CIRCUIT CITY
Chico Crossroads Shopping Center, Chico, CA
LEASE
between
CIRCUIT CITY STORES, INC.,
as Tenant
and
CHICO CROSSROADS CENTER, LTD.,
A CALIFORNIA LIMITED PARTNERSHIP,
as Landlord
dated February 15, 1994
CHICO CROSSROADS SHOPPING CENTER
TABLE OF CONTENTS
Page
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1. Leased Property...........................................................1
2. Construction of Building and Improvements.................................2
3. Lease Term................................................................2
4. Rent......................................................................4
5. Development of Shopping Center by Landlord................................5
6. Easements.................................................................6
7. Common Areas and Common Area Maintenance..................................8
8. Signs and Communications Equipment.......................................13
9. Taxes....................................................................13
10. Maintenance, Repairs and Replacements....................................16
11. Payment of Utility Bills.................................................17
12. Alterations..............................................................18
13. Mechanics' Liens.........................................................18
14. Insurance................................................................19
15. Damages by Fire or Other Casualty........................................24
16. Condemnation.............................................................28
17. Assignment and Subletting................................................30
18. Use......................................................................31
19. Warranties and Representations...........................................32
20. Estoppel Certificates....................................................39
21. Subordination, Non-Disturbance and Attornment............................39
22. Change of Landlord.......................................................40
23. Tenant's Financing.......................................................41
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24. Tenant's Property and Waiver of Landlord's Lien..........................41
25. Memorandum of Lease; Commencement Date Agreement.........................41
26. Expiration of Term and Holding Over......................................42
27. "For Rent" Signs.........................................................43
28. Force Majeure............................................................43
29. Events of Tenant's Default...............................................43
30. Landlord's Remedies......................................................44
31. Events of Landlord's Default; Tenant's Remedies..........................46
32. Waiver...................................................................47
33. Compliance with Applicable Laws..........................................47
34. Notices................................................................. 47
35. Brokers..................................................................48
36. Miscellaneous............................................................49
37. Effectiveness of Lease; Tenant's Right to Terminate......................52
38. Confidentiality..........................................................55
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EXHIBITS
"A" Site Plan
"A-1" Shopping Center Legal Description
"B" Index of Definitions
"C" Construction Provisions
"D" Removable Trade Fixtures
"E" Sign Plans and Criteria
"F" Permitted Encumbrances
"F-1" Permitted Title Encumbrances
"G" Subordination, Non-Disturbance and Attornment Agreement
"H" Memorandum of Lease
"I" Commencement Date Agreement
"J" Supplemental Site Plan Showing Portion of the Shopping Center As
Constructed As Well As The Land And Construction Area
"K" Prior Leases
"L" Tenant Improvement Allowance Reimbursement Criteria
"M" Tentative Vesting Parcel Map
"N" Disclosed Environmental Reports
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[Chico Crossroads Shopping Center
Chico, California]
LEASE
This LEASE is made as of the 15 day of February, 1994, by and between CHICO
CROSSROADS CENTER, LTD., a California Limited Partnership ("Landlord"), and
CIRCUIT CITY STORES, INC., a Virginia corporation having an address at 9950
Mayland Drive, Richmond, Virginia 23233 ("Tenant").
WITNESETH:
That for and in consideration of the mutual covenants herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. LEASED PROPERTY. Landlord demises and leases to Tenant and Tenant
leases and takes from Landlord all those certain "Premises" consisting of the
"Building" and "Other Improvements" (both as defined in paragraph 2), as and
when same are constructed, together with exclusive rights in the four (4)
parking spaces labelled "Customer Pick-Up" adjacent to the Building as shown on
the Supplemental Site Plan (provided such spaces are approved by the City's
Architectural Review Board) and with the easements described in paragraph 6
below, all located in the "Shopping Center" (herein so called), which consists
of that certain real property with buildings and improvements constructed or to
be constructed thereon, located at the southeast corner of Whitman Avenue and
20th Street, lying and being in the City of Chico (the "City"), County of Butte,
State of California (the "State"), and more particularly shown on EXHIBIT "A"
hereto (the "Site Plan") and described by metes and bounds or platted lot legal
description on EXHIBIT "A-1" attached hereto and made a part hereof for all
purposes. The Building and Other Improvements will be located on an
approximately 23,014 square foot parcel (the "Land") to be delivered by
Landlord, as more particularly shown (approximately) outlined in red on the
Supplemental Site Plan. All of the Shopping Center exclusive of the Premises is
"Landlord's Premises". The description of the Premises may be adjusted in
accordance with Tenant's final bid set of Plans and Specifications as described
in EXHIBIT "C" attached hereto. Tenant's exclusive right to the "Customer
Pick-Up" spaces shall be subject to the rights of tenants under leases of space
in the Shopping Center executed and delivered prior to the date of this Lease,
as said leases may be from time to time be extended and/or renewed (the "Prior
Leases"). A list of the Prior Leases is
1
attached hereto as EXHIBIT "K". If the tenant under any such Prior Lease has
the right to prohibit such exclusive use and objects to the use of said
Customer Pick-Up spaces, Tenant shall immediately cease displaying signage
indicating that such spaces are for Tenant's customers only. In all events,
Landlord shall use its best efforts to obtain consents from the tenants under
the Prior Leases to the extent required.
2. CONSTRUCTION OF BUILDING AND IMPROVEMENTS. Commencing immediately
upon "delivery of the Land" (as defined in the Construction Provisions (herein
so called) attached hereto as EXHIBIT "C" and incorporated herein by reference
for all purposes), Tenant shall have the right and obligation as provided in the
Construction Provisions to construct within the Shopping Center a one-story
retail building, containing approximately 23,014 square feet of ground-floor
gross leasable area, with provisions for customer pickup, delivery and car
stereo installation facilities, initially for use as a Circuit City Store (the
"Building"), together with loading ramps, detector check valves and vaults,
sidewalks, trash compactor, transformer pad and other such appurtenances and
improvements (collectively, the "Other Improvements"), as more particularly set
forth in the Construction Provisions. Said Building shall be equipped with an
automatic fire sprinkler system. The Building and Other Improvements are
sometimes collectively referred to herein as the "Improvements". The
Improvements shall be constructed in accordance with the "Plans and
Specifications" to be prepared by Tenant and approved by Landlord as specified
in the Construction Provisions. Except as otherwise provided herein, title to
the Improvements shall be transferred to Landlord upon full payment of the
"Tenant Improvement Allowance", as defined in the Construction Provisions.
3. LEASE TERM. Subject to the conditions to the effectiveness of this
Lease set forth in paragraph 37, the construction term (the "Construction
Term") of this Lease shall commence on the date of Landlord's delivery of the
Land to Tenant in accordance with, and in the condition specified in, the
Construction Provisions, and shall end on the "Commencement Date" (as defined
below). The main term (the "Main Term") of the Lease shall commence on the
earlier of (i) 210 days following "delivery of the Land," which shall occur
no earlier than March 1, 1994 and, subject to force majeure, no later than
June 15, 1994, provided Tenant has obtained the approval of the Architectural
Review Board of the City of Chico as well as Landlord's approval of Tenant's
Plans and Specifications necessary for the construction of the Improvements
or (ii) Tenant's opening for business (the "Commencement Date") and shall end
on the last day of January following the twentieth (20th) anniversary of the
Commencement Date; provided, however, the Commencement Date is subject to
adjustment as described in EXHIBIT "C". If Tenant, after exercising its best
efforts, without economic concern, is unable to obtain
2
the necessary permits for the construction of the Improvements and/or
Tenant's occupancy therein, Landlord shall, at Tenant's election, join
Tenant, both financially and in name, in pursuing a claim against the City of
Chico and/or subdivision thereof, as the case may be, for its failure to
provide Tenant the necessary permit(s). In all events, if Tenant is unable
to obtain the requisite authorization within one (1) year following its
submittal of the approved Plans and Specifications, Tenant shall have the
right to terminate this Lease within sixty (60) days following the
expiration of said one (1) year period. In the event Tenant terminates the
Lease, Tenant shall reimburse Landlord for all out-of-pocket costs incurred
by Landlord in the "delivery of the Land," supported by adequate back-up
documentation, including, but not limited to, the relocation and buy-out
costs of tenants necessary to facilitate the "delivery of the Land" to
Tenant, as well as lost rents from such tenants which were bought out, which
costs shall in no event exceed Four Hundred Twenty-Five Thousand and NO/100
Dollars ($425,000.00).
In addition to the Main Term, Tenant shall have the option (a "Renewal
Option") to renew and extend the Lease for five (5) consecutive five (5) year
periods (the "Option Periods") immediately following the Main Term, at the
rent specified below. Tenant shall give Landlord written notice of its
election to exercise any Renewal Option at least one hundred eighty (180)
days prior to the expiration of the Main Term or any then-current Option
Period, as applicable; provided, however, that in order to avoid any
forfeiture or inadvertent lapse of such Renewal Option, if Tenant shall fail
to give any such notice within the one hundred eighty (180) day time limit
and shall not have given Landlord prior written notice of its intent not to
exercise its Renewal Option, then and as often as the same shall occur,
Tenant's right to exercise such Renewal Option shall nevertheless continue,
as shall its tenancy hereunder (under the same terms and conditions as
theretofore in effect and notwithstanding that the Main Term or then-current
Option Period shall have expired), until ten (10) business days after
Landlord shall have given Tenant a written notice of Landlord's election to
terminate the Renewal Option, during which period Tenant may exercise its
Renewal Option at any time prior to the expiration of such ten (10) business
day period. Upon the giving of notice of renewal and extension in accordance
with the foregoing provisions, the Term (defined below) of this Lease shall
thereupon be renewed and extended in accordance with such notice without
further act by Landlord or Tenant, the same as if such notice had been timely
given hereunder. Notwithstanding the foregoing, it shall be a condition
precedent to Tenant's right to exercise a renewal option that no "Event of
Default" occurring prior to such exercise remains uncured; provided, however,
if the "Event of Default" is of a non-monetary nature, Tenant may exercise
the Renewal Option if litigation has
3
commenced regarding said defaults. In the event the above-referenced litigation
results in a decision adverse to Tenant, Tenant's exercise of the Renewal Option
shall be deemed void unless Tenant has promptly commenced to cure such default
following the decision and pays to Landlord the amount of award, if any, plus
attorney's fees and costs to the extent required hereunder.
The Construction Term, Main Term and Option Periods are, collectively,
the "Term". The term "Lease Year" shall mean each successive period of
twelve (12) consecutive calendar months, commencing on the first day of each
February during the Term, except that the first Lease Year shall commence on
the Commencement Date and shall end on the last day of January following the
first anniversary of the Commencement Date.
4. RENT.
(a) BASE RENT. During the Construction Term, Tenant shall have no
rental obligations nor shall Tenant be responsible for any Real Estate Taxes (as
defined in paragraph 9) or CAM Charges (as defined in paragraph 7) or any
similar costs, fees, rentals or expenses. Tenant agrees to pay base rent ("Base
Rent") for the Premises in the amounts and in the manner specified hereunder,
commencing (subject to the provisions of paragraphs 3 and 4 of the Construction
Provisions) on the Commencement Date.
Tenant shall pay Base Rent in equal monthly installments, without offset or
deduction, except as specifically permitted by this Lease, in advance on the
first day of each succeeding calendar month throughout the Term, with
appropriate proration for any partial calendar month or Lease Year, to the
address given for Landlord in paragraph 34 hereof, unless Landlord shall give
Tenant written notice of a change of address or of the party to whom such rents
shall be payable along with written documentation reasonably satisfactory to
Tenant of such party's right to receive payment hereunder. Unless adjusted as
provided in paragraph 3 of the Construction Provisions, Base Rent shall be paid
pursuant to the following schedule:
(i) FIRST FIVE YEARS. During the first sixty (60) full calendar
months of the Main Term, Tenant shall pay annual Base Rent in the amount of
$10.00 times the ground-floor gross leasable square footage contained in
the Building (as measured from the exterior boundary of exterior building
walls) (the "Initial Base Rent"), payable in equal monthly installments.
In determining the ground-floor gross leasable square footage of the
Building, the parties agree that the figure shall be as set forth in
Tenant's approved Plans and Specifications. If any Lease Year is other
than twelve (12) months in length, annual Base Rent during such Lease Year
shall be the product of the applicable monthly Base Rent
4
times the number of months in such Lease Year, with appropriate proration
for any partial calendar month therein.
(ii) INCREASES IN BASE RENT. Annual Base Rent shall increase on
the first day of the sixty-first (61st) full calendar month of the Main
Term, over the Initial Base Rent charged hereunder by the lesser of ten
percent (10%) or one and one-half (1-1/2) times the percentage increase in
the "CPI-U" (as defined below) during the sixty (60) month period ending on
the first three (3) months preceding said adjustment date. As used herein,
the CPI-U shall be the United States Department of Labor, Bureau of Labor
Statistics Consumer Price Index for All Urban Consumers, U.S. City Average.
If at any time during the Term the CPI-U shall be discontinued, Landlord
and Tenant shall mutually and reasonably agree to substitute an existing
official index published by the Bureau of Labor Statistics or its successor
or another, similar governmental agency, which index is most nearly
equivalent to the CPI-U. Furthermore, Annual Base Rent shall increase on
the first day of the one hundred twenty-first (121st) full calendar month
of the Main Term and each five (5) years thereafter throughout the Term
(each such date of Base Rent adjustment being hereinafter referred to as an
"Adjustment Date"), over the Initial Base Rent by the lesser of twelve
percent (12%) or one and one-half (1-1/2) times the percentage increase
in the CPI-U.
5. DEVELOPMENT OF SHOPPING CENTER BY LANDLORD. Landlord covenants that
the location of buildings and other tenant space therein will only be within the
"Permissible Building Areas" as shown on the Site Plan, and the parking ratio
for the Shopping Center shall be at least as shown thereon, but in no event
shall said ratio be less than the greater of (i) three and one-half (3-1/2)
spaces per 1,000 square feet of gross leasable area (excluding mezzanine space
and outside sales area) or (ii) that required by applicable zoning requirements.
All such parking shall be at ground level. Following the commencement of the
Construction Term, Landlord shall not permit construction traffic over the
Premises, and Landlord shall refrain from interfering with the conduct of
Tenant's construction and business. Landlord shall keep and maintain or cause
the improvements and the "Common Areas" (as defined in paragraph 7(a)) in the
Shopping Center to be kept and maintained in good condition and repair, ordinary
wear and tear excepted, and shall not operate, or permit to be operated, in the
Shopping Center any activity which constitutes a nuisance, overburdens the
available utilities, or violates any of the "Site Covenants" contained in
subparagraph 19(a)(ix) or the prohibited activities set forth in subparagraph
19(a)(viii).
5
6. EASEMENTS. In addition to and simultaneously with the lease of the
Premises, Landlord grants to Tenant certain nonexclusive leasehold easements
over or upon certain areas of Landlord's Premises, as set forth below, which
easements shall run as covenants with Landlord's Premises and the Premises
during the Term and shall expire or terminate simultaneously with this Lease,
except as provided below.
(a) CONSTRUCTION EASEMENTS. For the period of Tenant's construction
of the Improvements, and any renovation or reconstruction thereof, Landlord
grants to Tenant a nonexclusive easement over the hatched portion of the Common
Area (as defined in paragraph 7(a) below) shown on the Site Plan for the purpose
of construction access to the Premises. In addition, Landlord grants to Tenant
for the period in which Tenant is engaged in the initial construction of the
Improvements as well as any reconstruction pursuant to paragraph 15 hereof, an
exclusive easement for a construction staging area (the "Staging Area") within
the area designated "Staging Area" on the Supplemental Site Plan for Tenant's
use in constructing the Improvements. Tenant's use of the construction
easements under this paragraph 6(a) shall be subject to the requirements of
paragraph 2(a) of the Construction Provisions.
(b) FOOTING AND FOUNDATION EASEMENTS. Landlord grants to Tenant, and
Tenant grants to Landlord, easements and rights in Landlord's Premises and the
Premises, as appropriate (i) for the construction and maintenance of
foundations, footings, supports and demising walls; (ii) to allow their
respective buildings to abut and connect (but not to bear structurally upon each
other unless and except as otherwise provided herein); (iii) for roof
projections, allowing the grantee to tie its building into the adjoining
building by flashing and reglets; and (iv) for unintentional encroachments not
to exceed three (3) feet beyond that indicated in Tenant's approved Plans and
Specifications which reasonably occur in the construction of the building
components set forth in subparagraphs (i) through (iii) above. No such
attachment or connection shall be made, however, unless detailed plans therefor
shall have been timely submitted to and approved by the party to whose building
the attachment is to be made, which approval shall not be unreasonably withheld.
No such attachment or connection shall impede Landlord's ability to separately
insure the building designated "C" on the Site Plan from the improvements within
the Shopping Center.
(c) UTILITY EASEMENTS. During the Term, upon prior reasonable
request of Tenant (following the initial "Landlord Work" as set forth in the
Construction Provisions), Landlord agrees to obtain, if required for the
construction of the Improvements, such underground, public or private utility
easements as Tenant reasonably deems necessary, without unreasonably interfering
with the use by Landlord
6
of the Common Areas, for the benefit of the Premises. For the purpose of
exercising the rights granted in this subparagraph 6(c), Tenant and/or the
utility provider shall have the right to enter upon and use the Common Areas to
install the utility systems, to such extent and so long as reasonably necessary
to accomplish such purpose, subject to restoration of the Common Areas following
such installation and any other reasonable conditions and requirements imposed
by Landlord.
(d) COMMON AREA EASEMENT. During the Term, Landlord grants to
Tenant, for the benefit of the Premises, the nonexclusive right, privilege and
easement (the "Common Area Easement") to use the Common Areas for their intended
purposes and to permit Tenant and its employees, agents, subtenants, assignees,
licensees, suppliers, customers and invitees to use the same, in common with
Landlord, its successors, assigns, employees, agents, lessees, licensees,
suppliers, customers and invitees and all other persons claiming by or through
them, for the purposes (without limitation) of parking and pedestrian, service
and vehicular access, ingress and egress to, from and between the Premises and
the Landlord's Premises and the streets and highways abutting and adjacent to
the Shopping Center, in accordance with the Site Covenants, without payment of
any fee or other charge therefor, except pursuant to paragraph 7(b) below. It
is specifically agreed that with respect to the parking spaces designated on the
Site Plan as Tenant's "Customer Pick-Up", notwithstanding the fact the same are
in, and constitute a part of, the "Common Areas", such parking spaces shall be
used exclusively by Tenant's customers, invitees and patrons, subject to
paragraph 1 above. In addition, Tenant shall have the right, subject to
obtaining any required approvals from tenants of Prior Leases to use such
sidewalks as are immediately adjacent to Tenant's Improvements and within
Tenant's Parking Lot Sales Area as shown on the Supplemental Site Plan for
"sidewalk sales", seasonal and promotional sales and other sales customary to
Tenant's business operations. Landlord represents that the only approvals
required under Prior Leases for sidewalk sales on the sidewalks immediately
adjacent to the Improvements are approvals of the tenants of the building spaces
designated "B", "D" and "H" on the attached Site Plan, provided that such
activities do not unreasonably interfere with the use of said sidewalks or
pedestrian traffic. Seasonal and promotional sales and other sales from
Tenant's Parking Lot Sales Area shall not exceed fourteen (14) days per Lease
Year, in the aggregate. Tenant shall be responsible for cleaning such sales
area during and following such use and for the repair of any damages, ordinary
wear and tear excepted, resulting from such use.
(e) NON-DEDICATION. None of the easements granted by the parties to
this Lease is intended, nor shall any of them be construed, as a dedication of
any portion
7
of the Shopping Center for public use, and the parties will refrain from taking
any action which would cause such a dedication and will take whatever steps may
be necessary to avoid any such dedication, except as may be agreed upon in
writing by the parties hereto or their respective successors or assigns.
(f) RULES AND REGULATIONS. Tenant's use of the above easements shall
be subject to such reasonable, non-discriminatory rules and regulations
governing use which Landlord may from time to time prescribe in writing,
including the designation of specific areas within the Shopping Center in which
automobiles owned by Shopping Center tenants and their employees, subtenants,
licensees and concessionaires shall be parked, which shall include a reasonable
number of parking spaces in reasonable proximity to the Tenant's Improvements
for use by Tenant and Tenant's employees, subtenants, licensees and
concessionaires; provided, however, Landlord's designation of the parking for
Tenant's employees shall be subject to the prior approval of Tenant, which
approval shall not be unreasonably withheld, and in no event shall the employee
parking of any other tenant in the Shopping Center be located within Tenant's
Preferred Area. Such rules and regulations may include without limitation the
restriction of designated areas for drive-thru-bank, savings, restaurant and
other drive-thru facilities and for seasonal or promotional sales activities
outside of Tenant's Preferred Area and for sidewalk sales and the designation of
certain parking spaces immediately adjacent to a store for the exclusive use of
the patrons of such store. Landlord shall not be responsible for the failure of
any other Shopping Center occupant to comply with said rules and regulations.
Tenant acknowledges that Landlord does not have the right to require the
occupants of the building areas designated "B" and "D" on the Site Plan to
comply with employee parking rules and regulations and that the occupant of the
building are designated "H" on the Site Plan has the reasonable right of
approval over the location of designated employee parking spaces. Certain
tenants under Prior Leases have similar approval rights as to employee parking
spaces established nearby their stores. Landlord reserves the right to
construct low-rise monument signs within landscaped areas or adjacent to
buildings for use by other occupants selected by Landlord, whether or not shown
on the Site Plan; however, without the prior written consent of Tenant, such
signs may not be placed in Tenant's Preferred Area.
7. COMMON AREAS AND COMMON AREA MAINTENANCE.
(a) DEFINITION OF COMMON AREAS. The term "Common Areas" shall be
defined to include the parking areas, lanes, drives, entrances, truck
passageways, sidewalks, elevators, escalators, ramps, stairways, landscaped and
other unpaved areas, parking lot lighting facilities and equipment, Landlord's
pylon sign(s), directional, traffic
8
and monument sign structure(s) and shared utility facilities located in the
Shopping Center (including any such areas and facilities contained within
outparcels and adjacent tracts but reserved to the benefit of the Shopping
Center occupants) and intended and available (subject, however, to the rules and
regulations authorized in paragraph 6(f) above) for the common use of all of the
tenants within the Shopping Center (including any outparcel and other adjacent
occupants which contribute toward "CAM Charges" (as defined below) and which are
not responsible for separate maintenance of such outparcels or tracts), their
subtenants, licensees, and business invitees. Landlord shall be responsible
for operating, maintaining and repairing the Common Areas in a first-class
manner, including cleaning, maintenance of Landlord's pylon (exclusive of
Tenant's sign panels) and other sign structure(s), snow removal and ice treat-
ment, removal of Common Area trash and garbage, lighting, repairing, repaving
and restriping the parking area, and maintaining, replanting and replacing
landscaping, all such work to be referred to collectively as "Common Area
Maintenance".
(b) CAM CHARGES. For the purpose of this paragraph 7, the cost of
Common Area Maintenance (the "CAM Charges") shall include (i) Landlord's
reasonable and proper direct costs and expenses of operating and maintaining the
Common Areas, (ii) Landlord's overhead expenses for administering same (or in
lieu thereof a management fee) in an amount not to exceed eight percent (8%) of
the total of such costs (specifically excluding from such total the amounts paid
by Landlord and Tenant for insurance, capital expenditures and real estate
taxes) and (iii) liability and casualty insurance premiums for insuring the
Common Areas. Notwithstanding the foregoing, the following shall not be
included in the CAM Charges:
(1) real estate taxes paid, and maintenance performed, on outparcels
or other adjacent tracts not reserved to the benefit of the Shopping Center
occupants;
(2) any dues or charges for a merchants' or other association of the
tenants in the Shopping Center;
(3) maintenance, repairs or replacements to the Common Areas (but no
other portions of the Shopping Center), necessitated by the negligent or
wrongful act of the Landlord or made to correct any construction defect
(including, without limitation, repairs necessitated by a change in a code,
law or regulation, when such repair is not attributable to a specific use
of Tenant or Tenant's assignee or sublessee), to any interior mall space or
to any buildings (including exterior walls thereof) or utility systems not
part of the Common Areas;
9
(4) repairs or replacements necessitated by any governmental entity
or by the negligence or the wrongful action of Landlord (including failure
to construct any portion of the Shopping Center in accordance with plans or
specifications therefor) or any other tenant or made to correct any initial
construction defect in existence prior to the Commencement Date of this
Lease or to correct damage caused by subsidence or adverse or substandard
soil conditions;
(5) amounts paid to entities related to Landlord in excess of the
cost of such services from any competitive source;
(6) amounts reimbursable from insurance proceeds, under warranty or
by Tenant, any other tenant in the Shopping Center or any other third party
other than pursuant to a Common Area expense provision similar to this
paragraph 7;
(7) premiums for Common Area liability insurance for coverage in
excess of the limits established in paragraph 14(e) below;
(8) replacements of a capital nature, unless the costs of same are
amortized over the entire useful life of such replacements and provided
that replacements are not the direct result of initial defects in materials
or workmanship (such amortization shall be on a straight-line basis, as
determined under generally accepted accounting principles in effect when
said costs are paid, together with interest at the then current "prime
rate" published by the San Francisco branch of Bank of America, N.T. &
S.A., plus one percent (1%) per annum, such interest to be adjusted
annually in advance based on the published prime rate of interest on
January 1 of each calendar year); provided, however, in no event shall
Tenant's share of capital costs for any one CAM Year be in excess of
$15,000.00;
(9) improvements, repairs or replacements (other than patching and
similar minor periodic maintenance) to the parking lot or other paved areas
during the first thirty-six (36) full calendar months following the
Commencement Date;
(10) reserves for anticipated future expenses;
(11) interest, late charges or penalties incurred as a result of
Landlord's failure to pay bills in a timely manner;
(12) Landlord's personnel, overhead, home office or administrative
expenses except as set forth in subparagraph (b)(ii) above;
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(13) amounts incurred to remediate any Hazardous Substances (as
defined in the Construction Provisions); or
(14) any charges attributable to maintenance, repairs or replacements
of the pylon sign so long as Tenant is unable to maintain a "face panel" on
such sign; provided, however, any such charges attributable to a pylon sign
on which Tenant maintains a "face panel" shall be allocated in equal
proportion to Tenant and the other occupants maintaining face panels on
such sign.
CAM Charges shall be in an amount consistent with the costs incurred
by other landlords of similar shopping centers in the City (but not greater than
as described in this paragraph 7(b)), and in all events such charges shall be
obtained at competitive rates.
(c) TENANT PAYMENTS. Commencing on the Commencement Date and
continuing until the expiration of the first Lease Year, Tenant shall pay to
Landlord a fee (which Landlord estimates, without warranty, to be $1.66 per
square foot of ground-floor gross leasable area in the Building per annum),
payable in equal monthly installments, as its share of CAM Charges. Thereafter,
the annual charge shall be computed on the basis of periods of twelve (12)
consecutive calendar months, as designated by Landlord (each such period is a
"CAM Year"), and shall be paid by Tenant in equal monthly installments, in
advance, on the first day of each month during such CAM Year. For any period
within the Term which is less than a full CAM Year, the annual charge shall be
appropriately prorated. Within sixty (60) days after the end of the first CAM
Year and each CAM Year thereafter, Landlord will furnish to Tenant a statement
showing in detail (with such substantiating documentation as Tenant may
reasonably request) the amount of the CAM Charges for the preceding CAM Year and
the then-current number of square feet of ground-floor gross leasable area in
the Shopping Center. Any necessary adjustment with respect to amounts owed by
either party for such preceding CAM Year shall thereupon be made; and the
monthly payments to be made by Tenant for the ensuing year shall be estimated
according to the Common Area maintenance budget prepared by Landlord and
delivered to Tenant. Subject to adjustments as herein contemplated, Tenant's
share of CAM Charges shall always be the product of the CAM Charges multiplied
by a fraction (such fraction being referred to herein as "Tenant's Pro Rata
Share"), the numerator of which is the number of square feet of the ground-floor
gross leasable area in the Building and the denominator of which is the number
of square feet of the ground-floor gross leasable area (excluding the area of
any outside sales area exclusive to a single occupant, except to the extent said
sales area is included in the calculation of such occupant's pro rata share of
CAM Charges) in the Shopping Center.
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Notwithstanding the foregoing, as of the date hereof, Tenant acknowledges that
Landlord is obligated, for purposes of calculating "proportionate share"
hereunder, to use 103,904 square feet as the gross leasable area for
Building "H", should Landlord be able to modify the lease pertaining to said
Building "H" or otherwise collect rent based upon the actual square footage of
said building (e.g., 112,904 square feet), then the calculations hereunder shall
be amended to reflect such square footage. In determining the ground-floor
gross leasable area of any building in the Shopping Center (including the
Building), measurement shall be made from the centerline of any common walls and
from the outside of any exterior walls. The gross leasable area of any outside
sales area, if and when included in the calculation of Tenant's Pro Rata Share
pursuant to this paragraph 7(c), shall be measured from the outside of the
exterior wall of any adjacent building to the actual exterior perimeters of
such outside sales area, including any aisles, fences or walls included therein.
Changes in applicable floor areas shall result in corresponding adjustments of
Tenant's Pro Rata Share, but in no event shall the denominator of the fraction
by which Tenant's Pro Rata Share is determined be less than eighty-five percent
(provided said percentage shall be increased to ninety-five percent when
building improvements have been constructed upon the building area designated
"F" and "G" on the Site Plan or when the tenant or occupant thereof commences
paying rent thereon) of the gross leasable area of the Shopping Center as shown
on the Site Plan, except to the extent reduced as a result of a Taking, as
defined in paragraph 16 hereof, or damage until restored (except to the extent
the occupant of such damaged Premises continues to pay CAM Charges during such
period of restoration). Notwithstanding anything to the contrary, in no event
shall Tenant's Pro Rata Share be in excess of twelve percent (12 %) of CAM
Charges. The remainder of CAM Charges shall be borne by Landlord and/or other
tenants.
(d) EXAMINATION OF LANDLORD'S RECORDS. Tenant shall have the right,
from time to time, but not more often than once as to any CAM Year and no later
than two (2) years after the end of such CAM Year, to examine and make copies of
the records pertaining to CAM Charges for such CAM Year. Tenant's right of
examination shall be exercised during reasonable business hours at Landlord's
principal records office on reasonable prior notice to Landlord. If such
examination shall disclose any over-charge by Landlord, Landlord shall promptly
reimburse Tenant for any overpayment of Tenant's Pro Rata Share of CAM Charges;
and if such overpayment by Tenant is in excess of three percent (3%) of the
actual Tenant's Pro Rata Share of CAM Charges, Landlord shall reimburse Tenant
for the reasonable cost of such examination or audit,
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not to exceed $3,000.00 in any one CAM Year. Tenant shall promptly reimburse
Landlord for any underpayment disclosed by such examination.
8. SIGNS AND COMMUNICATIONS EQUIPMENT.
(a) SIGNS. If at any time during the Term, space shall become
available on either of the two (2) pylon signs currently existing in the
Shopping Center as shown on the Site Plan or should Landlord construct an
additional pylon sign, Tenant shall have the first right to place its "face
panels" on any such pylon sign at a location specified by Landlord (which
location shall be the best Landlord shall then be able to provide, subject to
any limitations set forth in the Prior Leases) to identify Tenant's store.
Tenant shall exercise such first right, if at all, by written notice to Landlord
given within thirty (30) days of Tenant's receipt of written notice from
Landlord that space for Tenant's face panel has become available. If Tenant
fails to exercise such right, said first right shall terminate. Tenant's first
right shall also be subject to Landlord's agreement, in pending negotiations, to
provide space on the bottom location on the pylon sign on U.S. Highway 99 to the
tenant of "Pad 1" as shown on the Site Plan. Tenant's face panel on any such
pylon sign may not be larger than the largest face panel or panels on such sign.
Attached as a portion of EXHIBIT "E" are plans and specifications for Tenant's
current prototypical face panels and for Tenant's building signage, which
Landlord hereby approves upon its execution of this Lease. Notwithstanding the
foregoing, Tenant shall be entitled without Landlord's consent, but subject to
governmental requirements, as aforesaid, to replace any and all of its signs
with signage consistent with Tenants's then-current prototypical sign plans. In
the event of an assignment or subletting as a result of which Tenant is no
longer occupying any portion of the Premises, Tenant's signs may be replaced by
signs identifying the appropriate assignee or subtenant, provided that the
specific design of such signage shall be subject to Landlord's consent, which
consent shall not be unreasonably withheld, conditioned or delayed. None of
Tenant's signs visible from the exterior of the Building shall have any bulbs or
other forms of lighting that go on and off intermittently.
(b) COMMUNICATIONS EQUIPMENT. Tenant may, from time to time,
install, maintain and/or replace any satellite dishes or antennas on the roof
of the Building as Tenant deems necessary or desirable, provided same shall
not adversely and materially affect the roof or the structural elements
thereof. Upon removal by Tenant of any satellite dishes or antennas, Tenant
shall repair any damage done in connection with such removal. Tenant shall be
responsible for obtaining all governmental permits and approvals required for
any such use.
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9. TAXES.
(a) TAXES CONTEMPLATED HEREUNDER. The term "Real Estate Taxes" shall
mean all general real estate taxes and assessments and other ad valorem
taxes, rates and levies paid upon or with respect to the Shopping Center,
including the Premises, for a calendar year or a portion thereof to any
governmental agency or authority and all charges specifically imposed in lieu
of any such taxes. Nothing contained in this Lease shall require Tenant to
pay any local, county, municipal, state or federal income, franchise,
corporate, estate, inheritance, gift, succession, capital levy, business or
transfer tax of Landlord, or any local, county, municipal, state or federal
income, profits, gross receipts, sales or renewal tax. Moreover, if under the
laws of the State of California or any political subdivision with
jurisdiction over the Shopping Center, the methods of taxation shall be
altered so as to impose in lieu of current methods for the assessment and
taxation of real property, in whole or in part, taxes based on other
standards, or in lieu of any increase therein, such tax shall be
deemed to be a Real Estate Tax for the purposes of this Lease.
(b) PAYMENT OF REAL ESTATE TAXES. Landlord agrees to use reasonable
efforts to obtain either a single, separate tax bill or an assessor's "pro
rate" showing the Real Estate Taxes attributable to the Land and the
Improvements and a proportionate share of the Common Areas. In the event the
Land and the Improvements are not segregated for tax purposes to permit a
single, separate tax bill for the same, then at such intervals as Landlord is
required to pay the Real Estate Taxes, Tenant shall pay Tenant's Pro Rata
Share of Real Estate Taxes (calculated in the same manner as Tenant's Pro
Rata Share of CAM Charges in paragraph 7(c) without, however, a percentage
maximum on Real Estate Taxes levied on improvements) levied against the tax
parcel or parcels comprising the Shopping Center (the "Tax Parcel"). In no
event shall the denominator used to determine Tenant's Pro Rata Share be less
than the gross leasable area upon which the assessment of Real Estate Taxes
is based; in the event adjustments are made during any year, appropriate
prorations shall be made. Landlord has heretofore obtained approval of
vesting Parcel Map No. 95, a copy of which is attached hereto as EXHIBIT "M".
Landlord may modify the boundaries of the parcels shown on said map such that
Parcel 5 will contain no building improvements other than the Improvements
and such that Parcel 6 will contain no building improvements. In such event,
if Tenant has elected to pay Real Estate Taxes based on a separate assessment
as opposed to pursuant to a Pro Rata Share calculation, Landlord may require
Tenant to pay the Real Estate Taxes levied or assessed against said Parcels 5
and 6, provided that the total land area within said Parcels 5 and 6 does not
exceed 80,549 square feet, in satisfaction of Tenant's obligation
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to pay Real Estate Taxes under this paragraph 9(b). Tenant's Pro Rata Share
of Real Estate Taxes shall be net of any early-payment discounts available
at the time Tenant's payment is due if made by Tenant when due. Tenant shall
pay Tenant's Pro Rata Share of Real Estate Taxes within thirty (30) days
after Tenant's receipt of Landlord's statement therefor, accompanied by the
tax bill on the basis of which such statement is rendered. Landlord shall
pay, or cause the payment of, all Real Estate Taxes before any fine, penalty,
interest or cost may be added thereto, become due or be imposed by operation
of law for the nonpayment or late payment thereof. In no event shall Tenant
be liable for any discount forfeited or penalty incurred as a result of late
payment by another tenant or by Landlord. Taxes shall be prorated as of the
Commencement Date and the expiration or earlier termination of this Lease,
and Landlord shall promptly return to Tenant any overpayment made by Tenant
not attributable to the period of Tenant's possession of the Premises. Only
installments coming due during the Main Term and Option Periods, if so
exercised, shall be included in Real Estate Taxes for the calculation of
Tenant's Pro Rata Share. Landlord shall remain primarily responsible for such
payment notwithstanding the fact that such payment may be made by a tenant of
Landlord's Premises or other third party pursuant to an agreement to which
Tenant is not a party. In addition, should Landlord fail to pay such Real
Estate Taxes before same become delinquent, Tenant shall have the right, at
its election, to cure such failure by payment of delinquent Real Estate Taxes
and any interest and penalties due thereon and in such event Tenant may
deduct the cost thereof, plus interest at the lesser of fifteen percent (15%)
per annum or the highest rate permitted by State law (the "Default Rate"),
from the next installment(s) of Base Rent and other charges due hereunder.
(c) CONTEST OF REAL ESTATE TAXES AND/OR ASSESSED VALUATION OF
PROPERTY. Tenant shall have the right, at Tenant's sole expense, to contest
the amount or validity, or otherwise seek an exemption or abatement, of any
Real Estate Taxes or to seek a reduction in the valuation of the Premises
assessed for Real Estate Tax purposes, by appropriate proceedings diligently
conducted in good faith, provided that Tenant shall first have notified
Landlord of its intent to do so and Landlord shall have failed to notify
Tenant in writing, within five (5) days of receipt of Tenant's notice, that
Landlord intends to contest such Real Estate Taxes or seek such a reduction.
In any instance where any such action or proceeding is being undertaken by
Tenant, Landlord shall cooperate with Tenant, execute any and all documents
required in connection therewith and, if required by any law, rule or
regulation of the taxing authority, shall join with Tenant in the prosecution
thereof; no such action or proceeding shall excuse Landlord's or Tenant's
payment of Real Estate Taxes prior to delinquency. Tenant shall
15
be entitled to a refund of any overpayment of Real Estate Taxes relating or
allocable to the Premises, as well as a reimbursement of all costs, fees and
expenses it incurs in such protest or reassessment.
10. MAINTENANCE, REPAIRS AND REPLACEMENTS. Except (i) for costs
covered by the Landlord's insurance required to be maintained hereunder, (ii)
for condemnation proceeds to be received by Tenant, (iii) for obligations
arising from the negligent acts or omissions or willful misconduct of
Landlord (or its agents or employees), or (iv) as otherwise set forth in this
Lease, Tenant shall be solely responsible for maintenance of the exterior and
interior non-structural elements of the Building, including, but not limited
to, repairs and/or replacements to plate glass, Tenant's store front and
doors, plumbing, heating, electrical and air conditioning systems which serve
only the Premises and for the maintenance and repairs and/or replacements
required by reason of construction and/or design defects in the Improvements.
Landlord shall maintain all structural elements of the Premises (whether or
not same serve only the Premises), including, without limitation, the roof,
roof structure, floor slab, foundation, load bearing walls and exterior
structural walls (unless required by reason of construction or design defects
in the Improvements), but shall have no other responsibility for maintenance,
repair or replacements to the Premises or any part thereof except to the
extent maintenance, repair or replacements are required due to the negligent
acts or omissions or willful misconduct of Landlord (or its agents or
employees); provided, however, this provision is in no way intended to limit
Landlord's obligation to maintain, repair and replace any and all elements,
both structural and non-structural, of the Common Areas pursuant to the terms
of this Lease. In connection with Landlord's maintenance obligations
pertaining to the roof, Tenant shall deliver to Landlord a "Bonded Roof
Guaranty" warranting said roof for a minimum of ten (10) years; during the
period of said guaranty Landlord's maintenance on the roof shall be at no
cost to Tenant, except to the extent of a construction or design defect not
covered by the guaranty. Following the expiration of the guaranty, Landlord
shall continue to maintain the roof, provided Tenant shall reimburse Landlord
within thirty (30) days of demand and receipt of reasonable supportive
evidence of the amount and payment of the costs to be reimbursed. All
maintenance of a capital nature must be amortized according to generally
accepted accounting principles. In addition to the Landlord's maintenance and
repair obligations set forth herein and otherwise set forth in this Lease,
Landlord agrees to maintain the Other Improvements immediately surrounding
the Building, including sidewalks and landscaping, except to the extent such
maintenance is required due to a design or construction defect in the Other
Improvements. If Tenant is required during the last five
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(5) years of the Term of the Lease (without consideration to the exercise of
any additional Renewal Options) to expend any sum in satisfaction of its
obligations hereunder pertaining to the HVAC system in the Building, and if
the resulting replacement cannot be fully amortized in accordance with
generally accepted accounting principles, or the Internal Revenue Code and
Regulations, over the remainder of the Term (without consideration to the
exercise of any additional Renewal Options), then Tenant shall be reimbursed
by Landlord upon Tenant's surrender of the Premises, for the unamortized
portion of the cost associated with such repairs, construction or alteration
for the period beyond the remainder of the Term (without consideration to the
exercise of any additional Renewal Options), not to exceed $50,000.00 (so
long as same is not the result of a change in Tenant's use, sublease,
assignment or alteration to the Premises). Should either party fail to
perform its obligations under this paragraph 10, the other party may, at its
option, effect such maintenance, replacements or repairs, provided that such
curing party shall have given the nonperforming party thirty (30) days' prior
written notice, except in the case of emergencies (in which event only such
notice as may be reasonable under the circumstances shall be required); but
further provided that such thirty (30) day period (or reasonable period in
event of emergencies) shall be extended in respect of any cure that cannot
with reasonable diligence be accomplished within such period so long as the
party required to effect such cure has commenced such cure within such thirty
(30) day period (or reasonable period in event of emergencies) and thereafter
diligently prosecutes such cure to completion. The nonperforming party shall
reimburse the other party on demand for the reasonable and actual amount so
expended (as evidenced by detailed invoice), plus interest at the Default
Rate from the date incurred. However, in the event of emergency repairs, no
interest shall accrue if reimbursed within thirty (30) days of request
(including detailed invoice) for reimbursement. All maintenance, repairs or
replacements shall be done by Tenant or Landlord lien-free and in a good and
workmanlike manner consistent with the quality of labor and materials used in
originally constructing the Improvements and in accordance with all
applicable law. In order for Landlord and Tenant to effectively perform their
maintenance, repair and replacement obligations hereunder, Tenant and
Landlord, as applicable, shall assign to the other party any and all
manufacturers' and contractors' warranties relating to such work performed on
behalf of the other party to the party who is required to maintain same under
the Lease.
11. PAYMENT OF UTILITY BILLS. Tenant will pay directly to the
appropriate utility company or governmental agency, when due, all bills for
gas, water, sanitary sewer, electricity, telephone and other public or
private utilities used by Tenant with regard to
17
the Improvements. Landlord shall pay when due all utility charges incurred in
the operation of the Common Areas.
12. ALTERATIONS. During the Term, Tenant shall have the right, at its
discretion and its sole cost, without Landlord's consent, to make (i) any
alterations or modifications to the interior of the Building necessary or
desirable in order to bring the Premises into conformity with Tenant's
then-current prototype for similarly sized stores (provided same complies
with the regulations of the City of Chico and does not affect the structural
integrity of the Building) and (ii) any interior non-structural alterations
or modifications it may desire. With Landlord's consent, which shall not be
unreasonably withheld, conditioned or delayed, Tenant shall have the right,
at its sole cost, to alter, modify or reconstruct the exterior and/or
structure of the Building or Other Improvements. Landlord's withholding of
consent as to any exterior and/or structural alteration or modification shall
be deemed reasonable only if same is materially inconsistent with the
then-existing architecture of the Shopping Center or if such alteration or
modification would increase the ground floor gross leasable square footage of
the Building, add an additional story to the Building, result in the Building
extending higher than thirty (30) feet above the ground, adversely affect the
structural integrity of the Building or if Landlord's Mortgagee's consent is
required to the alteration and if such Mortgagee fails or refuses to grant
such approval. Tenant shall cause all such alterations to be lien-free (in
accordance with paragraph 13) and made and completed at Tenant's cost in a
workmanlike manner and in compliance with all applicable law. Should
Landlord's consent be required, conceptual plans and specifications for such
work shall be provided to Landlord prior to commencement of any such work.
Landlord shall be deemed to have consented to such work if written notice of
disapproval, with reasons specified, is not received by Tenant within fifteen
(15) business days following Tenant's delivery of such plans and
specifications to Landlord. Without cost or expense to Landlord, Landlord
shall cooperate with Tenant in the obtaining of any and all licenses,
building permits, certificates of occupancy or other governmental approvals
which may be required in with any such modifications or alterations,
and Landlord shall execute, acknowledge and deliver any documents reasonably
required in furtherance of such purposes.
13. MECHANICS' LIENS. Landlord and Tenant covenant to each other that
they will not permit any lien to be filed against the Premises or the
Shopping Center as a result of nonpayment for, or disputes with respect to,
labor or materials furnished to the Premises or the Shopping Center as a
result of nonpayment for, or disputes with respect to, labor or materials
furnished to the Premises or the Shopping Center for or on behalf of Tenant,
Landlord or any party claiming by, through, or under Tenant or Landlord, nor
shall either party permit any
18
judgment, lien or attachment to lie, as applicable, against the Premises or
the Shopping Center. Should any lien of any nature, including but not limited
to the foregoing, be filed against the Premises or Shopping Center, the party
on account of whose actions such lien has been filed shall, within thirty
(30) days after receipt of written notice of such lien, cause said lien to be
removed, or otherwise protected against execution during good faith contest
by (i) posting a bond therefor, (ii) escrowing adequate funds to cover the
claim and related transaction costs or (iii) taking such other action as may
be permissible under applicable title insurance regulations and reasonably
acceptable to the other party hereto. Furthermore, to the extent Landlord or
Tenant is unable to obtain owner's or leasehold title insurance, as the case
may be, or an endorsement thereto, without mechanic's liens shown on "Schedule
B" therein, due to a mechanic's lien attributable to work of Landlord or
Tenant, such party shall provide the necessary indemnity to the title company
to allow the party seeking the insurance to obtain such insurance without the
mechanic's liens listed as an exception to title. Notwithstanding the
foregoing, Landlord's obligations under the preceding two sentences shall
only apply to liens filed that have a priority of record to this Lease.
Furthermore, Landlord and Tenant shall indemnify, defend (with counsel
reasonably acceptable to the party being defended) and hold harmless, the
other party hereto against all claims, costs, liability, or expense resulting
from the breach by such indemnifying party of its obligations under this
paragraph 13.
14. INSURANCE.
(a) PROPERTY DAMAGE. During the Construction Term, Tenant shall keep or
require its general contractor to keep, in full force and effect, a policy of
builder's risk insurance covering loss or damage to the Improvements for the
full replacement value of all such construction. During the Main Term and all
Option Periods, Tenant shall keep in full force and effect a policy of fire
and extended coverage insurance covering loss or damage to the Premises in
the amount of full replacement value of the Building, exclusive of
excavation, footings and foundations (which initial amount shall be not less
than the Tenant Improvement Allowance), with a commercially reasonable
deductible, for which Tenant shall be fully responsible provided that Tenant
satisfies the requirements for self-insurance contained in paragraph 14(d)
below. Landlord and Landlord's first "Mortgagee" (as defined in paragraph 21
below), shall be named in such policy or policies as additional insureds as
their respective interests may appear, and said policy or policies shall be
endorsed with standard mortgagee's loss payable endorsements for the benefit
of Landlord's Mortgagee. Said insurance shall include a twelve (12) month
business interruption endorsement covering the Base Rent,
19
Real Estate Taxes and CAM Charges payable by Tenant for the benefit of
Landlord and Landlord's Mortgagee, notwithstanding any abatement provision in
Paragraph 15 hereof. Landlord shall not construct, or permit to be
constructed, any improvement in the Shopping Center, nor conduct any
activity, or permit the conduct of any activity, in the Shopping Center which
will prevent Tenant from being able to obtain insurance coverage at
commercially reasonable rates, including, without limitation, a
fully-sprinklered fire insurance rate. Should Landlord cause or permit any
insurance rate increase to occur, Landlord will reimburse Tenant for the
additional premium required, subject to Tenant's right to self-insure (in
which event Landlord will contribute to Tenant's self insurance fund to cover
increased actuarial risks). Tenant agrees not to keep, use or sell any
article on or from the Premises, in order to conduct any activity therefrom,
which may be prohibited by the standard form of fire insurance policy. In
the event that any conduct or activity by or under Tenant on or from the
Premises results in the rates of fire insurance premiums upon other
improvements within the Shopping Center being increased, Tenant agrees to pay
to Landlord, upon demand, the amount of increase in such fire insurance
premiums attributable thereto.
(b) LIABILITY INSURANCE. During the Term, Tenant shall keep in full
force a policy of commercial general liability insurance with bodily injury and
property damage coverage with respect to the Premises and business operated
by Tenant, which shall name Landlord and Landlord's first Mortgagee as
additional insureds as their respective interests may appear. The limits of
such commercial general liability policy shall be not less than $3,000,000.00
combined single limit for bodily injury and property damage, with a
commercially reasonable deductible. All such insurance shall be written as
primary insurance not contributing with and not in excess of coverage which
Landlord may carry.
(c) WORKERS' COMPENSATION INSURANCE. To the extent
required by law, Landlord and Tenant shall maintain workers' compensation
insurance covering their respective employees in statutory limits, or
maintain such alternate coverages or arrangements as legally permissible.
(d) SELF-INSURANCE. Notwithstanding anything to the contrary contained
herein, Tenant shall have the right to self-insure against any of the risks
or portions thereof set forth in subparagraphs (a) and (b) (and to the extent
then permitted by law, (c)) above, provided Tenant is then occupying the
Premises and has a reported net worth, as of the end of Tenant's most recent
quarterly reporting period, of not less than Fifty Million Dollars
($50,000,000), as computed in accordance with generally accepted accounting
principles, consistently applied, as determinable from Tenant's public
20
disclosures and/or regularly maintained corporate balance sheets which are
generally available to shareholders (no right of Landlord to audit or conduct
independent investigations being implied by this provision).
(e) COMMON AREA, ADDITIONAL AREA AND THIRD PARTY TENANT INSURANCE AND
INSURANCE DURING LANDLORD'S CONSTRUCTION. During the Term, Landlord shall
keep in full force and effect, in form reasonably acceptable to Tenant,
policies of commercial general liability insurance, with bodily injury and
property damage insurance, and fire and extended coverage insurance, with
respect to the Common Areas and with respect to all other areas of the
Shopping Center over which Landlord from time to time has present possessory
rights (or has the right under any lease to provide insurance coverage
because of a tenant's failure to maintain such required coverage) but which
do not constitute a portion of the Common Areas (such areas here sometimes
collectively referred to as the "Additional Areas"). The Additional Areas
shall include, without limitation: (i) as yet unconstructed portions of the
Shopping Center intended for tenant occupancy, (ii) constructed but
unoccupied portions of the Shopping Center, (iii) vacated or otherwise
uninsured tenant space, whether by reason of lease expiration, default or
otherwise, and (iv) constructed and occupied portions of the Shopping Center.
In the case of fire and extended coverage insurance for the Additional
Areas, such insurance need not cover interior leasehold improvements, trade
fixtures, equipment and/or other personal property of tenants and/or other
occupants, and such insurance, as to buildings leased by other tenants, may
be provided through self-insurance carried by or under the applicable tenant,
provided that such tenant has a net worth of not less than Fifty Million
Dollars ($50,000,000.00) and the provision of such self-insurance has been
approved by Landlord's Mortgagee, except for tenants of Prior Leases which
shall be bound by the terms of their respective leases. Said liability
policies shall name Tenant, and any lender, investor or other stakeholder
which is designated by Tenant from time to time, as an additional insured
to the fullest extent Tenant and such stakeholder have insurable
interests. The limit of the fire and extended coverage insurance policy
shall be the same as that set forth in subparagraph (a) above (exclusive of
footings, foundations and excavations); the limits of the commercial general
liability insurance shall not be less than $1,000,000.00 combined single
limit for bodily injury and property damage, with a commercially reasonable
deductible. The cost of the premiums for coverages relating to Common Areas
shall be an element of CAM Charges, provided that Tenant shall not be liable
for its pro rata share of any premium for coverage in excess of that coverage
which is customary among owners of like shopping centers in the City or the
minimum coverage required by this law, whichever is greater. With the
exception of the Prior
21
Leases, Landlord shall assure (through parallel lease provisions or
otherwise) that all areas of the Shopping Center, including the Additional
Areas and areas leased to third party tenants or sold to third party
occupants, are insured with substantially similar coverages to those required
for the Premises and the Common Areas. During any period in which Landlord is
conducting construction activities at the Shopping Center, Landlord or its
general contractor shall keep in full force and effect with regard to the
Shopping Center, in form reasonably acceptable to Tenant, at least the
minimum insurance coverages set forth below:
1) Workers' Compensation - statutory limits;
2) Employers Liability - $500,000; and
3) Comprehensive General and Comprehensive Auto Liability as follows:
a) Bodily Injury - $1,000,000 per occurrence;
b) Property Damage - $1,000,000 per occurrence;
c) Independent Contractors Liability or Owner's Protective
Liability; same coverage as set forth in subparagraphs (a)
and (b) above;
d) Products/Completed Operations coverage which shall be kept in
effect for two (2) years after completion of work with a limit
of $1,000,000;
e) "XCU" Hazard Endorsement, if applicable;
f) "Broad Form" Property Damage Endorsement;
g) "Personal Injury' Endorsement; and
h) "Blanket Contractual Liability" Endorsement.
Additionally, Landlord shall keep or require its general contractor to keep
in full force and effect a policy of builder's risk insurance covering loss
or damage to such construction for the full replacement value of all such
construction. To the fullest extent Tenant has an insurable interest, such
liability policy shall name Tenant an additional insured.
(f) POLICY PROVISIONS. All policies of insurance (other than
self-insurance) enumerated above shall be provided by insurance carriers with
a Best rating of not less than B+X. Any insurance coverage enumerated above
may be effected by a blanket policy or policies of insurance or under
so-called "all risk" or "multi-peril" insurance policies, provided that the
total amount of insurance available with respect to the Premises and Tenant's
or Landlord's liability hereunder shall be at least the equivalent of
separate policies in the amounts herein required, and provided further that
in other respects any such policy or policies shall comply with the
provisions of this paragraph 14. Landlord shall not be entitled to
self-insure against any of the risks recited herein, except the amount of any
commercially reasonable deductible shall be deemed to be self-insurance. An
increased coverage or "umbrella" policy may be provided and utilized by
either party to increase the coverage provided by individual or blanket
policies in lower
22
amounts, and the aggregate coverage provided by all such policies with
respect to the Premises and Tenant's or Landlord's liability hereunder shall
be satisfactory provided that such policies otherwise comply with the
provisions of this paragraph 14.
(g) WAIVER OF RIGHT OF RECOVERY AND SUBROGATION. To the extent that
insurance proceeds are actually received in satisfaction of a loss which is
required to be covered by insurance or is self-insured hereunder (with the
deductible under any policy being deemed to be self-insured), Landlord and
Tenant hereby waive any and all rights of recovery against each other for any
loss or damage to the Premises or the contents contained therein, for loss of
income on account of fire or other casualty, or for injury sustained on the
Premises or the Common Areas; and each party's aforesaid policies of
insurance shall contain appropriate provisions recognizing this mutual
release and waiving all rights of subrogation by the respective insurance
carriers. Notwithstanding the foregoing, Tenant acknowledges that the
tenants of the buildings within the building areas designated "B" and "H" on
the Site Plan carry the fire and extended coverage insurance for their
buildings pursuant to their Prior Leases and that Landlord does not have the
right to require said tenants to obtain a waiver of subrogation in favor of
Tenant in the insurance policies for these buildings or to conform their
policy provisions to paragraph (f) above. This provision and the provisions
of paragraph (f) above, therefore, shall not apply to either of said
buildings, while said Prior Leases continue in effect (the "Excluded Leases").
(h) EVIDENCE OF INSURANCE. Subject to Tenant's right to self-insure
hereunder, upon (i) commencement of the Main Term (as to casualty insurance),
(ii) upon delivery of the Land (as to liability insurance) and (iii) no less
than annually thereafter, Tenant and Landlord shall cause to be issued to
each other in lieu of the original policy, a duplicate of such policy or
appropriate certificates of insurance reasonably acceptable to the other
party and evidencing compliance with the applicable covenants of this
paragraph 14. Each such certificate shall provide that no expiration,
cancellation or material change in the insurance evidenced thereby shall be
effective unless thirty (30) days' unconditional notice of such expiration,
cancellation or material change shall have been given to the
certificate-holder (and Landlord's first Mortgagee, if applicable). This
provision shall not apply to the fire and extended coverage insurance
provided by the tenants under the Excluded Leases, provided that Landlord
agrees to provide proof of such insurance to Tenant upon request, in the form
of certificates evidencing such insurance provided to Landlord by the tenants
under the Excluded Leases.
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(i) INDEMNITIES. Except if arising from the negligent or willful acts
of Landlord or its agents or employees (to the extent that paragraph 14(g) is
inapplicable thereto), Tenant hereby agrees to indemnify, defend and hold
Landlord harmless from all claims, costs, liability, damage (exclusive of
consequential damages) or expense, including attorneys' fees, for any death,
damage or injury to persons or property occurring on the Premises or
resulting from the use thereof as well as the Common Areas by Tenant, its
agents or employees.
Except if arising from the negligent or willful acts of Tenant or its
agents or employees (to the extent that paragraph 14(g) is inapplicable
thereto), Landlord agrees to indemnify, defend and hold Tenant harmless from
any and all claims, costs, liability, damage (exclusive of consequential
damages) or expense, including attorneys' fees, for any death, damage or
injury to persons or property occurring in, on or around the Common Areas and
other areas within the Shopping Center with respect to which Landlord is
obligated to carry insurance or resulting from the use thereof by Landlord,
its agents or employees.
15. DAMAGES BY FIRE OR OTHER CASUALTY.
(a) INSURED CASUALTY. In the event of a casualty, causing destruction
or damage to the Improvements, Common Areas and/or Additional Areas, as
applicable, which casualty is covered by the standard form of fire and
extended coverage insurance required under this Lease or which is actually
covered by insurance carried by or for the benefit of either Landlord or
Tenant (exclusive of self-insurance carried beyond the insurance required
hereunder), this Lease shall not terminate except as expressly set forth
herein. Notwithstanding anything to the contrary, in the event Tenant
reasonably estimates, after due investigation, restoration shall take more
than three hundred sixty (360) days from the date of such determination,
Tenant shall have the right upon thirty (30) days written notice to terminate
this Lease. If this Lease is not terminated, within a reasonable time after
such casualty, subject to force majeure, applicable building codes, the
procurement of building permits and the receipt of insurance proceeds (unless
self-insured) to the extent of the damage to the Premises, or the Common
Areas or Additional Areas, as applicable, Tenant shall complete
reconstruction of the Building and Other Improvements, and Landlord shall
complete reconstruction of the Common Areas and sufficient Additional Areas
such that one hundred fifty thousand (150,000) square feet of ground floor
gross leasable area (inclusive of the Building) are free from casualty damage
(including, in the case of the Premises, substantially equivalent value in
equipment, furniture, and fixtures), to that condition existing immediately
prior to such casualty, in the reconstructing party's reasonable discretion,
with, in event of any Tenant
24
reconstruction, such alterations as may be permitted under paragraph 12
hereof and with, in the event of any Landlord reconstruction, such
alterations as Landlord may reasonably determine to be appropriate, subject to
the limitations set forth herein, or which any tenant under a Prior Lease has
the right to make. From the date of the casualty until Tenant resumes
operations in the Premises to the same level as before such casualty, Base
Rent and other charges shall abate or, in the case where Tenant is still
operating in the Premises, be reduced to the extent such casualty has
interfered with Tenant's use of the Premises, for a period not to exceed
twelve (12) full calendar months. In the event, subject to force majeure,
the Premises, Common Areas and/or Additional Areas, as applicable, are not
substantially repaired and reconstructed, and equipment, furniture and
fixtures restored or replaced as required above, by the party with repair and
restoration obligations within two hundred forty (240) days after receipt of
any required governmental permits, for which permits the party with repair
obligations shall make prompt application following such destruction or
damage, and insurance proceeds (if not self-insured), then the other party,
at its option, by giving written notice to the party with repair obligations,
within thirty (30) days after the expiration of said period, may undertake
completion of such reconstruction (subject to the prior rights of any tenant
under a Prior Lease to complete such construction), in which event the party
with repair obligations shall make available to the notifying party all
applicable insurance proceeds for such reconstruction (including any
applicable deductible) or, if self-insured, the amount necessary for such
reconstruction.
(i) APPLICATION OF FUNDS. All insurance
(or self-insurance) proceeds received on account of such damage or
destruction to be repaired and restored under the preceding provisions of
this paragraph 15(a), less the cost, if any, of such recovery, shall be
applied pursuant to the terms of this Lease to the payment of the cost of
such restoration, repair, replacement, rebuilding, or alteration (the
"Work"), including expenditures made for temporary repairs or for the
protection of property pending the completion of permanent restoration,
repair, replacement, rebuilding, or alteration, and, if required by
Landlord's first Mortgagee, shall be held by a mutually agreeable
third-party escrow agent (which is, for these purposes, the "Escrow
Agent"), in an interest-bearing account in a federally insured financial
institution or institutions such that all funds are deposit insured (or
otherwise assured in a manner acceptable to the parties), to be paid out,
as provided below, from time to time (but no more often than once
monthly), as the Work progresses, upon Tenant's written request in event
of work by Tenant, or Landlord's written request in event of work by
Landlord, accompanied
25
by a certificate of the architect or engineer in charge of the Work (the
"Certificate"), dated not more that seven (7) days prior to such request,
stating that the sum then requested either has been paid by Tenant or
Landlord, as applicable, or is justly due to the named contractors,
subcontractors, materialmen, engineers, architects, or other persons
(whose addresses shall also be stated) who have rendered services or
furnished materials for certain portions of the Work. Landlord's
Mortgagee, if a bank, savings and loan association or other institutional
lender, may act as the Escrow Agent. The Certificate shall give a brief
description of such services and materials, shall list the several
amounts so paid or owing to each of such persons, shall state the cost of
the Work at the date of the requisition, and shall state that no part of
such expenditures has been or is being made the basis for any other
request for payment. The Certificate shall state also that, except for
the amounts listed therein, there is no outstanding indebtedness known to
such architect or engineer, after due inquiry, for labor, wages,
materials, supplies, or services in connection with the Work which, if
unpaid, might become the basis of a vendor's, mechanic's, laborer's,
materialman's, or similar lien upon the Work or upon the Premises or any
part thereof.
(ii) DISBURSEMENT. Upon compliance with the foregoing
provisions of paragraph 15(a)(i), the Escrow Agent shall pay, out of the
escrowed funds, to the persons named in the Certificate the respective
amounts stated to be due to them or shall pay to Tenant, in the event of
Tenant work, or Landlord, in the event of Landlord work, the amount
stated to have been paid by Tenant or Landlord, as applicable; provided,
however, that such payments shall not exceed in amount the cost of the
relevant Work as stated in the Certificate. If the insurance proceeds or
reconstruction funds paid by Tenant or Landlord, as applicable, to the
Escrow Agent exceed the amount required to pay the total cost of the
Work, the party paying such amount to the Escrow Agent, as applicable,
after payment of all costs of the Work, shall be entitled to receive or
retain, as applicable, such excess.
(b) UNINSURED CASUALTY. In the event of any uninsured fire, earthquake
or other casualty, causing destruction or damage to the Improvements, Common
Areas and/or Additional Areas, which has a repair and reconstruction cost of
twenty-five percent (25%) or more of the then-total reconstruction cost of
any of said areas (which percentage shall be reduced to ten percent (10%)
during the last five (5) years of the Main Term or during an Option Period),
Tenant shall have the option of terminating this
26
Lease; provided that Landlord may prevent the termination of this Lease by
notifying Tenant in writing within thirty (30) calendar days following
Tenant's election to terminate, of its agreement to pay Tenant's repair and
reconstruction costs in excess of twenty-five percent (25%) (or ten percent
(10%), as the case may be), of the total reconstruction cost (the "Excess
Cost"), and delivering to Tenant or the Escrow Holder, as the case may be,
funds sufficient to pay the Excess Cost within sixty (60) days of Landlord's
election or prior to the commencement of Tenant's construction, whichever is
sooner. Tenant shall notify Landlord of its exercise of such option within
sixty (60) days following the occurrence of casualty and unless Landlord
prevents such termination from becoming effective, shall thereupon make
available to Landlord all insurance proceeds or reconstruction costs as set
forth in subparagraph (a) above. In the event Tenant does not elect to
terminate this Lease as set forth above, or in the event that Landlord
prevents Tenant's termination from becoming effective as set forth
immediately above, then, subject to force majeure, within two hundred forty
(240) days after receipt by Tenant of the required governmental permits for
restoration, for which permits Tenant shall make prompt application following
such destruction or damage, Tenant shall complete reconstruction of the
Improvements to their condition existing immediately prior to such damage, in
Tenant's reasonable discretion, with such alterations as may be permitted
under paragraph 12, and shall restore the Premises (including equipment,
furniture and fixtures). From the date of the casualty until Tenant resumes
operations in the Premises to the same level as before such casualty, Base
Rent and other charges shall abate (for a period not to exceed twelve (12)
consecutive calendar months) or, in the case where Tenant is still operating
in the Premises, be reduced to the extent such casualty has interfered with
Tenant's use of the Premises (for a period not to exceed twelve (12)
consecutive calendar months). Should Tenant elect to maintain this Lease in
full force and effect, Landlord shall reconstruct Common Areas sufficient to
enable Tenant and the remaining occupants to operate their business at the
same level as prior to such casualty, but in all events, Landlord shall
reconstruct Tenant's Preferred Area. Additionally, except as to the Prior
Leases, Landlord shall assure (through parallel lease provisions or
otherwise) that all areas of the Shopping Center leased to third party
tenants or sold to third party occupants are subject to substantially similar
reconstruction obligations to those of the Premises, Common Areas and
Additional Areas.
(c) LAST TWO (2) YEARS OF MAIN TERM OR OPTION PERIOD.
Notwithstanding the foregoing, if any such damage or destruction occurs
within the last two (2) years of the Main Term or of any Option Period and
the cost to repair said damage is estimated to be equal to or in excess of
fifty percent (50%) of the aggregate
27
Base Rent due for the remainder of the Main Term or Option Period, as the
case may be, or if the restoration is reasonably estimated by Tenant to take
in excess of forty-five (45) days from the date of the damage or destruction,
Tenant shall be under no obligation to restore the Improvements, in which
case this Lease shall terminate at Tenant's option, such option to be
exercised by Tenant giving not less than thirty (30) days' prior written
notice to Landlord within sixty (60) days following the date of such
casualty, and Landlord shall receive the proceeds of any insurance (together
with any applicable deductible) which may be payable with regard to such
destruction or damage or, in the event Tenant self-insures, the amount
necessary for reconstruction of the Improvements.
16. CONDEMNATION.
(a) DEFINITION OF TAKING AND SUBSTANTIAL TAKING. For the purpose
of this Lease, a "Taking" shall mean any condemnation or exercise of the
power of eminent domain by any authority vested with such power or any other
taking for public use, including a private purchase in lieu of condemnation
by an authority vested with the power of eminent domain; the "Date of
Taking" shall mean the earlier of the date upon which title to the Premises,
the Shopping Center or any portion thereof so taken is vested in the
condemning authority or the date upon which possession of the Premises, the
Shopping Center, or any portion thereof is taken by the condemning authority;
and "Substantially All of the Premises" shall mean (i) so much of the
Improvements and/or Shopping Center and Common Areas as, when taken, leaves
the untaken portion unsuitable, in Tenant's reasonable opinion, for the
continued feasible and economic operation of the Premises by Tenant for the
same purposes as immediately prior to such Taking or as contemplated herein,
(ii) so many of the parking spaces within the Shopping Center as reduces the
parking ratio below the greater of three and one-half (3-1/2) spaces (with no
more than twenty percent (20%) for compact spaces) per 1000 square feet of
ground-floor gross leasable area or that ratio which is required by the
zoning ordinance applicable to the Shopping Center, and Landlord's failure to
provide substantially equivalent alternative parking reasonably acceptable to
Tenant within sixty (60) days after such Taking, or (iii) so much of the
Common Area Easement described in paragraph 6(d) above that access to the
Premises is materially impeded so as to adversely affect Tenant's business.
(b) TENANT'S RIGHTS UPON TAKING OR SUBSTANTIAL TAKING. In the event
of a Taking of Substantially All of the Premises, Tenant, at its option upon
thirty (30) days' written notice to Landlord, which shall be given no later
than sixty (60) days following the Taking, shall have the right to terminate
this Lease. All Base Rent and other sums payable by Tenant hereunder shall be
apportioned and paid through and
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including the Date of Taking, and neither Landlord nor Tenant shall have any
rights in any compensation or damages payable to the other in connection with
such Taking, subject, however, to paragraph 16(g) below.
(c) TENANT'S RIGHTS UPON LESS THAN SUBSTANTIAL TAKING. In the event
of a Taking of less than Substantially All of the Premises, Base Rent and other
charges shall be reduced fairly and equitably in accordance with the portion
condemned or taken, effective as of the Date of Taking, and Tenant shall make
all necessary restorations to the Improvements so that the portions of the
Improvements not taken constitute a complete architectural unit, provided
that the cost thereof to Tenant shall not exceed the proceeds of Tenant's
condemnation award (to the extent that such relates to the Improvements and
not to Tenant's personal property, intangibles or out-of-pocket expenses
unrelated thereto) and the portion of Landlord's award allocable to the
Premises, which Landlord shall make available to Tenant for such restoration.
If required by Landlord's first Mortgagee, such awards shall be escrowed and
disbursed in accordance with the procedure set forth in paragraph 15(a)
above. If the Taking occurs within the last two (2) years of the Main Term or
of any Option Period and has a material impact on Tenant's ability to conduct
business as reasonably determined by Tenant, this Lease shall terminate at
Tenant's option, such option to be exercised by Tenant giving not less than
thirty (30) days' prior written notice to Landlord within sixty (60) days of
the date of such Taking. In the event that this Lease is not terminated as a
result of the Taking, this Lease shall terminate as to the portion or
portions of the Premises taken.
(d) LANDLORD'S OBLIGATIONS UPON ANY TAKING. In the event of any
Taking following which the Lease continues in effect, Landlord shall make all
necessary restorations to all portions of the Common Areas and Additional
Areas remaining following such Taking such that the Common Areas and these
Additional Areas are acceptable for continued use and occupancy for shopping
center purposes and such that they each constitute a complete architectural
unit and serve the function originally intended. Additionally, except as to
the Prior Leases, Landlord shall assure (through parallel lease provisions or
otherwise) that all areas of the Shopping Center leased to third party
tenants or sold to third party occupants are subject to substantially similar
reconstruction obligations to those of the Premises and Common Areas.
(e) RIGHTS UPON TEMPORARY TAKING. In the event of a Taking of the
Premises, the Common Areas and/or any other area within the Shopping Center,
or any portion thereof, for temporary use (specifically one not exceeding 60
days in duration), without the taking of the fee simple title thereto, this
Lease shall remain in full force and
29
effect. All awards, damages, compensation and proceeds payable by the
condemnor by reason of such Taking relating to the Premises, or relating to
the Common Areas but reasonably attributable to the Premises, for periods
prior to the expiration of the Lease shall be payable to Tenant. All such
awards, damages, compensation and proceeds for periods after the expiration
of the Lease shall be payable to Landlord. Anything contained herein to the
contrary notwithstanding, a temporary Taking for any period in excess of
ninety (90) days may, at Tenant's option, be deemed a permanent Taking and
shall be governed by subparagraph (b) or (c) above, as applicable.
(f) TAKING OF THE PYLON SIGN(S). In the event of a taking, whether
permanent or temporary, of any pylon or monument sign (as contemplated by
paragraph 8) on which Tenant has installed identification panels, Landlord
shall use reasonable efforts to provide a substitute site (reasonably
acceptable to Tenant) therefor, with adequate electrical power, located so as
to be visible to vehicular traffic or roadways adjacent to the Shopping
Center and/or at entrances to the Shopping Center, and Landlord shall replace
and/or rebuild any of such signage so taken at its sole cost; provided,
however, Tenant's rights with respect to the replacement signs are subject to
the same restrictions as imposed with respect to the original signs.
(g) TENANT'S RIGHT UPON CONDEMNATION. In the event of a Taking
described in subparagraph (b) or (c) above, Tenant shall be entitled to claim
compensation from the condemning authority for the value of its leasehold
interest in the Premises, its unamortized leasehold improvements paid for by
Tenant, relocation expenses and any other items to which Tenant is entitled
under applicable law; provided that in no event shall any such compensation
paid to Tenant reduce the award or damages payable to Landlord based on the
fair market value of the real property and the buildings and other
improvements in the Shopping Center owned by Landlord.
17. ASSIGNMENT AND SUBLETTING. Tenant shall have the right to sublet,
assign, transfer, reassign and grant concessions or licenses ( a "Transfer")
in all or any part of the Premises and any of Tenant's rights and obligations
under this Lease during the Term, without Landlord's prior consent, provided
any change in use, if any, resulting from such Transfer is not in violation
of the terms of this Lease. In the event of such a Transfer, Tenant shall
remain liable for all of Tenant's obligations to Landlord's arising hereunder
so long as this Lease is not changed, modified or amended in any respect by
Landlord and any transferee. Sales, assignments, mergers and acquisitions
involving all or "substantially all" the beneficial ownership interests in
the Tenant shall not be deemed a Transfer hereunder and same may be effected
without Landlord's knowledge or consent. For purposes of this Lease if
Tenant's interest in the Premises is transferred
30
with a beneficial ownership interest in Tenant, the term "substantially all"
shall mean at least so much of the interest in Tenant so that the tenant
ultimately responsible hereunder has a net worth equal to or in excess of
Fifty Million and NO/100 Dollars ($50,000,000.00).
Any assignment or subletting of this Lease by Tenant shall be executed
by Tenant and the assignee or sublessee. Each assignee or sublessee, for the
benefit of Landlord, shall agree to assume, be bound by, and perform all
terms, covenants, and conditions of this Lease to be kept and performed by
Tenant. After execution of the assignment or sublease, Tenant will forward a
completed copy thereof to Landlord.
18. USE.
(a) Tenant shall initially maintain, use and operate the Premises
as a retail store for (i) the sale of consumer, office and automotive
electronics products (which include, but shall not be limited to,
televisions, stereos, speakers and video recorders and players), computer
hardware and software, entertainment software and entertainment media (which
include, but shall not be limited to, records, game cartridges, video tapes,
cassettes and compact discs), cellular telephones, household appliances
(which include, but shall not be limited to, refrigerators, freezers, stoves,
microwave ovens, vacuum cleaners and dishwashers) and related goods and the
sale and installation of motor vehicle audio, stereo and telephone systems
(all of such items being herein collectively referred to as the "Products"),
and (ii) renting, servicing, repairing and warehousing of the Products
(collectively herein, the "Initial Use").
(b) Thereafter, Tenant shall have the right to use the Premises
for any lawful retail use; provided, however, that the Premises shall not be
used (i) for any illegal purpose, (ii) for any use prohibited under paragraph
19(a)(viii) below, (iii) in violation of any exclusive use restriction granted
a tenant or other occupant of the Shopping Center pursuant to a Prior Lease
or any restrictive covenant in a Prior Lease shown on EXHIBIT "F", or (iv) in
violation of any other applicable provision of the "Permitted Title
Encumbrances" contained in EXHIBIT "F-1".
(c) Nothing contained in this Lease shall be construed to require
Tenant to operate the Premises continuously either for the use first stated
or for any other use. However, should Tenant fail to open and engage in the
Initial Use for at least one (1) business day within one (1) full year
following the Commencement Date, subject to force majeure (financial
inability excepted), Landlord shall have the right upon thirty (30) days'
prior written notice to Tenant to terminate the Lease and thereafter Tenant
shall be relieved of all obligations hereunder. If this Lease is so
terminated pursuant to this paragraph 18(c), the Improvements shall become
the property of Landlord, and Landlord
31
shall not be required to deliver the Tenant Improvement Allowance as required
by Exhibit "C". Notwithstanding anything to the contrary, Tenant may
eliminate Landlord's termination right if within the thirty (30) day period
following Tenant's receipt of Landlord's termination notice, Tenant opens for
business in the Premises.
19. WARRANTIES AND REPRESENTATIONS.
(a) Landlord represents, warrants and/or covenants to Tenant that:
(i) QUIET AND PEACEFUL ENJOYMENT. Landlord and those persons
executing this Lease on its behalf have the right and lawful authority to
enter into this Lease and perform Landlord's obligations hereunder, and
Landlord warrants, represents and covenants that, so long as Tenant is not in
default hereunder beyond any applicable cure period, Tenant shall have quiet
and peaceful use, enjoyment and occupancy of the Premises free from
interference by those lawfully claiming by, through or under Landlord.
(ii) TITLE. Landlord's fee simple interest in the Shopping
Center is free and clear of any mortgages, deeds, encumbrances, declarations,
easements, agreements, leases, tenancies or restrictions, except those
matters set forth on EXHIBIT "F-1" attached hereto and entitled "Permitted
Title Encumbrances", or any other encumbrances which would restrict Tenant's
use of the Premises for the Initial Use or would restrict in any respect the
right of Tenant, its employees, customers and invitees to use the Common
Areas in accordance with the terms of this Lease. Nothing contained in this
Lease, including the Permitted Title Encumbrances and those matters disclosed
on EXHIBIT "F", shall restrict Tenant's right to engage in the Initial Use
in the Premises. Landlord specifically covenants and warrants that no third
party, including but not limited to any other occupant of the Shopping
Center, has the right to object to Tenant's tenancy hereunder, prohibit the
selling, renting, servicing, repairing or warehousing of the Products, or the
right to consent to any feature of the Improvements or Tenant's signage as
permitted by this Lease. This representation and warranty is a material
inducement to the Tenant's execution of this Lease and is made to Landlord's
best actual knowledge as of the date of this Lease (defined as the actual
knowledge of Jamie Sohacheski and Robert Flaxman, excluding imputed or
constructive knowledge).
(iii) CERTIFICATE OF AUTHORITY. Landlord covenants that it is
a duly constituted limited partnership under the laws of the State of
California, and that its general partner who is acting as its signatory in
this Lease is duly authorized and empowered to act for and on behalf of
Landlord. Landlord has
32
furnished Tenant prior hereto with evidence of (a) the existence of the
limited partnership, and (b) the authority of the general partner to bind
Landlord as contemplated herein.
(iv) NO LITIGATION. There are no judicial, quasi-judicial,
administrative or other orders, injunctions, moratoria or pending proceedings
against Landlord or the Shopping Center which preclude or interfere with, or
would preclude or interfere with, the construction contemplated in paragraph
2 hereof or the occupancy and use of the Premises for the purposes herein
contemplated.
(v) HAZARDOUS OR TOXIC MATERIALS. Landlord, to Landlord's
best actual knowledge, as of the date of this Lease, (which knowledge
Landlord represents is based solely upon the contents of the Environmental
Reports listed on EXHIBIT "N" attached hereto) has not used, discharged,
dumped, spilled or stored (other than use or storage in compliance with all
applicable laws) any Hazardous Substances (as defined in the Construction
Provisions) on or about the Shopping Center, whether accidentally or
intentionally, and has received no notice and has no knowledge that any such
condition exists at the Shopping Center. If any claim is ever made against
Tenant relating to Hazardous Substances present at or around the Shopping
Center, whether or not such substances are present as of the date hereof, or
any such Hazardous Substances are hereafter discovered at the Shopping Center
(unless introduced by Tenant, its agents, invitees or employees), all costs
of removal incurred by, all liability imposed upon, or damages suffered by,
Tenant because of the same shall be borne by Landlord, and Landlord hereby
indemnifies and agrees to defend and hold Tenant harmless from and against all
such costs, losses, liabilities and damages, including, without limitation,
all third-party claims (including sums paid in settlement thereof, with or
without legal proceedings) for personal injury or property damage and other
claims, actions, administrative proceedings, judgments, compensatory and
punitive damages, lost profits, penalties, fines, costs, losses, attorneys'
fees and expenses (through all levels of proceedings), consultants or experts
fees and all costs incurred in enforcing this indemnity. The representation,
warranty and indemnity of Landlord described in this paragraph 19(a)(v) shall
survive the termination or expiration of this Lease. Notwithstanding the
foregoing, Landlord shall not be required to remove or to remediate Hazardous
Substances unless such Hazardous Substances materially interfere with the
conduct and operation of Tenant's business from the Shopping Center or unless
Tenant or Landlord is
33
required to remove same pursuant to a governmental or court order or judgment
or is required by applicable law, code, regulation or the like.
(vi) TENANT'S EXCLUSIVE USE. So long as the Premises are used
for the initial uses set forth in paragraph 18, no other tenant or occupant
of the Shopping Center shall be entitled to sell or rent (or rent to own) any
of the Products, subject only to rights granted any such tenants under the
Prior Leases.
(vii) ZONING AND SUBDIVISION. The Premises and the Shopping
Center are presently properly subdivided, in conformity with all applicable
laws and zoned so as to permit (A) the development and operation of the
Premises and the Shopping Center in accordance with the provisions of this
Lease; and (B) the Initial Use described in paragraph 18 of this Lease,
subject to obtaining any plan approvals, conditional use permits or similar
authorization that may be required. Provided, however, Tenant's failure to
obtain the necessary permits for the construction of the Improvements once
Landlord or Tenant has received the approval of the Architectural Review
Board for the City of Chico, shall not be deemed a violation of this
representation.
(viii) PROHIBITED ACTIVITIES. Subject to the rights of
tenants under the Prior Leases, Landlord shall not operate or lease (or
permit to be operated or leased) any building or tenant space in the Shopping
Center for use as:
(A) a bar, pub, nightclub, music hall or disco in which less than fifty
percent (50%) of its space or revenue is devoted to and derived from food
service;
(B) a bowling alley;
(C) a billiard or bingo parlor;
(D) a flea market;
(E) a massage parlor;
(F) a funeral home;
(G) a facility for the sale of paraphernalia for use with illicit drugs;
(H) a facility for the sale or display of pornographic material (as
determined by community standards for the area in which the Shopping Center
is located);
(I) an off-track betting parlor;
(J) a carnival, amusement park or circus;
(K) a gas station, car wash or auto repair or body shop, other than
within the building area designated as "Pad 1" on the Site Plan (the
parties specifically acknowledging that Tenant's car stereo installation
facility is not included in this prohibition (K));
(L) a facility for the sale of new or used motor vehicles, trailers or
mobile homes;
(M) a facility for any use which is illegal or dangerous, constitutes a
nuisance or is inconsistent with an integrated, community-oriented retail and
commercial shopping center;
(N) a skating rink;
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(0) an arcade, pinball or computer gameroom (provided that retail
facilities in the Shopping Center, exclusive of the Premises, may operate no
more than four (4) such electronic games incidentally to their primary
operations);
(P) service-oriented offices (such as, by way of example, medical or
employment offices, travel agencies, real estate agencies or dry cleaning
establishments) or other nonretail uses within 250 feet of the Premises,
except for offices and storage facilities incidental to a primary retail
operation;
(Q) a banquet hall, auditorium or other place of public assembly;
(R) a training or educational facility (including, without limitation,
a beauty school, barber college, reading room, school or other facility
catering primarily to students or trainees rather than customers);
(S) a theater of any kind; or
(T) a gymnasium, sport or health club or spa.
In addition to the foregoing, Landlord shall not operate, lease or
permit to be operated or leased any restaurant within any building on
Landlord's Premises, which is located within three hundred (300) feet of the
front entrance to the Building, subject, however, to the rights of tenants
under the Prior Leases. In addition, no auction, fire, or
going-out-of-business sale shall be conducted in the Shopping Center,
subject, however, to the rights of tenants under the Prior Leases.
(ix) SITE COVENANTS. With regard to the development of the
Shopping Center and the uses and operations of the Common Areas, Landlord
makes the following representations and warranties (the "Site Covenants"):
(A) BUILDING HEIGHT AND LOCATION. With the exception of
buildings in existence as of the date of this Lease, no building adjacent to
the Premises, including any parapet thereon, shall exceed thirty (30) feet in
height above finished grade (but may include a mezzanine), nor shall it be
positioned so as to project beyond the portion of the front wall of the
Building, except as shown on the Site Plan attached hereto. Except for the
kiosk shown on the Supplemental Site Plan, no outparcels, barriers,
buildings, kiosks or other structures, either temporary or permanent, shall
be located within Tenant's Preferred Area, and no building located on an
outparcel elsewhere in the Shopping Center shall exceed one story,
twenty-five (25) feet in height, including parapet, and shall be subject to
all size restrictions set forth on the attached Site Plan.
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No development shall occur within the Tenant's Preferred Area except as shown
on the Site Plan.
(B) CONSTRUCTION AND ALTERATIONS. Following the end of
the first Lease Year, subject to the rights of tenants under the Prior
Leases, no construction shall be permitted in the Shopping Center (except on
Pads "F," "G," "1" and "2" as shown on the Site Plan) during the
months of October, November and December within 250 feet of the Premises,
except for interior alterations not affecting the operations of any other
occupant of the Shopping Center and except for emergency repairs. In the
event of any substantial construction within the Shopping Center, Landlord
shall designate a construction access route, staging and parking areas
located so as to minimize interference with customers or the operations of
other occupants of the Shopping Center and shall require erection of safety
barriers as necessary and an opaque wall around the site of such construction
of a size necessary to screen such construction from ground level view,
subject to the rights of tenants under Prior Leases. With regard to any
construction on Landlord's Premises, Landlord shall be solely responsible for
any governmentally imposed impact fees, hook-up, connection, installation or
tap-in fees and other, similar construction-related charges. Except as shown
on the Site Plan, Landlord shall make no changes in the Common Areas located
in Tenant's Preferred Area (including, without limitation, changes in the
location of curbcuts, drive aisles, roadways, sidewalks or parking spaces or
reduction of the parking ratio specified in paragraph 5) without Tenant's
express written consent, which Tenant may, in its sole discretion, withhold.
With respect to changes in the Common Areas in the rest of the Shopping
Center, Tenant's prior written consent shall be required with respect to
changes which would reduce the parking ratio below that required by paragraph
5 above, which consent may be withheld in Tenant's sole discretion.
(C) PROHIBITED USES IN COMMON AREAS. Landlord covenants
that it shall not, without Tenant's express written consent, permit the
following uses or activities to occur in the Common Areas: (1) advertisements
or signs except for the pylon signs described in paragraph 8, the "for
rent" signs described in paragraph 27, traffic control signs and low rise
monument signs not in excess of six (6) feet in height within landscaped
areas or adjacent to buildings; (2) display or sale of
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merchandise except as permitted under paragraph 6 above; (3) operation of
loudspeakers or other sound electronically amplified so as to be heard in the
Common Areas; or (4) imposition of a charge for parking. Parking by employees
of Tenant, Landlord and other occupants of the Shopping Center shall be in
designated "employee parking" areas, the location of which shall be
designed by Landlord, subject, however, to the provisions of paragraph 6
above. Tenant's approval shall be required to the designation of employee
parking within Tenant's Preferred Area. The provisions of this paragraph (C)
shall be subject to the rights of tenants under the Prior Leases.
(D) EASEMENTS. Landlord shall not subdivide, parcel or
otherwise divide the Shopping Center or create any easements in the Common
Areas without Tenant's prior written consent, which consent shall not be
unreasonably withheld or delayed; provided, however, it shall not be
unreasonable for Tenant to withheld its consent if such act on the part of
Landlord would adversely affect Tenant's rights or increase Tenant's
obligations under this Lease. Tenant hereby approves Tentative Parcel Map No.
95 attached hereto as EXHIBIT "M".
(E) TRUCK ACCESS. Landlord covenants that it will not
at any time during the Term, alter the truck access to the Premises within
Tenant's Preferred Area.
(x) INTERFERENCE WITH TENANT'S RECEPTION/TRANSMISSION.
Landlord shall not install or permit to be installed by Landlord, any other
tenant or other person anywhere in the Shopping Center, any radio or other
transmitting equipment which would cause any interference with satellite,
radio or television reception or transmission in or from the Building. The
provisions of this paragraph (X) are subject to the rights of tenants under
the Prior Leases; provided, however, to the extent of any interference caused
by the tenants of said Prior Leases, Landlord agrees to exercise reasonable
efforts under its powers pursuant to the Prior Leases to eliminate such
interference.
(xi) NOTICES AFFECTING THE PREMISES. Landlord shall promptly
forward to Tenant any notice or other communication affecting the Premises
and/or the rights of Tenant hereunder received by Landlord from any owner of
property adjoining, adjacent or nearby to the Premises or the Shopping Center
or from any municipal or governmental authority, in connection with any
hearing or
37
other administrative procedure relating to the use or occupancy of the
Premises and/or the rights of Tenant hereunder.
(xii) CONSTRUCTIVE TRUST. Landlord covenants that all sums
paid by Tenant to Landlord and intended for payment by Landlord to a third
party (such as, by way of example, taxes and certain elements of CAM Charges)
are given to Landlord in trust and shall be applied only for such third-party
payments, as and when due or to reimburse Landlord for payment of same.
(xiii) UTILITY LINES/EASEMENTS. Landlord represents and
warrants that upon the delivery of the Land, all utility lines and easements
located above or below the Land will have been relocated to enable Tenant to
construct the Improvements on the location shown on the Site Plan without
encroaching on said lines and/or easements. Landlord further represents and
warrants that as of such date there shall be no third party utility lines
under the Premises.
(b) Tenant represents, warrants and covenants to Landlord that:
(i) TENANT'S AUTHORITY. Tenant is a duly constituted
corporation organized under the laws of the Commonwealth of Virginia; it has
the power to enter into this Lease and perform Tenant's obligations
hereunder; and the Vice President executing this Lease on Tenant's behalf has
the right and lawful authority to do so.
(ii) TENANT'S WARRANTY AS TO HAZARDOUS OR TOXIC MATERIALS. As
to Tenant's use and occupancy of the Premises and use of the Common Areas,
Tenant will not introduce, discharge, dump, spill or store within the
Premises or the Shopping Center any Hazardous Substances; and Tenant
indemnifies and agrees to hold Landlord harmless from and against all costs,
liability and damages as a result thereof, to the same extent that Landlord
indemnifies and holds Tenant harmless in subparagraph (a)(v) above. The
warranty and indemnity of Tenant described in this paragraph 19(b)(ii) shall
survive the termination of this Lease.
(c) In the event there is a condition at variance with the
foregoing representations, warranties and/or covenants of Landlord with
respect to the Premises or the Shopping Center which prevents or in any
material way inhibits the use of the Premises or any part thereof or the
Common Areas for their intended purposes by Tenant or Tenant's employees,
licensees, agents, suppliers, customers or invitees, or if Landlord shall
default in the observance or performance of any of the foregoing
representations and warranties, then, in addition to such other remedies as
may be accorded Tenant at law, in equity or under the terms of this Lease,
Tenant may, in addition to its other remedies under this Lease, after thirty
(30) days' notice to Landlord, obtain an injunction
38
or writ of specific performance to enforce such term or covenant, the parties
hereby acknowledging the inadequacy of Tenant's legal remedy and the irreparable
harm which would be caused to Tenant by any such variance or default. In
addition, in the event that any of the representations, warranties and covenants
set forth in this paragraph 19 are untrue or incorrect, or in the event that
Tenant suffers any loss, cost, liability or damage as a result of the breach of
any of such covenants, representations and warranties, Landlord shall defend,
indemnify and hold Tenant harmless from any of such loss, costs, liability or
damage incurred as a result of Landlord's breach hereunder.
20. ESTOPPEL CERTIFICATES. Without charge, at any time and from time to
time hereafter, within ten (10) days after receipt of written request by either
party, the other party shall certify, by written and duly executed instrument,
to any other entity ("Person") specified in such request: (a) as to whether this
Lease has been supplemented or amended, and, if so, the substance and manner of
such supplement or amendment; (b) as to the validity, force and effect of this
Lease; (c) as to the existence of any default hereunder, to the certifying
party's best knowledge; (d) as to the existence of any offsets, counterclaims,
or defenses hereto on the part of such other party, to the certifying party's
best knowledge; (e) as to the commencement and expiration dates of the Term; and
(f) as to any other matters which may reasonably be so requested. Any such
certificate may be relied upon by the party requesting it and any Person to whom
the same may be exhibited or delivered, and the contents of such certificate
shall be binding on the party executing same.
21. SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT.
(a) Within forty-five (45) days following the execution hereof,
Landlord shall deliver to Tenant with regard to and any and all Ground Leases
(as defined below) and any and all Mortgages (as defined below) encumbering the
Premises and placed thereon by Landlord, a non-disturbance and attornment
agreement in the form OF EXHIBIT "G" hereto attached, executed by the Landlord
under any such Ground Lease ("Ground Lessor") or the holder of such Mortgage
("Mortgagee"), as applicable. In addition, throughout the term, Landlord shall
deliver to Tenant a non-disturbance and attornment agreement in the form of
EXHIBIT "G" executed by Ground Lessor or Mortgagee (as applicable) with regard
to all future Ground Leases and Mortgages and with regard to all renewals,
modifications, replacements and extensions of such Ground Leases or Mortgages if
the same have priority to this Lease or if Landlord desires that Tenant
subordinate this Lease to the same. Upon Tenant's receipt of the non-
disturbance and attornment agreement Tenant shall if acceptable to Tenant
(provided Tenant may not object if such agreement is in the form of EXHIBIT "G"
attached hereto) execute same, in
39
recordable form, and, this Lease shall be subordinate to the corresponding
Ground Lease or Mortgage.
In the event of a foreclosure of any Mortgagee, Tenant shall attorn to
a Mortgagee or any purchaser at a foreclosure sale (any such foreclosure, or
deed in lieu thereof, shall be referred to as a "Foreclosure") of a Mortgage if
Tenant and such Mortgagee have entered into a non-disturbance and attornment
agreement and, if they have not, Tenant shall so attorn only if such Mortgagee
or purchaser executes a writing in favor of Tenant which states the following
(provided Tenant is not in uncured default beyond the expiration of any
applicable grace periods): (i) this Lease shall not terminate by reason of such
Foreclosure, (ii) Tenant's possession of the Premises shall not be disturbed,
(iii) the Mortgagee or purchaser upon such Foreclosure shall recognize Tenant
and all its rights hereunder and shall be obligated to fully and completely
perform Landlord's duties and obligations under the Lease arising from and after
the date of such Foreclosure, including but not limited to an obligation to make
all payments to Tenant and satisfy all construction obligations set forth in
this Lease (subject, however, to the exceptions to the liability of a Mortgagee
or any purchaser at a foreclosure sale set forth in section 5 of the attached
EXHIBIT "G"), (iv) Tenant shall not be named as a party in any action for
foreclosure, and (v) the Mortgagee, whether or not the Mortgage is foreclosed,
shall make all proceeds arising from a casualty or condemnation loss to the
Premises available to Tenant for restoration of the Improvements in accordance
with the terms hereof. In the event of termination of the Ground Lease, Tenant
shall attorn to any Ground Lessor from whom Tenant has received a non-
disturbance agreement in accordance with this paragraph 21.
Landlord shall cause any present or future Mortgagee to deliver a
non-disturbance and attornment agreement in accordance with this paragraph
21, as set forth in paragraph 37(b) below. As used in this paragraph 21, the
term "Mortgage" shall mean any mortgage, deed to secure debt, deed of trust,
trust deed or other collateral conveyance of, or lien or encumbrance against,
the Premises, and the term "Ground Lease" shall mean any ground lease or
master lease affecting the Premises.
(b) If requested by any Mortgagee, from time to time during the Term,
Tenant agrees to execute such subordination, non-disturbance and attornment
agreement, which shall include agreements as may be satisfactory to Tenant and
as are typically found in subordination, non-disturbance and attornment
agreements with institutional lenders.
22. CHANGE OF LANDLORD. Subject to paragraph 21 above, in the event
Landlord's interest in the Premises passes to a successor (the "Successor") by
sale, lease,
40
Foreclosure or in any other manner, Tenant shall be bound to the Successor
under all of the terms of this Lease for the balance of the Term with the
same force and effect as if the Successor were the landlord under the Lease,
and Tenant hereby agrees to attorn to the Successor as its Landlord, such
attornment to be effective upon written notice thereof given by Landlord to
Tenant. In the event that Landlord's interest in the Premises passes to a
Successor and such Successor is bound unto Tenant as set forth above,
Landlord shall be released from all obligations to Tenant hereunder arising
after the date Landlord's interest so passes, except that Landlord agrees to
indemnify, defend and hold Tenant harmless from and against all costs,
claims, loss, liability or damage suffered by Tenant as a result of
Landlord's transfer of its interests hereunder and/or Landlord's failure to
provide Tenant with notice of such Successor.
23. TENANT'S FINANCING. Notwithstanding any other provisions of this
Lease, Tenant may, without Landlord's consent, from time to time, secure
financing or general credit lines and grant the lenders thereof, as security
therefor, (i) a security interest in Tenant's fixtures, personalty, inventory
and equipment (collectively, "Personalty"), (ii) the right to enter the
Premises to realize upon any Personalty so pledged, and/or (iii) a collateral
assignment of Tenant's leasehold interest in the Premises, with rights of
reassignment; provided, however, such collateral assignment may be made
solely for the purpose of securing Tenant's indebtedness. Upon Tenant
providing notice of such financing to Landlord (which notice shall identify
Tenant's lender and provide an initial address to which notices to such
lender may be given by Landlord pending written notification of a change of
address), Landlord agrees to evidence its consent in writing to such security
interest and agreement and to give such lenders the same notice and
opportunity to cure any default of Tenant as is provided Tenant hereunder.
24. TENANT'S PROPERTY AND WAIVER OF LANDLORD'S LIEN. All of the
Personalty shall be and remain the personal property of Tenant. Landlord
expressly waives its statutory or common law landlord's liens (as same may be
enacted or may exist from time to time) and any and all rights granted under
any present or future laws to levy or distrain for rent (whether in arrears
or in advance) against the aforesaid property of Tenant on the Premises and
further agrees to execute any reasonable instruments evidencing such waiver,
at any time or times hereafter upon Tenant's request; provided that the
beneficiary of such instrument and/or waiver agrees in writing that its right
to remove any Personality from the Premises will expire no later than thirty
(30) days following its receipt of written notification of the termination or
expiration of this Lease and that such beneficiary agrees to repair any
damages to the Building resulting from such removal.
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25. MEMORANDUM OF LEASE: COMMENCEMENT DATE AGREEMENT. Landlord and Tenant
agree, at the other's request and at the sole expense of the requesting party,
to execute a Memorandum of Lease in recordable form, substantially similar to
that attached hereto as EXHIBIT "H", setting forth such provisions hereof as may
be required by State law. In addition, Landlord and Tenant shall execute a
Commencement Date Agreement in the form attached hereto as EXHIBIT "I", once the
Commencement Date has been established. Recording costs for either or both
documents shall be borne by Tenant. The provisions of this Lease shall control,
however, with regard to any omissions from, or provisions hereof which may be in
conflict with, the Memorandum of Lease or Commencement Date Agreement.
26. EXPIRATION OF TERM AND HOLDING OVER. All of the Personalty shall be
removable by Tenant any time prior to, or within thirty (30) days after, the
expiration or earlier termination of this Lease and shall be so removed by
Tenant at the request of Landlord within thirty (30) days after the expiration
or termination of this Lease. In the event Tenant fails to remove any or all of
its Personalty within the said thirty (30) day period, Landlord may remove such
Personalty, or the balance thereof, cause such Personalty to be placed into
storage and thereafter charge Tenant the cost of such removal and storage,
together with interest thereon at the Default Rate. Those improvements that are
integrated into the physical structure of the Building, except any of Tenant's
trade fixtures, shall not be removed and shall become the property of Landlord.
(A nonexclusive list of Tenant's removable trade fixtures is attached hereto as
EXHIBIT "D".) Tenant agrees promptly to repair any damage to the Premises
occasioned by the removal of Tenant's trade fixtures, furnishings and equipment
(except for small holes caused by nails, fasteners and the like) and to
surrender the Premises broom clean, in as good condition as on the date of
Tenant's opening for business therein, ordinary wear and tear and casualty that
Tenant is not required to repair or restore and condemnation excepted and free
and clear of liens and/or encumbrances arising out of or resulting from Tenant's
use and/or occupancy of the Premises not previously approved by Landlord in
writing. Tenant agrees that at the expiration of this Lease, it will deliver to
Landlord peaceable possession of the Premises. No holding over by Tenant nor
acceptance of Base Rent or other charges by Landlord shall operate as a renewal
or extension of the Lease without the written consent of Landlord and Tenant.
Should Tenant hold over without the consent of Landlord, this Lease shall
continue in force from month to month, subject to all of the provisions hereof
and at the monthly Base Rent Tenant had been paying during the preceding Lease
Year increased by fifty percent (50%).
42
27. "FOR RENT" SIGNS. Tenant hereby permits Landlord during the last one
hundred twenty (120) days of the Main Term or of any Option Period, as the case
may be (provided that no applicable Renewal Option has been exercised or deemed
exercised), to place one (1) "For Rent" or "For Sale" sign, not exceeding four
(4) feet by four (4) feet in size, on the parking lot of the Shopping Center.
Tenant will also allow Landlord or its agents, upon prior written notice and
accompanied by a representative of Tenant designated by Tenant, to show the
Premises, exterior and interior, to prospective purchasers or mortgagees and,
during the last one hundred twenty (120) days of the Term to prospective
tenants, during reasonable business hours by prior appointment, provided same
does not interfere with the conduct of Tenant's business.
28. FORCE MAJEURE. Except as otherwise specifically contemplated in this
Lease or in paragraph 4 of the Construction Provisions, in the event that
Landlord or Tenant shall be delayed or hindered in, or prevented from, the
performance of any act required hereunder by reason of strikes, lockouts, labor
troubles, inability to procure materials, delay by the other party, failure of
power or unavailability of utilities, riots, insurrection, war or other reason
of a like nature not the fault of such party or not within its control,
financial inability excepted, then performance of such act shall be excused for
the period of delay, and the period for the performance of any such act shall be
extended for a period equivalent to the period of such delay; provided, however,
that in connection with the construction of the Improvements, the consequences
of delays by the other party shall be governed by paragraph 4 of the
Construction Provisions.
29. EVENTS OF TENANT'S DEFAULT. Any of the following occurrences,
conditions or acts by Tenant shall constitute an "Event of Default" under this
Lease:
(a) FAILURE TO PAY RENT; BREACH. (i) Tenant's failure to make any
payment of money required by this Lease (including without limitation Base Rent,
CAM Charges or Real Estate Taxes) (subject to Tenant's right to pay same under
protest), within ten (10) days after the receipt of written notice from Landlord
to Tenant that same is overdue; or (ii) Tenant's failure to observe or perform
any other material provision of this Lease within thirty (30) days after
receipt of written notice from Landlord to Tenant specifying such default and
demanding that the same be cured; provided that, if such default cannot with due
diligence be wholly cured within such thirty (30) day period, Tenant shall have
such longer period as is reasonably necessary to cure the default, so long as
Tenant proceeds promptly to commence the cure of same within such thirty (30)
day period and diligently prosecutes the cure to completion and provided further
that in the case of an emergency, Landlord shall be required to give only such
notice as is reasonable under the circumstances.
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(b) BANKRUPTCY. Tenant's adjudication as bankrupt or insolvent, or
the appointment of a receiver, trustee in involuntary bankruptcy or other,
similar officer to take charge of any substantial part of Tenant's property,
which proceeding is not dismissed within one hundred twenty (120) days after it
is begun of if Tenant shall file or petition to have Tenant adjudged a bankrupt
or a petition for reorganization.
30. LANDLORD'S REMEDIES. After the occurrence of an Event of Default by
Tenant, Landlord shall have the right to exercise the following remedies:
(a) CONTINUE LEASE. Landlord may, at its option, continue this Lease
in full force and effect, without terminating Tenant's right to possession of
the Premises, in which event Landlord shall have the right to collect Base Rent
and other charges when due, including any sums due for any Option Period for
which a Renewal Option has been exercised. In the alternative, Landlord shall
have the right to peaceably re-enter the Premises on the terms set forth in
subparagraph (b) below, without such re-entry being deemed a termination of the
Lease or an acceptance by Landlord of a surrender thereof. Landlord shall also
have the right, at its option, from time to time, without terminating this
Lease, to relet the Premises, or any part thereof, with or without legal
process, as the agent, and for the account, of Tenant upon commercially
reasonable terms and conditions, in which event the rents received on such
reletting shall be applied (i) first to the reasonable and actual expenses of
such reletting and collection, including without limitation necessary renovation
of the Premises, reasonable and actual attorneys' fees and any reasonable and
actual real estate commissions paid, and (ii) thereafter toward payment of all
sums due or to become due Landlord hereunder. If a sufficient amount to pay
such expenses and sums shall not be realized or secured, in Landlord's exercise
of reasonable efforts to mitigate its damages (which Landlord hereby agrees to
make), then Tenant shall pay Landlord any such deficiency monthly, and Landlord
may bring an action therefor as such monthly deficiency shall arise. Landlord
shall not, in any event, be required to pay Tenant any sums received by Landlord
on a reletting of the Premises in excess of the rent provided in this Lease, but
such excess shall reduce any accrued present or future obligations of Tenant
hereunder. Landlord's re-entry and reletting of the Premises without
termination of this Lease shall not preclude Landlord from subsequently
terminating this Lease as set forth below. It is the intent of this paragraph
that Landlord have the remedy provided in California Civil Code Section 1951.4
(Landlord may continue lease in effect after Tenant's breach and abandonment and
recover rent as it becomes due, if Tenant has the right to sublet or assign
subject only to reasonable limitations).
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(b) TERMINATE LEASE. Landlord may terminate this Lease by written
notice to Tenant specifying a date therefor, which shall be no sooner than
thirty (30) days following receipt of such notice by Tenant, and this Lease
shall then terminate on the date so specified as if such date had been
originally fixed as the expiration date of the Term. In the event of such
termination, Landlord shall be entitled to recover from Tenant all of the
following:
(i) The "worth at the time of the award" (defined below) of any
obligation which has accrued prior to the date of termination;
(ii) The "worth at the time of the award" of the amount by which
the unpaid Base Rent and all other charges which would have accrued
after termination until the time of award exceeds the amount of any sums
which Landlord has (or Tenant proves that Landlord could have) received
in mitigation; and
(iii) The "worth at the time of the award" of the amount by which the
unpaid Base Rent and other charges for the balance of the Term after the
time of award exceeds the amount of any sums which Landlord has (or
Tenant proves that Landlord could have) received in mitigation.
As used in this paragraph 30(b), the term, "worth at the time of the
award", shall be computed by allowing simple interest at an accrual equal to
the Default Rate for past due obligations, and a discount rate to net
present value equal to the discount rate of the Federal Reserve Bank of San
Francisco at the time of award, plus one percent (1%) on anticipated future
obligations, on the amount of the obligations payable on the date of such
calculation. In the event this Lease shall be terminated as provided above,
by summary proceedings or otherwise, Landlord, its agents, servants or
representatives may immediately or at any time thereafter peaceably re-enter
and resume possession of the Premises and remove all persons and property
therefrom, by summary dispossession proceedings. Landlord shall never be
entitled to dispossess the Tenant of the Premises pursuant to any "lock-out"
or other nonjudicial remedy.
(c) REMEDIES ARE CUMULATIVE. The various rights and remedies reserved
to Landlord herein, are cumulative, and Landlord may pursue any and all such
rights and remedies (but no others), whether at the same time or otherwise
(to the extent not inconsistent with specific provisions of this Lease).
Notwithstanding anything herein to the contrary, Landlord expressly waives its
right to forcibly dispossess Tenant from the Premises, whether peaceably or
otherwise, without judicial process, such that Landlord shall not be entitled
to any "commercial lockout" or any other provisions of
45
applicable law which permit landlords to dispossess tenants from commercial
properties without the benefit of judicial review.
31. EVENTS OF LANDLORD'S DEFAULT; TENANT'S REMEDIES. Any of the
following occurrences, conditions or acts by Landlord shall constitute an
"Event of Default": (a) Landlord's failure to make any payments of money due
Tenant hereunder within ten (10) days after the receipt of written notice from
Tenant that same is overdue (in which event the delinquent amount shall
accrue interest at the Default Rate); or (b) Landlord's failure to perform
any nonmonetary obligation of Landlord hereunder within thirty (30) days
after receipt of written notice from Tenant to Landlord specifying such
default and demanding that the same be cured; provided that, if such default
cannot with due diligence be wholly cured within such thirty (30) day period,
Landlord shall have such longer period as may be reasonably necessary to cure
the default, so long as Landlord proceeds promptly to commence the cure of
same within such thirty (30) day period and diligently prosecutes the cure to
completion and provided further that in the case of an emergency, Tenant
shall be required to give only such notice as is reasonable under the
circumstances. Notwithstanding the foregoing, upon Landlord providing notice
of any Mortgagee to Tenant (which notice shall identify the Mortgagee and
provide an address to which notices to said Mortgagee may be given by Tenant
pending written notice of a change of address from such Mortgagee), Tenant
agrees to give such Mortgagee the same notice and opportunity to cure any
default of Landlord as is provided Landlord hereunder.
Upon the occurrence of an Event of Default by Landlord, at Tenant's
option, in addition to any and all other remedies which it may have at law
and/or in equity, and without its actions being deemed an election of
remedies or a cure of Landlord's default, Tenant may do all or any of the
following: (i) pay or perform such obligations and offset Tenant's reasonable
and actual cost of performance, including any and all transaction costs and
attorneys' fees, plus interest at the Default Rate, against the Base Rent,
CAM Charges and any and all other amounts and charges due Landlord hereunder
or (ii) in the event such Event of Default by Landlord materially interferes
with the conduct and operation of Tenant's business from the Premises and has
not been cured by Landlord's Mortgagee within the time permitted for cure by
such Mortgagee under this paragraph 31, terminate this Lease and sue for
damages, including interest, transaction costs and attorneys' fees as
specified in subsection (i) above. If Landlord fails to pay Tenant the
Tenant Improvement Allowance in a timely manner, Tenant shall be entitled to
the rights and remedies set forth in the Construction Provisions. As to a
breach of the warranties and representations contained in paragraph 19, Tenant
shall be entitled to the remedies
46
provided therein, in addition to those remedies provided herein. The various
rights and remedies reserved to Tenant herein are cumulative, and Tenant may
pursue any and all rights and remedies, whether at the same time or otherwise.
32. WAIVER. If either Landlord or Tenant fails to insist on the strict
observance by the other of any provisions of this Lease, neither shall
thereby be precluded from enforcing nor be held to have waived any of the
obligations, past, present or future, of this Lease. Either party may accept
late payment or performance by the other without waiving any Event of Default
which may then have accrued. Landlord's acceptance of Base Rent or other
payments from Tenant while Tenant is in default under this Lease shall not be
construed as a waiver of such default.
33. COMPLIANCE WITH APPLICABLE LAWS. During the Term, Landlord and
Tenant shall comply with all lawful requirements of the local, county and
state health boards, police and fire departments, municipal and state
authorities and any other governmental authorities with jurisdiction over the
Shopping Center, and of the board of fire underwriters, respecting Tenant's
use and occupancy of the Improvements or Landlord's operation of the Shopping
Center, as applicable. In the event that Tenant, within thirty (30) prior
days' written notice (except in the case of an emergency, in which event only
such notice as is reasonable under the circumstances shall be required) from
Landlord or any such authority ordering performance of any such work which
Tenant is required to perform in order for Tenant and/or the Improvements to
remain in, or come into, compliance with any such requirement, fails to
perform or diligently commence performance of same with reasonable
promptness, Landlord may perform said work and collect the reasonable cost
theref plus interest at the Default Rate from Tenant with the next istallment
or installments of Base Rent. In the event that Landlord, within thirty (30)
prior days' written notice (except in the case of an emergency, in which
event only such notice as is reasonable under the circumstances shall be
required) from Tenant or any such authority ordering performance of any such
work which Landlord is required to perform in order for Landlord and/or
Landlord's Premises to remain in, or come into, compliance with any such
requirement, fails to perform or diligently commence performance of same with
reasonable promptness, Tenant may perform said work and deduct the reasonable
cost thereof plus interest at the Default Rate from Landlord with the next
installment or installments of Base Rent.
34. NOTICES. Any notice permitted or required to be given pursuant to
this Lease shall be deemed to have been given three (3) business days after
mailing a written notice by certified mail, postage prepaid, return receipt
requested, or one (1) business
47
day after sending by Federal Express or other comparable overnight express
courier service (with proof of receipt available), addressed to the parties
as follows:
If to Tenant: CIRCUIT CITY STORES, INC.
9950 Mayland Drive
Richmond, Virginia 23233
Attention: Corporate Secretary
with a copy to: CIRCUIT CITY STORES, INC.
9950 Mayland Drive
Richlmond, Virginia 23233
Attention: Vice President of Real Estate
If to Landlord: Chico Crossroads Center, Ltd.,
c/o Commercial Management and Development
4811 Chippendale Drive, Suite 307
Sacramento, California 95841
with a copy to: Mr. Jaime Sohacheski
8665 Wilshire Boulevard, Suite 200
Beverly Hills, California 92011
and
Mr. Robert A. Flaxman
2402 Michelson Avenue, #265
Irvine, California 92715
or to such other addressees as any party hereto shall from time to time give
notice to the other party in accordance with this paragraph.
35. BROKERS. Landlord and Tenant each covenant that they have not
dealt with any real estate broker or finder with respect to this Lease,
except for The Equity Group, Inc. which represented Tenant and Lowen Real
Estate which represented Landlord (collectively, the "Brokers"). Lowen Real
Estate shall be paid a commission by Landlord pursuant to a separate written
agreement between Lowen Real Estate and Landlord. Lowen Real Estate shall
pay fifty percent (50%) of said commission to The Equity Group, Inc.,
pursuant to separate agreement between Lowen Real Estate and The Equity
Group, Inc. The Equity Group, Inc. shall be paid one-half of its share of
the commission within fifteen (15) days following the satisfaction or waiver
by Landlord and Tenant, as applicable, of the contingencies set forth in
paragraph 37 hereof, and the remainder shall be paid within fifteen (15) days
following the earlier of (i) Tenant's opening for business or (ii) the
Commencement Date. Should any portion of the commission due The Equity
Group, Inc. not be delivered within fifteen (15) days following written
notice to Landlord, the same shall constitute a Landlord Event of
48
Default hereunder (provided, however, Tenant may not terminate this Lease due
to such default) and said amount shall accrue interest at the Default Rate
until delivered in full to The Equity Group, Inc. Except for the foregoing,
each party shall hold the other party harmless from all damages, claims,
liabilities or expenses, including reasonable and actual attorneys' fees
(through all levels of proceedings), resulting from any claims that may
asserted against the other party by any real estate broker or finder with
whom the indemnifying party either has or is purported to have dealt.
36. MISCELLANEOUS.
(a) HEADINGS AND GENDER. All paragraph headings, titles or
captions contained in this Lease are for convenience only and shall not be
deemed a part of this Lease and shall not in any way limit or amplify the
terms and provisions of this Lease. The masculine, feminine or neuter gender
and the singular or plural number shall be deemed to include the others
whenever the context so requires or indicates.
(b) CONSTRUCTION. The parties hereto agree that all the
provisions hereof are to be construed as covenants and agreements as
though the words importing such covenants and agreements were used in each
separate paragraph hereof.
(c) WAIVER OF JURY TRIAL. In the event of any court action
arising out of this Lease, each party hereby expressly waives its right to
trial by jury.
(d) RELATIONSHIP OF LANDLORD-TENANT. Nothing contained in this
Lease shall be deemed or construed by the parties hereto or by any third
person to create the relationship of principal and agent, partnership, joint
venture, or any other association between Landlord and Tenant other than the
landlord-tenant relationship described herein.
(e) ENTIRE AGREEMENT; MERGER. This Lease, including all exhibits
hereto (which are hereby incorporated herein by reference for all purposes),
contains the full and final agreement of every kind and nature whatsoever
between the parties hereto concerning the subject matter of this Lease, and
all preliminary negotiations and agreements of whatsoever kind or nature
between Landlord and Tenant are merged herein. This Lease cannot be changed
or modified in any manner other than by a written amendment or modification
executed by Landlord and Tenant.
(f) ATTORNEYS' FEES. In the event either party shall be required
to commence or defend any action or proceeding against any other party by
reason of any breach or claimed breach of any provision of this Lease, to
commence or defend any action or proceeding in any way connected with this
Lease or to seek a judicial declaration of rights under this Lease, the party
prevailing in such action or proceeding shall be entitled to recover from or
to be reimbursed by the other party for the prevailing party's reasonable and
actual attorneys' fees and costs through all levels of proceedings.
49
(g) PARTIAL INVALIDITY. If any provision of this Lease or the
application thereof to any person or circumstance shall be deemed invalid or
unenforceable, the remainder of this Lease and its application to other
persons or circumstances shall not be affected by such partial invalidity but
shall be enforced to the fullest extent permitted by law as though such
invalid or unenforceable provision was never a part hereof.
(h) CONSENTS. Any consent or approval granted by either party
hereunder shall be deemed a consent only as to the matter on which such consent
was requested and shall not waive the consenting party's right to give or
withhold consent to any subsequent matter.
(i) HOLIDAYS. If the day on which rent or any other payment due
hereunder is payable falls on a Sunday or on a legal holiday on which the
United States mails are not delivered, it shall be payable on the following
business day.
(j) APPLICABLE LAW. This Lease shall be construed in accordance
with the laws of the State, and the parties agree that jurisdiction for all
actions hereunder shall lie therein.
(k) SUCCESSORS AND ASSIGNS. All rights, obligations and
liabilities herein given to or imposed upon any party hereto shall extend to
the permitted successors and assigns of such party.
(l) COUNTERPARTS. This Lease may be executed in one or more
identical counterparts, and as so executed by all parties hereto shall
constitute a single instrument for purposes of the effectiveness of this Lease.
(m) TRADEMARKS AND TRADE NAMES. All trademarks, trade names,
service marks, signs and all other marks of identification used by Tenant in
its business shall at all times remain the exclusive property of Tenant, and
Landlord shall have no right, interest in, or title to any of Tenant's
trademarks, trade names, service marks, signs or other marks of identification
unless and to the extent Tenant fails to remove same within thirty (30) days of
the expiration or termination of this Lease, in which case Landlord shall have
the right to remove said items and store or destroy same at Tenant's sole cost
and expense, provided Landlord first notifies Tenant of its intent to exercise
such right.
(n) LATE FEE. If Tenant shall fail to pay, within ten (10) days
of when due and payable, any rent or any additional rent, then Tenant shall pay
to Landlord as a late charge and in consideration of the additional costs
incurred by Landlord and the additional record keeping required to be performed
by Landlord, a minimum sum of Two Hundred Fifty Dollars ($250.00), or a sum
equal to one percent (1%) of the amount due, whichever is greater; provided,
however, during the first twelve (12) months following
50
the Commencement Date, no late charge shall be due by Tenant until the second
said violation in such twelve month period. In addition, any amount due
Landlord that is not paid within ten (10) days of when due, other than
interest, shall bear interest from the date such amount becomes due until it
is paid to Landlord at a rate of interest equal to the Default Rate.
(o) LIABILITY OF LANDLORD. Tenant agrees that, except to the extent
of the negligence or willful misconduct of Landlord or its agents or employees,
Landlord shall not be liable for injury or damage which may be sustained by
the person, goods, wares, merchandise or property of Tenant, its employees,
invitees or customers, or by any other person in or about the Premises caused
by or resulting from fire, steam, electricity, gas, water or rain which may
leak or flow from or into any part of the Premises, or from the breakage,
leakage, obstruction or other defects of the pipes, sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures of the same,
whether the said damage or injury results from conditions arising upon the
Premises or from other sources. The parties acknowledge and agree that
Landlord shall not be liable for any damages arising from any act or neglect
of any other tenant of the Shopping Center.
(p) NO PERSONAL LIABILITY. The obligations of Landlord under this
Lease do not constitute personal obligations of Landlord, and Tenant shall
look solely to the real estate described on EXHIBIT "A-1" and to the rent,
profits and other income generated therefrom (exclusive of any rent, profits
or other income collected by Landlord prior to the entry of the judgment
against Landlord) and to no other assets of Landlord for satisfaction of any
liability in respect of this Lease and will not seek recourse against Landlord
or the individual general partners of a general partnership which is Landlord
herein, nor against any of their personal assets for such satisfaction.
(q) LANDLORD'S SELF-HELP. Should Tenant fail to pay and discharge
(or post satisfactory bond), when due and payable, any tax or assessment,
payable by Tenant under this Lease, or any lien or claim for labor or materials
employed or used in, or any claim for damages arising out of the repair,
alteration, maintenance and use of the Premises, or should Tenant fail to
procure and maintain or to evidence the procurement and maintenance of any
insurance to be procured and maintained by Tenant under this Lease (self-
insurance excepted), or should Tenant fail to fully perform any covenant or
agreement to be performed by Tenant, as provided for in this Lease, after
thirty (30) days' written notice from Landlord, or commence to cause within
said thirty (30) day period and be diligently pursuing a cure of such default,
then Landlord may, at its option and without waiving or releasing Tenant from
any of Tenant's obligations hereunder pay
51
any such tax, assessment, lien, claim, or charge, or settlement or discharge
any action therefor or satisfy any judgment thereon or obtain any such
insurance. Sums incurred or paid by Landlord in connection therewith,
together with interest at the Default Rate on such costs, expenses and sums
from the date incurred or paid by Landlord, shall be deemed to be additional
rental hereunder and shall be paid by Tenant with and at the same time as the
next installment of rent hereunder, and any default therein shall constitute
a breach of the covenants and conditions of this Lease.
(r) DESIGNATION OF USE/TENANCY. The designation of any type of use
or tenancy with respect to any building site or the designation of any building
site on the attached Site Plan is not intended as a covenant or representation
that such building sites shall be construed or devoted to such a use or
tenancy.
(s) PROHIBITIONS ON RENT INCREASES. In the event that at any
time any governmental law, rule or regulation prohibits or postpones, in whole
or in part, any increase in the Base Rent or other sums payable by Tenant
hereunder, then, and in either of such events, such increase shall be made to
the maximum extent permissible by law at the time provided in this Lease,
and/or at any time or times thereafter such increase, or any portion thereof,
may lawfully be made and any such increase, the payment of which has been
prohibited or postponed, shall thereafter become due and payable to the maximum
extent at the earliest time or times permitted by law.
(t) SUBORDINATION TO DECLARATION. Tenant agrees to subordinate this
Lease of record to any Declaration of Covenants, Conditions and Restrictions
and Grant of Easements ("Declaration"), or Common Area Maintenance Agreement
("CAMA") recorded by Landlord encumbering the Shopping Center, provided that
the said Declaration and/or CAMA, as the case may be, is consistent with this
Lease and does not adversely affect Tenant's rights or increase Tenant's
obligations under this Lease.
(u) PARCEL MAP. Tenant acknowledges that Landlord may attempt to
record a parcel or final map subdividing the Shopping Center into lots or
parcels and agrees to join in executing any certificates or other documents
required in connection therewith, so long as said map does not adversely affect
Tenant's rights or increase Tenant's obligations under this Lease; provided
that this subparagraph (h) shall not be construed as obligating Tenant to incur
any expense or to agree to incur any expense in connection therewith other than
costs incurred in reviewing same.
37. EFFECTIVENESS OF LEASE; TENANT'S RIGHT TO TERMINATE. Notwithstanding
the execution of this Lease or any provision hereof to the contrary, the
parties hereto agree that the effectiveness of this Lease is expressly
conditioned upon the complete satisfaction (or waiver) of each and all of the
following conditions:
52
(a) Landlord's delivery of subordination, non-disturbance and
attornment agreements, executed by any and all existing mortgagees in a form
satisfactory to Tenant, within forty-five (45) days of execution hereof.
Tenant hereby approves such an agreement in the form attached hereto as
EXHIBIT "G".
(b) Landlord's delivery of the Land by the date and in the
condition specified in the Construction Provisions.
(c) Tenant's obtaining the approval of the Architectural Review
Board of the City of Chico for Tenant's Improvements; provided, however, if
the approval is subject to certain conditions, the requirement of this
paragraph 37(c) shall only be satisfied if the conditions are acceptable to
Tenant. Tenant shall notify Landlord within five (5) business days following
Tenant's receipt of the conditional approval whether such conditions are
acceptable to Tenant. Tenant's failure to respond within said five day
period shall conclusively be deemed an acknowledgment of Tenant's disapproval
of such condition(s).
(d) Landlord's representations, warranties and covenants,
including but not limited to those set forth in paragraph 19 herein, being true
and accurate in all material respects as of the date of delivery of the Land
(as defined in the Construction Provisions).
(e) Tenant's obtaining satisfactory assurances within forty-five
(45) days of the date of execution hereof that all necessary approvals and
consents from other tenants in the Shopping Center may be obtained. Landlord's
written certification that this condition has been satisfied shall constitute
satisfactory assurances. Landlord agrees to use reasonable efforts to obtain
such approvals or consents promptly following the execution of this Lease.
(f) Tenant's obtaining satisfactory written assurances that Landlord
has obtained financing adequate to fund the Tenant Improvement Allowance within
forty-five (45) days of the date of execution hereof.
(g) No later than thirty (30) days prior to delivery of the Land
to Tenant, Landlord delivering to Tenant a draft Development Schedule prepared
by Landlord; provided, however, Landlord's failure to timely deliver such
Schedule shall not provide Tenant with a right to terminate the Lease or delay
its opening for business.
(h) Landlord's delivery to Tenant within forty-five (45) days
from Tenant's execution of this Lease of all termination, relocation and/or
other agreements necessary to accommodate Tenant's construction and occupancy
as described herein. However, should Landlord, after exercising commercially
reasonable efforts to enforce all remedies available at law and in equity, be
unable to enforce the terms of any
53
aforesaid agreement, the same shall constitute a force majeure event, and
Tenant shall have the right to terminate this Lease as provided in paragraph
4(a) of EXHIBIT "C", in which event Landlord shall have no liability to
Tenant resulting from Landlord's inability to deliver the Land as required
hereunder, including any reimbursement of Tenant's costs.
The existence of the foregoing conditions is solely for the
benefit of Tenant, and Tenant may waive any such condition at its sole
discretion by delivering to Landlord a written notice signed by Tenant which
specifically states the condition(s) being waived by Tenant.
Notwithstanding any other provision in this Lease to the contrary,
in the event any of the foregoing conditions shall not be met, satisfied or
waived upon the latest date set forth herein for said condition, the parties
hereto expressly agree that Tenant shall have the right to terminate this
Lease in its sole and absolute discretion at anytime prior to the
satisfaction or waiver of any such condition by delivering to Landlord a
written notice signed by Tenant which states that Tenant is terminating
this Lease on account of the failure of one or more of the foregoing
conditions. In the event of any such termination, the rights and obligations
of the parties shall be of no further force and effect and the parties shall
have no further liability one to the other (except that the indemnifications
set forth in paragraphs 14(i), 19(a)(v) and 19(b)(ii) hereof shall survive
such termination) upon Tenant's delivery of said notice to Landlord.
Notwithstanding the execution of this Lease or any provision hereof
to the contrary, the parties hereto agree that the effectiveness of this Lease
is expressly conditioned upon the complete satisfaction (or waiver by Landlord)
of each and all of the following conditions:
(a) The satisfaction (as opposed to waiver by Tenant) of the
conditions in subparagraphs (a), (c), (e) and (h) above in this paragraph 37
within the time provided above for the satisfaction of each such condition;
provided Landlord agrees to use reasonable efforts to satisfy said conditions.
(b) That the Construction Term of this Lease commence by May 6,
1995, subject, however, to extension by Tenant by reason of any failure by
Landlord to perform Landlord's obligations under this Lease.
The existence of the foregoing conditions is solely for the
benefit of Landlord, and Landlord may waive any such condition in its sole
discretion by delivering to Tenant a written notice signed by Landlord which
specifically states that the condition(s) is being waived by Landlord.
Notwithstanding any other provision of this Lease to the contrary, in the
event any of the foregoing conditions shall not be met,
54
satisfied or waived, the parties hereto expressly agree that Landlord shall
have the right to terminate this Lease in its sole and absolute discretion at
any time prior to the satisfaction or waiver of any such condition by
delivering to Tenant thirty (30) days' prior written notice signed by
Landlord which states that Landlord is terminating this Lease on account of
the failure of one or more of the foregoing conditions. In the event of any
such termination, the rights and obligations of the parties shall be the same
as in the event of a termination by Tenant pursuant to the foregoing
provisions of this paragraph 37.
38. CONFIDENTIALITY. The parties hereto, including, but not limited
to, their heirs, successors, assigns and legal representatives, agree that this
Lease may not be recorded and that all such parties hereby agree to use their
best reasonable efforts to preserve the confidentiality of this transaction.
This confidentiality agreement extends to any developers, bankers, lawyers,
accountants, employees, agents or any other persons acting on behalf of the
parties hereto and to prospective lenders and transferees of the parties. The
parties hereto agree to use their best reasonable efforts to avoid discussing
with, or disclosing to, any third parties (except those parties listed above)
any of the terms, conditions or particulars in connection with this
transaction. It is specifically agreed by way of illustration, but not by
limitation, that the covenant of confidentiality set forth herein shall not be
breached if such information is disclosed in connection with or due to any
governmental law or ordinance, but this covenant of confidentiality shall be
breached if Landlord, or any of Landlord's developers, bankers, accountants,
agents, lenders, lawyers or other similar parties, discloses the content of, or
delivers a copy of this Lease to, any third party without the express written
consent of all parties to this Lease. Any breach of this confidentiality
agreement shall constitute an Event of Default
55
under the terms and provisions of this Lease but shall not permit termination
of this Lease.
WITNESS the following signatures and seals:
LANDLORD
--------
CHICO CROSSROADS CENTER, LTD.,
a California limited partnership
ATTEST (WITNESS):
By: JMLB, Inc.,
a California corporation
/s/ [illegible]
- -------------------------
/s/ [illegible] By: /s/ Jamie Sohacheski
- ------------------------- -------------------------------
Jamie Sohacheski
Its: President
TENANT
------
CIRCUIT CITY STORES, INC.,
a Virginia corporation
ATTEST:
/s/ [illegible] By: /s/ Benjamin B. Cummings, Jr.
- -------------------------- ---------------------------------------
Its: Assistant Secretary Name: Benjamin B. Cummings, Jr.
-------------------------------------
Title: V.P.
------------------------------------
56
EXHIBIT "A"
SITE PLAN
(See Attached)
1
[SITE PLAN MAP]
EXHIBIT "A-1"
LEGAL DESCRIPTION
Lots 4 and 9 as shown on that certain map entitled, "CHICO INDUSTRIAL
SUBDIVISION", which map was filed in the office of the Recorder of the County
of Butte, State of California, on July 6, 1965 in Book 34 of Maps, at Pages
7, 8 and 9.
EXCEPTING THEREFROM that portion deeded to the State of California, by Deed
recorded September 27, 1974 in Book 1941 of Official Records, at Page 219,
records of Butte County, California.
ALSO EXCEPTING all minerals, oil, gas and other hydrocarbon substances below
a depth of 500 feet and all geothermal rights below a depth of 250 feet of
said real property without the right of surface entry, as reserved in Deed
recorded April 16, 1980 in Book 2506 of Official Records, Page 661, records
of Butte County, California.
ALSO EXCEPTING THEREFROM those portions deeded to the City of Chico, by deed
recorded April 28, 1980 in Book 2510 of Official Records, at Page 195, and
recorded May 15, 1980 in Book 2515 of Official Records, at Page 276; and
recorded October 27, 1988, under Recorder's Serial No. 88-36683, records of
Butte County, California.
The above described lots comprise one legal parcel as disclosed by
Certificate of Merger No. 36, recorded August 22, 1988, under Recorder's
Serial No. 88-27710, records of Butte County, California.
1
EXHIBIT "B"
INDEX OF DEFINITIONS
TERM PARAGRAPH WHERE DEFINED
Assessment(s) Exh. "C", para. 1(a)
Base Rent 4(a)
Building 2
CAM Charges 7(b)
CAM Year 7(c)
Certificate 15(a)(i)
City 1
Commencement Date 4
Common Area Easement 6(d)
Common Area Maintenance 7(a)
Common Areas 7(a)
Concept Plans Exh. "C", para. 2(b)
Construction Term 3
CPI-U 4(a)(ii)
Date of Taking 16(a)
Default Rate 9(b)
Delivery of the Land Exh. "C", para. 1(b)
Escrow Agent 15(a)(i)
Event of Default (Landlord) 31
Event of Default (Tenant) 29
Foreclosure 21(a)
Grading Plans Exh. "C", para. 1(b)
Ground Lessor 21(a)
Hazardous Substances Exh. "C", para. 1(a)
Improvements 2
Land 1
Landlord Introduction
Landlord's Premises 1
Landlord Work Exh. "C", para. 1(d)
Lease Year 3
Main Term 3
1
TERM PARAGRAPH WHERE DEFINED
Modified Proctor Exh. "C", para. 2(a)
Mortgage 21(a)
Mortgagee 21(a)
Option Periods 3
Other Improvements 2
Permissible Building Areas Exhibit "A"
Permitted Encumbrances Exhibit "F"
Person 20
Personalty 23
Plans and Specifications Exh. "C", para. 2(b)
Premises 1
Real Estate Taxes 9(a)
Renewal Option 3
Shopping Center 1
Site Covenants 19(a)(ix)
Site Work Exh. "C", para. 1(b)
Site Plan 1
Staging Area 6(a)
State 1
Substantial Completion Exh. "C", para. 2(e)
Substantially All of the Premises 16(a)
Successor 22
Taking 16(a)
Tax Parcel 9(b)
Tenant Introduction
Tenant Improvement Allowance Exh. "C", para. 3
Tenant's Preferred Area Exhibit "A"
Tenant's Pro Rata Share 7(c)
Term 3
Transfer Exh. "C", para. 3
Work 15(a)(i)
Worth at the time of the award 30(b)
2
[Chico Crossroads Shopping Center
Chico, CA]
EXHIBIT "C"
CONSTRUCTION PROVISIONS
THESE CONSTRUCTION PROVISIONS (herein so called) are, hereby made a
part of the Lease between Landlord and Tenant to which these Construction
Provisions are attached as EXHIBIT "C". All defined terms shall have the
meanings attributed to them in the Lease unless otherwise specifically
defined in these Construction Provisions.
1. LANDLORD'S DELIVERY OF THE LAND;OTHER LANDLORD WORK.
All of the work set forth in subparagraphs (a), (b) and (c) below is,
collectively, the "Landlord Work":
(a) HAZARDOUS SUBSTANCES. Landlord shall deliver the
Land to Tenant free of any pollution or contamination from toxic or hazardous
substances, asbestos or any other chemicals or substances in amounts which
exceed standards for public health or welfare as established and regulated by
any local governmental authority, the State or the United States Government
(herein collectively referred to as "Hazardous Substances"). Landlord hereby
grants Tenant and its agent access to the Premises and Shopping Center to
enable Tenant to conduct such soil and environmental tests as its deems
necessary. If Tenant's tests disclose any such pollution or contamination to
be removed by Landlord, Tenant must notify Landlord of such disclosed
contamination as soon as possible following any necessary confirmation of
said discovery, and Landlord may terminate this Lease within thirty (30) days
following notice of such results if the costs of such removal will exceed
$25,000 or if the reasonable time required to complete such removal will
exceed sixty (60) days.
Landlord has heretofore provided Tenant with copies of Landlord's
environmental site assessment(s) (the "Assessment(s)") of the Premises; a
list of the Assessments provided to Tenant is attached hereto as EXHIBIT "N".
(b) SITE WORK. Landlord, at its sole cost and expense,
shall: (i) cause the Land to be free and clear of any known or unknown
(which, but for Landlord's failure to discover same, should be removed prior
to delivery of the Land to Tenant) obstructions, foundations, footings,
utilities, easements, improvements and tenancies; (ii) complete grading of
the Land and the "Construction Area," as defined below, in accordance with
the "Standards for Grading Work" attached hereto as ATTACHMENT "1", and with
the final plans prepared by Mike Byrd of Rolls, Anderson and Rolls (the
"Grading Plans"), which Grading Plans are subject to Tenant's written
approval, which
1
approval shall be given or denied within ten (10) business days following
Tenant's receipt of such Grading Plans (any disapproval shall be in writing
and in sufficient detail to allow Landlord to make appropriate changes);
(iii) completion of Tenant's building pad strictly in accordance with
Tenant's geotechnical report; (iv) use reasonable efforts to obtain approvals
for all on and off-site permits required for any work to be performed by
Landlord which are a prerequisite for issuance of Tenant's building permit;
(v) complete the Staging Area in accordance with the Grading Plans; and (vi)
use reasonable efforts to obtain Architectural Review Board approval (which
includes approval of the Site Plan and Tenant's elevations) from governmental
authorities having jurisdiction over the Shopping Center, permitting Tenant's
construction of the Premises (subject to issuance of Tenant's building
permit). All of the work described in (i) through (vi) above is,
collectively, the "Site Work". No changes shall be made to any of the Site
Work, including but not limited to any plans and specifications therefor,
without Tenant's prior written consent. The Site Work shall be performed in
accordance with the construction schedule attached hereto as ATTACHMENT "3"
(sometimes referred to herein as the "Construction Schedule"). Landlord
specifically covenants and agrees that any problems or delays it encounters
in grading the Premises in satisfaction of the Site Work requirements set
forth above in connection with the condition of the soils, including
environmental or hazardous waste issues, subsidence sinking, surface waters,
subsurface waters, unforeseen site conditions or the like shall be its sole
responsibility, shall cause a force majeure delay unless Jaime Sohocheski or
Robert A. Flaxman have actual knowledge of such condition as of the execution
hereof, and in no event shall the cost associated with such problems or
conditions be passed on to Tenant in any manner.
The term "Construction Area" means the Land, the Staging Area and the
portion of the area between the face of curb for the Building as shown on the
Supplemental Site Plan and the truck access driveway (at least twenty-five
(25) feet in width) at the rear of the Shopping Center. The Construction
Area is depicted on the "Supplemental Site Plan" attached hereto as EXHIBIT
"J". As a portion of the Site Work that will be completed prior to the
delivery of the Land, Landlord shall demolish the existing building
designated "C" on the Site Plan between the buildings indicated as "B" and
"D", demolish pad building "3" on the Site Plan, and complete the concrete
work for the parking spaces and landscape areas along the southeast wall of
the building indicated as "B" on the Supplemental Site Plan and remove the
paving from the Construction Area.
If the items of Site Work to be performed on the Land are completed earlier
than forty-five (45) days prior to Tenant's scheduled commencement of
construction of the
2
Improvements (as provided below), the Land shall be overbuilt and sloped to
drain and, within such forty-five (45) day period, shall be regraded and
recompacted.
Subject to force majeure, Landlord covenants and agrees to complete, at
its sole cost and expense, each item of the Site Work and to assure that
temporary utilities are available (at no cost to Tenant other than any
deposits and use charges) within five (5) feet of the building pad as
designated on the Supplemental Site Plan attached as EXHIBIT "J" and
temporary telephone service to the Premises and the Staging Area, in
accordance with the dates established therefor in ATTACHMENT "3", to the end
that promptly upon completion of such requirements (collectively "delivery of
the Land"), Tenant shall be able, subject to issuance of its building permit
and matters within Tenant's control, to commence construction of the
Improvements.
Landlord acknowledges that Tenant's ability to obtain a building permit
for its construction may be delayed due to the failure by Landlord to obtain
necessary approvals or permits or to pay necessary fees for its construction
and development of the Shopping Center. Landlord agrees that delivery of the
Land shall not be deemed to have occurred until all Landlord's approvals and
permits for the "Landlord Work," as defined below, shall have been obtained
and all such fees, including but not limited to impact fees and assessments,
(excluding assessment bonds of record not yet due and payable as well as fees
associated with the issuance of a building permit for the Improvements for
which Tenant is specifically responsible hereunder) shall have been paid, if
and to the extent that such approvals, permits and fees for Landlord's Work
shall be prerequisites to the issuance of Tenant's building permit. Landlord
agrees to keep Tenant advised in writing on a monthly basis as to Landlord's
progress in completing the Site Work. Landlord represents that to the best of
its knowledge, all of the requirements for paving, curbing, stripping,
lighting, landscaping, sidewalks, fire hydrants, and gutters for adequate
drainage as well as any other work required by the City of Chico and any
other duly constituted public authority have been satisfied as the same
relate to the existing Shopping Center as improved. Furthermore, to the
extent additional Site Work, including any required utility relocations, is
required as a condition of Tenant obtaining any or all of the required
approvals from the City of Chico, Landlord shall perform such Work at
Landlord's sole cost and expense, provided the cost thereof does not exceed
$100,000, exclusive of site development fees to be paid by Landlord. Upon
the delivery of the Land, Landlord shall certify to Tenant that all elements
of the Site Work have been completed in the form of the Site Work Certificate
attached hereto as ATTACHMENT "4". In the event any permit fees to be paid
by Landlord cover any portion of the construction and/or use of the
Improvements, the cost of such fees, shall be equitably
3
allocated between Landlord and Tenant based on the construction costs for the
work to be performed by each party covered by such fees. In such event,
Tenant shall reimburse Landlord its proportionate share of any such fees
prior to commencing the construction of the Improvements, provided that
Tenant has received a written request from Landlord for such reimbursement,
together with reasonable supportive evidence of the amount and payment of
such fees and of the allocation of such fees to Tenant.
Should the Site Work require minor adjustments in order to be in
accordance with ATTACHMENTS "1" and/or "2", Tenant may direct its contractor
to make such adjustments, the total cost of which shall be reimbursed by
Landlord to Tenant upon demand in a sum not to exceed Five Thousand Dollars
($5,000.00). Such required adjustments shall not be construed as delaying the
"delivery of the Land" provided that Tenant directs its contractor to make
such adjustments or Landlord makes such adjustments promptly following
receipt of written request from Tenant to make such adjustments and in all
events such adjustments do not interfere with Tenant's construction of the
Improvements. Tenant agrees to notify Landlord in writing of any defects or
required adjustments in the Site Work reasonably discoverable from an
inspection of the Construction Area within ten (10) days of Tenant's receipt
of the Site Work Certificate and within ten (10) days of the discovery of any
other defects and/or required adjustments in the Site Work.
(c) PAVING, LIGHTING, UTILITIES, LANDSCAPING AND DRAINAGE.
Landlord, at its sole cost and expense, and in accordance with ATTACHMENT
"3", shall cause a contractor licensed in the State to (i) assure the
availability (at no cost to Tenant, except deposits and use charges) of the
temporary utilities, as described in the "Utilities Specifications" attached
hereto as ATTACHMENT "5" (ii) complete the construction and installation
within five (5) feet of the Building, of permanent telephone service and
permanent utilities service, including but not limited to gas, electric
(provided, however, Landlord shall only be required to provide conduit and
pull rope from Landlord's main transformer to Tenant's designated service
point as shown on the Supplemental Site Plan), domestic water and fire water
(in the capacities set forth in ATTACHMENT "5"), each at Tenant's required
entry points shown on the Supplemental Site Plan; (iii) complete the
integration of the Site Work and the Improvements into the existing Shopping
Center storm water drainage system at Tenant's required location shown on the
Supplemental Site Plan; and (iv) complete the construction and installation
of paving and curbing for parking areas (including sidewalk curb in front of
the Building), vehicular access and service roads, and driveways within the
Construction Area, in accordance with the "Paving Specifications" attached
hereto as ATTACHMENT "7" (provided that Tenant shall be responsible for
concrete work where its Building and/or the sidewalk in front of its
4
Building connect with existing Common Area curbs, which work shall include
the installation of concrete landscaping planters and associated
landscaping). In connection therewith, upon thirty (30) days notice Tenant,
Landlord shall commence to pave, according to the paving specifications
attached to the Lease, all area within the Construction Area and adjacent
thereto, up to the footprint of Tenant's Improvements, to the extent not
already improved with curbs, sidewalks or landscaping. Such paving shall be
completed, at Landlord's sole cost and expense, within fifteen (15) business
days following said thirty (30) day notice period. Landlord represents that
to the best of its knowledge, subject to any required increases to meet
Tenant's standards set forth in ATTACHMENT "5", all utilities, sewer and
water required for the Premises are in placed serving the building partially
located upon the Land that will be demolished in part by Landlord.
(d) LANDLORD WORK. All of the work described to be performed by
Landlord in this paragraph 1 is collectively referred to as the "Landlord
Work". All Landlord Work shall be performed in accordance with all applicable
laws and this Lease, in a good and workmanlike manner, as appropriate by
engineers, surveyors, architects and consultants, who are bondable, licensed
in the State and of good reputation. Landlord's general contractor shall be
experienced in shopping center development and in coordinating construction
schedules with major anchors and national retailers. In the event that
Landlord defaults at any time in completion of any component of the Landlord
Work and fails to correct such default such that an Event of Default occurs,
Tenant shall have the right, but not the obligation, to perform at Landlord's
sole cost and expense, all or any part of Landlord's Work. Tenant shall
exercise this right by providing Landlord with written notice thereof, which
notice shall reasonably detail those portions of the Landlord Work which
Tenant elects to complete. Tenant may exercise the rights set forth in this
paragraph 1(d) from time to time so long as Tenant provides Landlord notice
specified herein (i) within a reasonable amount of time prior to the date
upon which Landlord would otherwise commence that portion of the Landlord
Work, or (ii) at such other time where it is feasible for Tenant to take over
that portion of the Landlord Work from Landlord. In the event and to the
extent that Tenant exercises its right hereunder, Landlord agrees to
cooperate in good faith and provide Tenant with reasonable assistance so that
Tenant can complete said portions of the Landlord Work. Landlord agrees to
reimburse Tenant for any and all costs incurred by Tenant in connection with
any portion of the Landlord Work which Tenant is in the process of completing
within fifteen (15) days after receipt of written request from Tenant, which
request shall be reasonably supported by invoices and/or written description
of the
5
Landlord Work performed. In the event that the Landlord does not timely
reimburse Tenant as hereinabove contemplated, Tenant shall be entitled to
deduct the costs of such Landlord Work from rentals and other payments due
under the Lease, together with interest at the Default Rate from the date of
expenditure by Tenant until paid or otherwise deducted in full.
2. TENANT IMPROVEMENTS.
(a) BUILDING CONSTRUCTION. Upon completion of all requirements
therefor, Landlord shall give Tenant written notice (which shall include any
required certifications, including but not limited to those required by
ATTACHMENT "1") of delivery of the Land in the form of ATTACHMENT "4". Tenant
shall promptly notify Landlord within ten (10) days of Tenant's receipt of
such written notice from Landlord if any such requirement has not ben met to
Tenant's reasonable satisfaction. Upon completion of any such previously
unmet requirements (excluding minor corrections and/or additions the
completion of which by Landlord will not interfere with Tenant's
construction, which work shall be promptly completed by Landlord upon notice
from Tenant to complete such work), Tenant shall promptly commence and pursue
to completion with due diligence the construction of the Improvements. The
construction work on the Improvements shall be performed by a duly licensed
contractor chosen by Tenant with a bonding capacity sufficient for Tenant's
work and approved by Landlord's Mortgagee (Landlord shall be responsible for
obtaining such approval, which approval shall not be unreasonably withheld or
delayed), shall be done in a good and workmanlike manner, in compliance with
all applicable laws and in substantial accordance with the "Plans and
Specifications" (defined below). Furthermore, when constructing the
Improvements, Tenant shall (i) provide fencing and security around the
Construction Area; (ii) conduct its work (including the delivery of
construction materials) so as to minimize the interference with the business
of other occupants of the Shopping Center; (iii) require its workers and
other agents to park in the Construction Area or those areas designated on
the Supplemental Site Plan, as discussed below; (iv) store all tools,
materials and construction vehicles within the Construction Area; and (v)
keep the Construction Area reasonably neat and clean (based on reasonable
construction standards) and the area outside the Construction Area as neat
and clean as the remainder of the Shopping Center. In the event Tenant's
construction personnel, delivery vehicles or construction vehicles are parked
within the Shopping Center in an area not designated for such parking,
Landlord may arrange for such vehicles to be towed at its owner's expense. In
connection herewith, Landlord has designated for Tenant's exclusive use
during the entire Construction Term certain parking spaces as shown on the
Supplemental Site Plan; said
6
spaces shall be labeled "Circuit City Construction Personnel Parking Only,
Violators Will Be Towed At Owner's Expense." To the extent of any violation
with respect to Tenant's exclusive parking during the Construction Term,
Landlord shall, at the request of Tenant, make immediate arrangement for the
towing of cars. Provided that the Land is delivered on or before the date
set forth on ATTACHMENT "3", Tenant covenants and agrees to use reasonable
efforts and due diligence to achieve "Substantial Completion" (as defined
below) on or before the date which is seven (7) months thereafter.
(b) PLANS AND SPECIFICATIONS. Tenant shall prepare and furnish to
Landlord for its approval, not to be unreasonably withheld, conditioned or
delayed, complete architectural drawings and specifications and building
elevations (the "Plans and Specifications") for the construction of the
Building and Other Improvements, incorporating therein the items specified
and shown in the "Concept Plans" attached hereto as ATTACHMENT "9" within
thirty (30) days following the approval of same by the Architectural Review
Board of the City of Chico. Landlord agrees that it will approve the Plans
and Specifications, so long as they are materially consistent with the
Concept Plans and the requirements of this Lease and delivered to Landlord's
architect concurrently therewith, within ten (10) business days after receipt
thereof. Furthermore, provided Tenant's Plans and Specifications are approved
by the City of Chico, Landlord shall not require Tenant to alter its building
elevations, standard entrance tower, customer pickup area or the use of
Alucobond and red trim on the front exterior of the Building. If the Plans
and Specifications are not disapproved by Landlord within fifteen (15) days
of delivery thereof to Landlord, same shall constitute a Landlord Delay and
extended the Commencement Date, day for day based on the Landlord Delay. The
Plans and Specifications shall not be substantially changed by Tenant without
the prior written consent of the Landlord, which consent shall not be
unreasonably withheld, conditioned or delayed. Any such changes, however,
shall comply with the restrictions in this Lease, the Concept Plans and with
applicable building codes and other governmental requirements.
Notwithstanding anything contained in this Lease to the contrary, in no
event, may the Plans and Specifications, as originally prepared or as
modified, provide for a building containing greater or less than
twenty-three thousand fourteen (23,014) square feet (provided, however Tenant
shall be provided a differential of [plus or minus] one percent (1%)), to the
nearest square foot, nor for a building with a canopy or facia extending
higher than twenty (20) feet above the ground or deeper than twelve (12) feet
from the storefront line nor for a building parapet extending higher than
thirty-four (34) feet above the ground. In the event that any such change in
the Plans and Specifications requested by Tenant requires modifications to
the Landlord Work, Tenant shall reimburse Landlord
7
for all additional costs incurred by Landlord as a result of such change
including, without limitation, architect's and engineer's fees, within
fifteen (15) days of a receipt of a request for such reimbursement, together
with reasonably supportive evidence of the amount and payment of such
additional costs and shall extend the required completion dates for Landlord
Work as set forth in the Construction Schedule to the extent necessary to
account for any such requested modifications.
(c) PERMITS. Tenant, at its sole cost and expense, shall obtain or
cause to be obtained those certain building permits, licenses, other
governmental approvals and temporary and permanent certificates of occupancy
which may be required for the lawful construction and occupancy of the
Premises as a retail shopping facility in accordance with the Plans and
Specifications. Landlord agrees to assist and cooperate fully with Tenant in
obtaining such permits, licenses, approvals and certificates. Landlord shall
be responsible for any other permits, licenses, approvals and certificates.
Landlord shall be responsible for any other permits necessary for the
development of the Shopping Center.
(d) LANDLORD INSPECTIONS. During the course of construction of the
Improvements, Landlord may, at its own risk and in cooperation with Tenant's
contractor, enter upon the Land for purposes of inspecting the work, provided
that such inspections shall not interfere with Tenant's construction.
(e) SUBSTANTIAL COMPLETION. Substantial completion of the
Improvements ("Substantial Completion") shall be deemed to occur when a
certificate of occupancy, whether temporary and subject to minor items to be
completed, or permanent, as the case may be, has been issued by the
applicable governmental authority, and Tenant has opened its store facility
for business with the public for the Initial Use. The foregoing shall not be
deemed to relieve Tenant of its responsibility to complete the Improvements
in accordance with the Plans and Specifications and to obtain a permanent
certificate of occupancy.
3. COSTS. Within thirty (30) days following Substantial Completion and
Tenant's furnishing to Landlord (i) the certificates of insurance required
under paragraph 14 of the Lease, (ii) those items set forth on EXHIBIT "L"
attached hereto (iii) a bill of sale conveying title to the Improvements to
Landlord, and (iv) evidence of the expiration of all mechanic's lien periods
applicable to the construction of the Improvements, other than the lien
period of Tenant's general contractor (provided, however, in lieu of waiting
for the expiration of the lien period, Tenant may provide, Landlord's
Mortgagee with an endorsement from Preferred Land Title & Escrow Company (or
another title insurance company) insuring priority of the lien of the
Mortgagee's deed of trust against mechanic's liens attributable to Tenant's
construction of the Improvements), Landlord shall pay to Tenant a "Tenant
Improvement Allowance" in an amount equal to One
8
Million Four Hundred Thousand and No/100 Dollars ($1,430,000.00), payable by
wire transfer of funds by Landlord or Landlord's Mortgagee to Tenant's
account ("Payment Date"). From the Commencement Date until the Payment Date
Tenant shall pay in lieu of the Base Rent set forth in paragraph 4(a) of the
Lease, a ground rent in the amount of $7,262.00 per month (hereinafter
"Interim Ground Rent"). Furthermore, should Tenant fail to deliver items (i)
through (iv) set forth in this paragraph 3, which items are the prerequisite
to Landlord's obligation to wire Tenant the Tenant Improvement Allowance,
within one (1) year following Substantial Completion, Tenant shall pay in
lieu of the Base Rent set forth in paragraph 4(a) of the Lease, a ground rent
of $87,140.00 per year for the remainder of the Lease. If the ground floor
gross leasable area of the Building is increased (not to exceed 23,244 square
feet) pursuant to a change in Tenant's Plans and Specifications, which Plans
and Specifications currently show the ground floor gross leasable area of the
Building as 23,014 square feet, the Tenant Improvement Allowance shall
likewise be proportionately increased, yet in not event shall the Tenant
Improvement Allowance be decreased. If Landlord fails to pay the Tenant
Improvement Allowance in full on or before the Payment Date, Landlord shall
be in default hereunder, no Base Rent, Interim Ground Rent, Taxes or CAM
Charges shall be due or owing to Landlord until the same is paid to Tenant,
and interest shall accrue on the unpaid Tenant Improvement Allowance at the
Default Rate commencing on the date following the Payment Date until the date
of payment of the Tenant Improvement Allowance; provided, however, that if
Landlord has not tendered payment of the Tenant Improvement Allowance by that
date which is one (1) year from the Payment Date (the "Payment Date
Anniversary"), then (i) such date shall become the Commencement Date; (ii)
Base Rent shall be reduced to ground rent equal to Seventy-Five Thousand and
No/100 Dollars ($75,000.00) per annum during the first year following the
Payment Date Anniversary and Fifty Thousand and No/100 Dollars ($50,000.00)
per annum thereafter during the Term of the Lease; and (iii) this Lease shall
be converted to a ground lease, with ownership of the Improvements remaining
with Tenant, and Landlord's and any Mortgagees' names being removed as
additional insured or mortgagees on any casualty insurance described in
paragraph 14(a) of the Lease. Ownership of the Improvements, however, shall
rest in Landlord upon the expiration of earlier termination of this Lease.
Notwithstanding anything to the contrary, in the event Landlord delivers to
Tenant the entire Tenant Improvement Allowance, inclusive of interest
thereon, within six (6) months following the Payment Date, Tenant shall, for
the period from the Payment Date until the date such payment is actually
received, pay to Landlord rent of $4,878.33 per month, subject to proration
for any partial month, plus Tenant's share of CAM Charges
9
and Real Estate Taxes as determined pursuant to the Lease. Such payment shall
be due with Tenant's first payment of Base Rent, provided Landlord has
provided Tenant notice of Tenant's Share of CAM Charges and Real Estate
Taxes. In the event Landlord fails to provide Tenant notice of Tenant's Share
of CAM Charges and Real Estate Taxes at such time, within thirty (30) days
following the delivery of such notice Tenant shall pay such charges, so long
as such notice is provided within one hundred twenty (120) days of the date
the Tenant Improvement Allowance payment is made.
4. CONSTRUCTION DELAYS.
(a) DELAYS BY LANDLORD. In the event, subject to force majeure,
Landlord shall fail to complete the Site Work and accomplish delivery of the
Land in the condition specified by the date set forth on ATTACHMENT "3"
hereto, Landlord agrees that it shall reimburse Tenant for its fixed and
ascertainable costs incurred as a result thereof in the exercise of all
reasonable efforts to open for business by the date which is seven (7) months
following the date Landlord should have delivered the Land and completed the
Site Work. Such costs shall be limited to Tenant's out-of-pocket expenses of
construction overtime, acceleration charges and bonuses paid to Tenant's
contractors or subcontractors, charges for the scheduling of construction
crews on days on which work cannot be performed due to the delays by Landlord
and construction period interest charges actually incurred to the extent that
such charges exceed those which would have accrued without such delay.
In the event, subject to force majeure, Landlord shall fail to
accomplish delivery of the Land by the date which is forty-five (45) days
following the date Landlord should have delivered the Land, or to complete
any element of the Landlord Work by the completion date established therefor
in ATTACHMENT "3", Tenant, at its option and upon five (5) days' prior
written notice to Landlord, which notice may be given prior to or at any time
after the applicable date for performance, may in addition to any other
rights and remedies set forth herein, enter the Shopping Center and perform
any task required for delivery of the Land or, as applicable, any element of
the Landlord Work which has not been timely completed, and Landlord shall
reimburse Tenant for its reasonable and actual costs thereof, including
interest on such costs at the Default Rate. If such costs are not reimbursed
to Tenant prior to the Commencement Date, Tenant may offset such amounts
against Base Rent and CAM Charges otherwise due until such costs and accrued
interest are reimbursed or offset in full.
If by reason of default and regardless of force majeure, Landlord shall
fail to complete delivery of the Land to Tenant by the date which is one
hundred twenty (120) days from the date set forth on ATTACHMENT "3", Tenant
shall be entitled to terminate this
10
Lease at any time prior to such delivery and receive from Landlord promptly
thereafter a sum equal to the actual out-of-pocket and substantiated
third-party legal, architectural and engineering costs incurred by Tenant to
the date of termination, not to exceed One Hundred Thousand and No/100
Dollars ($100,000.00). In addition to any other rights and remedies set forth
herein, if the Landlord fails to timely deliver the Land or complete any
element of the Site Work as required herein regardless of force majeure and
as a result thereof Tenant would be opening for business in the Premises
during the period of November 15 through February 28 of any year, Tenant may
elect to delay opening of its store facility until after such period, during
which time Tenant shall pay no Base Rent, Interim Base Rent, Taxes or CAM
Charges. In such event, Landlord shall deliver the Land and complete the Site
Work on the date required by Tenant, and Landlord shall pay to Tenant on
demand an amount equal to all additional, direct out-of-pocket costs incurred
by Tenant in the development of its store facility, including, but not
limited to, costs of materials and all engineering, architectural and legal
fees, which were a direct result of Landlord's delays hereunder, not to
exceed One Hundred Thousand and No/100 Dollars ($100,000.00).
(b) TENANT'S INABILITY TO OBTAIN PERMITS. Notwithstanding
anything to the contrary, Tenant, if after exercising its best efforts to
obtain the permits necessary for the construction of the Improvements is
unable to do so within forty-five (45) days following the "delivery of the
Land," Tenant shall, as of the Commencement Date (which may be delayed until
the next March 1 following delivery of the Land as provided in paragraph 4(a)
above), pay in lieu of the Base Rent required under paragraph 4(a) of the
Lease a rent of $7,262.00 per month; provided, however, once Tenant
ultimately obtains the required permits, the Base Rent set forth in paragraph
4(a) of the Lease shall be applicable upon the earlier of (i) 180 days
following Tenant's receipt of the permits, subject to extension to the next
March 1 following delivery of the Land or (ii) Tenant's opening for business
in the Premises.
(c) MISCELLANEOUS. Notwithstanding the foregoing, a delay by
any party in exercising its cure rights or other remedies hereunder shall not
be deemed an event of force majeure for purposes of extending the date(s)
established for performance by the party whose actions or omissions gave rise
to such cure rights or remedies. All sums owing to Tenant under paragraph 1
hereof and/or subparagraph (a) above shall, to the extent applicable, be
added to the Tenant Improvement Allowance and paid simultaneously therewith;
and, if not so paid, Tenant shall be entitled to offset all such costs, plus
interest at the Default Rate, against Base Rent and CAM Charges otherwise due
hereunder. All sums owing to Landlord by Tenant under this Lease shall, to the
11
extent applicable and except for Base Rent and CAM Charges, be deducted from
the Tenant Improvement Allowance.
Notwithstanding anything contained herein to the contrary, Landlord
covenants that it shall complete its construction and delivery obligations in
accordance with the "Completion Dates" set forth in the Construction
Schedule. In the event that the Landlord fails to complete its construction
and delivery obligations in accordance with such Completion Dates, subject to
force majeure unless specifically indicated otherwise, Tenant may, at its
sole election, exercise such remedies as are set forth in this EXHIBIT "C"
and the Lease.
5. ATTACHMENTS.
"1" Standards for Grading Work
"2" Intentionally Omitted
"3" Construction Schedule
"4" Site Work Certification
"5" Utilities Specifications
"6" Intentionally Omitted
"7" Paving Specifications
"8" Shopping Center Lighting Specifications
"9" Concept Plans
12
ATTACHMENT "1"
Standards for Grading Work
1. The Land and the Construction Area shall be graded in accordance
with the following:
(a) The Grading Plan shall show spot elevations in accordance
with standard engineering practice and these spot elevations shall be shown
with the existing (shown as a dashed line) and final (shown as a solid line)
elevations. Whether existing or proposed, all buildings, improvements, roads
and highways adjacent to or within 100 feet of the Construction Area, shall
be shown in their true locations.
(b) The Building will be accessible by grade level parking only.
Steps and stairs are not permitted.
(c) Asphalt paving areas will be graded to avoid ponding water
with slopes no less than 1.5% and no more than 4.0%
(d) Surface drainage swales will not be allowed without prior
approval of Tenant. Such swales must have a grade of not less than 0.5% and
no more than 3.5% and shall be constructed of concrete.
(e) The cut and fill on the Construction Area should be
balanced, if practical. All fill material must meet the recommendations set
forth in that certain Geotechnical Investigation Report prepared by LRA
Engineering dated December 17, 1993 ("Geotechnical Report") and sources for
acquisition of fill material, as well as locations for cut material, must be
identified.
(f) No retaining walls or embankments causing breaks in grade
shall be permitted unless specifically approved by Tenant.
2. "Tenant's Pad Area" shall be defined as the area extending five
(5) feet beyond the Building walls and truck dock and ramp area, or to the
back of curbing around the Building, whichever is further. The Site Work
shall comply with the following additional requirements:
(a) Landlord shall be responsible for preparing the Tenant's Pad
Area subgrades to within plus or minus one-tenth of a foot as set by Tenant's
architect, which information shall be provided to Landlord on or before
February 15, 1994. Tenant's subgrades are typically 8"-10" below finish floor
elevation. Landlord will complete compaction in accordance with the
Geotechnical Report and appropriate engineering standards and building code
requirements, so as to enable Tenant to perform construction work necessary
to provide completed Improvements in accordance with the "Plans and
1
[MAP OF CIRCUIT CITY SITE PLAN]
Specifications" (defined in the Construction Provisions), with standard
footings and without the necessity of pilings or spread footings or other
extraordinary foundation work. Tenant's minimum slab thickness and under slab
fill will be established in accordance with the Geotechnical Report. All
compacted areas of the site shall be verified by an independent professional
soils engineering test laboratory and a certificate from such independent
laboratory indicating compliance with the Geotechnical Report shall be
furnished to Tenant upon completion of the Site Work.
(b) Tenant's Pad Area soil shall have a minimum bearing capacity
of 2,500 pounds per square foot. Earth stabilization and/or replacement shall
be performed by Landlord as necessary to meet this minimum requirement.
(c) During the preparation of Tenant's Pad Area, Landlord shall
at its expense have an independent professional soils engineering test
laboratory monitor and certify the preparation of Tenant's Pad Area in
accordance with the Geotechnical Report. The greater of three in-place
compaction tests per work day or one in-place compaction test per 5,000
square feet of pad area must be completed.
(d) On or before the delivery of the Land, Landlord shall
provide Tenant with:
(i) An independent soils engineer's written certification
that all pad work was completed in accordance with the Grading Plans. This
report shall include the results of all compaction and other tests performed
during the pad preparation phase and any tests performed prior to the date of
such certification.
(ii) A surveyor's written elevation certification stating
that Tenant's Pad Area is at the prescribed elevation within the stated
tolerance of plus or minus one-tenth of a foot. This certification shall be
based on elevation shots taken on a 50-foot-grid minimum including pad
perimeter and corners.
(e) Landscaping slopes and berms shall be set by Landlord to
preserve the integrity of the slopes as determined by an independent soils
engineer. However, in no case may the slope of a landscaping berm exceed 3 to
1 in turf areas, or 2 to 1 in ground cover and shrub areas.
(f) All material, including native and fill shall comply with
the standards established in the Geotechnical Report.
(g) The Grading Plans shall not be materially changed by
Landlord without the prior consent of Tenant, which consent shall not be
unreasonably withheld or delayed.
(h) All outlots or future building areas shall be rough graded
and maintained in a clean and aesthetically acceptable condition.
2
ATTACHMENT "2"
(Intentionally Omitted)
1
ATTACHMENT "3"
Construction Schedule
LANDLORD'S TASK COMPLETION DATE
--------------- ---------------
1. Construction of the Staging Area. 5/6/94 (yet in no event
later than 6/15/94)
2. Completion of Site Work 5/6/94 (yet in no event
later than 6/15/94)
3. Installation of temporary utilities. 5/6/94 (yet in no event
later than 6/15/94)
4. Landlord's delivery of the Land to Tenant. 5/6/94 (yet in no event
later than 6/15/94)
5. Architectural Review Board Approval. 3/15/94
6. Construction and installation of permanent 7/15/94
utilities including permanent telephone
service.
7. Integration of Improvements with Shopping 7/15/94
Center storm water drainage system.
8. Construction and installation of paving 15 business days following
(including heavy-duty paving) and curbing. notice from Tenant
1
Attachment "4"
--------------
Site Work Certification
To: Circuit City Stores
9950 Mayland Drive
Richmond, Virginia 23233
Attention: Vice President-Real Estate
Re: Circuit City Store/[Location]-Lease Agreement dated January __, 1994
Ladies and Gentlemen:
The undersigned, as Landlord under the Lease has caused "delivery of the
Land" to occur, and accordingly, completion of the Site Work, all in
accordance with the terms of the Lease. Specifically the undersigned hereby
certifies that: (i) the grading of the Land and the Construction Area has
occurred in accordance with the Standards for Grading Work, attached as
ATTACHMENT "1" to the Lease, and Tenant's building pad has been prepared in
accordance with that certain Geotechnical Investigation Report prepared by
LRA Engineering dated December 17, 1993; (ii) the Staging Area has been
completed and (iii) an all-weather construction access road to the Land no
less than 24 feet width has been prepared and is ready for your use.
All conditions precedent to issuance of your building permit which are
part of Landlord's Work have been satisfied by the Landlord, and we certify
that all elements of the Site Work and delivery of the Land have been
satisfied in accordance with the Lease.
[LANDLORD]
1
Attachment "5"
--------------
Utilities Specifications
Landlord will assure that the following temporary utilities shall be
available at no cost to Tenant (except any deposits or use charges) to within
five (5) feet of the Premises no later than the date for completion of such
temporary utilities set forth in the Construction Schedule:
water (2" line, with sufficient pressure that pumping is not
necessary) and electric power (200 amps, 1-phase, 4-wire,
120 volts, with weatherproof and rainproof fused disconnect
switch) for use by Tenant in its construction of the Improvements.
Landlord will provide the following permanent utilities, at the heights
specified below, to within five (5) feet of the Premises at Tenant's entry
points identified on the Supplemental Site Plan no later than the date for
completion of such permanent utilities set forth in the Construction Schedule:
gas (if available), telephone service, permanent electricity
(adequate for 600-amp panel, 3-phase, 277/480 volt) (service
only - conduti and pull rope), sanitary sewer (4" line), domestic
water (2" line), fire protection water (8" line, 50 pounds per
square inch residual pressure, 2000 gallons per minute or at least
sufficient capacity to service Tenant's sprinkler system without
the need for any water pump, as approved by Tenant's fire
protection consultant).
1
Attachment "6"
--------------
[Intentionally Omitted]
1
Attachment "7"
--------------
Paving Specifications
1. With respect to the Construction Area.
(a) Pavement design shall be based on the Geotechnical Report.
(b) All pavement design shall be subject to review and approval by
Tenant, and shall conform to the recommendations of the Geotechnical Report.
(c) Consideration must be given to heavier use in main drives and
service area.
2. With respect to sidewalks and curbs:
(a) Landlord shall provide and install all curbs and sidewalks
including perimeter curbs and sidewalks, with the exception of the sidewalk
within the face of curb and around the perimeter of Tenant's Building.
(b) All sidewalks and curbs to be constructed by Landlord shall be
a minimum of four (4) inches thick, with a rough non-skid texture (as
approved by the Landlord's architect with respect to the Common Area), over a
suitable granular base. Salt finish is not acceptable.
3. With respect to reconstruction or new construction:
(a) Entrance and access roads and other areas as required for
suitable drainage, shall have six (6) inch curbs with 18-inch gutters;
however, next to sidewalks and buildings when drainage is not a factor a
straight curb six (6) inches (without gutters) above the finished paving
shall be permitted. Parking lot islands and landscape enclosures shall be
vertical barrier-type curbs and all integral-type curbs and gutters and
vertical barrier-type curbs shall be concrete. Extruded asphalt or concrete
curbing may only be used where appropriate outside the Construction Area.
(b) Curbs at all non-parking areas shall be painted red with an
exterior flat red latex paint, receive a trowel finish and be designated "No
Parking" by a contrasting paint color.
1
Attachment "8"
--------------
Shopping Center Lighting Specifications
Minimum design standards for lighting of the Shopping Center to be
completed as part of Landlord's Work are as follows:
1. The Developer shall prepare and submit plans showing the location
and height of all light poles, fixtures, type of fixture shielding
(if any), circuiting and details of the complete lighting
arrangement and equipment.
2. Illumination as measured (in foot candles) at pavement shall be
equal to the greater of (i) that required under applicable code or
(ii) that which exists in the Shopping Center as of the execution of
the Lease.
3. Twenty-five percent (25%) of the overall lighting shall be
designated as security lighting (i.e., remains on from dusk to
dawn). The security lighting layout and pattern shall be subject to
Tenant's approval.
4. Selection of fixture types shall be subject to Tenant's review and
approval prior to design and circuiting.
5. Landlord shall install a seven-day time switch to control all
parking area lighting wired to a common house panel. All Security
lighting shall be placed on photo-cell switching.
6. The control of parking area lights shall be accessible to Tenant's
local store management due to late-night and holiday sales.
7. Where possible, lighting shall be provided by building mounted
fixtures.
1
Attachment "9"
--------------
CONCEPT PLANS
[See Attached]
1
[GRAPHIC]
[GRAPHIC]
[GRAPHIC]
EXHIBIT "D"
-----------
NON-EXCLUSIVE LIST OF REMOVABLE TRADE FIXTURES
STORE FIXTURES
ALL STORAGE RACKING
ALL SECURITY SYSTEM ITEMS
TELEPHONES AND PAGING SYSTEMS
COMPUTER SYSTEM
OFFICE FURNITURE AND TRASH RECEPTACLES
BATTERY CHARGER
TRASH COMPACTOR
SIGNS (INTERIOR/EXTERIOR)
ANTENNA SYSTEM
ELECTRONIC SWITCHING
AIR COMPRESSOR (ROADSHOP)
SAFE
CONVEYOR
MEDECO CYLINDER LOCKS (5)
REFRIGERATOR AND MICROWAVE USED BY EMPLOYEES
TACK BOARDS
WATER COOLER
FIRE EXTINGUISHERS
AUDIO ROOM FIXTURES AND SWITCHGEAR
PICTURES
WAREHOUSE AND MATERIAL HANDLING EQUIPMENT (MOVABLE LADDERS,
DOLLIES, ETC.)
TRACK LIGHTS (CANS ONLY, NOT TRACKS)
1
EXHIBIT "E"
-----------
SIGN PLANS AND CRITERIA
(See Attached)
1
[GRAPHIC]
[GRAPHIC]
[GRAPHIC]
[GRAPHIC]
[GRAPHIC]
[GRAPHIC]
EXHIBIT "F"
-----------
PERMITTED ENCUMBRANCES
A. Other Shopping Center occupants' exclusive uses and restrictive covenants
in Prior Leases prohibit the following uses of the Premises:
1. Any non-retail purpose (the following shall not be deemed non-retail:
barber shops, insurance agencies, travel agencies, medical, dental or
optometric facilities, beauty salons, banks, small loan offices, real estate
offices and gasoline service stations, and the following if incidental to
retailing: other offices, storage, storage, repairs and alteration
facilities).
2. A business selling home improvement items including, not but limited
to, lumber, building materials and/or garden supplies, except that other
stores may sell such items as an incidental part of their business. For the
purposes of this paragraph, such sales shall be "incidental" if they do not
exceed fifteen percent (15%) of the sales in such business.
3. A retail grocery, meat or produce store of any nature, provided that
this restriction shall not prohibit a specialty bake shop or a delicatessen.
4. Entertainment purposes, such as: cinema, theater, skating rink,
bowling alley, bar, tavern, discotheque, dance hall, amusement gallery, pool
hall, health club, gym, massage parlor or off-track betting facility.
5. For the renting, leasing, sale of any motor vehicle including, but
not limited to: operation of any dealership relating to motorcycles,
automobiles, trucks and recreational vehicles, including trailers.
6. A restaurant (fast-food or sit-down) within two hundred (200) feet
of any wall of the building designated "B" on the Site Plan, provided that
this provision shall not apply to an ice cream store, yogurt store or donut
shop. In addition, no restaurant shall be located within two hundred (200)
feet from the front entrance of the store on the building area designated "D"
on the Site Plan, nor shall any office, other than a travel agency or real
estate firm, neither being larger than two thousand (2,000) square feet, be
located within two hundred fifty (250) feet of said front entrance. In
addition, no training or educational facilities shall be located within two
hundred (200) feet of said front entrance.
7. A business, trade or profession which requires or has a license or
permit to conduct a pharmacy, or which employs or is required to employ a
registered or licensed pharmacist or the conduct of any store, business,
trade or profession which is called, labeled, named or is commonly known or
referred to as a "drug store," "pharmacy," or "apothecary."
8. A sit-down family-oriented buffet style restaurant.
9. A restaurant.
10. So long as an office supply store has not ceased to be operating on
the premises currently designated as Building F and G on the Site Plan for a
continuous period in excess of six (6) months (excepting any periods during
which remodeling or
1
restoration work is being conducted with due diligence) the Premises may not
be operated as a store having as its primary business the sale of office
supplies, office equipment, office furniture and/or other office products and
related goods. This restriction, however, shall not be deemed to prohibit
Tenant, its subtenants, transferees, successors or assigns from using the
Premises in whole or in part, for the operation of a standard Circuit City
store or other similar store for the sale of consumer electronics, automotive
electronic products, household appliances and related goods, the warehousing
and servicing of same and/or sale and installation of car stereo, audio and
telephone systems and similar electronics equipment.
11. A theater, auditorium, meeting hall or other place of assemble; any
sports or entertainment facility within four hundred (400) feet of the
building designated "F" and "G" on the Site Plan; automobile sales or
repairs; bowling alley, pool hall or skating rink, bar serving alcoholic
beverages (except as an incident to a full kitchen restaurant operation);
funeral parlor; massage parlor; any type of karate, gymnasium, health club or
physical fitness facility within four hundred (400) feet of the building
designated "F" and "G" on the Site Plan; car wash; off-track betting
establishment; amusement or game room within two hundred (200) feet of the
building designated "F" and "G" on the Site Plan (excluding electronic games
incidental to the operation of a restaurant); a so-called "flea market" or
other operation for the sale of used goods (excluding antique stores), night
club, discotheque or dance hall; hotel or other lodging facilities; offices
(except incidental to a retail operation); school (including, without
limitation, trade school or class sessions of any nature whatsoever) within
two hundred (200) feet of said building designated "F" and "G"; gun range;
any business or use which emits offensive odors, fumes, dust or vapor, or
constitutes a public or private nuisance, or emits loud noise or sounds which
are objectionable, or creates a fire, explosive or other hazard;
manufacturing facility; warehousing (except incidental to a retail
operation) adult book store or similar store selling or exhibiting
pornographic materials as a substantial part of its business and which
prohibits the admission of minors; or a restaurant within two hundred (200)
feet of said building designated "F" and "G".
12. Any use other than a retail use.
13. Office use except (i) offices incidental to retail uses and (ii)
offices providing services to the general public and customarily found in
similar shopping centers, e.g., banking, finance services, real estate or
securities brokerage services, financial or tax-planning services,
accounting, insurance or legal services, optical, medical or dental services
or travel agencies.
B. The following uses of the Premises shall be prohibited throughout the
Lease Term:
1. The uses prohibited under the Prior Leases and set forth in
Paragraphs 1-13 of Section A above, notwithstanding the expiration or
termination or amendment of any Prior Lease.
2. The sale of pet food, supplies, fish, birds and small animals and
grooming and veterinary services and related goods and services.
3. As an auditorium, meeting hall, school or other place of public
assembly, gymnasium or dance hall; for bingo or similar games of chance, or
as a massage parlor, video game arcade, bowling alley, skating rink, car wash
or car repair or car rental
2
agency, night club or adult book or adult video store which prohibits the
admission of minors to the store.
C. Permitted Title Exceptions.
1. The exceptions set forth in the Preliminary Title Report for the
Shopping Center attached hereto as EXHIBIT "F-1".
NOTWITHSTANDING ANYTHING CONTAINED IN THIS EXHIBIT "F" TO THE CONTRARY,
NOTHING CONTAINED HEREIN SHALL BE CONSTRUED TO PROHIBIT THE EXERCISE OF THE
RIGHTS AND PRIVILEGES GRANTED TO THE TENANT UNDER THE LEASE, INCLUDING BUT
NOT LIMITED TO THE TENANT'S EXCLUSIVE USE RIGHTS SET FORTH IN PARAGRAPH
19(a)(vi) OF THE LEASE.
3
EXHIBIT "F-1"
-------------
PERMITTED TITLE ENCUMBRANCES
(See Attached)
4
ORDER NO. C-57287 - TO
Page 2
S C H E D U L E B
At the date hereof, exceptions to coverage in addition to the printed
exceptions and exclusions in said policy form would be:
1. General and special taxes for the fiscal year 1993-94
a. First Install : $26,066.90, paid
Second Install : $20,066.90, Due February 1, 1994, Delinquent
April 11, 1994
Code Area : 002-275
Land : $1,009,188.00
Improvements : $3,089,988.00
Exemption : $0.00
Parcel No. : 005-560-014
b. First Install : $17,389.47, paid
Second Install : $17,389.47, Due February 1, 1994, Delinquent
April 11, 1994
Code Area : 002-275
Land : $567,018.00
Improvements : $2,731,050.00
Exemption : $0.00
Parcel No. : 005-560-016
c. First Install : $10,093.57, paid
Second Install : $10,093.57, Due February 1, 1994, Delinquent
April 11, 1994
Code Area : 002-275
Land : $396,392.00
Improvements : $1,517,944.00
Exemption : $0.00
Parcel No. : 005-560-017
d. First Install : $70,793.21, paid
Second Install : $70,793.21, Due February 1, 1994, Delinquent
April 11, 1994
Code Area : 002-275
Land : $3,666,370.00
Improvements : $1,663,334.00
Exemption : $0.00
Parcel No. : 005-560-019
2. According to our Records, a Supplemental Tax has generated on this
property by reason of an issuance of a permit, Assessment No.
995-055-010, Butte County Tax Collectors Office cannot furnish us
amounts at this time.
(Continued)
Order No: C-57287 Schedule B- Continued
Page 3
3. The lien of supplemental taxes, assessed as a result of transfer of
interest and/or new construction, said supplemental taxes being
assessed pursuant to Chapter 3.5 commencing with Section 75 of the
California Revenue and Taxation Code.
NOTE: All Supplemental Taxes which may have been or will be assessed
pursuant to the above are the sole responsibility of the Vestee(s)
herein and this company assumes no liability regarding the same UNLESS
specifically instructed to do so.
4. Assessments and/or charges which may be levied against the premises by
Entity : Whitman Avenue Assessment District (collected with
taxes)
5. Assessments and/or charges which may be levied against the premises by
Entity : Village Park Assessment District (collected with
taxes)
6. Assessments and/or charges which may be levied against the premises by
Entity : Southeast Chico Redevelopment Area
7. Dedications of easements and other purposes as disclosed by the
following map
Map : Book 34, of Maps, at Page(s) 7, 8 & 9
For : Sewer easement
Affects : 7.5 feet in the Southerly portion of Lot 4
For : Drainage
Affects : 45 feet in the South Easterly portion of Lot 4
8. Relinquishment of abutter's rights and waiver of damages in and to the
adjacent freeway as disclosed by the following deed to the State of
California
Recorded on : January 9, 1964
Recorded in : Book 1290, Official Records, Page 81
9. Quitclaim Deed and Authorization to pump, take or otherwise extract
water from beneath the surface, as granted to the California Water
Service Company, a California corporation, recorded September 8, 1965
in Book 1389 of Official Records, at page 468, records, of Butte
County, California. Affects lot 9.
(Continued)
Order No: C-57287 Schedule B- Continued
Page 4
10. Easement and/or right of way for the purpose stated herein and
incidental purposes
Granted to : City of Chico
For : Drainage
Recorded on : October 30, 1973
Recorded in : Book 1871, Official Records, Page 489
Affects : Lot 4
11. Relinquishment of abutter's rights and waiver of damages in and to
the adjacent freeway as disclosed by the following deed to the State
of California
Recorded on : September 27, 1974
Recorded in : Book 1941, Official Records, Page 219
12. Release and relinquishment of any and all abutter's rights of access
to the City of Chico, contained in instrument recorded April 28, 1980
in Book 2510 Official Records, Page 195, records of Butte County,
California.
13. Easement and/or right of way for the purpose stated herein and
incidental purposes
Granted to : City of Chico
For : Storm drain easement and appurtenances
Recorded on : November 7, 1980
Recorded in : Book 2567, Official Records, Page 233
Affects : Lot 9
14. TERMS, CONDITIONS AND PROVISIONS of an Agreement
Relating to : Assignment and Assumption of Option Agreement
Executed by : Douglas W. Bradford, etal
Recorded on : June 10, 1988
Recorded in : Butte County Recorder's Serial No. 88-18600
Said Agreement was Assigned on June 10, 1988 in Butte County
Recorder's Serial No. 88-18601
15. A Lease, affecting the premises herein, executed by and between the
parties named herein, subject to the covenants and conditions therein
Dated : June 6, 1988
Lessor : Douglas W. Bradford
Lessee : Homeclub, Inc., a Delaware corporation (now
Homebase)
Term: : Twenty years
Recorded on : June 10, 1988
Recorded in : Butte County Recorder's Serial No. 88-018605
Rerecorded on : September 2, 1988
Rerecorded in : Butte County Recorder's Serial No. 88-30024
(Continued)
Order No: C-57287 Schedule B- Continued
Page 5
A notice of Lease Restrictions recorded June 13, 1988 in Butte County
Recorder's Serial No. 88-18847
Assignment of Leases recorded June 28, 1991 under Butte County
Recorder's Serial No. 91-026315.
Assignment of Leases recorded July 29, 1992 under Butte County
Recorder's Serial No. 92-033930.
16. A Lease, affecting the premises herein, executed by and between the
parties named herein, subject to the covenants and conditions therein
Dated : May 25, 1988
Lessor : Douglas W. Bradford
Lessee : Netco Foods, Inc., a California corporation
Term : Twenty years
Recorded on : June 10, 1988
Recorded in : Butte County Recorder's Serial No. 88-018606
Rerecorded on : September 2, 1988
Rerecorded in : Butte County Recorder's Serial No. 88-30025
A notice of Lease Restrictions recorded June 13, 1988, in Butte County
Recorder's Serial No. 88-18847.
Assignment of Leases recorded June 28, 1991 under Butte County
Recorder's Serial No. 91-026315.
Assignment of Leases recorded July 29, 1992 under Butte County
Recorder's Serial No. 92-033930.
17. A Lease, affecting the premises herein, executed by and between the
parties named herein, subject to the covenants and conditions therein
Dated : May 23, 1988
Lessor : Douglas W. Bradford
Lessee : Pay Less Drug Stores Northwest, Inc.
Term : Twenty-five years
Recorded on : June 10, 1988
Recorded in : Butte County Recorder's Serial No. 88-018607
Rerecorded on : September 2, 1988
Rerecorded in : Butte County Recorder's Serial No. 88-30026
A notice of Lease Restrictions recorded June 13, 1988 in Butte County
Recorder's Serial No. 88-18847.
Assignment of Leases recorded June 28, 1991 under Butte County
Recorder's Serial No. 91-026315.
Assignment of Leases recorded July 29, 1992 under Butte County
Recorder's Serial No. 92-033930.
(Continued)
Order No: C-57287 Schedule B- Continued
Page 6
18. TERMS, CONDITIONS AND PROVISIONS of an Agreement
Relating to : Assessment and Cost Sharing
Executed By : Park Springfield, etal
Recorded on : June 10, 1988
Recorded in : Butte County Recorder's Serial No. 88-018608
19. TERMS, CONDITIONS AND PROVISIONS of an Agreement
Relating to : Assessment and Cost Sharing
Executed By : Park Springfield, Ltd., etal
Disclosed by : Notice of Non-Responsibility
Recorded on : June 10, 1988
Recorded in : Butte County Recorder's Serial No. 88-018609
20. Easement and/or right of way for the purpose stated herein and
incidental purposes
Granted to : City of Chico,
For : Public Utility purposes and appurtenances
Recorded on : October 27, 1988
Recorded in : Butte County Recorder's Serial No. 88-36684
21. Easement and/or right of way for the purpose stated herein and
incidental purposes
Granted to : Pacific Gas and Electric Company
For : Pipeline and appurtenances
Recorded on : October 28, 1988
Recorded in : Butte County Recorder's Serial No. 88-36901
A Notice of Final Description recorded July 14, 1989, under Butte
County Recorder's Serial No. 89-26398.
22. Easement and/or right of way for the purpose stated herein and
incidental purposes
Granted to : California Water Service Company, a Corporation
For : Pipeline and appurtenances
Recorded on : December 23, 1988
Recorded in : Butte County Recorder's Serial No. 88-43512
23. TERMS, CONDITIONS AND PROVISIONS of an Agreement
Relating to : Assignment and Assumption
Executed By : Pacific Quadrant Development Company, etal
Recorded on : January 10, 1989
Recorded in : Butte County Recorder's Serial No. 89-000933
(Continued)
Order No: C-57287 Schedule B - Continued
Page 7
24. Easement and/or right of way for the purpose stated herein and
incidental purposes
Granted to : Pacific Bell
For : Underground Communication facilities and
appurtenances
Recorded on : February 22, 1989
Recorded in : Butte County Recorder's Serial No. 89-5677
25. Consent to removal of personal property affixed to real property
In Favor of : Bank of America NT & SA
Executed by : Pacific Quadrant Chico
Recorded on : March 3, 1989
Recorded in : Butte County Recorder's Serial No. 89-006958
26. A covenant running with the land which recorded March 15, 1989 in
Butte County Recorder's Serial No. 89-9229.
27. An unrecorded lease, affecting the premises herein, executed by and
between the parties named herein, subject to the covenants and
conditions therein
Lessor : Pacific Quadrant - Chico
Lessee : George & Nancy Kirby, Husband & Wife
Disclosed by : Notice of Non-Responsibility
Recorded on : January 3, 1990
Recorded in : Butte County Recorder's Serial No. 90-000295
Assignment of Leases recorded June 28, 1991 under Butte County
Recorder's Serial No. 91-026315
Assignment of Leases recorded July 29, 1992 under Butte County
Recorder's Serial No. 92-033930.
28. An unrecorded lease, affecting the premises herein, executed by and
between the parties named herein, subject to the covenants and
conditions therein
Lessor : Pacific Quadrant - Chico
Lessee : Joseph and Linda Hilliard, Husband and Wife (The
Dirty Dog)
Disclosed by : Notice of Non-Responsibility
Recorded on : April 6, 1989
Recorded in : Butte County Recorder's Serial No. 90-013782
Assignment of Leases recorded June 28, 1991 under Butte County
Recorder's Serial No. 91-026315
Assignment of Leases recorded July 29, 1992 under Butte County
Recorder's Serial No. 92-033930.
(Continued)
Order No: C-57287 Schedule B- Continued
Page 8
29. An unrecorded lease, affecting the premises herein, executed by and
between the parties named herein, subject to the covenants and
conditions therein
Lessor : Pacific Quadrant - Chico
Lessee : Randy J. & Carole Gish (Husband & Wife) - The
Postal Shoppe
Disclosed by : Notice of Non-Responsibility
Recorded on : July 10, 1990
Recorded in : Butte County Recorder's Serial No. 90-028926
Assignment of Leases recorded June 28, 1991 under Butte County
Recorder's Serial No. 91-026315.
Assignment of Leases recorded July 29, 1992 under Butte County
Recorder's Serial No. 92-033930.
30. An unrecorded lease, affecting the premises herein, executed by and
between the parties named herein, subject to the covenants and
conditions therein
Lessor : Pacific Quadrant - Chico
Lessee : Richard F. & Eva M. Casey (Husband & Wife)-
Check-X-Change
Disclosed by : Notice of Non-Responsibility
Recorded on : July 13, 1990
Recorded in : Butte County Recorder's Serial No. 90-029620
Assignment of Leases recorded June 28, 1991 under Butte County
Recorder's Serial No. 91-026315.
Assignment of Leases recorded July 29, 1992 under Butte County
Recorder's Serial No. 92-033930.
31. An unrecorded lease, affecting the premises herein, executed by and
between the parties named herein, subject to the covenants and
conditions therein
Lessor : Pacific Quadrant - Chico
Lessee : Marge & Ted Crane, Husband & Wife
Disclosed by : Notice of Non-Responsibility
Recorded on : October 15, 1990
Recorded in : Butte County Recorder's Serial No. 90-044257
Assignment of Leases recorded June 28, 1991 under Butte County
Recorder's Serial No. 91-026315.
Assignment of Leases recorded July 29, 1992 under Butte County
Recorder's Serial No. 92-033930.
(Continued)
Order No: C-57287 Schedule B- Continued
Page 9
32. An unrecorded lease, affecting the premises herein, executed by and
between the parties named herein, subject to the covenants and
conditions therein
Lessor : Pacific Quadrant - Chico
Lessee : Wayne & JoAnn Murphy (Husband & Wife)
Disclosed by : Notice of Non-Responsibility
Recorded on : October 29, 1990
Recorded in : Butte County Recorder's Serial No. 90-046330
Assignment of Leases recorded June 28, 1991 under Butte County
Recorder's Serial No. 91-026315.
Assignment of Leases recorded July 29, 1992 under Butte County
Recorder's Serial No. 92-033930.
33. A Deed of Trust to secure an indebtedness of the amount stated herein
and any other amounts payable under the terms thereof
Dated : June 27, 1991
Trustor(s) : CHICO CROSSROADS CENTER, A CALIFORNIA LIMITED
PARTNERSHIP
Trustee : First Interstate Bank of California
Beneficiary(s) : First Interstate Bank of California
Amount : $8,250,000.00
Recorded on : June 28, 1991
Recorded in : Butte County Recorder's Serial No. 91-026316
34. Assignment of Lessors Interest in a California Limited Partnership to
First Interstate Bank of California, a California Corporation Recorded
June 28, 1991 under Butte County Recorder's Serial No. 91-026317.
35. A Deed of Trust to secure an indebtedness of the amount stated herein
and any other amounts payable under the terms thereof
Dated : June 4, 1992
Trustor(s) : Chico Crossroads Center, a California Limited
Partnership
Trustee : First Interstate Bank of California
Beneficiary(s) : First Interstate Bank of California
Amount : $2,150,000.00
Recorded on : July 29, 1992
Recorded in : Butte County Recorder's Serial No. 92-033929
36. A Financing Statement
Debtor : Chico Crossroads Center, a California Limited
Partnership
Secured Party : First Interstate Bank of California
Recorded on : July 29, 1992
Recorded in : Butte County Recorder's Serial No. 92-033931
(Continued)
Order No: C-57287 Schedule B- Continued
Page 10
37. An unrecorded lease, affecting the premises herein, executed by and
between the parties named herein, subject to the covenants and
conditions therein
Disclosed by : Notice of Non-Responsibility
Recorded on : December 24, 1992
Recorded in : Butte County Recorder's Serial No. 92-059003
38.
39. Easement and/or right of way for the purpose stated herein and
incidental purposes
Granted to : City of Chico
For : Public right of way
Recorded on : May 12, 1993
Recorded in : Butte County Recorder's Serial No. 93-018761
Affects : Lot 9
40.
41. An unrecorded lease, affecting the premises herein, executed by and
between the parties named herein, subject to the covenants and
conditions therein
Lessee : David Kalbach
Disclosed by : Personal Property Tax Bill 985-000-909-000-92
Assignment of Leases recorded July 29, 1992 under Butte County Recorder's
Serial No. 92-033930.
(Continued)
ORDER NO. C-57287 -TO
Page 11
Schedule B (continued)
42. An unrecorded lease, affecting the premises herein, executed by
and between the parties named herein, subject to the covenants and
conditions therein
Lessee : Randy and Carole Gish, dba The Postal Shoppe
Disclosed by : Personal Property Tax Bill 850-025-641-000
Assignment of Leases recorded July 29, 1992 under Butte County
Recorder's Serial No. 92-033930.
43. An unrecorded lease, affecting the premises herein, executed by
and between the parties named herein, subject to the covenants and
conditions therein
Lessee : Fleming Technology Leasing Co., Inc., dba
Fleming Technology Leasing Co. Inc.
c/o AVTAX Inc.
Assignment of Leases recorded July 29, 1992 under Butte County
Recorder's Serial No. 92-033930.
44. Any and all unrecorded leases of the following as evidenced by a
physical inspection thereof
1. Hometown Buffet
2. Payless Drug
3. Chubby's
4. Miracle Ear
5. Fantastic Sam's
6. Computer Warehouse
7. O'Bears Yogurt
8. Check X Change
9. AVCO Financial Services
10. Food 4 Less
11. Dirty Dog
12. Home Base
13. Nevada Bob's
(Continued)
Order No: C-57287 Schedule B- Continued
Page 12
14. Play It Again Sports
15. Din Ho Chinese Fast Food
45. A Notice of Non-Responsibility
Executed by : Chico Crossroads Center
Recorded on : October 12, 1993
Recorded in : Butte County Recorder's Serial No. 93-044685
46. A Notice of Non-Responsibility
Executed by : Chico Crossroads Center
Recorded on : October 12, 1993
Recorded in : Butte County Recorder's Serial No. 93-044685
NOTES:
1. Conveyances within the last six months are as follows
NONE
2. As of January 1, 1990, Chapter 598, California Statutes of 1989 (AB
512; Ins. Code Sec 12413.1) becomes effective. The law requires that
all funds be deposited and available for withdrawal by the title
entity's escrow or subescrow account prior to disbursement of any
funds. ONLY CASH OR WIRED FUNDS CAN BE GIVEN IMMEDIATE AVAILABILITY
UPON DEPOSIT. Cashier's checks, Tellers checks and Certified checks
may be available one business day after deposit. All other funds such
as personal, corporate or partnership checks and drafts may cause
material delays in disbursement of funds on this order. In order to
avoid delays, all funding should be by wire transfer. Outgoing wire
transfers will not be authorized until confirmation of the respective
incoming wire transfer or availability of deposited checks.
EXHIBIT "G"
-----------
SUBORDINATION, NON-DISTURBANCE AND
----------------------------------
ATTORNMENT AGREEMENT
--------------------
THIS AGREEMENT, dated the ____ day of ______________, 199__, between
_______________________, a _______________________________ ("Mortgagee"), and
CIRCUIT CITY STORES, INC., a Virginia corporation ("Tenant").
W I T N E S E T H :
(a) Tenant has entered into a certain lease (the "Lease") dated
________, _______ with ______________________________________________
("Landlord"), covering premises located within that certain property known as
___________________ Shopping Center, located in the City of __________________
___________________ County, ___________ , and more particularly described in
SCHEDULE A hereto; and
(b) Mortgagee has made a loan to Landlord as evidenced and secured by a
Deed of Trust recorded ________________, 199___ in the land records of
_____________ County, _____________________, in Book __________ at page _____
(the "Mortgage"), encumbering the property described in SCHEDULE A; and the
parties hereto desire to set forth their agreement with regard to the priority
of the Mortgage and the effect thereof on Tenant and its leasehold interest in
the aforesaid premises, as set forth below.
NOW, THEREFORE, in consideration of the premises and of the sum of One
Dollar ($1.00) by each party in hand paid to the other, the receipt of which
is hereby acknowledged, the parties hereby agree as follows:
1. The Lease is and shall be subject and subordinate to the lien of the
Mortgage insofar as it affects the real property of which the
premises form a part, and to all renewals, modifications,
consolidations, replacements and extensions thereof, to the full
extent of the principal sum secured thereby and interest thereon.
2. Tenant agrees that it will attorn to and recognize any purchaser at a
foreclosure sale under the Mortgage, any transferee who acquires the
premises by deed in lieu of foreclosure, the successors and assigns
of such purchasers, as its Landlord for the unexpired balance (and
any extensions, if exercised) of the term of the Lease upon the same
terms and conditions set forth in the Lease.
1
3. In the event that it should become necessary to foreclose the
Mortgage, Mortgagee thereunder will not terminate the Lease nor join
Tenant in summary or foreclosure proceedings so long as Tenant is not
in default under any of the material terms, covenants, or conditions
of the Lease, beyond any applicable cure period provided in the Lease.
4. Mortgagee consents to the application of casualty and condemnation
proceeds in accordance with paragraphs 15 and 16 of the Lease between
Landlord and Tenant, whether or not the Mortgage is then foreclosed.
5. In the event that Mortgagee shall succeed to the interest of
Landlord under the Lease, Mortgagee shall not be:
(a) liable for any act or omission of any prior lessor (including
Landlord); or
(b) liable for the return of any security deposits unless delivered
to Mortgagee; or
(c) bound by any rent or other periodic payments which Tenant might
have paid for more than the current month to any prior lessor
(including Landlord); or
(d) bound by any material amendment or modification of the Lease made
without its consent, which consent shall not be unreasonably
withheld or delayed.
6. Notwithstanding anything contained herein to the contrary, it is
expressly understood and agreed that in the event that Landlord
defaults in the payment of the Tenant Improvement Allowance, as
defined in the Lease, and Mortgagee acquires title to the Shopping
Center by foreclosure or otherwise, Mortgagee shall become liable
for payment of the Tenant Improvement Allowance to Tenant, and
Tenant shall otherwise be entitled to effect a Transfer all in
accordance with the terms of the Lease.
2
7. This Agrement shall be binding upon and shall inure to the benefit
of the parties hereto, and their successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed these presents the
day and year first above written.
ATTEST: CIRCUIT CITY STORES, INC.,
a Virginia corporation
By:
- -------------------------------------- -----------------------------------
- -------------------------------------- -----------------------------------
ATTEST: COMPANY NAME
By:
- -------------------------------------- -----------------------------------
- -------------------------------------- -----------------------------------
Note: Attach appropriate notary blocks for the State.
3
EXHIBIT "H"
MEMORANDUM OF LEASE
This Memorandum of Lease is made this ____day of January, 1994, between
CHICO CROSSROADS CENTER, LTD., a California limited partnership (hereinafter
referred to as "Landlord"), and CIRCUIT CITY STORES, INC., a Virginia
corporation (hereinafter referred to as "Tenant").
W I T N E S E T H:
Landlord and Tenant have entered into a Lease (the "Lease") dated
January __, 1994, whereby Landlord has leased to Tenant all those certain
"Premises" consisting of the "Building" and "Other Improvements," as and when
the same are constructed, together with exclusive rights in the four (4)
parking spaces labelled "Customer Pick-Up" adjacent to the Building as shown
on the Site Plan (provided such spaces are approved by the City's
Architectural Review Board, all located in the "Shopping Center," lying and
being in the City of Chico, County of Butte, State of California, the legal
description of which is set forth on EXHIBIT "A-1" attached hereto (the
"Property"). The Lease contains provisions and rights appurtenant to the
Property, some of which are as follows:
I. TERM. The term of the Lease shall commence on the
Commencement Date (as established in the Lease) and
end on the last day of January following the twentieth
(20th) anniversary of the Commencement Date. Thereafter,
Tenant has the right under the Lease to renew and extend
the term of the Lease for five (5) successive periods of
five (5) years each.
1
II. EXCLUSIVE USE RIGHTS. The Lease provides, subject to certain conditions,
that Tenant shall enjoy the sole and exclusive privilege in the Shopping
Center located on the Property, subject to the rights of tenants under the
Prior Leases, for (i) the sale of consumer, office and automotive
electronics products (which include, but shall not be limited to,
televisions, stereos, speakers and video recorders and players), computer
hardware and software, entertainment software and entertainment media
(which include, but shall not be limited to, records, game cartridges,
video tapes, cassettes and compact discs), cellular telephones, household
appliances (which include, but shall not be limited to, refrigerators,
freezers, stoves, microwave ovens, vacuum cleaners and dishwashers) and
related goods, and the sale and installation of motor vehicle audio,
stereo and telephone systems (all of such items being herein collectively
referred to as the "Products"), and (ii) renting, servicing, repairing and
warehousing of the Products.
III. SUCCESSORS. The covenants, conditions and agreements made and
entered into by the parties hereto shall be binding upon and
inure to the benefits of their respective heirs, administrators,
executors, representatives, successors and assigns.
IV. INCORPORATION OF LEASE. All terms and conditions of the Lease
are hereby incorporated herein by reference as if fully set
forth herein.
2
V. CONFLICTS WITH LEASE. This Memorandum of Lease is soley for
notice and recording purposes and shall not be construed to alter
modify, expand, diminish or supplement the provisions of the Lease.
In the event of any inconsistency between the provisions of this
Memorandum of Lease and the provisions of the Lease, the provisions
of the Lease shall govern.
IN WITNESS WHEREOF, this Memorandum of Lease has been duly executed
by the parties hereto as of the day and year first above written.
Chico Crossroads Center, Ltd.,
a California limited partnership
By: JMLB, Inc.,
a California corporation
By:________________________________
Jamie Sohacheski
Its: President
___________________________________
__________________________________
CIRCUIT CITY STORES, INC.,
a Virginia corporation
By:
___________________________________
Name:
___________________________________
Title:
___________________________________
Note: Attach appropriate notary blocks for the State.
3
OD No. 917
Chico, California
LEASE TERM COMMENCEMENT DATE ACKNOWLEDGEMENT
Landlord and Tenant (identified below) acknowledge and agree that the term of
the Lease between Landlord and Tenant dated December 15, 1993 commenced on
October 31, 1994 and that the initial term expires on October 31, 2009.
LANDLORD:
CHICO CROSSROADS CENTER
a California limited partnership
By: JMLB, INC.
BY: J. Sohacheski
-------------------------------
ITS: President
-------------------------------
DATE:5-1-95
-------------------------------
TENANT:
OFFICE DEPOT, INC.,
a Delaware corporation
BY: /s/ Karen L. illegible
-------------------------------
ITS: Lease Administrator
DATE: 11/2/94
-------------------------------
EXHIBIT "I"
COMMENCEMENT DATE AGREEMENT
THIS AGREEMENT, made as of this 21 day of November, 1994, between CHICO
CROSSROADS CENTER, LTD., a California limited partnership (herein called
"Landlord"), and CIRCUIT CITY STORES, INC. (herein called "Tenant").
W I T N E S E T H:
WHEREAS, Landlord is the owner of certain premises situated in CHICO,
BUTTE County, CALIFORNIA (herein called the "Premises"); and
WHEREAS, by that certain lease dated February 15, 1994 (herein called
the "Lease"), Landlord leased the Premises to Tenant; and
WHEREAS, a memorandum or short form lease in respect of the Lease was
recorded in the office of the Clerk of BUTTE County, CHICO, on the 31 day of
MAY, 1994, in Book SERIAL #94-022936 at Page___; and
WHEREAS, Tenant is in possession of the Premises and the term of the
Lease has commenced; and
1
WHEREAS, under Paragraph 25 of the Lease, Landlord and Tenant agreed to
enter into an agreement setting forth certain information in respect of the
Premises and the Lease;
NOW, THEREFORE, Landlord and Tenant agree as follows:
1. The term of the Lease commenced on, and the Commencement Date (as
such term is defined in the Lease) was, NOVEMBER 12, 1994. The term of the
Lease shall expire on January 31, 2014 unless Tenant exercises any option to
extend the term of the Lease or unless the Lease terminates earlier as
provided in the Lease.
2. The date of commencement of the first "Option Period" (as such term
is defined in the Lease) shall be February 1, 2015 if Tenant effectively
exercises its option in respect thereof, and if Tenant does so, the term of
the Lease shall expire on January 31, 2020 unless Tenant exercises any option
to further extend the term of the Lease or the Lease terminates earlier as
provided in the Lease.
3. The date of commencement of the second Option Period shall be
February 1, 2020 if Tenant effectively exercises its option in respect
thereof, and if Tenant does so, the term of the Lease shall expire on
January 31, 2025 unless Tenant exercises any option to further extend the
term of the Lease or the Lease terminates earlier as provided in the Lease.
4. The date of commencement of the third Option Period shall be
February 1, 2025 if Tenant effectively exercises its option in respect
thereof, and if Tenant does so, the term of the Lease shall expire on
January 31, 2030 unless Tenant exercises any
2
option to further extend the term of the Lease or the Lease terminates
earlier as provided in the Lease.
5. The date of commencement of the fourth Option Period shall be
February 1, 2030 if Tenant effectively exercises its option in respect
thereof, and if Tenant does so, the term of the Lease shall expire on
January 31, 2035 unless Tenant exercises any option to further extend the
term of the Lease or the Lease terminates earlier as provided in the Lease.
6. The date of commencement of the fifth Option Period shall be
February 1, 2035 if Tenant effectively exercises its option in respect
thereof, and if Tenant does so, the term of the Lease shall expire
January 31, 2040 unless the Lease terminates earlier as provided in the Lease.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the day and year first above written.
Attest or Witness: Chico Crossroads Center, Ltd.,
a California limited partnership
_____________________________ By: JMLB Inc.
-------------------------------
a California corporation
By:
----------------------------
Jamie Sohacheski
Its: President
Attest: CIRCUIT CITY STORES, INC.
/s/ Joseph illegible By /s/ Behjamin B. Cummings, Jr.
- ----------------------------- --------------------------------
Assistant Secretary Vice President
3
Location #3322
2041 Whitman Ave.
Chico, CA
ASSIGNMENT AND ASSUMPTION OF LEASE
THIS ASSIGNMENT AND ASSUMPTION OF LEASE ("Assignment") is made as of
May 1, 1994, by and between CIRCUIT CITY STORES, INC., a Virginia corporation
("Assignor"); and CIRCUIT CITY STORES WEST COAST, INC., a California
corporation ("Assignee"). RECITALS:
A. Assignor is the lessee under that certain lease or sublease
described in Exhibit A attached hereto (as now or hereafter amended, "the
Lease") for the premises described in the Lease (the "Leased Premises").
B. Assignee is a wholly-owned subsidiary of Assignor.
C. Assignor desires to assign its right, title and interest in the
Lease to Assignee, and Assignee desires to accept such assignment and assume
the performance of all of Assignor's obligations under the Lease on the terms
set forth herein.
AGREEMENTS:
NOW, THEREFORE, it is mutually agreed among the parties as follows:
1. As of the date hereof, Assignor assigns, transfers, sells and
conveys to Assignee (a) all of Assignor's right, title, interest and estate
in and to the Lease and (b) all of Assignor's other rights, title and
interest with respect to the Leased
Premises, including without limitation, all licenses, rights, permits,
warranties and entitlements applicable to the Leased Premises.
2. As of the date hereof, Assignee accepts said assignment and
expressly assumes the payment and performance of all of Assignor's
obligations under the Lease arising from and after the date hereof.
3. Notwithstanding anything to the contrary contained herein, Assignor
shall not be released from the performance of the lessee's obligations under
the Lease, and Assignor shall remain primarily liable for said performance,
including without limitation, the payment of all rent and the performance of
all of the lessee's other obligations throughout the remainder of the term of
the Lease.
4. Assignor warrants that it has good and marketable leasehold title
to, and lawful possession of, the Leased Premises pursuant to the Lease.
Assignor shall indemnify, defend and hold harmless Assignee from and against
any loss, damage, claim, cost or expense (including reasonable attorneys'
fees and litigation expenses) incurred or suffered by, or asserted against,
Assignee as a result of a breach by Assignor of the foregoing warranty of
title contained herein.
5. This Assignment shall be binding upon and inure to the benefit of the
parties hereto, their respective successors and assigns.
2
WITNESS the following signatures.
ASSIGNOR:
CIRCUIT CITY STORES, INC.
By: /s/ P Dunn
---------------------------------
Title: Treasurer
ASSIGNEE:
CIRCUIT CITY STORES WEST COAST, INC.
By: /s/ P Dunn
---------------------------------
Title: Treasurer & CFO
3
EXHIBIT "J"
-----------
SUPPLEMENTAL SITE PLAN
(See Attached)
[ M A P ]
EXHIBIT "K"
-----------
LIST OF PRIOR LEASES
1) Homeclub, Inc. Shopping Center Lease, dated June 6, 1988, as amended
2) HomeTown Buffet, Inc. Lease, dated May 15, 1992, as amended
3) Payless Drug Stores Northwest, Inc., dated May 23, 1988, as amended
4) Netco Food, Inc. Lease, dated May 25, 1988, as amended
5) Office Depot, Inc. Lease, dated December 15, 1993
1
EXHIBIT "L"
-----------
TENANT IMPROVEMENT ALLOWANCE REIMBURSEMENT CRITERIA
1. An application for payment signed by Tenant's Vice President of
Construction certifying that the Improvements have been completed in
compliance with Tenant's Plans and Specifications with only such
modifications as are permitted by this law.
2. A Certificate of Completion of the Improvements duly executed by
Tenant's Vice President of Construction addressed to Landlord.
3. "Record Drawings" in a form reasonably satisfactory to Landlord
showing any modifications to Tenant's Plans and Specifications.
4. Any bond or bonds required to release any stop notices received by
Landlord or by Landlord's lender (currently, First Interstate Bank) with
respect to Tenant's construction of the Improvements.
5. Any other items reasonably required by Landlord's lender
(currently, First Interstate Bank), as a condition to said lender's
disbursement of any portion of the Tenant Improvement Allowance, including
any lien waivers or affidavits unconditionally waiving lien rights (provided,
however, said requirement may be alternatively satisfied by Tenant providing
an indemnity which enables a title company to insure the priority of the lien
of said lender's deed of trust against any mechanic's liens attributable to
work performed by or at the request of Tenant, for which Tenant is
financially responsible).
1
EXHIBIT "M"
-----------
TENTATIVE VESTING PARCEL MAP
(See Attached)
1
[ M A P ]
[LETTERHEAD]
June 30, 1994
Dear Landlord,
Enclosed is your copy of the Assignment and Assumption of Lease made May 1,
1994, by and between Circuit City Stores, Inc. and Circuit City Stores West
Coast, Inc.
If you have any questions, please call Jeff Fender at (804) 527-4000,
extension 4492.
Sincerely,
/s/ Philip J. Dunn
- ------------------
Philip J. Dunn
Treasurer
PJD/kc
[LETTERHEAD]
May 26, 1995
Circuit City Stores
9950 Mayland Drive
V.P.R.E.
Richmond, VA 23233
RE: Circuit City Store #3322
Dear Sir:
Enclosed please find the fully executed Lease Commencement for the above
referenced store.
Should you have any questions, please call.
Sincerely,
/s/ Ann Weatherford
- --------------------
Ann Weatherford
Property Manager
[LETTERHEAD]
Location #3322
2041 Whitman Ave.
Chico, CA
April 20, 1994
Chico Crossroads Center, Ltd.
c/o Commercial Management and Development
4811 Chippendale Drive, Suite 307
Sacramento, CA 95841
NOTIFICATION OF ASSIGNMENT OF LEASE
Dear Landlord:
Circuit City Stores, Inc., a Virginia corporation ("Circuit City
Stores"), is the tenant under a lease (the "Lease") for the Circuit City store
referred to above.
Circuit City Stores has now decided to assign its rights under the
Lease to its wholly owned subsidiary, Circuit City Stores West Coast, Inc., a
California corporation. The assignment will occur on May 1, 1994, or soon
thereafter. A copy of the form of Assignment and Assumption Agreement that
will be used in this transaction (the "Assignment") is attached. Upon
completion of the transaction, a fully executed copy of the assignment
agreement will be sent to you.
The Lease will remain in full force and effect and Circuit City Stores
will remain fully liable under the Lease.
Very truly yours,
CIRCUIT CITY STORES, INC.
By: /s/ Benjamin B. Cummings
------------------------------------
Its: V.P.
------------------------------------