6/29/98
RETAIL SPACE LEASE
THIS LEASE ("Lease") is entered into as of the date set forth in
Article 1 by and between Landlord and Tenant.
ARTICLE 1
BASIC LEASE PROVISIONS
1.1 Date of Lease: June 16, 1998
1.2 Landlord: Marina Opportunity I (Tierra Verde), L.P.
1.3 Tenant: Boat Tree, Inc.
1.4 Tenant's Trade Name: Boat Tree
(Article 11)
1.5 Shopping Center: Tierra Verde Marine Center;
(Article 2) located in Pinellas County, Florida
1.6 Premises: Approximately 4,800 square feet located in the
(Article 3) Shopping Center at 120 Pinellas Bayway, as shown
on Exhibit B-1 attached hereto, and approximately
1,200 square feet located on a tract adjacent to U.S.
19, as shown on Exhibit B-2 attached hereto
1.7 Floor Area: A total of approximately 6,000 square feet,
(Article 3) approximately 4,800 square feet being located in the
Shopping Center (as shown on
Exhibit B-1), and
approximately 1,200 square
feet being located on a tract
adjacent to U.S. 19 (as shown
on Exhibit B-2).
1.8 Term: Sixty (60) months
(Article 4)
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1.9 Minimum Annual Rental:
(Article 7)
Months Following
The Rental
Commencement Dollars Per Dollars Per Annum Dollars Per Month
Date Square Foot
1-12 $16 $96,000 $8,000
12-24 $18 $108,000 $9,000
25-60 $20 $120,000 $10,000
1.10 Percentage Rate: Nine Percent (9%) (Article 7)
1.11 Use of Premises: Boat sales, showroom and office (with the exclusive
right to (Article 11) the sale or brokerage of boats, watercraft, boat motors or
boat trailers, as set forth in Article 15)
1.12 Security Deposit: $4,000 (Article 22)
1.13 Addresses for Notices and Payments: (Article 24)
LANDLORD TENANT
Notices To: Notices To The Premises:
Marina Opportunity I (Tierra
Verde), L.P.
6142 Campbell Road, Suite 200
Dallas, Texas 75248
Landlord's Address for Payments
and Reports:
Marina Opportunity I (Tierra
Verde), L.P.
110 Pinellas Bayway
Tierra Verde, Florida 33715
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This Article 1 is intended to supplement and/or summarize the
provisions set forth in the balance of this Lease. If there is any conflict
between any provisions contained in this Article 1 and the balance of this
Lease, the balance of this Lease shall control.
ARTICLE 2
EXHIBITS
The following Exhibits and Addendum are attached to this Lease and, by
this reference, made a part of this Lease:
EXHIBIT A -- Site plan of a retail shopping center and/or commercial
development constructed on real property located in the County and State
specified in Article 1 (the "Shopping Center"). Exhibit A shows, among other
things, the principal improvements which currently comprise the Shopping Center,
as well as those additional improvements which Landlord currently contemplates
constructing in the Shopping Center. Landlord, at any time, may change the
shape, size, location, number and extent of the improvements shown on Exhibit A
and eliminate, add or relocate any improvements to any portion of the Shopping
Center, including, without limitation, buildings, parking areas, roadways, curb
cuts, temporary or permanent kiosks, displays or stands, and may add land to
and/or withdraw land from the Shopping Center, so long as such actions do not
(a) materially alter the access of Tenant and its customers to the Shopping
Center Premises, or (b) materially alter the visibility of Tenant's facility
from adjacent roadways, or (c) reduce the outside display area of Tenant.
EXHIBIT B-1 and B-2 -- Premises
EXHIBIT C -- Construction Provisions
EXHIBIT D -- Example of Tax and Insurance Increases in Respect of the Shopping
Center Premises
EXHIBIT E -- Rules and Regulations
EXHIBIT F -- Signage
EXHIBIT G -- Addendum - Special Provisions
ARTICLE 3
PREMISES
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3.1 PREMISES. Landlord leases to Tenant and Tenant leases from Landlord
for the Term (as defined in Article 4), and upon the covenants and conditions
set forth in this Lease, the premises described in Section 1.6 under "Premises"
(the "Premises"). The portion of the Premises shown on Exhibit B-1 are herein
referred to as the "Shopping Center Premises" and the portion of the Premises
shown on Exhibit B-2 are herein referred to as the "U.S. 19 Premises." The U.S.
19 Premises are not located in the Shopping Center, and, accordingly, references
in this Lease to Premises located in the Shopping Center shall refer only to the
Shopping Center Premises and not to the U.S. 19 Premises. The parties agree that
all existing furniture, displays, fixtures and equipment (including fax
machines, phone systems, computer equipment and printers, photocopying machines
and any office trailer) located in the Premises shall remain in the Premises and
may be used by Tenant without any additional cost; however, such items shall
remain the property of Landlord. As soon as practicable after the execution of
this Lease, Landlord and Tenant shall agree upon an inventory of items in the
Premises which Tenant will be allowed to use pursuant to the preceding sentence,
such inventory to be determined in good faith by the parties hereto.
Furthermore, it is agreed that so long as this Lease remains in effect (a)
Tenant, at no additional cost, shall have the right to use an area outside of
the Shopping Center Premises for the display of boats (the exact configuration
of such area to be agreed upon by the parties acting in good faith); (b) Tenant,
at no additional cost, shall have the right to use at least four (4) wet slips
in the marina adjacent to the Shopping Center in connection with its boat sales
operation; (c) Tenant, at no additional cost, shall have the right to use
eighteen (18) outdoor storage racks, as designated by Landlord from time to
time, for new and used boats in the proximity of the Shopping Center Premises;
and (d) Tenant shall have the right to utilize from time to time, as needed, the
forklifts owned by Landlord (with operators employed by Landlord) for the
purpose of moving and launching Tenant's boats; provided, however, that (i)
Tenant shall pay Landlord a charge of $2.50 per move for such services, and (ii)
Landlord shall not be required to provide such services to Tenant to the extent
that same unreasonably interfere with the operation of Landlord's business.
3.2 RESERVATION. Landlord reserves the right to use the exterior walls,
floor, roof and plenum in, above and below the Premises for the installation,
maintenance, use and replacement of pipes, ducts, conduits, wires, alarm lines,
heating, ventilating and air conditioning lines, fire protection lines and
systems, electric power, telephone and communication lines and systems, sanitary
sewer lines and systems, gas lines and systems, water lines and systems, and
structural elements serving the Shopping Center and for such other purposes as
Landlord deems necessary.
3.3 FLOOR AREA. The parties hereto stipulate that the Premises contain
the number of square feet of Floor Area specified as "Floor Area" in Section
1.7.
ARTICLE 4
TERM
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The term of this Lease (the "Term") shall commence on the Rental
Commencement Date (as defined in Section 7.1) and shall continue, unless sooner
terminated in accordance with the provisions of this Lease, for the number of
months specified in Section 1.8 as "Term", computed from the first day of the
month following the Rental Commencement Date.
ARTICLE 5
POSSESSION
5.1 DELIVERY OF POSSESSION. Except as otherwise provided herein,
Landlord and Tenant agree that it is a condition precedent to the obligations of
the parties in respect of this Lease that Landlord acquire the Premises.
Landlord shall tender possession of the Premises to Tenant no later than the
fifteenth (15th) business days after Landlord acquires the Premises; provided,
however, Landlord shall not be obligated to deliver possession of the Premises
to Tenant until Landlord has received from Tenant all of the following: (a) the
Security Deposit, the first monthly installment of Tenant's estimated share of
Taxes and Insurance Expenses and the first monthly installment of Minimum Annual
Rental (as each is defined in this Lease); (b) executed copies of policies of
insurance or certificates thereof as required under Article 16; and (c) copies
of governmental permits and authorizations as required under this Lease. Tenant
shall accept possession of the Premises at such time as Landlord tenders same to
Tenant.
ARTICLE 6
OPENING DATE
6.1 OPENING DATE. Tenant shall open for business to the public in the
Premises as soon as practicable after the Rental Commencement Date.
6.2 CERTIFICATES. Within ten (10) days after Tenant initially opens for
business to the public in the Premises, Tenant shall (a) execute and deliver to
Landlord a certificate substantially in accordance with the criteria set forth
in Section 21.3 of this Lease (the "Tenant's Certificate"), and (b) deliver to
Landlord the Certificate of Occupancy for the Premises issued by the appropriate
governmental agency.
ARTICLE 7
RENTAL
7.1 RENTAL COMMENCEMENT DATE. The term "Rental Commencement Date" as used
in this Lease shall mean the fifteenth (15th) business day after Landlord
acquires title to the Premises.
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7.2 MINIMUM ANNUAL RENTAL. Subject to the provisions of Section 7.3
below, Tenant shall pay the sum specified in Section 1.9 as "Dollars Per Annum"
(the Minimum Annual Rental") in the monthly installments so specified, in
advance, on or before the first (1st) day of each month, without prior demand,
offset or deduction, commencing on the Rental Commencement Date. Should the
Rental Commencement Date be a day other than the first day of a calendar month,
then the monthly installment of Minimum Annual Rental for the first fractional
month shall be equal to one-thirtieth (1/30th) of the monthly installment of
Minimum Annual Rental for each day from the Rental Commencement Date to the end
of the partial month.
7.3 PERCENTAGE RENTAL.
(a) After the first year of the Term, Landlord may, at
Landlord's sole election, require Tenant to pay, in lieu of the Minimum
Annual Rental specified in Section 1.9, an amount (the "Percentage
Rental") equal to the product obtained by multiplying the percent
specified as "Percentage Rate" in Section 1.10 (the "Percentage Rate")
by Tenant's Gross Profit (as defined in sub-paragraph (b) below). After
the first year of the Term, Landlord shall have the right to elect, on
an annual basis, whether Tenant is to pay Minimum Annual Rental or
Percentage Rental for the succeeding calendar year by sending written
notice to Tenant on or before January 31 of such succeeding calendar
year; provided, however, that Tenant has delivered to Landlord the
financial information required to be delivered by Tenant under this
Lease. During any year in which Tenant is paying Percentage Rental,
Tenant shall, on or before the tenth (10th) day of each month during
the Term, pay to Landlord the Percentage Rental for the preceding
calendar month. Within thirty (30) days following receipt by Landlord
of Tenant's annual statement certified by Tenant as provided in
sub-paragraph (c) below, Landlord shall determine the Gross Profit of
Tenant for the preceding calendar year and the amount paid to Landlord
as Percentage Rental and shall make an adjustment as follows: If Tenant
paid to Landlord an amount greater than the Percentage Rental required
to be paid for said year, Tenant shall be entitled to a credit against
Tenant's next payment(s) of rental for the amount of the overpayment.
If Tenant paid an amount less than the Percentage Rental required to be
paid, the difference shall be paid to Landlord with the submission of
said annual certified statement. Percentage Rental shall be computed
separately with respect to each calendar year. Notwithstanding anything
contained herein to the contrary, if Landlord elects that Tenant pay
Percentage Rental during a calendar year, Landlord shall have the right
to revoke such election and to require Tenant to pay Minimum Annual
Rental thereafter if during such calendar year (i) Tenant fails to
continuously and uninterruptedly conduct its business as required by
Article 11; or (ii) Tenant otherwise defaults in its obligations under
this Lease; or (iii) Tenant's business is interrupted by an event of
casualty, a Taking (as hereinafter defined), or for any other reason.
(b) The term "Gross Profit" as used in this Lease means the
positive difference between Gross Boat Sales and Qualified Boat Costs.
As used in this Lease, the term "Gross Boat Sales" means the total
gross selling price of all boats, watercraft and related
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merchandise sold or rented in or from the Premises by Tenant, its
subtenants, licensees and concessionaires, whether for cash or on
credit, excluding therefrom the following: (i) the selling price of all
boats, watercraft and related merchandise returned by customers and
accepted for full credit; (ii) interest or other charges paid by
customers or other charges paid by customers for extension of credit;
(iii) sales taxes, excise taxes, or gross receipts taxes imposed by
governmental entities upon the sale of boats, watercraft and related
merchandise, but only if collected from customers separately from the
selling price and paid directly to the respective governmental
entities; (iv) sums and credits received in the settlement of claims
for loss of or damage to boats, watercraft and related merchandise, to
the extent previously reported as gross sales; (v) the price allowed on
all boats, watercraft and related merchandise traded in by customers
for credit or the amount of credit for discounts and allowances made in
lieu of acceptance thereof; (vi) cash refunds made to customers in the
ordinary course of business; (vii) gift certificates, or like vouchers,
until such time as the same shall have been converted into a sale by
redemption; and (viii) revenues derived from the sale of finance and
insurance products. All sales originating at the Premises shall be
deemed made and completed from the Premises, even though bookkeeping or
payment of the account is transferred to another location for
collection, or filling of the sale order and actual delivery of the
boat, watercraft or other merchandise is made from a location other
than the Premises. Each installment sale, credit sale or layaway sale
shall be treated as a sale for the full cash price at the time of sale
or deposit. As used in this Lease, the term "Qualified Boat Costs"
means the sum of (1) the cost of boats, watercraft and related
merchandise sold at the Premises which is paid by Tenant to the dealer
thereof~ (2) the expenses paid by Tenant to make the boats, watercraft
and related merchandise sold at the Premises ready for sale; and (3)
the rigging costs paid by Tenant in respect of the boats, watercraft
and related merchandise sold at the Premises.
(c) Tenant shall furnish to Landlord a statement of Gross
Profit certified by Tenant within ten (10) days after the close of each
calendar month, and an annual statement certified by Tenant, including
a monthly breakdown of Gross Profit, on or before the twentieth (20th)
day of January of each calendar year. Statements shall include a
breakdown of Gross Boat Sales and Qualified Boat Costs, as well as the
Gross Profit of all subtenants, licensees and concessionaires. If
Tenant is required to pay Percentage Rental in respect of such calendar
year, the certified annual statement shall be accompanied by a payment
to Landlord of any underpayment of Percentage Rental as provided in
subparagraph (a) above.
7.4 ADDITIONAL RENTAL. Tenant shall pay, as "Additional Rental", all
sums required to be paid by Tenant to Landlord pursuant to this Lease in
addition to Minimum Annual Rental or Percentage Rental (as the case may be),
whether or not the same be designated "Additional Rental" (the "Additional
Rental").
7.5 PLACE OF PAYMENT. Tenant shall a Minimum Annual Rental or Percentage
Rental (as the case may be) and Additional Rental to Landlord at the address
specified as "Landlord's
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Address for Payments and Reports" in Section 1.13 or to such other address
and/or person as Landlord may from time to time designate in writing to Tenant.
7.6 LATE PAYMENTS. If Tenant fails to a when the same is due and
payable any Minimum Annual Rental or Percentage Rental (as the case may be) or
Additional Rental, the unpaid amounts shall bear interest at the maximum lawful
rate from the date due to the date of payment. Further, and without in any
manner waiving Tenant's default or limiting Landlord's remedies in equity or at
law, should Tenant fail to make a timely payment of Minimum Annual Rental or
Percentage Rental (as the case may be) or Additional Rental two (2) or more
times during the Term, Landlord, at its option, may require (a) Tenant to pay
Minimum Annual Rental or Percentage Rental (as the case may be) in quarterly
installments, in advance for the balance of the Term; or (b) the amount
specified in Section 1.17 as "Security Deposit" to be increased by one hundred
percent (100%).
ARTICLE 8
TENANT FINANCIAL DATA
8.1 RECORDATION OF SALES. At the time of a sale or other transaction,
Tenant shall record the sale or other transaction using Tenant's existing
accounting and recording system.
8.2 BOOKS AND RECORDS. For a period of at least three (3) years
following the close of each calendar year, Tenant shall keep at its corporate
headquarters (currently located in Orlando, Florida) full and accurate books of
account and records relative to transactions in the Premises in accordance with
generally accepted accounting principals consistently applied. Without limiting
the generality of the foregoing, the following records shall be kept by Tenant:
(a) federal and state income tax returns; (b) state and local sales taxes and
use tax returns; (c) copies of all sales slips; (d) bank statements and deposit
receipts; (e) paid invoices for the purchase of merchandise; (0 merchandising,
receiving and shipping records; (g) sales journal and general ledger; and (h)
any other financial information which Landlord reasonably deems necessary in
order to confirm Tenant's calculation of Gross Profit.
8.3 AUDITS. Landlord, at any time within sixty (60) days after receipt
of any statement and upon no less than thirty (30) days prior written notice to
Tenant, may cause an audit to be made of Tenant's Gross Profit and all Tenant's
books and records related to sales from the Premises. Tenant shall make
available for the audit these books and records at the office of Tenant in
Florida in which such books and records are located. If the audit discloses an
underpayment of Percentage Rental, Tenant shall immediately pay to Landlord the
amount of the underpayment with interest at the rate set forth in Section 27.17
from the date the payment should have been made. If the audit discloses an
under-reporting of Gross Profit in excess of five percent (5%) of Gross Profit,
then Tenant shall also immediately pay to Landlord all reasonable costs and
expenses incurred in the audit and in collecting the underpayment, including
auditing costs and attorneys' fees. If the audit
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discloses an under-reporting of Gross Profit in excess of ten percent (10%) of
Gross Profit, then, in addition to Landlord's other rights contained in this
Section 8.3, Landlord may terminate this Lease upon notice to Tenant.
8.4 FINANCIAL STATEMENTS. Within thirty (30) days after Landlord's
written request, Tenant shall furnish Landlord with the following documents: (a)
financial statements, including balance sheets, profit and loss statements and
changes to financial condition, reflecting Tenant's current financial condition,
and (b) written evidence of ownership of controlling stock interest if Tenant is
a corporation, or of ownership of interests in profits and losses if Tenant is a
partnership. Any information obtained from Tenant's financial statements shall
be confidential and shall not be disclosed other than to carry out the purposes
of this Lease; however, Landlord may divulge the contents of any financial
statements in connection with any financing arrangement or assignment of
Landlord's interest in the Premises or Shopping Center or in connection with any
administrative or judicial proceedings.
ARTICLE 9
TAXES AND INSURANCE PREMIUMS
9.1 REAL PROPERTY TAXES.
(a) As used in this Lease, the term "Taxes" shall include any
form of tax or assessment, license fee, license tax, tax or excise on
rent, or any other levy, charge, expense or imposition (individually
and collectively "impositions") imposed by any federal, state, county
or city authority having jurisdiction, or any political subdivision
thereof, or any school, agricultural, lighting, drainage or other
improvement or special assessment district (individually and
collectively "governmental agencies"), on any interest of Landlord or
Tenant (including any legal or equitable interest of Landlord or its
mortgagee, if any) in the Premises, the remainder of the Shopping
Center or the underlying realty, including but not limited to: (i) Any
impositions (whether or not such impositions constitute tax receipts to
governmental agencies) in substitution, partially or totally, of any
impositions now or previously included within the definition of real
property taxes including those imposed or required by governmental
agencies to increase tax increments to governmental agencies, and for
services such as fire protection, street, sidewalk and road
maintenance, refuse removal or other governmental services formerly
provided without charge to property owners or occupants; (ii) any
impositions allocable to or measured by the area of the Premises or any
rental payable under this Lease; and (iii) any impositions upon this
Lease transaction or any document to which Tenant is a party, creating
or transferring an interest or an estate in the Premises. The term
"Taxes" shall not include Landlord's general income taxes, inheritance,
estate or gift taxes.
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(b) As used in this Lease, the term "Insurance Premiums" shall
include premiums paid by Landlord for insurance policies in respect of
the Shopping Center, including specifically, without limitation, fire
and casualty insurance, liability insurance, and any insurance required
by any mortgagee of the Shopping Center.
(c) From and after the Rental Commencement Date, Tenant shall
pay to Landlord, as Additional Rental, Taxes and Insurance Premiums
pursuant to subparagraph (d) below. Taxes for any partial year shall be
prorated. Landlord, at its option, may collect Tenant's payment of its
share of Taxes and Insurance Premiums after the actual amount of Taxes
and Insurance Premiums are ascertained, or in advance monthly or
quarterly based upon estimated Taxes and Insurance Premiums. If
Landlord elects to collect Tenant's share of Taxes and Insurance
Premiums based upon estimates, Tenant shall pay to Landlord from and
after the Rental Commencement Date, and thereafter on the first day of
each month or quarter during the Term (as determined by Landlord), an
amount estimated by Landlord to be the monthly or quarterly Taxes and
Insurance Premiums payable by Tenant. Landlord may periodically adjust
the estimated sum on the basis of Landlord's reasonable judgment. If
Landlord collects Taxes and Insurance Premiums based upon estimated
amounts, then within sixty (60) days following the end of each calendar
year, or at Landlord's option, its fiscal year, Landlord shall furnish
Tenant a statement covering the year just expired showing the total
Taxes and Insurance Premiums payable by Tenant for that year and the
payments made by Tenant with respect to that year as set forth above.
If the actual Taxes and Insurance Premiums payable for that year exceed
Tenant's payments for that year, Tenant shall pay to Landlord the
deficiency within ten (10) days after receipt of the statement. If the
payments exceed the actual Taxes and Insurance Premiums payable for
that year, Tenant shall be entitled to offset the excess against the
next payment(s) for Taxes and Insurance Premiums that become due to
Landlord.
(d) Tenant shall pay: (i) Taxes on rent due under this Lease;
(ii) Taxes and Insurance Premiums becoming due in respect of the U.S.
19 Premises; and (iii) Tenant's share (as calculated pursuant to
subparagraph (e) below) of Taxes and Insurance Premiums due in respect
of the Shopping Center Premises; provided, however, that the obligation
of Tenant to pay Taxes and Insurance Premiums in respect of the
Shopping Center Premises shall be limited as follows: (A) during the
period from the date of this Lease to December 31, 1998, Tenant's
payment of Taxes and Insurance Premiums in respect of the Shopping
Center Premises shall be limited to the annual amount of Ten Thousand
Dollars ($10,000), prorated for the partial year (it being agreed that
such proration results in Tenant being obligated to pay $5,000 for
Taxes and Insurance Premiums in respect of the Shopping Center from
July 1, 1998 to December 31, 1998); (B) for the 1999 calendar year, the
J obligation of Tenant to pay Taxes and Insurance Premiums in respect
of the Shopping Center Premises shall be the sum of Ten Thousand
Dollars ($10,000) plus a percentage of such amount equal to the
percentage by which the total amount of Taxes and Insurance Premiums
payable with respect to the Shopping Center Premises increases during
such period; and (C) after the
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1999 calendar year, the obligation of Tenant to pay Taxes and Insurance
Premiums in respect of the Shopping Center Premises shall increase by a
percentage equal to the percentage by which the total amount of Taxes
and Insurance Premiums payable with respect to the Shopping Center
Premises increases. An example of the manner in which the amount of
Taxes and Insurance Premiums payable by Tenant in respect of the
Shopping Center Premises may increase is attached hereto as Exhibit D.
(e) If the Premises and underlying realty are part of a larger
parcel for assessment or insurance purposes (the "larger parcel"),
Tenant's share of the Taxes and Insurance Premiums shall be determined
by multiplying all of the Taxes or Insurance Premiums, as the case may
be, on the larger parcel by a fraction, the numerator of which is the
Floor Area of the Premises and the denominator of which is the Floor
Area of all areas available for exclusive use and occupancy by retail
tenants of the larger parcel, exclusive of the Common Facilities (as
defined in Section 13.5).
9.2 PERSONAL PROPERTY TAXES. Tenant shall pay, prior to delinquency,
all taxes, assessments, license fees and public charges levied, assessed or
imposed upon its business operation, trade fixtures, leasehold improvements,
merchandise and other personal property in, on or upon the Premises (including,
without limitation, the furniture, displays, fixtures and equipment owned by
Landlord and used by Tenant pursuant to Section 3.1). If any such items of
property are assessed with property of Landlord (other than the property
described in the immediately preceding sentence), then the assessment shall be
equitably divided between Landlord and Tenant. Landlord shall determine the
basis of prorating and dividing any of these assessments and its determination
shall be binding. No taxes, assessments, fees or charges referred to in this
paragraph shall be considered Taxes under the provisions of Section 9.1.
9.3 CONTESTING TAXES. If Landlord contests any Taxes levied or assessed
during the Term and such contest is successful, then Tenant shall pay to
Landlord that portion of all costs incurred by Landlord in connection with the
contest pursuant to the formula set forth in Section 9.1(d) for the allocation
of Taxes. If Landlord contests any Taxes levied or assessed during the Term and
such contest is unsuccessful, Landlord shall be solely responsible for the costs
incurred by Landlord in connection with the contest.
ARTICLE 10
UTILITIES
10.1 TENANT UTILITY FACILITIES. For purposes of this Lease, the term
"Tenant Utility Facilities" shall mean and be deemed to include, but not be
limited to, sanitary sewer lines and systems, gas lines and systems, heating,
ventilating and air conditioning lines and systems, water lines and systems,
fire protection lines and systems, electric power, and telephone and
communication lines and systems exclusively serving the Premises.
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10.2 UTILITY CHARGES. Tenant agrees to pay directly to the appropriate
utility company all charges for utility services supplied to Tenant for which
there is a separate meter and/or submeter to the Premises. Tenant agrees to pay
to Landlord its share of all charges for utility services supplied to the
Premises for which there is no separate meter or submeter upon billing by
Landlord of its share as reasonably estimated by Landlord.
10.3 UTILITY SERVICES PROVIDED BY LANDLORD. Landlord, at any time
during the Term, may provide any utilities to the Premises. In that event,
Tenant shall pay to Landlord, monthly in advance, on the first day of the month,
as Additional Rental, a sum to reimburse Landlord for the cost of the utilities.
The sum may be estimated from time to time by Landlord and, if estimated, shall
be subject to adjustment at the end of each calendar quarter or year, or, at
Landlord's option, each fiscal quarter or year. If Landlord discontinues
furnishing any of the utilities for any reason, Tenant shall obtain its own
utility service for the Premises. Any utilities supplied by Landlord shall be at
competitive rates.
10.4 WAIVER OF LIABILITY. Regardless of the entity which supplies any
of the Tenant Utility Facilities or provides any service referred to in this
Article 10, Landlord shall not be liable in damages for any failure or
interruption of any utility or service. No failure or interruption of any
utility or service shall entitle Tenant to terminate this Lease or discontinue
making payments of Minimum Annual Rental, Percentage Rental or Additional
Rental.
10.5 TENANT'S NONPAYMENT. If Tenant fails to pay any charges referred
to in this Article 10 when due as provided for in this Article 10, Landlord may
pay the charge, and Tenant agrees to reimburse Landlord for any amount paid by
Landlord.
ARTICLE 11
TENANT'S CONDUCT OF BUSINESS
11.1 PERMITTED USE AND TRADE NAME. Tenant shall use the Premises solely
for the use and under the trade name specified in Sections 1.4 and 1.11,
respectively, as "Use of Premises" and "Tenant's Trade Name".
11.2 COVENANT TO OPERATE. From and after initially opening for business
to the public in the Premises, Tenant shall operate continuously and
uninterruptedly in the entire Premises the business which it is permitted to
operate under the provisions of this Lease, and, at all times, shall keep and
maintain within the Premises an adequate stock of merchandise and trade fixtures
to service and supply the usual and ordinary requirements of its customers.
11.3 HOURS OF BUSINESS. Tenant shall keep the entire Premises continuously
open for business during the hours of 9:00 a.m. to 6:00 p.m. (or later, at
Tenant's option), excluding the
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week from Christmas Day to New Year's Day and nationally recognized holidays;
provided, however, that Tenant may elect to close its business on Sundays.
11.4 RULES AND REGULATIONS. Tenant shall keep the Premises in a neat
and clean condition, free from any objectionable noises, odors or nuisances and
shall comply with all health and police regulations. Tenant shall not sell
merchandise from vending machines or allow any coin or token operated vending
machine or telephones on the Premises, except those exclusively used by
employees and customers of Tenant. Tenant shall deposit trash and rubbish only
within receptacles approved by Landlord. Landlord shall cause trash receptacles
to be emptied at Tenant's cost and expense; provided, however, at Landlord's
option, Landlord may provide trash removal services, the cost of which shall be
paid for by Tenant pursuant to an equitable proration of said costs by Landlord.
Tenant shall not erect any aerial or antenna on the roof or exterior walls of
the Premises. Tenant shall not solicit or distribute materials in the Common
Area. Tenant has read the Rules and Regulations attached hereto as Exhibit E and
agrees to abide by the terms thereof.
11.5 ADVERTISING MEDIA. Tenant shall not affix upon the Premises any
sign, advertising placard, name, insignia, trademark, descriptive material or
other like item without obtaining the prior written approval of Landlord, which
approval shall not be unreasonably withheld. The parties acknowledge that
Landlord has approved the signs (and the location thereof) set forth on Exhibit
F attached hereto. No advertising medium shall be utilized by Tenant which can
be heard or seen outside the Premises, including without limitation, flashing
lights, search lights, loudspeakers, phonographs, radios or televisions, without
the prior written approval of Landlord. Tenant shall not display, paint or place
any handbill, bumper sticker or other advertising devices on any vehicle parked
in the Common Area. Tenant shall not distribute any handbills or other
advertising matter in the Shopping Center.
11.6 RADIUS RESTRICTION. During the Term, neither Tenant nor any entity
owned by or controlled directly or indirectly by or under common control with
Tenant, nor any shareholder or partner holding more than fifty percent (50%) of
the shares or partnership interest, as the case may be, of Tenant shall own,
operate or have any financial interest in any business similar to or in
competition with the business of Tenant (with respect to the franchises of
Tenant at the time of the Rental Commencement Date), as described in Section
1.11 of this Lease under "use of Premises~~ if the other business is opened
after the date of this Lease and is located within five (5) miles of the
Shopping Center. Without limiting Landlord's remedies if Tenant violates this
covenant, Landlord, for so long as Tenant is operating the other business, may
include the Gross Profit of the other business in the Gross Profit made from the
Premises for the purpose of computing Percentage Rental. Landlord or its
authorized representative, at all reasonable times during the Term, and for a
period of at least one (1) year after expiration or earlier termination of this
Lease, shall have the right to inspect, audit, copy and make extracts of the
books, records and accounts pertaining to such other business in the manner set
forth in Section 8.3 of this Lease, for the purpose of determining and verifying
the Additional Rental due to Landlord pursuant to this Section 11.7.
boattree\misc\tierra.lse
13
11.7 SHOPPING CENTER NAME. Tenant shall not use the name of the
Shopping Center except in its advertising as the address reference for the
Premises. Landlord reserves the right, in its sole discretion, to change the
name and logo of the Shopping Center at any time.
ARTICLE 12
MAINTENANCE, REPAIRS AND ALTERATIONS
12.1 LANDLORD'S MAINTENANCE OBLIGATIONS. Landlord shall maintain in
good condition and repair the foundations, roofs and exterior surfaces of the
exterior walls of all buildings (exclusive of doors, door frames, door checks,
windows, window frames, and storefronts). Notwithstanding anything contained
herein to the contrary, if any repairs or replacements are necessitated by the
negligence, gross negligence, or willful acts of Tenant or anyone claiming under
Tenant or by reason of Tenant's failure to observe or perform any conditions or
agreements contained in this Lease or caused by alterations, additions or
improvements made by Tenant, or anyone claiming under Tenant, the cost of same
shall be the sole responsibility of Tenant. Furthermore, notwithstanding
anything to the contrary contained in this Lease, Landlord shall not be liable
for failure to make repairs required to be made by Landlord under the provisions
of this Lease unless Tenant has previously notified Landlord in writing of the
need for such repairs and Landlord has failed to commence and complete the
repairs within a reasonable period of time following receipt of Tenant's written
notification. To the extent permitted by law, Tenant waives the benefit of any
law permitting Tenant to make repairs at Landlord's expense.
12.2 LANDLORD'S RIGHT OF ENTRY. Landlord, its agents, contractors,
servants and employees, may enter the Premises at all reasonable times (a) to
examine the Premises; (b) to perform any obligation of, or exercise any right or
remedy of, Landlord under this Lease; (c) to make repairs, alterations,
improvements or additions to the Premises or to other portions of the Shopping
Center as Landlord deems necessary or desirable; (d) to perform work necessary
to comply with laws, ordinances, rules or regulations of any public authority or
of any insurance underwriter; and (e) to perform work that Landlord deems
necessary to prevent waste or deterioration in connection with the Premises
should Tenant fail to commence to make, and diligently pursue to completion, its
required repairs within three (3) days after written demand by Landlord. If
Landlord makes any repairs required to be made by Tenant, Tenant shall pay the
cost of the repair to Landlord, as Additional Rental, promptly upon receipt of a
bill.
12.3 TENANT'S MAINTENANCE OBLIGATIONS. Tenant, at its expense, shall
keep the Premises and the HVAC facilities and phone lines serving the Premises
in first class order, condition and repair and shall make repairs necessary to
keep the Premises in this condition. All repairs shall be of a quality equal to
or exceeding that of the original. If Tenant fails to make these repairs and
replacements or otherwise maintain the Premises within thirty (30) days after
written demand by Landlord, or if Tenant commences but fails to complete any
repairs or replacements within a reasonable time after written demand by
Landlord, Landlord may make the repairs or
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14
replacements without liability to Tenant for any loss or damage that may accrue
to Tenant's stock or business, and Tenant shall pay to Landlord the costs
incurred by Landlord in the making of any repairs or replacements together with
interest at the maximum lawful rate from the date of commencement of the work.
Tenant shall repair promptly at its expense any damage to the Shopping Center
caused by Tenant or its agents or employees or caused by the installation or
removal of Tenant's personal property.
12.4 ALTERATIONS.
(a) Landlord agrees that Tenant may, at its own expense and
after giving Landlord notice in writing of its intention to do so, from
time to time during the term hereof, make alterations, additions,
improvements and changes (collectively referred to in this article as
"improvements") in and to the interior of the Premises (except those of
a structural nature) as it may find necessary or convenient for its
purposes, provided that the value of the Premises is not thereby
diminished; provided, however, no improvements costing in excess of Two
Thousand Five Hundred Dollars ($2,500.00) may be made without first
procuring the approval in writing of Landlord. In addition, no
improvements shall be made to any store front, mechanical system, the
exterior wall or roof of the Premises, nor shall Tenant erect any
mezzanine or increase the size of same, if one be initially
constructed, unless and until the written consent and approval of
Landlord shall first have been obtained. In no event shall Tenant make
or cause to be made any penetration into or through the roof or floor
of the Premises without the prior written approval of Landlord. Tenant
shall be directly responsible for any and all damages resulting from
any violation of the provisions of this Article. All improvements to be
made to the Premises which require the approval of Landlord shall be
under the supervision of a competent architect or competent licensed
structural engineer and made in accordance with plans and
specifications with respect thereto, approved in writing by Landlord
before the commencement of work, where such approval is required
pursuant to the provisions of this Article. All work with respect to
any improvements must be done in a good and workmanlike manner and
diligently prosecuted to completion to the end that the Premises shall
at all times be a complete unit except during the period of work. Upon
completion of such work, Tenant shall file for record in the office of
the County Recorder where the Shopping Center is located a Notice of
Completion, as required or permitted by law, and Tenant shall deliver
to Landlord, within ten (10) days after completion of said work, a copy
of the building permit with respect thereto. Upon termination of this
lease, such improvements shall not be removed by Tenant but shall
become a part of Premises. Any such improvements shall be performed and
done strictly in accordance with the laws and ordinances relating
thereto. In performing the work of any such improvements, Tenant shall
have the work performed in such a manner as not to obstruct the access
to the premises of any other tenant in the Shopping Center.
(b) In the event that Tenant shall make any permitted
improvements to the Premises under the provisions of this Section 12.4,
Tenant agrees to carry such insurance as
boattree\misc\tierra.lse
15
required by Article 16.1(e) covering any such improvements, it being
expressly understood and agreed that none of such improvements shall be
insured by Landlord under the insurance it may carry upon the building
of which the Premises are a part, nor shall Landlord be required under
any provisions for reconstruction of the Premises to reinstall any such
improvements.
(c) Any trade fixtures, signs and other personal property of
Tenant which Tenant places in the Premises and is not permanently
affixed to the Premises shall remain the property of Tenant and
Landlord agrees that Tenant shall have the right, provided Tenant is
not in default under the terms of this Lease, to remove any and all of
its trade fixtures, signs and other personal property which it may have
stored or installed in the Premises, including without limitation,
counters, shelving, showcases, mirrors and other movable personal
property. Tenant shall, at its expense, immediately repair any damage
occasioned to the Premises by reason of the removal of any such trade
fixtures, signs, and other personal property, and upon the last day of
the Lease Term or the date of earlier termination of this Lease, shall
leave the Premises in a neat and clean condition, free of debris. All
trade fixtures, signs and other personal property installed in or
attached to the Premises by Tenant must be in good condition when so
installed or attached.
(d) All improvements to the Premises by Tenant, including but
not limited to mechanical systems, light fixtures, floor coverings and
partitions and other items comprising Tenant's Work pursuant to Exhibit
C but excluding removable trade fixtures and signs, shall become the
property of Landlord upon expiration or earlier termination of this
Lease.
12.5 MECHANICS' LIENS.
(a) Tenant agrees that it will pay or cause to be paid all
costs for work done by it or caused to be done by it on the Premises,
and Tenant will keep the Premises free and clear of all mechanics'
liens and other liens on account of work done for Tenant or persons
claiming under it. Tenant agrees to and shall indemnify, defend and
save Landlord free and harmless against any and all liability, loss,
damage, costs, attorneys' fees and all other expenses on account of
claims of lien of laborers or materialmen or others for work performed
or materials and supplies furnished for Tenant or persons claiming
under it. In addition, Tenant shall keep Tenants' leasehold interest
and any of those improvements to the Premises which are or become
property of Landlord pursuant to this Lease free and clear of all liens
of attachment or judgment liens.
(b) If Tenant shall desire to contest any claim of lien, it
shall furnish Landlord adequate security of the value or in the amount
of the claim, plus estimated costs and interest, or a bond of a
responsible corporate surety in such amount conditioned on the
discharge of the lien. If a final judgment establishing the validity or
existence of a lien for any amount is entered, Tenant shall immediately
pay and satisfy the same.
boattree\misc\tierra.lse
16
(c) If Tenant shall default in paying any charge for which a
mechanics' lien claim and suit to foreclose the lien have been filed,
and shall not have given Landlord security to protect the property and
Landlord against such claim of lien, Landlord may (but shall not be so
required to) pay the said claim and any costs, and the amount so paid,
together with reasonable attorneys' fees incurred in connection
therewith, shall be immediately due and owing from Tenant to Landlord,
and Tenant shall pay the same to Landlord with interest at the maximum
lawful rate from the dates of Landlord's payments.
(d) Should any claim of lien be filed against the Premises or
any action affecting the title to such property be commenced, the party
receiving notice of such lien or action shall forthwith give the other
party written notice thereof. Landlord or its representatives shall
have the right to go upon and inspect the Premises at all reasonable
times and shall have the right to post and keep posted thereon notices
of non-responsibility, or such other notices which Landlord may deem to
proper for the protection of Landlord's Interest in the Premises.
Tenant shall, before the commencement of any work which might result in
any such lien, give to Landlord written notice of its intention to do
so in sufficient time to enable the posting of such notices.
ARTICLE 13
COMMON AREA
13.1 DEFINITION OF COMMON AREA. The term "Common Area", as used in this
Lease, shall mean all areas, including all parking areas, within the exterior
boundaries of the Shopping Center now or later made available for the general
use of Landlord and other persons entitled to occupy Floor Area in the Shopping
Center. Without limiting the generality of the foregoing, Landlord may include
in Common Area those portions of the Shopping Center presently or later sold or
leased to purchasers or tenants, as the case may be, until the commencement of
construction of the building(s) thereon, at which time there shall be withdrawn
from the Common Area those areas not provided by the owner or lessee for common
use. Common Area shall not include (i) the entry way to a tenant's premises,
(ii) any improvements installed by a tenant outside of a tenant's premises,
whether with or without Landlord's knowledge or consent, or (iii) any areas or
facilities that could be considered as Common Area except that the areas or
facilities are included in the description of premises leased to a tenant.
13.2 MAINTENANCE AND USE OF COMMON AREA. The manner in which the
Shopping Center shall be maintained shall be determined by Landlord in its sole
discretion. If any owner or tenant of any portion of the Shopping Center
maintains its own Common Area (Landlord shall have the right to allow any
purchaser or tenant to so maintain its own Common Area), then Landlord shall not
have responsibility for the maintenance of that portion of the Common Area. The
use and occupancy by Tenant of the Premises shall include the use of the Common
Area (except those portions of the Common Area on which have been constructed or
placed permanent or
boattree\misc\tierra.lse
17
temporary kiosks, displays, carts and stands and except areas used in the
maintenance or operation of the Shopping Center), in common with Landlord and
other tenants of the Shopping Center and their customers and invitees, subject
to rules and regulations concerning the use of the Common Area established by
Landlord from time to time.
13.3 CONTROL OF AND CHANGES TO COMMON AREA. Landlord shall have the
sole and exclusive control of the Common Area, as well as the right to make
changes to the Common Area. Landlord's rights shall include, but not be limited
to, the right to (a) restrain the use of the Common Area by unauthorized
persons; (b) cause Tenant to remove or restrain persons from any unauthorized
use of the Common Area if they are using the Common Area by reason of Tenant's
presence in the Shopping Center; (c) utilize from time to time any portion of
the Common Area for promotional, entertainment and related matters; (d) place
permanent or temporary kiosks, displays, carts and stands in the Common Area and
to lease same to tenants; (e) temporarily close any portion of the Common Area
for repairs, improvements or alterations, to discourage non-customer use, to
prevent dedication or an easement by prescription, or for any other reason
deemed sufficient in Landlord's judgment; and (f) change the shape and size of
the Common Area, add, eliminate or change the location of improvements to the
Common Area, including, without limitation, buildings, parking areas, roadways
and curb cuts, and construct buildings on the Common Area. Landlord may
determine the nature, size and extent of the Common Area and whether portions of
the same shall be surface, underground or multiple-deck; as well as make changes
to the Common Area from time to time which in its opinion are deemed desirable
for the Shopping Center, except to the extent that such modifications of the
Common Area violate the provisions of Article II.
13.4 PARKING. Tenant and its employees shall park their vehicles only
in the parking areas from time to time designated for that purpose by Landlord.
Landlord may, in its sole discretion, allocate certain portions of the parking
area for the exclusive use of one or more tenants of the Shopping Center.
ARTICLE 14
ASSIGNMENT AND SUBLETTING
14.1 NO ASSIGNMENT. Tenant shall not transfer, assign, sublet, enter
into franchise, license or concession agreements, change ownership or voting
control (as hereinafter defined), mortgage, encumber, pledge or hypothecate this
Lease or Tenant's interest in the Premises or Tenant's business (collectively
"Assignment" or "Assign") without the prior written consent of Landlord, which
consent shall not be unreasonably withheld. If Tenant is a partnership or
corporation, any cumulative change in excess of twenty-five percent (25%) of the
partnership interest or of the voting stock of Tenant shall constitute a change
of ownership or voting control and shall constitute an assignment for purposes
of this Lease.
14.2 PROCEDURES.
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(a) Should Tenant desire to enter into an Assignment, Tenant
shall request in writing Landlord's consent to the Assignment at least
sixty (60) days before the effective date of the Assignment, providing
the following: (i) the full particulars of the proposed Assignment,
including its nature, effective date, terms and conditions, copies of
any offers, draft agreements, subleases, letters of commitment or
intent, and other documents pertaining to the proposed Assignment; (ii)
a description of the identity, net worth and previous business
experience of the proposed transferee, including, without limitation,
copies of the proposed transferee's latest income, balance sheet and
changes in position statements (with accompanying notes and disclosures
of all material changes thereto) in audited form, if available, and
certified as accurate by the proposed transferee; (iii) a detailed
description of the proposed use of the Premises together with the
proposed trade name of the transferee; and (iv) any further information
relevant to the proposed Assignment which Landlord shall have requested
within fifteen (15) days after receipt of Tenant's request for consent.
(b) Within fifteen (15) days after receipt of Tenant's request
for consent, together with all of the above-required information,
Landlord shall respond as follows: (i) consent to the proposed
Assignment, subject to Section 14.6 below; (ii) refuse to consent to
the proposed Assignment, or (iii) refuse to consent to the proposed
Assignment and, at any time within thirty (30) days thereafter, elect
to terminate this Lease on ten (10) days written notice to Tenant. In
the event Landlord proceeds pursuant to the foregoing clause (iii),
Landlord shall pay to Tenant the unamortized book value of Tenant's
leasehold improvements at the Premises, exclusive of removable trade
fixtures (to the extent said leasehold improvements were paid for by
Tenant as evidenced by copies of invoices and proof of payment)
amortized on a straight line basis over the Term; whereupon Tenant
shall provide Landlord with a bill of sale for said leasehold
improvements.
14.3 LANDLORD CONSENT. If Tenant requests Landlord's consent to an
Assignment, Landlord and Tenant agree (by way of example and without limitation)
that Landlord shall have the right to withhold its consent if any of the
following situations exist or may exist: (a) the proposed transferee's use of
the Premises conflicts with the "Use of Premises" as set forth in Section 1.11
or the "Trade Name" as set forth in Section 1.4; (b) in Landlord's reasonable
business judgment, the proposed transferee lacks sufficient business reputation
or experience to operate a successful business of the type and quality permitted
under this Lease; (c) Tenant is in default pursuant to this Lease; (d) In
Landlord's reasonable business judgment, the present net worth of the proposed
transferee is less than the greater of Tenant's net worth as of the date of this
Lease or Tenant's net worth at the date of Tenant's request for consent; (e) in
Landlord's reasonable business judgment, the Percentage Rental that Landlord
anticipates receiving from the proposed transferee is less than the Percentage
Rental which Landlord has received from Tenant; and/or (0 the Assignment would
breach any covenant of Landlord respecting radius, location, use or exclusivity
in any other lease, financing agreement or other agreement relating to the
Shopping Center. Any attempted or purported Assignment without Landlord's prior
written consent shall be void and of no force or
boattree\misc\tierra.lse
19
effect, and shall not confer any estate or benefit on anyone. A consent to one
(1) Assignment by Landlord shall not be deemed to be a consent to any subsequent
Assignment to any other party.
14.4 NO RELEASE. No Assignment, whether with or without Landlord's
consent, shall relieve Tenant or any guarantor of Tenant's obligations under
this Lease from its covenants and obligations under this Lease or any guaranty
of this Lease.
14.5 FORM. Any Assignment shall be evidenced by an instrument in
writing in form satisfactory to Landlord and shall be executed by the
transferor, assignor, sublessor, licensor, concessionaire, hypothecator or
mortgagor and the transferee, assignee, sublessee, licensee, concessionaire or
mortgagee in each instance, as the case may be. Further, Landlord shall be
entitled to prorate Minimum Annual Rental or Percentage Rental (as the case may
be) and Additional Rental to the effective date of the Assignment and bill
Tenant for all such costs, which costs must be paid by Tenant to Landlord within
five (5) days of receipt of a bill, but in no event later than the effective
date of the Assignment.
14.6 PROFITS. Any assignment or sublease rentals and any other economic
consideration received by Tenant as a result of or in consideration of any
assignment or subletting, whether denominated as rent under the assignment or
sublease or otherwise, which in the aggregate exceeds the total sums which
Tenant is obligated to pay Landlord under this Lease (prorated to reflect
obligations allocable to that portion of the leased Premises subject to such
assignment or sublease) shall become the property of Landlord and shall be paid
by Tenant to Landlord within ten (10) days after receipt thereof.
Notwithstanding the foregoing provisions of this Section 14.6, however, if an
assignment of this Lease is consummated in accordance with the terms of this
Lease as a part of the sale of Tenant's entire business (including inventory) in
the Premises, Tenant shall not be required to pay Landlord any proceeds from
such sale which are not expressly allocated to the sale of Tenant's leasehold
interest. This provision for payment shall apply to any subsequent assignee or
subtenant and the Landlord's recapture rights herein shall prevail over any
inconsistent provision in any such sublease or assignment to which Landlord has
consented. The Landlord's right of recapture herein is expressly reserved by the
Landlord from the grant of the Tenant's leasehold estate contained in this
Lease.
14.7 FEES. Tenant agrees to reimburse Landlord for Landlord's
reasonable attorneys' fees incurred in conjunction with the processing and
documentation of any requested Assignment. In addition, Tenant shall pay to
Landlord concurrently with the request for consent referred to in Section 14.2
the sum of Five Hundred Dollars ($500.00) as reimbursement to Landlord for its
review and processing of the application.
14.8 Assignment to an Affiliate. For purposes of this Section 14.8, the
term "Pozo Person" refers to one or more of the following: (a) Joe Pozo; (b) a
member of the immediate family of Joe Pozo; or (c) a trust established for the
benefit of Joe Pozo or members of his immediate family. Notwithstanding anything
contained herein to the contrary, Tenant may assign the entirety of this
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20
Lease to (i) a nonpublic entity in which a Pozo Person owns fifty-one percent (5
1%) or more of the ownership interests, or (ii) a corporation whose stock is
publicly traded in which a Pozo Person owns twenty percent (20%) or more of the
outstanding stock entitled to vote for members of the board of directors;
provided that (A) written notice of such assignment is sent to Landlord at least
thirty (30) days prior to the effective date of such assignment; (B) the
assignee executes an instrument reasonably satisfactory to Landlord pursuant to
which such assignee assumes all obligations of Tenant under this Lease; and (C)
Tenant shall remain liable for the covenants and obligations of Tenant under
this Lease.
ARTICLE 15
EXCLUSIVE RIGHT OF TENANT
So long as this Lease remains in effect, Landlord shall not use or
permit the use of any portion of the Shopping Center for the sale or brokerage
of boats, watercraft, boat motors or boat trailers. Nothing contained in the
preceding sentence shall be construed to prohibit Landlord from selling
replacements of boat motors within the boat repair facility operated by Landlord
in the proximity of the Shopping Center Premises. In the event of any breach of
the covenant set forth in the preceding sentence, Tenant may either (a)
terminate this Lease, in which event Landlord shall have no further liability
for such breach, or (b) pursue its other remedies at law or in equity.
ARTICLE 16
INSURANCE
16.1 TENANT'S INSURANCE. Tenant, at its sole cost and expense,
commencing on the earlier of (i) the date of Substantial Completion of the
Premises, or (ii) the date Tenant is given earlier access to the Premises, and
continuing during the Term, shall procure, pay for and keep in full force and
effect the following types of insurance, in at least the amounts and in the form
specified below:
(a) Comprehensive liability insurance with coverage limits of
not less than One Million Dollars ($1,000,000.00) combined single limit
bodily injury, personal injury, death and property damage liability per
occurrence, or current limit carried by Tenant, whichever is greater,
insuring against any and all liability of the insureds with respect to
the Premises or arising out of the maintenance, use or occupancy of the
Premises or related to the exercise of any rights of Tenant pursuant to
this Lease, subject to increases in amount as Landlord may reasonably
require from time to time. All such comprehensive liability insurance
shall specifically insure the performance by Tenant of the indemnity
agreement as to liability for injury to or death of persons and injury
or damage to property in Section 16.6 below. Further, all comprehensive
liability insurance shall include, but not be limited to, personal
injury, blanket contractual, cross liability and severability of
interest clauses,
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21
products/completed operations, broad form property damage, independent
contractors, and owned, non-owned and hired vehicles insurance.
(b) Worker's compensation coverage as required by law,
together with employer's liability coverage, and waiver by Tenant's
insurer of any right of subrogation against Landlord by reason of any
payment pursuant to such coverage.
(c) Insurance covering all of the items specified as Tenant's
Work in Exhibit C, Tenant's leasehold improvements, Alterations
permitted under Article 12; trade fixtures, merchandise and personal
property from time to time in, on or about the Premises, in an amount
not less than their full replacement value including replacement cost
endorsement cost from time to time, providing protection against any
peril included within the classification Fire and Extended Coverage,
sprinkler damage, vandalism, malicious mischief, and such other
additional perils as covered in an "all risk" standard insurance
policy. Any policy proceeds shall be used for the repair or replacement
of the property damaged or destroyed unless this Lease shall cease and
terminate under the provisions of Article 17. In addition,
comprehensive boiler and machinery coverage on all heating, air
conditioning and ventilation equipment, electrical, mechanical and
other such systems serving the Premises in an amount not less than the
replacement value of such equipment, systems and improvements.
(d) Any insurance policies designated necessary by Landlord
with regard to Tenant's or Tenant's contractors, construction of
Tenant's Work pursuant to Exhibit C, as well as with regard to the
construction of Alterations pursuant to Section 12.4 of this Lease,
including but not limited to contingent liability and "all risks"
builders' risk insurance, in amounts as acceptable to Landlord.
16.2 POLICY FORM. All policies of insurance provided for herein shall
be issued by insurance companies with general policy holder's rating of not less
than A and a financial rating of not less than Class X as rated in the most
current available "Best's Key Rating Guide" and which are qualified to do
business in the state where the Shopping Center is situated. All such policies
shall name Landlord, Tenant and Landlord's mortgagee(s) or beneficiary(ies) as
additional named insureds and shall be for the mutual and joint benefit and
protection of Landlord, Tenant and Landlord's mortgagee(s) or beneficiary(ies).
Executed copies of the policies of insurance or certificates thereof shall be
delivered to Landlord prior to Tenant, its agents or employees, entering the
Premises for any purpose. Thereafter, executed copies of renewal policies or
certificates thereof shall be delivered to Landlord within thirty (30) days
prior to the expiration of the term of each policy. All policies of insurance
delivered to Landlord must contain a provision that the company writing the
policy will give to Landlord thirty (30) days notice in writing in advance of
any cancellation or lapse or the effective date of any reduction in the amounts
of insurance. All public liability, property damage and other casualty policies
shall be written as primary policies and any insurance carried by Landlord shall
not be contributing with such policies.
boattree\misc\tierra.lse
22
16.3 BLANKET POLICIES. Notwithstanding anything to the contrary
contained in this Article 16, Tenant's obligations to carry insurance may be
satisfied by coverage under a so-called blanket policy of insurance; provided,
however, Landlord and Landlord's mortgagee(s) or beneficiary(ies) shall be named
as additional insureds as their interests may appear, the coverage afforded
Landlord will not be reduced or diminished, and the requirements set forth in
this Lease are otherwise satisfied.
16.4 INCREASED PREMIUMS DUE TO USE OF PREMISES. Tenant shall not do any
act in or about the Premises which will tend to increase the insurance rate upon
the building of which the Premises are a part. Tenant agrees to pay to Landlord
upon demand the amount of any increase in premiums for insurance resulting from
Tenant's use of the Premises, whether or not Landlord shall have consented to
the act on the part of Tenant. If Tenant installs upon the Premises any
electrical equipment which constitutes an overload of the electrical lines
servicing the Premises, Tenant, at its own expense, shall make whatever charges
are necessary to comply with the requirement of the insurance underwriters and
any appropriate governmental authority.
16.5 REIMBURSEMENT OF INSURANCE PREMIUMS BY TENANT. Landlord, at
all times from and after the Rental Commencement Date, shall maintain in effect
a policy or policies of insurance covering the building of which the Premises
are a part, in an amount equal to the full replacement cost (exclusive of the
cost of excavations, foundations and footings) during the Term, or the amount of
insurance Landlord's mortgagee(s) or beneficiary(ies) may require Landlord to
maintain, whichever is the greater, providing protection against any peril
generally included in the classification "Fire and Extended Coverage", and such
other additional insurance as covered in an "all risk" standard insurance
policy, with earthquake coverage insurance if deemed necessary by Landlord in
Landlord's sole judgment or if required by Landlord's mortgagee(s) or the
beneficiary(ies), or by any federal, state, county, city or local authority.
Landlord's obligation to carry this insurance may be brought within the coverage
of any so-called blanket policy or policies of insurance carried and maintained
by Landlord. Tenant agrees to pay to Landlord, as Additional Rental, its share
of the cost to Landlord of this insurance as provided in Section 9.1.
16.6 INDEMNITY. To the fullest extent permitted by law, Tenant
covenants with Landlord that Landlord shall not be liable for any damage or
liability of any kind or for any injury to or death of persons, or damage to
property of Tenant or any other person occurring from and after the Rental
Commencement Date (or such earlier date if Tenant is given earlier access to the
Premises), from any cause whatsoever, related to the use, occupancy or enjoyment
of the Premises by Tenant or any person thereon or holding under Tenant,
including, but not limited to, damages resulting from any labor dispute, and
Tenant shall defend, indemnify and save Landlord harmless from all liabilities
whatsoever on account of any real or alleged damage or injury and from liens,
claims and demands related to the use of the Premises and its facilities, or any
repairs, alterations or improvements (including original improvements and
fixtures specified in Exhibit C as Tenant's Work) which Tenant may make or cause
to be made upon the Premises; but Tenant shall not be liable for damage or
injury ultimately determined to be occasioned by the negligence of Landlord
boattree\misc\tierra.lse
23
or its designated agents, servants or employees. This obligation to indemnify
shall include reasonable attorneys' fees and investigation costs and all other
reasonable costs, expenses and liabilities incurred by Landlord or its counsel
from the first notice that any claim or demand is to be made or may be made.
16.7 EXCULPATION. Tenant hereby agrees that Landlord shall not be
liable for injury to Tenant's business or any loss of income therefrom or for
damage to goods, wares, merchandise or other property of Tenant, Tenant's
employees, invitees, customers, or any other person in or about the Premises,
nor shall Landlord be liable for injury to the person of Tenant, Tenant's
employees, agents or contractors, whether such damage or injury is caused by or
results from fire, steam, electricity, gas, water or rain, or from the breakage,
leakage, obstruction or other defects of pipes, sprinklers, wires, appliances,
plumbing, air conditioning or lighting fixtures, or from any other cause,
whether the said damage or injury results from conditions arising upon the
Premises or upon other portions of the building of which the Premises are a
part, or from other sources or places and regardless of whether the cause of
such damage or injury or the means of repairing the same is inaccessible to
Tenant. Landlord shall not be liable for any damages arising from any act or
neglect of any other tenant, if any, of the building in which the Premises are
located.
16.8 WAIVER OF SUBROGATION. Landlord and Tenant each waive any rights
it may have against the other on account of any loss or damage occasioned to
Landlord or Tenant, as the case may be, their respective property, the Premises
or its contents, or to other portions of the Shopping Center, arising from any
risk covered by property insurance required to be carried by them pursuant to
this Lease; and each of the parties, on behalf of their respective insurance
companies insuring the property of either Landlord or Tenant against any such
loss, waives any right of subrogation that it may have against the other.
16.9 FAILURE BY TENANT TO MAINTAIN INSURANCE. If Tenant refuses or
neglects to secure and maintain insurance policies complying with the provisions
of this Article, Landlord may secure the appropriate insurance policies and
Tenant shall pay upon demand the cost of same to Landlord, as Additional Rental.
ARTICLE 17
DAMAGE
17.1 DUTY TO RESTORE. If the Premises are partially or totally damaged
by fire or other casualty so as to become partially or totally untenantable,
which damage is insured against under any policy of fire and extended coverage
insurance then covering the damaged improvements, this Lease shall not terminate
and said improvements shall be rebuilt by Landlord with reasonable diligence at
Landlord's expense, unless Landlord shall elect to terminate this Lease, as
provided in Section 17.2 or Section 17.5.
boattree\misc\tierra.lse
24
17.2 ELECTION TO TERMINATE. If the Premises are damaged by an insured
casualty to the extent of at least twenty-five (25%) percent of the replacement
cost (cost to repair or replace at the time of loss without deduction for
physical depreciation) prior to the last three (3) lease years of the Term
hereof, to the extent of at least ten (10%) percent thereof during the last
three (3) lease years of said Term or to any extent by an uninsured cause at any
time during the lease Term, Landlord shall, within not more than ninety (90)
days after such damage notify Tenant of Landlord's election (a) to terminate
this Lease or (b) to restore the Premises. If Landlord elects to repair or
restore the damaged improvements, then, with respect to the Premises, Landlord
and Tenant each shall restore them in the same manner and to the same extent as
work was done by each of them in the original construction and fixturizing of
the improvements. If Landlord elects not to restore, as aforesaid, this Lease
shall terminate effective as of the date of such damage upon the giving of
notice of election by Landlord, as aforesaid. If Landlord elects to restore or
fails to give notice of its election, as aforesaid, then this Lease shall remain
in full force and effect. If Landlord elects to restore the Premises but fails
to complete such restoration within ninety (90) days after the occurrence of
damage to the Premises (or such longer period of time as may be required to
complete such restoration in the exercise of due diligence by Landlord), then
Tenant may terminate this Lease by written notice to Landlord.
17.3 RENT ADJUSTMENT. If this Lease is not terminated, as provided in
this Article 17, then, during the period of repair and restoration, the Minimum
Annual Rental shall be equitably adjusted.
17.4 TIME LIMITATION. If the damage is such that in reasonable
contemplation it cannot be repaired within six (6) months from the date of its
occurrence (force majeure excepted) then either party shall have the right to
terminate this Lease on sixty (60) days notice to the other.
17.5 RIGHT OF MORTGAGEE. Notwithstanding anything contained herein to
the contrary, if a mortgagee of the Shopping Center requires that insurance
proceeds in respect of a casualty be applied to payment of its mortgage,
Landlord shall have the right to elect not to restore the Premises and to
terminate this Lease, in which event this Lease shall terminate effective as of
the date of such damage upon the giving of notice of election by Landlord.
ARTICLE 18
EMINENT DOMAIN
18.1 TAKING. The term "Taking" as used in this Article 18 shall mean an
appropriation or taking under the power of eminent domain by any public or
quasi-public authority or a voluntary sale or conveyance in lieu of condemnation
but under threat of condemnation.
18.2 TOTAL TAKING. In the event of a Taking of the entire Premises, this
Lease shall terminate and expire as of the date possession is delivered to the
condemning authority, and
boattree\misc\tierra.lse
25
Landlord and Tenant shall each be released from any liability accruing pursuant
to this Lease after termination.
18.3 PARTIAL TAKING. If there is a partial Taking of the Floor Area of
the Premises, or if a Taking results in a material impairment of access to, or
visibility of, the Premises or a reduction of the outside display area of
Tenant, then either Landlord or Tenant may terminate this Lease as of the
effective date of such taking, upon giving notice in writing of such election
within thirty (30) days after receipt by Tenant from Landlord of written notice
that a portion of the Premises have been so appropriated or taken.
18.4 TERMINATION OF LEASE. If this Lease is terminated as provided
above, Landlord shall be entitled to the entire award or compensation in such
condemnation proceedings, or settlement in lieu thereof relating to the
Premises, but the Minimum Annual Rental or Percentage Rental (as the case may
be) and Additional Rental for the last month of Tenant's occupancy shall be
prorated and Landlord shall refund to Tenant any Minimum Annual Rental or
Percentage Rental (as the case may be) and Additional Rental paid in advance.
Subject to the preceding provisions, Tenant shall be entitled to pursue its own
action for any damages sustained by Tenant as a result of a Taking of the
Premises.
18.5 CONTINUATION OF LEASE. In the event of a Taking, if Landlord and
Tenant elect not to so terminate this Lease as provided above (or have no right
to so terminate), Landlord agrees, at Landlord's cost and expense, as soon as
reasonably possible after the Taking to restore the Premises (to the extent of
the condemnation proceeds made available to Landlord) on the land remaining to a
complete unit of like quality and character as existed prior to the Taking; and
thereafter the Minimum Annual Rental shall be reduced on an equitable basis,
taking into account the relative value of the portion taken as compared to the
portion remaining; and Landlord shall be entitled to receive the total award or
compensation in such proceedings.
18.6 RIGHT OF MORTGAGEE. Notwithstanding anything contained herein to
the contrary, if a mortgagee of the Shopping Center requires that proceeds of a
Taking be applied to payment of its mortgage, Landlord shall have the right to
elect not to restore the Premises and to terminate this Lease, in which event
this Lease shall terminate effective as of the date of such Taking upon the
giving of notice of election by Landlord.
ARTICLE 19
DEFAULTS BY TENANT
19.1 EVENTS OF DEFAULT. Should Tenant at any time be in default with
respect to any payment of Minimum Annual Rental, Percentage Rental, Additional
Rental, or any other charge payable by Tenant pursuant to this Lease for a
period of ten (10) days after written notice from Landlord to Tenant; or should
Tenant be in default in the prompt and full performance of any other
boattree\misc\tierra.lse
26
of its promises, covenants or agreements herein contained for more than thirty
(30) days after written notice thereof from Landlord to Tenant specifying the
particulars of the default; or should Tenant vacate or abandon the Premises; or
should Tenant make any general assignment for the benefit of creditors; or
should there be filed against Tenant a petition to have Tenant adjudged a
bankrupt or a petition for reorganization or arrangement under any law relating
to bankruptcy [unless, in the case of a petition field against Tenant, the same
is dismissed within sixty (60) days]; or should Tenant institute any proceedings
under the Bankruptcy code or any similar or successor statute, code or act; or
should an appointed trustee or receiver take possession of substantially all of
Tenant's assets located at the Premises, or of Tenant's interest in this Lease,
where possession is not restored to Tenant within thirty (30) days; or should
substantially all of Tenant's assets located at the Premises or Tenant's
interest in this Lease have been attached or judicially seized, where the
seizure is not discharged within thirty (30) days; then Landlord may treat the
occurrence of any (1) or more of the foregoing events as a breach of this Lease,
and in addition to any or all other rights or remedies of Landlord and by law
provided, it shall be, at the option of Landlord, without further notice or
demand of any kind to Tenant or any other person: (a) The right of Landlord to
declare the Term ended and to re-enter and take possession of the Premises and
remove all persons therefrom; or (b) the right of Landlord without declaring
this Lease terminated to re-enter the Premises and occupy the whole or any part
for and on account of Tenant and to collect any unpaid rentals and other
charges, which have become payable, or which may thereafter become payable; or
(c) the right of Landlord, even though it may have reentered the Premises, to
thereafter elect to terminate this Lease and all of the rights of Tenant in or
to the Premises. Landlord shall not be deemed to have terminated this Lease, or
the liability of Tenant to pay any Minimum Annual Rental, Percentage Rental,
Additional Rental, or other charges later accruing, by any re-entry of the
Premises pursuant to Section 19.1(b) above, or by any action in unlawful
detainer or otherwise to obtain possession of the Premises, unless Landlord
shall have notified Tenant in writing that it has so elected to terminate this
Lease.
19.2 TERMINATION OF LEASE. Should Landlord elect to terminate this
Lease pursuant to the provisions of Section 19.1 (a) or (c) above, Landlord may
recover from Tenant, as damages, the following (in addition to any other damages
recoverable under applicable law): (a) the worth at the time of award of any
unpaid rental which had been earned at the time of the termination; plus (b) the
worth at the time of award of the amount by which the unpaid rental which would
have been earned after termination until the time of award exceeds the amount of
rental loss Tenant proves could have been reasonably avoided; plus (c) the worth
at the time of award of the amount by which the unpaid rental for the balance of
the Term after the time of award exceeds the amount of rental loss that Tenant
proves could be reasonably avoided; plus (d) any other amount necessary to
compensate Landlord for all the detriment proximately caused by Tenant's failure
to perform its obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom, including, but not limited to any
costs or expenses incurred by Landlord in (i) retaking possession of the
Premises, including reasonable attorneys' fees therefor, (ii) maintaining or
preserving the Premises after any default, (iii) preparing the Premises for
reletting to a new tenant, including repairs or alterations to the Premises,
(iv) leasing commissions or (v) any other costs
boattree\misc\tierra.lse
27
necessary or appropriate to relet the Premises; plus (e) at Landlord's election,
any other amounts in addition to or in lieu of the foregoing as may be permitted
from time to time by the laws of the State where the Shopping Center is
situated.
As used in subparagraphs (a) and (b) above, the "worth at the time of
award" is computed by allowing interest at the maximum lawful rate. As used in
subparagraph (c) above, the "worth at the time of award" is computed by
discounting such amount at the discount rate of the Federal Reserve Bank
situated nearest to the location of the Shopping Center at the time of award
plus one percent (1%).
19.3 DEFINITION OF RENTAL. For purposes of this Article only, the term
"rental" shall be deemed to be the Minimum Annual Rental, Percentage Rental and
all other sums required to be paid by Tenant pursuant to the terms of this
Lease.
19.4 NON-MONETARY DEFAULTS. Notwithstanding any other provisions of
this Article, if the default complained of, other than a default for the payment
of monies , cannot be rectified or cured within the period requiring
rectification or curing as specified in the written notice relating to the
default, then, as to a default susceptible to being cured, the default shall be
deemed to be rectified or cured if Tenant within the notice period shall have
commenced the rectification and curing of the default and shall continue
thereafter to diligently complete the same.
ARTICLE 20
DEFAULTS BY LANDLORD
20.1 In the event Landlord shall neglect or fail to perform or observe
any of the covenants, provisions or conditions contained in this Lease on its
part to be performed or observed within thirty (30) days after written notice of
default or if more than thirty (30) days shall be required because of the nature
of the default, if Landlord shall fail to proceed diligently to cure such
default after written notice thereof, then in that event Landlord shall be
liable to Tenant for any and all damages sustained by Tenant as a result of
Landlord's breach; provided, however, it is expressly understood and agreed that
any money judgment resulting from any default or other claim arising under this
Lease shall be satisfied only out of the rents, issues, profits and other income
("income") actually received from the operation of the Shopping Center and the
U.S. 19 Premises, and no other real, personal or mixed property of Landlord (the
term "Landlord" for purposes of this Article 20 only shall mean any and all
partners, both general and/or limited, if any, which comprise Landlord),
wherever situated, shall be subject to levy on any such judgment obtained
against Landlord and if such income is insufficient for the payment of such
judgment, Tenant will not institute any further action, suit, claim or demand,
in law or in equity, against Landlord for or on the account of such deficiency.
Tenant hereby waives, to the extent waivable under law, any right to satisfy
said money judgment against Landlord except from income received by Landlord
from the operation of the Shopping Center and the U.S. 19 Premises. Tenant shall
have the right to set off damages incurred by Tenant as a result of Landlord's
boattree\misc\tierra.lse
28
default against any sums due Landlord by Tenant pursuant to the terms of this
Lease; provided, however, that in no event shall Tenant be entitled to set off a
sum in excess of the amount of six (6) monthly installments of Minimum Annual
Rental.
20.2 If the Premises or any part thereof are at any time subject to a
first mortgage or a first deed of trust and this Lease or the rentals due from
Tenant hereunder are assigned to such mortgagee, trustee or beneficiary (called
Assignee for purposes of this Article only) and Tenant is given written notice
thereof, including the post office address of such Assignee, then Tenant shall
give written notice to such Assignee, specifying the default in reasonable
detail, and affording such Assignee a reasonable opportunity to make performance
for and on behalf of Landlord. If and when the said Assignee has made
performance on behalf of Landlord, such default shall be deemed cured.
ARTICLE 21
SUBORDINATION ATTORNMENT AND TENANT'S CERTIFICATE
21.1 SUBORDINATION. Upon written request of Landlord, or Landlord's
mortgagee, or the beneficiary of a deed of trust of Landlord, or lessor of
Landlord, Tenant will subordinate its rights pursuant to this Lease in writing
to the lien of any mortgage, deed of trust or the interest of any lease in which
Landlord is the lessee (or, in the alternative, cause the lien of said mortgage,
deed of trust or the interest of any lease in which Landlord is the lessee to be
subordinated to this Lease), or to the Agreements referred to in Article 25
hereof, and upon any building hereafter placed upon the land of which the
Premises are a part, and to all advances made or hereafter to be made upon the
security thereof.
21.2 ATTORNMENT. In the event any proceedings are brought for
foreclosure, or in the event of the exercise of the power of sale under any
mortgage or deed of trust made by Landlord covering the Premises, or should the
lease in which Landlord is the lessee be terminated, Tenant shall attorn to the
purchaser or lessor under this Lease upon any foreclosure, sale or lease
termination and recognize the purchaser or lessor as Landlord under this Lease,
provided that the purchaser or lessor shall acquire and accept the Premises
subject to this Lease. Tenant agrees that no such purchaser or lessor shall be
liable for any default committed prior to foreclosure.
21.3 TENANT'S CERTIFICATE. Tenant, within ten (10) days from receipt of
Landlord's written request, shall execute, acknowledge and deliver to Landlord a
written statement certifying (i) that this Lease is in full force and effect,
without modification (or, if there have been modifications, that the same is in
full force and effect as modified, and stating the modification), (ii) that
there are no uncured defaults in Landlord's performance and that Tenant has no
right of offset, counterclaim or deduction against Minimum Annual Rental or
Percentage Rental (as the case may be) and Additional Rent, (iii) the dates to
which the Minimum Annual Rental or Percentage Rental (as the case may be) and
Additional Rental have been paid, and any other matters reasonably requested by
Landlord. Failure of Tenant to execute and deliver this statement shall
constitute, at
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29
Landlord's option, either (i) a breach of this Lease, or (ii) acceptance of the
Premises by Tenant and Tenant's acknowledgement that the statements referenced
above are true and correct, without exception. In addition, within ten (10) days
from receipt of Landlord's written request, Tenant shall execute, acknowledge
and deliver to any mortgagee or proposed mortgagee of Landlord a subordination,
non-disturbance and attornment agreement in such form as may be reasonably
required by such mortgagee or proposed mortgagee; provided, however, that such
subordination, non-disturbance and attornment agreement must provide that
Tenant's rights under this Lease shall not be infringed upon so long as Tenant
is not in default under this Lease.
ARTICLE 22
SECURITY DEPOSIT
22.1 SECURITY DEPOSIT. Tenant shall deposit with Landlord the sum
specified in Section 1.12 as "Security Deposit" (the "Security Deposit") on or
prior to the Rental Commencement Date. Unless otherwise required by applicable
law, the Security Deposit shall be held by Landlord without obligation or
liability for payment of interest thereon as security for the faithful
performance by Tenant of all of the terms of this Lease to be observed and
performed by Landlord. The Security Deposit shall not be mortgaged, assigned,
transferred or encumbered by Tenant without the prior written consent of
Landlord. Unless otherwise required by applicable law, Landlord shall not be
required to keep the Security Deposit separate from its general funds.
22.2 APPLICATION OF SECURITY DEPOSIT. Should Tenant at any time during
the Term hereof be in default of any provision of this Lease, Landlord may, at
its option and without prejudice to any other remedy which Landlord may have at
law or in equity, appropriate the Security Deposit, or the portion thereof as
may be deemed necessary, and apply same toward payment of Minimum Annual Rental,
Percentage Rental, Additional Rental, or to loss or damage sustained by Landlord
due to the default on the part of Tenant. Within five (5) days after written
demand by Landlord, Tenant shall deposit cash with Landlord in an amount
sufficient to restore the Security Deposit to the original sum deposited.
22.3 REFUND. Should Tenant perform all of its obligations under this
Lease, the Security Deposit, or any balance thereof then remaining, shall be
returned to Tenant, within sixty (60) days of the expiration of the Term or the
earlier termination thereof, or as otherwise prescribed by law.
22.4 SALE OF PREMISES. Landlord may deliver the Security Deposit to the
purchaser of Landlord's interest in the Premises, and Landlord shall then be
discharged from any further liability with respect to the Security Deposit, and
this Section 22.4 shall also apply to any subsequent transfers of Landlord's
interest in the Premises.
ARTICLE 23
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30
QUIET ENJOYMENT
Upon Tenant's payment of Minimum Annual Rental or Percentage Rental (as
the case may be) and Additional Rental, and its observation and performance of
all the covenants, terms and conditions of this Lease to be observed and
performed by Tenant, Tenant shall peaceably and quietly hold and enjoy the
Premises from and after delivery thereof to Tenant; subject, however, to (a) the
rights of the parties as set forth in this Lease, (b) any mortgage or deed of
trust to which this Lease is subordinate, (c) any ground or underlying leases,
agreements and encumbrances to which this Lease is subordinate, and (d) all
matters of record.
ARTICLE 24
NOTICES
Except as otherwise required by law, any notice, information, request
or reply (the "Notice" for purposes of this Article only) required or permitted
to be given under the provisions of this Lease shall be in writing and shall be
given or served either personally or by mail. If given or served by mail, such
Notice shall be deemed sufficiently given if (a) deposited in the United States
mail, certified mail, return receipt requested, postage prepaid, or (b) sent by
express mail, or other similar overnight service, provided proof of service is
available, addressed to the addresses of the parties specified as "Addresses for
Notices and Payments" in Section 1.14. Any Notice given or served by mail shall
be deemed given or served as of the date of deposit in the mails. Either party
may, by written notice to the other in the manner specified herein, specify an
address within the United States for notices in lieu of the address specified in
Section 1.14.
ARTICLE 25
TITLE OF LANDLORD
Landlord covenants that if it acquires title to the Premises, there
will be no liens upon its estate other than (a) covenants, conditions,
restrictions, easements, ground leases, mortgages or deeds of trust
(collectively referred to as the "Agreements"); (b) any liens not preventing
Tenant from using the Premises as permitted by this Lease; (c) the effect of any
zoning laws of the city, county and state where the Shopping Center and the U.S.
19 Premises are situated, and (d) general and special taxes not delinquent.
Tenant agrees that (i) as to its leasehold estate, it, and all persons in
possession or holding under it, will conform to and will not violate the terms
of the Agreements or any matters of record and (ii) this Lease is subordinate to
the Agreements and any amendments or modifications thereto; provided, however,
if the Agreements are not of record as of the Rental Commencement Date, then
this Lease shall automatically become subordinate to the Agreements upon
recordation, provided the Agreements do not prevent Tenant from using the
Premises for the use set forth in Section 1.11.
boattree\misc\tierra.lse
31
ARTICLE 26
SHOPPING CENTER EXPANSION
At any time during the Term, Landlord may expand, in any manner, the
existing Shopping Center, which expansion may include the addition of shops
and/or the addition of new buildings to the Shopping Center (collectively the
"Expanded Center"); provided, however, that such actions shall not (a)
materially alter the access of Tenant and its customers to the Shopping Center
Premises, or (b) materially alter the visibility of Tenant's facility from
adjacent roadways, or (c) reduce the outside display area of Tenant. If Landlord
deems it necessary for construction personnel to enter the Premises in order to
construct the Expanded Center, Landlord shall give Tenant no less than fifteen
(15) days prior notice, and Tenant shall allow such entry. Landlord shall use
reasonable efforts to complete the work affecting the Premises in an efficient
manner so as not to interfere unreasonably with Tenant's business. Tenant shall
not be entitled to any damages or to reduction in Minimum Annual Rental,
Percentage Rental or Additional Rental for any interference or interruption of
Tenant's business upon the Premises or for any inconvenience caused by such
construction work. Landlord shall have the right to use a portion of the
Premises to accommodate any structures required for the Expanded Center. If, as
a result of Landlord utilizing a portion of the Premises for such purpose, there
is a permanent increase or decrease in the Floor Area of the Premises of one
percent (1%) or more, there shall be a proportionate adjustment of Minimum
Annual Rental and all other charges based on Floor Area. During the course of
construction, Tenant shall continue to pay Minimum Annual Rental and Additional
Rental.
ARTICLE 27
MISCELLANEOUS
27.1 WAIVER. Any waiver by Landlord of a breach of a covenant-of this
Lease by Tenant shall not be construed as a waiver of a subsequent breach of the
same covenant. The consent or approval by Landlord to anything requiring
Landlord's consent or approval shall not be deemed a waiver of Landlord's right
to withhold consent or approval of any subsequent similar act by Tenant. No
breach by Tenant of a covenant of this Lease shall be deemed to have been waived
by Landlord unless the waiver is in writing signed by Landlord.
27.2 RIGHTS CUMULATIVE. Except as provided herein to the contrary, the
rights and remedies of Landlord specified in this Lease shall be cumulative and
in addition to any rights and remedies not specified in this Lease.
27.3 ENTIRE AGREEMENT. It is understood that there are no oral or
written agreements or representations between the parties hereto affecting this
Lease, and this Lease supersedes and cancels any and all previous negotiations,
arrangements, representations, brochures, agreements and
boattree\misc\tierra.lse
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understandings, if any, between Landlord and Tenant or displayed by Landlord to
Tenant with respect to the subject matter thereof, and none thereof shall be
used to interpret or construe this Lease.
27.4 NO REPRESENTATION. Landlord reserves the absolute right to effect
such other tenancies in the Shopping Center as Landlord, in the exercise of its
sole business judgment, shall determine to best promote the interests of the
Shopping Center. Tenant does not rely on the fact, nor does Landlord represent,
that any specified tenant or number of tenants shall, during the Term of this
Lease, occupy any space in the Shopping Center. This Lease is and shall be
considered to be the only agreement between the parties hereto and their
representatives and agents. All negotiations and oral agreements acceptable to
both parties have been merged into and are included herein. There are no other
representations or warranties between the parties and all reliance with respect
to representations is solely upon the representations and agreements contained
in this Lease.
27.5 AMENDMENTS IN WRITING. No provision of this Lease may be
amended except by an agreement in writing signed by Landlord and Tenant.
27.6 NO PRINCIPAL AGENT RELATIONSHIP. Nothing contained in this Lease
shall be construed as creating the relationship of principal and agent,
partnership or joint venture between Landlord and Tenant.
27.7 LAWS OF FLORIDA TO GOVERN. This Lease shall be governed by and
construed in accordance with the laws of the State of Florida.
27.8 SEVERABILITY. If any provision of this Lease or the application of
such provision to any person, entity or circumstances, is found invalid or
unenforceable by a court of competent jurisdiction, the determination shall not
affect the other provisions of this Lease and all other provisions of this Lease
shall be deemed valid and enforceable.
27.9 SUCCESSORS. All rights and obligations of Landlord and Tenant
under this Lease shall extend to and bind the respective heirs, executors,
administrators, and the permitted concessionaires, successors, subtenants and
assignees of the parties. If there is more than one (1) Tenant, each shall be
bound jointly and severally by the terms , covenants and agreements contained in
this Lease.
27.10 TIME OF ESSENCE. Except for the delivery of possession of the
Premises to Tenant, time is of the essence.
27.11 WARRANTY OF AUTHORITY. If Tenant is a corporation or partnership,
each individual executing this Lease on behalf of the corporation or partnership
represents and warrants that he or she is duly authorized to execute and deliver
this Lease on behalf of the corporation or partnership, and that this Lease is
binding upon the corporation or partnership. If Tenant is a
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corporation, the persons executing this Lease on behalf of Tenant hereby
covenant and warrant that (i) Tenant is a duly qualified corporation and all
steps have been taken prior to the date hereof to qualify Tenant to do business
in the State where the Shopping Center is situated, (ii) all franchise and
corporate taxes have been paid to date, and (iii) all future forms, reports,
fees and other documents necessary to comply with applicable laws will be filed
when due.
27.12 MORTGAGEE CHANGES. Tenant shall not unreasonably withhold its
consent to changes or amendments to this Lease requested by the holder of a
mortgage or deed of trust, or such similar financing instrument, covering
Landlord's fee interest in the Premises so long as such changes do not alter the
economic terms of this Lease or otherwise diminish the rights, or increase the
obligations, of Tenant.
27.13 CAPTIONS AND TERMS. The captions of Articles of this Lease are
for convenience only, are not a part of this Lease and do not in any way limit
or amplify the terms and provisions of this Lease. Except as otherwise
specifically stated in this Lease, "the term" shall include the original term
and any extension, renewal or holdover thereof.
27.14 BROKERS. Tenant represents and warrants that it has not had any
dealings with any realtors, brokers or agents in connection with the negotiation
of this Lease.
27.15 RECORDING. Tenant shall not record this Lease or any short form
of this Lease. Tenant, upon the request of Landlord, shall execute and
acknowledge a short form memorandum of this Lease for recording purposes, upon
the expiration or earlier termination of this Lease for any reason, Tenant,
within-three (3) days of the date of request by Landlord, shall convey to
Landlord by quitclaim deed any and all interest Tenant may have under this
Lease.
27.16 TRANSFER OF LANDLORD'S INTEREST. Should Landlord sell, exchange
or assign this Lease (other than a conditional assignment as security for a
loan), then Landlord, as transferor, shall be relieved of any and all
obligations on the part of Landlord accruing under this Lease from and after the
date of the transfer. No holder of a mortgage or a deed of trust to which this
Lease is subordinate shall be responsible in connection with the Security
Deposit, unless the mortgagee or holder of a deed of trust actually receives the
Security Deposit.
27.17 INTEREST ON PAST DUE OBLIGATIONS. Unless otherwise specifically
provided in this Lease, any amount due from Tenant to Landlord under this Lease
which is not paid when due and any amount due as reimbursement to Landlord for
costs incurred by Landlord in performing obligations of Tenant upon Tenant's
failure to so perform shall bear interest at the lesser of (a) twelve percent
(12%) from the date originally due until paid; or (b) the maximum interest rate
allowed by applicable law.
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34
27.18 RIGHT TO SHOW PREMISES. During the last one hundred eighty (180)
days of the Term, Landlord shall have the right to go upon the Premises to show
same to prospective tenants or purchasers and to post appropriate signs.
27.19 INDEPENDENT CONTRACTORS. Whenever in this Lease it provides that
Landlord shall perform certain work or services, Landlord shall be entitled to
contract with an independent contractor to perform said work or services, or
provide the service itself.
27.20 FORCE MAJEURE. Any prevention, delay or stoppage due to strikes,
lockouts, labor disputes, acts of God, inability to obtain labor or materials or
reasonable substitutes therefor, governmental restrictions, governmental
regulations, governmental controls, judicial orders, enemy or hostile
governmental action, civil commotion, fire or other casualty, and other causes
beyond the reasonable control of the party obligated to perform, shall excuse
the performance by that party for a period equal to the prevention, delay or
stoppage, except the obligations imposed with regard to Minimum Annual Rental
and Additional Rental to be paid by Tenant pursuant to this Lease; provided the
party prevented, delayed or stopped shall have given the other party written
notice thereof within thirty (30) days of such event causing the prevention,
delay or stoppage. Notwithstanding anything to the contrary contained in this
Section 27.20, in the event any work performed by Tenant or Tenant's contractor
results in a strike, lockout and/or labor dispute, the strike, lockout and/or
dispute shall not excuse the performance by Tenant of the provisions of this
Lease.
27.21 HOLDING OVER. This Lease shall terminate without further notice
upon the expiration of the Term, and should Tenant hold over in the Premises
beyond this date, the holding over shall not constitute a renewal or extension
of this Lease or give Tenant any rights under this Lease. In such event,
Landlord may, in its sole discretion, treat Tenant as a tenant at will, subject
to all of the terms and conditions in this Lease, except that Tenant shall pay
Minimum Annual Rental in an amount equal to the greater of (a) one and one-half
(1 1/2) times the sum of the Minimum Annual Rental or Percentage Rental (as the
case may be) which was payable for the twelve (12) month period immediately
preceding the expiration of the Lease, or (b) the then currently scheduled rent
for comparable space in the Shopping Center and the U.S. 19 Premises, as the
same is reasonably determined in Landlord's business judgment. In the event
Tenant fails to surrender the Premises upon the expiration of this Lease, Tenant
shall indemnify and hold Landlord harmless from all loss or liability which may
accrue therefrom, including, without limitation, any claims made by any
succeeding tenant founded or resulting from Tenant's failure to surrender.
Acceptance by Landlord of any Minimum Annual Rental, Percentage Rental or
Additional Rental after the expiration or earlier termination of this Lease
shall not constitute a consent to a hold over hereunder, constitute acceptance
of Tenant as a tenant at will or result in a renewal of this Lease.
27.22 ATTORNEYS' FEES. In the event that at any time after the date of
this Lease either Landlord or Tenant shall institute any action or proceeding
against the other relating to the provisions of this Lease, or any default
hereunder, the party not prevailing in the action or
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35
proceeding shall reimburse the prevailing party for the reasonable expenses of
attorneys' fees and all costs or disbursements incurred therein by the
prevailing party, including without limitation, any fees, costs or disbursements
incurred on any appeal from the action or proceeding.
27.23 NON-DISCRIMINATION. Tenant herein covenants by and for itself,
its heirs, executors, administrators and assigns and all persons claiming under
or through it, and this Lease is made and accepted upon and subject to the
following conditions: That there shall be no discrimination against or
segregation of any person or group of persons on account of race, sex, marital
status, color, creed, national origin or ancestry, in the leasing, subleasing,
transferring, use, occupancy, tenure or enjoyment of the Premises herein leased,
nor shall the Tenant itself, or any person claiming under or through it,
establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, sublessees, subtenants or vendees in the premises herein
leased.
27.24 RADON GAS. Radon is a naturally occurring gas which, when
accumulated in a building in sufficient quantities, may present health risks to
persons who are exposed to it over time. Levels of radon that exceed federal and
state guidelines have been found in buildings in Florida. Additional information
regarding radon and radon testing may be obtained from the county public health
unit. (Pursuant to Section 404.056(8), Florida Statutes).
27.25 FINANCING BY TENANT. Tenant has advised Landlord that Tenant will
obtain financing for its inventory in the Premises from an institutional lender
("Institutional Lender Financing"). If requested by Tenant, Landlord will
execute such documents as are necessary to subordinate any liens conferred upon
Landlord to the liens and security interests imposed upon Tenant's inventory by
the Institutional Lender Financing.
27.26 INTERPRETATION. If more than one person or corporation is named
as Landlord or Tenant in this Lease and executes the same as such, then and in
such event, the words "Landlord" or "Tenant" wherever used in this Lease are
intended to refer to all such persons or corporations, and the liability of such
persons or corporations for compliance with and performance of all the terms ,
covenants and provisions of this Lease shall be joint and several. The masculine
pronoun used herein shall include the feminine or the neuter as the case may be,
and the use of the singular shall include the plural. The parties agree that
this Lease supersedes and replaces the lease dated in March of 1998 which
Landlord and Tenant previously executed in respect of the Premises.
[This space intentionally left blank]
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease
on the day and year first above written.
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36
LANDLORD:
MARINA OPPORTUNITY I (TIERRA VERDE), L.P.,
a Texas limited partnership
By: Marina Opportunity (Tierra Verde), L.L.C.,
a Texas limited liability company
Its General Partner
By: /s/ John Powers
Name: John Powers
Title: Sr. Vice President
TENANT:
BOAT TREE, INC.,
a Florida corporation
By: /s/ Joe Pozo
Name: Joseph G. Pozo, Jr.
Title: President
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