EXHIBIT 10.17
SUBLEASE
Kmart Corporation, Sublessor
Central Coast Bancorp, Sublessee
(Community Bank of Central California)
KMART NO. 3 748
491 Tres Pinos Road
Hollister, CA 95023
(Unit 103)
SUBLEASE - TABLE OF CONTENTS
ARTICLE I GRANT AND TERM
Section 1.1 Demised Premises
Section 1.2 Length of Term
Section 1.3 Construction of Demised Premises
Section 1.4 Intentionally Deleted
Section 1.5 When Demised Premises are Ready
for Possession
Section 1.6 Sublessee's Work
Section 1.7 Intentionally Deleted
ARTICLE II RENT TAXES AND INSURANCE
Section 2.1 Rent, Place of Payment
Section 2.2 Annual Minimum Rent
Section 2.3 Percentage Rent
Section 2.4 Gross Sales Defined
Section 2.5 Radius Restriction
Section 2.6 Real Estate Taxes
Section 2.7 Other Taxes
Section 2.8 Insurance
Section 2.9 Sublessee's Payment of Taxes,
Insurance and Common Area Expenses;
Sublessee's Proportionate Share
Section 2.10 Additional Rent
ARTICLE III RECORDS AND REPORTS
Section 3.1 Reports by Sublessee
Section 3.2 Sublessee's Records
Section 3.3 Sublessor's Right to Audit
ARTICLE IV OPERATION AND MAINTENANCE OF COMMON AREAS
Section 4.1 Designation of Common Areas
Section 4.2 Construction of Common Areas
Section 4.3 Common Areas to Remain Private Property
Section 4.4 Sublessee's Proportionate Share
of Common Area Expense
ARTICLE V USE OF PREMISES
Section 5.1 Use of Premises
Section 5.2 Change of Name
Section 5.3 Storage, Office Space
Section 5.4 Care of Premises
Section 5.5 Sublessee's Obligation to Light
Display Windows
ARTICLE VI UTILITY SERVICES
Section 6.1 Sublessor's Obligation to Install
Utility Services and Option to
Supply Such Services
Section 6.2 Sublessee's Obligation for Payment
ARTICLE VIIMAINTENANCE OF DEMISED PREMISES
Section 7.1 Sublessor's Obligations for Repair
and Maintenance
Section 7.2 Sublessee's Obligations for Repair
and Maintenance
Section 7.3 Abuse of Plumbing Walls, Etc.
Section 7.4 Surrender of Premises
ARTICLE VIII SIGNS
Section 8.1 Signs
ARTICLE IX FIXTURES AND ALTERATIONS
Section 9.1 Sublessee's Fixtures and Alterations
Section 9.2 Sublessor's Changes and Additions
ARTICLE X INSURANCE AND INDEMNITY
Section 10.1 Indemnification
Section 10.2 Increase in Fire Insurance Premium
Section 10.3 Sublessee's Obligation to Carry Property,
Public Liability and Worker's Compensation
Insurance
Section 10.4 Environmental Covenants and
Indemnification
ARTICLE XI RECEIVING DELIVERY AND SUBLESSEE PARKING
Section 11.1 Receiving and Delivery of Sublessee's
Merchandise and Disposition of Refuse
Section 11.2 Sublessee and Employee Parking
ARTICLE XII ASSIGNMENT AND SUBLETTING
Section 12.1 Assignment and Subletting
Section 12.2 By Sublessor
ARTICLE XIII ACCESS TO PREMISES
Section 13.1 Right of Entry by Sublessor
Section 13.2 Sublessor's Right to Exhibit Premises
ARTICLE XIV EMINENT DOMAIN
Section 14.1 Total Condemnation
Section 14.2 Partial Condemnation
Section 14.3 Sublessor's and Sublessee's Damages
ARTICLE XV DESTRUCTION OR DAMAGE TO DEMISED PREMISES
Section 15.1 Reconstruction of Damaged Premises
Section 15.2 Waiver of Subrogation
ARTICLE XVI BANKRUPTCY AND INSOLVENCY
Section 16.1 Continuation of Obligations Under
This Sublease After Institution of
Bankruptcy Proceedings
Section 16.2 Conditions to the Assumption and
Assignment of this Sublease in
Proceedings Under Chapter 7, 11 or 13
of the Bankruptcy Code
Section 16.3 Conditions to the Assignment of the
Sublease in Bankruptcy Proceedings
Section 16.4 Sublessor's Option to Terminate Upon
Subsequent Bankruptcy Proceedings of
Sublessee
Section 16.5 Use and Occupancy Charges
Section 16.6 Sublessee's Interest Not Transferable
By Virtue of State Insolvency Law
Without Sublessor's Consent
Section 16.7 Sublessor's Option to Terminate Upon
Insolvency of Sublessee or Guarantor
Under State Law or Upon Insolvency of
Guarantor Under Federal Bankruptcy Act
ARTICLE XVII DEFAULT OF THE SUBLESSEE
Section17.1 Right to Re-enter
Section17.2 Right to Relet
Section17.3 Legal Expenses
Section 17.4 Waiver of Rights of Redemption
Section 17.5 Sublessee's Failure to Operate
Continuously
ARTICLE XVIII WAIVER OF LIABILITY
Section 18.1 Waiver of Liability
ARTICLE XIX
Section 19.1 Intentionally Deleted
ARTICLE XX HOLDING OVER SUCCESSORS
Section 20.1 Holding Over
Section 20.2 Successors
ARTICLE XXI SECURITY DEPOSIT
Section 21.1 Security Deposit
ARTICLE XXII MISCELLANEOUS
Section 22.1 Non-Waiver
Section 22.2 Subordination
Section 22.3 Notices
Section 22.4 No Partnership
Section 22.5 No Liability for Loss and Damage
Section 22.6 Sublessor's Use of Common Areas
Section 22.7 Gender
Section 22.8 Sublessee's Acknowledgement of
Acceptance of Premises; Estoppel
Certificate
Section 22.9 Accord and Satisfaction
Section 22.10 Captions and Section Numbers
Section 22.11 Partial Invalidity
Section 22.12 No Option
Section 22.13 Recording
Section 22.14 Liens
Section 22.15 Brokers Commission
Section 22.16 Force Majeure
Section 22.17 Entire Agreement
Section 22.18 Late Charges and Interest
Section 22.19 Cumulative Remedies
Section 22.20 Rules and Regulations
Section 22.21 Time
Section 22.22 Attornment
Section 22.23 Merchants Association/Promotional
Fund
Section 22.24 Waiver of Trial by Jury; Injunction
Section 22.25 Attachments:
Exhibit "A", Legal Description
Exhibit "B", Site Plan
Exhibit "C", Construction Work
Exhibit "D", Sign Design Criteria
Exhibit "E", Space Layout
Exhibit "F", Commencement Letter
Exhibit "G", Guaranty
Exhibit "H", Incorporated Sublease Terms, Rents
and Conditions
SUBLEASE
THIS SUBLEASE AGREEMENT, made and entered into on
July 17, 2000, by and between KMART CORPORATION, a
Michigan corporation, (hereinafter "Sublessor"),
whose office address is 3100 West Big Beaver Road,
Troy, Michigan 48084, Attention: Vice President
- -Real Estate and Central Coast Bancorp, a California
corporation, (hereinafter "Sublessee"), whose
principal address is 301 Main Street, Salinas,
California 93901, doing business as Community Bank
of Central California.
WITNESSETH:
ARTICLE I
GRANT AND TERM
Section 1.1 Demised Premises. Sublessor, in
consideration of the rent to be paid and the
covenants to be performed by Sublessee, does hereby
demise and subleases unto Sublessee, and Sublessee
hereby takes and subleases from Sublessor, that
certain building area having a frontage, measuring
from center of partition to center of partition, and
a depth, measuring from outside of wall to outside
of wall, altogether totaling approximately the
square feet as set forth within Exhibit H,
incorporated herein, the boundaries and location
which are shown by cross hatching and designated by
the name set forth in Section 5.2 and on Exhibit "E"
which is attached hereto, signed or initialed by
Sublessor and Sublessee and incorporated herein by
reference (hereinafter the "Demised Premises"). The
Demised Premises are now or hereafter to be erected
within the shopping center development commonly
known and located as set forth within Exhibit H,
incorporated herein, which is more fully described
on Exhibit "A" attached hereto and made a part
hereof (hereinafter the "Shopping Center"). Exhibit
"B" sets forth the general layout of the Shopping
Center and shall not be deemed to be a warranty,
representation or agreement on the part of the
Sublessor that said Shopping Center will be
constructed exactly as indicated on said Exhibits.
Sublessor may increase, reduce or change the number,
dimensions or locations of the walks, buildings and
parking areas (in any manner whatsoever) as
Sublessor shall in its sole discretion deem proper
and Sublessor reserves the right to make alterations
or additions to, and to build additional stories on
the building in which the Demised Premises are
contained and to modify or add buildings and/or
floors adjoining the same or elsewhere in the
Shopping Center.
The exterior walls and roof of the Demised
Premises and the area beneath the Demised Premises
are not demised hereunder, and the use thereof,
together with the right to install, maintain, use,
repair, and replace pipes, ducts, conduits, wires
and structural elements leading through the Demised
Premises are hereby reserved unto Sublessor.
Sublessor's interest in the Demised Premises
arises from a Lease, dated as set forth within
Exhibit H, and incorporated herein, and Sublessee
takes expressly subject to the provisions, as
amended, of said "Master Lease", any mortgage,
indenture, permitted exceptions, declarations,
operating agreements, restrictions, easements, other
agreements, and matters of record. Notwithstanding,
Sublessee's interest in the Demised Premises shall
also be subject to and subordinate to any existing
or subsequent mortgage and/or financing in any form
on the Demised Premises and/or the Shopping Center
and/or any portion thereof, even if the same shall
be modified, replaced, amended, renewed, extended,
consolidated or supplemented from time to time.
Section 1.2a Term. The primary term of this
Sublease shall commence on the date as set forth in
Exhibit H, incorporated herein, (hereinafter the
"Commencement Date"), and shall expire on the date
as set forth in Exhibit H, incorporated herein, or
unless sooner terminated as hereinafter provided.
Promptly after the Commencement Date has occurred,
the parties shall execute and attach hereto an
agreement in the form of Exhibit F hereto setting
forth the dates upon which the term commenced and
shall expire.
As used herein, the term "Sublease Year" shall
mean the twelve (12) consecutive calendar months
commencing with the Commencement Date and each
succeeding anniversary of such date thereafter. Any
rent or other Sublessee payment due hereunder which
is based on an annual (twelve months) charge shall
be prorated to reflect any fractional Sublease Year.
If the Commencement Date is not on the first day of
a calendar month, then the first payment of rent for
the period between the Commencement Date and the
first day of the first full calendar month shall be
prorated on a daily basis for such period prior to the
first full calendar month and shall be due and payable
on the Rent Commencement Date, as hereinafter defined.
During the period following Sublessor's notice to
Sublessee that the Demised Premises are ready for
Sublessee's possession under this Section and prior
to the Rent Commencement Date, all of the provisions
of this Sublease shall be binding upon Sublessee
(other than the duty to pay Annual Minimum Rent),
including but not limited to, construction, hold
harmless, alterations and additions, property and
liability insurance, liens, real estate taxes and
common area maintenance.
Section l.2b Option to Extend Term. Provided
Sublessor is in control of the Demised Premises and
has exercised its option to extend its term, as
applicable, Sublessee may, at its option, extend the
term of this Sublease for a period as set forth
within Exhibit H, incorporated herein, by giving
written notice of such extension to Sublessor at
least NINE (9) months, but no more than TWELVE (12)
months prior to the expiration of the then current
term. No exercise of any option herein granted shall
be effective if Sublessee is in default in any
material respect hereunder at the time of exercise
or defaults in any material respect prior to the
commencement of the extended term. Any extended term
of this Sublease shall be on the same terms and
conditions as contained in this Sublease except that
the rent shall be increased as provided in Article
II hereof, and except that Sublessee shall not have
any options to extend beyond the period set forth
within Exhibit H, or beyond Sublessor's term,
whichever terminates. earlier. The extended term
shall commence on the date of expiration of the
primary term or the immediate preceding extended
term, as applicable.
Section 1.3 Construction of Demised Premises. The
parties acknowledge that Sublessor has prior to the
Commencement Date constructed on the site of the
Shopping Center the Demised Premises in
approximately the location as shown on Exhibit "B".
Sublessee shall be permitted to install its trade
fixtures so long as such activities do not interfere
with other construction work. Sublessor shall have
no responsibility or liability whatsoever for any
loss of or damage to any fixtures or other equipment
so installed or left upon the Demised Premises.
Section 1.4 Sublessor Not Liable For Delays Right of
Cancellation.
Intentionally Omitted.
Section 1.5 When Demised Premises are Ready for
Possession. THE DEMISED PREMISES ARE NOW READY FOR
OCCUPANCY BY SUBLESSEE AND, BY EXECUTION OF THIS
SUBLEASE, SUBLESSEE ACKNOWLEDGES AND AGREES THAT IT
HAS INSPECTED AND SHALL ACCEPT THE DEMISED PREMISES,
THE COMMON AREAS AND THE SHOPPING CENTER ON THE
COMMENCEMENT DATE IN THEIR THEN 'AS IS" AND "WHERE
IS" PHYSICAL AND ENVIRONMENTAL CONDITION. SUBLESSEE
ACKNOWLEDGES AND AGREES THAT NEITHER SUBLESSOR NOR
ITS AGENTS OR EMPLOYEES HAS MADE ANY EXPRESS
WARRANTY OR REPRESENTATION REGARDING THE PHYSICAL
CONDITION OF OR ANY ENVIRONMENTAL CONDITION ON THE
DEMISED PREMISES OR THE SHOPPING CENTER, THE QUALITY
OF MATERIAL OR WORKMANSHIP OF THE DEMISED PREMISES,
LATENT OR PATENT, OR THE FITNESS OF THE DEMISED
PREMISES FOR ANY PARTICULAR USE OR PURPOSE, AND THAT
NO SUCH REPRESENTATION OR WARRANTY SHALL BE IMPLIED
BY LAW, IT BEING AGREED THAT ALL SUCH RISKS ARE TO
BE BORNE BY SUBLESSEE.
Section 1.6 Sublessee's Work. Sublessee shall at
its sole cost and expense perform the construction
obligations with respect to the Demised Premises
described in this Sublease, including those
obligations set forth in Section 9 herein and
Exhibit C attached hereto, fixture, stock and staff
the Demised Premises and open for business to the
general public.
Section 1.7 Late Opening. Intentionally Deleted.
ARTICLE II
RENT, TAXES AND INSURANCE
Section 2.1 Rent Place of Payment. Sublessee
shall pay to Sublessor during the term hereof, as
rental for the Demised Premises, at the times
designated, all of the amounts designated herein as
Annual Minimum Rent, Percentage Rent, additional
rent, and any other amount, money or charge
required to be paid. pursuant to the terms of this
Sublease whether or not the same may be designated
by any such label or term. All amounts required to
be paid by Sublessee under this Sublease shall,
unless otherwise specifically stated, be paid
without any prior demand therefore and without any
deduction or set-off whatsoever at Sublessor's
address set forth on page 1 of this Sublease or
such other place as the Sublessor may designate.
Should Sublessor, in anyone or more instances,
accept any payment that is late, such acceptance
shall not be deemed a waiver of any of Sublessor's
rights or any of Sublessee's obligations including,
but not limited to, the obligation to pay all
amounts due under this Sublease on or before the
date designated herein for payment thereof.
Section 2.2 Annual Minimum Rent. Sublessee shall
pay in advance to Sublessor for the original term
of this Sublease an aggregate minimum rental of at
least the amount set forth within Exhibit H,
incorporated herein, (hereinafter "Minimum Rent").
Sublessee's obligation to pay Annual Minimum Rent
shall begin on the date as set forth in Exhibit H,
incorporated herein, ("Rent Commencement Date").
For so long as Sublessee shall not default in the
payment of any sums due under this Sublease and
shall not default under any of the other provisions
of this Sublease, the Minimum Rent may be paid
under the schedule set forth within Exhibit H,
incorporated herein, (all amounts, unless otherwise
provided, shall be paid in monthly installments, in
advance on or before the first day of each calendar
month).
Notwithstanding the foregoing Rent Commencement
Date, Sublessee's obligation to pay all other
charges under this Sublease, including but not
limited to common area maintenance charges, taxes,
insurance, shall in no way be waived. Sublessee
shall pay for such charges in advance on or before
the first day of each calendar month throughout the
Sublease Term including any extended or hold-over
period. All Gross Sales during this period shall be
added to the Gross Sales of the first Sublease Year
for the purposes of calculating Percentage Rent or
reporting Gross Sales, as applicable.
In the event Sublessee exercises its option to
extend Sublessee's term as provided in Section
1.2(b), Sublessee shall pay in advance to Sublessor
for the option term of this Sublease an aggregate
minimum rental of at least the amount(s) as set
forth in Exhibit H, incorporated herein,
(hereinafter "Minimum Rent"). For so long as
Sublessee shall not default in the payment of any
sums due under this Sublease and shall not default
under any of the other provisions of this Sublease,
the Minimum Rent may be paid under the schedule as
set forth in Exhibit H, incorporated herein, (all
amounts, unless otherwise provided, shall be paid
in monthly installments, in advance on or before
the first day of each calendar month).
Section 2.3 Percentage Rent. The Percentage Rent,
if any, shall be as set forth within Exhibit H,
incorporated herein. Notwithstanding, Sublessee
shall be required to report Gross Sales (as herein
defined) pursuant to this Sublease upon Sublessor's
request.
Section 2.4 Gross Sales Defined. The term "Gross
Sales" as used herein shall mean the total amount
in dollars of the actual sales price, whether for
cash or otherwise, of all sales of merchandise,
service and other receipts whatsoever of all
business conducted in or from the Demised Premises,
including mail or telephone orders received or
filled at the Demised Premises, and including all
deposits not refunded to customers, orders taken,
although said orders may be filled elsewhere, and
sales or service by Sublessee and any sublessee,
assignee, concessionaire or licensee or otherwise
in the Demised Premises; provided, however, that
nothing herein shall prevent Sublessor from
requiring an additional or different percentage
rental as a condition to approval of any sublessee,
assignee, concessionaire or licensee of Sublessee
hereunder. Gross Sales shall also include (i) sales
from vending machines, pay telephones and video
games at the Demised Premises, except that Gross
Sales shall include only the net amount received by
Sublessee in the event of vending machines
installed by other than Sublessee, its
subtenant(s), assignee(s), concessionaire(s) or
licensee(s) and (ii) rent or fees received by the
Sublessee from any subtenant, assignee, licensee or
other occupant of the Demised Premises (but only if
any such subtenant, assignee, licensee or other
occupant does not have sales or services which are
included in Gross Sales). No deduction shall be
allowed for uncollected or uncollectible credit
accounts.
Gross Sales shall not include, (i) any sums
collected and paid out for any sales or excise tax
imposed by any duly constituted governmental
authority, (ii) the exchange of merchandise between
the stores of Sublessee, if any, where such
exchanges of goods or merchandise are made solely
for the convenient operation of the business of
Sublessee and not for the purpose of consummating a
sale which has theretofore been made at, in, from or
upon the Demised Premises, and/or for the purpose of
depriving Sublessor of the benefit of a sale which
otherwise would be made at, in, from or upon the
Demised Premises, (iii) the amount of returns to
shippers or manufacturers, (iv) the amount of any
cash or credit refund made upon any sale where the
merchandise sold, or some part thereof, is
thereafter returned by the customer and accepted by
Sublessee, or (v) the sale of fixtures after their
use in the conduct of business in the Demised
Premises.
Section 2.5 Radius Restriction.During the term of
this Sublease, neither Sublessee nor any person,
firm nor corporation who or which controls or is
controlled by Sublessee directly or indirectly,
either individually or as a partner r stockholder,
or otherwise, shall own, operate or become
financially interested in any similar or competing
business located within a radius of four (4) miles
from the outside boundary of the Shopping Center.
Section 2.6 Real Estate Taxes. During the term of
this Sublease and any renewals or extensions
thereof, Sublessee agrees to pay, as additional
rent, its Proportionate Share (as hereinafter
defined) of all real estate taxes and assessments,
general and special, and all interest and penalties
thereon which may be levied or imposed or assessed
during the term of this Sublease, or any extensions
or renewals thereof, against the land described in
Exhibit 'A' and the improvements located thereon,
excluding, however any commercial outparcels which
are separately assessed. In the event that separate
real estate taxes and assessments are secured for
the Demised Premises and the land beneath the same,
Sublessee shall pay said taxes plus Sublessee's
Proportionate Share of any additional taxes assessed
against the land described in Exhibit 'A' and the
buildings and common areas located thereon.
Sublessee shall furnish receipts for the payment of
any such taxes to Sublessor upon demand.
Sublessee shall itself pay one hundred (100%)
percent of all real property taxes assessed upon or
attributable to any alterations, additions,
installations, improvements, fixtures, machinery, or
equipment placed, used, constructed or installed in,
on, or about the Demised Premises, by Sublessee or
by Sublessor at the expense of Sublessee, regardless
of whether same become a part of the real property
and regardless of whether or not title thereto
becomes vested in the Sublessor. If for any reason
any such taxes are assessed against the Sublessor,
then the Sublessee shall, upon demand, fully
reimburse the Sublessor therefor.
Should Sublessor elect to initiate an appeal
regarding real estate taxes and assessments the
Sublessee shall fully cooperate with Sublessor as
requested by Sublessor. Sublessee may, at its own
expense, contest any liens, claims, or charges of
any kind with respect to the Demised Premises which
Sublessee reasonably believes are unlawful or
excessive; provided, however, if Sublessee's
activities increase the valuation of the entire
Shopping Center, Sublessee shall be solely liable
for any such increase and Sublessee shall, if
Sublessor requires the same, furnish reasonable
security for the payment of any and all liability,
cost and expense which may arise from such
activities prior to commencing same. Should any
governmental authority having jurisdiction thereover
impose a tax or surcharge of any kind or nature
upon, against or with respect to the parking areas
or the number of parking spaces in the Shopping
Center, such tax or surcharge shall likewise be
deemed to constitute a tax and/or assessment against
such land and such buildings for the purpose of this
Section and Sublessee shall be obligated to pay its
proportionate share thereof as provided herein. The
Proportionate Share to be paid by Sublessee shall
also include Sublessee's Proportionate Share of any
costs, expenses and attorneys' fees incurred by
Sublessor in connection with the negotiation for
reduction in the assessed valuation of land,
buildings and improvements comprising the Shopping
Center and any protest or contest of real estate
taxes and/or assessments.
Section 2.7 Other Taxes. Sublessee shall reimburse
Sublessor upon demand for the following taxes,
assessments, levies and charges, foreseen and
unforeseen: (a) all taxes which are, at any time,
imposed or levied upon or assessed against (i)
any Annual Minimum Rent, Percentage Rent or any
additional rent reserved or payable hereunder or any
other sums payable by Sublessee hereunder, (ii) this
Sublease or the leasehold estate hereby created or
which arise in respect of the operation, possession,
occupancy or use of the Demised Premises; (b) any
gross receipts or similar taxes imposed or levied
upon, assessed against or measured by any Annual
Minimum Rent, Percentage Rent, additional rent or
such other sums payable by Sublessee hereunder; (c)
all sales and use taxes which may be levied or
assessed against or payable by Sublessor or
Sublessee on account of the acquisition, leasing,
subleasing, or use of the Demised Premises or any
portion thereof, or on account of any Annual Minimum
Rent, Percentage Rent or additional rent reserved or
payable hereunder or any other sums payable by
Sublessee hereunder.
Sublessee shall pay before delinquency all: (i)
municipal, county, and state taxes, foreseen and
unforeseen, assessed during the term of this
Sublease against any leasehold interest or personal
property of any kind, owned by or placed in, upon or
about the Demised Premises by the Sublessee; and
(ii) sales, use, excise, luxury and other taxes,
foreseen and unforeseen, upon Sublessee's business
or upon any sales made on or from the Demised
Premises.
Notwithstanding the foregoing provisions of this
Section, Sublessee shall not be required to
reimburse Sublessor for any franchise or income
taxes of Sublessor (other than any gross receipts or
similar taxes imposed or levied upon, assessed
against or measured by Annual Minimum Rent,
Percentage Rent, additional rent or any other sums
payable by Sublessee hereunder), unless any such tax
or charge is imposed upon or levied or assessed
against Sublessor in substitution for or in place or
reduction of any other tax, assessment, charge or
levy referred to in this Article, in which case
Sublessee shall reimburse Sublessor therefor; all
such taxes, if any, to be reimbursed by Sublessee to
Sublessor shall be determined as if the Demised
Premises were the only property of Sublessor and the
receipts from the Demised Premises were the only
receipts of Sublessor.
Section 2.8 Insurance. The Sublessee shall also
pay to Sublessor, as additional rent, its
Proportionate Share of any premiums payable by
Sublessor for Property Insurance covering the
buildings and improvements situated within the
Shopping Center and Liability Insurance covering
Sublessor's legal liabilities. Sublessor's "Property
Insurance" (or similar term used herein) shall mean
the insurance carried by Sublessor from time to time
covering risk of damage to or destruction of the
buildings and improvements situated within the
Shopping Center and/or loss of rentals caused
thereby, including, but not limited to, any of the
following to the extent required under the Master
Lease or deemed advisable by Sublessor in its sole
determination: fire, tornado, flood, other perils,
vandalism, malicious mischief, and all risk.
Sublessor's "Liability Insurance" (or similar term
used herein) shall mean insurance carried by
Sublessor from time to time insuring against cost,
loss, damage or expense, incurred by reason of any
claim, suit, liability or demand for bodily injury,
death or property damage arising out of, pertaining
to or involving Sublessor's maintenance and repair
of the Common Areas.
Notwithstanding any provisions of this Sublease
to the contrary, Sublessor shall have the right to
self-insure, in whole or part, providing its net
worth is maintained in excess of ONE HUNDRED MILLION
AND NO/lOO ($100,000,000.00) Dollars. In the event
Sublessor elects to self-insure then Sublessee shall
also pay its Proportionate Share of an estimated
premium which would be due under a standard property
and/or liability insurance policy. Sublessor will
provide Sublessee with specific information
describing the basis for an estimated cost
attributed to a self-insurance.
Should there be a dispute as to the estimated
premium provided by Sublessor, Sublessee shall have
the right, at its sole expense, to review same with
no more than three insurance companies rated as A +
according to Best's Insurance Reports, (hereinafter
"Consulting Insurers"), as to the reasonableness of
Sublessor's premium assessment in light of factors
including, but not limited to, the shopping center
location and size, demographics, and the physical
characteristics of the Shopping Center's
improvements. Should the Consulting Insurers find
Sublessor's estimated premium to be either
unreasonably higher or lower in light of all the
circumstances than the local prevailing market rate
then Sublessor and Sublessee shall agree on an
adjusted premium which shall then take effect on a
non-retroactive basis.
Section 2.9 Sublessee's Payment of Taxes Insurance
and Common Area Expenses: Proportionate Share.
Sublessee's Proportionate Share shall mean and be
equal to a fraction, the numerator of which shall be
the number of square feet of floor area in the Demised
Premises, and the denominator of which shall be the
total number of square feet of then constructed gross
leasable floor area in the Shopping Center. Sublessee's
Proportionate Share of all of the aforesaid taxes
and assessments, insurance premiums, and common area
expenses (as provided in Article IV) levied or
assessed for or during the term hereof, and all
other charges to be paid by Sublessee on a
proportionate basis under this Sublease shall be
paid to Sublessor in monthly installments on or
before the first day of each calendar month, in
advance, in an amount estimated by Sublessor or
Sublessor may elect, at its sole option, to bill
such amounts in arrears; provided, that in the event
Sublessor is required under any mortgage covering
the Shopping Center to escrow real estate taxes and
insurance, Sublessor may, but shall not be obligated
to, use the amount required to be so escrowed as a
basis for its estimate of the monthly installments
due from Sublessee hereunder. Upon receipt of all
bills for taxes, assessments, insurance and Common
Area expenses, attributable to any calendar year
during the term hereof, Sublessor shall furnish
Sublessee with a written statement of the actual
amount of Sublessee's Proportionate Share thereof.
In the event no tax bill or insurance bill is
available, Sublessor will compute the amount of such
tax and insurance. If the total amount paid by
Sublessee under this Section for any calendar year
during the term of this Sublease shall be less than
the actual amount due from Sublessee for such year,
as shown on such statement, Sublessee shall pay to
Sublessor the difference between the amount paid by
Sublessee and the actual amount due, such deficiency
to be paid within ten (10) days after Sublessor's
delivery of such. statement; and if the total amount
paid by, Sublessee hereunder for any such calendar
year shall exceed such actual amount due from
Sublessee for such calendar year, such excess shall
be credited against the next installment of taxes
and assessments and insurance due from Sublessee to
Sublessor hereunder.
All amounts due hereunder shall be payable to
Sublessor at the place where the Annual Minimum Rent
is payable. For the calendar years in which the
Sublease Term commences and terminates, the
provisions of these Sections shall apply, and
Sublessee's liability for its Proportionate Share of
any taxes and assessments and insurance for such
year shall be subject to a pro rata adjustment based
on the number of days of said calendar year during
which the term of this Sublease is in effect. A copy
of a tax bill or assessment or insurance bill
submitted by Sublessor to Sublessee (or Sublessor's
good faith calculation if no such bill is available)
shall at all times be sufficient evidence of the
amount of taxes and/or assessments and insurance
assessed or levied against the property to which
such bill relates. Prior to or at the commencement
of the term of this Sublease and from time to time
thereafter throughout the term hereof, Sublessor
shall notify Sublessee in writing of Sublessor's
estimate of Sublessee's monthly installments due
hereunder. Sublessor's and Sublessee's obligations
under this Section shall survive the expiration of
the term of this Sublease.
Section 2.10 Additional Rent. The Sublessee shall
also pay, as additional rent, any other money and
charges required to be paid pursuant to the terms of
this Sublease, whether or not the same may be
designated "additional rent". If such amounts or
charges are not paid at the time provided in this
Sublease, such amounts shall be collectible as
additional rent with the next installment of rent
thereafter falling due hereunder, but nothing herein
contained shall be deemed to suspend or delay the
payment of any amount of money or charge at the time
the same becomes due and payable hereunder, or limit
any other remedy of the Sublessor. All such payments
shall be made by Sublessee to Sublessor at the place
where the Annual Minimum Rent is payable, and
without any deductions or set off whatsoever.
ARTICLE III
RECORDS AND REPORTS
Section 3.1 Reports by Sublessee. Within fifteen
(15) days after the end of each Three (3) calendar
months, or any portion thereof, during the Sublease
Term, Sublessee shall furnish to Sublessor a
statement signed and verified by Sublessee (or by
an authorized officer if Sublessee be a
corporation) of the Sublessee's Gross Sales during
such Three (3) month period or portion thereof.
Within sixty (60) days after the close of each
Sublease Year, Sublessee shall deliver to Sublessor
a statement of Gross Sales for each such Sublease
Year showing the Gross Sales made during such
Sublease Year, certified by a duly qualified
officer of Sublessee as being true, complete and
correct, and signed by an independent certified
public accountant employed by Sublessee, to the
effect that nothing came to their attention during
their review of the schedules supporting
Sublessee's computation of Gross Sales which would
cause them to believe such computation was
inaccurate or that any Gross Sales were not
included therein. Sublessee shall deliver the
statements referred to herein to Sublessor at the
same address where Rent is then being paid.
Section 3.2 Sublessee's Records. Sublessee shall
keep in the Demised Premises or in some other
location within the metropolitan area in which the
Demised Premises are located, a permanent, accurate
and complete set of books and records, in accordance
with generally accepted accounting methods and
principles, of all sales of merchandise and services
and all revenue derived from any business conducted
in the Demised Premises, whether included in Gross
Sales or not, during each day of the term hereof,
together with all supporting records. Sublessee
further agrees that it and its subtenants shall
keep, retain and preserve these records for at least
two (2) years after the expiration of each Sublease
Year.
Section 3.3 Sublessor's Right to Audit. Sublessor
shall have the right, after five (5) days written
notice, to have its employees, mortgagees or outside
auditors conduct a special audit of Sublessee's and
its subtenant's books and records pertaining to
sales, services, and business conducted on, in or
from the Demised Premises. If such audit shall
disclose a discrepancy of more than one percent (1%)
of Gross Sales, Sublessee shall promptly pay to
Sublessor twice the cost of said audit or $500.00,
whichever is greater, in addition to the deficiency
in Percentage Rent, which amount shall be payable in
any event If such discrepancy is more than three
percent (3%) of Gross Sales, or if Sublessee shall
fail to permit inspection and/or audit of its
records, Sublessor shall have the further remedy by
not less than ten (10) days notice to Sublessee to
declare this Sublease terminated on account of
Sublessee's failure to properly report its Gross
Sales. Sublessor shall have the right to audit
Sublessee's books and records for a period of two
(2) years after the close of each Sublease Year.
ARTICLE IV
OPERATION AND MAINTENANCE OF COMMON AREAS
Section 4.1 Designation of Common Areas. The
"Common Areas" shall include the parking areas,
access roads and facilities which may be furnished
by Sublessor within the Shopping Center, the
employee parking areas, the truckway or ways,
driveways, pedestrian sidewalks, ramps, landscaping
and planting areas, fences, retaining walls,
retention ponds, if any, and all other areas,
buildings and improvements which may be provided by
the Sublessor for the general use in common of the
tenants of the Shopping Center, their officers,
agents, employees and customers and all lighting and
drainage facilities incident thereto.
Section 4.2 Construction of Common Areas.
Sublessor shall hard-surface, properly drain,
landscape and light the parking area or parking
areas, together with the necessary access roads
within the limits of the Shopping Center. The use
arid occupancy by the Sublessee of the Demised
Premises shall include the use of the Common Areas
during the term hereof, in common with all others to
whom Sublessor has granted or hereinafter may grant
rights to use same. Sublessor shall operate, manage
and maintain the Common Areas during the term of
the Sublease. The manner in which the Common Areas
shall be used, maintained and operated, and the
expenditures therefor shall be at the sole
discretion of Sublessor and the use of such areas
shall be subject to such regulations as Sublessor,
in its sole discretion, shall make from time to
time. Sublessor may at any time temporarily close
any Common Area to make repairs or changes in such
area or to discourage non-customer parking.
Section 4.3 Common Areas to Remain Private
Property. In order to establish that the Shopping
Center, and any portion thereof; are and shall
continue to remain private property, Sublessor shall
have the unrestricted right in the Sublessor's sole
discretion, with respect to the entire Shopping
Center and/or any portion thereof controlled by the
Sublessor, to close the same to the general public
for at least one (1) day in each calendar year, and
in connection therewith to seal off all entrances to
the Shopping Center or any portion thereof.
Section 4.4 Sublessee's Proportionate Share of
Common Area Expenses. Sublessee shall pay, in
addition to the rental, additional rental and other
charges set forth in Article II of this Sublease,
Sublessee's Proportionate Share of all costs and
expenses of every kind and nature paid or incurred
by Sublessor in operating, managing, equipping,
policing, lighting, draining, repairing, replacing
and maintaining the Common Areas and providing
security therefor. Such costs and expenses shall
include, but not be limited to: illumination and
maintenance of the Shopping Center and its signs,
whether the signs are located on or off the
Shopping Center site; cleaning, lighting and snow
removal from, and all repair and replacements of,
parking areas and driveways; removal of excessive
accumulations of snow, ice or water from the roof
surfaces; management fees paid parties other than
Sublessor; line painting, and landscaping; premiums
for liability, property damage and workmen's
compensation insurance, wages, personal property
taxes, supplies; and the reasonable depreciation of
equipment used in the operation of the Common Areas
(but there shall be excluded the original cost of
such equipment and original cost of constructing
the Common Areas); and an amount equal to ten 10%)
percent of the total of all of the foregoing costs
and expenses to cover Sublessor's administrative
costs. The Proportionate Share to be paid by
Sublessee shall be computed and paid in the same
manner as taxes and insurance as provided in
Article II of this Sublease.
ARTICLE V
USE OF PREMISES
Section 5.1 Use of Premises. Sublessee shall use
and occupy the Demised Premises during the
continuance of this Sublease solely for the purpose
as set forth within Exhibit H, incorporated herein,
and for no other purposes without the written
consent of Sublessor. If any governmental license
or permit shall be required for the proper and
lawful conduct of Sublessee's business or other
activity carried on in the Demised Premises or if a
failure to procure such a license or permit might
or would, in any way, affect Sublessor or the
Shopping Center, then Sublessee, at Sublessee's
expense, shall duly procure and thereafter maintain
such license or permit and submit the same for
inspection by Sublessor. Sublessee, at Sublessee's
expense, shall at all times comply with the
requirements of each such license or permit.
Sublessee shall continuously operate one hundred
(100%) percent of the Demised Premises during the
entire term of this Sublease for the purpose stated
in this Sublease, conducting Sublessee's business
diligently, energetically, and in a high class and
reputable manner. Sublessee shall maintain on the
Demised Premises a substantial stock of goods,
wares and merchandise and equipment adequate to
assure successful operation of Sublessee's
business. Sublessee shall keep the Demised Premises
open and available for business activity therein
during all usual days and hours for such type
business in the vicinity so long as same does not
conflict with the Shopping Center hours of
operation hereinafter stated or such periods and
hours as may be set by the Sublessor at its option
during the term of this Sublease. Sublessee shall
include the address and identity of its business
activity in the Demised Premises in all
advertisements made by Sublessee in which the
address and identity of any other local business
activity of like character conducted by Sublessee
shall be mentioned, and shall not divert elsewhere
any trade, commerce or business which ordinarily
would be transacted by Sublessee in or from the
Demised Premises. No auction, liquidation, going
out of business, fire or bankruptcy sales may be
conducted in the Demised Premises. Sublessee shall
have absolute freedom to determine its own selling
prices and sales practices. Sublessee shall not do
any act tending to injure the reputation of the
Shopping Center as determined by Sublessor.
Sublessee shall at all times operate its business
in a lawful manner and in compliance with all
applicable laws, statutes, ordinances, regulations,
codes and orders. Sublessee shall not: (i) use the
Common Areas for its own business purposes; or (ii)
solicit business in the Common Areas; or (iii)
distribute or place any handbills or other
advertising matter in or on automobiles parked in
the parking area or in other Common Areas.
Sublessee will be required to maintain normal
business operations pursuant to the following
schedule:
Monday -9:00 a.m. to 5:00 p.m. (Other Hours Optional)
Tuesday -9:00 a.m. to 5:00 p.m. (Other Hours Optional)
Wednesday- 9:00 a.m. to 5:00 p.m. (Other Hours Optional)
Thursday -9:00 a.m. to 5:00 p.m. (Other Hours Optional)
Friday -9:00 a.m. to 6:00 p.m. (Other Hours Optional)
Saturday -All Hours Optional
Sunday -All Hours Optional
Section 5.2 Change of Name. Sublessee's advertised
name, as used by Sublessee for identification of the
business operated in the Demised Premises, shall be
as set forth within Exhibit H, incorporated herein.
Sublessee shall not change such advertised name of
the business operated in the Demised Premises
without the written consent of the Sublessor.
Section 5.3 Storage Office Space. Sublessee shall
warehouse, store and/or stock in the Demised
Premises only such goods, wares and merchandise as
Sublessee intends to offer for sale at retail, at,
in, from or upon the Demised Premises. This shall
not preclude occasional emergency transfers of
merchandise to the other stores of Sublessee, if
any, not located in the Shopping Center. Sublessee
shall use for office, clerical or other non-selling
purposes only such space in the Demised Premises as
is from time to time reasonably required for
Sublessee's business in the Demised Premises.
Section 5.4 Care of Premises. (a) Sublessee shall
not perform any acts or carry on any practices which
may injure the building or be a nuisance or menace
to other tenants in the Shopping Center and shall
keep the premises under its control, including the
show windows, sidewalks, service corridors and
receiving and loading areas adjacent to the Demised
Premises, orderly, neat, safe, clean and free from
rubbish, dirt, snow and ice at all times. Sublessee
shall store all trash and garbage within the Demised
Premises and arrange for the regular pick-up of such
trash and garbage at Sublessee's expense. In the
event Sublessor shall provide any service or
facilities for such pickup, then Sublessee shall be
obligated and shall pay a Proportionate Share of the
actual cost thereof. Sublessee shall not burn any
trash or garbage of any kind within the Demised
Premises or Shopping Center. In the event Sublessee
fails to keep the Demised Premises in the condition
called for above, Sublessor may enter upon the
Demised Premises and have all rubbish, dirt, trash
and garbage removed and the sidewalks cleaned, in
which event Sublessee agrees to pay all charges
incurred by Sublessor therefor. Said charges shall
be paid to the Sublessor by Sublessee as soon as a
bill is presented to it and the Sublessor shall have
the same remedy as is provided in Article XVII of
this Sublease in the event of Sublessee's failure to
pay said charges within ten (10) days after being
billed therefor.
(b) Sublessee shall not keep or display any
merchandise or signs on or otherwise obstruct the
sidewalks or areaways adjacent to the Demised
Premises. Sublessee shall not use, permit, or allow
the use of any portion of the Demised Premises as
sleeping apartments, lodging rooms, or for any
immoral or unlawful purposes. Sublessee shall
maintain the show windows and signs in neat and
clean condition. Sublessee shall not permit noise or
odors in the Demised Premises which are objected to
by Sublessor or any tenant or occupant of the
Shopping Center, and upon written notice from
Sublessor, Sublessee shall immediately cease and
desist from causing such noise or odor. No radio,
television, loudspeakers, phonographs, sound
amplifiers or other similar device shall be
installed exterior to the Demised Premises and no
aerial shall be erected on the roof or exterior
walls of the building in which the Demised Premises
are located. Sublessor may direct the use of all
pest extermination and scavenger contractors at such
intervals as Sublessor may require.
Section 5.5 Sublessee's Obligation to Light
Display Windows. If requested by Sublessor, Sublessee
shall keep the display windows in the Demised
Premises well lighted from dusk until 11:00 P.M., or
such other reasonable time as determined by
Sublessor, during each and every day of the term of
this Sublease, unless prevented by causes beyond the
control of Sublessee.
ARTICLE VI
UTILITY SERVICES
Section 6.1 Sublessor's Obligation to Install
Utility Services and Option to Supply Such Services.
Sublessor shall cause to be installed the necessary
mains and conduits in order that water and sewer
facilities and electricity may be available to the
Demised Premises. Sublessor is not obligated to
supply facilities to make gas available to the
Demised Premises. If Sublessee shall use water, gas
and/or electricity for any purpose in the Demised
Premises and Sublessor shall elect to supply the
water, gas and/or electricity, Sublessee shall
accept and use the same as tendered by Sublessor and
pay therefor at the applicable rates filed with the
proper regulating authority and in effect from time
to time covering such services.
Section 6.2 Sublessee's Obligation for Payment.
Sublessee shall be solely responsible for and
promptly pay all charges, when due, for water, gas,
electricity, heat, sewer, and any other utility used
upon or furnished to the Demised Premises, including
but not limited to such amounts as Sublessor has
expended for service tap-in fees, metering fees and
other fees of a similar nature pertaining to the
Demised Premises.
Payment for any and all water, gas and
electricity used by Sublessee, if furnished by
Sublessor, shall be made monthly and within ten (10)
days of the presentation by Sublessor to Sublessee
of bills therefor. Sublessor shall have the right to
cut off and discontinue, without notice to
Sublessee, said water, gas and electricity, or any
other service (regardless of whether or not
furnished by Sublessor) whenever and during any
period for which bills for the same or rent or any
other obligations under this Sublease are not
promptly paid by Sublessee.
The obligation of Sublessee to pay for such
utilities as provided in this Sublease shall
commence as of the date on which possession of the
Demised Premises is delivered to Sublessee,
notwithstanding any other provision of this Sublease.
ARTICLE VII
MAINTENANCE OF DEMISED PREMISES
Section 7.1 Sublessor's Obligations for Repair
and Maintenance. Sublessor, after receiving written
notice from the Sublessee and having reasonable
opportunity thereafter to obtain the necessary
workmen therefor, shall keep in good order and
repair the foundation, roof and outer walls of the
Demised Premises but not the exterior entrances,
doors, door frames, closure devices, window glass,
window casings or moldings, window frames, windows
or any of the hardware or appliances or
appurtenances of said entrances, doors or window
casings, window frames and windows, or any
attachment thereto or attachments to the Demised
Premises used in connection therewith; provided,
however, that Sublessor shall not be called on to
make any repairs to areas for which Sublessor is
responsible if the repairs are made necessary by the
act, negligence or omission of Sublessee, its
subtenants, assignees, concessionaires or their
respective agents, employees, invitees or licensees,
and the Sublessee shall make all repairs resulting
therefrom. Sublessor's obligation with respect to
repairs to and maintenance of the Demised Premises
shall be only as expressly set forth in this
Section. Notwithstanding anything to the contrary
contained herein, Sublessee shall be obligated, at
its own expense, to repair any damage to the roof or
outer walls of the Demised Premises caused by a
breaking and entering of the Demised Premises; said
repairs shall be coordinated with Sublessor to
prevent Sublessor's roof warranty, if any, from
being canceled and/or the breach of Sublessor's
lease, if any.
Section 7.2 Sublessee's Obligations for Repair
and Maintenance. Except as specifically otherwise
provided in the immediately preceding Section, the
Sublessee shall at its own expense at all times take
good care of and keep the Demised Premises and every
part thereof, including, but without limitation, all
walls, floors, ceilings, partitions, additions,
alterations, doors, closure devices, windows,
fixtures, hardware, equipment and appurtenances
thereof (including lighting, sprinkling, heating,
plumbing, and air conditioning systems, in good
order, condition and repair, and Sublessee shall
replace such systems, accessories, appurtenances and
related equipment as necessary (including reasonably
periodic interior painting and replacement of floor
coverings as determined by Sublessor). If Sublessee
refuses or neglects to repair and maintain the
Demised Premises as required under this Sublease,
and to the satisfaction of the Sublessor, as soon as
possible after written demand therefore, Sublessor
may make any such repairs and perform any such
maintenance without liability to Sublessee for any
loss or damage that may accrue to Sublessee's
merchandise, fixtures, or other property or to
Sublessee's business by reason thereof, and upon
completion thereof Sublessee shall pay as additional
rent, upon presentation of bill therefor,
Sublessor's costs for making such repairs and
maintenance plus twenty (20%) percent thereof for
overhead. Sublessee further covenants that
throughout the Sublease Term, it shall at its own
expense: (1) make all repairs and replacements in
and about the Demised Premises necessary to preserve
them in good order and condition (except those
specifically required of Sublessor in this
Sublease), which repairs and replacements shall be
at least equal in quality to the original work and
to promptly pay the expenses of such repairs and
replacements; (2) suffer no waste or injury to the
Demised Premises; (3) give prompt notice to the
Sublessor of any damage that may occur to the
Demised Premises; (4) keep and maintain the Demised
Premises in clean, sanitary and safe condition in
accordance with the laws of the state wherein the
Demised Premises is located and in accordance with
all directions, rules and regulations of the health
officer, fire marshal, building inspector, or other
proper officials of the governmental agencies having
jurisdiction and to execute and comply with all
laws, rules, orders, ordinances and regulations at
any time issued or in force, applicable to the
Demised Premises or to the Sublessee's use and
occupancy thereof of the Municipal, City, County,
State and Federal governments and each and every
department, bureau and official thereof and of the
Board of Fire Underwriters having jurisdiction
thereof, including installation and maintenance of
fire extinguishers and other fire protection devices
as may be required from time to time by any agency
having jurisdiction thereof or the insurance
underwriters insuring the building in which the
Demised Premises are located.
Sublessee agrees to keep the plate glass insured
with a responsible Insurance Company in the name of
the Sublessor and to deliver the policy or policies
to Sublessor, and upon its failure to do so,
Sublessor may place such insurance and charge the
same to the Sublessee; provided, however, the
failure on the part of the Sublessor to place such
insurance does not release the Sublessee of
liability for any damage to such plate glass.
Section 7.3 Abuse of Plumbing Walls. The plumbing
facilities shall not be used for any other purpose
than that for which they are constructed, and
Sublessee shall not permit or suffer any foreign
substance of any kind to be thrown therein, and the
cost of repair or replacement necessitated by any
breakage, stoppage, or damage (whether on or off
the Demised Premises) resulting from a violation of
this provision shall be home by Sublessee. The
Sublessee, its employees or agents, shall not alter
or deface any walls, ceilings, partitions, floors,
wood, stone, or iron work without the Sublessor's
prior written consent.
Section 7.4 Surrender of Premises. At the
expiration of the tenancy hereby created, Sublessee
shall surrender the Demised Premises in the same
condition as the Demised Premises were in upon
delivery of possession thereof to Sublessee,
reasonable wear and tear excepted, and shall
surrender all keys for the Demised Premises to
Sublessor at the place then fixed for the payment
of rent and shall inform Sublessor of all
combinations on locks, safes and vaults, if any,
located in the Demised Premises. Sublessee shall
fully comply with the provisions of Article IX of
this Sublease prior to surrendering the Demised
Premises to Sublessor. Sublessee's obligation to
observe or perform this covenant shall survive the
expiration or other termination of the term of this
Sublease. Sublessee shall further leave the Demised
Premises in a broom clean condition with all trash
and debris removed from the Shopping Center and
shall remove all of Sublessee's signs from both the
interior and exterior of the Demised Premises in
such a manner so as to not cause damage to the
walls or other areas.
ARTICLE VIII
SIGNS
Section 8.1 Signs. Sublessee shall not erect or
install any exterior signs, exterior or interior
window or door signs or advertising media, or
window or door lettering or placards without the
prior written consent of Sublessor. Sublessee shall
not install any exterior lighting or plumbing
fixtures, shades or awnings, or any exterior
decorations or painting, or build any fences or
make any changes to the storefront without the
previous written consent of Sublessor.
Within 60 days of opening Sublessee shall erect
one exterior sign in accordance with the criteria
described in Exhibit "D", Sign Control, which is
attached and incorporated herein, and as outlined
in Sublessor's prior written approval of
Sublessee's design. Sublessor's review and approval
of Sublessee's sign design and/or package shall not
imply that the design and/or legal requirements
have been met and Sublessee warrants that it will
rely solely upon its own employees, agents,
contractors, and consultants in connection with
such compliance. Sublessee shall be solely
responsible for complying with all legal
requirements and for obtaining all permits and any
violations thereof.
ARTICLE IX
FIXTURES AND ALTERATIONS
Section 9.1 Sublessee's Fixtures and Alterations.
Sublessee shall not modify or alter the exterior of
the Demised Premises nor make any structural
alterations to the Demised Premises. Sublessee
shall not make any significant modification to the
interior of the Demised Premises including, but not
limited to the mechanical, electrical, plumbing or
architectural systems, or any part thereof without
the prior written consent of Sublessor. Sublessee
shall present to the Sublessor detailed plans and
specifications for any modifications desired by
Sublessee at the time such approval is sought. Any
damage caused to the Demised Premises and/or the
common areas of the Shopping Center, or the
facilities serving the same, by virtue of any
alteration, addition or improvement installed by
Sublessee, whether authorized or unauthorized by
Sublessor, shall be the responsibility of Sublessee
and Sublessee shall be liable for any necessary
repairs.
Sublessee shall not commence any work until
detailed plans and specifications for such work are
submitted by Sublessee within the time requirements
of Exhibits C and D to Sublessor and are approved
in writing by Sublessor, in its sole discretion,
with Sublessor reserving the right to inspect
during and after Sublessee's buildout and
improvements. Sublessor's consent and review of
Sublessee's plans and specifications and inspection
of Sublessee's buildout and improvements shall not
imply that Sublessor has ascertained that such use,
plans and specifications, and buildout and/or
improvements comply with the requirements of any
local, state or federal law, rule or regulation;
and Sublessee warrants that it will rely solely
upon its own employees, agents, contractors, and
consultants in connection with such compliance.
Sublessor shall have no responsibility or liability
whatsoever for any loss of, or damage to, any
improvements, fixtures or other equipment so
installed or left upon the Demised Premises.
All alterations, decorations, additions,
improvements and fixtures, other than trade
fixtures, which shall be made or installed by the
Sublessee upon the Demised Premises and which in
any manner are attached to the floors, walls or
ceilings, shall remain the property of the
Sublessee for the term of this Sublease; provided,
however, that such alterations, decorations,
additions, improvements and fixtures shall not be
removed from the Demised Premises without the prior
consent in writing from the Sublessor.
Upon the termination or expiration of this Sublease
the Sublessee shall at its own expense remove such
alterations, decorations, additions, improvements
and fixtures as the Sublessor shall designate in
writing for removal, and the Sublessee shall
restore the Demised Premises as provided in Article
VII of this Sublease. In the event the Sublessee
fails to remove such alterations, decorations,
additions, improvements and fixtures designated for
removal by the Sublessor and so restore the Demised
Premises, then upon the expiration of this
Sublease, the Sublessor shall have the right to
remove any such alterations, decorations,
additions, improvements and fixtures at the expense
of the Sublessee, and the Sublessee shall upon
demand reimburse the Sublessor for the cost of
removing same and for restoring the Demised
Premises to such condition. Sublessee shall leave
upon and surrender with the Demised Premises, as a
part thereof, without disturbance or molestation or
injury, such of the alterations, decorations,
additions, improvements and fixtures that the
Sublessor designates for retention by the
Sublessor, and such items shall automatically
become the property of the Sublessor without any
payment to the Sublessee therefor. Any linoleum or
other floor covering of similar character which may
be cemented or otherwise adhesively affixed to the
floor of the Demised Premises shall upon expiration
of the Sublease term be and become the property of
the Sublessor. However, in the event Sublessee
alters the floor surface or attaches or cements any
material or substance to the floor which serves
Sublessee's trade use, but is "nonstandard" for
other potential sublessees, such as, but not
limited to, a "pebbled floor", Sublessee shall, at
Sublessee's expense remove and repair the floor to
its original condition, excepting reasonable wear
and tear, upon Sublessor's request. The terms of
this provision shall survive the termination and
expiration of this Sublease.
Section 9.2 Sublessor's Changes and Additions.
Sublessor hereby reserves the right at any time,
and from time to time, to make alterations or
additions to, and to build additional stories on
the building in which the Demised Premises are
located and to build adjoining the same. Sublessor
also reserves the right at any time, and from time
to time, to demolish or construct other buildings
and improvements in the Shopping Center, and to
enlarge the Shopping Center, and to make
alterations therein or additions thereto, and to
build additional stories on any building or
buildings within the Shopping Center, and to build
adjoining thereto and to construct decks or
elevated parking facilities and free-standing,
single story buildings within the parking lot areas
of the Shopping Center. Sublessor reserves the
right to relocate, at any time, the various
buildings, parking areas and other common areas
shown on Exhibit B; Sublessee acknowledges that the
said Exhibit B creates no easement rights in common
areas shown thereon, but only the right to use said
areas in common with all other tenants and
occupants of the Shopping Center, and to such
others to whom Sublessor has granted, or may
hereafter grant rights to use the same, as said
common areas may exist from time to time during the
term of this Sublease.
ARTICLE X
INSURANCE AND INDEMNITY
Section 10.1 Indemnification. Sublessee agrees to
indemnify Sublessor, and save it harmless from and
against any and all claims, actions, damages,
liability and expense, including attorneys fees, in
connection with loss of life, personal injury and/or
damage to property arising from out of any
occurrence in, upon or at the Demised Premises or
the occupancy or use by Sublessee of the Demised
Premises or any part thdreof, including, but not
limited to the sidewalks immediately adjoining the
Demised Premises and the loading platform area, if
any, allocated to the use of Sublessee, or arising
from or out of Sublessee's failure to comply with
any of Sublessee's obligations hereunder, or arising
from any inaccuracy in Sublessee's representations
and warranties contained herein, or occasioned
wholly or in part by any act or omission by
Sublessee, its agents, contractors, employees,
servants, customers, subtenants, assignees,
concessionaires or licensees. In case Sublessor
shall, without fault on its part, be made a party to
any litigation commenced by or against Sublessee,
then Sublessee shall protect and hold it harmless
and shall pay all costs, expenses and reasonable
attorneys' fees incurred or paid by Sublessor in
connection with such litigation. Sublessee shall
also pay all Sublessor's costs, expenses and
reasonable attorneys' fees that may be incurred by
Sublessor in enforcing the Sublessee's covenant and
agreements in this Sublease.
Section 10.2 Increase in Fire Insurance Premium.
Sublessee shall not carry any stock of goods or do
anything in or about the Demised Premises which will
in any way tend to increase the insurance rates on
said premises or the building of which they are a
part. Sublessee shall pay as additional rental the
entire amount of any increase in premiums for
insurance against loss by fire that may be charged
during the term of this Sublease on the amount of
insurance at any time carried by Sublessor on said
premises and/or the building of which they are a
part, resulting from the business carried on in the
Demised Premises by Sublessee, whether or not
Sublessor has consented to the same. The obligations
of Sublessee under this Section are in addition to
its obligations contained elsewhere in this Sublease
concerning insurance. If Sublessee installs any
electrical equipment that overloads the lines in the
Demised Premises, Sublessee shall at its own expense
make whatever changes are necessary to comply with
the requirements of the Insurance Underwriters and
governmental authorities having jurisdiction thereof.
Section 10.3 Sublessee's Obligation to Carry Property Commercial General
Liability and Workers Compensation Insurance.
Sublessee shall maintain, at its own expense, from
the date of delivery of possession to it of the
Demised Premises through the expiration of the
Sublease Term, insurance of the following character:
(i) Insurance against fire, vandalism, malicious
mischief and such other perils as are from
time to time included in a standard extended
coverage endorsement, insuring Sublessee's
merchandise, trade fixtures, furnishings,
windows, plate glass, equipment and all items
of personal property of Sublessee located on
or within the Demised Premises, in an amount
not less than the full amount of the actual
replacement cost thereof;
(ii) Commercial general liability insurance, and if
necessary, Commercial Umbrella
Liability Insurance, against claims for bodily
injury, death, property damage or other
loss occurring on, in or about the Demised
Premises and adjoining sidewalks and
passageways, or arising from the acts of Sublessee
or its agents, employees or invitees
on, in or about the Shopping Center, such
insurance to afford protection to Sublessor
and such other parties as Sublessor shall
designate, with a limit of not less than
$2,000,000 for each occurrence. If such
commercial general liability insurance
contains a general aggregate limit, it
shall apply separately to the Demised
Premises
(iii) Workers' compensation insurance covering all
persons employed in connection with
any work done on or about the Demised Premises
with respect to which claims for death or
bodily injury could be asserted against Sublessor,
Sublessee or the Demised Premises; and
(iv) At any time when the Demised Premises are
being altered, maintained or repaired on behalf of
Sublessee, or its subtenants, assigns,
concessionaires or licensees,
commercial general liability insurance for each
contractor in the amounts set forth in Section 10.3
(ii), and builder's risk insurance (in completed
value non-reporting form) in the amount
of the full replacement cost of the improvements on
the Demised Premises, exclusive of
foundations, including the value of the alterations
thereto and the materials and supplies therefor.
All insurance policies required hereunder shall
be issued by companies of recognized financial
standing, duly licensed to do business under the
laws of the state wherein the Demised Premises are
located, and given an "A" rating by Best's Insurance
Guide, or upon Sublessee's request, as required by
Sublessor's Lease and mortgage, and shall name
Sublessor and any other parties in interest
designated by Sublessor as additional named
insureds, including a mortgagee clause in favor of
any mortgagee of the Demised Premises or the
Shopping Center or any portion thereof. Each such
policy shall contain an agreement by the insurer
that it will not cancel or materially modify such
policy except after thirty (30) days prior written
notice to Sublessor. Sublessee shall deliver to
Sublessor, upon delivery of possession of the
Demised Premises, the original or duplicate policies
or certificates of the insurers, evidencing all the
insurance which is required to be maintained by
Sublessee hereunder and Sublessee shall, within
thirty (30) days prior to the expiration of any such
insurance, deliver other original or duplicate
policies or other certificates of the insurers
evidencing the renewal of such insurance. Should
Sublessee fail to effect, maintain or renew any
insurance provided for in this Section, or to pay
the premium therefor, or to deliver to Sublessor any
of such policies or certificates, then and in any of
said events Sublessor may, at its option but without
obligation so to do, upon five (5) days notice to
Sublessee, procure such insurance. Any sums expended
by Sublessor to procure such insurance shall be
additional rent hereunder and shall be paid by
Sublessee immediately after delivery to Sublessee of
a statement therefor.
Section 10.4 Environmental Covenants and
Indemnification. Sublessee represents and covenants
that it shall comply in all material respects with
the requirements of any applicable federal and
state environmental law, regulation, rule or local
governmental ordinance ('Environmental Law")
relating to the Demised Premises including
obtaining required air permits, and shall notify
Sublessor promptly and provide copies to Sublessor
of any order, notice, permit application or other
communication received by Sublessee with respect to
the Demised Premises from any governmental agency
in connection with the alleged violation of any
such Environmental Law.
Sublessee further represents that to the best of
its knowledge, it is not aware of any toxic or
hazardous waste, substance or material (as such are
or may be defined under any applicable
Environmental Law) which shall or may be used,
released, generated, stored, treated, drained, or
disposed of from, on, or about the Demised Premises
or Shopping Center in violation of any applicable
Environmental Law. Sublessee covenants and agrees
that it, its employees, agents, representatives,
assigns, or successors shall not use, release,
generate, store, treat, drain, or dispose of any
toxic or hazardous waste(s) upon, from, or about
the Demised Premises or Shopping Center not in
accordance with the Environmental Laws.
Sublessee shall indemnify, defend and hold
Sublessor and Master Landlord, if any, harmless
from and against all loss, liability, damage, fine,
penalty, cost and expense, whatsoever, including
attorneys' fees, hereafter incurred by Sublessor or
Master Landlord, if any, as a result of Sublessee's
violation of any applicable Environmental Law
relating to the Demised Premises or Shopping
Center. Indemnification under this section shall
survive the expiration or termination of this
Sublease.
ARTICLE XI
RECEIVING, DELIVERY AND TENANT PARKING
Section 11.1 Receiving and Delivery of Sublessee's
Merchandise and Disposition of Refuse.
All receiving and delivery of goods and
merchandise and all removal of merchandise,
supplies, equipment, garbage and refuse shall be
made only by way of the rear of the Demised
Premises or at any other location designated by
Sublessor, and only at such time designated
for such purpose by Sublessor.
Section 11.2 Sublessee dnd Employee Parking.
Notwithstanding any other provision of this
Sublease, Sublessee and its employees shall park
their automobiles only in areas specifically
designated for that purpose from time to time by
Sublessor. Sublessee shall, within five (5) days
after written notice from Sublessor, furnish to
Sublessor the automobile license numbers assigned to
its automobiles and the automobiles of all of its
employees. Sublessee shall be responsible for its
employees and any violation hereof by its employees.
In the event that Sublessee or its employees fail
tpark their automobiles in designated parking areas,
then Sublessor may, at its option, charge the
Sublessee and Sublessee shall pay to Sublessor as
additional rent Ten ($10.00) Dollars per day per
automobile parked in any area other than those
designated for Sublessee and employee parking.
ARTICLE XII
ASSIGNMENT AND SUBLETTING
Section 12.1 Assignment and Subletting. Sublessee
shall not sell, assign, hypothecate, pledge, or in
any manner transfer this Sublease or any estate or
interest therein by operation of law or otherwise,
nor sublet the Demised Premises or any part thereof,
nor allow anyone to conduct business at, upon or
from the Demised Premises, without the prior written
consent of Sublessor. Consent by Sublessor to one or
more assignments of this Sublease or to one or more
sublettings of the Demised Premises or the
collection of rent by Sublessor from any subtenant
or assignee of Sublessee shall not constitute a
waiver hereof ot operate to exhaust any of the
Sublessor's rights under this Article. The sale,
issuance, or transfer of any voting capital stock of
Sublessee or Sublessee's Guarantor, if any, (if
Sublessee or Sublessee's Guarantor, if any, be a
non-public corporation the stock of which is not
traded on any exchange or over the counter), which
directly or indirectly results in a change in the
voting control of Sublessee or Sublessee's
Guarantor, if any, shall be deemed to be an
assignment of this Sublease within the meaning of
this Section. Any such transfer either voluntarily
or involuntarily or by operation of law or
otherwise, without the consent of Sublessor shall at
Sublessor's option terminate this Sublease, in
addition to any remedies it may have under Article
XVII of this Sublease or at law, and any purported
such transfer shall be null and void. If the
Sublessee's interest in and to this Sublease is
assigned, the Sublessee's liability for performance
of any terms, conditions, covenants and agreements
contained herein to be performed by Sublessee shall
remain in full force and effect, notwithstanding the
fact that Sublessor may have consented to such
assignment. Sublessor has entered into this Sublease
with Sublessee in order to obtain for the benefit of
the entire Shopping Center the unique attraction of
Sublessee's trade name and the unique merchandising
mix and product line associated with Sublessee's
business, and the foregoing prohibition on
assignment or subletting or the like is expressly
agreed to by the Sublessee as an inducement to
Sublessor to sublease to Sublessee.
If Sublessee's interest in and to this Sublease
is transferred, the Percentage Rent payable by
Sublessee's transferee hereunder shall continue to
be computed as provided in Section 2.3 hereof, but
in no event shall such Percentage Rent be less than
the average Percentage Rent paid by Sublessee to
Sublessor for the two Sublease Years preceding
Sublessee's transfer of interest in and to this
Sublease.
Section 12.2 By Sublessor. Sublessor shall have the right to transfer,
assign and convey in whole or in part, any and all rights, obligations
and interests of Sublessor under this Sublease.
ARTICLE XIII
ACCESS TO PREMISES
Section 13.1 Right of Entry by Sublessor.
Sublessor shall have the right to enter upon the
Demised Premises at all reasonable hours for the
purpose of inspecting the same, or of making
repairs, additions or alterations to the Demised
Premises or any property owned or controlled by
Sublessor, without the same constituting an
eviction of Sublessee in whole or in part, and the
rent reserved shall in no way abate while said
repairs, alterations, improvements, or additions
are being made, by reason of loss or interruption
of business of Sublessee, or otherwise so long as
the foregoing do not result in any substantial
interference with Sublessee's business.
Section 13.2 Sublessor's Right to Exhibit.
Premises For a period commencing ninety (90) days
prior to the expiration of this Sublease, Sublessor
may have reasonable access to the Demised Premises
for the purpose of exhibiting the same to
prospective tenants.
ARTICLE XIV
EMINENT DOMAIN
Section 14.1 Total Condemnation If the whole of
the Demised Premises shall be taken by any public
authority under the power of eminent domain then
the term of this Sublease shall cease as of the day
possession shall be taken by such public authority
and the rent shall be paid up to that day with a
proportionate refund by Sublessor of such rent as
may have been paid in advance for a period
subsequent to the date of the taking.
Section 14.2 Partial Condemnation If less than
the whole, but more than twenty (20%) percent of
the Demised Premises are taken under the power of
eminent domain, Sublessor and Sublessee shall each
have the right to terminate this Sublease upon ten
(10) days prior written notice to the other and in
such event, such termination shall be effective
upon the day possession of the Demised Premises
shall be acquired for public use. Such notice shall
be given within thirty (30) days after such taking.
In the event (i) neither party hereto shall elect
to terminate this Sublease or (ii) less than twenty
(20%) percent of the Demised Premises are so taken,
the Sublease Term shall cease only on the part so
taken as of the day possession shall be taken by
such public authority and Sublessee shall pay rent
up to that day, with appropriate refund by
Sublessor of such rent as may have been paid in
advance for a period subsequent to the date of the
taking, and thereafter all the terms herein
provided shall continue in effect, except that the
Annual Minimum Rent shall be reduced in proportion
to the amount of the Demised Premises taken and the
breakpoint above which Percentage Rent, if any, is
computed and payable shall likewise be
proportionately reduced and Sublessor shall, at its
own cost and expense, make all necessary repairs or
alterations to the basic building as originally
installed by Sublessor, so as to constitute the
remaining Demised Premises a complete architectural
unit.
If more than twenty (20%) percent of the
building in which the Demised Premises are located
or more than ten (10%) percent of the Common Area
shall be taken under power of eminent domain,
Sublessor may, by written notice to Sublessee
delivered within thirty (30) days after the date of
surrendering possession to the public authority,
terminate this Sublease.
Notwithstanding the foregoing, if the Master Lease
terminates as a result of condemnation or taking by
eminent domain, this Sublease shall also
simultaneously terminate.
Section 14.3 Sublessor's and Sublessee's Damages.
All damages awarded for such taking under the power
of eminent domain, whether for the whole or a part
of the Demised Premises, shall belong to and be the
property of Sublessor whether such damages shall be
awarded as compensation for diminution in value to
the leasehold or to the fee of the Demised
Premises; provided, however, that Sublessor shall
not be entitled to any separate and additional
award made to Sublessee for loss of business, or
for depreciation to, and cost of removal of, stock
and trade fixtures.
ARTICLE XV
DESTRUCTION OR DAMAGE TO DEMISED PREMISES
Section 15.1 Reconstruction of Damaged Premises.
In the event the Demised Premises shall be
partially or totally destroyed by fire or other
casualty insured under the Property Insurance
carried by Sublessor so as to become partially or
totally untenantable, then the damage to the
Demised Premises shall be promptly repaired, to the
extent, of any proceeds received from such
insurance, unless Sublessor shall elect not to
rebuild as hereinafter provided. If Sublessor
elects to cause such repairs to be made, the
obligation of Sublessor hereunder shall be limited
to the Sublessor's Work covered by Exhibit "C"
hereof. In no event shall Sublessor be required to
repair or replace Sublessee's merchandise, trade
fixtures, furnishings or equipment. If more than
thirtyfive (35%) percent of the floor area of the
building in which the Demised Premises are located
shall be damaged or destroyed by fire or other
casualty, or if during the last three (3) years of
the term hereof more than twenty-five (25%) percent
of the Demised Premises or of the floor area of the
building in which the Demised Premises are located
shall be damaged or destroyed by fire or other
casualty, then Sublessor may elect either that the
building and/or Demised Premises, as the case may
be, be repaired or rebuilt or, at its sole option,
terminate this Sublease by giving written notice to
Sublessee of its election to so terminate, such
notice to be given within ninety (90) days after
the occurrence of such damage or destruction. If
Sublessor elects to repair or rebuild the Demised
Premises, it shall, within ninety (90) days after
the occurrence of such damage or destruction give
Sublessee notice of its intention to repair or
rebuild the Demised Premises and then proceed to
repair or rebuild same with reasonable dispatch,
subject, however, to delays of the type referred to
in the Force Majeure Section of this Sublease. If
Sublessor is required or elects to repair or
rebuild the Demised Premises as herein provided,
Sublessee shall repair or replace its merchandise,
trade fixtures, furnishings and equipment in a
manner and to at least a condition equal to that
prior to its damage or destruction, and if closed,
promptly reopen for business.
Section 15.2 Waiver of Subrogation. Each party
does hereby remise, release and discharge the other
party hereto and any officer, agent, employee or
representative of such party, of and from any
liability whatsoever hereafter arising from loss,
damage or injury caused by fire or other casualty
for which insurance, permitting the foregoing
release of liability and waiving the insurer's
right of subrogation (but not self-insurance), is
carried by such party at the time of such loss,
damage or injury to the extent of recovery by such
party under such insurance.
Each insurance policy required to be carried by
Sublessor or Sublessee under this Sublease shall
include a clause or endorsement to the effect that
the release contained in this Section will not
adversely affect or impair such policy or prejudice
the right of the insured to recover under such
policy, and each such policy shall permit this
waiver of liability and contain a waiver of
subrogation by the insurer.
ARTICLE XVI
BANKRUPTCY AND INSOLVENCY
Section 16.1 Continuation of Obligations Under This
Sublease After Institution of Bankruptcy Proceedings.
In the event that a petition concerning Sublessee is
filed under Chapter 7, 11, or 13 of the Bankruptcy
Code, Sublessee, Sublessee as Debtor-in-Possession
or the Trustee shall, until such time as this Sublease
is either assumed or rejected by Sublessee, Sublessee
as Debtor-in-Possession or the Trustee pursuant to this
Article, or otherwise, shall perform in a timely
manner all the obligations of Sublessee arising
under this Sublease, including, without limitation,
the payment of rent as required by this Sublease.
Acceptance of such performance by Sublessor shall
not constitute a waiver or relinquishment of any of
Sublessor's rights arising under this Sublease, the
Bankruptcy Code or otherwise.
Section 16.2 Conditions to the Assumption of the
Sublease in Proceedings Under
Chapter 7 11 or 13 of the Bankruptcy Code. In the
event that a Petition for discharge, reorganization
or adjustment of debts is filed concerning
Sublessee under Chapter 7, 11 or 13 of the
Bankruptcy Code, or a proceeding is filed under
Chapter 7 of the Bankruptcy Code and is transferred
or converted to Chapter 11 or 13, the Trustee,
Sublessee, or Sublessee as Debtor-in-Possession,
must elect to assume this Sublease within sixty
(60) days from the date of the filing or
transferring of the Petition under Chapter 11 or
13, or the Trustee, Sublessee or Sublessee as
Debtor-in-Possession, shall be deemed to have
rejected this Sublease and Sublessor thereupon
shall be entitled immediately to possession of the
Demised Premises without further obligation to the
Trustee, Sublessee or Sublessee as
Debtor-in-Possession; provided, however, Sublessor's
right to be compensated for damages shall survive
such rejection. No election by the Trustee,
Sublessee, or Sublessee as Debtor-in-Possession to
assume this Sublease, whether under Chapter 7, 11,
or 13 and whether for the purpose of assigning the
same or otherwise, shall be effective unless each
of the following conditions (which Sublessor and
Sublessee acknowledge are commercially reasonable
in the context of a bankruptcy proceeding of
Sublessee) have been satisfied, and Sublessor has
so acknowledged in writing that:
(1) Sublessee, Sublessee as
Debtor-in-Possession, or the Trustee shall comply
with all requirements of the Bankruptcy Code with
regard to curing or giving adequate assurance of
curing of all monetary and non-monetary defaults,
compensation for pecuniary loss and providing
adequate assurance of future performance.
(2) The obligations imposed upon the Trustee,
Sublessee, or Sublessee as Debtor-in-Possession,
shall continue with respect to Sublessee or any
assignee of this Sublease after the completion of
bankruptcy proceedings.
(3) The assumption of the Sublease will not:
(a) Breach any provision, including without
limitation provisions such as radius, location,
use or exclusivity provisions, in any other
lease, mortgage, financing agreement or other
agreement by which Sublessor is bound relating to
the Shopping Center; or
(b) Disrupt, in Sublessor's sole judgment, the
Sublessee mix of the Shopping Center or any other
attempt by Sublessor to provide a specific
variety of retail stores in the Shopping Center
which, in Sublessor's sole judgment, would be
most beneficial to all of the tenants of the
Shopping Center and would enhance the image,
reputation, and profitability of the Shopping
Center; or
(4) This Sublease has not been previously
terminated by Sublessor as provided herein.
For the purpose of this Section 16.2, Sublessor
and Sublessee acknowledge, in the context of a
bankruptcy proceeding of Sublessee, that a minimum
"adequate assurance of curing all defaults" shall
mean:
(a) The Trustee, Sublessee or Sublessee as
Debtor-in-Possession, has and will continue to
have sufficient unencumbered assets after the
payment of all secured obligations and
administrative expenses to assure Sublessor that
the Trustee, Sublessee or Sublessee as
Debtor-in-Possession, will have sufficient funds
to fulfill the obligations of Sublessee under
this Sublease, and to keep the Demised Premises
stocked with merchandise and properly staffed
with sufficient employees to conduct a
fully-operational, actively promoted business on
the Demised Premises; and
(b) The Bankruptcy Court shall have entered an
Order segregating sufficient cash payable to
Sublessor and/or the Trustee, Sublessee or
Sublessee as Debtor-in-Possession, to cure the
monetary and/or non-monetary defaults under this
Sublease within the time periods set forth above
and granting a valid and perfected first lien and
security interest and/or mortgage in property of
the Trustee, Sublessee or Sublessee as
Debtor-in-Possession, acceptable as to value and
kind to Sublessor, to secure to Sublessor the
obligation of the Trustee, Sublessee or Sublessee
as Debtor-in-Possession.
For the purpose of this Section 16.2, Sublessor
and Sublessee acknowledge that, in the context of a
bankruptcy proceeding of Sublessee, at a minimum
"adequate assurance of future performance" shall
include that:
(a) The trustee, Sublessee or Sublessee as
Debtor-in-Possession, shall also deposit with
Sublessor, as security for the timely payment of
rent, an amount equal to three (3) months base
rent in accordance with Section referring to
annual minimum rent hereof and other monetary
charges accruing under this Sublease; and
(b) If not otherwise required by the terms of
this Sublease, the Trustee, Sublessee or
Sublessee as Debtor-in-Possession, shall also pay
in advance on each date that Annual Minimum Rent
is payable an amount equal to 1/12th of
Sublessee's annual obligations under this
Sublease, for maintenance, common area charges,
real estate taxes, Merchants Association or
Sublessor's Promotional Fund dues, insurance and
similar charges, as estimated by Sublessor in
accordance with the provisions of this Sublease,
and subject to adjustment by Sublessor in further
accordance with the provisions of this Sublease.
Section 16.3 Conditions to the Assignment of the
Sublease in Bankruptcy Proceedings.
If the Trustee, Sublessee or Sublessee as
Debtor-in-Possession, has assumed the Sublease
pursuant to the terms and provision of Sections
16.2 hereof, for the purpose of assigning (or
elects to assign) Sublessee's interest under this
Sulease or the estate created thereby, to any other
person, such interest or estate may be so assigned
only if all the conditions set forth in Section
16.2 hereof are satisfied both before and after
such assignment and Sublessor shall acknowledge in
writing that the intended assignee has provided
adequate assurance as defined in this Section, of
future performance of all of the terms, covenants
and conditions of this Sublease to be performed by
Sublessee.
For purposes of this Section, Sublessor and
Sublessee acknowledge that, in the context of a
bankruptcy proceeding of Sublessee, at a minimum
"adequate assurance of future performance" in
connection with an assignment of this Sublease
shall mean that each of the following conditions
(which Sublessor and Sublessee acknowledge are
commercially reasonable) have been satisfied, and
Sublessor has so acknowledged in writing:
(a) The assignee has submitted a current
financial statement audited by a Certified
Public Accountant which shows a net worth and
working capital in amounts determined to be
sufficient by Sublessor to assure the future
performance by such assignee of the Sublessee's
obligation under this Sublease;
(b) The assignee, if requested by Sublessor,
shall have obtained guarantees in form and
substance satisfactory to Sublessor from one or
more persons who satisfy Sublessor's standards
of creditworthiness;
(c) The assignee has submitted in writing
evidence, satisfactory to Sublessor, of
substantial retailing experience in shopping
centers of comparable size to the Shopping
Center and in the sale of merchandise and
services permitted under this Sublease;
(d) The Sublessor has obtained all consents
or waivers from any third party required under
any lease, mortgage, financing arrangement or
other agreement by which Sublessor is bound to
permit Sublessor to consent to such assignment;
and
(e) The assignee has submitted in writing
evidence, satisfactory to Sublessor, that the
operating and financial performance of the
assignee, and any guarantors, and the net worth
and working capital of the assignee, and any
guarantors, are at least equal to that of
Sublessee as of the date Sublessee executed this
Sublease.
Section 16.4 Sublessor's Option to Terminate Upon
Subsequent Bankruptcy Proceedings of Sublessee.
In the event that this Sublease is
assumed by a Trustee appointed for Sublessee, by
Sublessee or by Sublessee as Debtor-in-Possession,
under the provisions of Section 16.2 or otherwise
hereof and thereafter Sublessee is liquidated or
files or has filed against it a subsequent Petition
for reorganization or adjustment of debts under
Chapter 7, 11 or 13 of the Bankruptcy Code, then,
in any of such events, Sublessor may, at its
option, terminate this Sublease and all rights of
Sublessee hereunder, by giving Sublessee written
notice of its election to so terminate, by no later
than thirty (30) days after the occurrence of any
such event.
Section 16.5 Use and Occupancy Charges. When, pursuant
to the Bankruptcy Code, the
Trustee, Sublessee or Sublessee as
Debtor-in-Possession, shall be obligated to pay
reasonable use
and occupancy charges for the use of the Demised
Premises or any portion thereof, such charges
shall not be less than the Annual Minimum Rent
provided under Section 2.2 of this Sublease and
other monetary obligations of Sublessee for the
payment of maintenance, common area charges,
real estate taxes, Merchants Association or
Sublessor's Promotional Fund dues, insurance and
similar charges. The acceptance of such rent and
other charges by Sublessor and the acceptance of
performance by the Trustee, Sublessee or Sublessee
as Debtor-in-Possession, by Sublessor shall not
constitute a waiver or relinquishment of any of
ublessor's rights arising under this Sublease, the
Bankruptcy Code or otherwise.
Section 16.6 Sublessee's Interest Not Transferable
By Virtue of State Insolvency Law Without Sublessor's
Consent. Neither Sblessee's interest in the Sublease,
nor any lesser interest of Sublessee herein, nor any
estate of Sublessee hereby created, shall pass to any
trustee, receiver, assignee for the benefit of creditors,
or any other person or entity, or otherwise by
operation of law under the laws of any state having
jurisdiction of the person or property of the
Sublessee (hereinafter referred to as the "state
law") unless Sublessor shall consent to such
transfer in writing. No acceptance by Sublssor of
rent or any other payments from any such trustee,
receiver, assignee, person or other entity shall be
deemed to have waived, nor shall it waive the
requirement to obtain Sublessor's consent of
Sublessor's right to terminate this Sublease for
any transfer of Sublessee's interest under this
Sublease withouisuch consent.
Section 16.7 Sublessor's Option to Terminate Upon
Insolvency of Sublessee or Guarantor Under State
Law or Upon Insolvency of
Guarantor Under Federal Bankruptcy Act. In the event
the estate of Sublessee created hereby shall be
taken in execution or by other process of law, or
if Sublessee or any guarantor of Sublesee's
obligations hereunder (hereinafter referred to as
the "guarantor") shall be adjudicated insolvent
pursuant to the provisions of any present or future
insolvency law under state law, or if any
proceedings are filed by or against the guarantor
under the Bankruptcy Code, or any similar
provisions of any future federal bankruptcy law, or
if a Receiver or Trustee of the property of
Sublessee or the guarantor shall be appointed under
state law by reason of Sublessee's or the
guarantor's insolvency or inability to pay its
debts as they become due or otherwise, or if any
assignment shall be made of Sublessee's or the
guarantor's property for the benefit of creditors
under state law, then and in such event Sublessor
may, at its option, terminate this Sublease and all
rights of Sublessee hereunder by giving Sublessee
written notice of termination within thirty (30)
days after the occurrence of such event.
ARTICLE XVII
DEFAULT OF THE TENANT
Section 17.1 Right to Re-enter. In the event
Sublessee shall:
(i) fail to pay any Annual Minimum Rent,
additional rent or other amounts payable and
due hereunder as and when each such payment
shall be due; or
(ii) fail to move into the Demised Premises and to
conduct its business as required by the
provisions of this Sublease; or
(iii) fail to use the Demised Premises in the
manner set forth in Section 5.) hereof
entitled Use of Premises or
(iv) fail to perform any other of the terms,
conditions or covenants of this Sublease to be
observed or performed by Sublessee for more
than thirty (30) days after written notice of
such default shall have been mailed to
Sublessee; or
(v) if Sublessee shall abandon said premises, or
permit this Sublease to be taken under any
writ of execution,
then the Sublessor, in addition to any other rights
or remedies it may have, shall have the right to
declare this Sublease terminated and the term ended
(in which event, this Sublease and the term hereof
shall expire, cease and terminate with the same
force and effect as though the date set forth in
said notice were the date originally set forth
herein and fixed for the expiration of the term and
Sublessee shall vacate and surrender the premises
but shall remain liable as hereafter provided),
and/or Sublessor shall have the immediate right to
possession of the Demised Premises and of reentry
and may, without notice, re-enter the Demised
Premises either by force or otherwise, and
dispossess, Sublessee and the legal representative
of Sublessee or other occupant of the Demised
Premises and remove their effects and hold the
Demised Premises as if this Sublease had not been
made, and Sublessee hereby waives service of notice
of intention to re-enter or to institute legal
proceedings to that end, in the event of re-entry
by Sublessor, Sublessor may remove all persons and
property from the Demised Premises and such
property may be removed and stored in a public
warehouse or elsewhere at the cost of, and for the
account of Sublessee, without notice or resort to
legal process and without being deemed guilty of
trespass, or becoming liable for any loss or damage
which may be occasioned thereby.
Section 17.2 Right to Relet. Should Sublessor
elect to re-enter, as herein provided, or should it
take possession pursuant to legal proceedings or
pursuant to any notice provided for by law, it may
either terminate this Sublease or it may from time
to time without terminating this Sublease, make such
alterations and repairs as may be necessary in order
to relet the Demised Premises, and relet said
premises or any part thereof for such term or terms
(which may be for a term extending beyond the term
of this Sublease) and at such rental or rentals and
upon such other terms and conditions as Sublessor in
its sole discretion may deem advisable. Upon each
such reletting all rentals and other sums received
by Sublessor from such reletting shall be applied,
first, to the payment of any indebtedness other than
rent due hereunder from Sublessee to Sublessor;
second, to the payment of any costs and expenses of
such reletting, including reasonable brokerage fees
and attorney's fees and of costs of such alterations
and repairs; third, to the payment of rent and other
charges due and unpaid hereunder, and the residue,
if any, shall be held by Sublessor and applied in
payment of future rent as the same may become due
and payable hereunder. If such rentals and other
sums received from such reletting during any month
be less than that to be paid during that month by
Sublessee hereunder, Sublessee shall pay such
deficiency to Sublessor, and if such rentals and
sums shall be greater, Sublessor shall retain the
excess. Such deficiency shall be calculated and paid
monthly. No such re-entry or taking possession of
said premises by Sublessor shall be construed as an
election on its part to terminate this Sublease
unless a written notice of such intention be given
to Sublessee or unless the termination thereof be
decreed by a court of competent jurisdiction.
Notwithstanding any such reletting without
termination, Sublessor may at any time thereafter
elect to terminate this Sublease for such previous
breach. Should Sublessor at any time terminate this
Sublease for any breach, in addition to any remedies
it may have, it may recover from Sublessee all
damages it may incur by reason of such breach,
including the cost of recovering the Demised
Premises, reasonable attorney's fees and the worth
at the time of such termination of the excess, if
any, of the amount of rent and charges reserved in
this Sublease for the remainder of the stated term
over the then reasonable rental value of the Demised
Premises for the remainder of the stated term, all
of which amounts shall be immediately due and
payable from Sublessee to Sublessor. In determining
the rent which would be payable by Sublessee
hereunder subsequent to default, the annual rent for
each year of the unexpired term shall be equal to
the Annual Minimum Rent set forth in Section 2.2
hereof, plus an amount equal to the average Annual
Percentage Rent paid by Sublessee from the
commencement of the term to the time of default, or
during the preceding three full calendar years,
whichever period is shorter. The failure or refusal
of Sublessor to relet the Demised Premises shall not
affect Sublessee's liability hereunder. The terms
"entry" and "re-entry" are not limited to their
technical meanings.
Section 17.3 Legal Expenses. If suit shall be
brought for recovery of possession of the Demised
Premises, for the recovery of rent or any other
amount due under the provisions of this Sublease, or
because of the breach of any other covenant herein
contained on the part of Sublessee to be kept and
performed, and a breach shall be established,
Sublessee shall pay to Sublessor all expenses
incurred therefor, including a reasonable attorney's
fee.
Section 17.4 Waiver of Rights of Redemption. Sublessee
hereby expressly waives
any and all rights of redemption granted by or under
any present or future laws in the event of Sublessee
being evicted or dispossessed for any cause, or in
the event of Sublessor obtaining possession of the
Demised Premises, by reason of the violation by
Sublessee of any of the covenants or conditions of
this Sublease, or otherwise.
Section 17.5 Sublessee's Failure to Operate
Continuously. The parties covenant and agree that
because of the difficulty or impossibility of
determining Sublessor's damages by way of loss of
the anticipated Percentage Rent, if any, from the
Sublessee or other tenants or occupants in the
Shopping Center, or by way of loss of value in the
property because of adverse publicity or appearances
by Sublessee's action, should Sublessee at any time
during the term:
(a) vacate, abandon, or desert the Demised Premises;
or
(b) cease operating its business therein for any
reason other than damage or destruction as
provided in Article XV,
then, in any such event, if Sublessor elects not
to terminate this Sublease as set forth in this
Article, then, in addition to any other rights
and remedies available to Sublessor under the
terms of this Sublease, Sublessee shall pay to
Sublessor (in addition to Minimum Annual Rent and
all other charges due under this Sublease) an
amount equal to 1-30th of the monthly installment
of the Annual Minimum Rent then due for each day
the Demised Premises and Sublessee's business
therein are not continuously and uninterruptedly
operated by Sublessee.
ARTICLE XVIII
WAIVER OF LIABILITY
Section 18.1 Waiver of Liability. Anything in this
Sublease to the contrary notwithstanding, Sublessee
agrees that it shall look solely to the estate and
property of the Sublessor in the land and buildings
comprising the Shopping Center of which the Demised
Premises are a part or in the underlying lease, as
the case may be, subject to prior rights of any
mortgagee of the premises or underlying lessor, for
the collection of any judgment (or other judicial
process) requiring the payment of money by
Sublessor in the event of any default or breach by
Sublessor with respect to any of the terms,
covenants and conditions of this Sublease, and no
other assets of the Sublessor shall be subject to
levy, garnishment, attachment, execution or other
procedures for the satisfaction of Sublessee's
remedies. In the event the Sublessor named on this
Sublease transfers this Sublease, except as
collateral security for a loan, upon such transfer
such Sublessor will be released from all liability
arid obligations hereunder, provided that the
Transferee assumes the obligations of this Sublease
thereafter accruing.
ARTICLE XIX
Section 19.1 Intentionally Deleted.
ARTICLE XX
HOLDING OVER, SUCCESSORS
Section 20.1 Holding Over. Any holding over after
the expiration of the term hereof with or without
the consent of the Sublessor, shall be construed to
be a tenancy from month to month at double the
Annual Minimum Rent herein specified for said
period of holdover plus double the annual
percentage rent for Percentage Rent as payable
hereunder for the three Sublease Years immediately
preceding, or the entire portion of the Sublease
Term, if less than three Sublease Years, and shall
otherwise be on the same terms and conditions
herein specified so far as applicable.
Section 20.2 Successors. Except as otherwise
expressly provided in this Sublease, all rights and
liabilities herein given to, or imposed upon, the
respective parties hereto shall extend to and bind
the several respective heirs, executors,
administrators, successors, and assigns of the said
parties; and if there shall be more than one
Sublessee, they shall all be bound jointly and
severally by the terms, covenants and agreements
herein. No rights, however, shall inure to the
benefit of any assignee of Sublessee unless the
assignment to such assignee has been approved by
Sublessor in writing as provided in the Assignment
and Subletting Section hereof.
ARTICLE XXI
SECURITY DEPOSIT
Section 21.1 Security Deposit. Sublessee shall
deposit with Sublessor a certified check
in the amount as set forth in Exhibit H,
incorporated herein. Said deposit shall be held by
Sublessor without liability for interest as security
for the faithful performance by Sublessee of all the
terms and provisions of this Sublease by Sublessee to
be observed and performed. The security deposit
shall not be mortgaged, assigned, transferred or
encumbered by Sublessee, without the written
consent of Sublessor, and any such act on the part
of the Sublessee shall be without force and effect
and shall not be binding upon Sublessor. If any of
the rents herein reserved or any other sum payable
by Sublessee to Sublessor shall be overdue and
unpaid or should Sublessor make payments on behalf
of the Sublessee, or Sublessee shall fail to perform
any of the provisions or terms of this Sublease, the
Sublessor may, at its option and without prejudice
to any other remedy which Sublessor may have on
account thereof, appropriate and apply said entire
deposit or so much thereof as may be necessary to
compensate Sublessor toward the payment of Annual
Minimum Rent, Percentage Rent or additional rent or
loss or damage sustained by Sublessor due to such
breach by Sublessee, and Sublessee shall forthwith
upon demand restore said security to the original
sum deposited. Should- Sublessee duly comply with
all of said terms and provisions of this Sublease
and promptly pay all of the rentals as they fall due
and all other sums payable by Sublessee to
Sublessor, then said deposit shall be returned in
full to Sublessee at the end of the term but in no
event is the said security to be returned until the
Sublessee has vacated the Demised Premises and
delivered possession satisfactorily to the
Sublessor. Sublessor's right to the
possession of the Demised Premises for non-payment
of rent or for any other reason shall not in any
event be affected by reason of the fact that he
Sublessor holds this security. In the event of
bankruptcy or other credit-debtor proceedings
against Sublessee, all securities shall be deemed to
be applied first to the payment of rent and other
charges due Sublessor for all periods prior to the
filing of such proceedings. The Sublessor shall not
be obliged to keep the said security as a separate
fund, but may mix the said security with its own
funds. In the event of a sale of the Demised
Premises or lease of the land on which it stands
subject to this Sublease, the Sublessor shall have
the right, at its option, to transfer this security
to the vendee or lessor and the Sublessor shall
thereupon be considered released by the Sublessee
from all liability for the return of such security
and the Sublessee shall look solely to the new
Sublessor for the return of said security. In the
event of any rightful and permitted assignment of
this Sublease by Sublessee, the said security
deposit shall be deemed to be held by Sublessor as a
deposit made by the assignee and Sublessor shall
have no further liability with respect to the return
of said security deposit to the assignor. Any
mortgagee of Sublessor shall be relieved and
released from any obligation to return such security
in the event such mortgagee comes into possession of
the Demised Premises and/or the Shopping Center by
reason of foreclosure of its security interest or
any proceeding in lieu thereof.
ARTICLE XXII
MISCELLANEOUS
Section 22.1 Non-Waiver. The failure of the
Sublessor to insist, in any one or more instances,
upon a strict performance of any of the covenants
of this Sublease, or to exercise any option herein
contained, shall not be construed as a waiver or a
relinquishment for the future of such covenant or
option, but the same shall continue and remain in
full force and effect. The receipt by the Sublessor
of rent, with knowledge of the breach of any
covenant hereof, shall not be deemed a waiver of
such breach and no waiver by the Sublessor of any
provision hereof shall be deemed to have been made
unless expressed in writing and signed by the
Sublessor.
Section 22.2 Subordination. This Sublease shall be
subject and subordinate at all times to the lien of
any mortgage or mortgages now on or hereafter
placed on the Demised Premises or the Shopping
Center or any part thereof, and to all advances
made or hereafter to be made upon the security
thereof, and also subject and subordinate to any
lease or other arrangement or right to possession
under which Sublessor is, or may hereafter be, in
control of the Demised Premises or the Shopping
Center or any part thereof. The Sublessee shall
execute and deliver such further instrument or
instruments subordinating this Sublease to the lien
of any such mortgage or mortgages or underlying
lease or leases as shall be desired by any
mortgagee or proposed mortgagee or lessor or
proposed lessor, and the Sublessee hereby
irrevocably appoints the Sublessor as the
attorney-in-fact of the Sublessee to execute and
deliver any such instrument or instruments for and
in the name of the Sublessee. Sublessee also agrees
that any mortgagee or trustee may elect to have
this Sublease a prior lien to its mortgage or deed
of trust, and in the event of such election and
upon notification by such mortgagee or trustee to
Sublessee to that effect, this Sublease shall be
deemed prior in lien to the said mortgage or deed
of trust, whether this Sublease is dated prior to
or subsequent to the date of said mortgage or deed
of trust.
Failure of the Sublessee to execute any statement
or instruments necessary or desirable to effectuate
the foregoing provisions of this Section regarding
Subordination, or other provisions of this Sublease
regarding Attornment and Estoppel Certificates
within ten (10) days following written request so to
do by Sublessor, shall constitute a breach of this
Sublease and the Sublessor shall have the right by
not less than ten (10) days notice to Sublessee to
declare this Sublease terminated and the term ended,
in which event, this Sublease shall cease and
terminate on the date specified on such notice with
the same force and effect as though the date set
forth in such notice were the date originally set
forth herein and fixed for the expiration of the
term, and Sublessee shall vacate and surrender the
Demised Premises but shall remain liable as provided
in this Sublease. Further, Sublessee hereby
irrevocably appoints Sublessor as attorney-in-fact
for the Sublessee with full power and authority to
execute and deliver in the name of the Sublessee any
such statements or instruments necessary to
effectuate such provisions of this Sublease.
Section 22.3 Notices. Any notice, demand, request
or other instrument which is required to be given
under this Sublease shall be delivered in person or
sent by United States Certified, Registered Mail,
return receipt requested, postage prepaid or
Express Mail, and shall be addressed (a) if to the
Sublessor, at the address set forth on page 1; and
(b) if to Sublessee, at the Demised Premises.
Either party may designate such other address as
shall be given by written notice, provided,
however, that in all events any notice to Sublessee
addressed to the Demised Premises shall be deemed
served as of the date of mailing. Notice need be
sent to only one Sublessee or Sublessor where
Sublessee or Sublessor consists of more than one
person or party.
Section 22.4 No Partnership Nothing contained
herein shall be deemed or construed by the parties
hereto, nor by any third party, as creating the
relationship of principal and agent or of
partnership or of joint venture between the parties
hereto, it being understood and agreed that neither
the method of computation of rent, nor any other
provision contained herein, nor any acts of the
parties herein, shall be deemed to create any
relationship between the parties hereto other than
the relationship of Sublessor and Sublessee.
Section 22.5 No Liability for Loss and Damage
Sublessor shall not be under any responsibility or
liability in any way whatsoever for the quality,
quantity, impairment, interruption, stoppage, or
other interference with service involving water,
heat, gas, electric current for light and power,
telephone, or any other service of whatsoever kind
or nature.
Sublessor shall not be liable for any damage to
property of Sublessee or of others located on the
Demised Premises, nor for the loss of or damage to
any property of Sublessee or of others by theft,
burglary or otherwise. Sublessor shall not be
liable for any injury or damage to persons or
property resulting from (but not limited to) fire,
explosion, falling plaster, steam, gas,
electricity, water, rain, snow or leaks from any
part of the Demised Premises, or from the pipes,
appliances or plumbing works, or by dampness or by
any other cause of whatsoever nature. Sublessor
shall not be liable for any such damage caused by
other tenants or persons in the Demised Premises,
occupants of adjacent property, of the Shopping
Center, or the public, or caused by operations in
construction of any private, public or quasi-public
work. All property of Sublessee kept or stored on
the Demised Premises shall be so kept or stored at
the risk of Sublessee only and Sublessee shall hold
Sublessor harmless from any claims arising out of
damage to the same, including subrogation claims by
Sublessee's insurance carriers.
Section 22.6 Sublessor's Use of Common Areas.
Sublessor reserves the right, from time to time, to
utilize portions of the common areas for carnival
type shows, rides and entertainment, outdoor shows,
displays, automobile and other product shows, the
leasing of kiosks, or such other uses which in
Sublessor's judgment tend to attract the public.
Further, Sublessor reserves the right to utilize
the lighting standards and other areas in the
parking lot for advertising purposes.
Section 22.7 Gender. In this Sublease the use of
gender references is not intended to be a
limitation, and the use of a particular gender
shall be interpreted to include the other of
masculine, feminine and neuter where the situation
so demands; similarly, the use of the singular
shall be interpreted to include the plural where
the situation so demands, and vice versa; and
references to "heirs, devisees, executors and
administrators" also includes "successors and
assigns" where the situation so demands, and vice
versa.
Section 22.8 Sublessee's Acknowledgment of Acceptance
of Premises Estoppel Certificate. Sublessee shall
furnish Sublessor, upon request at any time after
Sublessee has opened its doors for business in the
Demised Premises, a letter and/or Estoppel Certificate
addressed to the mortgagee or proposed mortgagee.
or financial institution or such other party
designated by Sublessor, providing the following
information:
1) that the emised Premises have been,
satisfactorily completed as of the date of such
letter and that Sublessee has accepted
possession, subject to the terms of the
Sublease;
2) the Commencement Date of the Sublease and the
expiration date of the Sublease;
3) the date when rent commenced;
4) that Sublessee has opened for business within
the Demised Premises;
5) that Sublessee has no claim, set-off or
recoupment against Sublessor (and if
Sublessee does have such a claim it shall
be stated in specific detail); and
6) such other information as Sublessor shall
request.
Upon failure of Sublessee to provide Sublessor at,
the request of such mortgagee or financial
institution a letter or certificate as above
described Sublessor shall have the right, in
addition to its other remedies, to cancel this
Sublease and Sublessee shall remain liable to the
Sublessor for any damages sustained by the
Sublessor as a result of such failure by Sublessee.
Section 22.9 Accord and Satisfaction. No payment
by Sublessee or receipt by Sublessor of a lesser
amount than the monthly rent herein stipulated
shall be deemed to be other than on account of the
earliest stipulated rent, nor shall any endorsement
or statement on any check or any letter
accompanying any check or payment as rent be deemed
an accord and satisfaction, and Sublessor may
accept such check or payment without prejudice to
Sublessor's right to recover the balance of such
rent or pursue any other remedy provided in this
Sublease or at law.
Section 22.10 Captions and Section Numbers. The
captions, section numbers, article numbers and
index appearing in this Sublease are inserted only
as a matter of convenience and in no way define,
limit, construe or describe the scope or intent of
such sections or articles of this Sublease nor in
any way affect this Sublease.
Section 22.11 Partial Invalidity. If any term,
covenant or condition of this Sublease or the
application thereof to any person or circumstance
shall, to any extent, be determined by a court of
competent jurisdiction to be invalid or
unenforceable, the remainder of this Sublease, or
the application of such term, covenant or condition
to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall
not be affected thereby and each term, covenant or
condition of this Sublease shall be valid and be
enforced to the fullest extent permitted by law.
This Sublease shall be governed by and construed in
accordance with the laws of the State in which the
Shopping Center is located.
Section 22.12 No Option. The submission of this
Sublease for examination does not constitute a
reservation of or option for the Demised Premises,
and this Sublease becomes effective as a Sublease
only upon execution and delivery thereof by
Sublessor and Sublessee.
Section 22.13 Recording. Sublessee shall not
record this Sublease without the written consent of
Sublessor. Sublessor and Sublessee shall each, at
the request of the other, execute a short form
sublease in recordable form, containing such
information as shall be satisfactory to Sublessor,
which short form sublease may be recorded;
provided, however, Sublessee shall not record any
such short form sublease or any other reference to
this Sublease until the term of this Sublease has
commenced.
Section 22.14 Liens. The Sublessee shall have no power
to do any act or make any contract which may create or
be the foundation for any lien, mortgage or other
encumbrance upon the estate of the Sublessor or of any
interest of the Sublessor in the Demised Premises, or
upon or in the building or buildings or improvements
thereon or hereafter erected or placed thereon, it
being agreed that should the Sublessee cause any
improvements, alterations or repairs to be made to
the Demised Premises, or material furnished or
labor performed therein, or thereon, neither the
Sublessor nor the Demised Premises not, any improvements
shall under any circumstances be liable for the payment
of any expense incurred or for the value of any work done
or material furnished to the Demised Premises or any
part thereof. All such improvements, alterations,
repairs, materials and labor shall be done at the
Sublessee's expense and the Sublessee shall be
solely and wholly responsible to contractors,
laborers and materialmen furnishing labor and
material to said premises and building or buildings
and improvements or any part thereof and all such
laborers, materialmen and contractors are hereby
charged with notice that they must look solely and
wholly to the Sublessee and the Sublessee's interest
in the Demised Premises to secure the payment of any
bills for work done and materials furnished.
In the event a mechanic's lien shall be filed
against the Demised Premises or Sublessee's
interest therein or against the Shopping Center or
any part thereof as the result of any repairs,
fixturing, alterations or other work undertaken by
the Sublessee, Sublessee shall, within ten (10)
days after receiving notice of such lien, discharge
such lien either by payment of the indebtedness due
or by filing a bond (as provided by statute) as
security therefor. In the event Sublessee shall
fail to discharge such lien, Sublessor may, but
shall not be obligated to, in addition to its
remedies as provided in the Section of this
Sublease entitled "Default of the Sublessee", have
the right to procure such discharge by filing such
bond and Sublessee shall pay the cost of such bond
to Sublessor as additional rent upon the first day
that rent shall be due thereafter.
Section 22.15 Broker's Commissions. Sublessee
represents and warrants that there are no claims
for brokerage commissions or finder's fees in
connection with the execution of this Sublease and
agrees to indemnify Sublessor against and hold it
harmless from all liabilities arising from any such
claim, including the cost of reasonable attorney
fees.
Section 22.16 Force Majeure. In the event that
either party hereto 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,
failure of power, restrictive governmental laws or
regulations, riots, insurrection, war or other
reason of a like nature not the fault of the party
delayed in performing the work or doing acts
required under the term of this Sublease, then
performance of such act shall be excused for the
period of the 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 such delay and extended
period shall in no event exceed ninety (90) days.
The party entitled to such extension hereunder
shall give written notice as soon as possible to
the other party hereto of its claim of right to
such extension and the reason(s) therefor. Should
any such delay or extended period required
hereunder exceed ninety (90) days, Sublessor may,
at its option, terminate this Sublease, and
Sublessor's and Sublessee's obligations and
liabilities hereunder shall be of no further force
and effect. The provisions of this Section shall
not operate to excuse Sublessee from the prompt
payment of rent, Percentage Rent, if any, or any
other payments required by the terms of this
Sublease or the obligations of Sublessee to
surrender the Demised Premises pursuant to this
Sublease.
Section 22.17 Entire Agreement. This Sublease and
the Exhibits, Riders and/or Addenda, if any are
attached and signed by the parties, set forth the
entire agreement between the parties. Any prior
conversations or writings are merged herein and
extinguished. No subsequent amendment to this
Sublease shall be binding upon Sublessor or
Sublessee unless reduced to writing and signed by
both parties.
Section 22.18 Late Charges and Interest. Any sums
to be paid by Sublessee to Sublessor and paid after
the date same are due shall bear interest at
eighteen (18%) per annum or the maximum allowable
rate by law, whichever is lesser, from the date
same initially became due through the date of full
payment of such indebtedness. The payment of such
interest shall not excuse or cure any default of
Sublessee under the Sublease.
Sublessee acknowledges that any late payment by
Sublessee to Sublessor of rent or other charges
payable by Sublessee under this Sublease or late
reporting of Gross Sales as required in this
Sublease will cause Sublessor to incur costs not
contemplated by this Sublease, the exact amount of
such costs being extremely difficult and
impracticable to determine. Such costs include,
without limitation, processing and accounting
charges. Therefore, if any installment of rent or
other charges due from Sublessee is not received by
Sublessor when due, then Sublessee shall reimburse
to Sublessor an additional sum of any cost incurred,
including attorney fees. The parties agree that the
charges do not constitute a late penalty as set
forth above since the charges shall be reimbursement
of the costs incurred by Sublessor rather than a
late fee penalty.
Acceptance of any late charges or reimbursement of
costs shall not constitute a waiver of Sublessee's
default with respect to the overdue rent or other
charges or requirement to report Gross Sales nor
prevent Sublessor from exercising any of the other
rights and remedies available to Sublessor.
Section 22.19 Cumulative Remedies. Each and every
one of the rights, remedies and benefits provided
by this Sublease to Sublessor shall be cumulative
and shall not be exclusive of any other such
rights, remedies and benefits allowed by law.
Section 22.20 Rules and Regulations. Sublessor
reserves the right to promulgate rules and
regulations from time to time pertaining to the
Demised Premises arid the Shopping Center. All such
rules and regulations shall apply substantially
uniformly to all of Sublessor's tenants in the
Shopping Center. Sublessee agrees to comply with
and observe all such rules and regulations. Failure
by Sublessee to keep and observe such rules and
regulations shall constitute a breach of this
Sublease as if same were contained herein as
covenants of Sublessee.
Section 22.21 Time. Time of performance by
Sublessee of its obligations under this Sublease is
of the essence.
Section 22.22 Attormnent. In the event of the
sale or assignment (except as collateral security
for a loan) of Sublessor's interest under this
Sublease, Sublessee shall attorn to the purchaser
or assignee and recognize such purchaser or
assignee as Sublessor under this Sublease, and in
such event Kmart Corporation shall be released from
all obligations and liabilities arising as
Sublessor under this Sublease.
Section 22.23 Merchants Association. The
Sublessor may create a Merchants Association
comprised of merchants doing business in the
Shopping Center and such other parties, if any, as
shall be permitted to join the Merchants
Association. The bylaws, charter, rules and
regulations of such association will be in
substantially the same form as those which are used
by other Merchants Associations in shopping centers
of comparable size and quality and approved by the
parties hereto.
Should Sublessor create such association, or if
such an association exists at the time Sublessee
takes possession of the Demised Premises, Sublessee
agrees to become a member and to remain a member so
long as it is doing business at the Demised
Premises. Sublessee agrees to pay minimum dues to
said association in the initial amount to be
determined payable in advance on the first day of
each month. Said minimum dues shall be subject to
annual adjustments as approved by a majority vote
of the members of the association, or as provided
in the bylaws of the association.
Sublessor reserves the right to create a
Promotional Fund instead of a Merchants
Association, which Promotional Fund shall be
managed and controlled by Sublessor. Sublessor
shall use such Promotional Fund to provide
promotional services for the benefit of the
Shopping Center. Sublessor agrees that Sublessee
shall have the right, upon written request, to
audit the books and records of any such Promotional
Fund. At the option of Sublessor, the minimum dues
payable by Sublessee for the Promotional Fund may
be increased annually, effective at the
commencement of each Sublease Year after the first,
by an amount equal: i) to the annual percentage
increase in the Consumer Price Index (CPI)
published in the second month preceding the
commencement of each such Sublease Year over and
above the CPI index for the same month in the
previous year or, ii) by the amount of 10%. Each
subsequent increase shall be applied to the then
current minimum dues.
Sublessee will, during the term of this
Sublease, to the fullest extent possible,
participate in all coordinated advertising and
promotion programs outlined by Sublessor under
either the Promotional Fund or under the Auspices
of the Merchants Association.
The failure of any other Sublessee in the
Shopping Center to contribute to the
Promotional Fund or become a member of the Merchants
Association shall in no way release Sublessee from
Sublessee's obligations hereunder.
Sublessee further acknowledges that Sublessor
retains the right to discontinue the activities of
any Merchants Association established at any time
and, at Sublessor's option, substitute a
Promotional Fund.
Section 22.24 Waiver of Trial by Jury.
Injunction Sublessor and Sublessee each hereby
waive trial by jury of any dispute arising under
this Sublease. In addition to all other remedies,
Sublessor is entitled to the restraint by
injunction of all violations by Sublessee, whether
actual, attempted or threatened, of any covenant,
condition or provision of this Sublease.
Section 22.25 Attachments. Attached hereto and
incorporated herein by reference are the following:
Exhibit "A", Legal Description;
Exhibit "B", Site Plan;
Exhibit "C", Construction Work;
Exhibit "D", Sign Design Criteria;
Exhibit "E", Space Layout
Exhibit "F", Commencement Letter;
Exhibit "G", Guaranty
Exhibit "H", Incorporated Sublease Terms, Rents, and
Conditions
IN WITNESS WHEREOF, Sublessor and Sublessee have
signed their names and affixed their seals on the
day and year first above written.
IN THE PRESENCE OF: SUBLESSOR: KMART CORPORATION
By: /s/ LORRENCE T KELLER
------------------------
Lorrence T. Kellar
Its: Vice President of Real Estate
SUBLESSEE: CENTRAL COAST BANCORP
(d/b/a Community Bank of Central California)
By: /s/ HARRY WARDWELL
-----------------------
Harry Wardwell
Its: Senior Vice President, Branch Manager
EXHIBIT A
LEGAL DESCRIPTION
Parcel A:
Parcel 4 as said Parcel is shown on that certain
Parcel Map filed for record June 28, 1991 in Book 8
of Parcel Maps, at page 34, San Benito County
Records.
Parcel B:
A non-exclusive Easement for ingress and egress as
described in the Reciprocal Easement and Operation
Agreement executed by and between Kmart, a Michigan
Corporation and K & S Market, Inc., a California
Corporation, Recorded June 14, 1989 as Document No.
8905249, Records of San Benito County, California.
Hoilister, CA
Kmart Store #3748
Ground Lease Property
February 24, 1997
Page 1 of 1
[Picture Omitted]
EXHIBIT "C"
CONSTRUCTION WORK
DIVISION I - TENANT'S/SUBTENANT'S WORK
(Minimum Requirements)
The Tenant/Subtenant acknowledges that the Demised
Premises are accepted "AS IS". This work will be
performed by the Tenant/Subtenant at the
Tenant's/Subtenant's own cost and expense in
accordance with the Tenant's/Subtenant's Plans and
Specifications previously approved in writing by
the Landlord/Lessor. Tenant's/Subtenant's
contractor(s) shall secure and pay for all
necessary permits, Certificate of Occupancy and/or
fees required by public authorities and/or utility
companies with respect to Tenant's/Subtenant's work.
A. General Requirements
1. All work installed by the
Tenant/Subtenant shall be coordinated with
and completed so as not to interfere with the
Landlord's/Lessor's construction schedule,
business operations, nor any other
Tenant's/Subtenant's activities.
2. All contractors employed by either the
Landlord/Lessor or the
Tenant/Subtenant shall allow other contractors, even
of the same trade, to
work on the Demised Premises without interference.
3. The Tenant/Subtenant and Tenant's/Subtenant's
contractors shall provide all
insurances required by the Landlord/Lessor, prior to
the start of any
construction work within the Demised Premises. The
Landlord/Lessor, Kmart
Corporation, shall be named as an additional insured.
4. The Tenant/Subtenant shall at all times, keep
the Demised Premises and the
surrounding area free from accumulations of waste
materials and/or rubbish
caused by his employees or workers. The
Tenant/Subtenant or his contractor
shall provide dumpsters and maintenance of said
dumpsters during the
construction period.
B. Interior Partitions
All partitions will be furnished and installed by
the Tenant/Subtenant.
C. Interior Finishes
All wallboard, trim, painting, staining,
enameling and any wall coverings or decor shall
be provided and installed by the
Tenant/Subtenant.
D. Flooring
Tenant/Subtenant shall provide carpet or resilient
tile flooring on all concrete floors.
E. Cabinets Shelving Counters etc.
Cabinets, shelving, counters, etc., are to be
furnished and installed complete by
Tenant/Subtenant, including connections to
utilities.
CONSTRUCTION WORK (continued)
F. Plumbing
Any plumbing facilities in excess of existing
facilities provided by the Landlord/Lessor, such
as kitchen equipment, toilet facilities,
janitor's sink, hose bibbs, laboratory sinks,
special fixturing or outlets, will be provided
and installed and connected by Tenant/Subtenant.
The Tenant/Subtenant will provide fire
extinguishers as required by building code and
insurance underwriters; see also "H'.
G. Heating, Cooling and Ventilating
Exhaust air vent systems as required for hoods,
etc., including outlets or connections thereto
will be provided by Tenant/Subtenant. Heating and
cooling required will be by the Tenant/Subtenant.
All vents and hoods shall comply with local
governing agencies. Tenant/Subtenant will submit
HVAC unit manufacturer, data and shop drawings
for Kmart approval. Upon approval, maintenance
brochures and 5-year warranty (HVAC unit - 1 year
and compressor - 4 year) shall be forwarded to
Kmart Corporation.
H. Fire Protection Sprinklers
The Tenant/Subtenant shall pay for and supply any
items required in excess of the existing
sprinkler system. Tenant/Subtenant will provide a
sprinkler layout and calculations for Governing
Authorities and Landlord/Lessor's approval. If
the Tenant/Subtenant is required to have a dry
chemical fire extinguisher system, it shall be
provided, installed and maintained by the
Tenant/Subtenant; see also "F".
I. Electrical Power and Lighting
Tenant/Subtenant will furnish and install the
electrical work in excess of that provided by
Landlord/Lessor. Such items may include, but not
limited to, lighting, special outlets, high
voltage outlets, exit light, telephone,
communication and music systems, burglar alarms
and/or warning systems, emergency generator,
Tenant's/Subtenant's store signs and controlling
time clocks. If Tenant/Subtenant furnished its
own light fixtures, the same will be installed at
the Tenant's/Subtenant's expense including the
cost of additional outlets.
J. Storefronts
Changes to the storefront design shall only be
initiated upon approval of the Landlord/Lessor.
K. Tenant/Subtenant Signs - (See Exhibit "D")
The Tenant/Subtenant shall furnish, install and
connect all identification signs at locations
provided at the canopy or building fascia at the
Tenant's/Subtenant's expense. All outside signs
shall be submitted to Landlord/Lessor for
approval before installation.
Canopy or building fascia sign design, lighting
and sign copy color shall be subject to
Landlord's/Lessor's approval. Said sign shall be
in conformance with the detailed sign criteria,
as prepared by Landlord's/Lessor's architect and
attached as Exhibit "D". Prior to fabrication,
three (3) copies of sign detail and copy must be
submitted to Landlord/Lessor for
Landlord's/Lessor's approval.
L. Roof Openings
Except as provided by Landlord/Lessor, pursuant
to J above, the Tenant/Subtenant will furnish all
curbs, lintels, flashings, counter flashings,
pipes, ducts, vent caps, air inlets, exhaust
hoods, louvers, etc., as necessary for
Tenant's/Subtenant's equipment requiring openings
through roof and/or exterior walls. Any cutting,
patching, or flashing of the roof for the
Tenant's/Subtenant's equipment must be performed
by the Landlord's/Lessor's roofing contractor
responsible for the roof guarantee. All such work
will be done at the Tenant's/Subtenant's expense.
DIVISION II CONSTRUCTION PROCEDURES
A. Upon execution of the Lease/Sublease the
Tenant/Subtenant will have thirty (30) working
days to provide to the Landlord/Lessor, a
Preliminary Floor Plan and Storefront Elevation
for review and preliminary approval.
When submitting Construction Plans and
Specifications (preliminary or completed)
Tenant/Subtenant shall send five (5) sets of
prints and specifications.
The approval of said "Preliminary Floor Plan
and Storefront Elevation" will require fifteen
(15) working days.
B. The Tenant/Subtenant can elect to contract with
an "outside" architect of its choosing for the
preparation of the "Construction Plans and
Specifications". The "outside" architect shall
prepare detailed construction drawings for the
Demised Premises, incorporating the improvements
desired by the Tenant/Subtenant (to the extent
such improvements are acceptable to the
Sublessor). Such drawings will be forwarded to
the Tenant/Subtenant for its approval.
C. All contractors engaged by the' Tenant/Subtenant
as permitted by the Landlord/Lessor shall-be
bondable, licensed contractors, possessing good
labor relations capable of performing quality
workmanship and working in harmony with any
contractor hired by Landlord/Lessor. All work
shall be coordinated with the general project
work.
D. Construction shall comply in all respects with
applicable Federal, State, County, Township and
City Statutes, ordinances, regulations, laws and
codes.
E. The Tenant/Subtenant shall not permit any
mechanic's liens to attach to the Demised
Premises or the shopping center development in
which the Demised Premises are located on account
of any labor or materials furnished or supplied
to the Demised Premises in connection with
Tenant's/Subtenant's work. In the event that such
a lien is attached, Tenant/Subtenant shall
forthwith cause the same to be discharged or in
lieu thereof furnish a bond for the benefit of
Landlord/Lessor issued by a duly licensed surety
company authorized to do business in the State
wherein the Demised Premises is located,
acceptable to Landlord/Lessor, which by its terms
indemnifies and holds the Landlord/Lessor
harmless from the effects of such lien.
F. The Landlord/Lessor, Landlord's/Lessor's agent,
an independent contractor, or an authorized
utility company as the case may be, shall have
the right, subject to the Landlord's/Lessor's
written approval, to run utility lines, pipes,
conduits or duct work, where necessary or
desirable, through attic space, or other parts of
the Demised Premises and to repair, alter,
replace or remove the same, all in a manner which
does not interfere unnecessarily with the
Tenant's/Subtenant's use thereof.
CONSTRUCTION WORK (continued)
G. Construction Coordinator
Assistant Manager of Design Division
Kmart Corporation
3100 West Big Beaver Road
Troy, MI 48084-3163
(248) 643-1224
H. Real Estate Coordination
Shopping Centers Asset Manager
Real Estate Department, West Annex
Suite 400
Kmart Corporation
3100 West Big
Beaver Road
Troy, MI 48084-3163
(248) 637-0714
(248) 637-9305 (fax)
THE USE OF "TENANT/SUBTENANT" AND
"LANDLORD/LESSOR" THROUGHOUT THIS EXHIBIT SHALL
ALSO BE INTERPRETED TO INCLUDE "TENANT/
LESSEE/SUBLESSEE" AND "LANDLORD/SUBLESSOR",
RESPECTWELY, AS APPLICABLE.
EXHIBIT "D"
SIGN DESIGN CRITERIA
NO SIGN INSTALLATION IS TO COMMENCE UNTIL WRITTEN
APPROVAL IS RECEIVED FROM THE REAL ESTATE
DEPARTMENT OF KMART CORPORATION.
REQUIREMENTS FOR SUBMITTAL OF TENANT/SUBTENANT
SIGNING PROPOSALS
Building
Sign:
1) Complete written description of
tenant's/subtenant's sign to
include:
Colors.
Construction.
Method of illumination.
Dimensioned scale drawing showing exact
size and location of sign on building.
Section and details of sign.
Detail showing attachment to building.
Amperage and voltage requirements (assume 480 volt)
2) Color photograph of
tenant's/subtenant's
storefront, minimum of 3" x 5".
3) Color photograph of the front of the entire
building including Kmart and
tenant's/subtenant's Demised Premises,
minimum of 3" x 5".
Pylon Sign:
1) Complete written description of
tenant's/subtenant's sign to include:
.Colors
.Construction
.Method of illumination
.Dimensioned scale drawing
.Section and details of sign
.Detail showing attachment to pylon
.Amperage and voltage requirements (assume 480 volt)
2) Color photograph of Kmart pylon with:
.Overall height dimension
.Height dimension of letter K panel
3) Site plan indicating location of Kmart pylon.
NOTE: Tenants/Subtenants proposing the
installation of an individual pylon sign must
indicate the proposed location of the new sign on the site
plan.
TENANT/SUBTENANT BUILDING SIGN DESIGN CRITERIA
A. Length
(1) May not exceed 50% of the building width.
(2) Length may vary in the instance of a lengthy
name or because the building architecture may
justify a larger or smaller sign for
aesthetic reasons.
(3) Shall comply with local sign ordinances.
B. Height
(1) May not exceed 5'-O".
(2) Shall comply with local sign ordinances.
C. Location
(1) Should always be on the (front) building
facade.
(2) Sign must be located to comply with local sign
ordinances.
(3) May not project above roof and/or parapet.
D. Construction
(1) Internally illuminated plastic faced letters.
(2) Individual internally illuminated plastic
faced cabinet letters.
(3) One single internally illuminated plastic
faced cabinet sign.
(4) Absolutely no exposed conduits, wiring, neon
tubing, or spotlighted signing.
(5) All wiring shall be "UL' rated.
(6) Moving or blinking lights will not be approved.
E. Maintenance
(1) When an existing sign is removed for the
installation of a new sign, it is the
responsibility of the tenant/subtenant to
restore the building facade in the event any
damage is incurred. This includes repairing
chips, cracks and holes and repainting faded
areas to match existing color.
NOTE All signing outlined above is subject to the
written approval of Kmart's Design
Division. Tenant/Subtenant must also obtain
the approval of the appropriate
governmental agencies and conform to all
applicable regulatory codes.
Tenant/Subtenant must submit sign drawings of
all proposed signing for each location.
Absolutely no reader boards or attraction
boards will be approved for
installation on the building.
The entire installation must be done in a neat
and workmanlike fashion; the
quality and workmanship shall be equivalent to
that of Kmart Corporation.
TENANT/SUBTENANT CORPORATE LOGO BUILDING SIGN DESIGN
CRITERIA
A. Corporate Logo Approval
(1) Permitted only when absolutely pertinent
to the tenants/subtenant's identity.
B. Size
(1) Should not exceed 5'-O" x 8'-O".
C. Location
(1) Approximately 5'-O" to 10'-0" from building end.
(2) Should be at least 12'-O" above sidewalk.
D. Construction and Maintenance
(1) All construction and maintenance guidelines
for building signs shall apply to corporate
logo signs.
NOTE Absolutely no reader boards or attraction
boards will be approved for
installation on the building.
All signing outlined above is subject to the
approval of Kmart's Design
Division. Tenant/Subtenant must also obtain
the approval of the appropriate
governmental agencies and conform to all
applicable regulatory codes.
Tenant/Subtenant must submit sign drawings of
all proposed signing for each location.
The entire installation must be done in a neat
and workmanlike fashion; the
quality and workmanship shall be equivalent to
that of Kmart Corporation.
TENANT/SUBTENANT PYLON SIGN PANEL DESIGN CRITERIA
A. Size
(1) Shall not be larger in width than the clear
space between column supports and a maximum
height of 6'-O".
B. Location
(1) Installed a minimum of 5'-O" below the Kmart
panel.
C. Design
(1) Simple and straightforward, in keeping with
the Kmart signing.
D. Construction
(1) Sign must be double-faced and internally
illuminated.
(2) Moving or blinking lights will not be approved.
E. Absolutely no reader boards will be approved for
installation on the Kmart pylon.
F. Maintenance
(1) We will expect any damage incurred to the
Kmart pylon during the installation or
removal of any signs to be repaired by the
tenant/subtenant. This includes removal of
any existing reader boards.
G. Fees
(I) A one-time fee for the use of the Kmart pylon
must be negotiated with the Real Estate
Department at Kmart Corporation International
Headquarters, Troy, Michigan 48084.
(2) The tenant/subtenant will be responsible for
the cost of all electricity consumed by its
sign.
NOTE All dimensions above are based on a sign
installation on a standard
Kmart pylon. In the event Kmart
Corporation installs a pylon smaller than
the standard pylon, all dimensions above
will be proportionately reduced.
All signing outlined above is subject to
the approval of Kmart's
Design Division. Tenant/Subtenant must
also obtain the approval of the
appropriate governmental agencies and
conform to all applicable regulatory
codes.
Tenant/Subtenant must submit sign
drawings of all proposed
signing for each location.
The entire installation must be done in a
neat and workmanlike fashion; the quality
arid workmanship shah be equivalent to
that of Kmart Corporation.
THE ABOVE CRITERIA ARE SUBJECT TO REVISION AT
THE SOLE DISCRETION OF KMART CORPORATION.
THE USE OF "TENANT/SUBTENANT" AND
"LANDLORD/LESSOR" THROUGHOUT THIS EXHIBIT SHALL
ALSO BE INTERPRETED TO INCLUDE "TENANT/ LESSEE!
SUBLESSEE" AND "LANDLORD/SUBLESSOR",
RESPECTIVELY, AS APPLICABLE.
[Picture Omitted]
EXHIBIT "F"
COMMENCEMENT LETTER
August 1, 2000
Mr. Harry Wardwell
Senior Vice President,
Branch Manager
Central Coast Bancorp.
301 Main Street
Salinas, CA 93901
Re: Kmart No. 3748- Hollister, CA
491 Tres Pinos Road, Unit 103
Hollister, CA 95023
Dear Mr. Wardwell:
Central Coast Bancorp has entered into a
sublease with Kmart Corporation for premises
at the referenced location. This letter will
outline procedures regarding payments and
clarify questions you may have relative to
administration of the sublease.
The commencement date of your sublease is August 1,
2000.
The expiration date of your initial primary term is
July 31, 2003.
Unless otherwise noted, your liability for all
payments is effective as of the commencement date.
MINIMUM RENT $1,890.00 per month commencing November
1, 2000.
If your sublease provides for periodic rent
increases it is your responsibility to
initiate the require change at the proper time.
PERCENTAGE RENT Not applicable.
ADDITIONAL RENT 1.5061% of Kmart's costs for
[real estate taxes, common area maintenance,
exterior repairs, parking lot lighting and
building fire insurance]; payable by monthly
escrow payments with an annual reconciliation
of costs and payments.
Real Estate Taxes: Monthly escrow payment $97.00.
Common Area Maintenance: Monthly escrow payment $102.00.
Repairs
Parking Lot Lighting: Monthly escrow payment is included in CAM.
Building Fire Insurance: Monthly escrow payment $12.00.
LATE PENALTY Please note that a late fee as
set forth in your sublease will be charged on
all late payments. Therefore, it is necessary
that your payments are received on or before
the first of each calendar month.
UTILITIES Electricity, gas and water, is
directly metered to your store, therefore you
should immediately establish an account with
the local utility company.
IT IS IMPERATIVE THAT YOU MAKE ARRANGEMENTS WITH THE
APPROPRIATE UTILITY COMPANIES TO ESTABLISH ACCOUNTS
IN YOUR NAME, AS KMART CORPORATION WILL ARRANGE
FINAL READINGS TO CLOSE OUR ACCOUNT ON JULY 31, 2000.
ESCROW PAYMENTS Your initial escrow rates have
been based on estimated costs. At the end of
each sublease year, scheduled payments will be
reconciled with actual costs and you will be
invoiced for any additional amount owed or
issued a refund, whichever is applicable. New
escrow rates are established annually based on
costs over the previous year. Occasionally an
escrow rate is adjusted during the year if it
appears that costs will significantly exceed
your scheduled payments.
SUMMARY OF MONTHLY PAYMENTS: Minimum Rent $1,890.00
Real Estate Taxes $ 97.00
CAM [/Repairs] $ 102.00
Parking Lot lighting Included in CAM
Building Fire Insurance $ 12.00
-----------
TOTAL MONTHLY PAYMENT $2,101.00
ADDRESS FOR PAYMENTS Rent and escrow payments
are due, in advance on the first day of each
month. Payment for invoiced items is due ten
(10) days following the date of the invoice.
Checks must be payable to "Kmart Corporation"
and should be mailed to the address below in
time to be received on or before the date they
are due.
Kmart #3748
Department G
P.O. Box 4771G
Carol Stream, IL 60197- 4771
Please identify your payments with the Kmart
location number (No. 3748), your tenant
identification number (No. 103), and a
notation of what you are paying, i.e. rent,
utilities, etc.
NOTE: The street address in Troy Michigan should be
used for all correspondence going to Kmart
Corporation All correspondence must include
the Kmart location number (No 3748 and the
city and state wherein your demised premises
is located.
ADDRESS FOR CORRESPONDENCE
Shopping Centers Asset Manager
Real Estate Department
Kmart Corporation
3100 West Big Beaver Road
Troy, MI 48084
(248-637-0714)
(Fax No. 248-637-9305)
A carbon copy is to be sent to the Property
Management Company:
PM Realty Group
225 W. Wacker Drive
Suite 2200
Chicago, IL 60606
Attn: Retail Division
Inquiries regarding your sublease or
administrative matters, including those
related to your account, should be directed to
PM Realty Group's property manager, Kathy
Douglas at 415.288.9559.
Unless otherwise advised, we will mail all
correspondence, invoices and statements to the
address used on this letter. If you would like
us to use an alternate address, please advise
the writer, with a carbon copy to Kmart
Corporation, Shopping Centers Asset Manager.
PROOF OF INSURANCE You are required to provide proof
of insurance as referred to in Article
X of your sublease.
MAINTENANCE AND REPAIRS Requests for maintenance
and repairs, other than those for which you are
responsible, are to be directed to the property
management company of the Kmart shopping center. If
repairs are not completed within a reasonable
period of time, you should advise the Shopping
Centers Asset Manager, Judy M. Chambers, listed
above.
We acknowledge receipt of your security deposit in
the amount of $2,101.00.
This letter is not intended to modify the captioned
sublease. In the event of error or discrepancy
between the sublease and this letter, the sublease
will prevail.
Sincerely,
PM Realty Group
Susan M. Ahlert
Vice President-Retail Leasing
cc: S. Bartos, Real Estate Accounting
D. Hurley, Real Estate Accounting
Shopping Centers Asset Manager, Real Estate
Department
EXHIBIT "G"
GUARANTY
INTENTIONALLY DELETED.
EXHIBIT H
INCORPORATED SUBLEASE TERMS, RENTS, AND CONDITIONS
(Sublease, dated July 17, 2000, between Kmart
Corporation,
Sublessor, and Central Coast Bancorp, Sublessee,
doing business as
Community
Bank of Central California)
The terms, rent(s), and conditions listed below
are incorporated within the specific sections of
the Sublease, as defined therein, and are as
follows:
Section 1.1 Demised Premises
The approximate dimensions of the Demised
Premises (Unit 103) are twenty (20) feet
(frontage) and seventy (70) feet (depth) totaling
approximately One Thousand Four Hundred (1,400)
square feet of space within the Kmart No. 3648,
Hollister, California Shopping Center located at
491 Tres Pinos Road, Hollister, California 95023.
Sublessor Master Lease Dated: March 4, 1997; Ground
Lease Dated: November 2, 1988
Section 1.2(a) Term:
Sublease Primary Term "Commencement Date": August 1,
2000
Sublease Primary Term Expiration Date: July 31,
2003, or unless sooner terminated as provided
within the Sublease.
Section 1.2 (b) Option to Extend Term:
Two (2) three (3) year options not beyond July 31,
2009.
Section 2.2 Annual Minimum Rent
Primary Term Aggregate Minimum Rent of at least
SIXTY FOUR THOUSAND EIGHT HUNDRED NINETY AND
00/100 DOLLARS ($64,890.00):
A. Commencing November 1, 2000, ("Rent
Commencement Date", as defined within the
Sublease) for the period from August 1, 2000,
through July 31, 2001, SEVENTEEN THOUSAND TEN
AND 00/100 DOLLARS ($17,010.00), payable in
equal monthly installments of ONE THOUSAND
EIGHT HUNDRED NINETY AND 00/100 DOLLARS
($1,890.00);
B. From August 1, 2001, through July 31, 2002,
TWENTY THREE THOUSAND FIVE
HUNDRED TWENTY AND 00/100 DOLLARS ($23,520.00) per
Sublease Year,
payable in equal monthly installments of ONE
THOUSAND NINE HUNDRED SIXTY
AND 00/100 DOLLARS ($1,960.00); and
C. From August 1, 2002, through July 31, 2003,
TWENTY FOUR THOUSAND THREE
HUNDRED SIXTY AND 00/100 DOLLARS ($24,360.00) per
Sublease Year, payable
in equal monthly installments of TWO THOUSAND THIRTY
AND 00/100 DOLLARS
($2,030.00)). The third (3rd) Sublease Year shall
terminate on July 31, 2003, whether or
not that period shall be for twelve (12) calendar
months or some other number of
calendar months more or less than that and in such
event the Annual Minimum Rent
shall be adjusted so that the sum of TWO THOUSAND
THIRTY AND 00/100
DOLLARS ($2,030.00) shall be paid for every calendar
month of the Sublease Year.
Likewise, any other amounts due under this Sublease
shall be adjusted higher or lower
on a proportional basis to reflect the actual number
of calendar months in the Sublease
Year.
First Option Term Aggregate Minimum Rent of at
least SEVENTY EIGHT THOUSAND ONE HUNDRED TWENTY
AND 00/loo DOLLARS ($78,120.00):
D. From August 1, 2003, through July 31, 2004,
TWENTY FIVE THOUSAND TWO
HUNDRED AND 00/100 DOLLARS ($25,200.00) per Sublease
Year, payable in equal
monthly installments of TWO THOUSAND ONE HUNDRED AND
00/100
DOLLARS ($2,100.00);
E. From August 1, 2004, through July 31, 2005,
TWENTY SIX THOUSAND FORTY
AND 00/loo DOLLARS ($26,040.00) per Sublease Year,
payable in equal monthly
installments of TWO THOUSAND ONE HUNDRED SEVENTY AND
00/100
DOLLARS ($2,170.00); and
F. From August 1, 2005, through July 31, 2006,
TWENTY SIX THOUSAND EIGHT
HUNDRED EIGHTY AND 00/100 DOLLARS ($26,880.00) per
Sublease Year,
payable in equal monthly installments of TWO
THOUSAND TWO HUNDRED
FORTY AND 00/100 DOLLARS ($2,240.00). The sixth
(6th) Sublease Year shall
terminate on July 31, 2006, whether or not that
period shall be for twelve (12) calendar
months or some other number of calendar months more
or less than that and in such
event the Annual Minimum Rent shall be adjusted so
that the sum of TWO
THOUSAND TWO HUNDRED FORTY AND 00/100 DOLLARS
($2,240.00) shall be
paid for every calendar month of the Sublease Year.
Likewise, any other amounts due
under this Sublease shall be adjusted higher or
lower on a proportional basis to reflect
the actual number of calendar months in the Sublease
Year.
Second Option Term Aggregate Minimum Rent of at
least EIGHTY FIVE THOUSAND SIX HUNDRED EIGHTY AND
00/100 DOLLARS ($85,680.00):
G. From August 1, 2006, through July 31, 2007,
TWENTY SEVEN THOUSAND
SEVEN HUNDRED TWENTY AND 00/100 DOLLARS ($27,720.00)
per Sublease Year,
payable in equal monthly installments of TWO
THOUSAND THREE HUNDRED TEN
AND 00/loo DOLLARS ($2,310.00);
H. From August 1, 2007, through July 31, 2008,
TWENTY EIGHT THOUSAND
FIVE HUNDRED SIXTY AND 00/100 DOLLARS ($28,560.00)
per Sublease Year, payable
in equal monthly installments of TWO THOUSAND THREE
HUNDRED EIGHTY
AND 00/100 DOLLARS ($2,380.00); and
I. From August 1, 2008, through July 31,
2009, TWENTY NINE THOUSAND FOUR HUNDRED AND
00/100 DOLLARS ($29,400.00) per Sublease Year,
payable in equal monthly installments of TWO
THOUSAND FOUR HUNDRED FIFTY AND 00/100 DOLLARS
($2,450.00). The ninth (9th) Sublease Year
shall terminate on July 31, 2009, whether or
not that period shall be for twelve (12)
calendar months or some other number of
calendar months more or less than that and in
such event the Annual Minimum Rent shall be
adjusted so that the sum of TWO THOUSAND FOUR
HUNDRED FIFTY AND 00/100 DOLLARS ($2,450.00)
shall be paid for every calendar month of the
Sublease Year. Likewise, any other amounts due
under this Sublease shall be adjusted higher
or lower on a proportional basis to reflect
the actual number of calendar months in the
Sublease Year.
Section 2.3 Percentage Rent
All references to Percentage Rent within the
Sublease shall be deleted if in reference to payment
of Percentage Rent since Sublessee does not pay
Percentage Rent. Sublessee shall, however, be
required to report Gross Sales (as defined within
the Sublease pursuant to this Sublease.
Section 5.1 Use Of Premises
Purpose: Bank facility to the general public.
Section 5.2 Change of Name
Business Name: Community Bank of Central California
Section 21.1 Security Deposit
TWO THOUSAND ONE HUNDRED ONE AND 00/l00 DOLLARS
($2,101.00).
FIRST AMENDMENT TO SUBLEASE
This First Amendment to Sublease (hereinafter "First
Amendment") is made and entered into on October 11,
2000, between Kmart Corporation, a Michigan
corporation, having its principal office at 3100
West Big Beaver Road, Troy, Michigan 48084
(hereinafter referred to as "Sublessor") and Central
Coast Bancorp, a California corporation, having its
principal office at 301 Main Street, Salinas,
California 93901 doing business as Community Bank of
Central California (hereinafter referred to as
"Sublessee").
WHEREAS, Sublessor and Sublessee entered into a
Sublease, dated July 17, 2000, (hereinafter referred
to as "Sublease"); and
'WHEREAS, Sublessor and Sublessee seek to
amend the terms of said Sublease as
hereinafter provided;
NOW THEREFORE, in consideration of the
mutual covenants herein contained, the
parties agree to the following:
1. ATM Definition. As used herein, the term "ATM"
shall mean an electronic fund transfer terminal
consisting of any automated teller machine, together
with the fixtures, access lines, equipment, and
furnishings (hereinafter "ATM") necessary to, or,
which will facilitate the operation of the automated
teller machine in the performance of certain banking
services and/or the dispensing of cash to
Sublessee's customers.
2. ATM Installation/Taxes/Security/Indemnification/
Insurance/Legal Compliance. The provisions of the
Sublease and master leases and agreements shall apply
to the installation of the ATM, including, without
limitation, repair of any damage caused thereof and
subsequent removal. The installed ATM will for all
purposes be and remain Sublessee's personal property
and shall not become a fixture or real property. During
the Sublease Term, Sublessee shall pay any and all
excise, privilege, sales, use, or other taxes levied
against or upon the ATM or upon any or all associated
fixtures and equipment. Sublessor, in its sole
discretion, may upon thirty (30) days prior written
notice require Sublessee, at Sublessee's expense,
to remove or relocate the ATM and to restore the area
to as good or better condition which existed prior to
the installation of the ATM thereof, and Sublessee
agrees to the same. In the event Sublessee fails to
perform as contemplated herein, Sublessor is authorized
by Sublessee to remove the ATM, in Sublessor's sole
discretion, without incurring any liability to
Sublessee or any third party. In such event,
Sublessee shall pay to Sublessor upon demand all
costs for removal, repair, and restoration and
indemnify, hold harmless, and defend Sublessor from
and against any liablity or claims arising thereof.
Sublessee shall submit to Sublessor its plans and
specifications for its ATM installation and signage
and performed such work pursuant to the Sublease and
its exhibits. Sublessee shall not commence any work
until the same is approved in writing by Sublessor,
in its sole discretion, its Landlord, its Ground
Lessor, and its/their mortgagee(s), as applicable.
Sublessee shall pay all expenses incurred by
Sublessor to obtain any consent(s) associated with
the ATM.
Sublessee, at its sole expense, shall provide,
without limitation, all necessary heating,
ventilation air-conditioning, and electrical power
support at the ATM location and will further pay all
utility usage charges applicable to the operation of
the ATM, including, without limitation, all costs of
access and connection to the designated electrical
junction box and/or panel. Servicing and other
operational functions shall be performed by Sublessee
only during pre-opening and post-closing facility hours
with the prior approval of Sublessor. Notwithstanding
any provisions to the contrary within the Sublease,
Sublessee shall provide its own security and
indemnify, hold harmless, and defend Sublessor, with
counsel acceptable to Sublessor, from any and all
claims, costs, including attorneys' fees, expenses,
causes of action, lawsuits, demands, and liabilities
arising, directly or indirectly, from, without
limitation, the installation, existence, use,
operation, maintenance, repair, and removal, of the
ATM, including, without limitation, the insertion of
explosive devices and any resulting claims or damage
caused thereof. Sublessee shall provide sufficient
and adequate insurance, satisfactory to Sublessor,
for and against the foregoing. Such claims shall also
include, without limitation, third party assertions
that any ATM or its equipment infringes any patent,
copyright, trademark or other proprietary right or
constitutes a misuse of any trade secret information.
Sublessee shall pay all costs, attorney fees,
settlement payments, and damages arising in
connection with any such claims.
Sublessee also agrees to reimburse, indemnify, and
hold harmless Sublessor from and against all claims,
costs, including attorney fees, expenses, causes of
action, lawsuits, demands, and liabilities against
Sublessor due to Sublessee's business activities,
including, without limitation, the negligent or
intentional acts, or omissions, of Sublessee's,
without limitation, agents, employees, customers,
contractors, or invitees.
Sublessee shall comply with all applicable laws and
regulations pertaining to the ATM, including without
limitation, the regulations of the Federal Reserve
Board.
3. Reciprocal Easement and Operation Agreement.
Sublessee shall be responsible to comply with the
provisions of the Reciprocal Easement and Operation
Agreement (hereinafter "REOA"), dated June 13, 1989,
between Sublessor and K & S Market, Inc. and to
obtain, at Sublessee's sole expense, any consent(s)
which may be required. A copy of the REOA is attached
hereto and and incorporated herein as Exhibit I to
the Sublease.
5. No Agency Partnership or Joint Venture. Nothing
contained within the Sublease or this
First Amendment shall be construed as creating a
relationship of principle and agent, or a
partnership, or joint venture between Sublessee
and Sublessor and Sublessee shall at all times
conduct its activities independently thereof.
6. Entire Agreement. This First Amendment contains
the entire agreement of Sublessee and Sublessor with
respect to the subject matter hereof and the same
shall not be modified unless in writing and signed
by the parties.
7. Captions and Section Numbers. The captions and
section numbers appearing in this First Amendment
are inserted only as a matter of convenience and in
no way define, limit, construe or describe the scope
or intent of such sections of this First Amendment
in any way affect the same.
8. Contingency. This First Amendment is contingent
upon Sublessee submitting to Sublessor detailed
plans and specifications of the modifications of the
Demised Premises, including, but not limited to, to
proposed signage, and obtaining Sublessor, its
Landlord, its Ground Lessor, and its/their
mortagee's(s'), as applicable, prior written
approval(s) prior to any work being commenced. Any
such modifications shall be completed in accordance
with the Sublease and its exhibits.
This First Amendment shall become binding upon the
respective parties, their successors, heirs, and
assigns.
Except for the modifications herein stated, all
provisions of the Sublease shall continue in full
force and effect.
IN WITNESS WHEREOF, Sublessor and Sublessee have
cause this First Amendment to be executed in
quadruplicate as of the day and year first above
written.
WITNESSES:
SUBLESSOR: KMART CORPORATION
By: /s/ LORRENCE T. KELLER
-----------------------
Lorrence T. Kellar
Its: Vice President of Real Estate
SUBLESSEE: CENTRAL COAST BANCORP
(d/b/a Community Bank of Central California)
By: /s/ HARRY WARDWELL
-----------------------
Harry Wardwell
Its: Senior Vice President, Branch Manager
Kmart #3748 - Hollister, CA
Central Coast Bancorp
(Community Bank of Central California)
First Amendment - Exhibit I
RECIPROCAL EASEMENT
AND AGREEMENT
Hollister, CA
TABLE OF CONTENTS
I. DEFINITION
1.01 Arby's Parcel
1.02 Base Parcel
1.03 Building Areas
1.04 Common Areas
1.05 Developer
1.06 Developer Parcel
1.07 Floor Area
1.08 K mart
1.09 K mart Building
1.10 K mart Parcel
1.11 Mortgage
1.12 Mortgagee
1.13 Owner
1.14 Parcel
1.15 Person
1.16 Responsible Owner
1.17 Shopping Center
1.18 State
II. LAND USE
2.01 No interference with Common Areas
2.02 Conformity to Size Plan
III. COMMON AREAS
3.01 Parking Areas
3.02 Unimproved Building Area as Common Area
3.03 Rules for Use of Common Areas
3.04 Grant and Declaration of Reciprocal Easement
3.05 Temporary Use of Common Areas During.
Construction and For Maintenance and Repair
3.06 Barriers and Traffic Control
3.07 Easement for Minor Encroachments
3.08 No Easements Beyond Shopping Center
IV. OPERATION AND MAINTENANCE OF COMMON AREAS
4.01 Responsibility for Maintenance
4.02 Taxes
4.03 Common Area Liability Insurance
V. UTILITY EASEMENT
5.01 Separate Utility Lines
5.02 Common Utility Lines
5.03 Location of Easements
5.04 Installation, Maintenance and Repair
5.05 Relocation
5.06 Master Storm Drain Easement
VI. BUILDING DESIGN AND CONSTRUCTION
[Intentionally Omitted]
VII SIGNS
7.01 Permitted Signs
7.02 Pylon Signs
VII EMINENT DOMAIN
IX. MORTGAG SUBORDINATE TO AGREEMENTES
X. NATURE OF AGREEMENT
10.01 Obligations of Agreement
10.02 No Dedication to Public
10.03 Amendment, Modification or Termination
10.04 Term of Agreement
XI. APPROVALS
XII. REMEDIES
12.01 Default of Owner
12.02 Other Remedies
12.03 Liens
12.04 No Waiver
12.05 No Termination for Breach
XIII. MISCELLANEOUS
13.01 Severability
13.02 Estoppel Certificate
13.03 Governing Law
13.04 Headings
13.05 No Partnership
13.06 Notices
13.07 Mechanics' Liens
RECIPROCAL EASEMENT AND OPERATION AGREEMENT
AGREEMENT made as of this 13th day of June,
1989 by and between K MART CORPORATION, a Michigan
corporation, having its principal address at 3100
West Big Beaver Road, Troy, Michigan 48084 ("K
mart') and K & S MARKET, INC., a California
corporation, having an address at. 591 Tres Pinos
Road, Hollister, California 95023 ("Developer').
WITNESSETH:
WHEREAS, Developer is the owner of a
certain parcel of real property containing
approximately 6.91 acres located in Hollister,
California, which real property is more
particularly described on Exhibit "A-1" attached
hereto and incorporated herein by reference
(hereinafter referred to as the "Developer Parcel");
and
WHEREAS, K mart is the owner of a certain
parcel of real property containing approximately
7.67 acres located in Hollister, California, which
real property adjoins and is contiguous with the
Developer Parcel and is more particularly described
on Exhibit "A-2" attached hereto and incorporated
herein by reference (hereinafter referred to as the
"K mart: Parcel"); and
WHEREAS, K mart and Developer have agreed
to develop the Developer Parcel and the K mart
Parcel (the combined legal description of which
Parcels is set forth on Exhibit A attached hereto)
as an integrated shopping center (hereinafter
referred to as the "Shopping Center') substantially
in accordance with the site plan shown on Exhibit
'3' attached hereto and incorporated herein by
reference; and
WHEREAS, the parties desire to subject the
K mart Parcel and the Developer Parcel to the
covenants, conditions and restrictions hereinafter
set forth, to establish the easements hereinafter
described, and to provide for the maintenance and
operation of the Common Areas, as hereinafter
defined, for the mutual benefit of the parties
hereto and their respective heirs, executors,
successors, assigns, employees, mortgagees,
tenants, customers and invitees.
NOW, THEREFORE, in consideration of the
mutual covenants and agreements herein set forth
and for other good and valuable consideration, the
receipt and sufficiency of which is hereby
acknowledged by each party hereto, the parties
agree as follows:
ARTICLE 1
DEFINITIONS
For purposes of this Agreement, the following terms
shall, unless otherwise indicated, have the
following meanings and the use of the singular shall
include the plural:
1.01 Arby's Parcel: That certain parcel of land
depicted as 'Arby's" on Exhibit B hereto.
1.02 Base Parcel The K mart Parcel and the
Developer Parcel and any other Parcel resulting
from a subdivision of the Developer Parcel which
other Parcel contains a building designed for a
single user having a ground Floor Area plan of at.
least 25,000 square feet.
1.03 Building Areas Those areas marked on
Exhibit B as K mart, Garden Shop, Retail, New
Office/Retail, Existing Office/Retail, Taco Bell
and Pad.
1.04 Common Areas All public and common
facilities erected on the Shopping Center intended
for common use, including but not limited to
entrances, exits, driveways, access roads, parking
areas, walks, service drives, directional signs,
lighting facilities, utility services, drainage and
retention pond facilities, landscaped areas and
other facilities and areas intended for common use,
as the same may exist from time to time in the
Shopping Center, but not including any buildings
erected on the Building Areas.
1.05 Developer K & S Market, Inc., a
California corporation, its successors and assigns,
so long as it is the Responsible Owner of the
Developer Parcel, otherwise the Responsible Owner
of the Developer
Parcel.
1.06 Developer Parcel That certain parcel of
land described in Exhibit A-1 attached hereto and made
a part hereof.
1.07 Floor Area Floor area measured from
exterior surface of exterior walls and from the
center of common walls or interior demising
partitions, but shall exclude mezzanines, if any.
1.08 K mart K mart Corporation, a Michigan
corporation, its successors and assigns, so long as
it is the Responsible Owner of the K mart Parcel,
otherwise the Responsible Owner of the K mart
Parcel.
1.09 K mart Building The K mart retail
store building plus adjacent retail space and garden
shop as the same is shorn on Exhibit 3.
1.10 K mart Parcel That certain parcel of
land described in Exhibit A-2 attached hereto and
made a part hereof.
1.11 Mortgage Any mortgage or deed of trust
or any leasehold mortgage.
1.12 Mortgagee The mortgagee under any mortgage,
the beneficiary under any deed of trust and the
leasehold mortgagee under any leasehold mortgage.
1.13 Owner Any person who or which is the
record owner of fee simple title to a Parcel or any
portion thereof which is part of the Shopping
Center; provided, however, in the event of the sale
by an owner of all or a portion of a Parcel and a
simultaneous leaseback of the Parcel or portions
thereof (a "sale/leaseback"), the seller/lessee
under such sale/leaseback shall be deemed to be the
"Owner" of such Parcel or portion thereof for the
purposes of this Agreement so long as it is
designated in the lease as the "Owner" for the
purposes of this Agreement, and provided further,
the lessee of a Parcel or a portion of a Parcel
under a ground lease or other lease having an
initial term of twenty-five (25) years or longer
shall be deemed to be an "Owner" of such Parcel or
a portion thereof for the purposes of this
Agreement so long as it is designated in the ground
lease or other lease as the "Owner" for the
purposes of this Agreement.
1.14 Parcel The K mart Parcel, the Developer
Parcel, and all parcels resulting from the
subdivision thereof.
1.15 Person An individual, partnership, firm,
association, corporation, or other form of business
or government entity.
1.16 Responsible Owner The Owner of a Base
Parcel, provided, however, that if any such Owner
shall transfer, convey or ground lease its interest
in any portion of a Base Parcel in such a manner as
to create multiple Owners of the Base Parcel, then
such multiple Owners shall designate one of their
number to act on behalf of all such Owners in the
performance of the provisions of this Agreement,
which Owner so designated shall be herein referred
to as the "Responsible Owner". Any such designation
shall be in writing, duly executed and acknowledged
by all multiple Owners of a Base Parcel (including
the Owner so designated), and recorded with the
Office of the County Recorder of the County in
which the Shopping Center is located. A copy of
such designation shall be sent to each other
Responsible Owner in the Shopping Center. In the
absence of any such written, recorded and mailed
designation, the Owner of the largest subparcel of
any such divided Base Parcel shall be the
Responsible Owner, provided however that for so
long as K mart is the Owner of any portion of the K
mart Parcel it shall be deemed to be the
Responsible Owner of the K mart Parcel.
1.17 Shopping Center The K mart Parcel and
the Developer Parcel.
1.18 State: The State of California.
ARTICLE 2
LAND USE
2.01 No Interference With Common Areas. No
use of the Shopping Center shall be made which shall
interfere with the use of the Common Areas within
the Shopping Center for the purposes for which they
were intended as provided in this Agreement or
impede the free flow of vehicular or pedestrian
traffic thereon.
2.02 Conformity to Site Plan. The parties
hereto agree to develop their respective Base
Parcels in the manner shown in the site plan
attached hereto as Exhibit 3. Subject to Section
3.02, any changes to the Exhibit 3 site plan may be
made only with the prior written consent of the
Responsible Owners, provided however, minor
modifications of an immaterial nature to the Common
Areas may be made by a Responsible Owner on such
Responsible Owner's Parcel without such consent if
such changes do not alter traffic flow, visibility,
or parking arrangements upon or access with respect
to the Shopping Center.
ARTICLE 3
C0MMON AREAS
3.01 Parking Areas There shall at all times
be maintained on Developer Parcel and the K mart
Parcel respectively parking spaces for a: least 4
automobiles for each 1,000 square feet of gross
square footage of Floor Area of all buildings
constructed on the Developer Parcel and the K mart
Parcel. There shall be no change in parking layout
or pattern of traffic flow within the Shopping
Center from that depicted on Exhibit 3 without the
prior written consent of the Responsible Owners.
3.02 Unimproved Building Areas as Common
Area Any portion of the Building Areas from time to
time not occupied by a building or buildings or
otherwise exclusively appropriated to the use of the
Owner of a particular Parcel (or to the use of a
tenant(s) of such Owner), shall, until such time as
construction is commenced thereon, be deemed "Common
Areas", provided the Owner of such vacant Building
Area shall be solely responsible for paying taxes
and assessments on and the costs of. maintaining
such vacant Building Areas. Nothing contained in
this Section 3.02 shall be deemed to prohibit any
Owner from building on any Building Area, even
though such Building Area may have previously been
included within the Common Areas.
3.03 Rules for Use of Common Areas The
Responsible Owners shall adopt reasonable rules and
regulations restricting the time, manner and place
of political and charitable activities in the Common
Areas of the Shopping Center.
No merchandise may be stored on the
Common Areas. No business may be conducted or
performed in or on the Common Areas or merchandise
sold therefrom except for one day" Shopping Center
wide sales conducted on any one or more of the Base
Parcels. Such sales shall be located only on the
sidewalks and walkways adjoining the buildings to be
constructed in the Shopping Center. No more than two
(2) such sales may be conducted in any calendar year
without the prior written approval of all the
Responsible Owners, which approval shall not be
unreasonably withheld.
Anything hereinabove to the contrary
notwithstanding, K mart shall have the right for so
long as it operates a K mart retail store on the K
mart Parcel to use the Common Areas within the K
mart Parcel and Developer shall have the right for
so long as it operates retail stores on the
Developer Parcel to use the Common Areas within the
Developer Parcel for special promotional events,
including truck and trailer sales, provided,
however, that such use by K mart or Developer, as
the case may be, does not unreasonably interfere
with the operations of the Shopping Center. There
shall be no distribution of flyers, circulars or
advertisements in, on or from the Common Areas. The
Responsible Owners shall each have the right to
obtain restraining orders, injunctions, or other
legal process in order to enjoin any such activities
not approved or consented to as hereinabove set
forth.
3.04 Grant and Declaration of Reciprocal
Easements Developer and K mart, each as grantor,
hereby reserves to itself and grants to the other
for the benefit of the other and the others
respective successors, assigns, mortgagees, lessees,
sub-lessees, employees, agents, customers, licensees
and invitees, and each declare for the benefit of
each of the respective Parcels within the Shopping
Center permanent, mutual, reciprocal and
nonexclusive easements and rights to use the Common
Areas for the purposes for which they are provided
and intended, including, but not. limited to,
ingress, egress, access, and parking for vehicular
or pedestrian traffic, upon or across the parking
areas, entrances, exits, driveways, walks or service
drives located within the Common Areas and the use
of storm drainage and retention facilities,
landscaping, public rest rooms and other public
facilities, direction signs and other areas intended
for common use.
3.05 Temporary Use of Common Areas During
Construction and For Maintenance and Repair. In
connection with work performed within any Building
Area, incidental encroachments upon the Common Areas
as a result of the use of ladders, scaffolding,
storefront barricades, and similar facilities
resulting in temporary obstruction of portions of
the Common Areas shall be permitted hereunder so
long as their use is kept within reasonable
requirements of construction or maintenance repair
work expeditiously pursued. Common Areas may be
utilized for ingress and egress of vehicles
transporting construction materials, equipment, and
persons employed in connection with any work
provided for herein and temporary storage of
material and vehicles being utilized in connection
with such construction, subject to all of the other
terms of this Agreement.
3.06 Barriers and Traffic Control Except as
provided in Section 3.05 above, no walls, fences, or
barriers of any sort or kind shall be constructed or
maintained in the Common Areas of the Shopping
Center, or any portion thereof, which shall prevent
or impair the use or exercise of any of the
easements granted herein, or the free access and
movement, including without limitation, pedestrian
and vehicular traffic, between the various Parcels;
provided, however, reasonable traffic controls as
may be necessary to guide and control the orderly
flow of traffic may be installed so long as access
driveways to the parking area in the Shopping Center
are not closed or blocked and the traffic
circulation pattern of the Common Areas, as depicted
on Exhibit 3, is not changed or affected in any way,
unless the prior written approval of the Responsible
Owners is first obtained.
3.07 Easement for Minor Encroachments. Each
of the parties hereby grants to the other the
non-exclusive right (a) to install, maintain and
repair footings and underground supports which
extend not more than three
(3) feet beyond the boundaries of the respective
Building Areas and (b) to
maintain such minor encroachments as are shown on
the final exterior plans
of any party where such encroachments have been
approved by Developer and
K mart, provided such encroachments do not extend
more than three (3) feet
beyond the boundaries of the respective Building
Areas.
3.08 No Easements Beyond Shopping Center. No
Owner shall grant an easement or easements of the
type set forth in this Article III for the benefit
of any property not within the Shopping Center
(except for easements for ingress and egress for the
benefit of the Arby's Parcel) without the prior
written consent of each other Owner, which consent
may be granted or withheld in the sole discretion of
such other Owner.
ARTICLE 4
OPERATION AND MAINTENANCE OF COMMON AREAS
4.01 Responsibility for Maintenance. Upon
completion of construction of the improvements on
the Common Areas or any portion thereof, the
Responsible Owner shall, during the term of this
Agreement, at its sole cost and expense, operate,
maintain and repair or cause to be operated,
maintained and repaired all Common Areas within its
respective Parcel and shall keep the same, or cause
the same to be continuously kept, in good condition
and repair, in a safe and sound condition, and clean
and free of rubbish, debris, and other hazards to
Persons using the same. Such maintenance, operation
and repair shall include, but not be limited to, the
following:
(a) The care and replacement
of all shrubbery, plantings, and other
landscaping;
(b) Maintenance, repair and replacement
of concrete and asphalt paving and other
surface materials used on drives, parking
areas and walkways using, to the extent
reasonably possible, the same type of
material originally installed, to the end
that drives, parking areas and walkways are
at all times kept in a level, smooth and
substantially uniform condition;
(c) Adequate marking, striping
and directional signing of all parking
areas;
(d) Maintenance, repair and replacement
of all common electrical and other common utility
equipment and facilities so that the same are at all
times in good operating condition, including
lighting in the Common Areas, and electric light
replacements;
(e) Payment of all electrical,
water and other utility charges or fees for
services furnished to the Common Areas; and,
(f) Snow removal, when and if
necessary, and sweeping and removal of
rubbish and debris at least two (2.) times
per week.
4.02 Taxes Developer and K mart shall
cooperate in undertaking to obtain separate tax
assessments for each Parcel within the Shopping
Center. Each Responsible Owner shall pay or cause to
be paid all Taxes levied against that Responsible
Owner's Base Parcel and the buildings and
improvements thereon.
4.03 Common Area Liability Insurance Each
Responsible Owner shall, at all times, maintain, or
cause to be maintained, general public liability
insurance against claims for personal injury or
death and property damage occasioned by accident
occurring upon, in or on the Common Areas on its
Base Parcel, such insurance in each case to afford
protection to the limit of not less than $1,000,000
in respect to injury or death to any one person and
to a limit of not less than $3,000,000 in respect of
the injury or death to any number of persons arising
out of any one accident, such insurance against
property damage to afford protection to the limit of
not less than $1,000,000 in respect to any instances
of property damage. Such insurance shall be written
by companies of nationally recognized financial
standing legally qualified to issue such insurance
and shall name each Responsible Owner as an insured,
as its interest may appear.
Anything contained in this- Section
4.03 to the contrary notwithstanding, any and all
insurance which any. Responsible Party is obligated
to carry hereunder may be carried pursuant to a
prudent selfinsurance program so long as such Party
maintains a tangible net worth, determined in
accordance with generally accepted accounting
principles consistently applied, of at least
$100,000,000. Upon request, any Responsible Party
shall deliver to the other Responsible Parties and
any mortgagee thereof duplicate policies or
certificates of insurance evidencing the existence
of all insurance required to be maintained hereunder.
ARTICLE 5
UTILITY EASEMENTS
5.01 Separate Utility Lines Each Responsible
Owner hereby reserves to itself and grants to each
other Responsible Owner, respectively, nonexclusive
easements in, to, over, under and across the Common
Areas of the respective parcels for the
installation, operation, flow and passage, use,
maintenance, repair, relocation and removal of
sanitary sewers, storm drains, water and gas mains,
electrical power lines, telephone lines and other
utility lines, all of such sewers, drains, mains and
lines to be underground, serving the respective
Parcels of each of the Responsible Owners.
5.02 Common Utility Lines Each Responsible
Owner hereby reserves
to itself and grants to each other Responsible
Owner, respectively,
nonexclusive easements in, to, over, under and
across the Common Areas of
the respective Parcels for the installation,
operation, flow and passage,
use, maintenance, repair, relocation and removal of
sanitary sewers, storm
drains, water and gas mains, electrical power lines,
cable T.V., telephone
lines and other utility lines, all of such sewers,
drains, mains and lines
to be underground, for the service of Common Areas
and for use in common
with other parties. Each such Responsible Owner
further reserves to itself
the right to grant such easements in, to, over,
under and across its
respective Parcels, for the purposes hereinabove
enumerated, to such other
Persons as may from time to time be entitled thereto.
5.03 Location of Easements The location of
all easements of the character described in this
Article V shall be subject to the prior written
approval of the Owner in, to, over and under whose
Parcel the same is to be located. If requested by
any utility company or an Owner upon completion of
construction of such utility facilities the Owners
of Parcels affected thereby shall join in the
execution of an agreement, in recordable form,
appropriately identifying the type and location of
such respective utility facility.
5.04 Installation Maintenance and Repair. The
grantee of any of the utility easements referred to
in this Article V shall be responsible as between
the grantor and the grantee thereof for the
installation, maintenance and repair of all sanitary
sewers, storm drains, pipes and conduits, mains and
lines and related equipment installed pursuant to
such grant. Any such maintenance and repair shall be
performed only after two (2) weeks notice to the
grantor of the grantee's intention to do such work,
except in the case of emergency, and any such work
shall be done without cost or expense to the
grantor, and in such manner as to cause as little
disturbance in the use of the Common Area as may be
practicable under the circumstances.
5.05 Relocation At any time the grantor of
any of the utility easements granted pursuant to
said Article V shall have the right to relocate on
the land of the grantor any such sewers, drains,
mains and lines and related equipment then located
on the land of the grantor provided that such
relocation shall be performed only after thirty
(30) days notice of the grantor's intention to so
relocate shall be given to the grantee, and such
relocation: (a) shall not interfere with or
diminish the utility services to the grantee; (b)
shall not reduce or unreasonably impair the
usefulness or function of such utility; and (c)
shall be performed without cost or expense to
grantee. Notwithstanding such relocation,
maintenance shall be the obligation of the grantee;
provided that if there shall be any material
increase in such cost as a result of any such
relocation, the grantor shall bear such excess.
5.06 Master Storm Drain Easement Developer and K
mart hereby grant to and for the benefit of the
other and, if so required by the City of Hollister,
agree to grant to the City of Hollister, a thirty
(30') foot storm drainage easement along the south
boundary of the Shopping Center as depicted on
Exhibit B hereto. Developer further hereby grants to
K mart corporation a twenty (20') foot storm
drainage easement along the west boundary of the
Shopping Center, which easement shall terminate upon
the earlier to occur of the termination of K mart's
Ground Lease of the Premises or the extension of the
thirty (30') foot storm drain on the southerly
boundary of the Shopping Center to hook up on to a
public drain on the west boundary of the Shopping
Center. K mart shall have the right to enter the
Developer Parcel to install and maintain, at its
sole cost and expense, such storm drain within the
boundaries of the easement. K mart shall use its
best efforts to minimize any disruption to business
activity caused by such entry.
ARTICLE 6
[INTENTIONALLY OMITTED]
ARTICLE 7
SIGNS
7.01 Permitted Signs The following signs shall be
permitted in the Shopping Center: (a) directional
signs for guidance upon the parking and driveway
areas, (b) exterior building identification signs of
any single occupant of the Building Areas of the
Shopping Center, so long as such signs are similar
to the standard identification signs from time to
time being used by any such occupant in its other
stores in similar shopping centers in the State or
so long as the Responsible Owner of the Parcel on
which the sign is to be located shall approve such
sign; (c) a temporary sign identifying the lender(s)
providing construction and/or permanent financing
for any improvement to be located in the Shopping
Center, (d) a sign or signs identifying an automated
teller machine(s) or similar financial equipment
operated on any of the Building Areas, so long as
similar to other such signs in first-class shopping
centers in the State, and (e) one (1) pylon
(monument) sign at the approximate location depicted
on Exhibit B hereto and one (1) pylon sign
(monument) sign at the western entrance to the
Shopping Center if and when such a sign is approved
by municipal authorities. No other signs shall be
erected or maintained upon the Common Areas or
Building Areas of the Shopping Center without the
prior written approval of the Responsible Owners,
which approval shall not be unreasonably withheld.
In no event shall any sign be installed on the roof
of a building or which projects above the to? of any
parapet wall or roof line if it is to be affixed to
the side of a building not having a parapet wall
unless such sign is of a design which is customary
and commonly used by the occupant of the K mart
Building.
Each building identification sign
located in the Shopping Center and which identifies
a single Shopping Center occupant shall be
maintained in good condition and repair by the
Shopping Center occupant identified on such building
identification sign.
7.02 Pylon Signs All pylon signs and the
identification panels thereon shall be maintained in
good condition and repair (or caused to be so
maintained) by the Responsible Party on whose Parcel
the pylon sign is located.
ARTICLE 8
EMINENT DOMAIN
In the event any part of the Shopping Center
shall be taken by eminent domain or any other
similar exercise of governmental authority, the
entire award for value of the land and improvements
so taken shall belong to the Owner of the property
so taken or to any Mortgagee or tenant of such
Owner, as their respective interests may appear, and
no other Owner, Mortgagee or tenant in the Shopping
Center shall claim any portion of such award by
virtue of any interest created by this Agreement. In
the event that (a) all of a Parcel or (b) such
portion thereof as shall render the continued use of
the remainder thereof impracticable, shall be taken
by eminent domain or by other similar authority of
law, then the Owner of such Parcel may by written
notice given to the then Owners of all Parcels
comprising the Shopping Center and thereafter duly
recorded in the office of the County Recorder of the
County in which the Shopping Center is located,
terminate, for itself, its successors and assigns,
all of its rights and obligations under this
Agreement as to the Parcel so taken. Any taking in
eminent domain of parking areas of a Parcel below
80% of the ratio required to be maintained under
Section 3.01, shall permit any Owner to terminate
this Agreement as to such Parcel. The right of
termination herein provided shall be exercised only
by thirty (30) days written notice by an Owner to
all other Owners and the holders of recorded first
Mortgagee on the Shopping Center and thereafter duly
recorded in the office of the County Recorder in the
County in which the Shopping Center is located.
Nothing hereinabove shall be deemed to
affect the rights of Developer and K mart under that
certain Ground Lease dated November 2, 1988, with
respect to a taking of the K mart Parcel.
ARTICLE 9
MORTGAGES SUBORDINATE TO AGREEMENT
Any Mortgage affecting any portion of the
Shopping Center shall at all times be subject and
subordinate to the terms of this Agreement and any
Person foreclosing any such Mortgage or acquiring
title by reason of a deed in lieu of foreclosure
shall acquire title to the premises affected thereby
subject to all of the terms of this Agreement.
ARTICLE 10
NATURE OF AGREEMENT
10.01 Obligations of Agreement. Except as
otherwise herein provided, each and every
covenant,
undertaking, condition, easement, right,
privilege, and restriction (herein referred to
-as "Obligations of this Agreement") made,
granted or assumed, as the case may be, by any
party to this Agreement, is made by such
party for the personal benefit of the other
parties hereto, and also as Owner and Owners
of a portion of the Shopping Center, and shall
be an equitable servitude on the portion of
the Shopping
Center owned by such party appurtenant to
or for the benefit of the other portions of
the Shopping Center. Every Obligation of this
Agreement shall run with the land, and shall
be binding upon the party making or assuming
the several Obligations of this Agreement, and
such party's successors,
assigns, Mortgagees, tenants, customers and
invitees and shall inure to the benefit of all
other parties to this Agreement and to their
respective successors, assigns, Mortgagees,
tenants, customers and invitees. Any transferee
of any part of the Shopping Center shall
automatically be
deemed, by acceptance of title to such Parcel
to have assumed all the Obligations of this
Agreement relating thereto, but only to the
extent such Obligations of this Agreement
accrue after the effective date of such
transfer of title, and to have agreed with the
Owner or Owners of all other
portions of the Shopping Center to- execute any
and all instruments and do any and all things
reasonably required to carry out the
intention of this
Agreement. Any transferor shall upon the
consummation of such transfer be
relieved of all further liability under this
Agreement. except such liability as may have
arisen during his
(its) period of ownership of the portion of the
Shopping Center so conveyed and which remains
unsatisfied, unless such transferor remains an
Owner hereunder.
10.02 No Dedication to Public Nothing
contained in this Agreement shall be deemed to be a
gift or dedication of any portion of the Shopping
Center to the general public or for any public use
or purpose whatsoever, it being the intention of the
parties hereto that this Agreement is for the
exclusive benefit of all Owners of any portion of
the Shopping Center and their successors, assigns,
Mortgagees, tenants, customers and invitees, and
that nothing in this Agreement, express or implied,
shall confer upon any Person, other than such
Owners, and their successors, assigns, Mortgagees,
tenants, customers and invitees any rights or
remedies under or by reason of this Agreement. The
Owners of all Parcels comprising the Shopping Center
shall have the right from time to time to close all
or any portion of the Shopping Center to such extent
as may be necessary to prevent a dedication thereof
to the public or the accrual of any rights in any
Person, not expressly granted rights hereunder.
10.03 Amendment Modification or Termination
This Agreement may be amended or modified at any
time by a declaration in writing mutually agreed to,
executed and acknowledged by all the Responsible
Owners of any Base Parcel and thereafter duly
recorded in the Office of the County Recorder of the
County in which the Shopping Center is located,
provided this Agreement shall not be terminated
during the term hereof or amended or modified
without the prior written consent of all Owners
whose interests would be adversely affected by such
amendment or modification. This Agreement shall not
be terminated, amended, altered or modified in any
way without the prior written consent of each first
Mortgagee then encumbering the Shopping Center, or
any Parcel thereof.
10.04 Term of Agreement This Agreement shall
be effective as of the date of recording hereof in
the Office of the County Recorder of San Benito
County and shall continue in full force and effect
until 11:59 p.m. on December 31, 2065; provided,
however, that in the event that no portion of the
Shopping Center is utilized for retail purposes for
a continuous period of two (2) years (excluding any
period during which an Owner is prevented from
engaging in such use by reason of strikes, lockouts
or other labor difficulties, the elements or act of
God, the requirements of any governmental act, law,
rule or regulation, fire or other casualty,
condemnation, war, riot, or insurrection), then this
Agreement and the restrictions and easements
hereunder shall terminate and be of no further force
or effect.
ARTICLE 11
APPROVALS
Upon receipt by an Owner of a request for
approval or consent hereunder, such Owner shall,
within thirty (30) days after receipt of such
request, notify in writing the Person making such
request of any objections thereto (such objections
to be specifically stated) and such Person may
within fifteen (15) days thereafter resubmit its
request for approval rectifying any such objections
to the appropriate Owner. The Owner shall then have
an additional fifteen (15) days after receipt of
said revisions to approve or disapprove same.
Failure to give any written notice of disapproval
within the periods provided for above shall
constitute approval thereof by such Owner. Whenever
in this Agreement an Owner is given the right to
approve or disapprove in its sole discretion, it may
disapprove without specifying the reason therefor.
ARTICLE 12
REMEDIES
12.01 Default of Owner. In the event a
Responsible Owner shall fail to perform its
obligations under this Agreement, the Responsible
Owners of the other Parcels or any of them may send
notice to the Responsible Owner who failed to
perform setting forth the obligation which the
Responsible Owner has failed to perform. In the
event such obligation is not performed within thirty
(30) days after receipt of such notice (unless the
Responsible Owner shall have commenced to perform
the same within such period and shall be diligently
proceeding to perform the same), then the other
Responsible Owners or any one of them upon ten (10)
days prior written notice to the Responsible Owner
who failed to perform, shall have the right to
perform the same. A Responsible Owner shall not be
deemed to have failed to perform its obligations
hereunder for so long as such delay is prevented due
to strikes, lockouts, inability to procure
materials, power failure, acts of God, governmental
restrictions, enemy action, civil commotion, fire,
unavoidable casualty or other causes beyond the
control of the Responsible Owner, provided that lack
of funds shall not be deemed a cause beyond the
control of the Responsible Owner.
In the event failure to perform any
repair or maintenance causes an emergency, or
performance of such repair or maintenance is
necessary to prevent or relieve an emergency, then
the notice required to be given hereunder need only
be such reasonable notice, if any, as is warranted
by the nature of the specific condition involved. If
appropriate action is not timely taken by the
Responsible Owner failing to perform, the other
Responsible Owners or any of them shall be entitled
immediately to perform such repair or maintenance.
In the event a Responsible Owner
performs any of the obligations of a Responsible
Owner who fails to perform as aforesaid, the
Responsible Owner so performing, in addition to any,
other remedies it may have, shall be reimbursed by
the defaulting Responsible Owner within thirty (30)
days of presentation of the appropriate statement
therefor, failing which, in addition to any other
remedies it may have, the Responsible Owner so
performing shall have a lien against real property
and improvements of the defaulting Responsible Owner
for the unpaid amount together with interest thereon
from the date said reimbursement was due at the rate
of 15% per annum or the highest rate permitted by
law, whichever is lower. Such lien shall be
subordinate to the interest of any mortgagee, lessee
or sublessee of the affected property, irrespective
of when their interest attached, and may be enforced
and foreclosed in a suit or action brought in any
court of competent jurisdiction.
12.02 Other Remedies In addition to the
foregoing, if any Owner defaults in the performance
of any other material provision of this Agreement,
which default continues for a period of thirty (30)
days following receipt of written notice specifying
the particulars of such
default, any other Owner may institute legal action
against the defaulting Owner for specific
performance, declaratory relief, damages or other
suitable legal or equitable remedy. In addition to
the recovery of damages and of any sums expended on
behalf of the defaulting Owner, the prevailing party
in the action shall be entitled to receive from the
other party its actual attorneys' fees and costs for
services rendered to the prevailing party in any
such action (including any appeal thereof).
The remedies and liens provided in this
Article XII and the enforcement thereof as herein
provided shall be in addition to and not in
substitution for or exclusion of any other rights
and remedies which the parties may have under this
Agreement or at law or-in equity.
12.03 Liens. The lien provided for in Section
12.01 shall only be
effective when filed for record by the curing party
as a claim of lien against the defaulting Owner in
the Office of the County Recorder of the County in
which the Shopping Center is located, signed and
verified, which claim of lien shall contain the
following as well as any other information
required by law in order to make the lien effective.
(i)A statement of the unpaid amount of costs
and expenses;
(ii) A description sufficient for
identification of that portion of the property of
the defaulting Owner which is the subject of the
lien;
(iii) The last known name and address of the
owner or reputed Owner of the property which is the
subject of the alleged lien; and
(iv)The name and address of the lien claimant.
The lien, when so established against
the real property described in the lien, shall be
prior and superior to any right, title, interest,
lien or claim which may be or has been acquired or
attached to such real property after the time of
filing of the lien. The lien shall be for the use
and benefit of the person curing the default of the
defaulting Owner, and may be enforced by any
remedies afforded lien claimants under applicable
law or otherwise, including, without limitation,
causing a Notice of Default, to be recorded against
the defaulting Owner's Parcel and thereafter causing
the Parcel to be sold in the manner provided by
applicable law. Any such sale shall be held as
promptly as possible. The curing party shall have
the power to bid on the Parcel of the defaulting
Owner at such foreclosure sale and thereafter to
hold, lease, mortgage and convey the same. Upon
payment in full (prior to such a foreclosure) of the
Delinquent Assessment together with all applicable
interest due thereon, the curing party shall
promptly cause to be recorded a further notice
stating the satisfaction and release of the lien
against the defaulting Owner's Parcel.
12.04 No Waiver. No delay or omission of any
Owner in the exercise of any right accruing upon any
default of any other Owner shall impair any such
right or be construed to be a waiver thereof, and
every such right maybe exercised at any time during
the continuance of such default. A waiver by any
Owner of a breach or a default of any of the terms
and conditions of this Agreement by any other Owner
shall not be construed to be a waiver of any
subsequent breach or default of the same or any
other provision of this Agreement. Except as
otherwise specifically provided in this Agreement,
no remedy provided in this Agreement shall be
exclusive, but each shall be cumulative with all
other remedies provided in this Agreement and at law
or in equity.
12.05 No Termination For Breach It is
expressly agreed that no breach, whether or not
material, of the provisions of this Agreement shall
entitle any Owner to cancel, rescind or otherwise
terminate this Agreement, but such limitation shall
not affect, in any manner, any other rights or
remedies which any Owner may have hereunder by
reason of any breach of the provisions of this
Agreement.
ARTICLE 13
MISCELLANEOUS
13.01 Severability. If any provision, or a
portion thereof, of this Agreement, or the
application thereof to any person or circumstances
shall, to any extent, be held invalid, inoperative
or unenforceable, the remainder of this Agreement,
or the application of such provision, or portion
thereof, to any other persons or circumstances shall
not be affected thereby; the remainder of this
Agreement shall be given effect as if such invalid,
inoperative or unenforceable portion has not been
included; such invalid, inoperative or unenforceable
provision, or portion thereof, or the application
thereof to any person or circumstances, shall not be
given effect; it shall not be deemed that any such
invalid, inoperative or unenforceable provision
affects the consideration for this Agreement; and
each provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
13.02 Estooel Certificate At any time, and
from time to time, within thirty (30) days after
notice or request by the holder of any actual or
proposed first Mortgage or ground lease affecting or
intended to affect any portion of the Shopping
Center, or any actual or proposed purchaser of any
portion of the Shopping Center, the then Owners of
all Parcels comprising the Shopping Center shall
execute and deliver to such Mortgagee, ground lessee
or purchaser a statement certifying that this
Agreement is unmodified and in full force and effect
or if there have been modifications, that it is in
full force and effect as modified in the manner
specified in the statement, and that to the
knowledge of such Owner there exists no default
under this Agreement or circumstances which with the
passage of time would result in the existence of
such a default, other than as specified therein.
13.03 Governing Law. This Agreement shall be
construed in accordance with the laws of the State
of California.
13.04 Headings The section headings in this
Agreement are for convenience only, shall in no way
define or limit the scope or content of this
Agreement and shall not be considered in any
construction or interpretation of this Agreement or
any part thereof.
13.05 No Partnership Nothing in this
Agreement shall be construed to make the Owners
partners or joint venturers or render any of said
Owners liable for the debts or obligations of the
others.
13.06 Notices Any notice, demand, request, consent,
approval, designation, or other communication made
pursuant to this Agreement by one Owner to any other
Owner shall be in writing and shall be given or
made or communicated by personal delivery or by
United States registered or certified mail, return
receipt requested, addressed, in the case of
Developer, to:
K & S Market, Inc.
591 Tres Pinos Road
Hollister, California 95023
and addressed, in the case of K mart to:
K mart Corporation
3100 W. Big Beaver Road
Troy, Michigan 48084
Attention: Vice President -- Real Estate
subject to the rights of any Owner to designate a
different address by notice similarly given.
No party other than K mart Corporation
or K & S Market, Inc. shall be entitled to notice
as a Responsible Owner unless such party shall have
recorded a notice of its designation as Responsible
Owner as provided in this Agreement with a
description of the Parcel with respect to which it
is Responsible Owner with the County Records for
the County in which the Shopping Center is located.
Any notice, demand, request, consent,
approval, designation or other communication so
sent shall be deemed to have been given, made or
communicated, as the case may be, on the date the
same was personally delivered or delivered by the
United States mail as registered or certified
matter, with postage thereon fully prepaid.
13.07 Mechanic's Liens If because of any act
or omission (or alleged act or omission) of an
Owner, its employees, agents, contractors or
subcontractors, any mechanic's or other lien,
charge or order for the payment of money or other
encumbrance shall be filed against the Parcel of
another Owner or Owners, the first Owner shall, at
its own cost and expense, cause the same to be
discharged of record or bonded within ten (10) days
after notice to said Owner of the filing thereof;
provided however, if the first Owner has a net
worth in excess of One Hundred Million Dollars
($100,000,000) it need not furnish the bond
otherwise required hereunder. In any event said
Owner shall indemnify and save harmless the other
Owner(s) from and against all costs, liabilities,
expenses, suits, penalties, claims and demands
(including actual attorneys fees and costs
incurred) resulting therefrom. If the first Owner
fails to comply with the foregoing provisions, the
other Owner(s) shall have the option of discharging
or bonding any such lien, charge, order or
encumbrance, and the first Owner agrees to
reimburse the other Owner(s) for all costs,
expenses and other sums of money expended in
connection therewith.
IN WITNESS WHEREOF, the parties hereto have
hereunto set their respective authorized signatures
as of the day and year first above written.
WITNESSED: SUBLESSOR: K & S MARKET, INC
By: /s/ FRANK KLANER
-------------------------
Frank Klaner
Its: Secretary/ Treasurer
K MART CORPORATION,
a Michigan corporation
By: /s/ M.L. SKILES
------------------------
M.L. Skiles
Its: Vice President
EXHIBIT A
Legal Description - Shopping Center
Parcel 2 and Parcel 3 of Parcel Map of a portion of
Homestead Lot 40 San Justo Rancho, in the City of
Hollister, County of San Benito, State of
California, according to the map thereof, recorded
in Book 6 of Parcel Maps at Page 23, San Benito
County Records.
EXHIBIT A-1
Legal Description - Developer Parcel
All of Parcel 2 of Parcel Map of a portion of
Homestead Lot 40 San Justo Rancho, in the City of
Hollister, County of San Benito, State of
California, according to the map thereof, recorded
in Book 6 of Parcel Maps at Page 23, San Benito
County Records.
EXCEPTING THEREFROM being more particularly
described as follows:
BEGINNING at the Southeast corner of said Parcel 2;
thence North 87 degrees 13 minutes 30 seconds West
along the South line of said Parcel 2, a distance of
578.00 feet; thence leaving the South line of said
Parcel 2 North 02 degrees 46 minutes 30 seconds
East, a distance of 170.00 feet; thence North 87
degrees 13 minutes 30 seconds West parallel with
the. South line of said Parcel 2, a distance of
55.00 feet; thence North 02 degrees 46 minutes 30
seconds East, a distance of 136.00 feet; thence
North 87 degrees 13 minutes 30 seconds West parallel
with the South line of said Parcel 2, a distance of
104.00 feet; thence North 02 degrees 46 minutes 30
seconds East, a distance of 156.12 feet to the point
of intersection with the Northwesterly prolongation
of the South line of that unrecorded lease dated
September 18, 1987 between K & S Market, Inc. and
Gary A. Laabs and Betty H. Laabs, husband and wife,
disclosed by that memorandum of lease recorded
September 23, 1987, Instrument No. 8707041; thence
South 75 degrees 03 minutes 55 seconds East along
the Northwesterly prolongation of the South line of
said unrecorded lease, a distance of 62.38 feet to
the Southwest corner of said unrecorded lease;
thence South 75 degrees 03 minutes 55 seconds East
along said South line, a distance of 185.15 feet to
a point on the West line of Parcel 4 of said Parcel
Map; thence South 02 degrees 46 minutes 30 seconds
West along the West line of said Parcel 4, a
distance of 4.00 feet to the Southwest corner of
said Parcel 4; thence South 87 degrees 13 minutes 30
seconds East along the South line of said Parcel 4,
a distance of 140.00 feet to the Southeast corner of
said Parcel 4; thence North 02 degrees 46 minutes 30
seconds East along the East line of said Parcel 4, a
distance of 200.00 feet to the Northeast corner of
said Parcel 4; thence South 87 degrees 13 minutes 30
seconds East along the North line of Parcel 2 of
said Parcel Map, a distance of 210.00 feet to the
Northwest corner of Parcel 3 of said Parcel Map;
thence South 02 degrees 46 minutes 30 seconds West
along the West line of said Parcel 3, a distance of
200.00 feet to the Southwest corner of said Parcel
3; thence South 87 degrees 13 minutes 30 seconds
East along the South line of said Parcel 3, a
distance of 141.42 feet to the Southeast corner of
said Parcel 3; thence South 02 degrees 16 minutes 00
seconds West along the East line of Parcel 2 of said
Parcel Map, a distance of 406.00 feet to the TRUE
POINT OF BEGINNING.
Containing 6.91 acres more or less.
EXHIBIT A-2
Legal Description - K mart Parcel
All of Parcel 3 and a portion of Parcel 2 of Parcel
Map of a portion of Homestead Lot 40 San Justo
Rancho, in the City of Hollister, County of San
Benito, State of California, according to the map
thereof, recorded in Book 6 of Parcel Maps at Page 23,
San Benito County Records and being more
particularly described as follows:
BEGINNING at the Southeast corner of said Parcel 2;
thence North 87 degrees 13 minutes 30 seconds West
along the South line of said Parcel 2, a distance of
578.00 feet; thence leaving the South line of said
Parcel 2 North 02 degrees 46 minutes 30 seconds
East, a distance of 170.00 feet; thence North 87
degrees 13 minutes 30 seconds West parallel with the
South line of said Parcel 2, a distance of 55.00
feet; thence North 02 degrees 46 minutes 30 seconds
East a distance of 136.00 feet; thence North 87
degrees 13 minutes 30 seconds West parallel with the
South line of said Parcel 2, a distance of 104.00
feet; thence North 02 degrees 46 minutes 30 seconds
East, a distance of 156.12 feet to the point of
intersection with the Northwesterly prolongation of
the South line of that unrecorded lease dated
September 18, 1987 between K & S Market, Inc. and
Gary A. Laabs and Betty H. Laabs, husband and wife
disclosed by that memorandum of lease recorded
September 23, 1987, Instrument No. 8707041; thence
South 75 degrees 03 minutes 55 seconds East along
the Northwesterly prolongation of the South line of
said unrecorded lease, a distance of 62.38 feet to
the Southwest corner of said unrecorded lease;
thence South 75 degrees 03 minutes 53 seconds East
along said South line, a distance of 185.15 feet to
a point on the West line of Parcel 4 of said. Parcel
Map; thence South 02 degrees .6 minutes 30 seconds
West along the West line of said Parcel 4, a
distance of 4.00 feet to the Southwest corner of
said Parcel 4; thence South 87 degrees 13 minutes 30
seconds East along the South line of said Parcel 4,
a distance of 140.00 feet to the Southeast corner of
said Parcel 4; thence North 02 degrees 46 minutes 30
seconds East along the East line of said Parcel 4, a
distance of 200.00 feet to the Northeast corner of
said Parcel 4; thence South 87 degrees 13 minutes 30
seconds East along the North line of Parcel 2 of
said Parcel Map, a distance of 210.00 feet to the
Northwest corner of Parcel 3 of said Parcel Map;
thence South 02 degrees 46 minutes 30 seconds West
along the West line of said Parcel 3, a distance of
200.00 feet to the Southwest corner of said Parcel
3; thence South 87 degrees 13 minutes 30 seconds
East along the South line of said Parcel 3, a
distance of 141.42 feet to the Southeast corner of
said Parcel 3; thence South 02 degrees 16 minutes 00
seconds West along the East line of Parcel 2 of said
Parcel Map, a distance of 406.00 feet to the POINT
OF BEGINNING.
Containing 7.67 acres, ore or less.
EXHIBIT B
Shopping Center Site Plan
SECOND AMENDMENT TO SUBLEASE
This Second Amendment to Sublease (hereinafter
"Second Amendment") is made and entered
into on October 11, 2000, between Kmart Corporation,
a Michigan corporation, having its
principal office at 3100 West Big Beaver Road, Troy,
Michigan 48084 (hereinafter referred to as
"Sublessor") and Central Coast Bancorp, a California
corporation, having its principal office at
301 Main Street, Salinas, California 93901 doing
business as Community Bank of Central
California (hereinafter referred to as "Sublessee").
WHEREAS, Sublessor and Sublessee entered into a
Sublease, dated July 17, 2000, (hereinafter referred
to as "Sublease"); and
WHEREAS, Sublessor and Sublessee entered into a
First Amendment to Sublease, dated October 11, 2000;
WHEREAS, Sublessor and Sublessee seek to amend the
terms of said Sublease as hereinafter provided;
NOW THEREFORE, in consideration of the mutual
covenants herein contained, the parties agree to the
following:
1. Section 1.2a of the Sublease and Exhibit H is
amended by deleting the Commencement Date of the
Primary Sublease Term, "August 1, 2000," and
inserting in lieu thereof the Commencement Date of
"September 15, 2000," said date being applicable
pursuant to Section 2.2 of the Sublease regarding
all other charges other than Minimum Rent;
2. Section 2.2 of the Sublease and Exhibit H is
amended by deleting the Rent Commencement
Date, "November 1, 2000", and inserting in lieu
thereof the Rent Commencement Date of "December 15,
2000";
3. Section 2.2 of the Sublease and Exhibit H is
further amended by denoting that the Aggregate
Minimum Rent for the Primary Term, September 15,
2000, through July 31, 2003, shall be at least SIXTY
TWO THOUSAND ONE HUNDRED FORTY SIX AND 45/100
DOLLARS ($62,146.45) rather than SIXTY FOUR THOUSAND
EIGHT HUNDRED NINETY AND 00/100 DOLLARS ($64,890.00);
4. Section 2.2 A of Exhibit H is amended by deleting
this paragraph in its entirety and inserting in lieu
thereof the following:
A. Commencing December 15, 2000, ("Rent Commencement
Date", as defined within the Sublease) for the
period from September 15, 2000, through July 31,
2001, FOURTEEN THOUSAND TWO HUNDRED SIXTY SIX AND
45/lOO DOLLARS ($14,266.45), payable in the first
payment of ONE THOUSAND THIRTY SIX AND 45/100
DOLLARS ($1,036.45) and equal monthly installments
thereafter through said period of ONE THOUSAND EIGHT
HUNDRED NINETY AND 00/100 DOLLARS ($1,890.00); and
This Second Amendment shall become binding upon the
respective parties, their successors, heirs, and
assigns.
Except for the modifications herein stated, all
provisions of the Sublease shall continue in
full force and effect.
IN WITNESS WHEREOF, Sublessor and Sublessee
have cause this Second Amendment to be
executed in quadruplicate as of the day and
year first above written.
WITNESSES: SUBLESSOR: KMART CORPORATION
By: /s/ LORRENCE T. KELLAR
-----------------------
Lorrence T. Kellar
Its: Vice President of Real Estate
SUBLESSEE: CENTRAL COAST BANCORP
By: /s/ HARRY WARDWELL
----------------------
Harry Wardwell
Its: Senior Vice President, Branch Manager
THIRD AMENDMENT TO SUBLEASE
This Third Amendment to Sublease ("Third Amendment")
is entered into on November 27,
2001, between Kmart Corporation, a Michigan
corporation, having its principal office at 3100
West Big Beaver Road, Troy, Michigan 48084
(hereinafter referred to as "Sublessor") and Central
Coast Bancorp, a California corporation,
(hereinafter referred to as "Sublessee"), whose
address is 301 Main Street, Salinas, California
93901.
WHEREAS, Sublessor and Tuan Anh Ngo ("Original
Sublessee:) entered into a sublease, dated
September 22, 1994, ("Sublease");
WHEREAS, Original Sublessee assigned its interest in
the Sublease to Thong Ngoc Mai ("First Assignee") on
or around June 16, 1995;
WHEREAS, First Assignee assigned his/her interest in
the Sublease to Phuong Linh Vu and Tu Tuan Cao on or
around December 18, 1998;
WHEREAS, Phuong Linh Vu and Tu Tuan Cao ("Assignor")
assigned his interest in the
Sublease to Sublessee on or around January 1, 2002.
WHEREAS, Sublessor and Sublessee seek to amend the
Sublease as hereinafter provided;
NOW THEREFORE, in consideration of the mutual
covenants herein contained, the parties agree to the
following:
1. Section 5.1 of the Sublease is amended by
deleting the following, "conducting the business of
a nail salon offering nail and facial services and
other incidental, related products and services",
and inserting in lieu thereof the following,
"operating a bank facility opened to the general
public";
2. Section 5.2 of the Sublease is amended by
deleting the name, "Fancy Nails", and inserting in
lieu the name, "Community Bank of Central
California";
4. This Third Amendment is contingent upon
Assignor's interest in the Sublease being assigned
to Sublessee as contemplated within the Consent to
Assignment, dated November 1, 2001, and the same
being fully executed;
This Third Amendment shall become binding upon the
respective parties, their successors, heirs, and
assigns.
This Third Amendment constitutes the entire
agreement of Sublessor and Sublessee with respect
to the subject matter thereof.
Except for the modifications herein stated, all
provisions of the Sublease shall continue in full
force and effect.
IN WITNESS WHEREOF, Sublessor and Sublessee have
cause this Third Amendment to Sublease to be
executed in quadruplicate as of the day and year
first above written.
WITNESSES: SUBLESSOR: KMART CORPORATION
By: /s/ LORRENCE T. KELLAR
------------------------
Lorrence T. Kellar
Its: Vice President of Real Estate
SUBLESSEE: CENTRAL COAST BANCORP
By: /s/ HARRY WARDWELL
------------------------
Harry Wardwell
Its: Senior Vice President, Branch Manager
ASSIGNOR: Phuong Linh Vu and Tu Tuan Cao, jointly
and severally, as Assignor, by signing below agree
that they were aware of the contemplated change of
use when they assigned their interest in the
Sublease to Assignee and approve the same.
WITNESSES: By: /s/ PHUONG LINH VU
---------------------
Phuong Linh Vu
By: /s/ TU TUAN CAO
---------------------
Tu Tuan Cao
FOURTH AMENDMENT TO SUBLEASE
This Fourth Amendment to Sublease ("Fourth
Amendment") is entered into on November 27, 2001,
between Kmart Corporation, a Michigan corporation,
having its principal office at 3100 West Big Beaver
Road, Troy, Michigan 48084 (hereinafter referred to
as "Sublessor") and Central Coast Bancorp, a
California corporation, whose address is 301 Main
Street, Salinas, California 93901 (hereinafter
referred to as "Sublessee").
WHEREAS, Sublessor and Tuan Anh Ngo ("Original
Sublessee") entered into a Sublease, dated
September 22, 1994, for Demised Premises (Unit
491C, formerly Unit 102) as more fully described
therein;
WHEREAS, the Original Tenant assigned its interest
in the Sublease to Thong Ngoc Mai ("First Assignee")
on or about June 16, 1995;
WHEREAS, First Assignee assigned his/her interest in
the Sublease to Phuong Linh Vu and Tu Tuan Cao
("Assignor") on or around December 18, 1998;
WHEREAS, Sublessor and Assignor entered into a First
Amendment to Sublease, dated June 9, 1999;
WHEREAS, Sublessor and Assignor entered into a
Second Amendment to Sublease, dated October 10, 2000;
WHEREAS, Assignor assigned its interest in the
Sublease to Sublessee on or around November 1, 2001;
WHEREAS, Sublessor and Sublessee entered into a
Third Amendment to Sublease ("Third Amendment"),
dated November 27, 2001; said Third Amendment
modifying this September 22, 1994, Sublease and
being a separate Third Amendment than the Third
Amendment to the July 17, 2000, sublease as
described below;
WHEREAS, Sublessor and Sublessee seek to cancel
this Sublease, effective the same date that the
Third Amendment to the Sublease is fully executed;
said sublease being a separate sublease, dated July
17, 2000, and defined below;
WHEREAS, Sublessor and Sublessee entered into a
separate Sublease, dated July 17, 2000, as amended,
("July 17, 2000, Sublease") between Sublessor and
Sublessee and desire that this July 17, 2000,
sublease replace this September 22, 1994, Sublease
in its entirety which is the subject of this Fourth
Amendment;
NOW THEREFORE, in consideration of the mutual
covenants herein contained, the parties agree to
the following:
1. Upon the Third Amendment to Sublease for the
July 17, 2000, sublease between Sublessor and
Sublessee being fully executed, this September 22,
1994, Sublease shall be canceled and of no force
and effect and the July 17, 2000, sublease shall
govern the relationship between Sublessor and
Sublessee for the Demised Premises;
This Fourth Amendment shall become binding upon
the respective parties, their successors, heirs,
and assigns;
This Fourth Amendment constitutes the entire
agreement of Sublessor and Sublessee with respect
to the subject matter thereof; and
IN WITNESS WHEREOF, Sublessor and Sublessee have
cause this Fourth Amendment to Sublease to be
executed in quadruplicate as of the day and year
first above written.
WITNESSES: SUBLESSOR: KMART CORPORATION
By: /s/ LORRENCE T. KELLAR
-----------------------
Lorrence T. Kellar
Its: Vice President of Real Estate
SUBLESSEE: CENTRAL COAST BANCORP
By: /s/ HARRY WARDWELL
-------------------------
Harry Wardwell
Its: Senior Vice President, Branch Manager