease or of the rentals accruing under this lease, be
deemed to be a real property tax or assessment levied or assessed against the
premises for the purposes of Section 2 of Article IV hereof. However, nothing
contained in this lease shall require Tenant to pay any income, excess profits,
franchise or similar tax payable by Landlord on account of the rentals accruing
under this lease.
ARTICLE V
PARKING AND COMMON AREA
SECTION 1. The term "Shopping Center" means the entire area within the
outer property limits as shown on Exhibit A, and all other pieces or parcels of
land at any time and from time to time used by Landlord in the operation of the
Shopping Center. Any portion of the Shopping Center that may be taken by eminent
domain, private purchase in lieu thereof or be dedicated to public use shall,
upon such taking, purchase or dedication be excluded, and any property adjacent
thereto which may be purchased or leased by Landlord and in fact added to the
Shopping Center by Landlord shall thereupon be included. The term "accommodation
areas" means all common areas and facilities outside the premises, which are
provided and designated by Landlord for general use and convenience (among
others) of Tenant and other lessees of all or any part of the Shopping Center
and/or their respective employees, customers, and invitees, including, but not
limited to, pedestrian sidewalks, landscaped areas, exterior stairway, first-aid
stations, comfort stations, corridors, arcades,
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sidewalks, elevators, interior stairs and balconies and similar areas and
improvements, the truck way or delivery tunnel, loading docks and delivery
yards. The site plan of the Shopping Center is tentative and the Landlord
reserves the right from time to time to make changes in the shape, size and
location of improvements, buildings, truck ways, accommodation areas, loading
docks, parking layout, and other improvements, and to eliminate from, or to add
to the Shopping Center, or to the parking areas or other portions of the
Shopping Center, any improvements or buildings.
SECTION 2. Landlord agrees to hard surface, xxxx, properly drain,
adequately light and landscape a parking area or areas, together with the
necessary access roads, within the limits of the Shopping Center, and Landlord
hereby grants to Tenant and Tenant's employees, agents, customers and invitees,
the right, during the term hereof, to use, in common with others entitled to the
use thereof, such parking area or areas, with access roads. Landlord further
agrees to operate, manage and maintain, during the term of this lease, all
parking areas, roads and accommodation areas within the Shopping Center. The
manner in which such areas and facilities shall be maintained, and the
expenditures therefor, shall be at the sole discretion of Landlord, and the use
of such areas and facilities shall be subject to such reasonable regulation as
Landlord shall make from time to time, including without limitation, the right
to close, if necessary, all or any portion of said areas, roads or facilities to
such extent as may in the opinion of Landlord's counsel be legally sufficient to
prevent a dedication thereof or the accrual of any rights of any person or of
the public therein, or to close temporarily all or any portion of the parking
areas or facilities.
SECTION 3.
(a) During the term of this lease Tenant agrees to pay upon demand, but not
more often than once each calendar month, in addition to fixed and percentage
rent, Tenant's proportionate share of all the costs and expenses of maintaining
and operating the parking areas, accommodation areas, delivery system and all
other common areas.
(b) Tenant's proportionate share of the cost and expenses described in this
Section 3 shall be determined by the ratio which the "Floor Area of the
Premises" bears to "Total Floor Area in the Shopping Center", as defined in (d)
and (e) of this Section 3.
(c) Such operating and maintenance costs shall include all costs and
expenses of operating and maintaining such areas and facilities in such manner
as Landlord may from time to time deem appropriate and for the best interests of
the tenants of the Shopping Center, including without limitation, labor,
compensation insurance, payroll taxes, materials, supplies, and all other costs
of operating, repairing, lighting, heating, air conditioning, cleaning,
painting, removing of rubbish or debris, policing, inspecting, and all casualty
and such other insurance in such amounts and covering hazards deemed appropriate
by Landlord, and real property taxes and assessments assessed against the
parking and common areas and all costs other than those which are properly
charged to capital account under generally accepted accounting principles, of
replacement of paving, curbs, walkways, remarking, direction or other signs,
landscaping, drainage and lighting facilities. There shall be excluded the cost
of
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construction of improvements to such common areas which is properly chargeable
to capital account and depreciation of the original cost of construction of such
common area. Tenant's share of such costs and expenses of maintaining and
operating such common areas may be estimated by Landlord, subject to adjustment
in future billing to Tenant. Such operating and maintenance costs shall be
computed under generally accepted accounting principles, and on or before March
1 of each year, Landlord shall determine (and furnish to Tenant a statement
showing in reasonable detail) the costs and expenses of maintaining such areas
referred to in this subparagraph during the preceding year ending December 31.
To the extent Tenant's proportionate share of such costs and expenses is greater
or less than the sum actually billed to and paid by Tenant therefor, as the case
may be, during said year, the difference shall be billed or refunded to Tenant,
as the case may be.
(d) "Floor Area of the Premises" is defined as the total square foot area
leased to Tenant. There shall be excluded from this area, however, space on
exterior or interior balconies or mezzanines, roofs or penthouses, or other
structures on roofs, unless used as selling space. No deduction or exclusion
shall be made from floor area otherwise computed by reason of columns, stairs,
elevators, escalators, ducts or other interior construction or equipment within
the premises. The "Floor Area of the Premises" demised in this lease is 60,000
square feet. Notwithstanding anything to the contrary herein contained, for
purposes of this Section 3 and for all purposes in which the total square foot
area leased to Tenant is utilized in this lease, the area shall be deemed to be
60,000 square feet regardless of the actual square footage of the building and
garden center.
(e) "Total Floor Area in the Shopping Center" is defined as the sum total
of the aggregate of the square foot areas, leased to and/or occupied from time
to time by all the tenants and occupants of the Shopping Center, including
Landlord, excluding exterior or interior balconies or mezzanines, roofs or
penthouses, or other structures on roofs unless used as selling space; common
areas; service corridors; and parking areas.
Any addition to, or subtractions from the "Total Floor Area in the Shopping
Center" shall be computed by Landlord, and a statement of any revision in the
"Total Floor Area in the Shopping Center" furnished to Tenant.
SECTION 4. Tenant and its officers, agents and employees shall park their
cars only in areas specifically designated for that purpose by Landlord from
time to time whether such areas be within or outside but reasonably near the
Shopping Center. Tenant further agrees that upon written notice from Landlord it
will, within five (5) days, furnish to Landlord the automobile license numbers
assigned to its car and the cars of all its officers, agents and employees.
Tenant shall not at any time park or permit the parking of its trucks or
vehicles of others in the truck passage or adjacent to loading docks so as to
interfere in any way with the use thereof, nor shall Tenant at any time park or
permit the parking of its truck or trucks of its suppliers in the parking lot.
SECTION 5. Landlord reserves the right to promulgate such reasonable rules
and regulations relating to the use of the parking areas and the accommodation
areas, and any part
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or parts thereof as Landlord may deem appropriate and for the best interests of
the tenants, and Tenant agrees to abide by such rules and to cooperate in the
observance thereof. Such rules and regulations shall be binding upon Tenant upon
delivery of a copy thereof to Tenant. Said rules and regulations may be amended
by Landlord from time to time, with or without advance notice, and all such
amendments shall be effective upon delivery of a copy thereof to Tenant.
SECTION 6. Landlord reserves the right to enforce parking charges (by
operation of meters or otherwise) with appropriate provisions for parking ticket
validation by Tenant. Landlord agrees that any parking charge shall be
determined by it from time to time in good faith primarily for the purpose of
discouraging the misuse and encouraging the maximum use and reuse of the parking
spaces by customers of tenants in the Shopping Center and not primarily for the
purpose of realizing a profit from parking operations, but the earning of a
profit shall not in and of itself constitute a breach of this provision, and any
such profit shall augment the maintenance fund provided for hereunder.
SECTION 7. In the event Landlord at any time hereafter determines, in its
sole judgment, that the best interest of the Shopping Center will be served by
having parking areas operated and maintained by a person, firm, or corporation
other than Landlord, it shall have the right to select and license or lease to
any person, firm or corporation the operation and maintenance of the parking
areas on such terms and conditions and for such time as Landlord shall, in its
sole judgment, deem reasonable and proper. Any such lease, license agreement or
contract shall require the licensee, lessee or operator to be bound by and to
perform all of the obligations of Landlord relative to the maintenance and
operation of the parking areas and shall make said occupant, licensee or lessee
responsible to Tenant and all other tenants in the Shopping Center, any such
lease or license shall not affect Tenant's obligation to contribute to the
operation and maintenance of the parking and accommodation areas as provided in
Section 3 of this Article.
SECTION 8. The Landlord, Tenant and other lessees, engaged in the work of
constructing improvements in the Shopping Center or making repairs therein,
including, but not limited to, construction of new buildings or building
addition(s) and construction or reconstruction work done by Tenant with respect
to improvements on the premises, shall have the right to make a reasonable use
of portions of the parking area and the accommodation areas and the truck way.
In determining the reasonableness of any such use all pertinent factors shall be
taken into consideration including, but not limited to, the interference, if
any, with the business and operations of the various business enterprises in the
Shopping Center, the availability of other space for such purpose and the cost
of using other space for such purposes.
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ARTICLE VI
CARE AND USE OF PREMISES
SECTION 1.
(a) The premises may be used and occupied only for the conduct of a typical
"G. I. Joe's" store under the trade name G. I. Joe's, subject always to the
provisions of Section 2 of this Article VI, and for no other purpose or purposes
and under no other trade name without the written consent of Landlord. Tenant
agrees to operate the entire premises during the term of this lease and any
renewal thereof, unless prevented from doing so by causes beyond Tenant's
control, and to conduct its business at all times in good faith, in a high grade
and reputable manner, and in such manner as will produce the maximum amount of
rent in and from the premises during the regular and customary hours for such
type of business and on all business days. Tenant shall promptly comply with all
laws, ordinances and regulations affecting the premises and promulgated by duly
constituted governmental authority affecting the cleanliness, safety, use and
occupation of the premises.
(b) Tenant shall continuously and uninterruptedly, during the term and any
extended term of this lease, during all usual business hours and on such days as
comparable businesses in the Shopping Center are open for business, occupy and
use the entire premises for the purpose or purposes specified herein and shall
continuously merchandise not less than one hundred percent (100%) of the
premises (except during any times when the premises may be untenantable by
reason of fire or other casualty and except those portions of the premises
designated as storage).
(c) Tenant shall at all times carry a full and complete stock of seasonable
merchandise offered for sale at competitive prices and will maintain an adequate
personnel for the efficient service of its customers, and in general employ its
best judgment, efforts and abilities to so operate the business conducted by it
on the premises in a manner calculated to produce the maximum volume of sales
and transactions obtainable.
SECTION 2. SEE ATTACHED EXHIBIT E
SECTION 3. SEE ATTACHED EXHIBIT E
SECTION 4. Tenant shall not perform any acts or carry on any practices
which may injure the building or be a nuisance or menace to other tenants in the
Shopping Center, and shall keep the premises under its control, including
sidewalks adjacent to the premises and loading platform areas allocated for the
use of Tenant, free and clean from rubbish and dirt at all times, and shall
store all trash and garbage within the premises and arrange for the regular
pick-up and cartage of such trash and garbage at Tenant's expense. Tenant shall
not burn any trash or garbage at any time in or about the building or anywhere
else in the Shopping Center. Tenant agrees to cooperate in the employment of a
trash removal contractor designated by Landlord should it be deemed desirable to
have all waste materials removed by one
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contractor, provided, however, that the employment of such contractor shall be
on a competitive basis insofar as the financial arrangement is concerned.
SECTION 5. SEE ATTACHED EXHIBIT E
SECTION 6. Tenant agrees that all receiving and delivery of goods and
merchandise and all removal of garbage and refuse shall be made only by way of
the truck ways and loading docks designated for Tenant's use. Landlord hereby
grants to Tenant and Tenant's employees, agents and invitees the right, during
the term hereof, to use, in common with others entitled to the use thereof, such
truck ways, service corridors, service elevators and loading docks subject to
such reasonable regulations as Landlord shall make from time to time.
SECTION 7. Unless prohibited by a labor Contract between Tenant and a labor
union representing Tenant's employees, Tenant agrees to keep open for business
at least two week nights designated by Landlord as to time and specific days,
and further agrees to keep open for business such additional nights as business
center merchants occupying more than fifty percent (50%) of the floor area in
the Shopping Center elect to remain open for business.
ARTICLE VII
MERCHANT'S ASSOCIATION
SECTION 1. A Promotional Fund or Merchants' Association has been
established for the Shopping Center. Tenant shall contribute to such fund on the
first day of each month during the term of this lease an amount not less than
one cent (1(cent)) per square foot of total store space under lease to Tenant,
but in any event not less than $5.00 per month. Landlord agrees to contribute to
such Promotional Fund throughout the term of this lease in an amount not less
than twenty percent (20%) of Tenant's contributions. During the term of this
lease, Tenant shall be an active participating member of the Merchants
Association.
SECTION 2. The Promotional Fund herein provided for shall be administered
by Landlord at the expense of the fund, and monthly reports of receipts and
expenditures shall be made available to Tenant. Disbursements from the fund
shall be made from time to time for the common benefit of Landlord and all
tenants and other occupants of the Shopping Center under the direction of a
promotional committee composed of a representative of Landlord, a representative
of any major department store which may become a tenant or occupant of the
Shopping Center, and not less than three (3) nor more than seven (7)
representatives of other tenants or occupants of the Shopping Center. Such
Promotional Committee may be, but is not required to be, a committee of any
tenant's organization which may be established for the Shopping Center. The
duties of such committee shall include planning and budgeting for promotional
and other special events and advertising for Eastport Plaza as a whole. Each
member of the committee shall have one vote. On matters which the committee may
refer for decision to all contributors of the fund, each contributor shall have
a vote in proportion to its monthly contribution. Contributions to be made to
the fund by tenants and occupants of the
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Center other than Landlord may be raised above the minimum herein set forth by a
majority vote of all such tenants and occupants other than Landlord, but shall
never be lowered below such minimum, nor shall Landlord's contribution be raised
other than indirectly by the raising of the contributions made by all tenants.
(a) SEE ATTACHED EXHIBIT E
SECTION 3. Any revenues, receipts, returns, rebates or reimbursements
derived from any promotional event or other activity paid for from the
promotional fund shall be returned to such fund and shall thereafter be
available for expenditure from such fund.
ARTICLE VIII
UTILITIES
SECTION 1. Landlord agrees that it will cause facilities to be made
available to the Tenant upon the premises for the delivery to and distribution
within the premises of water, power, electricity and telephone service, and for
the removal of sewage from the premises. Tenant agrees to use such utilities
with respect to the premises.
SECTION 2. Tenant agrees, at its own expense, to pay for all water, sewer,
natural gas, garbage removal, power and electric current and all other similar
utilities used by Tenant on the premises from and after the commencement of the
work to be performed by it. In the event and so long as any utilities are
furnished by Landlord, or are sub-metered by Landlord, then and in that event
the rates charged Tenant shall not exceed those of the local public utility
company if its services were furnished directly to Tenant, and shall not be less
than its pro rata share of any jointly metered service based upon the floor area
of the premises serviced.
ARTICLE IX
REPAIRS
SECTION 1. See attached Exhibit E.
SECTION 2. Except as provided in Section 1 of this Article, Landlord shall
not be obligated to make repairs, replacements or improvements of any kind upon
the premises, or any equipment, facilities or fixtures therein contained, which
shall at all times be kept in good order, condition and repair by Tenant, and in
a clean, sanitary and safe condition and in accordance with all applicable laws,
ordinances and regulations of any governmental authority having jurisdiction.
Tenant shall permit no waste, damage or injury to the premises. If Tenant
refuses or neglects to commence repairs within ten days after written demand, or
adequately to complete such repairs within a reasonable time thereafter,
Landlord may make the repairs without liability to Tenant for any loss or damage
that may occur to Tenant's stock or business by reason thereof, and if Landlord
make such repairs Tenant shall pay to Landlord on demand as additional rent the
cost thereof with interest at ten percent (10%) per annum from the date of
payment by Landlord until repaid by Tenant.
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SECTION 3. Tenant shall forthwith at its own costs and expense replace with
glass of the same quality any cracked or broken glass, including plate glass or
glass or other breakable materials used in structural portions, and any interior
and exterior windows and doors in the premises.
ARTICLE X
INSTALLATIONS, SIGNS AND ALTERATIONS
SECTION 1. At the beginning of and during the entire term, Tenant, at its
own expense, shall provide, install and maintain all necessary lighting
fixtures, store fixtures, floor coverings and other equipment required by it,
and all interior painting and decorating.
SECTION 2. Tenant shall not erect or install any exterior signs or window
or door signs, advertising media or window or door lettering or placards without
Landlord's prior written consent. Tenant shall not install any exterior lighting
or plumbing fixtures, shades or awnings, or make any exterior decoration or
painting, or build any fences, or install any radio or television antennae, loud
speakers, sound amplifiers or similar devices on the roof or exterior walls of
the building, or make any changes to the store front without Landlord's prior
written consent. Use of roof is reserved to Landlord.
SECTION 3. Except as hereinafter provided, Tenant shall not make or permit
to be made, any alterations, additions or changes to the premises without first
procuring Landlord's written consent. Should any repairs, changes, alterations,
improvements or additions (except structural changes) be required during the
term hereof by any governmental authority, or under or by virtue of any law,
ordinance or governmental regulation, the same shall be made by and at the cost
of Tenant. If structural alterations become necessary because of the application
of laws or ordinances or other directions, rule or regulations of any regulatory
authority having jurisdiction over the business carried on by Tenant, or because
of any act or default on the part of Tenant, or because Tenant has overloaded
any electrical or other facility, Tenant shall make such structural and/or
electrical alterations at its own cost and expense after first obtaining
Landlord's written approval of plans and specifications and furnishing such
indemnification against liens, costs and damages as Landlord may reasonably
require. All alterations, additions, improvements and fixtures, other than trade
fixtures, which may be made or installed by either of the parties hereto upon
the premises and which in any manner are attached to the floors, walls, or
ceilings, at the termination of this lease shall become the property of
Landlord, unless Landlord requests their removal, and shall remain upon and be
surrendered with the premises as a part thereof, without damage or injury; any
linoleum or other floor covering of similar character which may be cemented or
otherwise adhesively affixed to the floor shall likewise become the property of
Landlord, all without compensation or credit to Tenant. Notice is hereby given
that no mechanic's, materialmen's or other lien sought to be taken on the
premises shall in any manner affect the right, title or interest of Landlord
therein.
SECTION 4. See attached Exhibit E.
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ARTICLE XI
INDEMNITY
Tenant agrees to indemnify and save Landlord harmless against any and all
claims, demands, damages, cost and expenses, including reasonable attorneys'
fees for the defense thereof, arising from the conduct or management of the
business conducted by Tenant in the premises or from any breach or default on
the part of Tenant in the performance of any covenant agreement on the part of
Tenant to be performed pursuant to the terms of this lease, or from any act or
negligence of Tenant, its agents, contractors, servants, employees, sublessees,
concessionaires or licensees, in or about the premises, the sidewalks adjoining
the same, the loading platform area allocated to the use of Tenant, and the
common area. In case of any action or proceeding brought against Landlord by
reason of any such claim, upon notice from Landlord, Tenant covenants to defend
such action or proceeding by counsel reasonably satisfactory to Landlord. All
property kept, stored or maintained in the premises shall be so kept, stored or
maintained at the sole risk of Tenant. Tenant agrees to pay and discharge any
mechanic's, materialmen's or other lien against the premises or Landlord's
interest therein claimed in respect to any labor, services, materials, supplies
or equipment furnished or alleged to have been furnished to or upon the request
of Tenant, provided that Tenant may contest such lien claim, upon furnishing to
Landlord such indemnification for the final payment and discharge thereof,
together with the costs and expenses of defending the same, as Landlord may
reasonably require. Landlord shall not be liable, and Tenant waives all claims
for damages to person or property sustained by Tenant or Tenant's employees,
agents, servants, invitees and customers resulting from the building in which
the premises are located or by reason of the premises or any equipment or
appurtenances thereunto appertaining becoming out of repair, or through the acts
or omissions of person occupying adjoining premises or any part of the building
of which the premises are a part or any persons transacting any business in the
Shopping Center or present therein for any other purpose, or for loss or damage
resulting to Tenant or its property from burst, stopped or leaking water, gas,
sewer, or other pipes or conduits or plumbing fixtures, or from any failure of
or defect in any electric line, circuit or facility, or resulting from any
accident in or about the premises, the building in which the same are situated
or resulting directly or indirectly from any act or neglect of any other tenant
or person in said Shopping Center.
ARTICLE XII
INSURANCE
SECTION 1. Tenant shall not carry any stock of goods or do anything in or
about the premises which will in any way tend to increase insurance rates on the
premises or the building in which the same are located, nor invalidate any
insurance coverage thereon. If Landlord shall consent to such use, Tenant agrees
to pay as additional rental any increase in premiums for insurance against loss
by fire or extended coverage risks resulting from the business carried on in the
premises by Tenant. If Tenant installs any electrical equipment that overloads
the power lines to the building, Tenant shall at its own expense make whatever
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changes are necessary to comply with the requirements of insurance underwriters
and insurance rating bureaus and governmental authorities having jurisdiction.
SECTION 2. Tenant agrees to procure and maintain a policy or policies of
insurance, at its own cost and expense, insuring Landlord and Tenant from all
claims, demands or action for injury to or death of any one person in an amount
of not less than $300,000 and for injury to or death of more than one person in
any one accident to the limit of $1,000,000, and for damage to property in an
amount of not less than $50,000, made by or on behalf of any person or persons,
firm or corporation arising from, related to, or connected with the conduct and
operation of Tenant's business in the premises. Tenant shall carry like coverage
against loss or damage by boiler or internal explosion by boilers, if there is a
boiler in the premises. Said insurance shall not be subject to cancellation
except after at least ten (10) days' prior written notice to Landlord and the
policy or policies, or duly executed certificate or certificates for the same,
together with satisfactory evidence of the payment of the premiums thereon,
shall be deposited with Landlord at the commencement of the term and renewals
thereof not less than thirty (30) days prior to the expiration of the term of
such coverage. If Tenant fails to comply with such requirement, Landlord may
obtain such insurance and keep the same in effect, and Tenant shall pay to
Landlord the premium cost thereof upon demand.
SECTION 3. Tenant shall procure and maintain during the term of this lease
a policy or policies in acceptable Bureau companies, insuring Landlord and
Tenant, as their interests may appear, against breakage of all such glass in the
premises and shall deposit such policy or policies, or certificates evidencing
their existence, together with evidence of the payment of the premiums thereon,
with Landlord at the commencement of the term and at least thirty (30) days
prior to the expiration of each such policy. At Landlord's option, Landlord may
obtain such insurance to keep the same in force and effect, and Tenant shall pay
Landlord upon demand from time to time the premium cost thereof.
SECTION 4. Tenant agrees that it will at all times during the leased term
maintain in force on all of its fixtures and equipment in the premises a policy
or policies of fire insurance with a standard extended coverage endorsement
attached to the extent of at least eighty percent (80%) of their insurable
value, the proceeds of which will, so long as this lease is in effect, be used
for the repair or replacement of the fixtures and equipment so insured. It is
understood that Landlord shall have no interest in the insurance upon Tenant's
equipment and fixtures and will sign all documents necessary or proper in
connection with the settlement of any claim or loss by Tenant.
SECTION 5. See attached Exhibit E.
ARTICLE XIII
DAMAGE BY FIRE, ETC.
SECTION 1. In the event the premises shall be damaged or destroyed by
casualty, Landlord shall, with all reasonable diligence, repair such damage and
restore the premises to
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substantially their condition immediately prior to the happening of such event;
and the minimum rental (Article III, Section 1) shall be equitably reduced
during any period in which, by reason of such damage or destruction, there is
substantial interference with the operation of the business of Tenant in the
premises, having regard to the extent to which Tenant may be required to
discontinue its business in the premises, and such reduction shall continue for
the period commencing with such destruction or damage and ending with the
completion by Landlord of such work of repair and/or reconstruction as Landlord
is obligated to do. Nothing in this Section shall be construed to reduce
percentage rent. Provided, however:
(a) If the premises or the building of which they are a part be at any time
destroyed or damaged to the extent of one-third or more of its then replacement
value by a casualty which is not an "insured casualty" (an "insured casualty"
being a casualty which is not covered by Landlord's standard fire and extended
coverage insurance policy), Landlord shall have the right to cancel and
terminate this lease, as of the date of the happening of such event, by giving
Tenant notice of its election so to do within sixty (60) days after the
happening of such event.
(b) In the event the premises or the building of which they are a part
shall be destroyed or damaged to extent of one-third or more of its then
replacement value by a casualty (whether or not an insured casualty) within
three (3) years of the date when the term hereof, or any extension thereof
agreed to before such casualty, would otherwise expire, Landlord shall have the
right to cancel and terminate this lease, as of the date of the happening of
such event, by giving Tenant notice of its election so to do within sixty (60)
days after the happening of such event.
SECTION 2. Notwithstanding the foregoing provisions of this Article, Tenant
hereby agrees to repair any damage to the premises resulting from a casualty
(other than an insured casualty as that term is defined in Section l(a)) caused
by the negligence of Tenant, its employees, agents, contractors, customers,
invitees and licensees.
SECTION 3. In the event the Shopping Center of which the premises are a
part be damaged or destroyed to the extent of one-third or more of its then
replacement value, and whether or not the premises are themselves damaged,
Landlord shall have the right to cancel and terminate this lease, as of the date
of the happening of such event, by giving Tenant notice of its election so to do
within sixty (60) days after the happening of such event.
SECTION 4. In case Landlord elects to repair, rebuild or restore as in this
Article XIII provided, then its obligation shall be limited to the basic
building and exterior work as covered in Exhibit D attached hereto.
SECTION 5. In the event of any termination of this lease under the
provisions of Sections 1 and 3 of this Article XIII, the lease shall terminate
at the end of the calendar month in which the notice of termination prescribed
by said Sections 1 and 3 is given.
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ARTICLE XIV
CONDEMNATION
SECTION 1.
(a) If the premises, or a portion thereof exceeding one-third of the total
area leased to Tenant, shall be taken by condemnation, either party, upon notice
to the other, shall be entitled to terminate this lease provided that such
notice is given within thirty (30) days after Tenant has been deprived of
possession by such taking.
(b) If that part of the common areas of the Shopping Center devoted to
parking, that is to say, the common areas exclusive of mall and sidewalk areas,
shall be reduced by condemnation in an amount in excess of twenty percent (20%),
and Landlord shall not within ninety (90) days commence and thereafter with all
reasonable diligence complete action to restore such common area so taken,
either party, upon notice to the other, shall be entitled to terminate this
lease, provided that such notice is given within thirty (30) days after the
expiration of such ninety (90) days, if no action has been commenced by Landlord
within that period, or within thirty (30) days after Landlord ceases to
prosecute the work of restoring such common area with reasonable diligence.
SECTION 2. It is understood and agreed that Tenant shall have no right,
title or interest in or to any part of any condemnation award that may be made
for the whole or any part of the premises or for the whole or any part of the
common areas, but such award shall belong entirely to Landlord, except that
Tenant shall be entitled to receive and retain only such amounts as may be
specifically awarded to it in such condemnation proceedings because of the
taking of its trade fixtures and leasehold improvements which have not become
part of the realty. Tenant shall have no claim in any event against Landlord for
the value of any unexpired term of the lease and no right or claim to any part
of the award on account thereof.
SECTION 3. In the event some portion of the premises is taken by
condemnation but this lease is not terminated as above provided, this lease
shall remain in force, and during the period of restoration hereinafter provided
for the minimum rent or a fair and just proportion thereof according to the
nature and extent of the damage sustained shall be suspended or abated. In such
event, and promptly after the payment of damages for such condemnation, Landlord
shall restore the premises, at a cost to Landlord not to exceed the amount of
such damages, to a condition reasonably suitable for Tenant's continued
occupancy thereof. The annual minimum rent for the period after the completion
of such restoration shall be reduced proportionately to the reduction in the
total floor space of the premises effected by the taking.
SECTION 4. In the event there is taken by condemnation such a substantial
portion of the Shopping Center as it may then exist, as in Landlord's judgment
shall prevent the continued profitable operation of the Shopping Center, then
and in that event, Landlord shall have the right to cancel this lease upon
giving sixty (60) days' notice to Tenant.
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SECTION 5. The term "condemnation" shall include any form of taking under
any governmental or statutory authority, whether by formal proceedings or by
negotiation.
ARTICLE XV
ASSIGNMENT AND SUBLETTING
SECTION 1. Tenant shall not assign or in any manner transfer this lease or
any interest therein, nor sublet the premises or any part or parts thereof, nor
permit occupancy by anyone with, through or under it, without the previous
written consent of Landlord. Consent by Landlord to one or more assignments of
this lease, or to one or more sublettings of the premises shall not operate as a
waiver of Landlord's rights under this Article to any subsequent assignment or
subletting. No assignment shall release Tenant of any of its obligations under
this lease or be construed or taken as a waiver of any of Landlord's rights or
remedies hereunder.
SECTION 2. Tenant agrees not to change the advertised name of its place of
business operated in the premises without the written permission of Landlord.
SECTION 3. Neither this lease nor any interest therein, nor any estate
thereby created, shall pass to any trustee or receiver in bankruptcy, or any
assignee for the benefit of creditors, or by operation of law.
ARTICLE XVI
ACCESS TO PREMISES
Landlord shall have the right to enter upon the premises at all reasonable
hours for the purpose of inspecting the same or of making repairs, additions or
alterations thereto or to the building in which the same are located, or for the
purpose of exhibiting the same to prospective tenants, purchasers or others.
Landlord shall not be liable to Tenant in any manner for any expense, loss or
damage by reason thereof, nor shall the exercise of such right be deemed an
eviction or disturbance of Tenant's use or possession.
ARTICLE XVII
DEFAULT
SECTION 1. It is covenanted and agreed that if Tenant shall be in arrears
more than ten (10) days in the payment of rent, or if Tenant shall be in default
in the performance or keeping of any of the other covenants, agreements or
conditions contained in this lease, on Tenant's part to be performed and kept,
for a period of ten (10) days after notice of such default shall have been given
to Tenant, then and in any of said events, Landlord lawfully may, at Landlord's
option, immediately, or at any time thereafter while such default continues, and
without any further demand or notice, terminate this lease and enter upon the
premises, either with or without process of law, and repossess the same and
expel therefrom and remove the
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effects of any occupant of the same, forcibly if necessary, without being deemed
guilty of trespass and without prejudice to any remedies which might otherwise
be used for arrears in rent or breach of any covenant, agreement or condition.
SECTION 2. It is further covenanted and agreed that in the event of any
such termination or reentry, by summary proceedings or otherwise, rents and all
other charges required to be paid up to the time of such termination or re-entry
shall be paid by Tenant, and Tenant shall also pay to Landlord all expenses
which Landlord may incur for restoring the premises to the same condition in
which by Section 1 of Article XVIII they are required to be surrendered, and
such further expenses which Landlord may reasonably incur in preparing the
premises for reletting, but not including the expenses of any alterations.
Landlord may, at any time thereafter and from time to time, relet the premises,
in whole or in part, for such rental as may then be obtainable, either in
Landlord's own name or as agent for Tenant, for a term or terms which, at
Landlord's option, may be for the remainder of the then current term of this
lease, or for any longer or shorter period.
SECTION 3. If this lease be so terminated, Tenant nevertheless covenants
and agrees, notwithstanding any termination or re-entry by Landlord, whether by
summary proceedings or otherwise, to pay and be liable for, on the days
originally fixed herein for payment thereof, amounts equal to the several
installments of rent and other charges reserved as they would, under the terms
of this lease, become due if this lease had not been terminated, or if Landlord
had not re-entered, and whether the premises be relet or remain vacant, in whole
or in part, or for a period less than the remainder of the term, or for the
whole thereof; but, in the event the premises be relet by Landlord, Tenant shall
be entitled to a credit in the net amount of rent received by Landlord in
reletting after deduction of all expenses and costs incurred or paid in
reletting the premises and collecting the rent in connection therewith. As an
alternative, at the election of Landlord, Tenant will upon such termination pay
to Landlord, as damages, such a sum as at the time of such termination
represents the amount of the excess, if any, of the value of the total rent and
other benefits which would have accrued to Landlord under this lease for the
remainder of the lease term if the lease provisions had been fully complied with
by Tenant, over and above the rental value of the premises for the balance of
the term, both discounted to the then value. For the purposes of this provision,
it shall be deemed that the percentage rent for any period after any such
default and entry by Landlord would have been at a monthly rate thereafter equal
to the average monthly percentage rental which Tenant was obligated to pay to
Landlord under this lease in respect to the last five (5) full lease years
immediately preceding the date of such entry, or such lesser period of the term
hereof as may have then elapsed.
SECTION 4. Landlord is hereby given a first lien upon all property of
Tenant which shall come in or be placed upon the premises and whether acquired
by Tenant before or after the date hereof to secure the payment of rent and the
performance of each and every other covenant herein contained to be performed by
Tenant. Upon such default, and failure to cure as aforesaid, Landlord without
notice or demand may take possession of and sell such property without legal
process of any kind, at public or private sale after one publication of a notice
thereof in a daily newspaper published in Portland, Oregon, not less than ten
(10) days
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before such sale. The proceeds of such sale shall be applied first to the
payment of expenses thereof, second to the discharge of the rent or other
liability hereunder paid, and the balance, if any, held for the account of
Tenant. SEE ATTACHED EXHIBIT E
ARTICLE XVIII
SURRENDER OF POSSESSION
SECTION 1. At the expiration of the tenancy created hereunder, whether by
lapse of time or otherwise, Tenant shall surrender the premises in good
condition and repair, reasonable wear and tear and loss by fire or other
unavoidable casualty excepted.
SECTION 2. In the event Tenant remains in possession of the premises after
the expiration of the tenancy created hereunder, and without the execution of a
new lease, it shall be deemed to be occupying the premises as a tenant from
month to month, and shall pay as rent the greater of (i) two times the fixed
rental, or (ii) the percentage rental on gross sales and business transacted by
Tenant in that part of the premises operated by it, subject to all the other
conditions, provisions and obligations of this lease insofar as the same are
applicable to a month-to-month tenancy.
SECTION 3. Upon the expiration of the tenancy hereby created, if Landlord
so requests in writing, Tenant shall promptly remove any additions, fixtures,
and installations placed in the premises by Tenant and designated in said
request, and repair any damage occasioned by such removals at Tenant's expense,
and in default thereof. Landlord may effect such removals and repairs, and
Tenant shall pay Landlord the cost thereof, with interest at the rate of seven
percent (7%) per annum from the date of payment by Landlord.
ARTICLE XIX
SUBORDINATION
SECTION 1. This lease shall be subject and subordinate to any first
mortgages or trust deeds and to any extensions or renewals thereof that are now
or hereafter may be placed upon the whole or any part of the Shopping Center and
which include the premises; provided, however, that such first mortgages or
trust deeds shall contain provisions to the effect that this lease shall not be
cut off or terminated nor shall Tenant be disturbed in its possession or use of
the premises by foreclosure or other act under the terms of any such first
mortgages or trust deeds so long as Tenant is not in default in any of the
terms, conditions and covenants of this lease.
SECTION 2. Notwithstanding anything to the contrary elsewhere in this
lease, in the event of any act or omission by Landlord by reason of which Tenant
may claim the right to terminate this lease, or claim a partial or total
eviction, or claim a defense or offset against rental liability under this
lease, Tenant shall not attempt to exercise any such right (1) until it has
notified in writing the holder of any mortgage which at the time shall be a
first mortgage lien on the building of which the premises are a part (if the
name and address of such holder
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shall previously have been furnished by written notice to Tenant) of such act or
omission, and (2) until a reasonable opportunity for remedying such act or
omission shall have been given to such holder following the receipt of such
notice, provided such holder, with reasonable diligence, shall have commenced
and continued to remedy such act or omission or to cause the same to be
remedied. If remedying such act or omission by such holder necessitates the
obtaining of possession by such mortgagee, the reasonable opportunity to be
afforded to such holder shall include such time as shall reasonably be required,
with the exercise of reasonable diligence, to secure possession where such
possession in necessary, or where foreclosure is necessary, to commence and to
carry to completion the foreclosure of said mortgage and the sale of the
mortgaged premises pursuant to said foreclosure.
ARTICLE XX
NOTICES
Whenever under this lease a provision is made for notice of any kind, such
notice shall be in writing and signed by or on behalf of the party giving or
making the same. It shall be deemed sufficient notice and service thereof if
such notice is to Tenant and sent by registered mail, postage prepaid, to the
last post office address of Tenant, furnished to Landlord for such purpose, or
to the premises; and if to Landlord, sent by registered mail, postage prepaid,
to the Landlord at the address furnished for such purpose, or to the place then
fixed for the payment of rent, or to such other place or places designated in
writing by Landlord. If Landlord or Tenant is more than one person, notice need
be sent to but one Tenant or one Landlord, as the case may be.
ARTICLE XXI
STATEMENT OF TENANT
Tenant shall at any time and from time to time, upon not less than twenty
(20) days' prior written request by Landlord, execute, acknowledge and deliver
to Landlord a statement in writing, certifying that this lease is unmodified and
in full force and effect (or if there has been any modification thereof that the
same is in full force and effect as modified and stating the modification or
modifications) and the dates to which the minimum rent and other charges have
been paid in advance, if any, and such other statement relating to delivery and
acceptance of the premises as Landlord's lending institution may require. Any
such statement delivered pursuant to this Paragraph may be relied upon by any
prospective purchaser of the fee or the mortgagee or assignee of any mortgages
or any mortgage or the trustee or beneficiary of any deed of trust on the fee or
including the fee of the premises.
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ARTICLE XXII
QUIET ENJOYMENT
Landlord agrees that Tenant, upon paying the rent and performing the
covenants of this lease, may quietly enjoy, have and hold the premises during
the term hereof, or any extension thereof.
ARTICLE XXIII
ENCLOSED MALL
It is contemplated that during the term hereof, Landlord may modify the
Shopping Center so as to provide and include, among other improvements, the
installation of an enclosed air-conditioned mall (hereinafter referred to as the
"Enclosed Mall"). Landlord and Tenant hereby agree that if and when such an
Enclosed Mall is installed in the Center, the following terms and provisions of
this lease shall be effective and applicable; subject to the terms of Article
II, Section 5:
Enclosed Mall operation and maintenance expense refers to the amount equal
to the actual annual cost paid out in connection with the Enclosed Mall for the
following: utility expenses for lighting and operation of air-conditioning and
heating equipment; real and personal property taxes on the Enclosed Mall (land,
improvements and equipment); premiums on fire and extended insurance coverage,
vandalism insurance and plate glass insurance for the Enclosed Mall improvements
and equipment; maintenance, repair and replacement of mechanical equipment,
including automatic door openers, lighting fixtures (including replacement of
tubes and bulbs), air-conditioning and heating equipment, fire sprinkler
systems, security alarm systems, and all other items of equipment used
exclusively in connection with the Enclosed Mall; all other items of expense
incurred as a result of enclosing the mall; repair, maintenance and cleaning of
the Enclosed Mall structure including floors, ceilings, roof, skylights and
windows; and a reasonable allowance to Landlord for Landlord's supervision of
maintenance of the Enclosed Mall. Landlord may, however, cause any or all of
such services to be provided by an independent contractor or contractors. All
other items except as herein enumerated shall be treated as expenses of parking
and common areas and prorated as provided for in Article V.
Tenants whose premises face or open onto the Enclosed Mall shall pay the
entire cost of the Enclosed Mall operation and maintenance expenses as herein
described. Contributions towards Enclosed Mall operation and maintenance
expense, if any, during the term of this lease, by the major department stores
in the Shopping Center shall be credited towards payment of such Enclosed Mall
operation and maintenance expense. Tenant's share of the expenses of the
Enclosed Mall shall be equal to the product obtained by multiplying said
expenses by a fraction, the numerator of which shall be the total square foot
area of the premises and the denominator of which shall be Landlord's gross
leasable area which faces or opens onto the Enclosed Mall. Tenant shall pay
Landlord its share of the aforesaid costs and
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expenses on a periodic basis not more frequently than monthly within thirty (30)
days after Landlord's written request therefor.
Tenant, provided its premises fronts on the Enclosed Mall, agrees, during
all business hours, to operate the heating, ventilating and air-conditioning
equipment serving the demised premises so that inside temperatures are
maintained (i) within a range in which a majority of adults will be comfortable
in the demised premises and (ii) which will not unduly drain heat, ventilation
or cooled air from the Enclosed Mall. Landlord agrees to cause the heating,
ventilating and air-conditioning equipment serving the Enclosed Mall to be so
operated during such hours that heat, ventilation and cooled air are not unduly
drained from the premises.
ARTICLE XXIV
GENERAL
SECTION 1. Nothing herein contained shall be deemed or construed by the
parties hereto, nor by any third party, 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 computation of
rent nor any other provision contained herein, nor any acts of the parties
hereto, shall be deemed to create any relationship between parties hereto other
than the relationship of Landlord and Tenant. Whenever herein the singular
number is used, the same shall include the plural, and the masculine gender
shall include the feminine and neuter genders.
SECTION 2. The various rights and remedies herein contained and reserved to
each of the parties shall not be considered as exclusive of any other right or
remedy of such party, but shall be construed as cumulative and shall be in
addition to every other remedy now or hereafter existing at law, in equity, or
by statute. No delay or omission of the right to exercise any power by either
party shall impair any such right or power, or shall be construed as a waiver of
any default or as acquiescence therein. One or more waivers of any covenant,
term or condition of this lease by either party shall not be construed by the
other party as a waiver of a subsequent breach of the same covenant, term or
condition. The consent or approval by either party to or of any act by the other
party of a nature requiring consent or approval shall not be deemed to waive or
render unnecessary consent to or approval of any subsequent similar act.
SECTION 3. The laws of the State of Oregon shall govern the validity,
performance and enforcement of this lease. The invalidity or unenforceability of
any provisions of this lease shall not affect or impair any other provisions.
SECTION 4. The headings of the several articles and sections contained
herein are for convenience only and do not define, limit or construe the
contents of such articles and sections. All negotiations, considerations,
representations and understandings between the parties are incorporated herein
and may be modified or altered by agreement in writing between the parties.
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SECTION 5. In the event of any action at law or in equity between Landlord
and Tenant to enforce any of the provisions and/or rights hereunder, the
unsuccessful party to such litigation covenants and agrees to pay to the
successful party all costs and expenses, including reasonable attorneys' fees,
incurred therein by such successful party, and if such successful party shall
recover final judgment in any such action or proceeding, such costs, expenses
and attorneys' fees shall be included in and as a part of such judgment. Should
Landlord, without fault on its part, be made a party to any litigation
instituted by or against Tenant, Tenant covenants to pay to Landlord all costs
and expenses, including reasonable attorneys' fees, incurred by Landlord in or
in connection with such litigation.
SECTION 6. Tenant warrants that Tenant has not had any dealings with any
realtor, broker or agent, in connection with the negotiation of this lease
excepting only Bullier & Bullier, Inc., and Tenant hereby agrees to pay and to
hold Landlord harmless from any cost, expense or liability for any compensation,
commissions or charges claimed by any realtor, broker or agent, excluding those
named above, with respect to this lease and/or the negotiation thereof.
SECTION 7. In the event that, during the term of this lease, Landlord shall
sell its interest in the premises, then from and after the effective date of
such sale, Landlord shall be released and discharged from any and all further
obligations and responsibilities under this lease except those already accrued.
SECTION 8. Tenant agrees that in the event all or substantially all of
Tenant's assets be placed in the hands of a receiver or trustee, and such
receivership or trusteeship continues for a period of sixty (60) days, or should
Tenant make an assignment for the benefit of creditors or be finally adjudicated
a bankrupt, or should Tenant institute any proceedings under the Bankruptcy Act
as the same now exists or under any amendment thereof which may hereafter be
enacted, or under any other act relating to the subject of bankruptcy wherein
Tenant seeks to be adjudicated a bankrupt, or to be discharged of its debts, or
to effect a plan of liquidation, composition or reorganization, or should any
involuntary proceeding be filed against Tenant under any such bankruptcy laws
and such proceedings not be removed within ninety (90) days thereafter, then
this lease and any other interest, if any, in and to the premises shall not
become an asset in any of such proceedings and, in any such events and in
addition to any and all rights or remedies of Landlord hereunder or by law
provided, it shall be lawful for Landlord to declare the term hereof ended and
to re-enter the premises and take possession thereof and remove all persons
therefrom, and Tenant shall have no further claim thereon or hereunder. The
provisions of this Section 8 shall also apply to any Guarantor of this lease.
SECTION 9. The covenants, agreements and obligations herein contained shall
extend to bind and inure to the benefit of not only the parties hereto but their
respective personal representatives, heirs, successors and assigns.
SECTIONS 10, 11 and 12. See attached Exhibit E.
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ARTICLE XXV
OPTION TO EXTEND
See attached Exhibit E.
Attached hereto and by this reference made a part hereof are Exhibits A, C
and D. (There is no Exhibit B.) Exhibit E, setting forth additional provisions,
terms and conditions of this lease, is also attached hereto and by this
reference made a part hereof.
IN WITNESS WHEREOF, the parties hereto have duly executed this lease
together with the herein referred to Exhibits which are attached hereto, the day
and year first above written.
EASTPORT PLAZA SHOPPING CENTER G. I. JOE'S, INC., an Oregon
corporation
by /s/ by /s/
---------------------------------- ----------------------------------
President
by by
---------------------------------- ----------------------------------
Landlord Tenant Secretary
PAGE 22
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ARTICLE I.
PREMISES AND TERM
SECTION 1. Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, those certain premises defined herein. The premises are within
Eastport Plaza Shopping Center (hereinafter called the "Shopping Center"). The
Development Plan of the Shopping Center is attached hereto as Exhibit A and by
this reference made a part hereof. With reference to Exhibit A, the Shopping
Center consists of Parcel A, the Landlord's property, Parcel B, not owned by
Landlord, and Parcel C, which is part the Landlord's property and part not owned
by Landlord. The legal description of Landlord's property is set forth in
Exhibit C attached hereto and by this reference made a part hereof. The Shopping
Center lies within Multnomah County, Oregon, adjacent to and partially within
the present corporate limits of the City of Portland, in said County and State.
(a) The premises shall consist of a building to be constructed of
approximately 55,000 square feet, together with approximately 5,000 square feet
of fenced garden center, in the Shopping Center. The exact location of the
building in the Shopping Center is subject to the approval of the parties, as
more particularly set forth in Article I, Section 6(a). The location of the
building shall be north of the primary buildings in the Shopping Center, and a
sketch is attached hereto as Exhibit D and by this reference made a part hereof
showing the approximate contemplated location of the building.
(b) The premises shall be improved with a building and other improvements
in accordance with the final plans and specifications, as more particularly set
forth in Article I, Section 6(a). The improvements to be constructed, as set
forth in said plans and specifications, extend beyond the exterior walls of the
building to be constructed. However, upon completion of construction of the
building and all improvements as set forth in the plans and specifications and
upon commencement of the term of this lease, the "premises" shall be deemed to
consist of that portion of the Shopping Center lying within the exterior walls
of the building and the exterior fencing of the garden center. At that time, the
walkways, landscaping, paved areas and other improvements in areas outside of
said exterior walls and fences shall become a part of the common areas and
parking areas for the general use and convenience of Tenant and other tenants of
the Shopping Center and their respective employees, customers and invitees
("accommodation areas"), and shall be subject to all of the terms and conditions
of Article V of this lease. Reference to the "premises" in this lease from and
after the commencement date shall mean the premises as defined in this
subparagraph (b).
SECTION 2. The term of this lease shall commence when the building and
improvements are substantially complete and ready for use and occupancy, or when
Tenant begins to transact business on, at or from, the premises, whichever shall
be the sooner. Said date is herein referred to as the "commencement date". No
rent shall be payable by Tenant to Landlord until said term shall have commenced
as herein provided; however, Tenant's
PAGE 1(a). Eastport Plaza Lease
24
occupancy of the premises for any period prior to the commencement date shall be
subject to all other terms and provisions of this lease.
SECTION 2(a), (b), (c) SEE ATTACHED EXHIBIT E
SECTION 3. The term of this lease shall be: (i) The period from the
commencement date to the date upon which Landlord reimburses Tenant for the
construction costs (as hereinafter defined), and (ii) in the event the date of
such reimbursement occurs on a day other than the first day of a calendar month,
then plus the partial month between the date of such reimbursement and the next
succeeding first day of the calendar month, and (iii) plus twenty-five (25)
years thereafter; and this lease shall expire (unless sooner terminated as
provided herein) at midnight on the last day of the last calendar month of said
25-year period.
SECTION 4. For the purpose of this lease, a "lease year" shall mean a
period of 12 consecutive full calendar months, subject to the terms of this
Section 4. The first lease year shall begin on the first day of the calendar
month immediately succeeding the commencement date, or on the commencement date
in the event the commencement date occurs on the first day of a calendar month.
Each succeeding lease year shall commence upon the anniversary date of the first
lease year. In the event the commencement date occurs on a day other than the
first day of a calendar month, the partial month between the commencement date
and the next succeeding first day of the calendar month shall be deemed to form
a part of the first lease year. The final lease year shall end on the expiration
date of the term hereof, as set forth in Section 3 above, and the final lease
year may be less than 12 full calendar months.
SECTION 5. When the expiration date of the term of this lease is determined
pursuant to Section 3 above, Landlord and Tenant shall execute, acknowledge and
deliver a supplemental agreement in recordable form specifying the commencement
and termination dates of the term hereof.
SECTION 6. This lease is hereby made specifically contingent upon all of
the following conditions:
(a) Landlord approving the final plans and specifications for the
construction of the building and other improvements, as provided in Section 1
above, within 20 days of the date Tenant submits said plans and specifications
to Landlord. The location of the building in the Shopping Center and the design
of the building shall be subject to Landlord's approval. Said plans and
specifications shall include the design of the building, and an approval of said
plans and specifications by Landlord shall be deemed to be an approval of the
design of the building. Said plans and specifications shall include a site plan
designating the exact location of the building in the Shopping Center, and
Landlord's approval of said plans and specifications shall be deemed to be an
approval of the designated location of the building. Tenant shall submit said
plans and specifications to Landlord for approval within 20 days of the date of
execution of this lease. In determining whether said plans and specifications
will be approved, Landlord may take into consideration the general design
concept of the Shopping Center and the architectural compatibility and quality
of the building and
PAGE 2(a). Eastport Plaza Lease
25
improvements to be constructed. Subject to the foregoing considerations,
Landlord's approval of said plans and specifications shall not be unreasonably
withheld. Landlord may request changes or modifications of said plans and
specifications as a condition to its approval, and Tenant shall not unreasonably
withhold its consent to modifications and amendments that may be requested. The
approval of both Landlord and Tenant shall be noted on the final plans and
specifications, and both parties shall sign said final plans and specifications.
(i) SEE ATTACHED EXHIBIT E
(b) Xxxxxx-Xxxxxx Corporation, a Minnesota corporation, approving this
lease within 60 days of the execution hereof.
(c) Landlord obtaining satisfactory financing of its reimbursement of the
construction costs within 60 days from the date of execution of this lease.
Landlord intends to secure a mortgage loan to finance the building and
improvements.
(d) The cost of the paving work provided for in the final plans and
specifications shall also be subject to Landlord's approval. Tenant shall submit
cost figures within 90 days of Landlord's approval of the final plans and
specifications, and Landlord shall approve or reject the cost figures within 20
days from the date of submission to Landlord. Landlord's approval shall not be
unreasonably withheld.
(e) Landlord and Tenant shall each use their best efforts and shall
cooperate with one another to meet all of the foregoing conditions. If any of
the foregoing conditions are not timely met, either party shall have the right
to terminate this lease upon written notice to the other party, and upon such
notice this lease shall terminate and be of no further force or effect, and all
rights and obligations hereunder shall cease. If this lease is terminated by
reason of failure to meet any of the foregoing conditions, and without fault on
the part of either party, each party shall pay its costs and fees incurred by it
in connection with this transaction.
ARTICLE II.
CONSTRUCTION OF PREMISES
SECTION 1. Tenant shall construct or cause to be constructed building and
other improvements in accordance with the final plans and specifications
provided by Tenant and approved by Landlord.
(a) Tenant, prior to the commencement of construction, shall obtain or
cause to be obtained, and maintained in full force and effect, at the expense of
Tenant, until the construction work is completed, the following policies of
insurance:
(i) Public liability insurance in an amount not less than $500,000.00
for personal
PAGE 3(a). Eastport Plaza Lease
26
injuries, including death to any one person; not less than $1,000,000.00 for
personal injuries, including death, in any one accident; and not less than
$250,000.00 for property damage.
(ii) Workmen's compensation insurance.
The said policies of insurance shall name the Landlord and the Tenant as
insureds. Said policies of insurance may be obtained by Tenant's contractor or
subcontractors.
(b) The construction of the building and improvements by the Tenant shall
be in conformity with all applicable laws, ordinances, rules and regulations of
governmental authorities having jurisdiction. Without limiting the generality of
the foregoing, Tenant shall provide adequate safety precautions during the
period of construction for the protection of persons in the Shopping Center,
including other tenants and their employees, customers, and invitees. Prior to
the commencement of any construction, Tenant, at its expense, shall obtain from
such governmental authorities all necessary permits and authorizations for the
construction of the building and improvements.
(c) Tenant shall pay, as and when required by contract or law or otherwise,
all monies to all persons and firms entitled thereto in connection with
construction, so that the premises and the Shopping Center shall at all times be
free of liens for labor, services and materials supplied or claimed to have been
supplied in connection with Tenant's construction.
(d) Tenant shall hold harmless and indemnify Landlord and the premises from
any and all liens, claims, suits, judgments, penalties, expenses and damages
which the contractors of Tenant, their subcontractors, agents or employees or
materialmen may claim, assert, or obtain for work, labor and materials in
connection with any construction and the installation of any equipment therein.
If any lien, claim or encumbrance shall be filed or made against the Landlord or
the premises or the Shopping Center in connection with any such construction,
and/or installation of equipment therein, Tenant, at its expense, and within 30
days after notice of filing thereof, shall bond, discharge or satisfy the said
lien, claim or encumbrance.
(e) Tenant shall hold harmless and indemnify Landlord from any and all
other liability, expense, attorney's fees, causes of action, suits, claims or
judgments arising out of Tenant's construction of the building and improvements
as set forth in this lease.
(f) Upon the satisfaction of the conditions set forth in Section 6 above,
Tenant agrees to proceed promptly with the construction of the building and
improvements, and to diligently prosecute the construction to completion. All
work shall be done in a good and workmanlike manner, with good construction
practices, using first-class labor and materials.
(g) Tenant shall substantially complete construction of the building and
improvements within 180 days following the date upon which all of the conditions
set forth in Section 6 above have been satisfied. However, such period may be
extended by delays consented to in writing by Landlord and Tenant or delays
which may arise from strikes, lockouts, labor disputes, inability to obtain
labor or materials or reasonable substitutes
PAGE 4(a). Eastport Plaza Lease
27
therefor, governmental restrictions, regulations or controls, acts of God, or
other causes beyond the reasonable control of Tenant or Tenant's contractors.
(h) During the period of construction, Landlord shall provide Tenant with
adequate access to the premises for purposes of such construction. The Tenant
shall not unreasonably interfere with the conduct of the operation of the
Shopping Center or the conduct of the business of the tenants of the Shopping
Center during such construction. To the extent consistent with good and
reasonable construction practices, Tenant shall keep the premises and the
surrounding areas free from unnecessary debris during the construction period.
The Landlord reserves the right to impose reasonable rules and regulations
during the construction period relating to Tenant's construction, for the
benefit of the Shopping Center, its tenants, and their employees, customers and
invitees.
SECTION 2. "Construction costs" shall mean the following costs incurred in
connection with the construction of the building and improvements:
(a) Construction contract price or prices for the construction of the
building and the improvements specified in the final plans and specifications,
including landscaping, paving, walkways and curbs as designated on said final
plans and specifications.
(b) Utility hook-up charges, exterior signs and outside lighting as
specified in said final plans and specifications.
(c) Building permits and other authorizations, cost of performance bond and
payment bond, cost of preparation of plans and specifications, architectural and
engineering fees.
(d) Builder's risk, fire and extended coverage insurance premiums and the
premiums on the insurance required by Section 1, subparagraph (a), above during
the construction period.
(e) Actual financing charges pertaining to the construction of the building
and improvements, such as points, construction interest and the like.
SECTION 3. Tenant shall cause any contractor or contractors selected by
Tenant to construct the building and improvements to be bonded with respect to
performance and payment.
SECTION 4. Upon completion of the building and improvements in accordance
with the final plans and specifications to Landlord's satisfaction and upon
expiration of the period within which any lien could be filed for labor,
materials and/or equipment, Landlord shall reimburse Tenant for the construction
costs to the extent of $825,000.00 plus the actual cost of the paving (which
shall not exceed the amount previously approved by Landlord pursuant to Article
I, Section 6(d)). The foregoing amount of $825,000.00 plus the cost of paving is
hereinafter referred to in this lease as the "maximum reimbursement".
Construction costs in excess of the maximum reimbursement, and any other costs
relative to construction of the
PAGE 5(a). Eastport Plaza Lease
28
building and improvements, shall be promptly paid by Tenant without
reimbursement. Notwithstanding the construction of the building and improvements
by Tenant and notwithstanding any payment by Tenant on account of the
construction in excess of the maximum reimbursement, it is understood that
Tenant shall have no right, title or interest in said building and improvements
other than the leasehold interest as provided in this lease, and that title to
and ownership of the building and improvements shall be vested in Landlord. If
the construction costs reimbursed by Landlord to Tenant are less than the
maximum reimbursement, the rental hereunder shall be adjusted as set forth in
Article III.
SECTION 5. Landlord, at Landlord's expense, intends to construct an
extension of the existing Enclosed Mall to connect to Tenant's building. Tenant
shall give its full cooperation in connection with the construction work to be
performed by Landlord, subject to Landlord not unreasonably interfering with the
conduct of Tenant's business by reason of such construction. Landlord
contemplates completion of the extension of the Enclosed Mall within six months
of the completion of Tenant's building, and Landlord shall use reasonable
efforts and due diligence to construct such extension and to complete the
construction within the contemplated period. However, neither the construction
of such extension nor the completion of such construction within any fixed
period of time shall constitute conditions to the performance of this lease by
Tenant. Tenant shall not be liable for Enclosed Mall operation and maintenance
expense, as provided in Article XXIII, until such time as the Enclosed Mall is
connected to Tenant's building and is available for Tenant's use.
ARTICLE III.
RENT
SECTION 1. Tenant agrees to pay to Landlord, at such place or places as
Landlord shall designate from time to time in writing, rent for the premises for
each lease year as follows:
(a) Beginning upon the commencement date of the term of this lease and
continuing during the entire lease term, the greater of:
(i) "Fixed rent" as determined pursuant to subparagraph (b) below.
(ii) "Percentage rent" equal to certain perentages of the gross sales
(as hereinafter defined) for each lease year, with the percentage or percentages
to be determined pursuant to subparagraph (c) below.
(b) The fixed rent shall be $176,000.00 for the first lease year. The fixed
rent for the second lease year and for each succeeding lease year shall be
$198,000.00. Fixed rent shall be paid monthly in advance on or before the tenth
day of each calendar month during the lease term. If the final lease year of the
term of this lease is less than a full calendar year, the annual fixed rent for
that lease year shall be prorated on a monthly basis for each full calendar
month and on a daily basis for any partial month within the final lease year.
The monthly fixed
PAGE 6(a). Eastport Plaza Lease
29
rent for the first lease year will therefore be $14,666.67, and the monthly
fixed rent for each succeeding lease year will be $16,500.00. If the term of
this lease commences on other than the first day of a calendar month, the fixed
rent for the initial partial month shall be prorated on a daily basis, and the
prorata amount thereof shall be paid by Tenant on or before the tenth day of the
first calendar month thereafter, together with the monthly fixed rent due for
that calendar month. The prorata amount payable for any such partial month shall
be in addition to the amount of the fixed rent provided in this Section 1 for
the first lease year.
(i) The annual fixed rent has been determined by multiplying 55,000
square feet by $3.60 per square foot, but with a reduction of $.40 per square
foot for the first lease year (i.e. 55,000 times $3.20). In the event the amount
of the construction costs reimbursed by Landlord to Tenant pursuant to Article
II, Section 4, above is less than the maximum reimbursement, the annual fixed
rent shall be adjusted and determined as set forth herein.
(ii) The annual fixed rent has been determined based on the assumption
that the mortgage loan to be obtained by Landlord to finance the construction of
the improvements will be for a term of 25 years at an interest rate of 9-1/2%
per annum. The "annual mortgage constant" referred to herein is the percentage
required to amortize the principal amount of the mortgage loan, including
interest, calculated on a monthly payment basis, and is determined by dividing
the sum of 12 monthly mortgage payments, principal and interest, by the
principal amount of the mortgage. The annual fixed rent is based upon an annual
mortgage constant of 10.49% (25 years at 9-1/2%). If the annual mortgage
constant on the permanent mortgage loan obtained by Landlord to finance the
building and improvements is less than 10.49%, the annual fixed rent shall be
adjusted as provided herein.
(iii) In determining the adjustment of the annual fixed rent, if any,
the first computation shall be to adjust on account of the amount of the
Landlord's reimbursement for construction costs being less than the maximum
reimbursement. If the reimbursement is the maximum reimbursement, this
computation will not be made. If the reimbursement is less than the maximum
reimbursement, the amount of the difference shall be multiplied by the annual
mortgage constant of 10.49%, and the amount so determined shall reduce the
annual fixed rent both for the first lease year and for each succeeding lease
year. For example, if the amount of the reimbursement is $100,000.00 less than
the maximum reimbursement, such reduction shall be multiplied by the annual
mortgage constant of 10.49%, which equals $10,490.00, and the annual fixed rent
shall be reduced by this amount. In this example, the annual fixed rent for the
first lease year would be adjusted to $165,510.00 and the annual fixed rent for
each succeeding lease year would be $187,510.00. If the actual annual mortgage
constant is less than 10.49%, the annual fixed rent will be further adjusted as
set forth in subparagraph (iv) below.
(iv) When the annual mortgage constant for Landlord's permanent
financing is determined, the annual fixed rent will be adjusted if the annual
mortgage constant is less than 10.49%. This adjustment, if applicable, will be
made in any event, whether the reimbursed construction costs are the maximum
PAGE 7(a). Eastport Plaza Lease
30
reimbursement or less than the maximum reimbursement. The difference between the
actual annual mortgage constant and the assumed annual mortgage constant of
10.49% shall be multiplied by the amount of Landlord's actual reimbursement to
Tenant for construction costs, and the annual fixed rent shall be reduced by the
amount thereof. For example, if the actual mortgage loan obtained by Landlord is
for a term of 25 years and amortizes in equal monthly installments including
interest of 9%, the annual mortgage constant will be 10.08%. The difference
between the annual mortgage constants, that is .41%, will then be multiplied by
the amount of Landlord's reimbursement. For purposes of this example, assume
Landlord's reimbursement of construction costs is $825,000.00. The annual fixed
rent would therefore be reduced by $3,382.00; the annual fixed rent for the
first lease year would then be $172,618.00 and for each succeeding lease year
would be $194,618.00.
(c) The applicable percentage for percentage rent shall be three (3%)
percent of gross sales for each lease year to and including an amount computed
by dividing the annual fixed rent for each lease year by .03 (3%), and one and
one-half (1-1/2%) percent of the amount of gross sales in each lease year in
excess thereof. The point at which the percentage rent reduces from 3% to 1-1/2%
in each lease year is referred to herein as the "break point". In each lease
year, 3% of the break point will equal the annual fixed rent for that lease
year. For example, if the fixed rent is $176,000.00 for the first lease year,
the break point will be $5,866,667.00; and if the annual fixed rent during the
succeeding lease years is $198,000.00, the break point will be $6,600,000.00. In
the example set forth in (b)(iii) above, where the annual fixed rent is
determined to be $187,510.00, the break point will be $6,250,333.00. In the
example set forth in (b)(iv) above, where the annual fixed rent is determined to
be $194,618.00, the break point will be $6,487,267.00.
(d) Notwithstanding anything to the contrary set forth in this Section 1,
during the period from the commencement date of the term of this lease to the
date Landlord reimburses Tenant for the construction costs, Tenant shall be
entitled to a credit as against the monthly payments of the fixed rent. The
credit shall be computed by determining 1/12th of 10% of the amount required to
be reimbursed, and the amount so determined shall be applied as a credit each
month as against the monthly fixed rent. If a partial month should exist at the
commencement of the term and/or at the date of such reimbursement, the credit
for such partial month or months shall be prorated on a daily basis. This credit
shall have no effect upon the determination of the annual or monthly fixed rent
or the percentage rent or the determination of the break point for purposes of
percentage rent.
(e) Percentage rent, when applicable, shall be paid within 30 days after
the end of each lease year and shall be determined on the basis of the gross
sales transacted for each such lease year. Tenant shall be entitled to a credit
against such percentage rent in an amount equal to the aggregate amount of fixed
rent paid during such lease year.
PAGE 8(a). Eastport Plaza Lease
31
EXHIBIT E TO EASTPORT PLAZA LEASE
ARTICLE I (PREMISES AND TERM), SECTION 2. (a) Tenant's occupancy prior to
the commencement date for the purposes of constructing the premises pursuant to
Article II of this lease shall not be deemed occupancy for the purposes of the
commencement of the term of this lease.
(b) For the purposes of the commencement of the term of this lease, the
building and improvements shall be deemed substantially complete and ready for
use and occupancy at such time as Tenant begins fixturing the premises.
(c) Notwithstanding anything to the contrary contained herein, if Tenant is
unable to substantially complete construction of the building and improvements
so as to open for business on or before October 15, 1978, because of inability
to timely obtain the necessary building or other governmental permits, labor
disputes, strikes, lockouts, inability to obtain labor or materials or
reasonable substitutes therefor, governmental restrictions, regulations or
controls, acts of God or other causes beyond the reasonable control of Tenant,
the commencement date of this lease shall be such date as the Tenant actually
begins to transact business on the leased premises, or the date the building and
improvements are substantially complete and ready for use and occupancy,
whichever last occurs, but in no case later than March 1, 1979.
ARTICLE I (PREMISES AND TERM), SECTION 6(a). (i) In connection with the
construction of the premises by Tenant, Landlord will be constructing certain
improvements and performing certain work on the shopping center property
adjacent to, but not part of, the premises. Such work and improvements will be
shown on the final plans and specifications and designated as the responsibility
of Landlord. Such work and improvements shall be completed by Landlord in an
expeditious manner at Landlord's sole cost and expense and no portion thereof
shall be the responsibility of or chargeable to Tenant nor included in the
"construction costs" pursuant to Article II of this lease.
(ii) In the event traffic lights or other traffic control devices are
required to be installed in or near any of the public right of ways adjoining
the shopping center by any governmental authority, either as a condition for
granting a building permit for the construction of the premises or otherwise,
Landlord agrees to pay the cost thereof.
ARTICLE IV (TAXES), SECTION 2. Tenant shall pay before delinquency any and
all real property taxes and assessments of whatsoever kind or nature levied or
assessed against the land, building or other improvements constituting the
premises, as defined in Article I, Section l(b), or attributable thereto during
the term of this lease. Tenant shall deliver to Landlord copies of receipts
evidencing payment of all such real property taxes and assessments when due. All
real property taxes and assessments payable for a period, part of which shall be
within the lease term and part of which shall be either before or after the
lease
1 - EXHIBIT E
32
term, shall be prorated between Landlord and Tenant. Tenant shall indemnify and
hold Landlord and the premises harmless from any and all claims, demands and
liabilities arising out of or in any way connected with all such taxes or
assessments.
(a) If the premises are a part of a larger parcel of real property which is
assessed as one property for real property tax purposes, Tenant shall pay only
that part of such tax or assessment which is attributable to the land, building
and other improvements constituting the premises. For the purpose of determining
the amount of any assessment payable by Tenant under this subparagraph (a), the
figures supplied by the Multnomah County Department of Assessment and Taxation
or other taxing authority as to the breakdown of said assessment shall be
conclusive.
(b) Tenant shall have the right, at its own cost and expense, to contest in
good faith in any proper proceeding, in the name of Landlord, if necessary, the
payment or satisfaction of any taxes, assessments, licenses, charges, liens,
penalties or claims agreed to be paid by Tenant, if the validity thereof or the
right to assess or levy the same against or collect the same from the premises
or improvements be disputed by Tenant; and Landlord agrees to cooperate with
Tenant in this regard.
ARTICLE VI (CARE AND USE OF PREMISES), SECTION 2. The premises shall be
used only for business and commercial purposes, and no industrial, manufacturing
or processing activities (except such manufacturing or processing activities as
are usual, customary and incidental to, and operated in connection with,
business and commercial enterprises selling at retail and are so conducted on
the said property) shall be conducted in the premises. Tenant shall not conduct
any auction, fire, closing out or bankruptcy sale in or about the premises, nor
obstruct the sidewalks or common areas or use the same for business or display
purposes without the prior consent of Landlord, provided, however, Tenant may
display merchandise on the common areas adjacent to the premises and may conduct
sidewalk or parking lot sales on the common areas adjacent to the premises in a
manner similar to that currently being conducted at Tenant's other stores.
Tenant shall not abuse walls, ceilings, partitions, floors, wood, stone, iron
work; nor use plumbing for any purpose other than that for which constructed;
nor make or permit any noise or odor objectionable to the public, to other
occupants of the building or to Landlord to emit from the premises; nor create,
maintain or permit a nuisance thereon; nor cause to exist, or permit to exist,
any fire hazards in the premises; nor do any act tending to injure the
reputation of the Shopping Center; nor, without Landlord's consent, place nor
permit any radio or television antenna, loud speaker or sound amplifier, or any
phonograph or other devices similar to any of the foregoing on the roof or
outside of the building or at any place where the same may be seen or heard
outside of the building without Landlord's consent; nor, where loading and
delivery services are provided, use or permit to be used front entrances for
truck delivery or pickup of merchandise or supplies to or from the premises, or
permit trucks or other delivery vehicles while being used for any such purpose
to be parked at any place within the Shopping Center except such facilities as
are specifically provided for such purpose.
2 - EXHIBIT E
33
ARTICLE VI (CARE AND USE OF PREMISES), SECTION 3. Tenant agrees not to open
or operate, directly or indirectly any store substantially identical in
merchandise mix and operation to the store to be operated on the leased premises
within a radius of Two and One-half (2-1/2) miles of the Shopping Center.
ARTICLE VI (CARE AND USE OF PREMISES), SECTION 5. Tenant shall keep all
electric signs and lighted display windows on from sunset to 11:00 p.m., and
during any other hours when either the Shopping Center or the premises are open
for business. Tenant shall refer to the Shopping Center as Eastport Plaza
Shopping Center, or, such other name as may then be in use of the Shopping
Center, in designating the location of the premises in all newspaper or other
advertising, stationery, or other printed material and all other references to
the location of the premises, and shall not use the name of the Shopping Center
for any purpose other than Tenant's business address, without Landlord's written
consent. Tenant shall include the address and identity of its business
activities in the premises in all advertisements made by Tenant in which the
address and identity of any other local business activity of like character
conducted by Tenant shall be mentioned and shall not divert from the premises
any business which ordinarily would be transacted by Tenant therein. Provided,
however, Tenant may conduct, promote and advertise fire sales, discontinued,
damaged or distressed merchandise sales, closeout sales, grand opening sales,
sales and promotions of the type similar to "Crazy Days" sales and "Moonlight
Madness" sales, conducted by other shopping centers containing other stores of
Tenants, and similar types of sales and promotions at locations other than the
premises, without conducting, promoting and advertising similar sales at the
premises and may remove merchandise from the premises to such other locations
for such sales if, in the opinion of Tenant, the quality, quantity, type or
condition of such merchandise is such that it would be impractical or
uneconomical to sell, promote or advertise such merchandise on the premises.
ARTICLE VII (MERCHANT'S ASSOCIATION), SECTION 2(a). For the purposes of
SECTION 2, Tenant is a major department store.
ARTICLE IX (REPAIRS), SECTION 1. Landlord shall have no obligation
whatsoever to repair, alter, improve or maintain the premises, or any portion
thereof, during the lease term. During the lease term, at Tenant's own expense,
Tenant shall keep the entire premises and all buildings and improvements therein
and thereon in good order, condition and repair; and Tenant shall make all
repairs, alterations, restorations and/or improvements in, on or about the
premises which may be required from time to time by any legally constituted
governmental authority. Without limiting the generality of the foregoing,
Tenant's obligation to repair includes all exterior portions of the building and
fences constituting the premises. All such work shall be of a quality at least
equal to the original and shall be performed in accordance with plans and
specifications prepared by Tenant and promptly approved in writing by Landlord,
which approval shall not be unreasonably withheld. If Landlord reasonably deems
any such work necessary, Landlord may demand that Tenant perform the same
immediately; and if Tenant refuses or neglects to commence and complete same
with reasonable promptness, Landlord may cause such work to be performed of a
quality at least equal to the original, and the cost thereof shall be additional
rent payable by Tenant to
3 - EXHIBIT E
34
Landlord upon demand, with interest at the rate of Ten percent (10%) per annum.
Except in an emergency creating an immediate risk of personal injury or property
damage, Landlord may not perform repairs or work which are the obligation of
Tenant unless at least thirty days before work is commenced the Tenant is given
written notice outlining with reasonable particularity the repairs or work
required, and Tenant fails within that time to initiate such repairs in good
faith.
ARTICLE X (INSTALLATIONS, SIGNS AND ALTERATIONS), SECTION 4. Landlord
hereby consents to the installation of a sign on the building similar in color,
style and size to the sign currently in place on Tenant's "G. I. Joe's" store in
Beaverton, Oregon.
ARTICLE XII (INSURANCE), SECTION 5. Tenant shall procure and maintain in
full force during the term of this lease a policy or policies of fire insurance
with standard extended coverage endorsement to the extent of the full
replacement cost of the buildings and improvements placed in or on the premises.
Each such policy shall be written by a responsible insurance company licensed to
do business in the State of Oregon and shall be subject to reasonable approval
by Landlord as to form and company. Tenant shall furnish Landlord with
satisfactory evidence of the payment of the premiums thereon at the commencement
of the term and at least Thirty (30) days prior to the expiration of each such
policy. At Landlord's option, Landlord may obtain such insurance, subject to
Tenant's reasonable approval as to form and company, and keep the same in force
and effect, and Tenant shall pay Landlord upon demand from time to time the
premium costs thereof.
ARTICLE XVII (DEFAULT), SECTION 4. Landlord agrees that its lien on
Tenant's property shall be subordinate and secondary to any lien or security
interest on said property which Tenant has heretofore or may hereafter give to
any bank or other financial or lending institution as security.
ARTICLE XXIV (GENERAL), SECTION 10. Landlord, at Landlord's expense, shall
demolish and remove what was formerly known as the Xxxxxxxxx Building and
resurface the pad within Ninety (90) days from the completion of the building
and improvements by Tenant pursuant to the lease and the commencement date of
the term hereof.
ARTICLE XXIV (GENERAL) SECTION 11. Landlord intends to obtain an
appropriate zone change to permit expanded parking in the common areas
designated for parking, and landlord shall use its best efforts to obtain such
zone change. Landlord intends to cause the streets indicated in Exhibit A to be
vacated, and Landlord shall use its best efforts to vacate said streets.
However, and subject to Landlord's agreement to utilize its best efforts,
neither obtaining such zone change nor vacating said streets shall constitute
conditions to the performance of this lease by Tenant.
ARTICLE XXIV (GENERAL), SECTION 12. Tenant shall participate in at least
twelve (12) of the annual promotions of the Shopping Center by advertising in
the Eastport Plaza News owned by the Merchant's Association, with each
advertisement being not less than 100 inches in size. If, at the end of each
annual period during the term hereof, Tenant has not
4 - EXHIBIT E
35
complied with this requirement, Tenant shall pay to the Promotional Fund, in
addition to the amounts required to be paid pursuant to Article VII, the
difference between the cost of 1,200 inches of such advertising and the actual
cost expended by Tenant during such period. The reference to "annual" or "annual
period" in this Section 12 shall mean a January 31st fiscal year, which is the
fiscal year of the Merchant's Association. Tenant's advertising requirement
shall be prorated for any partial "annual period" existing at the commencement
of the term or at the expiration of the term of this lease.
ARTICLE XXV.
OPTION TO RENEW
SECTION 1. If Tenant shall not then be in default of any term, condition or
covenant contained herein, Tenant shall have the option to renew this lease for
two (2) separate and successive periods, herein called "extended terms", of five
(5) years each by giving written notice of each renewal at least six (6) months
prior to the expiration of the then current lease term. The terms and conditions
for each extended term shall be identical with the original term of this lease
except for the fixed and percentage rent during such periods, which shall be
computed as provided below in this Article.
SECTION 2. Beginning upon the effective date of each of the extended terms
and continuing during each of the extended terms, the annual fixed rent shall be
the fair (i.e. market) rental value of the premises upon the effective date of
the extended term. The parties shall mutually agree as to the fair rental value
of the premises upon the effective date of each of the extended terms, and the
amount agreed upon shall constitute annual fixed rent. If the parties are unable
to mutually agree upon the fair rental value not less than ninety (90) days
prior to the effective date of each of the extended terms, then the fair rental
value shall be determined by arbitration as set forth in Section 3 below.
SECTION 3. If arbitration is required to determine the annual fixed rental
for either extended term, the arbitration procedure shall be as follows: The
parties shall attempt to mutually agree upon one arbitrator to make the
determination, and if they are unable to agree upon one arbitrator within 15
days after arbitration is called for by either party, each party shall appoint
one arbitrator forthwith and the two arbitrators shall appoint a third
arbitrator. The three arbitrators shall make a determination of the fair rental
value of the premises with all reasonable dispatch, and a decision of two of the
three arbitrators shall be final and binding upon the parties hereto. Any
arbitrator selected hereunder shall be independent and qualified in the
commercial real property field, and shall have had appraisal experience in the
Portland metropolitan area. The cost of arbitration shall be borne equally by
both parties. The determination of the fair rental value of the premises by the
arbitrators shall constitute the annual fixed rental, and shall be effective as
of the commencement of the applicable extended term.
SECTION 4. The annual fixed rent for an extended term shall be divided by
.03 (3%), and this amount shall constitute the "break point" during such
extended term. The applicable
5 - EXHIBIT E
36
percentage for percentage rent during such extended term shall be Three percent
(3%) of gross sales for each lease year to and including the "break point", and
One and One-half percent (1-1/2%) of the amount of gross sales in each lease
year in excess thereof. Therefore, only the annual fixed rent for an extended
term will be redetermined as provided herein, the percentages to and from the
"break point" will remain the same as during the original term, and the "break
point" will be automatically adjusted when the annual fixed rent is determined
for such extended period.
SECTION 5. All other charges or additional rent provided for during the
original term of this lease shall remain in full force and effect during any
extended term.
6 - EXHIBIT E
37
Exhibit A Map insert
38
The following described real property in Xxxxxxx 0, Xxxxxxxx 0 Xxxxx, Xxxxx
2 East of the Willamette Meridian, in the County of Multnomah and State of
Oregon:
PARCEL I:
Beginning at a point on the east line of S.E. 82nd Avenue, which is North
0(degree) 32' 20" East 458.44 feet and South 89(degree) 55' 10" East 35.0 feet
from the southwest corner of Section 9, Township 1 South, Range 2 East of the
Willamette Meridian; thence North 0(degree) 32' 20" East along the east line of
S.E. 82nd Avenue, 173.39 feet; thence North 88(degree) 16' 20" West 5.00 feet;
thence North 0(degree) 23' 20" East, 568.23 feet; thence South 89(degree) 49'
20" East along a part of the Northerly boundary of the tract conveyed by deed of
Anlauf, recorded December 8, 1959 in Book 1987 page 271, Deed Records, 100.00
feet; thence North 0(degree) 32' 20" East along the western boundary of lands
conveyed by deed of Claunder, recorded January 25, 1960 in Book 1992 page 607,
Deed Records 186.09 feet to the south line of X.X. Xxxxxxx Street; thence South
89(degree) 59' 20" East along said south line of X. X. Xxxxxxx Street, 516.65
feet to the East line of S. E. 84th Avenue; thence North 0(degree) 05' 20" East
along the east line of S. E. 84th Avenue, 150.02 feet to the Northwest corner of
Xxx 00, Xxxxx 0, Xxxxx Xxxx Xxxxxxx; thence South 89(degree) 59' 20" East,
410.00 feet; thence North 0(degree) 05' 20" East 99.99 feet to the South line of
X. X. Xxxx Street; thence South 89(degree) 59' 20", East along said South line
of X. X. Xxxx Street, 160.03 feet to a point which is South 89(degree) 59' 20"
East 35.00 feet from the northeast corner of Xxx 0, Xxxxx 0, Xxxxx Xxxx Xxxxxxx;
thence South 0(degree) 09' 00" West 436.08 feet to a point which is the
northernmost point of the common Boundary between lands of Xxxxxxxxx and Xxxxxxx
acquired by deed from Xxxxxx, Xxxxx & Xxxxxxx, dated and recorded April 6, 1956
in Book 1777 page 427 Deed Records, and adjoining lands of Multnomah County
School District No. 1, as established by joint deed of Xxxxxxxxx and Xxxxxxx and
of said School District, dated November 14, 1958 recorded December 1, 1958, in
Book 1930 page 328, Deed Records; thence along said common boundary as
established by said joint deed and its extension South 0(degree) 09' 00" West,
124.07 feet; thence South 89(degree)44' 30" West 0.18 feet; thence South
0(degree) 32' 20" West 476.08 feet to the Xxxxxxxxx xxxxxx xx Xxxxx 0, Xxxxx
Xxxx, as actually platted; thence South 88(degree) 15' 10" East along the north
line of Block 6, Xxxxx Xxxx, as actually platted, 173.45 feet to the west line
of S. E. 87th Avenue; thence South 0(degree) 04' 50" West along the West line of
S. E. 87th Avenue to the Southeast corner of Xxx 0, Xxxxx 0, Xxxxx Xxxx, 159.55
feet; thence North 88(degree) 14' 10" West along the Southern Boundary of said
Lot 4, 99.99 feet; thence North 0(degree) 04' 50" east along the western
boundary of said Lot 4 to its intersection with the southern boundary of Xxx 0,
Xxxxx 0, Xxxxx Xxxx, 20.00 feet; thence North 88(degree) 14' 10" West along the
southern boundary of Xxx 0 xxx 00, Xxxxx 0, Xxxxx Xxxx, 73.43 feet; thence South
0(degree) 03' 20" West to the southeast corner of lands conveyed by deed from
Xxxxxx, Xxxxx & Xxxxxxx, dated and recorded April 6, 1956 in Book 1777 page 427,
Deed Records, 3.06 feet; thence North 89(degree) 55' 10" West along the southern
boundary of said lands as described in said deed, 1185.22 feet to the point of
beginning.
TOGETHER with the benefits of that certain Cross Easement Agreement and
Declaration Imposing Covenants recorded November 1, 1960 in Book 2035 page 320,
Deed Records; ALSO TOGETHER with the benefits of that certain Cross Easement
Agreement
EXHIBIT C
39
recorded March 6, 1975 in Book 1030 page 1066, Deed Records, so long as the
parties shall not be in default under said Agreements and so long as said
Agreements have not expired or been terminated in accordance with their terms.
EXCEPT the following described tract:
Beginning at a point in the Southwest quarter of Section 9, Township 1
South, Range 2 East of the Willamette Meridian, said point being North 0(degree)
23' 20" East along the center line of S. E. 82nd Avenue, a distance of 742.17
feet and South 89(degree) 55' 10" East, 751.66 feet from the Southwest corner of
Section 9, Township 1 South, Range 2 East of the Willamette Meridian; thence
North 0(degree) 04' 50" East 458.89 feet to a point in the South line of Block 9
Grand View Heights, a duly platted addition; thence South 89(degree) 59' 20"
East along said line, being a common boundary between said Block 9 and that
certain tract conveyed by deed from Xxxxxx, Xxxxx & Xxxxxxx, dated and recorded
April 6, 1956 in Book 1777 page 427, deed Records, 470.36 feet; thence South
0(degree) 09' 00" West along the common boundary between the property conveyed
by deed from Xxxxxx, Xxxxx & Xxxxxxx, dated and recorded April 6, 1956 in 1777,
page 427, Deed Records, and adjoining lands of School District No. 1, Multnomah
County, as established by joint deed of said School District and Xxxxxxxxx and
Xxxxxxx, dated November 14, 1958, recorded December 1, 1958 in Book 1930 page
328, Deed Records, 124.07 feet, thence South 89(degree) 44' 30" West along said
common boundary, 0.18 feet; thence South 0(degree) 32' 20" West continuing along
said common boundary, 335.42 feet; thence North 89(degree) 55' 10" West 202.50
feet; thence South 0(degree) 04' 50" West 16.10 feet; thence North 89(degree)
55' 10" West 96.65 feet; thence North 0(degree) 04' 50" East 16.10 feet; thence
North 89(degree) 55' 10" West 168.22 feet to the point of beginning.
EXHIBIT C
