EXHIBIT 10.4
KRCV CORP.
and
VENTURE STORES, INC.
UNITARY NET LEASE
Dated: August 6, 1997
TABLE OF CONTENTS
Article or
Section Title Page
Definitions 2
I Condition of Demised Premises 9
II Term 12
III Basic Rent; Net Lease 13
IV Impositions 14
V Insurance 21
VI Use of Demised Premises; Use of Common Areas 29
VII Surrender and Right to Remove Trade Fixtures 31
VIII Landlord's Right to Perform Tenants Covenants 33
IX Compliance with Laws and Insurance Policies 34
X Mechanics' Liens; Other Liens; Mortgages 36
XI Repairs and Maintenance; Common Area
Maintenance and Common Area Charges 38
XII Right of Landlord to Inspect and Repair 47
XIII Indemnification by Tenant 48
XIV Light, Heat and Power, etc. 50
XV Changes, Alterations and New Construction 50
XVI Destruction and Restoration 54
XVII Quiet Enjoyment 57
XVIII Eminent Domain 57
XIX Assignments and Subleases; Leasehold
Properties; Space Leases, Outlot Lease
and Vacant Areas 61
19.03 Transferred Leases and Collateral Leases 63
19.04 Non-disturbance 64
19.06 Special provisions as to Leasehold Properties 68
19.06(3) Tenant pay Underlying Lease Rents 69
19.07 Conversion of Collateral Leases; Vacant Areas 75
XX Default and Remedies 78
XXI Arbitration and Appraisal 86
XXII Estoppel Certificates; Financial Statements 88
XXIII Invalidity of Particular Provisions 89
XXIV Notices 89
XXV Options to Extend; Extended Term Basic Rent 90
XXVI Hazardous Substance 93
XXVII Miscellaneous 99
XXVIII Subordination 101
Signatures 102
UNITARY NET LEASE
LEASE dated as of the 6th day of August, 1997 by and
between KRCV CORP., a Kansas corporation ("Landlord"), and
VENTURE STORES, INC., a Delaware corporation ("Tenant" or
sometimes "Venture").
STATEMENT OF INTENT
This Unitary Net Lease constitutes one unitary,
indivisible, non-severable lease of all the Demised Premises and
this Lease is a single lease. This Lease does not constitute
separate leases contained in one document each governed by
similar terms. The use of the expression "Unitary Lease" to
describe this lease is not merely for convenient reference. It
is the conscious choice of a substantive appellation to express
the intent of the parties in regard to an integral part of this
transaction: To accomplish the creation of an indivisible
lease. The parties agree that from an economic point of view
the portions of the Properties leased by this Lease constitute
one economic unit and that the Basic Rent and all other
provisions have been negotiated and agreed to based on a demise
of all the portions of the Properties covered by this Lease as
a single, composite, inseparable transaction. Except as
expressly provided in this Lease for specific isolated purposes
(and in such cases only to the extent expressly stated), all
provisions of this Lease, including, without limitation,
definitions, commencement and expiration dates, rental
provisions, use provisions, renewal provisions, breach, default,
enforcement and termination provisions and assignment and
subletting, shall apply equally and uniformly to all the Demised
Premises as one unit and are not severable. The economic terms
of this Lease would have been substantially different had
separate leases or a "divisible" lease been contemplated by the
parties. A default of any of the terms or conditions of this
Lease occurring with respect to any portion of the Demised
Premises situated on a particular Property shall be a default
under this Lease with respect to all the Demised Premises.
Landlord and Tenant agree that the provisions of this Lease
shall at all times be construed, interpreted and applied such
that the intention of Landlord and Tenant to create a unitary
lease shall be preserved and maintained. The parties agree that
for the purposes of any assumption, rejection or assignment of
this Unitary Lease under 11 U.S.C. Section 365 or any amendment
or successor section thereof, this is one indivisible and
non-severable lease dealing with and covering one legal and
economic unit which must be assumed, rejected or assigned as a
whole with respect to all (and only all) the Demised Premises
covered hereby.
Words and phrases and expressions which appear in this
Lease with the first letter of each word capitalized are defined
terms. Defined terms shall have the meanings as defined in this
Lease.
Definitions
For this Lease the following terms shall have the following
meanings:
1. "Affiliate" means any corporation controlling,
controlled by, or under common control with either Tenant or
Landlord (whichever of Landlord or Tenant is being referred to
in the context) within the meaning of the rules and regulations
promulgated under the Securities Act of 1933, as amended.
2. "Appurtenances" means all easements (including any
rights under applicable construction, operating and/or
reciprocal easements agreements) over adjoining real property,
rights of way, hereditaments, interests in or to adjacent
streets or alleys or other real property and all the benefits
thereunto belonging and appertaining to the Land or the
Improvements.
3. "CAM" is defined in Section 11.03.
4. "CAM Costs" are defined in Section 11.03.
5. "Common Area Charges" means the amount or share
that a party is responsible to pay for CAM Costs as determined
in Section 11.07 and Section 11.08.
6. "Common Areas" means all areas and facilities
outside of the storerooms erected or situated on the Shopping
Centers designated and improved for common use, excepting (i)
other tenants' pylon signs and sign panels, and (ii) portions of
the Shopping Centers which are used by only one Outlot Lease
occupant and its employees, agents, customers, invitees and
licensees, and (iii) loading docks; but including, without
limitation, the following areas and facilities to the extent
they exist: parking areas; access roads; entrances and
driveways; lighting facilities; grass, shrubs, trees and
landscaping; retaining walls; landscaped areas, passageways
sidewalks and curbs (including exterior sidewalks and curbs
adjacent to the buildings); culverts; retention basins and
drainage facilities; directional and shopping center pylons or
monuments; marking or striping of the parking areas and
roadways; sewer and sewage disposal systems; water supply,
electric lines, gas lines and other service and utility lines,
pipes and installations of every kind and including those, if
any, off the Shopping Centers servicing common areas and common
facilities of the Shopping Centers, including traffic control
devices within the Shopping Centers and, to the extent the owner
of the Shopping Center is responsible for such devices off-site,
the traffic control devices on adjacent roadways.
7. "Covenants" means all recorded documents and/or
instruments which run with the land, encumber the Shopping
Centers or otherwise bind Tenant.
8. "Demised Premises" means collectively those
portions of the Shopping Centers which consist of certain
buildings or portions of buildings situated within the Shopping
Centers, as shown by outline in red on Exhibit B; the buildings
outlined in red are the premises intended to be leased to Tenant
under this Lease. Exhibit B shows certain portions of the
Demised Premises shaded by slanted lines, indicating that these
portions are vacant and unoccupied at the date of this Lease.
The Trade Fixtures owned by Landlord situated in and used in
conjunction with the use, occupancy and business of warehouse
and distribution of merchandise at the Distribution Center shall
be deemed to be included within the expression "Demised
Premises".
9. "Fee Title Property" means a Property owned by
Landlord in fee title.
10. "Floor Area of the Demised Premises" means the
aggregate gross square feet of all levels inside the Venture
Building and the other buildings, if any, within the Demised
Premises, measured from the exterior surface of perimeter walls
to the exterior surface of opposite perimeter walls, except if
a building on the Demised Premises shares a common wall with a
Landlord's Building on the Shopping Center, then measured to the
center of that common wall; Floor Area of the Demised Premises
shall include, but not be limited to, the gross square feet of
all basements, balcony or mezzanine space.
11. "Floor Area of Landlord's Building" means the
aggregate gross square feet of all levels inside Landlord's
Building, measured from the exterior surface of perimeter walls
to the exterior surface of opposite perimeter walls except if
the Landlord's Building shares a common wall with a building of
the Demised Premises, then measured to the center of that common
wall; Floor Area of Landlord's Buildings shall include, but not
be limited to, the gross square feet of all basements, balcony
or mezzanine space.
12. "Improvements" means all buildings, structures
and other improvements now existing or hereafter constructed on
the Land and any restoration, addition to or replacement thereof
(and when so referred to excludes and does not mean to include
Tenant's Trade Fixtures or the Appurtenances).
13. "Land" means the land of all the Properties
unless stated otherwise; the Land is described in attached
Exhibit A (and when so referred to excludes and does not mean to
include the Improvements, Tenant's Trade Fixtures or the
Appurtenances). (See item 22 of this Section.)
14. "Landlord" means the owner or owners at the time
in question of fee title to certain portions of the Demised
Premises which Landlord owns in fee title or in other instances
means the holder of a leasehold estate, as the lessee
thereunder, as to other portions of the Demised Premises which
constitute Leasehold Properties; in the event of any conveyance
or transfer thereof by the Landlord named on the top of page 1
of this Lease, and in case of any subsequent conveyances or
transfers thereof by the then Landlord, each grantor or
transferor shall be automatically freed and relieved, from and
after the date of his or its transfer or conveyance, of all
liability as respects the performance of any covenants or
obligations on the part of Landlord contained in this Lease
thereafter to be performed, provided the grantee or transferee
assumes in writing the obligations of Landlord which will arise
under this Lease from and after the date of the transfer. Any
money in the hands of the transferring Landlord at the time of
such transfer in which moneys Tenant has an interest, such as a
security deposit or the payments for Impositions pursuant to
Section 4.07 hereof, if any, shall, if there not be a default by
Tenant existing at the time, be turned over to the grantee or
transferee, it being intended that the covenants and obligations
contained in this Lease on the part of Landlord shall, subject
as aforesaid, be binding upon Landlord and its successors and
assigns only during and in respect of their respective
successive periods of ownerships.
15. "Landlord's Buildings" means buildings and
storerooms located within buildings in the Shopping Centers
which are owned or leased by Landlord or subleased by Landlord
from an Overlandlord, not including the Demised Premises and not
including any buildings owned or leased by any Overlandlord, if
any, within a Shopping Center, which is not leased by Landlord.
16. "Landlord's Common Area Charge" is defined in
Section 11.03.
17. "Landlord's Share" means a fraction, the
numerator of which is the Floor Area of Landlord's Buildings in
a particular Shopping Center and the denominator of which is the
Floor Area of Landlord's Buildings in that Shopping Center plus
the Floor Area of the Demised Premises in that same Shopping
Center (multiplied by the amount of the item to be shared, such
as CAM Costs or Impositions).
18. "Leasehold Property" means a Property held by
Landlord as the tenant under a lease or sublease.
19. (a) "Outlot" means a parcel of land in a Shopping
Center located on or in close proximity to the abutting public
road, together with the building and other improvements, if any,
at any time erected thereon; such building being free-standing,
the Outlot parcel often having its own curb cut and direct
access to the abutting public road, but sometimes relying solely
for access on the entrances, exits and roadways within the
Shopping Center; and most often the occupant of an Outlot will
be a restaurant or fast food operation, a bank, a gasoline
station, a national or regional retail chain store, or the like.
Some Outlots, for the purpose of this definition, may, at the
date of this Lease, consist of vacant and unimproved parcels
within the Shopping Center; some of such vacant and unimproved
parcels are labelled as Outlots on Exhibit B, but Landlord may
designate other areas, in Landlord's discretion, for Landlord to
develop. An Outlot leased to a tenant is included within the
definition of Space Lease, but reference to an Outlot or Outlot
Lease in certain places in this Lease may distinguish it from
other Space Leases for certain purposes.
(b) "Outlot Lease" means a lease or sublease,
license or other occupancy agreement, with respect to an Outlot,
and is a Space Lease, but only as to an Outlot.
(c) "Overlandlord" means the owner of the fee
title or lessee from the Fee Owner or who is a lessee of a
lessee of a Leasehold Property at the time in question and who
is also the lessor under the Underlying Lease.
20. "Property" means one of the parcels of the Land
together with all the buildings and other Improvements situated
thereon at the date of this Lease or at any time in the future,
and also includes the applicable Appurtenances pertaining to
such Land. "Properties" means more than one Property; and if
where used in this Lease, no limiting reference is used with the
word "Properties", it shall be intended in that context to mean
"all the Properties". The expressions Property or Properties as
used in this Lease is intended to be synonymous with the
expressions Shopping Center or Shopping Centers.
21. "Responsible Party" means the person or entity
who is responsible pursuant to this Lease, at the time in
question, to perform or cause to be performed the CAM tasks.
22. "Shopping Center" means all those parcels of real
estate which comprise collectively the Land legally described on
attached Exhibit A, but includes all the buildings and other
Improvements, if any, and the Appurtenances situated thereon.
Except for two of the Properties described on Exhibit A, and
another Property which is at the date of this Lease vacant and
unimproved land, each Shopping Center is, at the date of this
Lease, improved as a retail shopping center and contains erected
thereon, along with a parking field and similar improvements, a
Venture Building and in many cases other buildings. One of the
Properties referred to in the preceding sentence is being used
at the date of this Lease for a distribution/warehouse located
in Corsicana, Texas (hereinafter the "Distribution Center") and
another Property just referred to is being used as a
photo/studio processing center in O'Fallon, Missouri
(hereinafter the "Photo Studio") and the vacant and unimproved
Property just referred to is located in North Richland Hills,
Texas. However, for the purpose of this Lease, those three non-
shopping center Properties are deemed included with the other
Properties within the definition "Shopping Center".
The Shopping Centers constitute a larger aggregate
area than the Demised Premises, because the Demised Premises
consists of certain buildings and the storeroom space in those
certain buildings situated within Shopping Centers, and the
entire Shopping Centers have not been leased under this Lease to
Tenant: in some cases (as may be seen by reviewing the drawings
which are Exhibit B attached to this Lease), Tenant leases only
the Venture Building within a Shopping Center; and in other
cases, Tenant leases the Venture Building together with portions
of other buildings and the space within the other buildings
within a Shopping Center. The Common Areas in the Shopping
Centers have not been leased to Tenant; nor Landlord's
Buildings, if any, situated thereon.
22A. "Space Leases" means the following: Prior to
the date of this Lease, Venture operated and/or leased and/or
subleased various storerooms to various occupants of buildings
within certain of the Shopping Centers pursuant to subleases.
Those leases of space in the Shopping Centers to such tenants
which exist as of the date of this Lease, or leases, subleases,
licenses or other occupancy agreements which may hereafter be
entered into at any time in the future by Landlord or Tenant in
the Shopping Centers as part of the buildings erected or to be
erected thereon, are hereinafter sometimes referred to as "Space
Leases". Space Leases refer to all storerooms so leased other
than space occupied by Venture and used as a Venture Store and
includes also, unless indicated otherwise, Outlot Leases.
23. "Tenant", unless otherwise stated in the text
where the word is used, shall include Venture Stores, Inc. and
any successor of Venture Stores, Inc. and collectively shall
include in addition any permitted assignee of the leasehold
interest of Tenant under this Lease.
24. "Tenant's Share" means a fraction, the numerator
of which is the Floor Area of the Demised Premises located in a
particular Shopping Center and the denominator of which is the
Floor Area of the Demised Premises in that Shopping Center plus
the Floor Area of the Landlord's Buildings in that same Shopping
Center (multiplied by the amount of the item to be shared, such
as CAM Costs, Impositions, etc.).
25. "Tenant's Trade Fixtures" means items and
personal property owned by Tenant or any of Tenant's subtenants
located in or used in Tenant's or subtenant's business operation
at the Properties, such as, by way of example and not in
limitation, signs (excluding pylon structures), counters, cash
registers, showcases, tables, shelves, merchandise feature
walls, restaurant and kitchen equipment and restaurant fixtures,
counters, desks, gondola units, metal floor racks, stockroom and
wrapping area shelving and fixtures, office furniture, office
machines, light fixtures and alarm systems installed by Tenant
or by the subtenant. But Tenant's Trade Fixtures shall not
include building or structural items, such as walls and
partitions, compressors, blowers, ducts, air conditioning and
heating equipment, lights or lighting fixtures, electrical and
gas equipment, wiring and conduits, plumbing fixtures and pipes,
carpeting or other floor coverings, dropped ceilings, or pylon
structures and the like. It is understood and agreed that the
Trade Fixtures located and used at the Distribution Center in
the operation of the warehouse and distribution belong to
Landlord and not to Tenant and therefore are not items or
personal property within the definition "Tenant's Trade
Fixtures".
26. "Unavoidable Delays" means delays affecting the
process of construction, repair, maintenance or installations,
relating to the Demised Premises or Restoration of the
Improvements due to strikes, acts of God, acts of the elements,
inability to obtain labor or materials, governmental
restrictions, enemy action, earthquakes, civil commotion, war,
unavoidable casualty or similar causes beyond the reasonable
control of Tenant, but Unavoidable Delays shall not apply to or
excuse or delay payment of money. Neither financial inability
of Tenant to pay Rent or money or provide insurance coverage,
nor any delay or Unavoidable Delay relating to the business
operations of Tenant shall be relevant or deemed an event to
which Unavoidable Delay is applicable, and shall not be an
unavoidable delay or an excusing cause. As to any obligation
under this Lease by Landlord to pay money, Unavoidable Delay
shall not apply to or excuse or delay such payment.
27. "Underlying Lease" means the lease which was
entered into originally between the fee owner or lessee from the
Fee Owner of a Leasehold Property, as the lessor thereunder, and
the original lessee thereunder, the lessee's interest under
which lease has been sold and assigned by Venture to Landlord or
to Landlord's Affiliate contemporaneously with the making of
this Unitary Lease to Venture. The expression Underlying Lease
includes within its meaning both a lease from a fee owner of all
or substantially all of a Shopping Center (commonly referred to
as ground lease) as well as a lease from the fee owner of only
a Venture Building or a Venture Building and other structures
and areas within a Shopping Center. That certain lease, dated
September 16, 1985, made between Cook County, Illinois, as the
landlord thereunder, and The May Department Stores Company,
Venture's predecessor in interest, covering certain land used as
Common Area in conjunction with the Fee Title Property in
Elston, Illinois, shall also be deemed an Underlying Lease.
28. "Venture Building" means the entire store
building on each Property either being used at the date of this
Lease for operation of a "Venture" department store ("Venture
Store"), or else being used in part or in whole for other
purposes or by other occupants but which when built originally
constituted a "Venture Store" before being changed. There is a
Venture Building on each Property. Use of "Venture" in the
expression "Venture Building" is intended to refer to the
building as just described, whether or not at the time in
question it still is being used as a Venture Store.
WITNESSETH :
In consideration of the mutual covenants and agreements
hereinafter set forth, Landlord hereby leases to Tenant and
Tenant hereby leases from Landlord the Demised Premises and
together with a non-exclusive right for Tenant's benefit and the
benefit of Tenant's employees, customers, agents, licensees,
concessionees and invitees to use, with Landlord and all other
occupants of the Shopping Centers, if any, and all other
permittees of Landlord, the Common Areas and all easements,
rights and privileges and amenities otherwise appurtenant to the
Shopping Centers (see also Sections 6.02 and 11.10 hereof),
SUBJECT TO all matters of every kind and nature which now affect
the Demised Premises, including for example, without limitation
thereto: matters affecting the title to the Demised Premises,
whether or not of record; building code violations or violation
of any statute, law or ordinance; any state of facts an accurate
survey of the Demised Premises would disclose; the physical
condition; environmental conditions; existing and future zoning
laws, building codes and other laws; and the rights and
interests of persons in possession, Covenants, Existing
Mortgages, Underlying Leases and REAs.
Landlord and Tenant hereby covenant and agree as follows:
ARTICLE I
Condition of Demised Premises
Section 1.01. As a material inducement to Landlord in
consummating this transaction, including, acquiring Venture's
interest in the Properties and the making of this Lease, Tenant
hereby represents and warrants to Landlord that Tenant is fully
acquainted with the nature and condition, in all respects, of
the Demised Premises and the Properties and each portion or part
thereof, or to the extent not so actually acquainted has had
opportunity to become familiar with all such
conditions including (but not by way of limitation) the state of
the title thereto, the soil and geology thereof, the manner of
construction and the physical condition and state of repair or
lack of repair of the Land (which includes both the surface and
subsurface) and the Improvements (which includes all
improvements to the Demised Premises and the Shopping Centers of
every nature including inside the existing buildings and the
roofs and the structures thereof), and the nature and extent of
the rights of others (if any) with respect thereto, whether by
way of easement, right of way, lease, possession, lien,
encumbrance, license, reservation, condition or otherwise.
Tenant accepts the Demised Premises and the use of the Shopping
Center's Common Areas and each part and component thereof "AS
IS" and "WHERE IS" and "WITH ALL FAULTS", whether patent or
latent. Landlord in fact has not and does not make any
representations or warranties whatsoever to Tenant in this Lease
with respect to the condition of the Demised Premises or title
or any matters or things pertaining thereto, express, implied,
and Tenant hereby acknowledges that fact and waives any and all
rights and claims to the contrary. Notwithstanding such waiver,
and as the only exception, Tenant, as seller of the Properties
to Landlord, nevertheless shall be entitled to rely on all of
Landlord's representations and warranties, as purchaser, made in
the contract of sale which was executed contemporaneously
herewith to consummate this transaction. All representations,
warranties, covenants, indemnities and other post-closing
obligations of Tenant made or undertaken by Tenant to Landlord
in said contract of sale shall be, and hereby are, incorporated
by reference in this Section 1.01, and Tenant agrees that any
breach by Tenant, as the seller, of any of said representations,
warranties, covenants, indemnities or other post-closing
obligations shall automatically be deemed and shall constitute
a default by Tenant under this Lease as a breach and default of
such representations, warranties, covenants, indemnities or
other post-closing obligations made or undertaken to Landlord in
this Lease, and Landlord shall have all the rights and remedies
resulting from such default in addition to, and not in exclusion
of, all other rights or remedies available in law or in equity.
The breach of any representation, warranty, covenant, indemnity
or other post-closing obligation made or undertaken by Landlord,
as purchaser in the contract of sale, shall not in any event
permit Tenant to terminate this Lease or reduce the Basic Rent,
additional rent or other payments to be made by Tenant under
this Lease or diminish Tenant's other obligations, provided,
however, in the event of a Landlord default of the same, Tenant
shall be permitted to offset against the Basic Rent the amount
of any judgment Tenant obtains based on Landlord's default if
Landlord does not pay such judgment within ten days after the
judgment becomes final and unappealable.
Section 1.02. If the Demised Premises or portions thereof
either at the date of this Lease or, if agreed to by Tenant or
done with Tenant's written consent or done pursuant to this
Lease, in the future are the subject of (i) any Covenants,
agreements, tenancies, subtenancies, licenses, occupancies or
rights of others which apply to or relate to the use, operation,
maintenance, repair, construction or relate to any other aspect
of the Demised Premises or any portion thereof (including
without limitation the Existing Mortgages, Underlying Leases,
Collateral Leases, occupancy agreements or utility easements, or
(ii) any construction, operating and reciprocal easement
agreements or other easement agreements either declared by an
owner of adjoining property or to which Tenant is a party or
which is binding on Tenant or which is a matter of public record
affecting the Demised Premises or any part thereof, or any
similar agreements, (hereinafter referred to as "REAs"), Tenant
hereby assumes and agrees to perform and discharge, subject to
reimbursement by Landlord in certain instances pursuant to the
provisions contained in this Lease, any and all obligations with
respect to all of the same (including also for example Tenant's
status as a sublandlord under a sublease unless such sublease is
converted by Landlord from being a Collateral Lease to a
Transferred Lease) and with respect to any and all matters
affecting the Demised Premises or the title thereof, which
Landlord herein might otherwise be obligated to observe, do,
perform, or discharge by reason of the ownership of the Demised
Premises by Landlord. Notwithstanding the conveyance by Venture
of title to the Properties, in the case of REAs, Venture, or
whomever is the then Tenant under this Lease at the time in
question shall continue to be recognized as the party to the
REA. Landlord hereby reserves, shall have, and is hereby
granted by Tenant, equal rights with Tenant as such party to the
REA, and where a consent or approval is required or requested by
or related to the REA, neither Landlord nor Tenant will grant
such consent or approval without the written consent of the
other, and Landlord and Tenant each agree with each other not to
unreasonably withhold or delay such consent or approval or
condition the same on receiving money when Landlord or Tenant
requests the same, and neither Landlord nor Tenant will withhold
consent to any modification of an REA that does not adversely
impair or affect the Properties or their value or use. If the
REA and this Lease express in the respective documents different
obligations by Tenant concerning the same subject matter, the
obligations which require Tenant to do the greater amount shall
be observed by Tenant.
In any case where an Underlying Lease or other document
provides that notwithstanding Venture's transfer and sale of its
leasehold interest in a Property that if Venture leases or
subleases back the Venture Building and continues in possession,
Venture shall be continued to be the only party recognized as
the tenant, as before, then in such cases (but without intending
herein to concede or agree that this Lease or Landlord's
transaction with Venture falls within the intended category in
such Underlying Lease), Tenant agrees to follow Landlord's
directions and not act without Landlord's written consent in any
dealings with the Overlandlord or other party to the document.
ARTICLE II
Term
Section 2.01. The term of this Lease commences on August
6, 1997 and unless sooner terminated under any provision of this
Lease, shall expire on August 31, 2022 (the "Initial Term"),
subject to Tenant's rights of extension as provided in Article
XXV hereof.
Section 2.02 Except as expressly provided in Section 18.02
(Eminent Domain), Tenant has no right and will have no right
either to terminate this Lease, or to quit, abandon or surrender
the leasehold estate hereby created or all or any part of the
Demised Premises, or to be released, relieved or discharged from
the payment of Basic Rent or any obligation or liability under
this Lease for any reason, including, without limitation, if the
Demised Premises is subject to any damage to or destruction of
all or any part of the Improvements, or any interference with
the use or possession of all or any part of the Demised
Premises, or the occurrence of any act which renders the
performance by Landlord or Tenant impossible or which frustrates
the use of the Demised Premises for any purpose, or any force
majeure, or any action or threatened action of any court,
administrative agency or other governmental authority or the
expiration or termination of an Underlying Lease by effluxion or
otherwise.
ARTICLE III
Basic Rent; Other Rent; Net Lease
Section 3.01. In addition to all other payments to be made
by Tenant under this Lease, Tenant shall pay to Landlord in
lawful money of the United States commencing on the date of this
Lease and throughout the Initial Term, as net basic rent for
each year the rents set forth on the Schedule of Basic Rents
attached to this Lease and made a part of this Section 3.01 as
if fully set forth herein, payable in equal monthly installments
in advance monthly as set forth on said Schedule of (the "Basic
Rent"). In the Extended Terms, the Basic Rent shall be the
amounts provided for in Article XXV hereof. All Basic Rent
shall be paid on 25th day of each month prior to the month for
which the Basic Rent is due; prorated, however, for the partial
month of August at the beginning of the term. Rent shall be
paid at the address specified in Section 24.01, or other address
as may from time to time be designated. Unless requested
otherwise in writing by Landlord, Tenant agrees to make
payments of Basic Rent to Landlord by wire transfer of
immediately available Federal funds to Landlord's bank account
designated in writing to Tenant.
Section 3.02. It is the purpose and intent of both
Landlord and Tenant that this Lease is and shall always be an
absolutely "net" lease for Landlord and that all the Basic Rent
payable hereunder shall be net to Landlord and paid without any
abatements, deferral, reduction, set-off, counterclaim, defense
or deduction whatsoever, so that this Lease shall yield to
Landlord the Basic Rent and all additional rent free of all
costs, expenses and charges of every kind and nature relating to
the Demised Premises which may be attributed to or become due
during the term of this Lease (except as expressly provided
otherwise in this Lease as to certain taxes in Section 4.02);
all such costs, expenses and charges shall be paid by Tenant,
and Tenant agrees that Landlord shall be defended, indemnified
and saved harmless by Tenant from and against the same.
Section 3.03. Tenant will also pay, as additional rent,
all sums, Impositions (defined in Article IV), all rents and
other payments pursuant to all the Underlying Leases, all
payments pursuant to Existing Mortgages (except the principal
sum or the interest payable thereon and except to the extent a
payment is a prepayment penalty and is required by Landlord
electing to prepay the Existing Mortgage, or a payment is in the
nature of a penalty or added interest resulting from a default
by Landlord in the payment of the interest or principal or is an
increased payment made pursuant to a modification entered into
with the mortgagee without Tenant's consent which changes the
Mortgage to increase the amount of payments), and Tenant will
pay cleanup costs for remediation of any environmental condition
or other payments arising out of Article XXVI (Hazardous
Substances) hereof, and all other costs, expenses and other
payments which Tenant in any of the provisions of this Lease is
required to pay or has assumed or agreed to pay. All of such
sums, Impositions, costs, expenses and other payments, including
Basic Rent, shall be deemed to be collectively included in the
definition of "Rent" whenever that word is used in this Lease
with the initial capital letter R.
ARTICLE IV
Impositions
Section 4.01. Tenant agrees to pay, as additional rent in
addition to all other Rent, prior to delinquency and before any
fine, penalty, interest or cost may be added for the non-payment
thereof, but subject to certain reimbursement by Landlord
pursuant to Section 4.09 hereof, all taxes, assessments,
excises, levies, license and permit fees, water and sewer rents,
rates and charges, transit taxes, charges for public utilities
(whether governmental or nongovernmental), and all other
governmental charges, general and special, ordinary and
extraordinary, unforeseen as well as foreseen, of any kind and
nature whatsoever; the foregoing include (but are not limited
to) assessments for public improvements or benefits, which at
any time prior to or during the term of this Lease are laid,
assessed, levied, confirmed, imposed upon, or become due and
payable out of or in respect of, or become a lien on, (i) the
Shopping Centers or any part thereof or any personal property,
equipment or other facility located thereon or used in the
operation thereof; or (ii) rent, income or other payments
received from the Shopping Centers by Tenant or anyone claiming
by, through or under Tenant from subtenants or any other source;
or (iii) any use, occupancy or operation of the Shopping Center
or any rights, obligations, easements and franchises as may now
or hereafter be appurtenant or appertain to the Shopping Center;
or (iv) this transaction or any document to which Tenant is a
party creating or transferring an estate or interest in the
Shopping Center (provided, however, any subsequent conveyance by
Landlord of the fee title as to which a transfer tax is imposed
shall not be payable by Tenant); or (v) the Rent payable
hereunder to Landlord or as to any payments payable by Tenant to
any third party, as for example, any tax payable in any State
similar to the Florida sales tax on rents or the Michigan
business tax on gross receipts; or (vi) any tax, license fee or
levy on a tenant's occupancy or on a Tenant's leasehold
interest, such as in Iowa (all of which taxes, assessments,
water and sewer rents, rates and charges, transit taxes, charges
for public utilities, excises, levies, license fees and other
governmental charges described in the preceding portion of this
Section 4.01 are hereinafter collectively referred to as
"Impositions" or singly as an "Imposition"). Any Imposition
relating to a fiscal period of the taxing authority encompassing
a period after the end of this Lease a part of which period is
included within the term of this Lease shall be adjusted as
between Landlord and Tenant as of the expiration of the term of
this Lease by effluxion; so Landlord pays the portion of
Impositions attributable to any period subsequent to the
expiration by effluxion of the term of this Lease, and Tenant
pays the portion attributable to any period during the term of
this Lease; provided that to the extent any Impositions for the
payment of which Tenant is liable under clauses (v) hereinabove
is measured by Landlord's income, Tenant's liability therefor
shall be computed on the assumption that Landlord has no
property other than the Property subject to such Imposition.
Notwithstanding the foregoing definition, the expression
"Impositions" which Tenant shall be liable to pay under this
Lease shall not include the Impositions on any Landlord's
Building or an Outlot if it is being assessed and taxed as
separate and independent tax lot by the taxing authorities at
the date of this Lease or which is so taxed in the future
resulting from an application by Landlord for separate tax
subdivision and as separate and independent tax parcel and which
such Landlord's Building or Outlot is held by Landlord as a
Transferred Lease or is an Outlot Landlord developed from a
Vacant Area as the lessor under the Outlot Lease.
Section 4.02. Nothing herein contained shall require
Tenant to pay municipal, state or federal income taxes imposed
on Landlord in respect of Landlord's income or in respect of any
federal or state estate tax, succession tax, inheritance tax or
(other than as stated in clause (iv) in Section 4.01 above)
transfer taxes of Landlord, or corporation franchise taxes
imposed upon any corporate owner of Landlord's interest in the
Demised Premises; provided, however, that if at any time during
the term of this Lease the methods of taxation prevailing at the
commencement of the term hereof shall be altered so that in lieu
of or substitute for or a recharacterization of the whole or any
part of the taxes, assessments, levies, impositions or charges
now levied, assessed or imposed on real estate (including by
imposition of new taxes), there shall be imposed, (i) a tax,
assessment, levy, imposition or charge, wholly or partially as
a capital levy or otherwise, on the rents received from the
Demised Premises, or (ii) a tax, assessment, levy, imposition or
charge measured by or based in whole or in part upon the income
from the Demised Premises, or (iii) a license fee measured by
the rent payable under this Lease, then all such taxes,
assessments, levies, impositions or charges or the part thereof
so measured or based, shall be deemed to be included within
"Impositions", and Tenant shall pay and discharge the same as
herein provided in respect of the payment of Impositions;
provided, however, that to the extent any Impositions for the
payment of which Tenant is liable under clauses (I), (ii), or
(iii) hereinabove is measured by Landlord's income, Tenant's
liability therefor shall be computed upon the assumption that
Landlord has no properties other than the Property subject to
such Impositions.
Section 4.03. If, by law, any Imposition may at taxpayer's
option be paid in installments, then provided Tenant is not in
default, Tenant may exercise the option to pay (and which shall
include accrued interest on the unpaid balance of such
Imposition) in installments and, in such event, shall make such
payments as they become due during the term of this Lease and
prior to delinquency and before any fine, penalty, further
interest or cost may be added thereto, except that, if a default
under this Lease shall occur, Tenant shall, on demand, promptly
pay the remaining installments together with accrued interest,
if any.
Section 4.04. The certificate, advice or bill of the
non-payment of any such Imposition made or issued by the
appropriate official designated by law to make or issue the same
or to receive payment of any such Imposition shall be prima
facie evidence that such Imposition is due and unpaid at the
time of the making or issuance of such certificate, advice or
bill.
Section 4.05. As between the parties hereto, Tenant alone,
so long as Tenant is contesting the Impositions, shall have the
duty of attending to, making or filing any petition,
declaration, statement or report provided or required by law as
the basis of or in connection with the contest, determination,
equalization, reduction or payment of any Imposition which is to
be borne, paid or may become payable by Tenant, and Landlord
shall not be or become responsible therefor, nor for the
contents of any such petition, declaration, statement or report.
However, Landlord shall have the privilege, at its option in its
discretion, to voluntarily participate in or assume or share any
of such responsibilities to whatever extent Landlord desires,
all without diminishing Tenant's duty to pay the Impositions.
Section 4.06. Tenant shall have the right before any
delinquency occurs to contest or object to the amount or
validity of any Imposition by appropriate legal proceedings
diligently and in good faith, but Tenant shall pay the
Imposition timely and this right to contest shall not be deemed
or construed in any way as relieving, modifying or extending
Tenant's covenant to pay any such Imposition at the time and in
the manner stated in other Sections in this Article. Tenant
shall notify Landlord of all such contests when the protest or
proceeding is filed. Landlord shall not be required to join and
cooperate in any such proceedings unless necessary to do so in
order to prosecute such proceedings and Landlord will not be
subjected to any liability for the payment of any costs or
expenses in connection with any such proceedings brought by
Tenant. If Tenant shall not be contesting any Impositions,
nothing in this Section shall be in derogation of Landlord's
right to contest or appeal or negotiate for reduction, at
Tenant's expense, any Impositions payable in whole or in part
during the term of this Lease, by legal proceedings or in such
other manner as may be available to Landlord; provided, however,
if Landlord brings the proceeding without Tenant, Tenant shall
not be liable for expenses in an amount exceeding (i) the amount
of the refund Tenant receives, if any, or (ii) the value of the
benefits Tenant realizes from Landlord's contest, whichever of
(i) or (ii) is greater; and Landlord shall notify Tenant of such
proceedings.
Section 4.07. At the date of this Lease Tenant will pay
to Landlord initially an amount sufficient which, when added to
the monthly payments to be made subsequently by Tenant to
Landlord on an ongoing basis throughout the Lease Term, as
described hereinafter in this Section, will place in Landlord's
hands, by wire transfer of immediately available Federal funds
to Landlord's bank account designated in writing to Tenant
thirty days before the next Impositions payable by Tenant
hereunder are in the aggregate and severally payable to the tax
authorities, all the moneys sufficient to pay in full such
Impositions which will be due. After paying the initial amount
described in the immediately preceding sentence, Tenant shall
pay to Landlord, throughout the term of this Lease, as
additional rent, monthly payments, at the same time that the
monthly installments of Basic Rent are payable, amounts
estimated by Landlord to be designed to place in Landlord's
hands thirty days before the next date that the respective
Impositions payable by Tenant will be payable to the taxing
authority, in order to provide money for Landlord sufficient in
amount to pay such next occurring installments coming due of
Impositions; and in addition to those regular monthly payments,
Landlord may by notice given at any time and from time to time,
as to Impositions next becoming payable, require Tenant to pay
Landlord additional lump sum amounts if Landlord estimates that
the monthly payments, as they are on hand and will be
subsequently made, will not be sufficient to result in an amount
to meet the Impositions that are next due and payable; so that
Landlord always will have in hand the full amount of Impositions
payable by Tenant thirty days before the amount is payable to
the tax authorities. Payments so received by Landlord shall be
applied by Landlord to the payment of such Impositions (or if so
required by an Underlying Lease, will be paid to the
Overlandlord) so long as no Event of Default exists. Following
any Event of Default and so long as the Event of Default remains
uncured by Tenant, Landlord shall have the right to use the
payments or any portion thereof to cure the default regardless
whether the default relates to Impositions or other items which
gave rise to Tenant's default. Landlord shall furnish Tenant,
within fifteen business days after the date when any of the
Impositions would have become delinquent, receipts or other
proper evidence of payment of the Impositions. If the sum of
the payments by Tenant grows to contain an excess or deficiency
of money, more or less than will be sufficient or deficient to
pay the next installment, Landlord will adjust the future
regular monthly installments payments appropriately. Landlord
shall have the sole title and possession of the payments and
when the moneys are paid to Landlord it shall not be an asset of
Tenant, but until an Event of Default occurs, Landlord shall
keep the payments of Impositions in a bank selected by Landlord
in a separate bank account bearing interest at the bank's usual
rate for such accounts, separate from its business account, and
the interest thereon paid by the bank shall be added to and
deemed additional payments. Landlord shall send Tenant
appropriate information showing the interest earned. The bank
selected by Landlord shall be The Chase Manhattan Bank or a
comparable bank and Landlord shall notify Tenant as to the
identity of the bank holding the payments. No other interest
need be paid on the payments. If any surplus remains after
Landlord has paid any installment of Impositions, that surplus
shall continue to be held by Landlord to be applied as provided
in this Section. If for some reason Landlord is not collecting
the monthly payments and paying the Impositions, Tenant will pay
the Impositions which are payable by Tenant itself directly to
the taxing authorities, and in such event, Tenant agrees to
furnish Landlord within ten days after the date when any
Imposition would have become delinquent, receipts or other
proper evidence of payment of the Impositions. Landlord, in
determining the monthly estimates for the Landlord monthly
payments of Impositions to be paid to Landlord, shall take into
consideration payments made by Tenant to the holders of an
Existing Mortgage into a fund for Impositions held by the
mortgagee. Tenant's liability and obligation to pay Impositions
which are payable by Tenant shall not be released or diminished
and Landlord shall not assume the obligation to pay Impositions
by Landlord exercising Landlord's option under this Section 4.07
to collect the payments provided for in this Section, excepting
only to the extent of the amount of such payments Tenant has
placed in Landlord's hands timely; provided, however, so long as
no Event of Default exists, Landlord shall be responsible for
any interest, fines or penalties imposed by law for late payment
of Impositions (if Landlord is at fault in paying late) for any
installment thereof for which Tenant has placed sufficient funds
timely in Landlord's hands with which to pay the installment and
unless an Event of Default exists, Tenant shall have the right
of offset for any Impositions not so paid by Landlord which
threatens to result in loss of Tenant's Lease rights.
Section 4.08. In the event of a conveyance of the title
to the Demised Premises or transfer of Landlord's interest in
the Underlying Leases by Landlord as to a Leasehold Property, or
a transfer by Landlord of the title to or interest in any
individual Property of which the Demised Premises constitutes a
component, the grantee or transferee, as the case may be, shall
assume the obligations of the Landlord described in Section 4.07
with regard to the collection from Tenant of the Impositions and
the payment of Impositions.
Section 4.09. If for any reason Landlord is not
collecting the payments from Tenant as provided in Section 4.07
and Tenant is paying the Impositions directly to the taxing
authorities, Tenant shall bill Landlord for the amount of any
Impositions that are payable by Landlord to Tenant pursuant to
the provisions of this Section 4.09. Otherwise Landlord shall
pay to Tenant Landlord's Share of such Impositions within five
days after the Impositions have been paid in full by Tenant or
Landlord may credit Tenant for Landlord's share against the next
due installment of Basic Rent; provided, however, in any case
Landlord shall not be obligated to pay Tenant earlier than ten
(10) days before the Imposition is required to be paid to the
tax authority. If the Demised Premises is the only leasable
storerooms on a Shopping Center, Tenant shall pay all of the
Impositions on that Shopping Center without any reimbursement
from Landlord. As to those Shopping Centers which have
Landlord's Buildings in addition to the Demised Premises
thereon, Landlord shall pay to Tenant Landlord's Share of all of
the Impositions payable by Tenant which are attributable to
periods subsequent to the date of this Lease. Landlord shall
not be liable to pay a share of any Impositions payable for any
periods prior to the date of this Lease. Whether or not data
can be ascertained from the assessment records or by letter from
the assessor or the taxing authority as to the assessed value of
the Demised Premises apart from other buildings on such Shopping
Center and apart from the Land, Landlord shall reimburse Tenant
by paying Landlord's Share of Impositions as defined in clause
number 17 in "Definitions" and as described in this Section
4.09. It is the intent of this Lease that Tenant will pay to
Landlord all the Impositions payable to the tax authorities for
the Shopping Centers, subject to Landlord reimbursing Tenant for
Landlord's Share thereof as provided herein.
As to a Collateral Lease pertaining to an Outlot which at
the date of this Lease constitutes a subdivision for tax
purposes and is a separate and independent tax parcel and is
being billed as a separate and independent tax parcel to Tenant
or being billed to the subtenant under the Outlot Lease, Tenant
may continue that procedure and Tenant will diligently enforce
the Outlot Lease to assure faithful payment of the Impositions
by the subtenant with respect thereto. Tenant shall be and
remains primarily liable for payment of such Impositions, but in
determining Landlord's Share, if any, of the Impositions for the
Shopping Center in which that Outlot is located, the Impositions
and the square footage of the Outlot including the building
thereon will not be used to determine Landlord's Share.
Notwithstanding any dispute which may arise between
Landlord and Tenant concerning either the amount of Impositions
payable by Tenant or Landlord or Tenant's or Landlord's
obligation to pay Impositions, Tenant shall pay and continue to
pay to Landlord the Impositions as required by this Lease, but
subject later to refund, if any, to which Tenant may be
subsequently determined to be entitled pursuant to the
applicable provisions contained in this Lease.
Section 4.10. If any Property is located in Ohio,
Indiana or Illinois or any other State where Impositions are
payable in arrears, in all cases, the Impositions payable by
Tenant or by Landlord to Tenant for any year or other period
involved shall mean the amounts of those Impositions which are
payable with respect to the Shopping Center during that current
calendar year notwithstanding that the bill rendered from the
taxing authority is for the Impositions for the prior year but
payable during the then current calendar year, as is the
practice for example in Ohio or such similar States.
ARTICLE V
Insurance
Section 5.01. Tenant, at its sole cost and expense as
additional rent, but subject to certain reimbursement from
Landlord pursuant to Section 5.14 hereof and subject to Section
5.15 hereof, shall keep all the Improvements on all the
Properties insured for the mutual benefit of Landlord and Tenant
with Landlord as additional named insured (and also with both
Landlord and the Insurance Trustee hereinafter described as loss
payees for all proceeds to pay a claim over $150,000), insuring
against loss or damage by an "All-Risk" insurance policy without
any special exclusions or special conditions, including therein,
without intending to limit the nature of the risks to be insured
against by such a policy, insurance against risks of fire,
lightning, as well as other risks embraced by coverage of the
type known as the special form of extended coverage, and riot
and civil commotion, collapse, vandalism and malicious mischief,
and the other risks as from time to time covered by All-Risk
insurance policy and covering demolition and increased cost of
construction due to enforcement of then current building codes
and other laws. It is understood that if Tenant no longer is
the Responsible Party, Tenant will not be required to insure the
Improvements of the Common Areas (such as light poles,
landscaping, etc.). The insurance shall be in amounts
sufficient to prevent Landlord or Tenant from becoming a
co-insurer under the terms of the applicable policies, but in
any event in an amount not less than 100% of the then full
replacement cost of the Improvements (exclusive of the cost of
excavations, foundations, and footing below the lowest basement
floor) without deduction for physical depreciation, evidenced by
a replacement cost endorsement. Tenant will maintain such
policy with not more than an aggregate amount for all manner of
losses of $100,000 for all the buildings on the Land of each
Property as a deductible from the loss payable for any one
casualty to such buildings, which deductible amount may be
increased in any Extension Term (not during the Initial Term) to
such greater amount as Tenant deems prudent, but not more than
$200,000. Tenant shall cause the Improvements to be appraised
to determine their value for the insurance purposes hereunder at
least once every three years. The appraiser shall be selected
by Tenant subject to Landlord's approval. Tenant shall pay for
the appraisal, which may be done by appraising a representative
sample of the Improvements at fifteen Properties. Any dispute
as to the selection of the appraiser or the identity of which
shall be the representative fifteen Properties shall be
determined by arbitration pursuant to Article XXI. If Tenant's
insurance company serves as the appraisal person, Landlord
shall accept the same.
Section 5.02. Tenant, at its sole cost and expense, but
for the mutual benefit of Landlord and Tenant, with Landlord as
an additional named insured, shall maintain:
(a) Commercial general liability insurance
including contractual liability on an "occurrence basis"
for the Demised Premises and, so long as it is the
Responsible Party, the Common Areas, and every part
thereof against claims for personal injury, including
bodily injury, death or property damage occurring upon the
Demised Premises, such insurance to afford immediate
protection at the time of the inception of this Lease and
at all times during the term hereof, and to have a
combined single limit of Ten Million ($10,000,000) Dollars
or such greater limits as Landlord shall reasonably
require. Tenant may maintain such policy with not more
than $100,000 deductible for each occurrence; and
(b) Boiler and pressure vessel insurance,
including air tanks, pressure piping and major air
conditioning equipment if the Improvements contain
equipment of the nature ordinarily covered by such
insurance and for an amount not less than $5,000,000 or
such larger sum as Landlord may reasonably require, and
with not more than $10,000 deductible from the loss
payable for any casualty; and
(c) Rental value or business interruption
insurance, naming Landlord as an additional named insured
and loss payee, on an actual loss sustained basis against
loss or damage by all risks in an amount Basic Rent and
Impositions under this Lease of not less than one year's
Basic Rent plus one year's Impositions, endorsed to
provide a 360 day extended period of indemnity. The net
proceeds of any such insurance paid by the insurer to
Landlord and Tenant, when received by Landlord or Tenant,
less the cost of collecting such proceeds including
necessary attorneys' fees, to the extent available, shall
be applied to pay the Basic Rent and other Rent then due
and thereafter becoming due; and
(d) Flood insurance for any Property, equal to
the full replacement cost of the Improvements located
thereon or the maximum amount then available, if any of
the buildings on any Property is in a flood zone, so
designated and participating in the National Flood
Insurance Program.
(e) Such other insurance, and in such amounts,
as may from time to time be reasonably required by
Landlord against the same or other insurable hazards which
at the time are commonly insured against in the cases of
premises similarly situated.
Section 5.03. All insurance provided for in this Article
and in Article XV shall be effected under valid and enforceable
policies issued by insurers of recognized responsibility, the
insurance policies and the insurers to be satisfactory to
Landlord in Landlord's reasonable judgment and the holders of
Existing Mortgages and, to the extent the Underlying Lease so
requires, the Overlandlords, which insurers shall have a then
current financial ability and standing equivalent to Best's
Financial Rating and Policyholders' Rating of at least A:VII and
which are authorized to transact fire and casualty and liability
insurance in each of the States where the Demised Premises are
situated. On signing of this Lease and thereafter not less than
thirty days prior to the expiration date of each policy, the
original of each policy required to be furnished pursuant to
this Article or Article XV or a certificate of the insurer
reasonably satisfactory to Landlord shall be delivered by Tenant
to Landlord. At Landlord's request, Tenant shall deliver to
Landlord a true and complete copy of Tenant's insurance policies
required to be carried by Tenant in this Lease.
Each policy procured pursuant to Section 5.01 and
paragraphs (b), (c), (d) and (e) of Section 5.02 shall contain,
if obtainable, (i) a waiver by the insurer of the right of
subrogation against Landlord, and (ii) a statement that the
insurance shall not be invalidated if any insured waives in
writing, prior to a loss, any or all right of recovery against
any party for loss accruing to the property described in the
insurance policy.
Section 5.04. Tenant shall not take out separate insurance
concurrent in form or contributing in the event of loss with
that required in this Article or Article XV to be furnished by
Tenant unless Landlord is named as an additional named insured
therein, with loss payable as provided in Section 5.05 of this
Article. Tenant shall immediately notify Landlord of the taking
out of any such separate insurance and shall cause the original
policies in respect thereof or certificates therefor to be
delivered as required by Section 5.03 of this Article.
Section 5.05. All policies of insurance provided for in
Section 5.01 and paragraphs (b), (c), (d) and (e) of Section
5.02 shall provide for loss thereunder to be adjusted by and
payable to Tenant with respect to any particular casualty
resulting in damage or destruction not exceeding $150,000 in the
aggregate; and with respect to any particular casualty resulting
in damage or destruction exceeding $150,000 in the aggregate,
the loss to be adjusted by Landlord and Tenant and payable to be
owned by both Landlord and the Insurance Trustee; the insurance
proceeds to be disbursed by the Insurance Trustee as provided
in Sections 5.11 and 16.02 hereof. At Landlord's request, said
policies shall name Landlord's Mortgagee and the Overlandlords
as an additional insured as its interest may appear. Tenant
agrees to use the insurance proceeds as a trust money to
effectuate the repairs required by this Lease.
Section 5.06. Each such policy or certificate therefor
issued by the insurer shall contain (a) a provision that no act
or omission of Tenant which would otherwise result in forfeiture
or reduction of the insurance therein provided shall affect or
limit the obligation of the insurance company so to pay, in
accordance with Section 5.05 of this Lease, the amount of any
loss sustained and (b) an agreement by the insurer that such
policy shall not be cancelled or modified without at least 30
days' prior written notice by registered mail, return receipt
requested, to Landlord.
Section 5.07. Tenant shall likewise observe and comply
with the requirements of all policies of public liability, fire
and other policies of insurance at any time in force with
respect to the Demised Premises and Tenant shall so perform and
satisfy the requirements of the companies writing such policies
so that at all times companies of good standing satisfactory to
Landlord shall be willing to write or to continue such
insurance. Tenant shall, in the event of any violations or
attempted violations of the provisions of this Section by any
permitted subtenant, take steps, immediately upon knowledge of
such violation or attempted violation, to remedy or prevent the
same as the case may be.
If, at any time during the term of this Lease,
Landlord shall request that the amount of insurance provided by
Tenant, as required by the provisions of this Article and
paragraph (f) of Section 15.01 be increased on the ground that
such coverage is inadequate properly to protect the interest of
Landlord, or if Landlord shall require other insurance pursuant
to the provisions of paragraph (e) of Section 5.02, and Tenant
shall refuse to comply with such request, Tenant shall obtain
the insurance nevertheless and the dispute shall be submitted to
and decided by arbitration as provided in Article XXI hereof.
Landlord and Tenant shall be bound by the findings of such
arbitration proceeding except that in no event shall such
insurance be less than (and the arbitrators shall not have the
authority to decide less than) the amounts required by Landlord
pursuant to this Article or paragraph (f) of Section 15.01.
Section 5.09. Upon the expiration or earlier termination
of this Lease, unearned premiums upon any of such insurance
policies which, at Landlord's option, are transferred to and
taken over by Landlord shall be apportioned, provided that if an
Event of Default shall exist, the portion of such unearned
premiums to which Tenant would otherwise be entitled shall
belong to Landlord and shall be applied first to cure such Event
of Default.
Section 5.10. Any insurance provided for in this Article
may be effected by a policy or policies of blanket insurance and
may be continued in such form; provided, however, that the
amount of the total insurance allocation to the Demised Premises
shall be such as to furnish in protection the equivalent of
separate policies in the amounts herein required, and provided
further that in all other respects, any such policy or policies
shall comply with the other provisions of this Lease. In any
such case it shall not be necessary to deliver the original of
any such blanket policy to Landlord, but Tenant shall deliver to
Landlord a certificate issued by the insurance company of the
insurance policy and a duplicate of such policy, both of them in
form and content acceptable to Landlord.
Section 5.11. For any loss exceeding $150,000, Landlord
shall designate a bank or other financial institution or the
holder of an Existing Mortgage to receive, hold and disburse
insurance proceeds in accordance with this Lease ("Insurance
Trustee"). If, but only if, the proceeds of any insurance
policies provided for in this Article are paid to the Insurance
Trustee, the following provisions shall be applicable;
The Insurance Trustee is hereby made and constituted
a trustee to hold such proceeds and to deposit such proceeds and
to pay out such proceeds as provided in this Lease. The
Insurance Trustee shall not be obligated hereunder in any manner
except to receive and pay out any money that is received by it
as such trustee, together with such interest, if any, as is paid
by the Insurance Trustee at the time upon a like trust of like
amount. As between Landlord and Tenant, such interest on trust
funds shall be deemed to be the income of Tenant, to be held by
the Insurance Trustee subject to the terms and conditions of the
trust and this Lease. The Insurance Trustee is authorized to
retain from the trust fund the necessary expenses incidental to
the collection of any such funds, and a reasonable amount for
its services in connection with the trust.
All insurance money received by the Insurance Trustee
shall be held by the Insurance Trustee to secure the performance
by Tenant of its obligation under this Lease to repair, replace
or reconstruct any Improvements that have been damaged or
destroyed, or to pay any Rent or charges hereunder. If at any
time after the happening of any casualty it appears, in the sole
discretion of either the Insurance Trustee or Landlord, that the
insurance money and other money, if any, held in the trust will
not be sufficient to pay fully for the work of reconstruction or
repair, Tenant on demand from the Insurance Trustee or from
Landlord shall deposit such shortage or deficit with the
Insurance Trustee and any money so deposited shall be held and
used by the Insurance Trustee in the same manner and upon the
same conditions as those provided with respect to insurance
money.
As Tenant proceeds with the work of repair or
reconstruction of the Improvements, the insurance money held by
the Insurance Trustee shall be paid in accordance with Article
XVI hereof.
If any default by Tenant results in the termination of
this Lease, all insurance policies and all proceeds thereof and
all other money then in said insurance trust shall be promptly
delivered by the Insurance Trustee to Landlord as Landlord's
sole property to be applied toward curing the default. If this
Lease is terminated for any reason other than the default of
Tenant, the Insurance Trustee shall pay the proceeds and other
money in the insurance trust to Landlord as Landlord's sole
property.
Section 5.12. Tenant may not self-insure against the risks
provided for in this Article V, excepting only to the extent
expressly stated to be allowed in Section 5.01 (that is, carry
a deductible). Tenant shall be responsible for all losses and
damage by casualty so long as Tenant is responsible to carry the
insurance, including within the deductible or self-insured risk
amount. Landlord and Tenant agree that as between Tenant and
its insurance company, but not binding on Landlord, the
insurance policies to be maintained by Tenant under this Lease
may provide for greater deductibles than the deductibles
permitted by this Lease, so long as the certificates of
insurance with respect to such policies certify only the maximum
deductibles permitted by this Lease, so that Tenant's insurance
companies insure for or against all amounts in excess of the
maximum permitted under the applicable provisions of this
Article V. Tenant's failure to maintain policies of insurance
with the deductibles required by this Lease shall not constitute
an Event of Default so long as said certificates are furnished
and remain in full force and effect, without notice of
cancellation.
Section 5.13. The provisions contained in this Article V
are subject to the provisions contained in all the Existing
Mortgages and Underlying Leases relating to insurance coverage
and insurance policies and the insurance proceeds therefrom.
Tenant agrees to perform and comply with and observe faithfully
all the provisions and requirements of the Existing Mortgages
and the Underlying Leases regarding such insurance provisions.
Tenant agrees to name Landlord's Mortgagees and the holders of
Existing Mortgages and the Overlandlords as loss payees and
additional insureds as their interests may appear when requested
and shall obtain an endorsement providing that the insurance
company agrees to give the mortgagees and the Overlandlords at
least 30 days advance notice of any cancellation or reduction of
coverage, the amount insured or other material change and that
the policy will not have coverage impaired due to any act or
omission of Landlord of Tenant as an insured party.
Section 5.14. Landlord shall reimburse Tenant for the
actual premiums paid by Tenant for all the insurance required to
be carried in this Article V by paying to Tenant Landlord's
Share. In determining Landlord's Share, the amount of any
premiums for insurance paid for by a Space Tenant under a
Collateral Lease who carries its own insurance and pays the
premiums to the insurance, and the square footage of the space
occupied by such subtenant shall both be excluded in determining
Landlord's Share. In case blanket insurance is carried by
Tenant, the actual premiums for the Demised Premises shall be
the premiums paid to the insurance company divided by the total
number of square feet of buildings covered by the insurance.
At any time, Landlord shall have the right instead of
Tenant to obtain and carry the insurance policies required to be
carried by Tenant under this Lease. Landlord shall give Tenant
at least 45 days prior notice of exercise of such right. If
Tenant sustains a loss of premium refund by not receiving a full
premium refund due to early cancellation of its existing
policies due to Landlord taking over the insurance obligations
and substituting the insurance coverage, Landlord shall
reimburse Tenant or credit Tenant against the installments of
Basic Rent next coming due for the difference between a pro rata
refund and the premium short-rate refund received by Tenant. If
Landlord elects to and obtains and carries the insurance as just
described, Tenant shall reimburse Landlord for the Landlord's
cost thereof on demand for Tenant's Share thereof, and in such
case where Landlord carries the insurance, if Landlord elects to
do so, Landlord may collect all proceeds from all losses and
perform all repairs and restoration pursuant to Article XIV
hereof, instead of Tenant. In determining Landlord's Share, the
amount of any premiums for insurance paid for by a Space Tenant
under a Transferred Lease who carries its own insurance and pays
the premiums to the insurance company directly and the square
footage of the space occupied by such Space Tenant shall both be
excluded in determining Tenant's Share.
Section 5.15. As to any Outlot which is at the date of
this Lease being leased to a subtenant under an Outlot Lease and
which Outlot Lease is not a Transferred Lease which Outlot Lease
permits the subtenant to obtain and provide its lessor
thereunder with insurance that differs from the requirements of
this Article V, Tenant shall not be in default so long as the
subtenant of the Outlot provides the insurance coverage called
for by the Outlot Lease and Tenant diligently enforces its
rights against the subtenant to comply with its Outlot Lease.
As to any Outlot Lease which is a
Transferred Lease or any Outlot which Landlord has developed or
caused to be developed and Landlord is the lessor under the
Outlot Lease, Tenant shall not be required to provide the
insurance under this Article V, and Landlord may or may not at
its option provide the casualty insurance, but shall provide the
commercial general liability insurance.
ARTICLE VI
Use of Demised Premises; Use of Common Areas
Section 6.01. All the provisions contained in this Article
VI shall be subject to any restrictions or limitations or
covenants contained in any Existing Mortgages, Covenants,
agreements, Underlying Leases and other leases, Space Leases and
other subleases, licenses or REAs or in any other documents of
record, or in any documents to which Tenant is a party or by
which Tenant is bound, and also shall be subject to all zoning
laws and other laws; provided, however, Tenant may, if it is
able to do so, obtain a waiver or variance of any prior
restriction or limitation imposed by any of the foregoing.
Subject to the foregoing, Tenant may continue to use the Demised
Premises for conduct of a "Venture" department store business
where Tenant is at the date hereof using a Venture Building for
such purpose; and where at the date hereof there are Existing
Leases, Tenant may continue to permit the tenants under those
Existing Leases to conduct their businesses in accordance
therewith; and if Tenant ceases operating its Venture Store or
the tenant under an Existing Lease ceases operating its
business, the Demised Premises may be used for any lawful retail
use (it being understood that retail use may include retail
sales or retail services or a combination of the two such uses
and may entail a portion of the premises to be used for storage
or stockroom for merchandise being sold at the store). In
addition, except as stated in the next following sentence,
Tenant shall have the right at any time during the term of this
Lease to close its business operations at the Demised Premises
and Tenant has no duty to Landlord to stay open for business to
the public either as a Venture Store or anything else. However,
if an Underlying Lease, a Space Lease, or REA or any Covenant,
or any other document by which Tenant is bound, obligates Tenant
to stay open, continuously operate its business or prohibits
Tenant from ceasing business operations or leaving actual
occupancy of the Demised Premises or any part thereof, Tenant
hereby agrees to faithfully comply and perform such obligations,
and this shall apply as well to any case where Tenant is not so
obligated but pursuant to such documents its ceasing operation
would cause Landlord to be subject to a purchase option by a
third party or a forfeiture of Landlord's interest to any extent
or impose any monetary obligation or damages on Landlord; or if
any Existing Lease, REA, Covenant or other document confers a
remedy on the holder thereof in the event Tenant ceases
operations in the Venture Building (such as an abatement of
rent, right to terminate, etc.), then Tenant shall fully
compensate Landlord to the extent Landlord sustains any loss or
damage resulting from Tenant's cessation of operations. Tenant
shall have the right to divide the space in each building of the
Demised Premises into different (i.e., separate) spaces provided
(1) Landlord is notified of Tenant's intention to do so and (2)
the Venture Building occupied by Venture at the date of this
Lease must always consist of at least one, undivided storeroom
in size equal to 50% or more of the gross size of the Venture
Building now existing at the date of this Lease (the "Reduced
Venture Building") which shall only be used and occupied as a
retail store. The remainder of the former Venture Building may
be converted or adapted to be used for retail, services business
(i.e., the 50% or less), warehousing or storage or offices
(hereinafter referred to as "Space Conversion"). Tenant shall
not use the Demised Premises for any other use without the prior
written consent of Landlord, which consent shall not be
unreasonably withheld or delayed. Tenant will not use or permit
to be used any part of the Demised Premises for any unlawful,
dangerous, noxious or offensive trade or business and will not
cause or allow any nuisance on the Demised Premises. Tenant
assumes the risk of any law, ordinance, rule or regulation
either now in effect or hereafter enacted or in any document as
of the date of this Lease applying to the Demised Premises which
prohibits or limits Tenant's contemplated use of the Demised
Premises. Landlord shall have no liability or responsibility in
connection therewith, and the existence of such law, ordinance,
rule or regulation or provision in any such document shall not
permit Tenant to surrender this Lease or relieve Tenant to any
extent from its obligation to pay the full Basic Rent and other
Rent payable under this Lease or from any of its other
obligations under this Lease.
Section 6.02. Landlord grants to Tenant (for the benefit
of Tenant, its employees, agents, invitees, licensees and
customers), in common with Landlord, Landlord's employees,
agents, invitees, licensees and customers, and all others
granted such rights by Landlord in Shopping Centers that include
Landlord Buildings, throughout the Lease Term the non-exclusive
right and privilege to use, for the purposes for which they are
intended, all Common Areas as they are constituted from time to
time during the Lease Term, including the parking areas and
sidewalks within the boundaries of the Shopping Centers on which
the Demised Premises are situated, and also all other common
areas neither owned or leased by Landlord nor part of the
Shopping Centers, but which Landlord now or in the future is
permitted to use, if any, adjoining the Shopping Centers by
reason of rights Landlord holds under REAs. The rights hereby
granted with regard to the Common Areas shall constitute rights
appurtenant to the Demised Premises. Tenant agrees Landlord may
change the design or layout, reduce or enlarge the size or alter
the Common Areas in exercising Landlord's right to develop
Outlots or Vacant Areas, subject to Tenant's consent which
Tenant agrees it will not unreasonably withhold or delay, and
agrees that any dispute as to its reasonableness may at
Landlord's option be determined by arbitration. (See also
Section 15.04 hereof.)
ARTICLE VII
Surrender and Right to Remove Trade Fixtures
Section 7.01. On the last day of the term or on any
earlier termination of this Lease, or upon any re-entry by
Landlord upon the Demised Premises pursuant to Article XX
hereof, or upon surrender due to termination of an Underlying
Lease, Tenant shall surrender to Landlord the Demised Premises
in good and safe order, condition and repair, reasonable wear
and tear excepted, free and clear of all occupants, liens and
encumbrances, and in compliance with the Underlying Leases to
the extent such leases apply to the premises being surrendered,
excepting matters that are of record at the date of this Lease
and any other matters which Landlord causes to be placed against
the title, or which Landlord consents to in writing to be placed
of record against the title after the date of this Lease.
Section 7.02. Any of Tenant's Trade Fixtures may be
removed provided, however, that the removal of any of Tenant's
Trade Fixtures by persons or entities having a security interest
therein and who are entitled by law to remove such Tenant's
Trade Fixtures for purposes of taking possession thereof shall
be only permitted provided Tenant first undertakes directly to
Landlord to be responsible for any damage and for restoration of
the Demised Premises resulting from exercise of its rights and
Tenant gives Landlord security or assurances satisfactory to
Landlord for such purposes. In any case Tenant shall with due
diligence, and without expense to Landlord, cause any part of
the Demised Premises damaged by any removal of Tenant's Trade
Fixtures, inventory or other personal property to be promptly
repaired and restored. It is understood that the fixtures and
equipment at the Distribution Center are not Tenant's Trade
Fixtures in this Lease, and therefore this Section 7.02 does not
grant Tenant the right to remove them; nor shall Landlord's
waiver in Section 7.04 apply to them.
Section 7.03. Any of Tenant's Trade Fixtures, inventory
or other personal property which shall remain on the Demised
Premises for thirty days after the termination of this Lease
may, at the option of Landlord, be deemed to have been abandoned
by Tenant and may, at Tenant's expense, either be retained by
Landlord as its property or be disposed of without
accountability to Tenant in such manner as Landlord may see fit.
Section 7.04. Landlord hereby waives its right, if any,
to a lien on or distraint on any Tenant's Trade Fixtures,
inventory or other personal property of Tenant to the rights of
any seller or lessor of Trade Fixtures or lender who holds a
security interest in Tenant's Trade Fixtures, inventory or other
personal property of Tenant. Landlord shall deliver to Tenant,
if requested, a written confirmation in favor of such seller,
lessor or lender provided the form of the waiver is satisfactory
to Landlord in its reasonable judgment.
Section 7.05. The provisions of this Article shall survive
the expiration or termination of this Lease.
ARTICLE VIII
Landlord's Right to Perform Tenant's Covenants
Section 8.01. In addition to any other rights and remedies
available to Landlord, and not in substitution or derogation
thereof, if Tenant any time fails to make any payment or perform
any act on its part to be made or performed within the time
permitted by this Lease, then, after the occurrence of an Event
of Default after thirty days' written notice to Tenant (or in
case of emergency which would result in imminent danger to
persons or property or other like circumstances, on such shorter
notice or without notice, as in each such case is reasonable
under the circumstances) without waiving or releasing Tenant
from any obligation and without assuming any liability to Tenant
or anyone else, Landlord may (but shall not be required to) make
such payment or perform such act on Tenant's part. Landlord may
enter the Demised Premises for such purpose and take all actions
as may be necessary or appropriate.
Section 8.02. All payments, costs and expenses incurred
by Landlord in connection with the performance of any such act,
together with interest thereon at the lower of either the rate
of 12-3/4% per annum or the maximum legal rate permitted by
applicable law, accruing from the respective dates of Landlord's
making of each such payment or incurring of each such cost or
expense) shall constitute additional rent payable by Tenant
under this Lease and shall be paid by Tenant to Landlord on
demand. As to failure to comply with the insurance provisions
in this Lease, Landlord shall not be limited, in the proof of
any damages which Landlord may claim against Tenant arising out
of or by reason of Tenant's failure to provide and keep in force
insurance required by this Lease, to the amount of the insurance
premiums not paid or incurred by Tenant and which would have
been payable upon obtaining such insurance, but Landlord shall
also be entitled to recover as damages the uninsured amount of
any loss (to the extent of any deficiency in the amount of type
of insurance coverage required by the provisions of this Lease),
and the damages, costs and expenses of suit, including
attorneys' fees, suffered or incurred by reason of damage to, or
destruction of, the Demised Premises, occurring during any
period during which Tenant shall have failed or neglected to
provide insurance as aforesaid.
ARTICLE IX
Compliance With Laws and Insurance Policies
Section 9.01. Tenant, at its sole cost and expense,
subject to Section 9.02 hereof, shall promptly comply, and cause
its tenants and subtenants to comply (provided, however, tenants
or subtenants occupying portions of the Demised Premises on
Outlots shall not be required to carry the insurance Tenant is
required to carry, but shall only be required to carry
commercially reasonable insurance), with all present and future
laws, ordinances, orders, rules, regulations and requirements of
all federal, state and municipal governments, courts,
departments, commissions, boards, and officers, and shall comply
with and observe the provisions of all of Tenant's insurance
policies and the companies issuing such policies and will
require all tenants or subtenants to so comply, and shall comply
with any national or local Board of Fire Underwriters, or any
other body exercising functions similar to those of any of the
foregoing, foreseen or unforeseen, ordinary as well as
extraordinary, including, without limitation, Environmental
Laws, the Americans with Disabilities Act (collectively referred
to as "Requirements"), which may be applicable to the Demised
Premises, or to the Common Areas so long as Tenant is the
Responsible Party or any part thereof, including the buildings,
the parking lot, sidewalks, curbs, tunnels and vaults of the
Demised Premises or to the use or manner of use of the property
of the owners, tenants or occupants thereof, whether or not such
Requirement shall necessitate structural changes or
improvements, or the removal of any encroachments or projections
on or over the streets adjacent to the Demised Premises or the
Shopping Center, or on or over other property contiguous or
adjacent to the Demised Premises or the Shopping Center,
provided, however, it is understood that if the necessity to
make a change or addition to the Demised Premises is required
solely because Tenant is conducting some kind of activity and
Tenant chooses to cease such activity, which then obviates
Tenant's need to do the change or addition, Tenant may cease the
activity and thus comply with such law.
Section 9.02. Provided no Event of Default exists, Tenant
shall have the right to contest by appropriate proceedings
diligently conducted in good faith, without cost or expense to
Landlord, the validity or application of any Requirements. If
compliance with any such Requirement may legally be delayed
pending the prosecution of any such proceeding without the
incurrence of any lien, charge or liability of any kind against
the Demised Premises or Tenant's interest therein and without
subjecting Tenant or Landlord to any liability, civil or
criminal, or jeopardizing Landlord's interest in the Demised
Premises for failure so to comply therewith, Tenant may delay
compliance therewith until the final determination of such
proceeding provided that (i) Tenant first furnishes to Landlord
security, satisfactory in from and amount to Landlord, against
such fine, lien, charge or civil liability, and (ii) Tenant
shall be solely responsible for payment of such fine, lien,
charge or civil liability and shall indemnify, defend and hold
Landlord harmless with respect thereto. Landlord shall not be
required to join in any proceedings referred to in this Section
unless the applicable law requires such proceedings be brought
in the name of Landlord, in which event Landlord shall join in
the proceedings or permit the same to be brought in its name if
Tenant shall pay all expenses in connection therewith. However,
Landlord also shall have the right to contest the validity or
application of any Requirements.
Section 9.03. Tenant, at its expense, shall promptly and
diligently comply with , observe and perform a not violate any
Underlying Leases, other leases, Space Leases and other
subleases, Covenants, agreements and other instruments, whether
or not of record, which affect at the date of this Lease or
which in the future Tenant agrees shall affect the Demised
Premises or the Shopping Centers or any part thereof or which
affect the use, operation or maintenance thereof, including,
without limitation, complying with all REAs (including making
such payments and performing such acts or refraining from such
acts as are required and which are required to be paid,
performed or omitted from doing whether by Landlord or Tenant
under the REAs), licenses, concession agreements, and all
covenants and agreements with respect to maintaining and
repairing the Demised Premises and so long as Tenant is the
Responsible Party the Common Areas and operating or maintaining
automobile parking, malls, landscaping and walkways; provided,
however, as to any Space Leases which constitute a Transferred
Lease or a Space Lease which Landlord enters into with a tenant
or subtenant after the date of this Lease, applying to space in
Landlord's Buildings or to an Outlot, Tenant shall not be
responsible to comply with the Underlying Lease or to perform
the Landlord's duties under such Space Lease.
Section 9.04. Unless Tenant is contesting the Requirements
pursuant to Section 9.02, Tenant agrees to furnish Landlord
within ten days after Landlord's written request therefor such
permits, orders, certificates or other documents as might be
reasonably requested by Landlord to evidence compliance with
Requirements applicable to the Demised Premises.
ARTICLE X
Mechanics' Liens; Other Liens; Mortgages
Section 10.01. Subject to the provisions in Section 10.04
hereof, Tenant shall not permit to remain, and shall promptly
discharge, at its cost and expense, all liens (including
perfected liens, liens which have been filed of record and any
other kind of liens caused by Tenant or Tenant's tenants or
subtenants), encumbrances and charges (other than created by
Landlord) upon the Demised Premises or any part thereof, whether
for furnishing labor, materials or services to improve the
Demised Premises at the request of Tenant or Tenant's tenants or
subtenants and including any and all such liens, encumbrances or
charges whether placed, asserted, filed or claimed, or whether
the work, labor or services were furnished, prior to the date of
this Lease or during the term of this Lease. Further, Tenant
shall not permit to remain, and shall promptly discharge, at its
cost and expense, all such liens, encumbrances and charges filed
against the Shopping Centers or any part thereof arising out of
any act or omission or request for services, labor or material
by Tenant of Tenant's subtenants or anyone claiming or acting
by, through or under Tenant. Provided no Event of Default
exists under this Lease, Tenant shall have the right to contest
the validity or amount of any lien or claimed lien so long as it
acts promptly in good faith and continues with due diligence,
but only if Tenant first gives to Landlord such security as
Landlord reasonably requires to assure payment thereof and
prevent any sale, foreclosure or forfeiture of the Demised
Premises or any portion thereof by reason of such nonpayment.
The guaranty or assurance of a title company satisfactory to
Landlord or bonding of the lien by Tenant for twice the amount
of the lien shall be satisfactory security, provided Landlord is
satisfied the assurance or bond will be sufficient to cover the
lien plus interest thereon and Landlord's legal fees. On final
determination of the claim for lien, Tenant shall immediately
pay any judgment rendered with all costs and charges and shall
have the lien released or judgment satisfied at Tenant's own
expense, and if Tenant shall fail to do so, Landlord may at its
option pay any such final judgment and clear the Demised
Premises therefrom. If Tenant shall fail to contest with due
diligence the validity or amount of any such lien or claimed
lien or remove the lien, or fail to give Landlord security as
hereinabove provided, all within thirty (30) days after notice,
Landlord may, but shall not be required to, contest the validity
or amount of any such lien or claimed lien, or settle or
compromise the same without inquiring into the validity of the
claim or the reasonableness of the amount thereof.
Section 10.02. If any lien is filed against the Demised
Premises or any action affecting the title thereto be commenced,
including all such that arise out of facts or circumstances
occurring prior to the date of this Lease or during the term of
this Lease, or any such lien is filed against the Shopping
Centers or any part thereof, Tenant shall give to Landlord
written notice thereof as soon as notice of such lien or action
comes to the knowledge of Tenant and Tenant agrees to defend and
indemnify Landlord against all damages, losses, expenses, costs
and claims arising as a result of such lien or action, unless
such lien is caused by Landlord's or Landlord's tenants' action
or activities.
Section 10.03. Tenant agrees to give prompt notice to
Landlord of the commencement of any work or alteration or
improvement on the Demised Premises to cost in excess of
$250,000 in the aggregate with regard to one project or with
regard to all projects to be commenced within one year of the
commencement of construction of all the others, and Tenant
hereby grants to Landlord the right to post notices of
non-responsibility on the Demised Premises and record verified
copies thereof in connection with all work of any kind upon the
Demised Premises.
Section 10.04. At the date of this Lease, there exist one
or more certain mortgage liens on the Demised Premises or the
Shopping Centers or portions thereof ("Existing Mortgages").
One of such mortgages is held by Principal Mutual Life Insurance
Company. Tenant hereby agrees, with the one exception stated at
the end of this sentence, to perform and observe all the
covenants and provisions contained in the Existing Mortgages or
other loan documents held by Principal Mutual Life Insurance
Company in connection with its Existing Mortgage, and, if there
are any other Existing Mortgages held by any other person or
entity in connection with that person's or entity's Existing
Mortgage, excepting the payment of the interest or principal of
said Existing Mortgages, which interest and principal Landlord
agrees to pay.
Section 10.05. Tenant shall not mortgage or otherwise
encumber either (i) its interest in this Lease, or (ii) its
interest in the Demised Premises or any portion thereof, or
(iii) its interest in any Space Lease, Outlot Lease or any other
lease or sublease of the Demised Premises.
ARTICLE XI
Repairs and Maintenance; Common Area
Maintenance and Common Area Charges
Section 11.01. Tenant agrees, without cost to Landlord,
to take good care of the entire Demised Premises, and in
addition shall take good care of the Common Areas so long as
Tenant is the Responsible Party and each and every part thereof
(whether on, below or above the surface), including, without
limitation, the Improvements (including, without limitation, the
roofs, foundations, walls, heating, ventilating and air
conditioning systems, plumbing, electric and other utility
systems, windows and doors and their frames and apparatus,
floors, storefronts, signs and landscaping thereof), the
sidewalks, curbs, roadways, parking areas and fences, and Tenant
agrees to keep all of the same in good, clean and safe order and
condition, and shall promptly, at Tenant's own cost and expense,
make all repairs, fix all potholes, resurface parking areas when
necessary, all whether interior and exterior, structural and
nonstructural, ordinary as well as extraordinary, foreseen as
well as unforeseen, in order to keep the Demised Premises and
the Common Area in good repair, good condition, safe, clean and
sanitary condition, provided, however, if under another
agreement, lease, license or an REA a third party (e.g. the fee
owner of a Leasehold Property or the owner of an adjacent
shopping center) is obligated to care for the parking areas or
the other areas, Tenant need not do so, provided Tenant
diligently and promptly and in good faith enforces the
obligation of the third party to do so and Tenant does so in
case of a default by such third party. When used in this
Article or elsewhere in this Lease, the word "repairs" shall
include replacements when needed, but Tenant may repair an item
rather than replace it if repairing it will serve to keep the
item running properly and in good order. All such repairs
(including replacements) made by Tenant shall be at least equal
in quality and class to the original work.
Section 11.02. Landlord shall not be required to furnish
any services or facilities or to make any repairs or alterations
in or to the Demised Premises or with respect to the Common
Areas so long as Tenant is the Responsible Party, or spend any
money, Tenant hereby assuming the full and sole responsibility
for the condition, operation, repair, replacement, maintenance
and management and carrying charges of the Demised Premises and
subject to being entitled to Landlord's Common Area charges, the
Common Area of the Shopping Centers. Tenant expressly waives
any right to make repairs at the expense of Landlord which might
be provided for in any law now or hereafter in effect. As to
those portions of the Demised Premises occupied by another
tenant or subtenant under an Existing Lease which is a
Collateral Lease, Tenant shall use diligent efforts promptly and
in good faith to cause such tenants or subtenants to comply with
its maintenance and repair obligations.
Section 11.03. Except where a third party, such as an
adjacent property owner pursuant to an REA performs CAM tasks,
or except if pursuant to Section 11.12 Landlord elects to
perform the CAM tasks, Tenant agrees that from and after the
date of this Lease and throughout the Lease Term, Tenant shall
be the Responsible Party and assumes responsibility for
maintenance, repair and replacement, and the payment of all
costs relating thereto of the Common Areas located on or serving
each and all of the Shopping Centers (such tasks herein referred
to collectively, the "CAM"), all in compliance with this Lease
and in accordance with customary standards for comparable
shopping centers in the area in which the Shopping Center is
located. So long as Tenant is the Responsible Party, then
Landlord, in the manner hereinafter provided, agrees to
reimburse to Tenant either by payment or by crediting Tenant
against the next due installments of Basic Rent, during the Term
of this Lease, Landlord's Share of the CAM Costs with respect to
each of the Shopping Centers ("Landlord's Common Area Charge").
The Responsible Party shall perform common area maintenance and
repairs and other duties with respect to any adjoining property
to the extent that the owner of the Shopping Center is required
to do so under any REA, and any costs incurred, to the extent
not reimbursed by other parties, shall be included in CAM Costs.
Without limiting the foregoing, the expression "CAM
Costs" shall include, but not be limited to, the total of all
costs and expenses actually incurred for, and in connection
with, the operating, repair, service, maintenance, repairs or
replacements, of lighting facilities, all portions of the Common
Areas, and allocated to the calendar year on the cash method of
accounting. Any capital expenditure which would exceed $25,000
for any one Shopping Center in any twelve month period shall be
amortized over their useful life and only such amortized portion
shall be included in CAM Costs each year regardless who is the
Responsible Party. Such CAM Costs shall include, without
limitation, the following: the amortizing amount of the capital
expenditures just referred to, charges for electricity for
lighting of the Common Areas; the cost of repairing,
maintaining, replacing and operating the Common Areas, including
electrical and storm sewer systems; the cost of commercial
general liability insurance for the Common Areas; the wages of
non-management personnel employed in cleaning sidewalks and
parking areas, removal of snow, ice and trash and similar work;
fixing of potholes, resurfacing and/or repaving the parking lot
drives and entrances and exits; repairing and/or
replacing sidewalks; cost of general supplies and materials
consumed in the maintenance and operation of the Common Areas;
the cost of maintaining and/or replacing landscaping in the
Common Areas, cutting and feeding grass and shrubs and caring
for and replacing landscaping when required with similar
landscaping; the cost of rental of machinery and equipment used
in operation and maintenance; carrying general liability and
property damage insurance with respect to elements of the Common
Areas; wages of non-management personnel employed as security
personnel and parking attendants; the cost of miscellaneous
repairs to the Common Areas and to signs; compliance with
government Requirements with respect to the Common Areas; and
payments, if any, to adjacent owners under REAs for the
privilege of using that owner's access or areas or for common
area maintenance performed by such adjacent owner. Neither
Tenant nor Landlord in performing the duties of the Responsible
Party shall be entitled to any fee or charge from the other for
its administrative, home office or overhead services or
expenses. The Responsible Party shall have the right to
contract out to independent contractors all or any aspect of the
work or services. With respect to insurance premiums to be
included in CAM Costs, if any insurance for the Common Areas is
carried by a blanket policy, the premiums to be included in CAM
Costs in which Landlord is to share shall be calculated on the
premiums actually paid for the entire blanket policy coverage
for all the properties (including those, if any, which are not
Shopping Centers) divided by the aggregate square feet of
buildings situated on all of the properties covered by the
blanket policy in order to obtain a per square feet premium
cost, which then would be applied to the number of square feet
in Landlord's Buildings to determine Landlord's Share, or in the
Demised Premises to determine Tenant's Share, as the case may
be, as to any particular Shopping Center. Notwithstanding the
above, Landlord shall have the right from time to time to elect
to have either Landlord or Tenant provide commercial general
liability insurance for the Common Areas but until further
notice, Landlord hereby directs Tenant to carry such commercial
general liability insurance for the Common Area. In the event
Landlord does not elect to have Tenant provide commercial
general liability insurance for the Common Area, Landlord shall
procure and maintain such commercial general liability insurance
for the Common Area whereupon Tenant shall share in the cost and
expense to Landlord for obtaining and carrying such insurance to
the extent of Tenant's Share. Notwithstanding any provision
contained in this Lease to the contrary, the party responsible
for carrying general liability insurance shall also carry
insurance coverage for owned, hired and non-owned automobiles.
Section 11.04. In doing any construction at a Shopping
Center, Landlord and Tenant agree that they will use their
reasonable efforts to cause such activities to be conducted in
a manner that will minimize interference with the other's
business operations and with the business operations of other
tenants.
Section 11.05. Notwithstanding anything in this Lease to
the contrary, if Landlord, in connection with the construction
of any future Landlord's Building, or Tenant, in connection with
the construction of any expansion of the Demised Premises if
permitted by Landlord, as the case may be, paves previously
unpaved areas to enlarge the parking field or undertakes other
capital improvements to the Common Areas, to the extent that
such paving or capital improvements are required solely as a
result of the construction of such future permitted Landlord's
Building, or permitted expansion of a Demised Premises, such
cost shall be borne by the constructing party, and the same
shall not be deemed a part of CAM, except when and to the extent
such improvements become part of the Common Areas, CAM shall
apply. In addition, Tenant shall not include as a CAM Cost any
expenditures for traffic control personnel or similar functions
without first obtaining Landlord's prior written consent.
Section 11.06. The Responsible Party shall have the right
to promulgate and enforce reasonable rules and regulations
governing the conduct of customers and invitees in their use of
the Common Areas in the Shopping Centers, so long as such rules
and regulations are applied and enforced uniformly and without
discrimination, and do not increase Landlord's or Tenant's
obligations or burdens or require the expenditure of any money
by Landlord or Tenant. As part of CAM, the Responsible Party
will clear the snow and ice and trash from in front of all
vacant storerooms in the Shopping Centers (even if the vacant
storerooms are in the part of the Shopping Center not within the
Demised Premises) including the sidewalks so long as such
storerooms remain vacant; but Tenant shall not be required to
clean snow, ice or trash from the sidewalks in front of
storerooms in the Shopping Centers that are leased to and
occupied by other tenants unless the Space Leases (including
Outlot Leases) require the Landlord thereunder to perform same
(in which case Tenant shall perform same unless Landlord is the
Responsible Party).
Section 11.07. It is agreed that if there are no
Landlord's Buildings in a Shopping Center, 100% of the CAM Costs
for such Shopping Center shall be borne and paid for by Tenant
without reimbursement from Landlord, and until such time as
there shall exist Landlord's Buildings in such Shopping Center,
Tenant shall bear and pay 100% of the CAM Costs for that
Shopping Center without receiving from Landlord any share or any
other reimbursement.
Section 11.08. Starting on the date of this Lease
(prorated for a partial month at the beginning, if any), and
throughout the remainder of the Lease Term, the non-Responsible
Party agrees to reimburse each month to the Responsible Party
for all the Shopping Centers its share of CAM, the amount based
on the square foot of Floor Area of the Demised Premises or
Landlord's Buildings, as the case may be, in all the Shopping
Centers; provided, however, that this clause shall not apply if
there are no Landlord's Buildings in a Shopping Center. The
non-Responsible Party shall remit to the Responsible Party this
amount which represents the non-Responsible Party's contribution
to the cost of maintenance and operation of the Common Areas on
a monthly basis as billed throughout the Lease Term and any
renewals thereof.
Within ninety (90) days after the end of each calendar
year, the Responsible Party shall furnish the non-Responsible
Party with an annual statement in reasonable detail of the
Responsible Party's actual outlays for CAM Costs during said
year, and if said statement shows that the aggregate of the
non-Responsible Party's monthly payments theretofore paid by the
non-Responsible Party during such year was less than such
Party's Share, the non-Responsible Party shall pay the balance
due to the Responsible Party (without interest) within thirty
(30) days after receipt of said statement; and if the statement
shows that said aggregate exceeds the non-Responsible Party's
Share, the Responsible Party with delivery of said statement
shall refund a payment (without interest) for the excess.
Landlord may pay Landlord's Share or credit Tenant against the
next due installments of Basic Rent. The Responsible Party
shall furnish the non-Responsible Party with copies of all
invoices, paid receipts and other backup documents, and the
non-Responsible Party shall have the right at that party's
expense to audit the Responsible Party's records regarding CAM
Costs for the Shopping Centers at reasonable times and on
reasonable advance prior notice for twelve months.
Section 11.09. Notwithstanding any provision to the
contrary, in the Shopping Centers where there are Landlord's
Buildings it is agreed that sewer, water, electric, gas or other
similar utility lines, pipes, wires, equipment, facilities,
apparatus or systems which are located outside of Landlord's
Buildings or outside of the Demised Premises and which serve
exclusively either Landlord's Buildings or the Demised Premises,
as the case may be(hereinafter referred to collectively as
"Outside Utility Apparatus") shall not be the responsibility of
the Responsible Party as part of CAM, but shall be the
responsibility of the party whose building is exclusively
served, so that Landlord or its tenants in Landlord's Buildings
(if the Outside Utility Apparatus services Landlord's Buildings
exclusively) shall be solely responsible, or Tenant (if the
Outside Utility Apparatus services the Demised Premises
exclusively) shall be solely responsible from the point where
such Outside Utility Apparatus services either the Demised
Premises exclusively or Landlord's Buildings exclusively (as the
case may be), notwithstanding that such Outside Utility
Apparatus is located in the Common Areas. CAM Costs shall not
include (i) Landlord's cost of any utility or other service, if
any, separately sold by Landlord to Tenant or other tenants,
(ii) costs incurred by Landlord or Tenant for alterations, if
any, for other tenants, (iii) depreciation of the Shopping
Center buildings or components, and (iv) debt service or
indebtedness of Landlord or Tenant. If such Outside Utility
Apparatus services the Demised Premises and Landlord's Buildings
through common lines, such Outside Utility Apparatus shall be
the responsibility of the Responsible Party as a part of CAM
Costs. Further, if any Outside Utility Apparatus is added to
the Shopping Center after the date of this Lease by either
Landlord or Tenant for the purpose of servicing either
Landlord's Buildings or any of the Demised Premises exclusively
(as the case may be), the cost of the initial construction and
installation and of the subsequent maintenance, repair and
replacement thereof shall be borne by the party (i.e. either
Landlord or Tenant) whose building is serviced exclusively. So,
for an example, if Landlord desires to rent a portion of
Landlord's Building to a laundromat tenant, and Landlord causes
a new or oversized water line to be installed in the Common
Areas to service that store exclusively (and not the Demised
Premises in any way), Landlord shall bear all the expenses, as
just mentioned (and the same shall apply to Tenant).
Conversely, as a further example, if Tenant installs a larger
electric transformer outside its Store, which except for the
fact that it services the Demised Premises exclusively would
constitute part of the Common Areas, such costs and expenses
shall be borne solely by Tenant. However, any installation or
construction of Common Area improvements which serve both the
Landlord's Buildings and the Demised Premises or which serve the
Common Areas which is necessitated by applicable laws, rules,
regulations or orders of the governmental agencies having
jurisdiction, shall be deemed to be part of CAM Costs.
Section 11.10. Landlord agrees that Tenant shall enjoy,
jointly and severally together with Landlord and others
designated by Landlord, the access, parking, easement and right
to receive services benefits that inure to the Landlord under
all REAs, concerning such access, parking, easement rights or
the right to receive services thereunder, including the right
with respect to such matters to cure defaults of either the
other party to the REA responsible for the common area
maintenance or the owner of the remainder of the shopping center
of which a Shopping Center is a part and the right to enforce
performance of its (or their) obligations thereunder; provided,
however, Landlord hereby reserves unto itself concurrently with
Tenant the rights also of enforcement of all of the REAs, and
also reserves unto itself together with Tenant all rights,
privileges and benefits that are not of an access, parking,
easement, or right to receive services nature; and further,
Tenant shall not have the right, without Landlord's prior
written consent which Landlord will not unreasonably withhold or
delay, to modify or terminate any REA or the right to exercise
any other rights thereunder; and further, Landlord shall not
have the right to modify or terminate any REA without Tenant's
prior written consent which Tenant agrees not to unreasonably
withhold or delay; provided, however, if a REA affecting a
Shopping Center and adjacent land requires that the owner of the
adjacent land make payments to the lessee or operator of the
Shopping Center for CAM Costs, then Landlord and Tenant shall
cooperate to cause such payments to be made to the Responsible
Party for that Shopping Center involved, and such Responsible
Party shall apply such payments first to pay CAM Costs for that
Shopping Center, before Landlord and Tenant calculate their
respective Landlord's Share and Tenant's Share out of the net.
Any excess of such payments by the adjacent landowner over and
above the CAM Costs for that Shopping Center for the particular
year involved shall be paid to Tenant and Landlord according to
their respective Landlord's Share and Tenant's Share for that
Shopping Center. If, with respect to a failure to maintain the
Common Areas, Tenant cures a default or enforces performance by
the other owner or other party in accordance with a REA and in
doing so spends money, or in the event that at the time in
question Tenant is performing the common area maintenance under
that REA and the adjacent owner fails to pay its share of
expenses, Landlord grants Tenant, to the extent granted under
the REA, the right to collect reimbursement of Tenant's Share
from the adjacent owner or the other party to said REA,
provided, however, no offset against Landlord under this Lease
shall be available to Tenant against Basic Rent, other Rent or
any other charges. To the extent Tenant is entitled to
reimbursement for such expenditures from the other owner or
other party under the REA, Tenant, to the extent allowed by law,
shall be subrogated to Landlord's rights (including the right,
if necessary to bring suit, to sue in Landlord's name) to
collect such amount (i.e. Tenant's Share), and in furtherance
thereof, Landlord shall deliver to Tenant, on Tenant's
reasonable request, an assignment or confirmation of rights of
collection for such amount. If any REA applicable to a Shopping
Center requires Landlord to exercise a renewal option in order
to extend the term thereof prior to the expiration of the Term
of this Lease as it applies to such Shopping Center, Landlord
shall renew that REA.
Section 11.11. In the event Tenant alone remains open on
any Shopping Center at any time for business any time after
10:00 PM on any night on any day including Sunday and legal
holidays or 11:00 PM from Thanksgiving to Christmas (hereinafter
referred to as "After Hours"), then Tenant shall bear the cost
of the entire electric bills for electricity used to light the
Common Areas on that Shopping Center which are attributable to
such After Hours. If more stores than just Tenant alone remain
open on that Shopping Center, so that another store (or stores)
remains open with Tenant for all or part of the After Hours time
that Tenant remains open, then for the time Tenant remains open
with the others, Tenant (instead of bearing the entire cost)
will bear a share of the cost of the After Hours lighting in the
same ratio that the square footage size of the building on the
Demised Premises bears to the square footage of all of the
stores on that Shopping Center that are open After Hours during
the same time with Tenant. In the event Tenant does not remain
open After Hours but other tenants on the Shopping Center remain
open After Hours, then Tenant under this Master Lease shall not
be responsible to pay any share of such After Hours lighting.
It is understood and agreed that parking lot lighting and other
Common Area lighting customarily kept lit After Hours for
security purposes or other similar purpose common to the benefit
of the Shopping Center as a whole, even when no stores are open,
shall be deemed to be part of the CAM Costs, and the foregoing
After Hours provisions with respect to the tenants' sharing
shall not relate to such lighting.
Section 11.12. Notwithstanding any provision contained
in this Lease to the contrary, Landlord shall have the right to
cause Tenant to be the Responsible Party for any or all of the
Shopping Centers. Tenant shall have the right to cancel
Tenant's designation as the Responsible Party with respect to
any or all of the Shopping Centers in which event Landlord shall
become the Responsible Party , unless Landlord chooses not to be
in which event the provisions of Section 11.13 shall apply.
Section 11.13. In the event Landlord elects to become
the Responsible Party, Landlord shall have the right to be the
Responsible Party for and or all the Shopping Centers. Landlord
may give Tenant at least 30 days advance written notice of such
election and on the effective date of Landlord's assuming the
role of Responsible Party, Landlord shall function as the
Responsible Party in the same manner as otherwise called for in
this Lease, and Tenant shall pay to Landlord Tenant's Share of
CAM Costs. Thusly, the roles of manager of the Common Areas and
passive contributor of the Common Area Charge, between Landlord
and Tenant shall be reversed with respect to the Shopping Center
as to which Landlord has so elected. Therefore, Tenant's annual
proportionate share of CAM Costs shall be Tenant's Share. In
the event Landlord thereafter shall commit a material default in
performing the CAM and fails to cure within thirty days after
receipt of written notice from Tenant, or Landlord elects not to
be the Responsible Party and does not re-designate Tenant as the
Responsible Party, then Landlord and Tenant immediately shall
mutually agree upon an outside, experienced person, firm or
corporation who will act as manager and perform such functions,
and within fifteen days after notice Landlord shall designate an
outside, experienced person, firm or corporation to act as
manager and perform such functions, subject to Tenant's
approval, which approval shall not be unreasonably withheld or
delayed. If Tenant shall not object to a manager designated by
Landlord by giving written notice to Landlord within seven days
following receipt of Landlord's notice to Tenant, it shall be
deemed that Tenant shall have approved said manager. Landlord
and Tenant each shall pay its respective Landlord's Share and
Tenant's Share of CAM Costs, but in such case there shall be
added to the CAM Costs the management fees charged by such
manager. Tenant agrees that it shall always be responsible to
fill any gap in time where there would be no Responsible Party
until a person is found to assume such role. For example, if
Landlord shall elect to dismiss Tenant as the Responsible Party,
then until an outside manager assumes such role, if Landlord has
elected not to be the Responsible Party, Tenant shall be the
Responsible Party during such gap period, and any other like
situations. In the event Tenant neglects or fails to perform
any CAM on any occasion or occasions during the Lease Term while
Tenant is the Responsible Party, Landlord may give advance
written notice thereof to Tenant, and if Tenant does not correct
the condition within the time stipulated in this Lease but in no
event in less than thirty (30) days (except in an emergency),
Landlord may itself correct the condition or cause the condition
to be corrected, using outside contractors, if appropriate, and
Tenant's Share of any costs and expenses incurred by Landlord
together with interest thereon at the annual rate of 12-3/4% or
the maximum rate permitted by applicable law, whichever is
lower, shall be paid to Landlord by Tenant within thirty days
from receipt of an invoice.
ARTICLE XII
Right of Landlord to Inspect and Repair
Section 12.01. Tenant will permit Landlord and its
authorized agents and representatives to enter the Demised
Premises at all reasonable times for the purpose of inspecting
and, upon the occurrence of an Event of Default, making any
necessary repairs and performing any other work that may be
necessary by reason of Tenant's failure to make any such repairs
or perform any such work therein or thereon or Tenant's failure
to commence the same after reasonable written notice from
Landlord. Landlord will, so long as circumstances do not
require other notice, give Tenant five days' advance written
notice of Landlord's intention and having given Tenant
opportunity for Tenant to do the repairs or the work, as
provided in Article XX. If Landlord does the repairs or work,
Landlord will use reasonable efforts to minimize interference
with Tenant's business. Nothing shall imply any duty on
Landlord's part to do any such work, and performance thereof by
Landlord shall not constitute a waiver of Tenant's default in
having failed to perform the same or an assumption of liability
or obligation with respect thereto. Landlord shall not be
liable for inconvenience, annoyance, disturbance, loss of
business or other damage of Tenant by reason of making such
repairs or the performance of any such work, or on account of
bringing materials, tools, supplies or equipment into or through
the Demised Premises during the course thereof and the
obligations of Tenant under this Lease shall not be affected
thereby. Nothing herein shall limit or change the provisions of
Article VIII hereof (Landlord's Right to Perform).
Section 12.02. Landlord shall have the right to enter the
Demised Premises at all reasonable times during usual business
hours for the purpose of exhibiting the same to prospective
purchasers, mortgagees or other persons. Landlord shall give
Tenant reasonable advance prior written notice of such
inspection, and shall not interfere with conduct of Tenant's
business or be obtrusive in its visits.
ARTICLE XIII
Indemnifications
The indemnifications that follow in
the next two Sections shall apply to the extent the indemnify
party is not covered and indemnified by insurance.
Section 13.01. Excepting if caused solely by the
negligence or willful acts of Landlord or its agents or
employees, Tenant agrees to defend, indemnify and save harmless
Landlord against and from any and all claims by or on behalf of
any person or persons, firm or firms, corporation or
corporations arising from conduct or management of or from any
work or thing whatsoever done in or about the Demised Premises
and the Common Areas so long as Tenant is the Responsible Party,
and will further indemnify and save Landlord harmless against
and from any and all claims by or on behalf of any person or
persons, firm or firms, corporation or corporations, arising
during the term of this Lease from any condition of any
building, structure or improvement on the Demised Premises or
the Common Areas so long as Tenant is the Responsible Party, or
any street, curb or sidewalk adjoining the Demised Premises or
the Common Areas so long as Tenant is the Responsible Party, or
of any passageways or spaces therein or appurtenant thereto, or
arising from any breach or default on the part of Tenant in the
performance of any covenant or agreement on the part of Tenant
to be performed pursuant to the terms of this Lease, or arising
from any act of negligence of Tenant, or any of its agents,
contractors, servants, employees, sublessees or licensees, or
arising from any accident, injury or damage whatsoever caused to
any person, firm or corporation occurring during the term of
this Lease, in, on or about the Demised Premises or occurring in
the Common Area of the Shopping Centers so long as Tenant is the
Responsible Party, and from and against all costs, reasonable
counsel fees, expenses and liabilities incurred about any such
claim or action or proceeding brought thereon; and in the event
any action or proceeding be brought against Landlord, Tenant
agrees to defend Landlord in such action or proceeding by
counsel reasonably satisfactory to Landlord.
Section 13.02. Excepting if caused solely by the
negligence or willful acts of Tenant or its agents or
employees, Landlord agrees to defend, indemnify and save
harmless Tenant against and from any and all claims by or on
behalf of any person or persons, firm or firms, corporation or
corporations arising from conduct or management of or from any
work or thing whatsoever done in or about Landlord's Buildings
and so long as Landlord is the Responsible Party, the Common
Areas, and will further indemnify and save Tenant harmless
against and from any and all claims by or on behalf of any
person or persons, firm or firms, corporation or corporations,
arising during the term of this Lease from any condition of any
building, structure or improvement on Landlord's Building or, so
long as Landlord is the Responsible Party, the Common Areas, or
any street, curb or sidewalk adjoining Landlord's Building or
the Common Areas so long as Landlord is the Responsible Party,
or of any passageways or spaces in Landlord's Building, or
arising from any breach or default on the part of Landlord in
the performance of any covenant or agreement on the part of
Landlord to be performed pursuant to the terms of this Lease, or
arising from any act of negligence of Landlord, or any of its
agents, contractors, servants, employees, sublessees or
licensees, or arising from any accident, injury or damage
whatsoever caused to any person, firm or corporation occurring
during the term of this Lease, in, on or about Landlord's
Building or occurring in the Common Area of the Shopping Centers
so long as Landlord is the Responsible Party, and from and
against all costs, reasonable counsel fees, expenses and
liabilities incurred about any such claim or action or
proceeding brought thereon; and in the event any action or
proceeding be brought against Tenant, Landlord agrees to defend
Tenant in such action or proceeding by counsel reasonably
satisfactory to Tenant.
ARTICLE XIV
Light, Heat and Power, etc.
Section 14.01. Tenant agrees to pay, or cause to be paid,
all charges which are incurred by Tenant, or which may be
incurred by any tenant or subtenant, which might be a charge or
lien against the Demised Premises or for which Landlord may be
held liable or with respect to the Common Areas so long as
Tenant is the Responsible Party, for any utility or service,
including without limitation, gas, water, electricity, light,
heat or power, telephone or other communication service
installed, used, rendered or supplied upon or in connection with
the Demised Premises, and Tenant agrees to defend, indemnify and
save Landlord harmless from and against any liability or damages
on such account. Tenant shall also procure, or cause to be
procured, without cost to Landlord, any and all necessary
permits, licenses or other authorizations required for the
lawful and proper installation and maintenance upon the Demised
Premises of wires, pipes, conduits, tubes and other equipment
and appliances for use in supplying any such service to and upon
the Demised Premises. Landlord shall not be required to furnish
any utilities or services; however, Landlord shall grant such
utility easements as may be reasonably necessary for the
operation of Tenant's business in the Demised Premises.
ARTICLE XV
Changes, Alterations and New Construction
Section 15.01. Except if expressly otherwise provided in
this Lease, Tenant shall not demolish, raze or remove any
Improvements or add any new buildings (see also Article XIX
hereof). Tenant shall have the right at any time and from time
to time during the term of this Lease to make, at its sole cost
and expense, any (structural or non-structural) changes,
additions and alterations (hereinafter collectively referred to
as a "Change" or "Changes") to the Improvements which are part
of the Demised Premises without Landlord's consent, provided
Tenant complies with each of the following, which in all cases
Tenant covenants to observe and perform:
(a) No Change shall be undertaken until Tenant
procures and has paid for all permits and authorizations
of all government or departments or subdivisions having
jurisdiction. Landlord shall join in the applications
whenever necessary, provided Landlord incurs no liability
or expense in connection therewith.
(b) Any Change which constitutes either (i) a
reduction of the square footage of a Venture Building,
(ii) an expansion of the square footage of a Venture
Building, or (iii) the razing of and new construction of
a Venture Building shall not be in any of those instances
commenced or done until Tenant shall have obtained
Landlord's written approval which approval Landlord shall
not unreasonably withhold, delay or condition on the
payment of money to Landlord. It shall not be
unreasonable for Landlord to deny consent if expansion
would prevent or hinder any future development or
construction of the Shopping Centers (including expansion
of Landlord's Building or building on an Outlot by
Landlord).
(c) Any Change shall, when completed, be of
such a character as to neither reduce the value of the
Venture Building or any other portion of the Demised
Premises below its value immediately before such Change,
nor change the configuration of any Venture Building so
that there shall not exist at least a retail store
comprising no less than 50% of the gross square feet size
of the entire Venture Building with the remainder of the
Venture Building (up to 50% of the entire Venture
Building) used for retail sales or service, office or
warehousing, nor impair the structural strength or
structural integrity thereof; and if separate stores are
created there shall be individual, separate, independent
utilities (heating, air conditioning, toilets, electric
meters, electrical and plumbing systems). Tenant is
permitted to effectuate a Space Conversion (defined in
Section 6.01) in compliance with Section 6.01 and this
Section.
(d) Any Change shall be made promptly
(Unavoidable Delays, as defined in Section 26.01,
excepted) and in a good and workmanlike manner and in
accordance with all applicable permits and authorizations
and Requirements.
(e) Tenant shall comply with the provisions of
Article X hereof, and shall satisfy Landlord that if the
Change involves in the aggregate more than $250,000 cost
that Tenant proves to Landlord it has the financial
ability to pay for it so as to avoid mechanics' liens
against the Demised Premises or any liability on
Landlord's part in the event of non-payment, which may be
by Tenant furnishing Landlord with a payment and
completion bond in advance of the work. No payment and
completion bond shall be required for any non-structural
changes incidental to installing Trade Fixtures of the
Venture Building.
(f) During the period of construction of any
Change in, to or of the Improvements, Tenant shall
maintain or cause to be maintained the following
insurance:
(1) The commercial liability and
property damage insurance provided for in Section
5.02(a) for the mutual benefit of Landlord and Tenant
as named insureds;
(2) All-risk, including fire and any
other applicable insurance provided for in Article V,
which policy by endorsement, if not then covered,
shall also insure any Change, under a broad form all
risks builders' risk completed value form or
equivalent thereof; and
(3) Workers' compensation insurance
covering all persons employed in connection with the
work, with statutory limits as then required under the
laws of the state in which the Demised Premises is
situated.
Section 15.02. Tenant shall have the right at any time and
from time to time during the Term of this Lease, provided that
no Event of Default exists, and provided Tenant complies with
all Requirements and with all Underlying Leases, Covenants,
Existing Mortgages, REAs, leases, subleases and other documents
and instruments which may be applicable thereto:
(a) to raze, demolish or remove Improvements located
on an Outlot of which Tenant is the landlord under an Existing
Lease to the occupant of the Outlot (if permitted under the
lease of such Outlot), and to make, at Tenant's expense, Changes
in and to the Improvements now or hereafter located on the
Outlot covered by the Existing Leases of which Tenant is the
landlord under a lease to the occupant of the Outlot so long as
the parking available for the Venture Building on the Property
is not reduced to below 5 spaces per 1,000 square feet of floor
area in the Venture Building. This clause (a) applies only to
Collateral Leases, and does not apply to Transferred Leases.
(b) to construct or permit to be constructed on any
Outlot parcel of which Tenant is the landlord under an Existing
Lease to the occupant of the Outlot a building at Tenant's sole
cost and expense, or at the cost and expense of the tenant of
the Outlot parcel, so long as such building is constructed in
compliance with the criteria set forth in Section 15.01(a), (d),
(e) and (f) for Changes. This clause (b) applies only to
Collateral Leases and does not apply to Transferred Leases.
Section 15.03. All changes, additions and alterations
(other than Tenant's Trade Fixtures) to the Demised Premises and
all restoration, repair and replacement of the Improvements
pursuant to any of the provisions of this Lease (including,
without limitation, Articles XV and XVI hereof) or otherwise
shall immediately become and remain the property of Landlord
without any compensation.
Section 15.04. Subject to the provisions contained in
Underling Leases, REAs, Covenants, and subject also to the
provisions of Section 6.02 hereof, Landlord shall have the
exclusive right without Tenant's consent to develop, build,
construct, expand and maintain and lease and alter or raze any
Outlot or alter, expand or raze any of Landlord's Buildings of
which Landlord is the owner or which Landlord leases and is not
leased to Tenant under this Lease at the time in question, and
Landlord shall have the exclusive right to create, develop,
construct and maintain new Outlots and buildings and
improvements thereon. (See also the last sentence in Section
6.02 hereof.) In performing any activities authorized by this
Section 15.04, Landlord shall comply with all Requirements and
shall not impair the structural integrity of the Venture
Building as a result of any construction and shall not
unreasonably interfere with Tenant's business activities at the
Shopping Center.
ARTICLE XVI
Destruction and Restoration
Section 16.01. Subject to the provisions of Section 16.04
hereof, in case of any damage to or destruction of the
Improvements which constitute the Demised Premises by fire or
any other cause, Tenant, at Tenant's sole cost and expense,
whether or not the insurance proceeds, if any, shall be
sufficient for the purpose, and irrespective of the amount of
any loss, shall restore, repair, replace, rebuild or alter the
same (collectively referred to as "Restoration") as nearly as
possible to their value, condition and character immediately
prior to such damage or destruction or with such reasonable
changes or reasonable alterations as may be desired by Tenant
for sound business reasons, but in conformity with and subject
to the conditions of Article XV. Such Restoration shall be
commenced and prosecuted with due diligence in good faith.
In case of damage to or destruction of any of the
Improvements in the Shopping Centers by fire or other cause,
Tenant shall promptly give written notice thereof to Landlord.
Section 16.02. All insurance money paid as provided in
Section 5.05 for damage or destruction, less the actual costs,
fees and expenses, if any, incurred in connection with the
adjustment of the loss, if an amount up to $150,000, shall be
paid to Tenant, and if over $150,000, shall be paid to the
Insurance Trustee, held in trust in all cases (including whether
held by Tenant or over $150,000 and held by the Insurance
Trustee), and applied to the payment of the cost of the
aforesaid Restoration, including cost of demolition and
temporary repairs and for the protection of property pending the
completion of permanent Restoration paid out from time to time
to Tenant or in accordance with its directions, as Restoration
progresses on the written approval of Landlord and the written
request of Tenant which shall be accompanied by the following:
(a) A duplicate original copy of all the
construction contracts and all supporting documents
relating to a request for money and certificate signed
by Tenant's regular Vice President, dated not more
than 30 days prior to such request, setting forth the
following:
(1) That the sum then requested either
has been paid by Tenant, or is justly due to
contractors, subcontractors, materialmen, engineers,
architects or other persons who have rendered services
or furnished materials for the Restoration therein
specified, the names and addresses of such persons, a
brief description of such services and materials, the
several amounts so paid or due to each of said persons
in respect thereof, that no part of such expenditures
has been or is being made the basis in any previous or
then-pending request for the withdrawal of insurance
money or has been made out of the proceeds of
insurance received by Tenant, and that the sum then
requested does not exceed the cost of the services and
materials described in the certificate;
(2) That, except for the amount, if
any, stated in such certificate to be due for services
or materials and except for any amount to be withheld
pursuant to a directly related construction contract,
there is no outstanding indebtedness known to Tenant,
after due inquiry, which is then due and payable for
labor, wages, materials, supplies or services in
connection with such Restoration which, if unpaid,
might become the basis of a vendor's, mechanic's,
laborer's or materialman's statutory or similar lien
upon such Restoration or upon Tenant's leasehold
interest in the Demised Premises; and
(3) That the cost, as estimated by
Tenant, of the Restoration required to be done
subsequent to the date of such certificate in order to
complete the same, does not exceed the insurance
money, plus any amount deposited by Tenant to defray
such cost and remaining in the hands of the recipient
designated in Section 5.05 hereof after payment of the
sum requested in such certificate.
(b) If requested by Landlord, evidence reasonably
satisfactory to Landlord to the effect that there has not
been filed with respect to the Demised Premises or
Tenant's leasehold interest any vendor's, mechanic's,
laborer's, materialman's or other similar lien, which has
not been discharged of record, except such as will be
discharged by payment of the amount then requested.
In the event that any such Restoration involves
expenditures in excess of $250,000, the certificate required by
paragraph (a) of this Section shall be a certificate signed by
the architect or engineer in charge of the Restoration, selected
by Tenant and reasonably satisfactory to Landlord.
If the insurance money at the time held by the recipient
designated by Section 5.05 hereof, less the actual costs, fees
and expenses, if any, incurred by Landlord in connection with
the adjustment of the loss, shall be insufficient in the
reasonable judgment of Landlord to pay the entire cost of such
restoration, Tenant shall pay the deficiency to said recipient,
prior to commencement of construction, or, if construction is
underway, prior to continuation of the construction and before
the next requisition for insurance moneys need be honored.
Upon the receipt by said recipient of satisfactory
evidence, of the character required by the foregoing provisions
of this Section 16.01, that the restoration has been fully
completed and paid for in full and that there are no liens of
the character referred to therein, and there is no Event of
Default by Tenant under this Lease, any balance of the insurance
money at the time held by said recipient shall be paid to
Tenant, and if there is then existing an Event of Default, paid
to Landlord to be applied to cure the Event of Default.
Section 16.03. No destruction of, or damage to the Demised
Premises or the Shopping Centers or any part thereof, by fire or
any other cause shall permit Tenant to surrender this Lease or
shall relieve Tenant from its obligations to pay the full Basic
Rent and other Rent or relieve Tenant from any of its other
obligations under this Lease; and to the extent not prohibited
by applicable law, Tenant waives any rights now or hereafter
conferred upon it by statute or otherwise to quit or surrender
this Lease or the Demised Premises or any suspension,
diminution, abatement or reduction of rent on account of any
such destruction or damage.
Section 16.04. With respect to buildings situated on an
Outlot, if any exist, on a Property, the restoration of such
Outlot buildings shall be performed as specified in the Outlot
Lease; provided, however, Tenant shall not be obligated to
rebuild or restore any Improvements on an Outlot which is a
Transferred Lease or if the Outlot Lease is a Collateral Lease
and does not require restoration or rebuilding, but in any case,
Landlord shall be entitled to receive all the insurance proceeds
for the full replacement cost from the insurance company for the
loss or damage of the Improvements on the Outlot if the Outlot
constituted one of Landlord's Buildings or if the Outlot Lease
was a Collateral Lease and Tenant does not restore or rebuild.
Tenant will use reasonable commercial efforts to enforce the
Outlot Leases to compel the tenant or subtenant to restore if
the Outlot Lease so provides. If restoration is not required to
be performed, or if required but Landlord waives such
requirement, Tenant, at its expense, agrees to promptly raze the
damaged building and other improvements on the Outlot and pave
it for parking, landscaping or other appropriate use, so that
the former Outlot is integrated aesthetically with the Property.
Section 16.05. In the event any of Landlord's Buildings
is damaged or destroyed by casualty, and if Landlord does not
restore the building, Landlord shall promptly clear all debris
remaining from the damage and either repair and put the
remaining building in a sightly condition or raze the building
remains and keep the area of the former building sightly at its
own expense.
ARTICLE XVII
Quiet Enjoyment
Section 17.01. Landlord agrees that, upon paying the Rent
and all other charges herein provided for and observing and
keeping all covenants, agreements and conditions of this Lease
on its part to be observed and kept, Tenant shall quietly have
and enjoy the Demised Premises during the term of this Lease
without hindrance or molestation by Landlord, subject, however,
to the provisions of this Lease and to all matters which now
affect the Demised Premises including, without limitation, the
Underlying Leases, the Existing Mortgages and all matters
affecting title to the Demised Premises, whether or not of
record, and the rights and interests of persons and tenants in
possession.
ARTICLE XVIII
Eminent Domain
Section 18.01. In the event that a Property or Properties
or any portion thereof shall be taken in condemnation
proceedings or by exercise of any right of eminent domain or by
agreement between Landlord and Tenant and those authorized to
exercise such right (hereinafter referred to as "condemnation
proceedings" or a "taking"), Landlord shall be entitled to
collect from any condemnor the entire compensation that may be
awarded in any such proceedings for the Property or Properties
so taken, including without limitation, the fee title (as to Fee
Title Properties), the Improvements, Landlord's reversion and
all leasehold interests, without deduction therefrom for any
estate hereby vested in or owned by Tenant or any estate vested
in any other tenant or subtenant, subject, however, to the
rights of Tenant as set forth in this Article. Tenant agrees to
execute any and all further documents that may be required in
order to facilitate collection by Landlord of any and all such
awards.
Section 18.02. If at any time during the term of this
Lease there shall be a total taking (as hereinafter defined) of
all of a portion of the Demised Premises situated on a
particular Shopping Center, then this Lease shall terminate and
expire only with respect to the particular portion of the
Demised Premises so taken on the date of surrender of possession
to the condemning authority of the particular portion of the
Demised Premises on that Property so taken as a result of such
total taking. In the event this Lease terminates as to a
particular portion of the Demised Premises on that Property as
the result of a total taking, Tenant shall continue to pay in
full the Rent hereunder and, shall in all other respects, keep,
observe and perform all the terms, covenants, agreements,
provisions, conditions and limitations of this Lease to be kept,
observed and performed by Tenant until the date of such
surrender. Thereafter, that particular portion of the Demised
Premises shall be deleted from this Lease and not be a part of
the Demised Premises and the annual Basic Rent shall be reduced
in an amount equal to the product obtained by multiplying the
amount of the Net Award received by Landlord by 12-3/4 percent;
but in no event, however, shall the annual Basic Rent be reduced
by an amount greater than $200,000 per year during the Initial
Term or $400,000 during an Extended Term; and this Lease shall
remain in full force and effect as to the remaining portions of
the Demised Premises. As used herein "total taking" shall mean
(a) a taking of the whole of the demised Premises on that
single, individual Property, or (b) a taking of less than the
whole of the Demised Premises on that single, individual
Property, but, the taking is of such a substantial part of that
Property which that it results in the portion of the Demised
Premises on that Property remaining after such taking (even if
Restoration were made) being economically infeasible for the use
of that particular portion of the Demised Premises on that
Property. A taking of a portion or portions of areas of a
single, individual Property being utilized for parking purposes
shall not constitute a total taking unless there is taken 20% or
more of the area of the Land area of that particular Property
which is used or useable for parking and Landlord does not
provide an adequate alternative parking area or facility for
such use (including areas to which a REA, if any, applies).
Section 18.03. In the event of a total taking affecting
one or more of the Properties as aforesaid, then and in such
event the proceeds of the entire award for such taking which are
left after paying all legal fees and other expert fees and other
expenses of collection and after the Overlandlord receives the
proceeds, if any, to which it is entitled ("Net Award") shall be
paid to Landlord as Landlord's property, and Tenant shall not be
entitled to any portion of the award for the value of Tenant's
leasehold interest in the Property taken or otherwise.
No claim or demand of any kind shall be made by Tenant
against Landlord or against an Overlandlord or the condemning
authority or any other party by reason of such termination or
taking.
Section 18.04. If at any time during the term of this
Lease there shall be a taking of only a part of a particular
Property which is not a total taking as defined in Section 18.02
hereof (which said taking is hereinafter called a "Partial
Taking"), this Lease shall not terminate as to such Demised
Premises on that Property and Tenant shall promptly, except for
Unavoidable Delays, in compliance with the provisions of Article
XVI of this Lease, repair any damage to the Demised Premises or
the Property resulting from such partial taking, and of the
Improvements so damaged so as to render the same as nearly as
possible a complete and satisfactory architectural unit of the
same type and class immediately preceding such taking, unless
Landlord elects as to Landlord's Buildings not to restore or
replace Landlord's Buildings, as stated in clause (b) of this
Section 18.04.
In the event of a Partial Taking as aforesaid, as
compensation for the respective interests of Landlord and Tenant
taken as aforesaid the Net Award, subject to the Underlying
Leases and Existing Mortgages, shall be allocated, applied and
distributed as follows and in the following order of priority:
(a) So much thereof as shall be reasonably
necessary to repair any damage to the Property, or any
part thereof, resulting from such Partial Taking, and to
demolish, alter, restore, replace or repair the portion of
the Improvements so damaged so as to render the same as
nearly as possible a complete and satisfactory
architectural unit of the same type and class immediately
preceding such Partial Taking as provided above, shall be
made available to Tenant for the purposes aforesaid
substantially in the same manner and subject to the same
conditions as those set forth in Article XVI hereof with
respect to insurance proceeds and other moneys, and
(b) Landlord shall be entitled to retain the
entire remainder of the Net Award as compensation for its
interest in the Property thus taken.
In the event the cost of said repairs, demolitions, alterations,
restoration, replacement or rebuilding of the Demised Premises
shall exceed the award, Tenant shall pay the deficiency.
Landlord shall not be obligated to restore or replace or have
Tenant restore or replace any Landlord's Buildings unless
Landlord elects to do so, but to the extent Landlord receives
and retains the Net Award Landlord shall restore or rebuild the
Common Areas remaining after the taking.
Notwithstanding the event of a Partial Taking, the Basic
Rent payable in the amounts as provided in Sections 3.01 and
25.02 shall continue and shall not be suspended, waived,
diminished or reduced or the payment thereof interrupted,
delayed or deferred, excepting that if Landlord shall actually
receive and retain as its own funds any remainder of the Net
Award pursuant to clause (a) or, remaining after Landlord spends
money to restore Landlord's Buildings, retained pursuant to
clause (b) above, the annual Basic Rent shall be reduced in an
amount equal to the product obtained by multiplying by 12-3/4
percent the amount of the Net Award actually received and
retained by Landlord, if any, after Landlord has applied and
distributed the net award for the repair of the remaining
Property in accordance with clause (a) in Section 18.04.
Section 18.05. In the event of any dispute between
Landlord and Tenant as to whether a total taking within the
meaning of this Lease shall have occurred (including an
assertion by Tenant that is has the right to terminate this
Lease as to the particular Property affected pursuant to Section
18.02, clause (b) therein), or as to the amount of the
Restoration fund, such matters shall be determined by
arbitration as provided in Article XXI of this Lease.
Section 18.06. If all or any portion of the Demised
Premises is taken by the exercise of the right of eminent domain
for governmental occupancy for a limited period for less than
the term then remaining ("Temporary Taking"), this Lease will
not terminate and Tenant will continue to perform all of
Tenant's obligations as though such taking had not occurred
(except to the extent that Tenant is prevented from doing so by
reason of such taking; provided, in no event will Tenant be
excused from the payment of Rent and all other charges required
to be paid by Tenant under this Lease). In the event of such
Temporary Taking, Tenant will be entitled to receive the entire
amount of any award made for such taking (whether paid by way of
damages, rent or otherwise) and Landlord hereby assigns such
award to Tenant, unless the period of governmental occupancy
extends beyond the end of the Lease Term, in which case the
award will be equitably apportioned between Landlord and Tenant.
To the extent possible, Tenant agrees to restore the
Improvements to the condition which existed prior to such
Temporary Taking at Tenant's expense at the termination of any
such governmental occupancy.
Section 18.07 Nothing herein contained shall prevent
Tenant from maintaining or prosecuting its own independent
action in such condemnation proceeding for a separate damage
award for the value of any Tenant's Trade Fixtures and other
removable personal property or for relocation expenses and
damages for interruption of Tenant's business; provided,
however, that no such award to Tenant shall reduce, affect or
compromise the amount of Landlord's award pursuant to Section
18.01 or 18.03, which shall have priority, and if it would
reduce Landlord's benefits and compensation for the fee title,
if any, of Landlord or the leasehold value, Tenant shall not
make such claim for those damages.
ARTICLE XIX
Assignments and Subleases; Leasehold Properties;
Space Leases, Outlot Leases and Vacant Areas
Section 19.01. All the provisions contained in this
Article XIX shall be subject to Underlying Leases, Existing
Mortgages, Covenants, restrictions or limitations or covenants
contained in any agreements, leases, subleases, licenses, REAs
or any other documents of record or in any documents to which
Tenant is a party or is bound, and shall be also subject to all
laws. Without the prior written consent of Landlord, Tenant
may, subject, however, to each and every provision of this
Lease, sublet all or any portion of the Demised Premises. In
conjunction with a permitted subletting for which Tenant has
entered into a signed sublease, Tenant may divide any Venture
Buildings into different storerooms, but Tenant shall not
subdivide any Venture Building into different stores or
storerooms to the extent and degree whereby at all times and
after all subdivisions have been done at least 50% of the gross
square feet of the original size of the Venture Building (i.e.
when the Building was first built and occupied as a "Venture"
department store) does not remain as one storeroom designed for
retail use. Tenant may in any or all of the Venture Buildings
enter into agreements for concessions and licenses relating to
uses and purposes consistent with the permitted uses applicable
to the space permitted under Article VI. Any sublease entered
into by Tenant must provide for a commercially reasonable fixed,
basic rent payable monthly; any dispute on the issue of whether
the rent is at a commercially reasonable value shall be
determined by arbitration.
Tenant may assign or transfer its entire interest in this
Lease (but not less than its entire interest) without Landlord's
consent. However, Tenant shall always remain fully and
primarily liable under this Lease notwithstanding any
assignment, and the assigned Lease shall not derogate from the
fact or operate to change the fact that every Property affected
by Tenant's assignment remains covered by this Lease, a single,
unitary Lease covering all the Properties.
No sale, assignment or transfer of this Lease by Tenant
shall be effective until there shall have been delivered to
Landlord a duplicate original of such assignment containing an
agreement, in recordable form, executed by the assignor and the
proposed assignee whereby such assignee assumes the Lease and
the assignee shall agree, expressly for the benefit of Landlord,
to keep and perform and be bound, subject to the foregoing, by
each and all of the covenants, conditions, restrictions and
provisions in this Lease contained on the part of Tenant, and
any such sale, assignment or transfer shall be subject to each
and all of such covenants, conditions, restrictions and
provisions. Any purported sublease, sale, assignment or
transfer by Tenant which is not in conformity with the terms of
this Lease shall be void and of no force or effect whatsoever.
Section 19.02. Tenant agrees that each sublease entered
into by Tenant during the Lease Term will contain a provision
whereby the subtenant, at option of Landlord, agrees to attorn
to Landlord in the event of the termination of this Lease
whether such subtenant holds a non-disturbance agreement or not.
Within thirty days after written demand, but not more often than
four times each year, Tenant will furnish to Landlord a
schedule, certified as correct by Tenant, setting forth all
leases and subleases then in effect including the names of the
tenants thereunder, a description of the sublet demised premises
and the amount of annual rent and other payments (with a copy of
the lease, if requested) payable by each tenant thereunder. It
is understood that Landlord's consent or Tenant's right to
sublet shall neither (expressly or by implication) obligate
Landlord to grant any non-disturbance rights to the subtenant,
or any other rights from Landlord to the subtenant, except as
expressly stated in this Lease, nor grant the subtenant any
right of possession, use or occupancy for a term lasting beyond
the end of the term of this Lease (whether it ends by effluxion
or early termination), except as otherwise agreed to in a
non-disturbance agreement given to such subtenant, if any, nor
grant the subtenant any rights to awards in eminent domain or
other moneys beyond the Tenant's rights relating to such awards
under this Lease, and such subleases shall be subject and
subordinate to and the subtenant bound by this Lease.
Section 19.03. (a) As to certain Existing Leases covering
portions of the Shopping Centers, which are in effect at the
date of this Lease and which have been assigned by Tenant to
Landlord by unconditional assignments of leases
contemporaneously with the making of this Lease and each such
assignment dated the same date as this Lease (herein sometimes
referred to as "Transferred Leases"), Tenant (as landlord
thereunder) has assigned its entire interest in those leases
unconditionally to Landlord. As to all the other Existing
Leases covering other portions of the Shopping Centers at the
date of this Lease (herein sometimes referred to as "Collateral
Leases"), Tenant has assigned those leases to Landlord pursuant
to collateral assignments of leases, as additional security to
Landlord for Tenant's liability under this Lease. Tenant will
assign also to Landlord, as additional security to Landlord for
Tenant's liability under this Lease, its interest as landlord
under all future subleases hereafter entered into by Tenant and
all such future subleases shall also be "Collateral Leases"
under this Lease; the assignments to be used, both the
unconditional and conditional, shall be prepared by Landlord's
attorney, subject to Tenant's reasonable approval.
(b) Intending for Landlord to retain the
security interest in the Collateral Leases described in Section
19.03(a) and without relinquishing, diminishing or impairing
such security interest in and to the Collateral Leases, Tenant
hereby assumes and agrees to perform and observe the landlord's
obligations under each and all the Collateral Leases and agrees
to defend, indemnify Landlord and hold Landlord harmless from
and against all liabilities and obligations relating to or
arising out of all of the Collateral Leases and any and all
future subleases entered into by Tenant, and Tenant shall have
all the liabilities and obligations as the landlord arising out
of said Collateral Leases and said future subleases, including,
without limitation, all brokerage commissions or fees, if any,
associated with any of said Collateral Leases or future
subleases. If an Event of Default under the Lease occurs and is
continuing, Landlord shall have the right immediately to receive
and retain the rent, issues and profits from the Collateral
Leases and shall apply same (after deducting costs of
collection) towards curing Tenant's default, but any collection
of rent shall not be deemed to be a recognition or
non-disturbance agreement in favor of the tenant or subtenant.
(c) Landlord and Tenant will, upon signing
this Lease and thereafter from time to time, cause the
appropriate UCC-1 and UCC-3 Financing Statements to be signed
and filed and re-filed to perfect the lien and maintain the
priority of the collateral assignment of the Collateral Leases.
Tenant will execute and deliver a separate instrument of
collateral assignment prepared by Landlord's lawyer, if
requested by Landlord, for each Collateral Lease as well as for
each Transferred Lease.
Section 19.04 If a proposed subtenant desires a
non-disturbance agreement from Landlord as a prerequisite to
entering into the sublease, Tenant shall notify Landlord in
writing accompanied by the proposed sublease and information
regarding the proposed subtenant, its business, operations and
financial condition, and any Changes, new structures or other
alterations or improvements as may be proposed and other
information Landlord reasonably requests. Landlord shall not be
obligated to grant a non-disturbance agreement with respect to
a sublease of all or any portion of a Venture Building or all or
any portion of the rest of any Land (other than an Outlot, which
is dealt with in Section 19.05), except if each and all the
following conditions precedent are satisfied:
(i) the proposed sublease form shall contain
commercially reasonable terms and shall provide for the
subtenant to pay a fixed, basic rent (separate from the
additional rent payments such as for common area
maintenance, taxes and insurance and the like) equivalent
to the fair rental value then prevailing in the city or
town where the Property is located, and the proposed
sublease, in addition to meeting the requirements just
mentioned, shall be a net lease and shall contain and be
on terms, provisions and conditions at least as favorable
to Landlord as contained in this Lease including, without
limitation the foregoing, and also the provisions
contained in Section 27.06; to determine what is fair
rental value, all money or other consideration, if any,
(such as a lump sum payment) to be paid by or on behalf of
the tenant in addition to fixed, basic rent (hereinafter
referred to as the "Gross Premium") shall be divided by
the number of years in the initial term of the lease
(without counting renewal options) and the resultant
number (hereinafter called the "Annual Premium") shall be
added to the annual fixed, basic rent, and it shall be an
irrebuttable presumption that the total of the fixed,
basic rent stated in the lease plus the Annual Premium is
the fair rental value, and either the lease shall be
amended to provide that the tenant shall pay the higher
annual fixed, basic rent (which includes the Annual
Premium), or Landlord shall be paid the entire Gross
Premium in which case the lease need not be amended; and
this Gross Premium formula and the presumption shall apply
to Sec. 19.05(i) as well; and
(ii) the subtenant's proposed use of the
sublet space shall be a permitted use under this Lease;
and
(iii) the proposed subtenant shall have a net
worth of at least $50,000,000; and
(iv) any proposed Change, new structure or
other change or alteration shall comply in all respects
with this Lease; and
(v) the sublease shall be absolutely "net" to the
landlord thereunder and shall provide in addition to said
fixed, basic rent that the subtenant's payments of
Impositions and insurance premiums and payments toward all
repairs and maintenance of the Property and other Rent
shall not be less than a proportionate share based on the
ratio of the subtenant's building's square footage to the
square footage of the entire buildings (including the
subtenant's building's square footage) on the property
where the subtenant's building is situated, and that no
payments or rent will be paid more than one month in
advance, and the sublease shall provide that modification
or cancellation of the sublease without Landlord's prior
written consent shall not be binding on Landlord; and
(vi) the sublease shall be expressly subject
and subordinate to this Lease and the length of the entire
term of the sublease including options will not extend
beyond August 31, 2052 and the subtenant thereunder shall
agree to be bound, as to the space demised under the
sublease, by all the provisions of this Lease (other than
the provisions of this Lease which make this Lease a
unitary Lease and other than the Rent payments provided
for in this Lease); and
(vii) the subleased premises shall be for
50,000 square feet or more and the shape thereof shall be
rectangular with same width in frontage as in rear; and
(viii) Tenant shall pay Landlord's attorneys' fees
for review of Tenant's documents, negotiations, if any, and
other services in regard to such subletting.
If both the subtenant and the sublease meet all of the
foregoing conditions, Landlord shall provide the proposed
subtenant with a subordination, non-disturbance agreement in the
form attached as Exhibit C.
If Tenant enters into a sublease, and whether or not
Landlord's consent is required with respect thereto, Tenant
shall deliver to Landlord an executed counterpart of such
sublease or any subsequent amendments or modifications thereof,
within thirty days after Tenant entered into such sublease,
amendment or modification.
Section 19.05. As to a subtenant of an Existing Lease to
whom Tenant has prior to the date of this Lease subleased an
Outlot on any Property where such Outlot is permitted under this
Lease, Landlord shall enter into a subordination,
non-disturbance agreement with such subtenant in the form of
attached Exhibit C provided all of the following listed
conditions precedent are satisfied: Landlord shall not be
obligated to grant a non-disturbance agreement with respect to
a sublease of all or any portion of an outlot, except if:
(i) the sublease form contains commercially
reasonable terms and shall provide for the subtenant to
pay a fixed, basic rent (separate from the additional rent
payments such as for common area maintenance, taxes and
insurance and the like) equivalent to the fair rental
value then prevailing in the city or town where the
Property is located (see Gross Premium formula method in
Sec. 19.04(i) hereof, which shall apply in this Section
19.05 also), and the Existing Lease, in addition to
meeting the requirements just mentioned, is a net lease
and contains terms, provisions and conditions at least as
favorable to Landlord as contained in this Lease
including, without limitation, the foregoing and also the
provisions contained in Section 27.06; and
(ii) the subtenant's proposed use of the sublet
space shall be a permitted use under this Lease; and
(iii) the subtenant has a net worth of at least
$5,000,000; and
(iv) any proposed Change, new structure or other
change or alteration shall comply in all respects with
this Lease; and
(v) the sublease shall be absolutely "net" to the
landlord thereunder and the subtenant is totally
responsible at its expense for all cleaning, repairs,
replacements and maintenance of the Outlot and the
Improvements thereon, and the subtenant is responsible to
pay all the Impositions, taxes and assessments and
insurance and other costs, fees, charges and expenses
attributable to the Outlot and the Improvements and Trade
Fixtures and the business conducted thereon, and the
subtenant agrees that no rent or other payments will be
paid to the sublandlord or anyone else for a period more
than one month in advance, and the sublease states that
modification or cancellation of the sublease without
Landlord's prior written consent shall not be binding on
Landlord; and
(vi) the sublease shall be expressly subject and
subordinate to this Lease and the length of the entire
term of the sublease including options will not extend
beyond August 31, 2052 and none of the provisions of the
subtenant's lease violates this Lease and the subtenant
thereunder shall agree to be bound, as to the area or
space demised under the sublease, by all the provisions of
this Lease (other than the provisions which make this
Lease a Unitary Lease and other than the Rent payments
provided for in this Lease); and
(vii) Tenant pays Landlord's attorneys' fees for
review of documents, negotiations, if any, and other
services in regard to such subletting or subordination,
non-disturbance agreement.
If both the subtenant and the sublease meet all of the
foregoing conditions, Landlord shall enter into, with the tenant
of the Existing Outlot Lease and Tenant herein, with a
non-disturbance agreement in the form attached as Exhibit C.
Section 19.06. The following provisions in this Section
19.06 shall apply specifically to each of those Properties which
is a Leasehold Property, and shall apply, regardless whether
after the date of this Lease the owner of the fee title of a
Leasehold Property changes, that is, regardless of the identity
of the Overlandlord. Because this Lease is a sublease as to
each of the Properties which is a Leasehold Property, these
following provisions numbers (1) through (15) inclusive shall be
applicable only to a Leasehold Property; not applying to any Fee
Title Property. The following provisions are in addition to the
other provisions of this Lease which apply to all of the
Properties, including the Leasehold Properties, and these
following provisions shall not substitute for or replace the
other provisions in this Lease, except to the extent the
following provisions conflict with the other provisions in this
Lease, in which case these following provisions shall govern as
to a Leasehold Property:
(1) No Leasehold Property shall be used or occupied,
or permitted or suffered to be used or occupied, by Landlord or
Tenant or any party claiming by or through Landlord or Tenant
for any use, purpose or activity which is not permitted by the
Underlying Lease for such Leasehold Property.
(2) Tenant, insofar as applicable to the Demised
Premises, and Landlord insofar as applicable to Landlord's
Buildings, shall at its sole expense, (i) comply with the
Underlying Leases, and with all applicable legal requirements
pursuant to the Underlying Leases, and (ii) shall comply
pursuant to the Underlying Leases with the requirements of all
policies of insurance of whatsoever nature which Landlord or
Tenant is required to maintain pursuant to the Underlying
Leases.
(3) Tenant acknowledges that this Lease, and Tenant's
and Landlord's occupancy on a Leasehold Property, are subject to
and subordinate to the Underlying Leases. Tenant agrees that
the terms, covenants, provisions and conditions of the
Underlying Leases applying to Landlord as the tenant thereunder,
to the extent said Underlying Leases apply to the Demised
Premises, shall apply directly to Tenant, and Tenant hereby does
and shall assume and perform fully all the duties, obligations,
liabilities and undertakings of Landlord as the tenant under
each and all of the Underlying Leases, including, without
limitation, as additional rent under this Lease, payment of all
the fixed, basic rents and additional rents and other payments
to be made pursuant to the Underlying Leases, whether arising
before or on or after the date of this Lease even though the
Underlying Lease may cover both Demised Premises and Landlord's
Buildings, such payments to be made to Landlord at the same time
as Basic Rent and shall be paid by Tenant in addition to the
Base Rents and shall be made by wire transfer of immediately
available Federal funds in the bank account designated by
Landlord. In the event of any inconsistency between the terms,
covenants, provisions and conditions of any such Underlying
Lease and the terms, covenants, provisions and conditions of
this Lease as applies to the Demised Premises or, so long as
Tenant is the Responsible Party, as applies to Common Areas, on
a Leasehold Property, in that the Underlying Lease imposes an
obligation or liability on the tenant thereunder (and therefore
on Tenant under this Lease by virtue of Tenant's assumption
thereof) which is stricter or broader or more onerous or not
covered by this Lease, then, even though the subject matter may
be one which is the same in both the Underlying Lease and this
Lease, the terms, covenants, provisions and conditions of the
Underlying Lease with respect to such obligation or liability
shall control and be complied with by Tenant except if expressly
stated in this Lease otherwise.
Tenant and Landlord each agrees that it will not
do, or cause or suffer to be done, any act (whether of
commission or omission) which would result in a breach of or
default under any term, covenant, provision or condition of any
Underlying Lease.
Tenant agrees to furnish reports of sales and all
other data which Tenant is obligated to furnish the Overlandlord
under the Underlying Leases.
(4) Except if specifically and expressly stated
otherwise in this Lease, Landlord shall have no responsibility
or liability to provide any services to Tenant with respect to
either the Demised Premises, or for performing any of the
duties, obligations, liabilities or undertakings of any landlord
or tenant under any Underlying Lease as it applies to the
Demised Premises or to the Shopping Center. Landlord agrees,
however, that in cases where Landlord's cooperation is necessary
to enforce rights of the tenant under any of the Underlying
Leases, Landlord will use its reasonable efforts to cause the
Overlandlords to perform their duties, obligations, liabilities
and undertakings thereunder, provided Tenant agrees to and does
bear the expense and reimburse Landlord for any and all expenses
including experts and attorneys' fees incurred by Landlord in
connection therewith. To the extent that to do so does not
prejudice or impair the rights and remedies intended to be
enjoyed by Landlord under this Lease and does not in any manner
or to any degree increase the duties, obligations, liabilities
or undertakings of Landlord and does not modify or terminate an
Underlying Lease, Landlord agrees to otherwise cooperate with
Tenant so that all of the rights and benefits of the Underlying
Leases intended to be enjoyed by the prime tenants thereunder
shall be available to Tenant, except Tenant shall not have or
enjoy any options to cancel or terminate an Underlying Lease, or
surrender the premises covered by an Underlying Lease, or to
renew or to extend an Underlying Lease, or to purchase the fee
title, or to exercise rights of first refusal, or have any
rights to encumber, assign or sublet the interest of the tenant
under the Underlying Leases, or rights to build additional
buildings. Apart from assisting Tenant, at Tenant's full cost
and expense and without expense to Landlord, there shall be no
effect on this Lease, no liability imposed on Landlord and no
adverse circumstances to Landlord for Tenant's or Landlord's
failure to obtain any non-disturbance agreement from the
Overlandlord for any reason; Landlord not covenanting or
warranting Landlord's or Tenant's ability to obtain such
agreement or that Landlord itself will become a party to such
agreement if one can be obtained.
(5) In addition to other indemnification provisions
by Tenant in this Lease, and not in limitation thereof, Tenant
hereby agrees to and shall defend, indemnify and save Landlord
(in its capacity as tenant under the Underlying Leases and
assumer of the Underlying Leases only) harmless from and against
any and all liabilities, claims, demands, actions, suits,
losses, damages, costs and expenses (including experts' and
attorney's fees), arising before or on or after the date of this
Lease, that may be based on or asserted or alleged to be based
on any breach by Tenant of any term, covenant, provision or
condition of any Underlying Lease.
(6) In the event of any damage or destruction, or in
the event of any taking as a result of or in lieu of
condemnation or eminent domain of all or part of any Leasehold
Property, the terms, covenants, provisions and conditions of the
Underlying Lease for such Leasehold Property shall not be the
controlling instrument as between Landlord and Tenant, but the
provisions of this Lease relating to such event shall control
exclusively between Landlord and Tenant; that is, insofar as
Landlord or Tenant is not prevented by the terms of the
Underlying Lease or the consequences of the casualty or the
taking arising out of the provisions of the Underlying Leases or
Existing Mortgages applicable to the casualty event, and
Landlord is able to carry out the terms of this Lease in such
cases. Landlord shall not be required to assign any of
Landlord's rights as tenant under, or to pay over any amounts to
Tenant received by Landlord pursuant to, any of the Underlying
Leases by reason of any award or other payment relating to such
damage, destruction or taking.
(7) Landlord shall not modify any Underlying Lease
without Tenant's consent, which Tenant agrees not to
unreasonably deny or delay. Landlord shall not voluntarily
terminate such Underlying Lease for any reason without Tenant's
written consent. If Landlord defaults under an Underlying
Lease, then Tenant (upon reasonable advance written notice to
Landlord and Landlord's Mortgagee, unless the Underlying Lease
is in imminent danger of termination, in which case notice that
is feasible under the circumstances shall be given to Landlord
and said Mortgagee) may cure such default if after the notice
Landlord fails to take steps to effect such cure, and if Tenant
validly cures on Landlord's behalf Tenant may offset reasonable
cure expenses against the Base Rent payable to Landlord under
this Lease.
(8) Subject to clause (4) of this Section 19.06, the
performance by Overlandlord of Overlandlord's obligations in
accordance with any of the Underlying Leases, shall, for all
purposes, be accepted by Tenant, and shall be deemed to be the
performance of such obligations by Landlord under the provisions
of such Underlying Lease and also under this Lease to the extent
the obligations are the same, and in such case Tenant shall
neither look to Landlord for performance of such obligations nor
seek to hold Landlord liable for performance of such obligations
or for the manner of performance of such obligations or for any
default in performance or non-performance of such obligations;
(9) Whenever, by reason of Tenant's assumption of
all the obligations contained in an Underlying Lease as provided
in clauses (2) and (3) of this Section or otherwise, any
provision of the Underlying Lease requires the tenant thereunder
to make any payment of any money, including, without limitation,
the fixed, base rent payable thereunder, or requires such tenant
to take any action within a certain period of time (whether with
or without notice), then, notwithstanding that a provision in
this Lease calls for such payment to be made or action to be
taken at a different time, Tenant shall make such payment to
Landlord or take such action, as the case may be, within the
time specified in the Underlying Lease; and if such payment or
taking such action is required to be paid or done within a
specified time period after notice or receipt of an invoice,
then upon such notice or upon receipt of such invoice, Tenant
shall make such payment or take such action, as the case may be,
no later than ten days prior to last day of such time period
(excluding, however, installments of fixed, base rent under the
Underlying Leases which upon receiving such payments from Tenant
shall be paid by Landlord to the Overlandlord pursuant to the
Underlying Lease, Tenant being obligated to pay to Landlord in
this Lease, as additional rent, an amount which always shall
equal the fixed, base rent and other rent payments and money
payments payable under the Underlying Lease;
(10) Whenever any provision of an Underlying Lease
requires the Overlandlord to give notice or submit an invoice to
the tenant thereunder and Landlord has received such notice or
invoice but Tenant has not been given such notice or invoice by
the Overlandlord directly, then Landlord shall notify Tenant by
sending Tenant a copy of said notice or invoice. Such
notification by Landlord to Tenant of said Overlandlord's notice
or invoice shall for all purposes hereunder be deemed timely
given if sent to Tenant within five business days after receipt
by Landlord of the notice from Overlandlord;
(11) Whenever any provision of an Underlying Lease
requires the tenant under the Underlying Lease to obtain the
Overlandlord's consent for any purpose, including obtaining
consent prior to the undertaking of an act or proposed act, and
Tenant desires such consent, such provision shall for all
purposes hereunder be deemed to require the prior written
consent of both Overlandlord and Landlord; provided, however, if
Landlord is willing to consent, Landlord, at Tenant's expense,
shall cooperate to a reasonable extent with Tenant to obtain the
Overlandlord's consent provided Tenant pays all Landlord's
expenses in Landlord's extending such cooperation; and
(12) In the event Tenant contends that Overlandlord
is not observing, complying with or performing its obligations
under the Underlying Lease (thereby perhaps contending that
Landlord has similarly failed to observe, comply with or perform
its obligations under this Lease), or that the other party to an
REA is not observing, complying with or performing its
obligations under the REA, Tenant shall have the right to notify
Landlord of a default of the Overlandlord or the REA Party, as
the case maybe, which notice shall specify the nature of such
default. Landlord shall not be in default. Within five (5)
business days after its receipt of such notice, Landlord shall
give written notice to Overlandlord (in the manner required by
the Underlying Lease), which notice shall specify the nature of
such claimed default in the same manner as was specified in
Tenant's notice to Landlord. Landlord further agrees to extend
assistance to and cooperate with Tenant in order to effectuate
a cure of any alleged default, provided that all costs and
expenses in connection therewith are borne by Tenant. If Tenant
shall have given written notice to Landlord of such default by
the Overlandlord or the REA Party, as aforesaid, and if the
Underlying Lease allows withholding of such payments from the
landlord under the Underlying Lease and if Landlord consents in
writing, Tenant shall also have the right to have Landlord
withhold payments of that portion of the Base Rent payable to
the Overlandlord which is payable by Landlord at that time under
the Underlying Lease in accordance with the applicable
provision, if any, of the Underlying Lease allowing such
withholding of rent, provided, however, if Landlord then
withholds such Underlying Lease rent, Tenant agrees to defend,
indemnify and hold Landlord harmless from and against any and
all loss, cost, expense or liability as a result of the giving
of such notice of default to Overlandlord by Landlord, the
curing of such default by Tenant and the withholding of rent
under the Underlying Lease. Without limiting the generality of
the foregoing indemnity, it is expressly understood and agreed
that in the event the Underlying Lease is lawfully terminated by
Overlandlord as a result of proceedings arising out of the
operation of the provisions of this clause and the Overlandlord
claims against Landlord damages that Landlord is liable for the
loss of Overlandlord's rent, Tenant shall indemnify Landlord
from and against and shall be liable to Landlord for all the
damages that Landlord is liable for to Overlandlord.
(13) With respect to the Demised Premises,
Tenant, and with respect to the Landlord Buildings, Landlord,
shall each respectively comply with or cause the same to be in
compliance with all obligations of the tenant under the
Underlying Lease.
(14) If any provision in this Lease is the same
as a provision in the Underlying Lease, then if in legal or
arbitration proceedings between Landlord and Tenant there is an
interpretation or construction of that provision in the
Underlying Lease by a Court or by an arbitrator or arbitrators,
that will be the interpretation or construction that will apply
to that same provision in this Lease.
(15) Whenever in this Lease rights or privileges
are granted to Landlord or Tenant with respect to any matter or
thing, such rights or privileges shall be exercisable by the
Landlord insofar as the same are not inconsistent with, or in
violation of, the terms, covenants and conditions of the
Underlying Lease with respect to the same matter or thing and
the terms, rights and privileges granted to the Landlord and
Tenant herein, but where the rights and privileges granted by
the Underlying Lease to the tenant thereunder exceed the rights
and privileges granted in this Lease to Landlord or Tenant, then
Landlord or Tenant shall exercise such rights and privileges
only to the extent expressly permitted herein if the result of
exercising the greater rights or privileges in the Underlying
Lease would be detrimental to the other party hereto.
Section 19.07. At any time, and from time to time, during
the Lease Term, Landlord shall have the option to elect (i) to
acquire from Tenant an unconditional assignment of Tenant's
interest in any one or more Space Leases and Outlot Leases which
at the time are Collateral Leases (i.e. to convert them from
Collateral Leases into Transferred Leases); or (ii) to develop
then as yet unimproved Outlot areas or then vacant storerooms of
the Shopping Center (including any vacant storerooms which are
at that time part of the Demised Premises, subject to the
special provisions in the next following paragraph relating to
the case where the Vacant Storeroom was a Venture Store), to
build for Outlot Leases or Space Leases intended to be entered
into by Landlord with future occupants thereof (such unimproved
Outlot areas or being called herein "Vacant Areas" and such
vacant storerooms being called herein "Vacant Storerooms").
Landlord may exercise its option by notifying Tenant that
Landlord desires to receive such assignments or that Landlord
desires to take over and develop Vacant Areas, in each case as
designated by Landlord. Landlord will establish the date for
consummation of the transaction. Landlord's attorney shall
prepare the assignment form. Tenant will execute and deliver
the assignments to Landlord. Tenant agrees to obtain an
estoppel certificate from the tenant whose Space Lease or Outlot
Lease is to be assigned, if such be the case. The estoppel
certificate shall be addressed to and run in favor of both
Tenant and Landlord. The form shall be the form of estoppel
certificate Landlord desires or else the form the Space Lease or
Outlot Lease subtenant is obligated to deliver pursuant to its
sublease if Landlord had asked Tenant to obtain a different form
but Tenant was unable to obtain it. Tenant will use its best
efforts to obtain the estoppel certificates. When obtained,
Landlord shall receive the original estoppel certificate, and
will have opportunity to review it. If Landlord is not
satisfied with the certificate, Landlord may withdraw its
notification to receive the assignment, in which case the Space
Lease or Outlot Lease will continue to be held by Landlord as a
Collateral Lease.
In the event the Vacant Storeroom consists of a storeroom
in all or part of the Venture Building that was occupied by
Venture which became vacated because Venture ceased operating
the Venture Store as a Venture discount department store, that
space shall not be deemed to be a Vacant Storeroom (as used in
Section 19.07 above) until it has remained vacant and unused for
a retail store by Venture or by a subtenant or assignee of
Venture for a period of 360 days (the "Vacancy Period"), at
which time the space will be deemed to be a Vacant Storeroom.
Then, at any time after the Vacancy Period, Landlord shall have
the right, by giving Venture at least 45 days written notice, to
terminate this Lease as it applies to that Vacant Storeroom
solely. Landlord's notice shall specify the termination date,
which shall not be more than sixty (60) days after the date of
the termination notice, and Venture shall surrender and deliver
vacant and exclusive possession of that Vacant Storeroom to
Landlord in physical condition in accordance with the applicable
provisions of this Lease, and from and after the date of such
surrender, that Vacant Storeroom shall be deemed no longer a
part of the Demised Premises and Tenant shall have no further
obligations to pay the additional rent under this Lease as
applies to that storeroom, consisting of the payment of fixed,
basic rent or other payments to the Overlandlord (if that Vacant
Storeroom was located on a Leasehold Property), the CAM Charges,
the insurance, or the Impositions applicable to that storeroom;
nor shall the other provisions of this Lease placing obligations
on Tenant with regard to the Demised Premises be applicable with
respect to that Vacant Storeroom, except the following provision
shall survive: from and after the date that Landlord starts
receiving rent from a tenant who occupies all or any part of the
Vacant Storeroom (the "Rent Payment Date"), with whom Landlord
has entered into a lease ("Replacement Tenant"), Tenant shall be
entitled to a reduction of the Basic Rent under this Lease equal
to the annual Net Cash Flow as described in Section 19.07
hereof, with the same force and effect as if, as of the Rent
Payment Date, Tenant itself had entered into a lease with the
Replacement Tenant and on the Rent Payment Date that lease had
become a Collateral Lease and on that date Landlord had received
an assignment of that Collateral Lease, thereby converting it
into a Transferred Lease. The Rent Payment Date must commence
not later than two hundred and seventy (270) days after the
termination date set forth in the termination notice.
It is agreed that if Landlord desires to develop a Vacant
Area or Vacant Areas or add buildings in Shopping Centers or
expand existing buildings in the Shopping Centers, Landlord
shall have the exclusive right to do so. Tenant shall not have
any right to develop Vacant Areas, expand the Demised Premises
or build additional buildings. Tenant agrees to keep Landlord
informed of all areas that constitute Vacant Storerooms from
time to time, including information and data with respect to
such Vacant Storerooms, upon Landlord's request at reasonable
intervals. Further, Tenant agrees to notify Landlord in writing
prior to each time it intends to enter into a lease or other
occupancy agreement for a Vacant Storeroom.
If Landlord and Tenant consummate the assignment of a
Collateral Lease as described above in this Section 19.07, then,
from and after the date of the assignment (whereby a Collateral
Lease is converted into a Transferred Lease), insofar as
Landlord and Tenant are concerned, Tenant will no longer have
any landlord duties to the tenant under the Transferred Lease
which arise or accrue after the date of the assignment, and the
prior Collateral Lease assignment shall be terminated and the
tenant's existing premises which was covered by the Collateral
Lease shall be deleted from being a part of the Demised Premises
under this Lease and instead will become part of Landlord's
Buildings. Landlord will assume the landlord's duties under the
Transferred Lease as to duties arising or accruing after the
date of the assignment; provided, however, the foregoing shall
not be interpreted as relieving or changing Tenant's obligation
to perform its duties as the Responsible Party, as described
hereinbefore in this Lease. The date of the delivery of the
assignment of the Transferred Lease will be the effective date
of the assignment and Tenant and Landlord, as assignor and
assignee respectively, will prorate the subtenant's rents and
will prorate other items which are customarily prorated, such as
taxes, CAM, etc. With respect to the Transferred Lease,
Landlord will be responsible for all costs and expenses and
shall receive all the benefits accruing or attributable for the
period from and after the date of the assignment, and Tenant
will be responsible for all costs and expenses and shall receive
all the benefits accruing or attributable to the period before
the date of the assignment. By reason of Landlord accepting
such assignment of the Transferred Lease, the Basic Rent payable
by Tenant under this Lease will be reduced as follows: Tenant
will be entitled to a reduction in the annual Basic Rent then
payable under this Lease at the time of the assignment in an
amount equal to the annual Net Cash Flow, if any, applicable to
the Transferred Lease at the time of the assignment. Annual Net
Cash Flow applicable to the Transferred Lease is hereby defined
as an amount, computed and fixed one time as of the date of the
assignment and to be applicable in that fixed amount thereafter
without variation regardless whether the rent or other revenues
or expenses relating to the Transferred Lease premises changes
in any way. The annual Net Cash Flow reduction shall be
computed by taking (1) the amount of the annual fixed, base rent
payable under the Transferred Lease which is payable in the
calendar year in which the assignment occurs, (2) less (i.e.
deducting from the fixed, base rent aforesaid) the total of the
following amounts: (i) for a structural reserve an amount equal
to 15 cents multiplied by the square footage size of the
Transferred Lease premises, and (ii) an amount for a management
fee equal to 3% multiplied by the annual fixed, base rent
aforesaid, and (iii) an amount equal to the annual real estate
taxes and assessments, insurance premiums and costs and CAM
Costs attributable to the Transferred Lease premises to the
extent the Transferred Lease obligates the tenant thereunder to
pay less than 100% of each and all of such costs and expenses,
and (iv) an amount equal to the unamortized amount of all unpaid
broker's commissions, if any, payable under or arising out of
the assigned sublease and all unpaid allowances or contributions
(such as a construction allowance), if any, to be paid to Tenant
or the cost of all uncompleted work, if any, to be done by
Landlord pursuant to the sublease; said unamortized amount being
the amount of the unpaid brokers' commissions, unpaid
construction allowance or the cost of completing the unfinished
work (as the case may be) divided by the number of full calendar
years then remaining in the balance of the then current Lease
Term, not counting subsequent renewal or extension periods. The
resultant number shall be the Net Cash Flow reduction amount.
Tenant will deliver to Landlord any security deposit being held
under the assigned sublease, the original sublease documents,
copies of its file papers for that premises and other pertinent
documents.
As to any Vacant Area or Vacant Areas designated by
Landlord for development or leasing, no reduction of any kind at
any time in the Basic Rent or other Rent payable by Tenant under
this Lease shall occur or accrue to Tenant in such cases.
It is understood and agreed that the provisions for
reduction of the Basic Rent resulting from Landlord's acquiring
a Transferred Lease shall only apply to Collateral Leases and
which Landlord elects to convert into a Transferred Lease in the
future after the date of this Lease; and such reduction shall
not apply to Space Leases which have been or are assigned on or
prior to the date of this Lease or as of the date of this Lease,
Landlord having been assigned certain Space Leases
contemporaneously with the making of this Lease and the agreed
Basic Rent set forth on the attached Schedule of Basic Rents
having been computed and established and agreed to taking into
account these contemporaneous assignments of the Space Lease.
ARTICLE XX
Default and Remedies
Section 20.01. In case any of the following events shall
happen:
(a) Tenant shall at any time fail to pay Basic
Rent, additional rent or any other Rent or any monetary
obligation or shall fail to meet its duty as to the
delivery of any insurance policy required by this Lease,
and any such failure continues for ten days after written
notice thereof to Tenant and still continues after a
second 10-days' written notice thereof to Tenant; or
(b) Tenant shall at any time fail, whether by
action or inaction, to perform or observe or be in default
in any other of its covenants or agreements contained
herein (besides those specified in the immediately
preceding clause (a) above), and such failure shall
continue for thirty days after written notice thereof to
Tenant specifying the default; provided, however, in the
case of failure or default referred to in this clause (b)
is such that by its nature it cannot with due diligence
and in good faith be cured within the thirty days,
Tenant's period of time to cure shall be extended for such
period as shall be reasonably necessary to remedy the same
using all due diligence and good faith, and it shall be a
default if Tenant fails to proceed promptly and with all
due diligence in good faith to cure the same; or
(c) Tenant shall file a voluntary petition in
bankruptcy or shall file any petition or answer seeking or
acquiescing in any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or
similar relief for itself under any present or future
federal, state or other statute, law or regulation
relating to bankruptcy, insolvency or other relief for
debtors or Tenant is adjudicated as bankrupt or insolvent;
or shall seek or consent to or acquiesce in the
appointment of any trustee, receiver or liquidator of
Tenant or of all or any substantial part of its property,
or of any or all of the royalties, revenues, rents, issues
or profits thereof, or shall make any general assignment
for the benefit of creditors, or shall admit in writing
its inability to pay its debts generally as they become
due; or
(d) A court shall enter an order, judgment or
decree approving a petition filed by third parties against
Tenant seeking any reorganization, dissolution or similar
relief under any present or future federal, state or other
statute, law or regulation relating to bankruptcy,
insolvency or other relief for debtors, and such order,
judgment or decree shall remain unvacated and unstayed for
an aggregate of ninety days from the first date of entry
thereof; or any trustee, receiver or liquidator of Tenant
or of all or any substantial part of its property, or of
any or all of the royalties, revenues, rents, issues or
profits thereof shall be appointed without the consent or
acquiescence of Tenant and such appointment shall remain
unvacated and unstayed for an aggregate of ninety days;
then upon the occurrence of any of such events referred to
in clauses (a), (b), (c), or (d) (an "Event of Default") in
addition to any and all other rights or remedies available to
Landlord by this Lease and/or by law, Landlord shall have the
right to terminate this Lease and Tenant's possessory rights
hereunder (except for any default by Tenant which is not a
monetary default and is an act of commission or omission solely
in the performance by Tenant of Tenant's duties as the
Responsible Party; for this kind of default Landlord shall not
have a right to terminate this Lease based solely on such
default), by giving Tenant a written notice declaring the
termination and specifying the date on which the Lease will
terminate, and on the date so specified, this Lease will end as
fully and completely as if that were the date specified for the
expiration of the Lease, and Landlord shall have the right to
re-enter the Demised Premises and take possession thereof, and,
except to the extent Landlord may have agreed otherwise in
writing as to any persons, Landlord may remove all persons
therefrom, and Tenant shall have no further claim under this
Lease. All of Landlord's rights and remedies are cumulative and
non-exclusive of each other and Landlord may exercise any or all
of such rights, as well as any other rights or remedies
available, without releasing Tenant from any liability or
diminishing Tenant's liability arising out of this Lease and
notwithstanding any termination of this Lease or the exercise of
any remedies by Landlord, Tenant's liabilities shall survive and
Tenant shall remain liable for damages as hereinafter provided.
Should Landlord elect to terminate this Lease or re-enter as
herein provided, or should Landlord take possession pursuant to
legal proceedings or any notice provided for by law, Landlord
may recover from Tenant:
(i) the amount of the unpaid Rent which is due,
owing and unpaid by Tenant to Landlord at the time of
termination; and
(ii) all other amounts necessary to compensate
Landlord for all the detriment proximately caused by
Tenant's failure to perform its obligations under this
Lease or which in the ordinary course of things are likely
to result therefrom, including all costs (including
reasonable attorneys' fees) of repossession, removing
persons or property from the Demised Premises, repairs,
brokerage commissions for and expenses incurred in
reletting and reasonable alterations of the Property in
connection with reletting, if any; and
(iii) at Landlord's election, such other amounts in
addition to or in lieu of the foregoing as may be
permitted from time to time by applicable law.
(iv) Landlord shall always have the right to not
terminate this Lease and hold Tenant liable on the Rent
payment days for all Rent payments as they become due; and
in connection with the remedy under this clause (iv),
Landlord shall have the right to take exclusive possession
of the Demised Premises (without having terminated the
Lease) and re-renting for Tenant's account to another
tenant while holding Tenant liable nevertheless; provided,
however, at its option in its exclusive discretion,
Landlord shall have the continuing right at any time
before or after any re-letting, to terminate this Lease
for the previous default or for any subsequent default as
well.
In the alternative to damages described in clause
(iv) above in this Section 21.01, Landlord shall have the
right to recover from Tenant the worth at the time of
award of damages of the amount by which the unpaid rent
which would have come due after termination until the time
of award of damages exceeds the amount of rental loss that
Tenant proves Landlord has avoided by actually having
rented the Demised Premises to another tenant, or could
have been reasonably avoided if Landlord could have
mitigated Tenant's damages by signing a lease with another
tenant. Computations of the amounts recoverable by
Landlord in the immediately preceding sentence shall be
computed by allowing interest thereon at lower rate of
either the rate of 12-3/4% per annum or such other rate as
may be the maximum amount of interest then permitted to be
charged under the law of the state whose laws govern this
Lease as to the maximum rate of interest that may be
charged. The worth at the time of the award recoverable
by Landlord under the immediately preceding sentence above
shall be computed by discounting the amount otherwise
recoverable by Landlord at the discount rate of the
Federal Reserve Bank of New York at the time of the award
of damages.
Landlord shall be entitled to recover from Tenant all costs
of maintenance and preservation of the Demised Premises, and all
costs of re-letting and all costs, including reasonable
attorneys' and receiver's fees, incurred in connection with
re-giving possession, enforcing its remedies, entering into a
new lease or leases, suing to collect its Rent and in connection
with the appointment of and performance by a receiver to protect
the Demised Premises and Landlord's interest under this Lease.
Landlord shall use reasonable efforts, consistent with good
commercial real estate practice, to relet the Demised Premises.
Section 20.02. Nothing herein shall be deemed to affect
the right of Landlord under Article XIII of this Lease to
indemnification for liability, arising prior to the termination
of the Lease, for personal injuries or property damage. No
expiration or termination of the lease term pursuant to Section
20.01 or by operation of law, or otherwise, and no repossession
of the Demised Premises or any part thereof pursuant to Section
20.01, or otherwise, shall relieve Tenant of its liabilities and
obligations hereunder, all of which shall survive such
expiration, termination or repossession. In the event of any
termination of this Lease pursuant to Section 20.01 or any
repossession of the Demised Premises pursuant to Section 20.01,
Tenant, so far as permitted by law, waives (a) any notice of
re-entry or of the institution of legal proceedings to that end,
(b) any right of redemption, re-entry or repossession, (c) any
right to a trial by jury in any proceeding or in any matter in
any way connected with this Lease, and (d) the benefits of any
laws now or hereafter in force exempting property from liability
for rent or for debt.
Section 20.03. Except to the extent that Landlord may have
otherwise agreed in writing, no waiver by Landlord of any breach
by Tenant of any of its obligations, agreements or covenants
hereunder shall be deemed to be a waiver of any subsequent
breach of the same or any other covenant, agreement or
obligation; nor shall any forbearance by Landlord to seek a
remedy for any breach by Tenant be deemed a waiver by Landlord
of its rights or remedies with respect to such breach.
Section 20.04. No remedy herein or otherwise conferred
upon or reserved to Landlord shall be considered exclusive of
any other remedy, but the same shall be cumulative and shall be
in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute, and every
power and remedy given by this Lease to Landlord may be
exercised from time to time and as often as occasion may arise
or as may be deemed expedient.
Section 20.05. The rights herein given to receive,
collect, sue for or distrain any rent or rents, moneys or
payments, or to enforce the terms, provisions and conditions of
this Lease, or to prevent the breach or nonobservance thereof,
or the exercise of any such right or of any other right or
remedy hereunder or otherwise granted or arising, shall not in
any way affect or impair or toll the right or power of Landlord
upon the conditions and subject to the provisions in this Lease
expressed to terminate Tenant's right of possession because of
the occurrence of an Event of Default in or breach of any of the
covenants, provisions or conditions of this Lease.
Section 20.06. No receipt of money by Landlord from
Tenant, after the termination of Tenant's right of possession or
after the service of any notice or after the commencement of any
suit or after final judgment for possession of the Demised
Premises, shall renew, reinstate, continue or extend the right
of Tenant to remain in possession of the Demised Premises, or
affect any such notice, demand or suit.
Section 20.07 (a) It is expressly agreed that this Section
20.07 (arbitration procedure) shall not be available to Tenant
as to any failure by Tenant to timely furnish an insurance
policy or insurance certificate as required by this Lease or any
default under an Underlying Lease or under an Existing Mortgage
or to any failure by Tenant to pay Basic Rent or any other Rent
(including, without limitation, Impositions) or any other
payment of money which is owed by Tenant or which is due and
payable by Tenant under this Lease. If Tenant shall in good
faith dispute a notice given to Tenant by Landlord as a result
of Tenant's failure to observe, perform or satisfy any
(non-monetary, non-insurance policy/certificate, non-Underlying
Lease and non-Existing Mortgage) covenant, condition or
requirement on Tenant's part to be observed, performed or
satisfied under Articles XI (Repairs), IX (Compliance with Laws
and Insurance Policies), V (Insurance) other than the obligation
to deliver insurance policies or certificates, XV (Changes), VI
(Use) XII (Entry by Landlord), XVI (Damage or Destruction), XVII
(Condemnation), XXVI (Hazardous Substances) or XIX (Assignment
and Subletting) of this Lease, then the failure of Tenant to
perform or observe the term, covenant or condition which was the
subject matter of Landlord's notice relating to the Articles
just listed (but not any other Articles of this Lease) shall not
constitute an Event of Default by Tenant for which Landlord may
terminate this Lease if (i) Tenant shall dispute in good faith
the existence of such default and promptly (in no event later
than five business days after the giving of such notice)
notifying Landlord of such good faith dispute, the notice
expressly invoking and referring to this Section 20.07 and the
same does not create a default under an Underlying Lease or an
Existing Mortgage, or (ii) this Lease provides with respect to
any matter so in dispute that a dispute as to such matter shall
be determined by the Arbitration Proceeding, provided neither
Landlord's estate nor the Demised Premises shall be in imminent
danger of forfeiture and Landlord shall not be subject to
criminal liability, and Tenant, as provided in Section 23.03
hereof, shall, within five business days after giving Landlord
notice of its dispute, commence the Arbitration Proceeding to
determine whether a default in fact has occurred by making a
Demand for Arbitration pursuant to the "Quick Filing Directions"
(as set forth in the Commercial Arbitration Rules of the
American Arbitration Association), and Tenant shall diligently,
expeditiously and in good faith prosecute the Arbitration
Proceeding in such a manner so as to effect a final
determination, and no other Event of Default shall exist under
any Article or Section of this Lease; provided further, however,
that in the event Tenant shall dispute a default in accordance
with the provisions of this Section more than two times in any
12 calendar month period during the term of this Lease and the
decision or award in the Arbitration Proceeding in each such
case determined that Tenant was in default or if the arbitrator
appointed in accordance with the Arbitration Proceeding shall in
any decision or award determine that Tenant was acting in bad
faith, then, in such event, this Section 20.07 shall no longer
be in effect and Tenant shall have no further right under this
Section 20.07 to dispute a notice of default. When and if a
decision or award shall be made in the Arbitration Proceeding to
the effect that Tenant is in default, then, for purposes of
determining whether any applicable grace period shall have
expired, Tenant shall be deemed to have been given notice
thereof for the first time on the date of the issuance of such
decision or award. Failure by Tenant to strictly comply with
the time schedules set forth in this Section 20.07 shall cause
a waiver of Tenant's right to utilize this procedure, as time is
of the essence.
(b) The arbitration referred to in this Section 20.07
is intended to mean in each instance when Tenant avails itself
of this Section 20.07 the dispute or matter shall be determined
by arbitration under the Expedited Procedures provisions for the
Commercial Arbitration Rules of the American Arbitration
Association ("AAA") or its successor; provided, that with
respect to any such arbitration, (i) the list of arbitrators
referred to in the applicable rule of the AAA shall be returned
within five business days from the date received, (ii) the
parties shall notify the AAA by telephone, within five business
days of any objections to the arbitrator appointed and will have
no right to object of the arbitrator so appointed was on the
list submitted by the AAA and was not objected to in accordance
with the second sentence of the rule of the AAA, (iii) the
Notice of Hearing referred to in the rule of the AAA shall be
five business days in advance of the hearing, (iv) the hearing
shall be held within seven business days after the appointment
of the arbitrator and (v) the arbitrator shall have no right to
award damages. Any and all costs and expenses arising in
connection with such arbitration shall be borne by Tenant;
provided, however, in any instance when Tenant invokes this
Section 20.07, Landlord may send a notice within three days of
receipt of Tenant's notice that Landlord desires the issue to be
decided in a court of law instead of by arbitration, and in such
case Landlord (or Tenant, if it wishes) may bring an action at
law or equity and Tenant shall not be in default until the grace
period applicable to such default has expired without Tenant
having cured; the date of the final, unappealable decision of
the court being deemed the date Tenant received the default
notice for the first time.
Section 20.08. Landlord shall have the right to select
which State or States in which to bring any action at law or in
equity to enforce any provisions contained in this Article XX or
other provisions of this Lease, and Tenant hereby consents to
the jurisdiction of the proper court in any State or States
Landlord selects provided such States be either a State in which
any one of the Properties is situated or New York State.
Landlord and Tenant hereby agree that the substantive laws of
New York State shall govern and apply to all questions or issues
or disputes arising from the interpretation of this Lease or the
application of substantive laws to this Lease and this Lease
shall be interpreted under such laws of New York State. As to
cases in which Landlord starts legal action involving recovery
of possession of the Demised Premises or any part thereof, the
procedural law of the State where such lawsuit is commenced
shall govern. In case of an Event of Default, or to enforce the
provisions of this Lease or in any legal action arising out of
the provisions of this Lease, Landlord at its option may bring
one legal action in one court or may bring separate legal
actions, all at the same time or different times and in the same
state or in the different states where the Properties are
situated.
ARTICLE XXI
Arbitration and Appraisal
Section 21.01. If at any time, or from time to time during
the term hereof, any dispute shall occur between Landlord and
Tenant as to which (but only as to which) Landlord and Tenant
have specifically and expressly agreed in this Lease to the
settlement of such dispute by arbitration, such dispute shall be
settled promptly by arbitration in New York City by the American
Arbitration Association in accordance with the Commercial
Arbitration Rules then obtaining of the American Arbitration
Association and the law of the state in which the Demised
Premises is situated, and judgment upon the award rendered in
such arbitration may be entered in any court having jurisdiction
thereof; provided, however, the foregoing sentence shall not
apply to disputes covered by Section 20.07(a) and (b) hereof, as
Section 20.07 spells out its own arbitration provisions for
certain special circumstances. However, it is agreed that if
Landlord has demanded money in accordance with this Lease and
Tenant refuses to pay all or any part of the amount demanded
based on Tenant's dispute of such amount or based on Tenant's
denial of Landlord's right to payment, Tenant nevertheless shall
pay the amount that Tenant concedes is due, or if Tenant denies
the whole amount, Tenant shall pay the whole amount, pending the
decision of the arbitration, and any amount that Tenant did not
pay because it disputed Landlord's entitlement thereto shall be
resolved in the arbitration, and if Tenant is successful in the
determination in obtaining a refund, Landlord shall pay the
refund with interest thereon at the rate declared by the
arbitrators. Similarly as to any insurance policy required, if
Tenant disputes its duty, Tenant shall deliver the policy first
and arbitrate afterward. By paying or delivering the policies
(as the case may be) first, Tenant's rights of dispute shall not
be diminished.
Section 21.02. If it shall become necessary, for purposes
of Section 25.03 hereof to seek an independent determination of
the fair market rental value of the Demised Premises or any
portion thereof, or the amount of an allocable and distributable
share of a Net Award in a condemnation as specified in Section
18.03 hereof, or with respect to an insurance policy appraisal
under Section 5.01, as the case may be, either party may, by
notice to the other, appoint a disinterested person who is a
Member of the American Institute of Real Estate Appraisers (or
if such Institute is not in existence at the time in question,
a member of a similar or successor organization) (an "M.A.I.")
and whose office is located in a radius of 50 miles from the
particular Property of the Demised Premises which is the subject
of the question, as one of the appraisers. Within 20 days
thereafter the other party shall, by written notice to the party
appointing the first appraiser, appoint another disinterested
person who is an M.A.I. and whose office is located in a radius
of 100 miles from that Property and such three appraisers shall
as promptly as possible determine the value; provided, however,
that:
(a) if the second appraiser shall not have been
appointed as aforesaid, the first appraiser shall proceed
to determine such value; and
(b) if, within 20 days after the appointment of
the second appraiser, the two appraisers appointed by the
parties shall be unable to agree upon the appointment of
a third appraiser, they shall given written notice of such
failure to agree to the parties, and, if the parties fail
to agree upon the selection of such third appraiser within
10 days after the appraisers appointed by the parties gave
notice as aforesaid, then within 10 days thereafter either
of the parties upon written notice to the other party
hereto may apply for such appointment to the highest Court
of jurisdiction for the county in which that Property is
located or if none, to any other court having jurisdiction
and exercising functions similar to those now exercised by
the Court for such county.
Landlord and Tenant shall each be entitled to present evidence
and argument to the appraisers and to be represented by counsel.
The determination of the majority of the appraisers or of
the sole appraiser, as the case may be, shall be conclusive upon
the parties and judgment upon the same may be entered in any
court having jurisdiction thereof. The appraisers shall give
written notice to the parties stating their determination, and
shall furnish to each party a copy of such determination signed
by them.
The costs and expenses of such appraisal, including the
fees of the appraiser or appraisers, shall be divided equally
between Landlord and Tenant.
In the event of the failure, refusal or inability of any
appraiser to act, a new appraiser shall be appointed in his
stead, which appointment shall be made in the same manner as
hereinbefore provided for the appointment of the appraiser so
failing, refusing or unable to act.
Section 21.03. The arbitrator or arbitrators or appraiser
or appraisers may not change any of the terms of this Lease or
deprive any party to this Lease of any right or remedy expressly
or impliedly reserved in this Lease. No matter, subject or
dispute shall be submitted to arbitration or appraisal except if
it is specifically agreed to and so directed in this Lease.
ARTICLE XXII
Estoppel Certificates; Financial Statements
Section 22.01. At any time and from time to time,
Landlord, on at least twenty days' prior written request by
Tenant, and Tenant, on at least twenty days' prior written
request by Landlord, will deliver a statement in writing
certifying that this Lease is unmodified and in full force and
effect (or if there shall have been modifications that the same
is in full force and effect as modified and stating the
modifications) and the dates to which the rent and any other
payments, deposits or charges have been paid and stating whether
or not, to the best knowledge of the party executing such
certificate, the party requesting such statement is in default
in the performance of any covenant, agreement or condition
contained in this Lease and, if so, specifying each such default
of which the executing party may have knowledge, and such other
information as it is reasonable for the requesting party to
request.
Section 22.02. During the term of this Lease, Tenant shall
deliver to Landlord promptly upon their becoming available,
copies of all financial statements and reports which Tenant
sends to its stockholders or files with the SEC.
ARTICLE XXIII
Invalidity of Particular Provisions
Section 23.01. If any term or provision of this Lease or
the application thereof to any person or circumstance shall, to
any extent, be invalid or unenforceable, the remainder of this
Lease, or the application of such term or provision to persons
or circumstances other than those as to which it is held invalid
or unenforceable, shall not be affected thereby, and each term
and provision of this Lease shall be valid and be enforced to
the fullest extent permitted by law.
ARTICLE XXIV
Notices
Section 24.01. Whenever Landlord or Tenant shall desire
to give or serve upon the other any notice, demand, request or
other communication with respect to this Lease or with respect
to the Property each such payment, notice, demand, request or
other communication in order to be legally effective shall be in
writing and shall be given or served by mailing the same to such
party or parties by registered mail or by certified mail,
postage prepaid, return receipt requested, or by overnight
independent courier service, either Federal Express or UPS,
addressed as follows:
If to Landlord:
KRCV Corp.
Suite 100, c/o Kimco
3333 New Hyde Park Road
New Hyde Park, New York 11042-0020
Attention: Mr. Milton Cooper or Mr. Michael J. Flynn
Copy to: Robert P. Schulman, Esq.;
If to Tenant:
Venture Stores, Inc.
2001 East Terra Lane
O'Fallon, Missouri 63366-0110
Attention: Vice President-Real Estate
Copy to: Legal Department;
or at such other address or addresses as Landlord or Tenant may
from time to time designate for itself by notice given in the
manner aforesaid.
Every notice, demand, request or communication hereunder
shall be deemed to have been given or served as of the day of
actual delivery as shown by the addressee's registry receipt.
ARTICLE XXV
Options to Extend; Extended Term Basic Rent
Section 25.01. Provided no Event of Default exists under
this Lease, Tenant shall have six options (each called a
"Unitary Lease Extension Option") to extend the term of this
Lease, for all (and not less than all) the Demised Premises,
beyond the Initial Term by means of six additional separate and
consecutive 5-year periods, provided that this Lease is in
effect. Such options may be exercised by Tenant one or more at
a time by giving written notice to Landlord not less than nine
months ("Option Deadline Date" or "Deadline Date") prior to the
expiration of the then current term of this Lease. Each such
extension period shall be referred to herein as an "Extended
Term". If an Underlying Lease would need to be extended by
Landlord exercising an extension option in that Underlying Lease
in order to match Tenant's exercise of extension of this Lease,
and if the Underlying Lease provided for a specified period of
advance notice to the Overlandlord which is less than eight
months from the date of Tenant's nine month notice, then Tenant
must give notice of extension in this Lease not less than 45
days before the last day which Landlord has pursuant to the
Underlying Lease to validly exercise its extension option under
the Underlying Lease, as a condition for Tenant's extension
option to be validly exercised in this Lease.
As to each Leasehold Property, Landlord, subject to the
proviso in the next sentence and subject also to the other
provisions and conditions in this Article XXV, shall exercise
Landlord's rights to the extent necessary and to the extent
available to Landlord, in order to extend the term of the
Underlying Lease applicable to that Leasehold Property until at
least the end of the Initial Term of this Lease. During the
Initial Term of this Lease, Tenant shall not be required to give
Landlord any notice that Landlord's right to extend the term of
an Underlying Lease must be exercised, provided, however,
Landlord need not exercise its extension rights if on the date
Landlord's notice of extension of the Underlying Lease is to be
given to the Overlandlord, an Event of Default on the part of
Tenant then exists under this Lease. If such an Event of
Default exists, Landlord may or may not, at Landlord's option,
exercise the extension right in question.
Tenant shall have the right to notify Landlord by sending
Landlord a written notice stating expressly that Tenant desires
Landlord not to exercise an extension option under an Underlying
Lease and that Tenant desires the Underlying Lease to expire.
The notice must be received by Landlord not less than 360 days
before the last day on which Landlord is required to exercise
its extension option under the Underlying Lease; time being of
the essence. If Landlord receives such notice, Landlord may
either intentionally fail to exercise the Underlying Lease
extension option and permit the Underlying Lease to expire, or
Landlord may exercise its extension option for Landlord's own
account. In either case, the Underlying Lease shall cease as of
the end of the then current term of said lease for the purpose
of this Lease, and the Leasehold Property to which the extension
option applied shall be deleted from being part of the Demised
Premises and Tenant shall surrender to Landlord that portion of
the Demised Premises which is located on that Leasehold
Property, but this Lease shall continue in full force and effect
as to the remaining Properties and there shall be nevertheless
no reduction or other change in the Basic Rent, additional rent
or other payments by Tenant under this Lease other than the
payments which were required to be made by Tenant to Landlord as
additional rent for the rents pursuant to that Underlying Lease.
As to any period beyond the end of the Initial Term of this
Lease, provided Tenant gives Landlord Tenant's extension notice
timely in advance as set forth in the first paragraph of this
Section 25.01, when Tenant validly exercises its right to extend
the Initial Term or any subsequent Extended Term under this
Lease, Landlord will, in turn if necessary and if options are
available to Landlord, then exercise its options to extend the
Underlying Lease for each of those Leasehold Properties in order
to correspond with Tenant's extension notice given to Landlord
to extend this Lease. It is understood that in the event that
Landlord is not required to exercise an extension right to
extend the term of an Underlying Lease, because Tenant failed to
exercise validly its option pursuant to this Article XXV,
Landlord need not, but nevertheless may, exercise any such right
for its own account; and further, Tenant agrees that Landlord
need not in any instance exercise any option available to
Landlord to extend the term of an Underlying Lease if the term
of the Underlying Lease, as to be extended by Landlord would end
more than 30 days after the end of the proposed Extended Term of
this Lease following Tenant's exercise of its options.
When Landlord sends a notice to an Overlandlord extending the
term of the Underlying Lease, Landlord will send a copy of that
notice to Tenant. Within 30 days after receipt by Landlord of
a notice from Tenant extending this Lease in accordance with and
subject to the provisions and conditions in the above first
three paragraphs of this Section 25.01, Landlord will send its
own extension notice to the Overlandlord (when extension is
necessary) extending the Underlying Lease. If Tenant does not
receive from Landlord the copy of Landlord's extension notice to
the Overlandlord by the 30th day after the date Tenant had sent
its own valid extension notice to Landlord and also has not
received a notice from Landlord disputing Landlord's duty to
exercise an option to extend the Underlying Lease, then in such
case Tenant itself may exercise the extension option under the
Underlying Lease, on Landlord's behalf and acting in place and
stead of Landlord, by notice to the Overlandlord.
In the event any Underlying Lease does not contain sufficient
extension options for Landlord (as tenant thereunder) to be able
to keep granting Tenant extensions thereof as to any Leasehold
Property to match Tenant's exercise of extension option in
accordance with this Lease, and the leasehold estate of that
Leasehold Property shall therefore expire before the then
current term of this Lease will have expired, or if the
Underlying Lease expires or terminates for any reason whatsoever
other than by reason of a default by Landlord under this Lease,
therefore, in each such case, that particular Leasehold Property
shall no longer be part of the Demised Premises under this
Lease; and without any liability on Landlord's part, this Lease
shall terminate as to said expired Leasehold Property, but this
Lease shall continue in full force and effect as to the
remaining Properties and there shall be nevertheless no
reduction or other change in the Basic Rent.
Section 25.02. Each Extended Term shall be upon the same
terms and conditions as are set forth herein for the Initial
Term, except that the Basic Rent payable for each year during
the applicable Extended Term shall be an annual amount equal to
twice the annual Basic Rent payable by Tenant in the last twelve
months of the Initial Term, that is, September 1, 2021 through
August 31, 2022, payable in equal monthly installments during
the Extended Term, so that unless the annual Basic Rent stated
on the Schedule of Basic Rents attached to this Lease and made
a part hereof changes during the Initial Term, the annual Basic
Rent payable during each year of each Extended Term commencing
September 1, 2022 will be $24,964,183.68.
Section 25.03. Any exercise of any option to extend, and
the Extended Term which would be created by such exercise, shall
cease to be of any force or effect if, prior to the date upon
which such Extended Term would otherwise commence, the term of
this Lease shall have been terminated as provided in Article XX
(Default).
ARTICLE XXVI
Hazardous Substances
Section 26.01. Tenant agrees that all operations or
activities on or use or occupancy of the Demised Premises or use
of the Shopping Center and all portions thereof by Tenant in
this Lease, and all of Tenant's tenants, subtenants or occupants
shall comply with all Environmental Laws, as such term is
hereinafter defined.
Section 26.02. Tenant agrees to not permit to be present
on the Demised Premises, or contained in any transformers or
other equipment, or in the Common Areas so long as Tenant is the
Responsible Party, any PCBs or any asbestos (including any
structures, fixtures, equipment or other objects or materials
containing asbestos); provided, however, Tenant shall be
permitted to use and maintain (but not replace unless any
replacements are free of PCBs and asbestos) those transformers
and other equipment containing PCBs and permitted to use and
maintain the portions of any structures or materials containing
asbestos located at the Demised Premises on the date of this
Lease, so long as removal is not required by Environmental Laws.
("PCB" shall include all substances includible under the
definition of PCB in 40 CFR Section 761.3.)
Section 26.03. In the event any investigation or
monitoring of site conditions or any clean-up, containment,
restoration, removal or other remedial work is required under
any Environmental Laws or other laws or in order to comply with
the terms of this Lease, including, but not limited to, the
provisions of Section 26.06(collectively, the "Remedial Work"),
Tenant shall perform such Remedial Work (such performance being
herein sometimes referred to as "Remediation" and the act of
remediation being sometimes referred to herein as "Remediate")
in compliance with such Environmental Laws or other laws and
otherwise in compliance with this Lease. Remedial Work shall be
performed by contractors who have all necessary licenses and
expertise, selected by Tenant and approved in advance in writing
by Landlord (not to be unreasonably withheld) who shall perform
the Remedial Work under supervision of an environmental
consulting engineer selected by Tenant and approved in advance
in writing by Landlord (not to be unreasonably withheld), all
performed at Tenant's expense. In the event Tenant shall fail
to timely commence or fail to diligently prosecute to completion
such Remedial Work, Landlord may, but shall not be required to,
cause such Remedial Work to be performed, and all reasonable
costs and expenses thereof incurred in connection therewith
shall be payable on demand by Tenant.
Section 26.04 (a) All Remedial Work shall be satisfactory
to Landlord, in Landlord's reasonable judgment. Landlord shall
have the right at any time and from time to time to cause its
own contractor and consulting engineer ("Landlord's Consultant")
to conduct an environmental inspection in order to confirm
Tenant's compliance with this Article and to determine whether
or not any Hazardous Substances are present in quantities
sufficient to require further Remedial Work (each, an
"Inspection").
(b) The determination as to whether Remedial Work has
been completed in accordance with this Lease and in compliance
with all Environmental Laws and other applicable laws, shall be
evidenced by a certificate of compliance issued by Landlord's
Consultant (the "Certificate of Compliance").
(c) Landlord shall use reasonable efforts to cause any
Inspection to be conducted in a manner which minimizes
interference with the business of Tenant or any tenant or
subtenant. Nothing contained in this Section 26.04 shall be
deemed or construed to amend, modify or replace any other
obligation of Tenant set forth in this Article.
Section 26.05 The obligations of Tenant as set forth in
Article XXVI, shall survive the expiration or sooner termination
of this Lease. This Article XXVI shall be fully operative and
Tenant's obligations shall not be diminished by the fact that
Landlord may have knowledge at any time, whether before or after
the date of this Lease, of any Release, or that Landlord caused
Phase I or Phase II investigations to be done.
Section 26.06 (a) Notwithstanding any provision contained
in this Lease to the contrary, the provisions of this Section
26.06 shall govern and supersede any conflicting provisions
contained in this Lease.
(b) Tenant acknowledges that there have been Releases of
Hazardous Substances in the Demised Premises and/or the Shopping
Centers in which the Demised Premises are located (such existing
Releases, including, but not limited to, the Releases described
or referenced in the Existing Reports, as such term is
hereinafter defined, and all subsequent Releases relating to
such existing Releases being herein sometimes referred to as the
"Existing Contamination").
(c) Tenant agrees that Tenant shall be solely
responsible, at Tenant's sole cost and expense, for the Existing
Contamination, the Remediation of the Existing Contamination,
all liabilities and claims of third parties (including, but not
limited to, tenants at the Shopping Centers) relating to the
Existing Contamination and all Costs relating thereto.
(d) Without limiting the generality of the foregoing,
Tenant shall (i) pay all Costs relating to, or arising from or
in connection with, the Existing Contamination disclosed or
referenced in the Existing Reports (as such term is hereinafter
defined) and (ii) pay all Costs to Remediate the Existing
Contamination that is disclosed or referenced in the Existing
Reports which are required to be remediated by Environmental
Laws.
(e) Tenant agrees to indemnify, defend (by attorney
reasonably satisfactory to Landlord) and hold Landlord, and
Landlord's directors, officers, shareholders, employees and
agents, harmless from and against all claims (including without
limitation third party claims for personal injury or damage to
property), actions, administrative proceedings, judgments,
damages including punitive damages), penalties, fines, costs,
liabilities (including without limitation sums paid in
settlement of claims), expenses, losses (including without
limitation reasonable attorneys' and experts' fees and
disbursements and fees and expenses incurred in enforcing this
Lease or collecting any sums due hereunder), and all other costs
and expenses of any kind or nature (collectively, the " Costs")
that arise directly or indirectly from or in connection with (i)
the Existing Contamination (whether or not caused by Tenant and
whether or not located within the Demised Premises) and/or (ii)
the Release of any Hazardous Substance at, on, about, under,
over or within the Demised Premises, or any portion thereof or
any portion of the Shopping Center which was used by Tenant or
by Tenant's subtenants prior to or during the Term of this
Lease, and in particular (without limiting the generality of the
foregoing) any so-called TBA space which is or in the past was,
before the date of this Lease or at any time, so occupied by
Tenant or its subtenants even though such TBA space may be space
that Landlord takes over by a Transferred Lease and is not part
of Tenant's Demised Premises except, in the case of clause (ii)
only, to the extent (but only to the extent) such claims result
solely from Landlord's active negligence or willful misconduct
or solely from the acts of Landlord's tenants who occupy
Landlord's Buildings and the claim first arises after the date
of this Lease and after the space became part of Landlord's
Buildings in the Demised Premises and/or the Shopping Center.
Tenant shall pay Landlord on demand the total of all such Costs
suffered or incurred by Landlord. Without limiting the
generality of the foregoing, the indemnification provided by
this Section shall specifically cover Costs incurred in
connection with any investigation or monitoring of site
conditions, any clean-up, containment, remedial, removal or
restoration work (including capital expenditures and operating
and maintenance costs) required or performed by the Government
because of any Release and/or Existing Contamination, as well as
claims of third parties for loss or damage due to such Existing
Contamination and/or any Release. In the event a claim, action
or proceeding is brought against Landlord for which Tenant shall
have an indemnification obligation under this Section (an "
Indemnified Matter"), Landlord shall give Tenant notice thereof.
Tenant shall have the right to engage independent counsel
reasonably acceptable to Landlord to defend Landlord against any
claims, actions, suits or proceedings (an " Action"), the costs
and expenses thereof shall be paid by Tenant. Nothing contained
in this Section shall restrict Landlord's right thereafter to
retain, at Landlord's expense (so long as attorney selected by
Tenant and approved by Landlord is continuing Landlord's
defense), separate legal counsel during the pendency of any
Action. On receipt of written notice of a claim relating to an
Indemnified Matter, Landlord shall give Tenant prompt written
notice; provided, however, the failure to give such notice shall
not relieve Tenant of any liability hereunder. Landlord and
Tenant shall diligently keep each other fully informed, and each
shall fully cooperate with the other and its attorneys at all
stages of any Action.
Section 26.07 Definitions:
(a) "Environmental Laws": Any applicable statute,
regulation, rule, ordinance, code, license or order of any
Governmental Authority (defined below) and all applicable
judicial and administrative and regulatory decrees, judgments
and orders, relating tot he protection of public health, public
safety or the environment, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability
Act ("CERCLA"), 42 U.S.C. Sections 9601 et seq., as amended by
the Superfund Amendments and Reauthorization Act of 1986; the
Resource conservation and Recovery Act, 42 U.S.C. Sections 6901
et seq.; the Clean Air Act; the Federal Water Pollution Control
Act, 42 U.S.C. Sections 1251 et seq.; the National Environmental
Policy Act, 42 U.S.C. Sections 4321 et seq.; the Refuse Act, 33
U.S.C. Sections 401 et seq.; the Federal Insecticide, Fungicide
and Rodentcide Act, 7 U.S.C. Sections 136 et seq.; the Emergency
Planning and Community Right to Know Act, 42 U.S.C. Sections
11001 et seq.; the Occupational Safety and Health Act of 1970;
the Hazardous Materials Transportation Act, as amended by the
Hazardous Materials Transportation Authorization Act of 1994, 49
U.S.C. Sections 5101 et seq.; the Toxic Substances Control Act,
15 U.S.C. Sections 2601 et seq.; the Oil Pollution Act of 1990,
33 U.S.C. Sections 2701 et seq.; as each of these may be amended
from time to time; and any state or local analogues to any of
these statutes.
(b) "Existing Reports": The environmental reports
delivered by Tenant to Landlord or its agents and disclosed or
referenced in the environmental reports dated August 6, 1997
prepared by GAI Consultants, Inc., 1400 Airport North Office
Park, Suite A, Fort Wayne, Indiana.
(c) "Governmental Authority": Any municipal, county,
state and federal and foreign governments, agencies,
departments, authorities, both public and quasi-public, courts,
boards, bureaus, commissions and officers of any of the
foregoing.
(d) "Hazardous Substance": Any material, substance,
compound, solid, liquid or gas, or any radiation, emission or
release of energy in any form, whether naturally occurring, man-
made or the product of any process (1) which is or may under
certain conditions be toxic, harmful, hazardous or acutely
hazardous to public health, public safety or the environment,
(2) which is or may be defined or regulated as a "hazardous
waste," "hazardous substance," "toxic substance," pollutant or
contaminant under any Environmental Law, (3) the use, handling,
management, release, treatment, storage, transportation or
disposal of which is or may be regulated under any Environmental
Law, of (4) the removal, remediation or abatement of which is
required under any Environmental Law. Hazardous Substances
include but are not limited to asbestos, polychlorinated
biphenyls, mercury, lead, petroleum and petroleum products and
derivatives, urea formaldehyde foam insulation and radon and
other radioactive materials.
(e) "Release": Any condition, situation, circumstance
or event, relating to or arising from the release (or threatened
release) of a Hazardous Substance to the environment, or from
the presence of a Hazardous Substance at or about the Premises,
which could serve as the basis for or element of any claim or
liability under any law or regulation or under any common law or
equitable theory of recovery, including, without limitation, the
presence of underground storage tanks.
(f) "Costs": "Costs" shall also include any and all
damage, loss (including any diminution in the value of the
Demised Premises and/or the Shopping Center), liability and
expense (including, without limitation, fees incurred for the
services of attorneys, consultants, engineers, contractors,
experts, laboratories, accountants and nay other service
providers) arising from or in connection with any Environmental
Law, including, without limitation, the following:
(1) any and all response costs, clean-up costs, repair
costs, costs of demolition and costs of rebuilding,
and all other costs incurred in connection with the
investigation, clean-up, remediation or monitoring of
any Release, or violation of any Environmental Law,
including, without limitation, the preparation of any
work plans, remedial investigations, feasibility
studies or reports, or the performance of any clean-
up, remediation, removal, abatement, containment,
closure, restoration or monitoring work required by
any Governmental Authority (defined below), or
reasonably necessary to make full economic use of the
Demised Premises and/or the Shopping Center or to
protect human health or the environment, or otherwise
expended);
(2) any and all claims, costs and expenses of
investigation and defense of any claims, costs of
satisfying a judgment on any claims, and costs
incurred settling any claims (whether or not any such
claim is ultimately upheld);
(3) any and all personal injuries or injuries to the
environment, property or natural resources occurring
upon or off the Demised Premises and/or the Shopping
Center;
(4) any and all judgments, damages (including
consequential and punitive damages) lost income,
foregone profits, expenses (including litigation
expenses) attorneys' fees, disbursements, expert
witness expenses, consultant fees, losses, penalties,
fines, liabilities (including strict liability and
liability to any person to indemnify such person for
costs expended in connection with any Environmental
Condition or violation of Environmental Laws),
encumbrances, and liens; and
(5) any and all costs incurred in complying with any
directives of any Governmental Authority that are in
whole or in part incurred, sustained, filed, borne or
brought at any time in connection with the existence
of (i) any Environmental Condition or (ii) any
violation or alleged violation of Environmental Laws
by any tenant or Tenant.
ARTICLE XXVII
Miscellaneous
Section 27.01. All Rent and all other sums which may from
time to time become due and payable by Tenant to Landlord under
any of the provisions of this Lease shall, unless a different
rate of interest is specifically stated as to such obligation
elsewhere in this Lease, bear interest accruing from and after
the due date thereof at the rate of 12-3/4% per annum or at the
highest legal rate permitted under applicable law, whichever is
the lower rate.
Section 27.02. In all cases, the language in all parts of
this Lease shall be construed according to its fair meaning to
carry out the parties' intent and not interpreted strictly for
or against either Landlord or Tenant.
Section 27.03. Subject to the provisions hereof, this
Lease shall be binding upon and shall inure to the benefit of
the parties hereto and their respective legal representatives,
successors and assigns, and wherever a reference in this Lease
is made to either of the parties hereto such reference shall be
deemed to include also, wherever applicable and unless the
intent be expressed otherwise, a reference to the legal
representatives, successors and assigns of such party, as if in
every case so expressed.
Section 27.04. This Lease shall not be recorded in the
public records. A Short Form of Lease (Memorandum of Lease)
referring to this Lease shall be executed by Landlord and Tenant
and may be recorded by Tenant at its expense or if Landlord
wishes to record it, Landlord may do so at its own expense in
the office of the County Recorder of the county in which the
Demised Premises are located. The Short From Lease shall
contain all appropriate language permitted by local state law to
exculpate Landlord and the Property from persons furnishing
labor, materials or services to the Property filing mechanics'
liens and to insulate against such lien rights.
Section 27.05. This instrument may be executed in two or
more counterparts, each of which shall be deemed an original but
all of which together shall constitute one and the same
instrument.
Section 27.06 Notwithstanding anything contained in this
Lease, Tenant and its successors and assigns agree that it shall
look solely to the estate and property of Landlord in the Land
and Improvements for the collection of any claims, judgments (or
other judicial process) or liabilities requiring the payment of
money by Landlord or its successors or grantees in the event of
any default or breach by Landlord or with respect to or arising
out of this Lease or any of the terms, covenants and conditions
of this Lease to be observed or performed by the Landlord, and
no other assets of Landlord or Landlord's successors or
Landlord's parent corporation or affiliates shall be subject to
levy, execution or other procedures for the satisfaction of
Tenant's remedies, provided, however, if Tenant obtains a
judgment for money against Landlord which is final and
unappealable and Landlord fails to pay the judgment, Tenant
shall have the right to set off the amount of the judgment
against the Basic Rent payable by Tenant hereunder.
Section 27.07 Landlord and Tenant each represent and
warrant to the other that they did not deal with any broker,
finder or any other person entitled to any fee, compensation,
commission or other remuneration or reimbursements for expenses
in bringing out, introducing or causing this Lease, the
sale/leaseback transaction or any other aspect hereof to be
done.
Section 27.08. In any instance where the Demised Premises
shares a party wall with an adjacent store in Landlord's
Building, both Landlord and Tenant shall share equally in the
repair and replacement of such party wall should the same be
damaged by any casualty, each, however, having the obligation to
keep and repair in good order its own side of such party wall.
ARTICLE XXVIII
Subordination
Section 28.01 Landlord may, at its sole option at any time
or times on or after the date of this Lease, mortgage or grant
a deed of trust (a holder thereof being called "Mortgagee") with
respect to its fee interest or its leasehold interest in the
Demised Premises or the Shopping Center or any part thereof, in
amounts and on terms as Landlord, in Landlord's sole discretion,
determines; provided, however, that in no event shall this Lease
be subject and subordinate at any time to the lien, operation or
effect of any mortgage, deed of trust or any other similar
encumbrance created originally by Landlord, and any
modification, extension and renewal thereof, which may hereafter
be executed by Landlord affecting the Demised Premises or any
part thereof unless Tenant has consented or agreed to the
placing of such mortgage, pledge, encumbrance or deed of trust,
modification or renewal, except that if the proposed Mortgagee
is an institutional lender (i.e. a bank, insurance company,
corporate pension fund or the like), Tenant agrees to
subordinate its interest in this Lease so long as the Mortgagee
agrees to enter into a subordination, attornment and non-
disturbance agreement with Tenant in the customary form of such
instrument used by such institutional lender and otherwise
acceptable to Tenant in its reasonable judgment. Any such
proposed Mortgagee shall agree to enter into a subordination,
non-disturbance agreement with Tenant's subtenants who have
received or who are in the future entitled to receive a
subordination, non-disturbance agreement from Landlord pursuant
to Article XIX hereof, which shall be in form and substance
substantially similar to the subordination, non-disturbance
agreement (see Exhibit C) delivered by Landlord previously to
those subtenants, if any, who qualify under Article XIX of this
Lease as being entitled to receive the same from Landlord.
IN WITNESS WHEREOF, Landlord and Tenant have executed this
Lease as of the date first set forth on page 1.
WITNESSES: LANDLORD:
For Landlord: KRCV CORP.
/s/Linda Protitch By: /s/Michael J. Flynn
Michael J. Flynn
President
/s/Georgia Misoulis By: /s/ Robert P. Schulman
Robert P. Schulman
Secretary
WITNESSES: TENANT:
For Tenant: VENTURE STORES, INC.
/s/James Adkins By:/s/Russell E. Solt
James Adkins Russell E. Solt
Executive Vice President,
Administration & Chief
Financial Officer
/s/Donald Kennedy By:/s/Karren Prasifka
Donald Kennedy Asst.Secretary