Exhibit 10.42
AGREEMENT OF LEASE FOR SHOPPING CENTER SPACE
BETWEEN
SEQUEL INVESTORS LIMITED PARTNERSHIP
AND
OLD DOMINION ENTERPRISES, INC.
DATED AS OF:
MAY 20, 1997
SEMINOLE SQUARE
SHOPPING CENTER
CHARLOTTESVILLE, VIRGINIA
INDEX TO LEASE AGREEMENT
SECTION 1 Definitions................................................... 2
SECTION 2 Grant and Term................................................ 3
SECTION 3 Rent.......................................................... 4
SECTION 4 Construction of Improvements.................................. 7
SECTION 5 Use of Premises............................................... 8
SECTION 6 Quiet Enjoyment and Landlord's Right of Entry................. 8
SECTION 7 Nuisance, Waste, Hazardous Materials, Rules and Regulations... 9
SECTION 8 Compliance with Law, Liens, Indemnity......................... 10
SECTION 9 Maintenance and Repair of Premises............................ 11
SECTION 10 Common Areas and Charges...................................... 12
SECTION 11 Fixtures, Signs and Alterations............................... 13
SECTION 12 Condemnation.................................................. 14
SECTION 13 Insurance..................................................... 15
SECTION 14 Damage or Destruction......................................... 16
SECTION 15 Assignment, Subletting and Encumbrance........................ 17
SECTION 16 Default....................................................... 18
SECTION 17 Estoppel Certificates, Subordination, Mortgages Protection.... 23
SECTION 18 Surrender and Holdover........................................ 24
SECTION 19 Security Deposit.............................................. 25
SECTION 20 Promotion Fund and Advertising................................ 26
SECTION 21 General Provisions............................................ 26
EXHIBIT A Shopping Center Site Plan
EXHIBIT A-1 The Premises
EXHIBIT B Landlord and Tenant Improvements/Criteria Manual
EXHIBIT C Operating Hours
EXHIBIT D Sign Criteria
EXHIBIT E Tenant Covenants Relating to IRB Financing
EXHIBIT F Grand Opening
EXHIBIT G Guaranty
EXHIBIT H Keyman Insurance
EXHIBIT I Uniform Commercial Code Filing Form
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THIS LEASE AGREEMENT is made by and between Sequel Investors Limited
Partnership, a Virginia limited partnership (hereinafter called "Landlord"), and
Old Dominion Enterprises, Inc. TRADING AS Dominion Saddlery (hereinafter called
"Tenant").
SECTION 1 Definitions
This Section 1 is an integral part of this Lease and all of the terms hereof are
incorporated into this Lease in all respects. In addition to the other
provisions which are elsewhere defined herein, following whenever used in this
Lease shall have the meaning set forth in this Section, and only such meaning,
unless such meanings are expressly contradicted, limited or expanded elsewhere
herein:
Effective Date of
Lease: May 20, 1997
- -------------------- --------------------------------------------------------
Shopping Center: The real property or leasehold property shown on
the site plan outlined in green attached hereto as
Exhibit A, commonly known as The Seminole Square
Shopping Center, located at 242 Zan Road, as the same
may be modified from time to time pursuant to Section 6
hereof.
Premises: The portion of the Shopping Center identified by
cross-hatching on Exhibit A-1, consisting of
approximately 3,000 square feet of "Leasable Space"
located at 242 Zan Road, Charlottesville, VA.
Leasable Space: When used with respect to the Premises and all other
Leasable Space in the Shopping Center, means Landlord's
best estimate of the number of square feet of area in
all structural parts of the Shopping Center for
exclusive use of the Tenant thereof and its customers,
including without limitation, basements, mezzanines and
balconies used for the sale of goods and services; said
area shall be measured from the exterior face of
exterior walls and the center line of any walls which
Tenant shares with other tenants or occupants of the
Shopping Center, provided that no deduction from
Leasable Space shall be made for columns, stairs,
elevators or any interior construction or equipment
within the six (6) boundaries which demise the Leasable
Space. If the actual number of square fee within the
Premises is greater than Landlord's estimate, the number
of square feet shall be adjusted to the exact amount of
square feet within the Premises.
Commencement Date: June 1, 1997, or as such date may be deferred by a
cause or causes as set forth in Section 4.
Term: A period 3 years and 0 months following (a) the
Commencement Date, or (b) if the Commencement Date is
not the first day of a month, the first day of the month
following the month in which the Commencement Date
occurs or as said period may be extended by any options
to renew granted. Each twelve (12) month period
beginning with the Commencement Date or, if the
Commencement Date is not the first day of the month, the
day of the month following the Commencement Date shall
be a "Lease Year." If the Lease does not commence
Lease Year: on the first calendar day of a month, the period
from the Commencement Date to the first day of the first
full calendar month shall be the first "Lease Year"
although such Lease year will be, in actuality, less
than 31 calendar days, and the period from the end of
the last full Lease Year until the termination of the
Lease, shall be the last Lease Year.
Minimum Rent: The fixed annual rent payable by Tenant during the
Term in monthly installments in advance without notice,
demand or setoff as follows:
From the Commencement Date through the last day of the
2nd month of the Term, $1,625 per month;
From the 1st day of the 3 month through the last day of
the 12 month of the Term, $3,250 per month;
From the 1st day of the 13 month through the last day of
the 24 month of the Term, $3,375 per month;
From the 1st day of the 25 month through the last day of
the 36 month of the Term, $3,500 per month;
Percentage Rent: 6% ("Percentage Rate") of the Gross Sales (as
defined in Section 3) occurring in any "Fiscal Period"
which exceed One Million Dollars ($1,000,000.00) ("Base
Sales").
Fiscal Period: A period of time as designated by Landlord from
time to time, equal to a calendar year or other less
frequently recurring period within the Term, of such
portion thereof as is within the Term. The fiscal period
under this Lease shall initially be each Lease Year.
Security Deposit: $3,250.00 to be paid in cash, certified funds or
cashier's check.
Permitted Uses: Primarily the sale of the equipment and apparel of
the rider and horse both custom and stock, equestrian,
gifts, horse care products, equestrian consignment
items, equestrian related sportswear, books, magazines
and video tapes to be conducted under the Trade
Name/Trade Style Dominion Saddlery.
Tenant's The fraction (expressed as a percentage) determined from
time to time by dividing the number of square
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Proportionate Share feet of Leasable Space in the Premises by the number of
square feet of Leasable Space in the Shopping Center
that is or shall be leased to tenants who shall be
burdened in the same manner and similarly subject to
proportionate shares of taxes, insurance, common area
maintenance and the like as hereafter provided; and
subject to adjustment as hereinafter provided. There are
or may be other Leasable Space in the Shopping Center
that will not be burdened in the same manner.
Guarantor: Name: Reynolds Young SSN: ###-##-####
Address: 43717 John Mosby Highway
Chantilly, Virginia 22021
Broker's Name and Great Eastern Management Company, PO Box 5525,
Address Charlottesville, VA 22905-5526 Rivanna Realty and
Investment Company, 3054-A Berkmar Drive,
Charlottesville, VA 22901 Brownfield Realty and
Investment, PO Box 6846, Charlottesville, VA 22906
Estimated Charges: Estimated Tax Charge: $1,540.60 per annum, payable in
equal installments, in advance, at the rate of $128.80
per month, subject to annual adjustments.
Estimated Insurance Charge: $127.50 per annum, payable
in equal installments, in advance, at the rate of $10.62
per month, subject to annual adjustments.
Estimated Common Area Charge: $2,094.30 per annum,
payable in equal installments, in advance, at the rate
of $174.53 per month, subject to annual adjustments.
Estimated Water/Sewer Charge: $120.00 per annum, payable
in equal installments, in advance, at the rate of $10.00
per month, subject to annual adjustments.
Promotional Fund Charge: $1,500.00 per annum, payable in
equal installments, in advance, at the rate of $125.00
per month, subject to annual adjustments.
Exhibits: This Lease includes the following Exhibits, Riders and
Addenda which are incorporated herein and made a party
hereof by this reference:
EXHIBIT A Shopping Center Site Plan
EXHIBIT A-1 The Premises
EXHIBIT B Landlord and Tenant Improvements/Criteria manual
EXHIBIT C Operating Hours
EXHIBIT D Sign Criteria
EXHIBIT E Tenant Covenants Relating to IRB Financing
EXHIBIT F Grand Opening
EXHIBIT G Guaranty
EXHIBIT H Keyman Insurance
EXHIBIT I Uniform Commercial Code Filing Form
SECTION 2 Grant and Term
Grant: In consideration of the rents agreed to be paid and of
the covenants and agreements made by the respective
parties hereto, Landlord demises and leases to Tenant
and Tenant hereby leases from Landlord the Premises,
upon the terms and conditions herein provided, together
with the right to use, in common with others entitled
thereto, the Common Areas (as hereinafter defined),
subject to the terms and conditions of this Lease and to
reasonable rules and regulations for the use thereof as
prescribed from time to time by Landlord.
Term: Subject to the terms, covenants and agreements contained
herein, Tenant shall have and hold the Premises for the
entire Term. Landlord and Tenant agree to execute and
deliver a supplement to this Lease setting forth the
dates of commencement and expiration of the term when
determinable or requested by either party. If the
Commencement Date has not occurred upon the expiration
of twelve months following the date hereof, then this
Lease shall thereupon become null and void and shall
have no further force and effect in law or in equity.
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SECTION 3 Rent
Minimum Rent: Tenant covenants and agrees to pay to Landlord the
Minimum Rent specified in Section 1 in advance and
without notice, demand or setoff on the first day of
each month of the term; provided, however, that the
first and last payments due shall be made upon execution
and delivery of this Lease by Tenant. Acceptance of late
Rent at any time or times by Landlord shall in no way
waive Tenant's obligation to pay Rent in accordance with
this Section or be deemed a waiver of any of Landlord's
rights hereunder. If the Term commences on a day other
than the first day of the month, or ends on a day other
than the last day of the month, Tenant shall pay for the
fractional month within the Term on a per diem basis
(calculated on the basis of a thirty-day month).
Percentage Rent: (a) Within twenty (20) days following the end of
each Fiscal Year, Tenant shall pay to Landlord the
Percentage Rate, if any, for such Fiscal Period or such
proration of the Fiscal Period during the first and last
years of the Term applicable. The acceptance by Landlord
of said payment shall be without prejudice to Landlord's
rights of examination and verification as hereinafter
provided.
(b) The term "Gross Sales" as used herein for the
purpose of determining Percentage Rent shall mean the
dollar aggregate of the entire amount of receipts from
gross sales of Tenant and all of licensees,
concessionaires and tenants of Tenant, from all business
conducted upon or from the Premises by Tenant and all
others, whether such sales be evidenced by check,
credit, charge accounts, exchange or otherwise, and
shall include but not be limited to, the amounts
received from the sale of goods, wares and merchandise
and for services performed on or at the Premises
(including the value of all goods accepted in lieu of
cash payment), together with the amount of all orders
taken or received at the Premises, mail or telephone
orders received or filled on the Premises, whether such
orders are filled from the Premises or elsewhere, and
whether such sales be made by means of merchandise or
other vending devices in the Premises. If any one or
more departments or other divisions of Tenant's business
gross sales of such departments or divisions, whether
such sales be filled at the premises or elsewhere, in
the same manner and with the same effect as if the
business or sales of such departments and visions of
Tenant's business had been conducted by Tenant. Gross
Sales shall not include sales of merchandise of which,
and to the extent that, cash has been refunded, or
allowances made on merchandise claimed to be defective
or unsatisfactory, provided they shall have originally
been included in Gross Sales; and three shall be deduced
from Gross Sales the sale price of merchandise returned
by customers for exchange, provided that the sale price
of merchandise delivered to the customer in exchange
shall be included in Gross Sales. Gross Sales shall not
include the amount of any sales, use, service, gross
receipts or other like tax imposed by any federal,
state, municipal or governmental authority directly on
sales and collected from customers, provided that the
amount thereof is added to the selling price or absorbed
therein, and paid by the Tenant to such government
authority. No franchise, capital stock or personal
property tax and no income tax or similar tax based upon
income or profits as such shall be deducted from Gross
Sales in any event whatsoever. Each charge or sale upon
installment or credit shall be treated as a sale for the
full price in the calendar month during which such
charge or sale shall initially be made, irrespective of
the time when Tenant shall receive payment (whether full
or partial) therefore. There shall be no deduction for
uncollected or uncollectible credit accounts or for bad
debts or other losses.
(c) On or before the 20th day of each calendar month
during the Term, Tenant shall deliver to Landlord a
statement in writing, certified as true and correct by
an executive officer of the Tenant, which statement
shall show Gross Sales during the immediately preceding
calendar month. The statement referred to in this
subsection shall be in such form and style and shall
contain such details and information as Landlord may
reasonably require from time to time. The acceptance by
Landlord of payment of Percentage Rent or reports
thereof shall be without prejudice and shall in no event
constitute a waiver of Landlord's right to claim a
deficiency in the payment of such Percentage Rent or to
audit Tenant's books and records, as hereafter set
forth. Tenant agrees to prepare, keep and maintain for a
period of not less than three years complete and
accurate books of account and records of all purchases
and receipts of merchandise, inventories and all sales
and other transactions by Tenant and its
concessionaires, licensees and tenants from which Gross
Sales can be determined. Tenant agrees to record all
sales, as the time each sale is made, whether for cash
or credit, in a cash register or registers containing
locked-in cumulative tapes
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with accumulation capacity. Tenant shall keep for at
least three years all pertinent original sales records,
which records shall include (i) daily dated register
tapes; (ii) serially numbered sales checks and slips;
(iii) duplicate bank deposit slips and bank statements;
(iv) related computer records; (v) such other records as
would normally be required to be kept and examined by an
independent certified public accountant in accordance
with accepted auditing practices in performing an audit
of Tenant's Gross ales; and (vi) all income, sales and
occupation tax returns.
(d) Upon five days' prior written notice to Tenant,
Landlord shall have the right to cause a complete audit
to be made of business affairs conducted at, upon or
from the Premises by Tenant (and all concessionaires,
licensees or tenants of Tenant) and all books and
records pertaining thereto, including those specified in
subsection (c) of this Section, and Tenant will make all
such books and records available, or cause the same to
be made available for such examination at the Premises;
said audit shall be conducted by Landlord's authorized
representative. If the results of such audit shall show
that Tenant's statement of Gross Sales for any Fiscal
Period has been understated by 2% or more, then Tenant
agrees to pay Landlord the cost of such audit in
addition to any deficiency payment required as shown by
such audit with interest thereon as provided in the
Section titled "Method of Payment, Past Due Rents." A
report of the findings of Landlord's authorized
representative shall be biding and conclusive upon
Landlord and Tenant. The furnishing by Tenant of any
statement which understates Gross Sales by 5% or more
shall constitute a material breach of this Lease and
entitle Landlord at it election to all remedies herein
granted in the event of default by Tenant. Any
information obtained by Landlord as a result of such
audit shall be held in strict confidence by Landlord,
except in any action or proceeding by Landlord to
enforce its rights under this Lease, or in connection
with any prospective sale or financing of the Premises
or any part thereof.
(e) Tenant shall not directly or indirectly engage in,
own or operate any businesses similar to that authorized
to be conducted hereunder, or use or permit the use of
the same or a similar trade name, within a radius of
three miles of the nearest outside boundary of the
Shopping Center during the Term; provided, however, that
nothing herein shall be construed to prevent operation
of any of Tenant's existing stores under their present
tradenames. In the event of any violation of the
covenant contained in the previous sentence, and in
addition to all other remedies for default provided
hereunder, the Gross Sales, as defined in this Lese, of
any such businesses within the restricted radius shall
be included in the Gross Sales made from the Premises,
and the rent hereunder shall be computed upon the
aggregate of the Gross Sales made from the Premises and
from such other businesses. Under such circumstances,
Tenant agrees to make available to Landlord all sales
records from Tenant's other businesses within five (5)
days of Landlord's request. The audit provisions of
paragraph (d) above shall also apply to such other
businesses.
(f) Tenant agrees to cause the business located on the
Premises to be included in Tenant's advertising program
so that said business will receive at least equivalent
treatment with respect to advertising and publicity as
is afforded other businesses now owned, operated or
hereafter acquired by tenant and to cause mention of the
address, tradename and location of said business in such
advertising and publicity.
(g) In determining the rent payable by Tenant subsequent
to an event of default, as provided in Section 16, the
Percentage Rent for each year of the then unexpired term
shall be deemed to be equal to the average annual
Percentage Rent paid by Tenant from the Commencement
Date of the occurrence of such event of default, or
during the three Lease Years preceding such event of
default, whichever period is shorter, plus 10% per year
for each such year of the unexpired term.
(h) Landlord shall not become or be deemed a partner or
a joint venture with Tenant by reason of provision of
this Section 3.
(i) Intentionally deleted.
(j) Intentionally deleted.
(k) Should Tenant fail to furnish Landlord, when due,
with any Gross Sales Reports required herein, then
Landlord shall have the right to assess a minimum fee of
Twenty-five and No/100 Dollars ($25.00) per
5
day until the required report is furnished and such fee
shall be considered as additional rent hereunder.
(l) If the Lease year commences on any day other than
the first day of a full Fiscal Period, or terminates on
any day other than the last day of a full Fiscal Period,
then the First Fiscal Period shall be deemed to be those
days between the Commencement Date and the start of the
first full Fiscal Period, and the Last Fiscal Period
shall be those days from the end of the last full Fiscal
Period and the termination date of the Lease, and
Percentage Rent for those periods, if any is due, shall
be calculated according to the definition of Percentage
Rent in Section 1 of this Lease, and, just as in the
case of full Fiscal Periods, shall be due and payable on
the 20th of the month following the end of the Fiscal
Point.
Utility Charges: Tenant shall arrange for utilities on its own account
and in its own name and shall be solely responsible for
and pay when due all charges for heat, water, gas,
electricity or any other utility services used or
consumed in the Premise beginning on the date Tenant
takes possession of the Premises for purposes of
fixturing or Tenant Improvements as set forth in Section
4. In the event separate bills are not obtainable for
any such expense, Tenant shall pay Landlord the Tenant's
Proportionate Share of such charges and expenses,
subject to adjustment based on any extraordinary use or
consumption of any utility by Tenant on the Premises,
within five days after billing therefor. In the event
such charges shall not be paid when due, Landlord shall
have the right to pay same, which amount so paid is
hereby declared to be additional rent due on demand with
interest as provided in Section 3.
Taxes: Tenant agrees to pay Landlord as additional rent
Tenant's Proportionate Share of (a) the total general
and special real estate taxes and assessments which are
levied and assessed on all land and buildings in the
Shopping Center, including the Premises and all common
areas, during the Term and (b) Landlord's expenses in
contesting the validity of, or seeking a reduction in,
or in seeking to prevent an increase in any such tax or
assessment, or attempting to obtain any refund thereof
or reassessment in the value of the Shopping Center or
any portion thereof. Tenant's
Insurance: Landlord shall, during the Term, keep in full force and
effect public liability, property damage, fire, extended
coverage, casualty, rent loss and flood (if required)
insurance covering the Premises and the Shopping Center
(excluding the Tenant Improvements and property required
to be insured by Tenant pursuant to Section 13 hereof),
with coverage and in amounts as are customary with
respect to like properties in the area where the
Shopping Center is located. Tenant agrees to pay
Landlord as additional rent, Tenant's Proportionate
Share of the premiums charged Landlord for such
Insurance, prorated on a per diem basis for the first
and last Lease Years. Tenant's Proportionate Share shall
be paid in monthly installments on or before the first
day of each calendar month, in advance, in an amount
estimated by Landlord.
Additional Rent: Tenant covenants to pay and discharge when the
same shall become due, as additional rent, all amounts,
liabilities and obligations which Tenant has assumed or
agreed to pay or discharge pursuant to this Lease
including those enumerated in this Section 3 and
elsewhere in this Lease, together with every fine,
penalty, interest and cost which may be added for
non-payment or late payment thereof.
Method of Payment, The term "rent" as used in this Lease shall mean and
Past Due Rents: include all Minimum Rent, Percentage Rent, Estimated
Charges and additional amounts payable hereunder. All
rent shall be paid to Landlord at the Rental Payment
Address specified in Section 21 or at such other place
or to such other person as Landlord may from time to
time direct in writing, or as is otherwise provided
herein, in lawful money of the United States of America.
If Tenant should fail to pay the Landlord when due any
installment of Minimum Rent or other sum to be paid
hereunder, Tenant will pay Landlord on demand a late
charge of ten percent (10%) thereof or Three Hundred and
No/100 Dollars ($300.00), whichever is greater. Failure
to pay such late charge upon demand thereof shall be an
event of default under this Lease. Provision for such
late charge shall be in addition to all other rights and
remedies available to Landlord hereunder or at law or in
equity and shall not be construed as liquidated damages
or limiting Landlord's remedies in any manner. In
addition, any and all sums remaining unpaid shall accrue
interest at the rate of twelve percent (12%) or Chase
Manhattan Bank Prime plus three percent (3%) per annum
whichever is the greater, commencing on the due date for
any such payment, provided however that the rate shall
not exceed that which is limited by law.
Net Lease: This is a net lease and the rent, additional rent and
all other sums payable hereunder by Tenant shall be paid
without notice, demand, setoff, counterclaim, deduction,
or defense and, except as otherwise expressly provided
herein, without abatement or suspension. Except as
otherwise expressly provided in this Lease, this Lease
shall not terminate, nor shall Tenant have any right to
terminate this Lease nor shall Tenant be entitled to any
abatement or reduction of rent hereunder, nor shall the
obligations of Tenant
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under this Lease be affected, by reason if (i) any
damage to or in the destruction of all or any part of
the Premises from whatever cause, (ii) the taking of the
Premises or any portion thereof by condemnation,
requisition or otherwise for any reason, (iii) the
prohibition, limitation or restriction of Tenant's use
of all or any part of the Premises, or any interference
with such use, by law or ordinance or other governmental
regulation or by injunction, (iv) any default on the
part of Landlord under this Lease, or under any other
agreement to which landlord and Tenant may be parties,
(v) the bankruptcy, insolvency, reorganization,
composition, readjustment, liquidation, dissolution,
winding up or other proceeding affecting Landlord or any
assignee of Landlord, or (vi) any other cause whether
similar or dissimilar to the foregoing. It is the
intention of the parties hereto that the obligations of
Tenant hereunder shall continue to be payable in all
events and that the obligations of Tenant hereunder
shall continue unaffected, unless the requirement to pay
or perform the same shall have been terminated pursuant
to an express provision of this Lease.
SECTION 4 Construction and Improvements
Condition of Landlord agrees that it will, at its sole cost and
Premises: expense as soon as is practical after the execution of
this Lease, commence and pursue to completion the
improvements to been erected by Landlord to the extent
shown on the attached Exhibit B labeled "Description of
Landlord's Work and Tenant's Work." Tenant's taking
possession of the Premises shall be conclusive evidence
as against Tenant that the Premises were in satisfactory
condition when Tenant took possession. Tenant
acknowledges that it has inspected the Premises and
hereby accepts the Premises "AS IS" with no
representation or warranty by landlord as to the
condition of the Premises or their suitability for
tenant's proposed improvements thereto or use thereof or
the condition of the Shopping Center, and with no
promise by Landlord or its agent to improve or repair
the premises of the Shopping Center except as set forth
in Exhibit B attached hereto.
Tenant's Work: Any additional improvements to the Premises necessary
for the Tenant's use or occupancy thereof and not listed
as Landlord's work in Exhibit B shall be completed by
Tenant, at Tenant's expense, and shall hereinafter be
referred to as "Tenant Improvements." The Tenant
Improvements shall be completed by Tenant in conformity
with the specifications in Exhibit B. Tenant agrees to
submit to Landlord plans and specifications covering the
Tenant Improvements in such detail as Landlord or
Managing Agent may require within fifteen (15) days of
execution of this Lease and Tenant agrees not to
commence any work on any of the Tenant Improvements
until Landlord has approved such plans and
specifications in writing. At all times during Tenant's
construction, Landlord and its representatives shall
have the right to enter upon the Premises for the
purpose of inspecting construction and progress of the
Tenant Improvements. Tenant agrees that its entry onto
and occupation of the Premises prior to the Commencement
Date shall be subject to all of the terms of this Lease,
except the covenants to pay the amounts as set forth in
Section 3 as rent, taxes or insurance. If Tenant
Improvements deviate from the plans and specifications
approved by the Landlord, Landlord can elect to (a)
approve the deviation in the Tenant's Improvements, (b)
have Tenant make corrections to correspond with the
approved plans and specifications, and (c) place Tenant
in default for material deviation in Tenant's
Improvements.
Excuse of performance Anything in this Lease to the contrary notwithstanding,
neither Tenant nor Landlord shall be deemed in
Performance default with respect to the performance of
any of the terms of this Lease (except for payment of
money due hereunder) if a failure of performance is due
to any strike, lockout, boycott, labor dispute, civil
commotion, war-like operation, invasion, rebellion,
hostilities, military or usurped power, sabotage,
governmental regulation or control, inability to obtain
any material or service, Act of God, adverse weather
condition, energy shortage or any other cause whether
similar to dissimilar, beyond the reasonable control of
Tenant or Landlord; provided such cause is not due to
the willful act of Tenant or Landlord; and further
provided that delays or failures to perform resulting
from lack of funds shall not be deemed delays beyond the
reasonable control of a party; and further provided that
the foregoing shall not relieve Tenant from its
obligation timely to pay rent and other sums due under
this Lease. In order to claim the benefits of this
section, the party claiming any such excuse for its
performance hereunder must have given the other party
written notice of the cause and anticipated duration of
such failure of performance within 5 days of the
occurrence of said cause.
Failure of Tenant In the event that the Tenant fails to take possession
to Open: and to open the Premise for business fully improved, to
fixtured, stocked and staffed by the Commencement Date,
then the Landlord shall have, in addition to any and all
remedies herein provided, the right to its option to
collect not only the Minimum Rent and additional amounts
due in accordance with Section 3 hereof, but also
additional rent at the rate of $.03 per square foot of
Leasable Space in the Premises per day for each and
every day that the Tenant shall fail to
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commence to do business; said additional rent shall be
deemed to be liquidated damages for the benefit of
Landlord and shall be in lieu of any Percentage Rent if
applicable that might have been earned during such
period of the Tenant's failure to open.
SECTION 5 Use of Premises
Use: (a) The Premises shall be occupied and used only for the
Permitted Uses and for no other purpose whatever unless
Landlord, in its sole right, discretion or with the
approval and consent of any other interested party who
has a right, consents to a change of such uses. Tenant
acknowledges and agrees that the Permitted Uses of the
Premises set forth herein are a critical element of the
bargain of the parties hereto and that actual and
substantial detriment will result to Landlord and the
other tenants and occupants of the Shopping Center in
the event that a change or deviation in such uses shall
occur or be permitted without the express written
consents herein required.
(b) Tenant agrees to keep the Premises open and
diligently, actively and continuously operate the
business conducted therein under the tradename specified
in Section 1, using a sufficient number of adequately
trained managers and personnel for efficient service,
during the minimum hours and days and evenings of the
week which are indicated on Exhibit C, provided that
such minimum hours of operation are subject to change
from time to time by Landlord so long as any such change
is applicable to substantially all tenants of the
Shopping Center. Tenant shall carry at all times in the
Premises a full stock of current season merchandise of
such quantity, character, and quality as to maximize
Gross Sales and shall operate 100% of the Premises.
Tenant shall install and maintain at all times display
windows on the Premises. Tenant agrees to conduct
Tenant's business at all times in a first-class,
high-grade manner consistent with reputable business
standards and practices in good faith and in such manner
that the high reputation of the Shopping Center is
furthered. Tenant agrees that storage and office space
in the Premises shall only exist to the extent required
for the permitted uses conducted on the Premises. No
auction, fire, liquidation or bankruptcy sales may be
conducted in the Premises without the prior written
consent of Landlord having been first obtained. Landlord
makes no warrant that the zoning of the Premises is
proper for Tenant's business purpose. Such determination
shall be the Tenant's sole responsibility. Tenant
acknowledges that the Shopping Center is an
Interdependent enterprise and its success is dependent
upon the opening and continued operation of Tenant's
business in accordance with the Lease. In the event
Tenant breaches the provisions of this subparagraph (b),
in addition to all other remedies contained in this
Lease, Landlord may assess a charge of $.05 per square
foot of Leasable Space for each day or portion thereof
that these provisions are violated. Such charge shall be
deemed additional rent hereunder and shall be due and
payable within ten (10) days of billing thereof.
SECTION 6 Quiet Enjoyment and Landlord's Right of Entry
Quiet Employment: If and so long as Tenant shall pay the rent specified
herein and observe and perform all covenants, agreements
and obligations required by it to be observed and
performed hereunder, Tenant shall peaceably and quietly
hold and enjoy the Premises for the Term without
hindrance or interruption by Landlord or any other
person or persons lawfully or equitably claiming by,
though or under Landlord, subject, nevertheless, to the
terms and conditions of this Lease and the mortgages and
other matters to which this Lease is subordinate.
Landlord expressly reserves the right as to the Shopping
Center at any time to do, or permit to be done, any or
all of the following: add or remove buildings or
structures; change the number and location of buildings
and structures; change building dimensions; change the
number of floors in any of the buildings or structures;
enclose any mall; add to, alter or remove partially or
wholly any structure or structures used to enclose any
plaza area; change the identity and type of stores and
tenancies and the dimensions thereof; change the name of
the Shopping Center in which the Premises are located;
change the address or designation of the Premises;
provide subterranean and multiple level parking decks;
convert common areas into leasable areas; change the
means of access to and egress from the Shopping Center,
and expand or reduce the size of the Shopping Center,
provided, however, that no such changes shall deny or
materially interfere with reasonable visibility of,
ingress to, or egress from the Premises.
Right of Entry: Tenant agrees that Landlord, Managing Agent, their
agents, employees or servants or any person
8
authorized by Landlord may enter the Premises for the
purpose of inspecting the condition of the same and to
make such repairs, additions, improvements, changes or
alterations to the Premises or the building of which
they are a part as Landlord may elect to make, and to
exhibit the same to prospective purchasers, mortgagees
and, tenants of other areas of the Shopping Center and
to prospective tenants and to place in and upon the
Premises during the last six months of the Term as such
places as may be determined by Landlord "for rent" signs
or notices, and tenant undertakes and agrees that
neither Tenant nor any other person within Tenant's
control will interfere with such signs or notices. Such
entry, inspection and repairs, additions, improvements,
changes or alterations as Landlord may make of or to the
Premises or the building of which the Premises are a
part shall not constitute eviction of Tenant in whole or
in part, and the rent reserved shall in no wise abate
while such work is being done by reason of loss or
interruption of business of Tenant or otherwise. If
Tenant or Tenant's agents or employees shall not be
present to permit entry to the Premises at any time when
for any reason entry therein shall be necessary in the
reasonable judgment of the Landlord to prevent injury or
damage, Landlord, Managing Agent or their agents or
employees may enter same by or by forcible entry or
otherwise without liability therefor and without in any
manner affecting the obligations, covenants, terms or
conditions of this Lease. Nothing herein contained,
however, shall be deemed or construed to impose upon
Landlord any obligation or liability whatsoever for
care, supervision, repair, improvement, addition, change
or alteration of the Premises or the building of which
they are a part or the Shopping Center or any part
thereof other than herein expressly provided.
SECTION 7 Nuisance, Waste, Hazardous Materials, Rules and Regulations
Nuisance: Tenant shall not perform any acts or carry on any
practices which may injure the building of which the
Premises are a part, violate any certificate of
occupancy affecting same, constitute a public or private
nuisance or a menace to other tenants in the Shopping
Center, produce undue noise, create obnoxious fumes or
odors or otherwise cause unreasonable interference with
other tenants of the Shopping Center.
Waste, Etc.: Tenant agrees not to: (a) permit any unlawful or immoral
practice to be carried on or committed on the Premises;
(b) make any use of or allow the Premises to be used for
any purpose that might invalidate or increase the rates
of insurance therefor; (c) keep or use or permit to be
kept or used on the Premises any inflammable fluids or
explosives without the written permission of the
Landlord first had and obtained; (d) use the Premises
for any purpose whatsoever which might create a nuisance
or injure the reputation of the Premises or the Shopping
Center; (e) deface or injure the Premises or the
Shopping Center; (f) overload the floors; (g) sell or
consume or allow the sale or consumption of alcoholic
beverages on the Premises, unless the same is included
in the Permitted Uses and appropriate licenses and
insurance coverage has been secured; or (h) commit or
suffer any waste in or about the Premises. Tenant agrees
to pay as additional rent any increase in the cost of
insurance on the Premises to Landlord as a result of any
unauthorized use of the Premises by Tenant, but such
payment shall not constitute in any manner a waiver by
Landlord of its rights to enforce all of the covenants
and provisions of this Lease.
Hazardous Material: Tenant shall not cause or permit any Hazardous
Material to be brought upon, kept or used in or about
the Premises by Tenant, its agents, employees,
contractors or invitees, without the prior written
consent of Landlord (which Landlord shall not
unreasonably withhold as long as Tenant demonstrates to
Landlord's reasonable satisfaction that such Hazardous
Material is necessary or useful to Tenant's business and
will be used, kept and stored in a manner that complies
with all laws regulating any such Hazardous Material so
brought upon or used or kept in or about the Premises).
If Tenant breaches the obligations in the preceding
sentence, or if the presence of Hazardous Material on
the Premises caused or permitted by Tenant results in
contamination of the Premises, or if contamination of
the Premises by Hazardous Material otherwise occurs for
which Tenant is legally liable to Landlord for damage
resulting therefrom, then Tenant shall identify, defend
and hold Landlord harmless from any and all claims,
judgments, damages, penalties, fines, costs, liabilities
or losses (including, without
9
limitation, diminution in value of the Premises, damages
for the loss or restriction on use of rentable or usable
space or if any amenity of the Premises, damages arising
from any adverse impact on marketing of space, and sums
paid in settlement of claims, attorney's fees,
consultant fees and expert fees) which arise during or
after the lease term as a result of such contamination.
This indemnification of Landlord by Tenant includes,
without limitation, costs incurred in connection with
any investigation of site conditions or any cleanup,
remedial, removal or restoration work required by any
federal, state or local governmental agency or political
subdivision because of Hazardous Material present in the
soil or ground water on or under the Premises. Without
limiting the foregoing, if the presence of any Hazardous
Material on the Premises caused or permitted by Tenant
results in any contamination of the Premises, Tenant
shall promptly take all actions at its sole expense as
are necessary to return the Premises to the condition
existing prior to the introduction of any such Hazardous
Material to the Premises; provided that Landlord's
approval of such actions shall first be obtained, which
approval shall not be unreasonably withheld so long as
such actions would not potentially have any material
adverse long-term or short-term effect on the Premises.
As used herein, the term "Hazardous Material" means any
hazardous or toxic substance, material or waste which is
or becomes regulated by any local government authority,
the state in which the Premises are located or the
United States Government. The provisions of this Section
shall remain in force after the termination of the
Lease.
Rules and Tenant covenants and agrees with Landlord that:
Regulations:
(a) All loading and unloading of goods shall be done
only at such times, in the areas and through the
entrances designed for such purposes by Landlord.
(b) The delivery or shipping of merchandise, supplies,
furnishings and fixtures to and from the Premises shall
be subject to such rules and regulations as in the
judgment of Landlord are necessary for the proper
operation of the premises and the Shopping Center.
(c) All garbage and refuse shall be kept in the kind of
container specified by Landlord and shall be placed
outside of the Premises prepared for collection in the
manner and at the times and places specified by
Landlord. If Landlord shall provide or designate a
service for picking up refuse and garbage, Tenant shall
use same at Tenant's cost. Tenant shall pay the cost of
removal of all of Tenant's refuse or rubbish.
(d) No aerial or any other device or structure including
but not limited to T.V., disc, etc. shall be erected on
the roof or exterior walls of the Premises, or on the
Shopping Center, without in each instance, the written
consent of Landlord. Any aerial so installed without
such written consent shall be subject to removal without
notice at any time.
(e) Tenant shall keep the Premises at a temperature
sufficiently high to prevent freezing water in pipes and
fixtures.
(f) The areas immediately adjoining the Premises shall
be kept clean and free from dirt and rubbish by Tenant
to the satisfaction of Landlord, and Tenant shall not
place or permit any obstructions or merchandise in such
areas.
(g) Tenant and Tenant's employees shall park their cars
only in those portions of the parking areas designated
for that purpose by Landlord. Tenant shall from time to
time furnish Landlord with state automobile license
numbers assigned to Tenant's car or cars, and cars of
Tenant's employees.
(h) The plumbing facilities shall not be used for any
other purpose than that for which they were constructed,
and no foreign substance of any kind shall be disposed
of therein.
(i) Tenant shall not burn any trash or garbage of any
kind in or about the Premises or the Shopping Center.
Tenant shall sweep sidewalk in front of the store and
keep the windows and sills clean.
(j) Tenant shall keep the signs, exterior lights and
display window lights on the Premises lighted each and
every day of the Term during the hours designated by
Landlord.
(k) Tenant shall not use or allow the Premises to be
used for any unlawful or improper purpose, including,
but no limited to, the unlawful or improper use,
possession, sale or distribution of any illegal drugs or
controlled substances as prohibited by federal , state
or local law.
The term "Landlord" as used in (a) through (k) above
shall be deemed to include Landlord's Management Agent.
10
In the event any violation of any of the above rules and
regulations continues after five (5) days following
notice to the Tenant of such violation, beginning on
such fifth day tenant shall, in addition to any and all
other remedies of Landlord provided in this Lease for
default by Tenant, pay liquidated damages of Fifty
Dollars ($50.00) per day for each such violation for
each day such violation continues. Landlord reserves the
right to adopt additional rules and regulations in
respect to the conduct of Tenant's activities in the
Premises and the Shopping Center, which upon adoption
shall be deemed incorporated herein, provided that
Tenant is given notice thereof.
SECTION 8 Compliance with Law, Liens, Indemnity
Compliance with Tenant shall, at its expense, comply with and shall
Law and Contracts: cause the Premises and Tenant's employees to comply with
all governmental statutes, laws, rules, orders,
regulations and ordinances including environmental laws
and regulations affecting the Premises or any part
thereof, or the use thereof, at any time during the
Term. Tenant shall, at its expense, comply with the
requirements of all policies of insurance which at any
time may be in force with respect to the Premises, and
with the provisions of all contracts, agreements and
restrictions affecting the Premises or any part hereof
or the occupancy or use thereof.
Title and Covenant The Landlord's title is and always shall be paramount to
Against Liens: the title of the Tenant and nothing in this contained
shall empower the Tenant to do any act which can, shall
or may encumber the title of the Landlord. Tenant
covenants and agrees not to suffer or permit any lien of
mechanics or materialmen to be placed upon or against
the Shopping Center or the Premises or against the
Tenant's leasehold interest in the Premises and, in case
of any such lien attaching, to immediately pay and
remove same. Tenant has no authority or power to cause
or permit any lien or encumbrance of any kind
whatsoever, whether created by act of Tenant, operation
of law or otherwise, to attach to or be placed upon the
Shopping Center or the Premises, and any and all liens
and encumbrances created by Tenant shall attach only to
Tenant's interest in the Premises. If any such liens so
attach and Tenant fails to pay and remove same within
ten (10) days, Landlord, at its election, may pay and
satisfy the same and in such event the sums so paid by
Landlord, with interest from the date of payment at the
rate set forth in Section 3 hereof for amounts owed
Landlord by Tenant, shall be deemed to be additional
rent due and payable by Tenant at once without notice or
demand and/or Landlord may place Tenant in Default under
this Lease.
Indemnification: Tenant agrees to pay, and to protect, save harmless and
indemnify Landlord, agents and employees of Landlord,
from and against any and all liabilities, losses,
damages, costs, expenses (including all attorney's fees
and expenses of Landlord), causes of action, suits,
claims, demands or judgments of any nature whatsoever
(except those arising from the gross negligent acts of
Landlord, its agents or employees) arising from any of
the following: (a) any injury to, or the death of any
person or damages to property on the Premises; (b) any
injury to, or the death of any person or damage to
property upon adjoining sidewalks, parking areas,
streets or ways which arises out of or is in any manner
connected with any activity of Tenant or sponsored or
co-sponsored by Tenant, with or without Landlord
approval or which arises out of or is in any manner
connected with the use, condition or occupation of the
Premises or any part thereof by Tenant; (c) violation of
any agreement or condition of this Lease by Tenant; or
(d) violation by Tenant of any contract or agreement to
which Tenant is party or any restriction, statute,
ordinance or regulation, in each case affecting the
Premises or adjoining areas, or any part thereof.
SECTION 9 Maintenance and Repair of Premises
Maintenance by Tenant Tenant shall at all times maintain the entire Premises
(including maintenance of exterior entrances and all
glass and show window moldings) and all floors,
ceilings, interior walls, partitions, doors, fixtures,
equipment and appurtenances thereof (including, but not
limited to lighting, plumbing fixtures and heating, air
conditioning, ventilating, electrical and fire detection
and protection systems installed by landlord or tenant
exclusively serving the Premises and including leaks
around ducts, pipes, vents or other parts of the
heating, air conditioning, ventilating and plumbing
systems which protrude through the roof of the Premises)
in good order, appearance, condition and repair,
including all necessary replacements thereof. During the
entire term hereof, Tenant agrees to contract for the
regular maintenance and repair of the heating,
ventilating and air conditioning equipment with a
reputable service contractor acceptable to landlord and
to provide an executed copy of such agreement to
Landlord. If Landlord has not received a copy of such
agreement within ten (10) days of request therefor, in
addition to all other remedies
11
hereunder, Landlord may, but shall not have the
obligation to, contract for such services and bill the
Tenant the cost thereof plus 20% for administration and
overhead as additional rent payable upon demand.
Maintenance by (a) Landlord covenants to maintain or cause to be
Landlord: maintained only the foundation and roof of the Premises,
and the structural soundness of the concrete floors and
exterior and demising walls thereof in good order,
repair and condition, exclusive of any work required
because of damage caused by any act, omission or
negligence of Tenant, any subtenant or their respective
employees, agents, invitees, licensees or contractors.
Landlord shall not be required to commence any such
repair until ten (10) days after written notice from
Tenant that the same is necessary. The provisions of
this paragraph shall not apply in the case of damage or
destruction by fire or other casualty or a taking under
the power of eminent domain, in which events the
obligations of the Landlord shall be controlled by the
Sections of this Lease dealing therewith.
(b) If Landlord is required to make repairs to the
Premises by reason of Tenant's acts, omissions or
negligence, or if Tenant refuses or neglects to repair
as required hereunder to the reasonable satisfaction of
Landlord, Landlord may make such repairs without
liability to Tenant for any loss or damage that may
accrue to Tenant's merchandise, fixtures, or other
property or to Tenant's business by reason thereof. Upon
completion thereof, Tenant shall reimburse Landlord's
costs for making such repairs plus twenty percent (20%)
of such costs for overhead and supervision, upon
presentation of a bill therefor, as additional rent.
SECTION 10 Common Areas and Charges
Control of Common All automobile parking areas, entrances and exits
Areas: thereto, and other facilities furnished by Landlord from
time to time in or near the Shopping Center, including
employee and customer parking areas, mall areas, the
truck way or ways, loading docks, package pick-up
stations, Shopping Center signs, pedestrian sidewalks
and ramps, landscaped areas, exterior and interior
stairways, facades, canopies, hallways, display and
exhibit areas and other areas and Improvements provided
by Landlord for general use, in common, by tenants of
the Shopping Center, their officers, agents, employees
and customers shall at all times be subject to the
exclusive control and management of Landlord or its
designees, and Landlord shall have the right from time
to time to establish, modify and enforce reasonable
rules and regulations with respect to all facilities and
areas mentioned in this Section. All facilities and
areas, including but not limited to the foundations,
concrete floors, exterior walls, and roofs of all
buildings within the Shopping Center and all ducts,
conduits and similar items, heating, ventilating, air
conditioning, plumbing, security and fire detection and
protection systems and storm, sanitary drainage and
other utility systems not installed by or exclusively
serving a single tenant of the Shopping Center, are
hereinafter collectively called the "Common Areas."
Landlord or its designees shall have the right to
construct, maintain and operate lighting and parking
facilities on all Common Areas; to police the same; from
time to time to change or reduce the area, level,
location, size and arrangement of parking areas and
other facilities hereinafter referred to; to restrict
parking by tenants, their officers, agents and employees
to employee parking areas; to close all or any portion
of said areas or facilities to such extent as may, in
the opinion of Landlord's counsel, be legally sufficient
to prevent a dedication thereof or the accrual of any
rights to any person or the public therein to close
temporarily all or any portion of the parking areas or
facilities; to erect improvements or buildings on such
parking areas for lease or sale purposes and other
common areas and to lease area improvements; to
discourage non-customer parking; and to do and perform
such other acts in and to said areas and improvements
as, in the use of good business judgment, the Landlord
shall determine to be advisable with a view to the
improvement of the convenience and use thereof by
tenants of the Shopping Center, their officers, agents,
employees and customers; provided that no such changes
shall deny or materially adversely interfere with the
reasonable visibility of, ingress to or egress from the
Premises.
License: All Common Areas and facilities therein not within the
Premises which Tenant may be permitted to use and occupy
are to be used and occupied under a revocable license,
and if the amount of such areas be diminished, Landlord
shall not be subject to any liability nor shall Tenant
be entitled to any compensation or diminution or
abatement of rent, nor shall such diminution of such
areas be deemed constructive or actual eviction.
Maintenance (a) Tenant agrees to pay as additional rent, monthly or
Charges: less frequently as directed by Landlord, Tenant's
Proportionate Share of the Shopping Center's Common Area
Maintenance Cost (as hereinafter defined).
12
Such payments shall be based on Landlord's reasonable
estimates, subject to adjustment from time to time on
determination of the actual amount of the Shopping
Center's Common Area Maintenance Cost. The failure of
Tenant to pay any portion of Tenant's Proportionate
Share of the Shopping Center's Area Maintenance Cost on
or before the tenth (10th) day after notice from
landlord shall constitute a material default under this
Lease and shall be treated for all purposes as a default
in the payment of rent.
(b) "Shopping Center's Common Area Maintenance Cost"
shall be the total of all items of cost and expense
expended (including appropriate reserves) in operating,
managing, equipping, protecting, policing, lighting,
repairing, replacing and maintaining the Common Areas
and their facilities (less any insurance proceeds
collected with respect to any such repair or
replacement) including, but not limited to, all costs
and expenses of (1) maintaining and repairing the Common
Areas as shall be required in Landlord's judgment to
preserve the utility and condition of the Common Areas
in substantially the same condition and status though
not necessarily the same area or configuration as the
Common Areas were in as of the Commencement Date; (2)
security, fire detection and protection and traffic
direction and control; (3) cleaning and removal of
rubbish, dirt, debris, water, snow and ice (including
removal of water, snow and ice from rooftops); (4)
planting, replanting and replacing flowers and
landscaping; (5) water, drainage and sewage; (6)
liability, property damage, fire, extended coverage,
flood, rent loss, malicious mischief, vandalism,
worker's compensation and employees' liability, and any
other casualty and liability insurance; (7) wages,
health and welfare benefits, pension or profit sharing
benefits, union dues, vacations, unemployment taxes and
social security taxes; (8) personal property taxes; (9)
permits and licenses; (10) supplies; (11) the operation
of loud-speakers and any other equipment supplying
music; (12) utility services and lighting (including the
cost of light bulbs and electric current); (13)
patching, repairing, resurfacing, topping and marking of
all parking and drive areas; (14) filling, sealing and
supporting of sinkholes; (15) depreciation of machinery
and equipment used in the operation of the Common Areas
(but not including depreciation of the original cost of
acquiring Common Areas of the Shopping Center); (16)
administrative charges in an amount not to exceed
fifteen percent (15%) of the Shopping Center's Common
Area Maintenance Cost (exclusive of such administrative
charges); (17) the charges of any independent contractor
who, under contract with the Landlord or its
representatives, does any of the work of operating,
maintaining or repairing the Common Areas; and (18) any
other expense or charge, whether or not hereinbefore
mentioned, which in accordance with generally accepted
accounting and management principles, would be
considered as an expense of managing, operating,
maintaining or repairing the Common Areas.
SECTION 11 Fixtures, Signs and Alterations
Fixtures: All readily moveable furnishings, store fixtures and
equipment owned and used by Tenant in the Premises shall
at all time during the term be and remain the property
of the Tenant without regard to the means by which they
are installed in or attached to the Premises. Upon
expiration or termination of this Lease, Tenant shall
remove all such furnishings, fixtures, and equipment and
restore the Premises as provided in Section 18, provided
that Tenant shall not remove any equipment, conduits,
and fixtures providing water, plumbing, electrical,
heating, ventilation, air conditioning, lighting and
sewer service to the Premises, all of which, together
with any other furnishing, fixtures and equipment not
removed by Tenant as provided above, shall become the
property of Landlord upon expiration of the term or
termination of Tenant's right to possession of the
Premises pursuant to Section 16 and shall be
conclusively presumed to have been conveyed by Tenant to
Landlord under this Lease as a bill of sale without any
payment or credit by landlord to Tenant.
Signs: Tenant shall have the right to place signs and
advertisements on the exterior and interior of the
Premises and the Shopping Center in the locations and
subject to the conditions set forth in Exhibit D,
provided that the size, style and appearance of all
exterior signs and all interior signs visible from the
exterior of the Premises shall be subject to the
approval of Landlord or Managing Agent and shall be in
compliance with applicable law.
Contractual Lien: All furnishings, fixtures (including trade), personal
property, equipment and merchandise ("secured property")
which have been, are, or may be, put into the Premises
either before or after the Effective Date of the Lease,
whether exempt or not from sale under execution and
attachment under the laws of the state where the
Premises are located, shall at all times be subject to a
first lien and security interest in favor of Landlord,
for the purpose of securing Tenant's performance under
this Lease including, but not limited to,
13
the payment of all rent, additional rent or other sums
which may become due to Landlord from Tenant hereunder.
Upon default or breach of any covenants of this Lease,
Landlord shall have all remedies available under the
Uniform Commercial Code enacted in the state where the
Premises are located including, but not limited to, the
right to take possession of the above mentioned secured
property and dispose of it by sale in a commercially
reasonably manner. Tenant hereby agrees to sign a
Uniform Commercial Code Filing Form similar to that
attached hereto as Exhibit C upon a request to do so by
the Landlord, for the purpose of serving notice to third
parties of the security interest herein granted, or
failing to do so upon request, does hereby appoint
Landlord or the Managing Agent as tenant's
attorney-in-fact for said purpose. In addition to any
statutory lien provided by law, this provision is
intended to provide a contractual lien and security
interest in the secured property and is intended by the
parties to be fully enforceable as between themselves
and all third parties in all events, including but not
limited to, any event of bankruptcy described herein.
Tenant hereby grants such lien and security interest to
Landlord and warrants that there are no prior liens
existing against the secured property. In accordance
with said lien herein granted by Tenant to Landlord,
tenant shall not remove from the Premises any of said
secured property without the written consent of Landlord
(except for normal repairs and replacements).
Alterations: Tenant shall not make any alterations, additions,
improvements or changes in the Premises without in each
instance first obtaining the prior written consent of
Landlord, which consent shall not be unreasonably
withheld; provided that Tenant may make in a first-class
manner such interior additions, improvements and changes
in the Premises as Tenant may deem necessary or
desirable in connection with operation of its retail
store in the Premises so long as such alterations,
additions, improvements and changes are non-structural
and do not interfere with or otherwise affect any
heating, ventilating, air conditioning, plumbing,
security, fire detection and protection or utility
systems except those installed by Tenant or exclusively
serving the Premises. All such permitted alterations,
additions, improvements and changes in the Premises
shall be at Tenant's expense and shall conform to all
specifications set forth in Exhibit b and comply with
all insurance requirements and with applicable
governmental laws, and shall conform to all
specifications set forth in Exhibit B and comply with
all insurance requirements and with applicable
governmental laws, statutes, ordinances, rules and
regulations. Tenant shall be responsible for and shall
pay to Landlord, as additional rent, the entire amount
of any real estate taxes attributable to any
alterations, additions or improvements made by Tenant
pursuant to this Section. All such alterations,
additions, improvements and changes shall become upon
completion the property of the Landlord, unless
otherwise agreed to in writing by the Landlord.
Loss and Damage to Landlord shall not be liable for any damages to property
Tenant's Property of Tenant or of others located on the Premises, or for
the loss or damage to any property of Tenant or of
others by theft or otherwise. All property of tenant
kept or stored on the Premises shall be so kept or
stored by the risk of Tenant only, and Tenant shall hold
Landlord harmless from any claims arising out of damage
to the same, including subrogation claims by Tenant's
insurance carrier, unless such damage shall be caused by
the willful act or gross neglect of the Landlord.
SECTION 12 Condemnation
All of Premises If the whole of the Premises shall be taken or condemned
Taken: either permanently or temporarily for any public or
quasi-public use or purpose by any competent authority
in appropriation proceedings or by any right of eminent
domain or by agreement or conveyance in lieu thereof
(each of the foregoing being hereinafter referred to as
"Condemnation"), this Lease shall terminate as of the
day before the date of such taking, and Tenant shall pay
rent and perform all of its other obligations under this
Lease up to such date with a proportionate refund by
Landlord of any rent which shall have been paid in
advance for periods subsequent to such date.
Less Than All of If less than all but more than twenty-five percent of
Premises Taken: the Leasable Space in the Premises is taken by
Condemnation, or if (regardless of the percentage of
Leasable Space in the Premises which is taken) the
remainder of the Premises cannot be used for Tenant's
continued use or occupancy for Tenant's business, in the
reasonable judgment of Landlord, then in either such
event Landlord or Tenant shall each have the right to
terminate this Lease upon notice to the other party
within sixty days after possession is taken by such
Condemnation. If this Lease is so terminated, it shall
terminate as of the day before the day of such taking,
and Tenant shall pay rent and perform all of its other
obligations under this Lease up to such date with a
proportionate refund by Landlord of any rent which shall
have been paid in advance for periods subsequent to such
date. If this Lease is not so terminated, it shall
terminate only with respect to the parts
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of the Premises so taken as of the date possession shall
be taken by such authority, and Tenant shall pay rent up
to such date with a proportionate refund by Landlord of
any rent which shall have been paid in advance for
periods subsequent to such date. Thereafter, the Minimum
Rent and Estimated Charges shall be reduced in direct
proportion to the amount of Leasable Space of the
Premises taken, and Landlord agrees, at Landlord's cost
and expense, as soon as reasonably possible to restore
the remainder of the Premises to a complete unit of
similar quality and character as the condemnation award
received by Landlord (less all expenses, costs and legal
fees incurred by Landlord in connection with such award)
multiplied by a fraction the numerator of which is the
number of square feet of Leasable Space in the Premises
so taken and the denominator of which is the number of
square feet of Leasable Space in the Shopping Center so
taken will allow.
Shopping Center If any part of the Shopping Center is taken by
Taken: Condemnation so as to render, in Landlord's sole
judgment, the remainder unsuitable for use as a retail
shopping center, Landlord shall have the right to
terminate this Lease upon notice to Tenant within 120
days after possession is taken by such Condemnation. If
Landlord so terminates this Lease, it shall terminate as
of the day before the day of such taking, by the
condemning authority, and Tenant shall pay rent and
perform all of its other obligations under this Lease up
to such date with a proportionate refund by Landlord of
any rent which shall have been paid in advance for
periods subsequent to such date.
Ownership of Award: As between Landlord and Tenant, all damages
for any Condemnation of all or any part of the Shopping
Center, including without limitation all damages as
compensation for diminution in value of the leasehold,
reversion and fee of the Premises, and the Tenant
Improvements, shall belong to the Landlord without any
deduction therefrom for any present or future estate of
Tenant, and Tenant hereby assigns to Landlord all its
right, title and interest to any such award. Although
all damages in the event of any Condemnation are to
belong to Landlord, whether such damages are awarded as
compensation for diminution in value of the leasehold,
reversion or fee of the Premises, or the Tenant
Improvements, Tenant shall have the right to claim and
recover from the condemning authority, but not from
Landlord, such compensation as may be separately awarded
or recoverable by Tenant in Tenant's business by reason
of the Condemnation and for or on account of any cost or
loss which Tenant might incur in removing Tenant's
merchandise, furniture and fixtures, provided that the
effect of such award is not to reduce the award
otherwise payable to Landlord.
SECTION 13 Insurance
Insurance to be Tenant shall maintain throughout the Term, at its
Provided by Tenant: expense, insurance of the following character: (a)
casualty insurance against loss or damage by fire and
other risks from time to time included under "extended
coverage" policies with endorsements for vandalism and
malicious mischief, in the amount of the full
replacement cost of all Tenant Improvements, furniture,
trade fixtures, equipment, merchandise and all other
items of Tenant's property on the Premises; (b)
insurance against loss or damage to plate glass in or on
the Premises; (c) business interruption insurance
insuring that the monthly Minimum Rent and all other
payments due under this Lease will be paid for a period
of up to one year if the Premises are destroyed or
rendered inaccessible by a risk insured under (a) above;
(d) if the Permitted uses include sale and/or serving of
alcoholic beverages, insurance covering any claims
arising under applicable law relating to said uses which
could be asserted against Landlord, Tenant or the
Premises; (e) worker's compensation insurance in amounts
required by applicable law covering all personnel
employed in connection with any work done on or about
the Premises; (f) a policy of comprehensive, all risk
public liability insurance insuring Landlord and Tenant
against any liability arising out of the ownership, use,
occupancy or maintenance of the Premises and all areas
appurtenant thereto with initial basic limits of not
less than $500,000 for injury or death of one person in
any one accident or occurrence and with basic limits of
not less than $1,000,000 for injury or death of more
than one person in any one accident or occurrence. Such
insurance shall further initially insure Landlord and
Tenant against liability for property damage of not less
than $100,000 and not less than $100,000 for fire legal
liability; (g) such other insurance on the Premises in
such amounts and against such other insurable hazards
which at the time are commonly obtained in the case of
property similar to the Premises. In addition, Tenant
shall maintain throughout the Term, as its expense, a
standard umbrella insurance policy with initial limits
of $1,000,000. The limit of any of the insurance
required by this Section shall not limit the liability
of Tenant. Tenant may provide this insurance under a
blanket policy, provided that said insurance shall have
a Landlord's protective liability endorsement attached
thereto. The limits of all insurance required herein
shall be increased from
15
time to time to reflect the increase in the consumer
price index and as required by good business practice.
General Insurance Each policy of insurance referred to in the preceding
Requirements: paragraph shall be issued by companies of recognized
financial standing authorized to issue such insurance in
the state where the Premises are located, shall name as
the insured parties thereunder Landlord (including its
agent and other parties designated by Landlord) and
Tenant, as their interests may appear, and shall be
written as a primary policy which contains agreement by
the insurer that it will not cancel or fail to renew or
amend such policy or reduce the coverage thereunder
except after thirty days' prior written notice to
landlord and that any loss otherwise payable thereunder
shall be payable notwithstanding any act or negligence
of Tenant which might, absent such agreement, result in
a forfeiture of all or part of such insurance payment
and notwithstanding (a) the occupation or use of the
Premises for purposes more hazardous than permitted by
the terms of such policy; 9b) any foreclosure or other
action or proceeding taken by any mortgagee of the
Premises; or (c) any change in title of ownership of the
Premises. On or prior to the Commencement date, Tenant
shall deliver to Landlord certificates of the insurers,
evidencing all of the insurance which is required to be
maintained by Tenant hereunder together with evidence of
the payment of all premium therefore, and Tenant shall,
within thirty days prior to the expiration of any such
insurance, deliver other certificates of the insurers
evidencing the renewal or replacement of such insurance
together with evidence of the payment of all premiums
therefore. Should Tenant fail to maintain or renew any
insurance provided for in this Section, or to pay the
premium therefor, or to deliver to Landlord any of such
certificates, then and in any of said events, Landlord,
at its option, but without obligation to do so, may
procure such insurance, and any sums so expended by
Landlord (together with Landlord's reasonable
administrative expense in procuring such insurance)
shall be additional rent hereunder and shall be paid by
Tenant to Landlord on the first day of the month next
following the date on which such expenditure is made by
Landlord. If Tenant fails to furnish Landlord with a
copy of certificate of any insurance policy required to
be furnished by Tenant to Landlord when due, and such
failure continues for ten (10) days after written notice
from Landlord, Landlord may assess and collect a minimum
administrative fee of Ten and No/100 Dollars ($10.00)
for each day said policy or certificate has not been
received in the office of Landlord at the close of each
business day and such fee shall be considered as
additional rent hereunder and shall be in addition to
all other remedies hereunder.
Waiver of Claims: Landlord and Landlord's agent and employers shall not be
liable for and Tenant waives all claims for damages to
person or property sustained by Tenant or any party
claiming through Tenant resulting from any accident or
occurrence in or upon the Premises, the building of
which they shall be a part, or the Shopping Center,
including but not limited to such claims for damage
resulting from: (i) any equipment or appurtenances
becoming out of repair; (ii) Landlord's failure to keep
the Shopping Center, said building of the Premises in
repair; (iii) injury done or occasioned by wind,
settling, earth movement or other natural causes; (iv)
any defect in or failure of plumbing, heating, or air
conditioning equipment, electric wiring of installation
thereof, gas, water, steam pipes, stairs, porches,
railings or walks; (v) broker glass, the backing up of
any water or sewer pipe or downspout; the bursting,
leaking or running of any tank, tub, washstand, water
closet, waste or water pipe, drain or any other pipe or
tank through the roof, skylight, trapdoor, stairs,
walks, Common Area or any other place upon or near such
building or the Premises or otherwise; (vii) the failing
of any fixtures, plaster, stucco or the like; and (viii)
any act, commission, or negligence of co-tenants or of
other persons or occupants of the Shopping Center.
SECTION 14 Damage or Destruction
Destruction of In the event that the Premises are totally or partially
Premises: damaged or destroyed or destroyed by fire or other
casualty or occurrence covered by insurance, the damage
shall be repaired and the Premises restored to the same
condition as they were in immediately before such damage
or destruction by Landlord at Landlord's expense to the
extent of insurance recovery. If such damage results
from a cause not insured, or the cost of repair of
restoration exceeds the amount of insurance proceeds
received by Landlord and available for restoration of
the Premises, Landlord may elect to either repair or
restore the Premises or to terminate this Lease upon
giving notice of such election in writing to Tenant
within thirty days after the occurrence of the event
causing the damage; provided that if Landlord elects to
terminate this Lease, Tenant may, within thirty days
after receiving Landlord's notice to terminate, elect to
pay to Landlord at the time Tenant notifies Landlord of
such election the difference between the amount of
insurance proceeds and the cost of repair and
restoration, in which case Landlord shall repair and
restore the Premises as aforesaid and shall provide
Tenant with satisfactory evidence that all sums
contributed by
16
Tenant as provided in this Section have been expended by
Landlord in paying the cost of such repair and
restoration; provided further that if Tenant does not
give Landlord notice of such election, this Lease shall
terminate upon the expiration and said thirty-day
period. If Landlord is required or elects to rebuild as
herein provided, Landlord shall rebuild with due
diligence and in any event within 270 days after the
casualty (subject to causes of the type set forth in
Section 4 and delays in the adjustment of insurance)
only that part of the Premises originally provided by
Landlord at its expense pursuant hereto, and Landlord
shall have no responsibility to rebuild or restore any
portion of the Premises constructed by Tenant at its
expense. If the casualty or the repairing or rebuilding
shall render the Premises untenantable in whole or in
part, a proportionate abatement of the Minimum Rent
shall be allowed from the date when the damage occurred
until the date when the Premises have been restored by
Landlord, said proportion to be computed on the basis of
the relation which the square foot leasable area of the
portion of the Premises rendered untenantable and not
occupied by Tenant bears to the aggregate square foot
leasable area of the Premises.
Destruction of In the event that fifty percent (50%) or more of the
Shopping Center: Leasable Space of the buildings in the Shopping Center
of which the Premises are a part shall be damaged or
destroyed by fire or other cause, notwithstanding that
the Premises may be unaffected by such fire or other
cause, Landlord may terminate this Lease and the tenancy
hereby created by giving to Tenant thirty days' prior
written notice of Landlord's election to terminate,
which notice shall be given, if at all, within the sixty
(60) days following the date of said occurrence.
SECTON 15 Assignment, Subletting and Encumbrance
Assignment and Tenant shall not assign this Lease or any interest
Subletting: therein, whether voluntarily, involuntarily or by
operation of law, or sublet the Premises or any portion
thereof, without the prior written consent of Landlord,
which consent may be granted or withheld in the sole
discretion of Landlord, and no permitted assignment or
subletting shall relieve Tenant of Tenant's covenants
and agreements hereunder. The consent of Landlord to any
one assignment pursuant hereto shall not be deemed to be
a waiver of the provisions of this Section with respect
to any subsequent assignments or subleases. Each such
permitted sublease shall expressly be made subject to
the provisions of this Lease. If Tenant assigns any of
its rights and interests under this Lease, the assignee
under such assignment shall expressly assume all of the
obligations of Tenant hereunder in a written instrument
satisfactory to Landlord at the time of such assignment.
No assignment or sublease shall impose any obligations
on Landlord or otherwise affect any of the rights of
Landlord under this Lease nor shall it affect or reduce
any of the obligations of Tenant hereunder, and all such
obligations shall continue in full effect as obligations
of a principal and not as obligations of a guarantor or
surety to the same extent as though no assignment of
subletting had been made. In the event Tenant shall
assign this Lease or sublease the Premises for rent or
other consideration in excess of the rent payable
hereunder, Landlord shall receive all such excess rent
or other consideration as additional rent hereunder. The
assignee or sublessee shall be required to make all
payments due to Landlord and Landlord shall thereafter,
in a prompt manner, remit to Tenant any amounts that may
be due Tenant. Tenant shall, concurrently with the
execution and delivery of any such permitted assignment
or sublease, deliver a duplicate original thereof to
Landlord. A change in the beneficial or record ownership
of any class of capital stock of Tenant, a transfer of
partnership interests of the beneficial interest in
Tenant and a sale of substantially all of the
merchandise on the Premises to one purchaser shall be
treated as and deemed to be an event of assignment of
this Lease within the foregoing provisions of this
Section, if the effect of same shall be to result in a
change in management or control of Tenant which shall be
subject to the terms hereof. The Tenant shall pay
Landlord a minimum administrative fee of Five Hundred
and No/100 Dollars ($500.00) plus reasonable attorney's
fees for each proposed sublease or assignment of this
Lease. Upon any proposed sublease or assignment by
Tenant or its successor(s) which is not approved by
Landlord, the Landlord shall have the right to
unilaterally terminate this Lease within fifteen (15)
days of the proposed sublease or assignment.
Criteria for The Landlord has retained the prior right of consent to
Assignment an proposed assignment or sublease for several d
Subletting: substantial business and equity reasons which were
considerations for this Lease, including, without
limitation, the fact that the success and continuation
thereof of the Shopping Center is directly related to
the use and operation of each particular store in the
concept of the overall and integrated merchandising
scheme of the Shopping Center, the obligations of
Landlord owed to mortgagees, major tenants, other nearby
shopping centers and the public; the direct economic
benefits to be derived to Landlord in the form
17
of Percentage Rent based upon Gross Sales; and the
reputation and expertise of Tenant. In evaluating and
determining whether or not to consent to a requested
assignment or sublease of the Premises by Tenant,
Landlord must be satisfied in its sole reasonable
determination that the criteria elements set forth above
must continue to be satisfied and the Landlord must
receive adequate assurance of (i) the financial
condition and stability of the proposed assignee,
sublessee or subtenant ("assignee"); (ii) the reputation
and expertise of the assignee; (iii) the ability and
likelihood of payment by assignee of all rents and other
amounts due hereunder; (iv) assignee's ability including
the expectation of Percentage Rate in amounts no less
than that previously received from Tenant and expected
to be received in the future based upon increased
reasonable sales projection, and such other assurances
as Landlord requires.
Encumbrances: Neither this Lease nor the Term shall be mortgaged,
pledged or encumbered by Tenant, nor shall Tenant
mortgage, pledge or encumber the interest of Tenant in
and to any sublease of the Premises or the rental
payable thereunder, without the prior written consent of
Landlord, which consent may be granted or withheld in
the sole discretion of Landlord, and Tenant shall not
allow or permit any transfer of this Lease or any
interest hereunder by operation of law. Any such
mortgage, pledge, encumbrance, sublease, assignment or
transfer made in violation of this Section shall be
void.
SECTION 16 Default
Events of Default: Any of the following occurrences or acts shall
constitute an event of default under this Lease:
(a) If Tenant, at any time during Term, shall (i) fail
to make any payment of rent, additional rent or other
sum herein required to be paid by Tenant for a period of
five days after delivery of Landlord of written notice
to Tenant that any such payment has become due; or (ii)
fail to pay rent, additional rent or other sums herein
required to be paid by Tenant when due on two or more
occasions during any twelve-month period; or (iii) fail
to cure, immediately after notice from Landlord, any
hazardous condition which Tenant has created or suffered
in violation of law or this Lease; or (iv) fail to
observe or perform any of the covenants in respect to
assignment, subletting and encumbrance set forth in
Section 15; or (v) fail to remove any liens attached to
the Premises for a period of ten (10) days after notice
by Landlord; or (vi) fail to observe or perform any
other provision hereof for thirty days after Landlord
shall have delivered to Tenant written notice of such
failure provided that in the case of any default
referred to in this clause (vi) which cannot be cured by
the payment of money and cannot with diligence be cured
within such thirty-day period, if Tenant shall commence,
to cure the same within such thirty-day period and
thereafter shall prosecute the curing of same with
diligence and continuity, then the time within which
such failure may be cured shall be extended for such
period not to exceed sixty days as may be necessary to
complete the curing of the same with diligence and
continuity; or
(b) to the full extent permissible under the Bankruptcy
Reform Act of 1978, or any successor thereto, (i) if
Tenant or any Guarantor shall file a petition in
bankruptcy or for reorganization or for an arrangement
pursuant to any present or future federal or state
bankruptcy law or under any similar federal or state
law, or shall to be adjudicated a bankrupt or insolvent
or shall make an assignment for the benefit of its
creditors or shall admit in writing its inability to pay
its debts generally as thy become due, or if a petition
or answer proposing the adjudication of Tenant or any
Guarantor as a bankrupt or its reorganization under any
present or future federal or state bankruptcy law or any
similar federal or state law shall be filed in any court
and such petition or answer shall not be discharged or
denied within thirty days after the filing thereof; or
(ii) if a receiver, trustee or liquidator of Tenant or
any Guarantor of all or substantially all of the assets
of Tenant or any Guarantor of the Premises or any
portion thereof shall be appointed in any proceeding
brought by or against Tenant or any Guarantor and shall
not be discharged within thirty days after such
appointment, or if Tenant or any Guarantor shall consent
to or acquiesce in such appointment; or
(c) if the Tenant, without prior notice and Landlord's
consent, transfers a substantial part of Tenant's
furnishings, fixtures, merchandise, equipment,
operations, business or personnel from Premises, or is
in the process of so transferring, the Tenant shall be
deemed to have abandoned the Premises, or to be in the
process of abandoning the Premises, and in either case,
in addition to all remedies under this Section 16,
Landlord shall have the right to take any lawful action
to preserve its security, including, but not limited to,
the implementation of the remedies set forth in Sections
11 and 16 of this Lease immediately and without notice;
or
18
(d) if Tenant fails to carry on its business at the
Premises for a period of five consecutive business days;
or
(e) if Tenant fails to take possession of the Premises
within ten (10) days after possession is tendered by
Landlord, or fails to submit plans or other information
regarding the Tenant improvements for Landlord's
approval or to commence and complete construction of the
Tenant Improvements to be constructed by Tenant when and
as required by the provisions of this Lease and open its
business therein promptly upon such completion.
Right to Terminate: If an event of default shall have occurred, or with the
passage of time or the giving of notice would have
occurred, Landlord shall have the right at its election,
then or at any time thereafter, to give Tenant written
notice of Landlord's election to terminate this Lease on
a date specified in such notice. Upon the giving of such
notice, this Lease and estate hereby granted shall
expire and terminate on such date as fully and
completely and with the same effect as if such date were
the date hereinbefore fixed for the expiration of the
Term, and all rights of the Tenant hereunder shall
expire and terminate, but Tenant shall remain liable as
hereinafter provided. In the event the Tenant files any
bankruptcy proceeding, or any bankruptcy proceeding is
filed against the Tenant under the laws of the United
States, the Tenant shall elect (and shall make every
reasonable effort to cause the Trustee to elect) within
ten days of the entry of the Order of Relief whether to
accept or reject the terms of this Lease and perform the
same.
Right of Re-Entry: If any event of default shall have occurred, or with the
passage of time or the giving of notice would have
occurred, Landlord shall have the immediate right,
whether or not this Lease shall have been terminated
pursuant to this Section 16, to re-enter and repossess
the Premises or any part thereof by force, summary
proceedings, ejectment or otherwise with the right to
remove all persons and property therefrom. Landlord
shall be under no liability for or by reason of any such
entry, repossession or removal. No such re-entry or
taking of possession of the Premises by Landlord shall
be construed as an election of Landlord's part to
terminate this Lease unless a written notice of such
election be given to Tenant pursuant to this Section 16
or unless the termination of this Lease be decreed by a
court of competent jurisdiction.
Right to Relet: At any time or from time to time after the repossession
of the Premises or any part thereof pursuant to this
Section 16, whether or not this Lease shall have been
terminated pursuant to this Section 16, Landlord may
(but shall be under to obligation to) relet the Premises
or any other part thereof for the account of Tenant, in
the name of Tenant or landlord or otherwise, without
notice to Tenant, for such term or terms (which may be
greater or less than the which period would otherwise
have constituted the balance of the Term) and on such
conditions (which may include concessions or free rent)
and for uses as Landlord, in its absolute discretion,
and determine, and Landlord may collect and receive any
rents payable by reason of such reletting. Landlord
shall not be responsible or liable for any failure to
collect any rent due upon such reletting.
Tenant to Remain No expiration or termination of this Lease pursuant to
Liable: this Section 16, by operation of law or otherwise, and
no repossession of the Premises or any part thereof
pursuant to this Section 16 or otherwise, and no
reletting of the Premises or any part thereof pursuant
to or any part thereof pursuant to this Section 16,
shall relieve Tenant of its liabilities and obligations
hereunder, all of which shall survive such expiration,
termination, repossession or reletting.
Current Damages: In the event of any expiration or termination of this
Lease or repossession of the Premises or any part
thereof by reason of the occurrence of an event of
default, Tenant will pay to Landlord the rent,
additional rent and other sums required to be paid by
the Tenant for the period to and including the date of
such expiration, termination or repossession, and,
thereafter until the end of what would have been the
Term in the absence of such expiration, termination or
repossession, and whether or not the Premises or any
part thereof shall have been relet, Tenant shall be
liable to Landlord for, and shall pay to Landlord, as
liquidated and agreed current damages the rent,
additional rent and other sums which would be payable
under this Lease by Tenant in the absence of such
expiration, termination or repossession, less the net
proceeds, if any, of any reletting effected for the
account of Tenant pursuant to this Section 16, after
deducting from such proceeds all of Landlord's expenses
reasonably incurred in connection with such reletting
(including, without limitation, all repossession costs,
brokerage commissions, legal expenses, attorney's fees,
employee expenses, alteration costs and expenses of
preparation for such reletting). Tenant will pay such
current damages on the days on which rent would have
been payable under this Lease in the absence of such
expiration, termination or repossession, and Landlord
shall be entitled to recover the same from Tenant on
each such day.
Final Damages: At any time after any such expiration or termination of
this Lease or repossession of the Premises or any
19
part thereof by reason of the occurrence of an event of
default, whether or not Landlord shall have collected
ant current damages pursuant to this Section 16,
Landlord shall be entitled to recover from Tenant, and
Tenant will pay to Landlord on demand, as and for
liquidated and agreed final damages for Tenant's default
and in lieu of all current damages beyond the date of
such demand (it being agreed that it would be
impracticable or extremely difficult to fix the actual
damages), a lump sum payment equal to the excess, if
any, of (a) the rent, additional rent and other sums
which would be payable under this Lease from the date of
such demand (or, if it be earlier, the date to which
Tenant shall have satisfied in full its obligations
under this Section 16 to pay current damages) for what
would be the then unexpired Term in the absence of such
expiration, termination or repossession, discounted to
present worth at an assumed interest rate of 5% per
annum, compounded annually over (b) the then net rental
value of the Premises discounted to present worth at an
assumed interest rate of 5% per annum, compounded
annually for the same period. Rental value shall be
established by reference to the terms and conditions
upon which Landlord relets the Premises if such
reletting is accomplished within a reasonable period of
time after such expiration, termination or repossession,
and otherwise established on the basis of Landlord's
estimated and assumptions of fact regarding market and
other relevant circumstances, which shall govern unless
shown to be erroneous by a court of competent
jurisdiction. If any statute or rule of law shall
validly limit the amount of such liquidated final
damages to less than the amount above agreed upon,
Landlord shall be entitled to the maximum amount
allowable under such statute or rule of law.
Event of An "Event of Bankruptcy" means filing of a voluntary
Bankruptcy Defined: petition by Tenant, or the entry of an order for relief
against Tenant, under Chapter 7, 11, or 13 of the
Bankruptcy Code (or the conversion to Chapter 11 or 13
proceeding of a proceeding that is filed by or against
Tenant under any other chapter of the Bankruptcy Code).
The parties hereto agree that the following provisions
of this section are and shall be deemed to be
commercially reasonable.
Assumption of If an Event of Bankruptcy occurs, the trustee of
Lease: Tenant's bankruptcy estate, or Tenant as
debtor-in-possession, may assume the Lease, and may
subsequently assign the Lease, only if it: (i) files a
timely motion to assume in the appropriate court; (ii)
cures all monetary defaults within 10 days of date of
assumption and nonmonetary defaults within 60 days;
(iii) compensates Landlord for all pecuniary losses as a
result of the default of Tenant, trustee or
debtor-in-possession; (iv) provides Landlord with
Adequate Assurance of Future Performance as defined
herein within 60 days after the date of the filing of
the voluntary petition, the entry of the order for
relief or the date of conversion (or such additional
time as a court of competent jurisdiction may grant, for
cause, upon a motion made within the original 60-day
period); and (v) delivers to Landlord a written
statement that the conditions described herein have been
satisfied.
Adequate Assurance: (a) For purposes only of Assumption of Lease above and
in addition to any other requirements under the
bankruptcy Code, any future federal bankruptcy law and
applicable case law, "Adequate Assurance" means at least
entering an order segregating sufficient cash to pay
Landlord as described above, and granting Landlord a
valid first lien and security interest in a form
acceptable to Landlord, in Tenant's property or
bankruptcy estate in order to secure the trustee's or
debtor-in-possession's obligations to cure defaults as
described herein.
(b) Adequate Assurance of Future Performance - For
purposes only of Assumption of the Lease provisions
above, and in addition to any other requirements under
the Bankruptcy Code, any future federal bankruptcy law
and applicable case law, "Adequate Assurance of Future
Performance" means at least: (i) the trustee or
debtor-in-possession depositing with Landlord, as
security for the timely payment of rent and other
monetary obligations, an amount equal to the amount of
two (2) months' Minimum Rent and one-sixth (1/6) of
Tenant's annual obligation under the Lease for the
immediately proceeding twelve (12) months for Common
Area Maintenance costs, Real Estate Tax payments,
insurance costs, promotional funds and similar charges;
(ii) the trustee or the debtor-in-possession providing
adequate assurance of the source of the rent and other
consideration due under the Lease; (iii) the trustee or
the debtor-in-possession providing adequate assurance
that the Percentage Rent due under the Lease will not
decline substantially; and (iv) Tenant's bankrupt estate
and the trustee or debtor-in-possession providing
adequate assurance that the bankrupt estate (and any
successor after the conclusion of the Tenant's
bankruptcy proceedings) will continue to have sufficient
unencumbered assets after the payment of all secured
obligations and administrative expenses to assure
Landlord that the bankruptcy estate (and any successor
after the conclusion of Tenant's bankruptcy proceedings)
will have sufficient funds to fulfill tenant's
obligations under the Lease and to keep the Premises
stocked with Merchandise and properly staffed with
sufficient
20
employees to conduct a fully-operational, actively
promoted business on the Premises, and as set forth in
the Lease.
Assignment of (a) General - If the trustee or the debtor-in-possession
Lease after Event assumes the Lease under Assumption of Lease above and
of Bankruptcy: applicable bankruptcy law, it may assign its interest in
this Lease only if the proposed assignee first provides
Landlord with Adequate Assurance of Future Performance
of Assignee (see subparagraph (b) below) of all of
Tenant's obligations under the Lease and if Landlord
determines, in the exercise of its reasonable business
judgment, that the assignment of the Lease will not (i)
breach any other lease, mortgage, financing agreement,
or other agreement relating to the Shopping Center by
which Landlord is bound (and Landlord is not required to
obtain consents or waivers from any third party required
under any lease, mortgage, financing agreement, or other
agreement by which Landlord is bound); or (ii) disrupt
the tenant mix of the Shopping Center or any other
attempt by Landlord to provide a specific variety of
retail stores therein that, in landlord's reasonable
business judgment, would be most beneficial to all of
the tenants of the Shopping Center and would enhance its
image, reputation, and profitability.
(b) Adequate Assurance of Future Performance of Assignee
- For purposes only of subparagraph (a) above, and in
addition to any other requirements under the Bankruptcy
Code, any future federal bankruptcy law and applicable
case law, "Adequate Assurance of Future Performance of
Assignee" means at least the satisfaction of the
following conditions: (i) the proposed assignee
submitting a current financial statement, audited by a
certified public accountant, that shows a net worth and
working capital in amounts determined in the reasonable
business judgment of Landlord to be sufficient to assure
the future performance by the assignee of Tenant's
obligation under the Lease; (ii) if requested by
Landlord in the exercise of its reasonable business
judgment, the proposed assignee obtaining a guarantee
(in form and substance satisfactory to Landlord) from
one or more persons who satisfy Landlord's standards of
credit worthiest; and (iii) the proposed assignee
submitting written evidence, satisfactory to Landlord in
the exercise of its reasonable business judgment, of
substantial retailing experience in shopping centers of
comparable size to the Shopping Center and in the sale
of merchandise and services permitted under the Lease.
Rights Cumulative No right or remedy herein conferred upon or reserved to
Non-Waiver: Landlord or Tenant is intended to be exclusive of any
other right or remedy, and each and every right and
remedy shall be cumulative and in addition to any other
right or remedy given hereunder or now and hereafter
existing at law or in equity or by statute. The failure
of Landlord or Tenant to insist at any time upon the
strict performance of any covenant or agreement or to
exercise any option, right, power or remedy contained in
this Lease shall not be construed as a waiver or
relinquishment thereof for the future. The receipt by
Landlord of any rent, additional rent or any other sum
payable hereunder with knowledge of the breach of any
covenant or agreement contained in this Lease shall not
be deemed a waiver of such breach, and no waiver of any
provision of this Lease shall be deemed to have been
made unless expressed in writing and signed by Landlord
or Tenant. In addition to other remedies provided in
this Lease, Landlord or Tenant shall be entitled, to the
extent permitted by applicable law, to injunctive relief
in case of the violation, or attempted or threatened
violation, of any of the covenants, agreements,
conditions or provisions of this Lease, or to a decree
compelling performance of this Lease, or to any other
remedy allowed to Landlord or Tenant at law or in
equity.
Legal Expenses: In the event Tenant shall be in default in the
performance of any of its obligations under this Lease,
or with the passage of time or the giving of notice
would be in default, and an action shall be brought for
the enforcement thereof in which it shall be finally and
with no further appeal determined that Tenant was in
default, the Tenant shall pay to Landlord all attorney's
fees and litigation expense incurred or paid by Landlord
in connection therewith. In the event Landlord shall,
without fault on its part, be made a party to any
litigation commenced against tenant, if Tenant, at its
expense, shall fail to provide Landlord with counsel
approved by Landlord, tenant shall pay as additional
rent all costs and attorney's fees incurred or paid by
Landlord in connection with such litigation or proposed
litigation.
Landlord's Right Landlord may, but shall not be obligated to, cure any
to Cure: default by Tenant after complying with the notice to
provisions herein set forth (but such notice provisions
shall not apply in the case of an emergency), and
whenever Landlord so elects, all costs and expenses paid
or incurred by Landlord in curing such default,
including without limitation reasonable attorney's fees,
shall be considered as additional rent due on demand
with interest as provided in Section 3.
Default by Landlord: Landlord shall not be in default unless Landlord fails
to perform obligations required of Landlord within a
reasonable time, but in no event earlier than thirty
(30) days aft3er written notice by Tenant to Landlord
and to the holder of any first mortgage or deed of trust
covering the Premises whose name and address shall
21
have theretofore been furnished to Tenant in writing,
specifying wherein Landlord has failed to perform such
obligation; provided, however, that if the nature of
Landlord's obligation is such that more than thirty (30)
days are required for performance then Landlord shall
not be in default if Landlord commences performance
within such thirty (30) day period and thereafter
diligently prosecutes the same to completion. In no
event shall Tenant have the right to terminate this
Lease as a result of Landlord's default and Tenant's
remedies shall be limited to actual damages and in no
event shall Landlord ever have any liability or
responsibility whatever for any consequential or
indirect damages, whether proximately or remotely
related to a default by Landlord. The Landlord shall be
liable for the performance of its obligations hereunder
only to the extent of Landlord's equity in the Premises
and the respective owner or partners of Landlord, their
heirs, personal representatives, successors and assigns,
shall not be personally liable.
Landlord's default shall be waived by Tenant if Tenant
fails to provide Landlord with written notice of such
default within fifteen (15) days of such failure by
Landlord to perform any obligations required of Landlord
within this Lease.
Mitigation of (a) Commercially Reasonable Efforts. Both Landlord and
Damages: Tenant shall each use commercially reasonable efforts to
mitigate any damages resulting from a default of the
other party under this Lease.
(b) Criteria for Substitute Tenant. Landlord's
obligation to mitigate damages after a default by Tenant
under this Lease that results in Landlord regaining
possession of all or part of the Premises shall be
satisfied in full if Landlord undertakes to lease the
Premises to another tenant (a "Substitute Tenant") in
accordance with the following criteria: (i) Landlord
shall have no obligation to entertain negotiations with
any other prospective tenants for the Premises until
Landlord obtains full and complete possession of the
Premises including, without limitation, the final and
unappealable legal right to re-let the Premises free of
any claim of Tenant; (ii) Landlord shall not be
obligated to offer the Premises to any prospective
tenant when other premises in the Shopping Center
suitable for that prospective tenant's use are currently
available, or will be available within the next six
months; (iii) Landlord shall not be obligated to lease
the Premises to a Substitute Tenant for a rental less
than the current fair market rental then prevailing for
similar retail space in comparable shopping centers in
the same market area as the Shopping Center; (iv)
Landlord shall not be obligated to enter into a new
lease under terms and conditions that are unacceptable
to Landlord under the Landlord's then current leasing
policies for comparable space in the Shopping Center;
(v) Landlord shall not be obligated to enter into a
lease with any proposed Substitute Tenant that does not
have, in Landlord's reasonable opinion, sufficient
financial resources or operating experience to operate
the Premises in a first-class manner; (vi) Landlord
shall not be required to expend any amount of money to
specially advertise, alter, remodel, or otherwise make
the Premises suitable for use by a Substitute Tenant
unless Tenant pays any such sum to Landlord in advance
of such actions (which payment shall not be in lieu of
any damages or other sums to which Landlord may be
entitled to as a result of Tenant's default under this
Lease); or Landlord, in Landlord's sole discretion,
determines that any such expenditure is financially
justified in connection with entering into any lease
with such Substitute Tenant; (vii) Landlord shall not be
obligated to enter into a lease with any Substitute
Tenant whose use would: (a) disrupt the tenant mix or
balance of the Shopping Center; (b) violate any
restriction, covenant or requirement contained in the
lease of another tenant of the Shopping Center; (c)
adversely affect the reputation of the Shopping Center;
or (d) be incompatible with the operation of the
Shopping Center as a first-class shopping center.
(c) Mitigation Obligation Deemed Satisfied. Upon
compliance with the above criteria regarding the
reletting of the Premises after a default by Tenant,
Landlord shall be deemed to have fully satisfied
Landlord's obligation to mitigate damages under this
Lease and under any law or judicial ruling in effect on
the date of this Lease or at the time of Tenant's
default; and Tenant waives and releases, to the fullest
extent legally permissible, any right to assert in any
action by Landlord to enforce the terms of this lease,
any defense, counterclaim, or rights of setoff or
recoupment respecting the mitigation of damages by
Landlord, unless and to the extent Landlord maliciously
or in bad faith fails to act in accordance with the
requirements of this clause.
(d) Tenant's Mitigation Responsibility. Tenant's rights
to seek damages from Landlord as a result of a default
by Landlord, if allowed under this Lease, shall be
conditioned on Tenant taking all actions reasonably
required, under the circumstances, to minimize any loss
or damage to Tenant's property or
22
business, or to any of Tenant's officers, employees,
agents, invitees, or other third parties that may be
caused by any such default of Landlord.
SECTION 17 Estoppel Certificates, Subordination, Mortgagee Protection
Estoppel Within ten (10) days after request therefor by Landlord,
Certificate: Tenant agrees to execute and deliver a certificate in
the form presented by Landlord to any proposed mortgagee
or purchaser of the Premises, or to Landlord, certifying
(if such be the case) to matters requested by Landlord
including without limitation the following: (a) that
Tenant is in full and complete possession of the
Premises, such possession having been delivered by
Landlord or its predecessor and accepted by Tenant; (b)
that any improvements required to be furnished by
Landlord by the terms of this Lese have been completed
in all respects to the satisfaction of the Tenant; (c)
that this Lease is in full force and effect and has not
been amended, modified, supplemented or superseded
except as specifically noted; (d) that there is no
existing default on the part of Landlord in the
performance of any covenant, agreement or condition
contained in this Lease to be performed by Landlord; (e)
that the Tenant does not have any actual or pending
claim against the Landlord; (f) that no rents or other
charges have been prepaid by Tenant; and (g) that the
addressee of said certificate may rely on the
representations therein made; and certifying as to the
dates of commencement and termination of the Term, the
date on which rents commenced to accrue under this
Lease, and the date through which rents and other
charges hereunder have been paid. Failure of Tenant to
execute and deliver the requested certificate shall
constitute an event of default and Tenant agrees to pay
to Landlord as liquidated damages (and in addition to
all remedies available to Landlord under this Lease, at
law or in equity) $500.00 per day for each day Tenant
fails to so deliver such certificate to Landlord after
the expiration of the ten (10) day limit. Further, if
Tenant fails to execute any such certificate within said
ten (10) day period, Tenant hereby irrevocably appoints
Landlord as its attorney-in-fact, to execute such
instrument in Tenant's name.
Subordination/ The rights and interests of Tenant under this Lease
Superiority shall be subject and subordinate to any mortgage, trust
deed or deed of trust that is or hereafter may be placed
upon the Shopping Center, or any part thereof containing
the Premises and to any and all advances to be made
thereunder and to the interest thereon and all renewals,
amendments, modifications, replacements and extensions
thereof, if the mortgagee or trustee or secured party
named in such mortgage, trust deed or deed of trust
shall elect to subject and subordinate the rights and
interests of Tenant under this Lease to the lien of its
mortgage, trust deed or deed of trust and shall agree by
instrument in writing to recognize this Lease in the
event of foreclosure, if and so long as Tenant is not in
default hereunder. Any mortgagee or trustee of the
Shopping Center or any part thereof containing the
Premises may elect to give certain rights and interests
of Tenant under this Lease priority over the lien of its
mortgage, trust deed or deed of trust. In the event of
either such election and upon notification by such
mortgagee or trustee of that effect, the rights and
interests of Tenant under this Lease shall be deemed to
be subordinate to or to have priority over, as the case
may be, the lien of said mortgage, trust deed, or deed
of trust whether this Lease is dated prior to or
subsequent to the date of said mortgage or trust deed.
Tenant shall, within ten (10) days following the request
of Landlord or such secured party, execute and deliver
whatever instruments may be required for such purpose.
Failure of Tenant to execute and deliver such
instruments shall constitute an event of default and
Tenant agrees to pay to Landlord as liquidated damages
(and in addition to all remedies available to Landlord
under this Lease, at law or in equity) $500.00 per day
for each day Tenant fails to so deliver such instruments
to Landlord after the expiration of the ten (10) day
limit. Further, if Tenant fails to execute any such
instruments within said ten (10) day period, Tenant
hereby irrevocably appoints Landlord as its
attorney-in-fact, to execute such instruments in
Tenant's name.
Mortgagee Protection: Tenant agrees to give any mortgagee or trustee of trust
deed or deed of trust ("Mortgagee") of the Shopping
Center, by registered or certified mail, given at the
same time Tenant gives notice to Landlord, a copy of any
notice of default served upon the Landlord by Tenant,
provided that prior to such notice Tenant has been
notified in writing (by way of service on Tenant of a
copy of an Assignment of Rents and Leases, or otherwise)
of the address of such Mortgagee. Tenant further agrees
that if Landlord shall have failed to cure such default
within thirty (30) days after such notice to Landlord
(or if such default cannot be cured or corrected within
that time, then such
23
additional time as may be necessary if Landlord has
commenced within such thirty (30) days and is diligently
pursuing the remedies or steps necessary to cure or
correct such default), then the Mortgagee shall have an
additional thirty (30) days within which to cure or
correct such default (or if such default cannot be cured
or corrected within that time, then such additional time
as may be necessary if such Mortgagee has commenced
within such thirty (30) days and is diligently pursuing
the remedies or steps necessary to cure or correct such
default, including without litigation commencement of
foreclosure proceedings if necessary to effect such a
cure). Tenant shall have no right to, and shall not,
terminate this Lease on account of Landlord's default
and Tenant's remedies shall be as set forth in Section
16. Should any prospective mortgagee require a
modification or modifications of this Lease, which
modification or modifications will not cause an
increased cost or expense to Tenant or in any other way
substantially change the rights and obligations of
Tenant hereunder, then, and in such event, Tenant agrees
that this Lease may be so modified and agrees to
promptly execute whatever documents are required
therefor and failure to do so shall constitute an event
of default.
SECTION 18 Surrender and Holdover
Surrender: Upon the expiration or earlier termination of this
Lease, Tenant shall peaceably leave and surrender the
Premises to Landlord broom-clean and otherwise in the
condition in which the Premises are required to be
maintained by the terms of this Lease. Tenant shall
surrender all keys for the Premises to Landlord at the
place then fixed for the payment of rent and shall
inform Landlord of all combinations on locks, safes, and
vaults, if any, in the Premises. Tenant shall, at its
expense, remove from the Premises on or prior to such
expiration or earlier termination all furnishings,
fixtures and equipment situated thereon (including all
exterior and interior signs) which are not the property
of Landlord as provided in Section 11, and Tenant shall,
at its expense, on or prior to such expiration or
earlier termination, repair any damage caused by such
removal. Any property not so removed shall become the
property of Landlord, and Landlord may thereafter cause
such property to be removed from the Premises and
disposed of, but the cost of any such removal and
disposition and the cost of repairing any damage caused
by such removal shall be borne by Tenant.
Holdover: Should the Tenant or any party claiming under Tenant
hold over in possession at the expiration of the Term,
such holding over shall not be deemed to extend the Term
or renew this Lease, and such holding over shall be an
unlawful detainer and tenant or such parties shall be
subject to immediate eviction and removal. Tenant shall
pay upon demand to Landlord during any period while
Tenant shall hold the Premises after expiration of the
term, as liquidated damages, a sum equal to double the
highest monthly rate of Minimum Rent in effect during
the term or any extension thereof, plus double the
Percentage Rent (at the rate to be determined as set
forth in Section 3 hereof), and Tenant shall also pay
all damages, consequential as well as direct, sustained
by Landlord by reason of such holding over.
SECTION 19 Security Deposit
Security Deposit: The Security Deposit, if any, specified in Section 1
shall be held by Landlord as security for the full and
faithful performance by Tenant of each and every term,
covenant and condition of this Lease on the part of
Tenant to be observed and performed, and Landlord shall
have no liability to pay interest thereon unless
required by law nor shall Landlord be required to keep
the Security Deposit separate from its general funds.
Landlord's obligations with respect to the Security
Deposit are those of a debtor and not a trustee. If any
rent or additional rent herein reserved or any other
sums payable by Tenant hereunder shall be overdue and
unpaid or should Landlord make payments on behalf of
Tenant, or should Tenant fail to perform any of the
terms of this Lease, then Landlord may, at its option,
and without prejudice to any other remedy which Landlord
may have on account thereof, apply the Security Deposit
or so much thereof as may be necessary to compensate
Landlord toward the payment of the rents or other sums
due from Tenant, or towards any loss, damage or expense
sustained by Landlord resulting from such default on the
part of Tenant; and in such event Tenant shall forthwith
upon demand restore the Security Deposit to its original
amount, and the sum required to so restore the Security
Deposit shall be additional rent hereunder. In the event
Tenant shall have fully and faithfully complied with all
of the terms, covenants and conditions of this Lease,
the Security Deposit shall be returned in full to Tenant
within thirty days following the end of the Term or
earlier termination of this Lease. In the event that any
bankruptcy, insolvency, reorganization or other
creditor-debtor proceedings shall be instituted by or
against Tenant or its successors or assigns, Landlord
may apply the Security Deposit first to the payment of
any rent, additional rent and other amounts due Landlord
hereunder, and the balance, if any, of the Security
Deposit may be retained by Landlord in partial
liquidation of Landlord's damages. Landlord may deliver
the
24
Security Deposit to the purchaser of Landlord's interest
in the Premises, in the event that such interest is
sold, and Landlord shall thereupon be discharged from
any further liability with respect to the Security
Deposit. Any interest earned on the Security Deposit
shall belong to Landlord.
SECTION 20 Promotion Fund and Advertising
Promotion Funds: Tenant shall become and remain during the Term of this
Lease, a member in good standing in a Promotion Fund now
or hereafter established by the Landlord for the purpose
of advertising, public relations, sales promotions, and
other activities promoting the Shopping Center. Tenant
will contribute each month towards the Promotional Fund,
a sum in the amount specified in Section 1. Tenant
agrees to pay the Promotional Fund contribution in
advance on the first day of each month. The charge shall
increase/decrease annually effective the first January
of each year following the first full year of operation
by a percentage equal to the percentage change in the
U.S. Department of Labor Consumer Price Index for all
urban consumers. Such increase/decrease may be waived in
whole or in part at the discretion of Landlord.
Tenant agrees to pay to the Promotional Fund as an
Initial Assessment, in addition to the foregoing charge,
a sum in the amount specified in Section 1, for the
promotional expense incurred in connection with the
opening and/or ongoing marketing effort of the Shopping
Center, and its store. Said sum shall be paid within
thirty (30) days after a statement is rendered by
Landlord. Tenant shall pay such Initial Assessment
regardless of whether Tenant opens on the opening date
of the Shopping Center or on a subsequent date. Landlord
will contribute to the Fund an amount equal to 25% of
the total of Tenant's cash contribution as collected.
Landlord shall have the exclusive right to hire a
promotional director, secretary and other personnel,
which, in Landlord's sole judgment, are required to
carry out the purposes of the Promotional Fund. All such
personnel shall be under the exclusive control and
supervision of Landlord, who shall have the sole
authority to employ and discharge such personnel. The
Promotional Fund shall reimburse Landlord for all
expenses incurred by it on behalf of the promotional
programs of the Shopping Center, including any salary
and all reasonable expenses incurred by the promotional
director and other promotional personnel. Financial and
operating statements of the Promotional Fund shall be
made available for Tenant's review upon written request.
A violation of the provisions in this Section 20
(including non-payment of dues) shall constitute and
event of default of this Lease.
Advertising: Unless required by law, Tenant shall not change its
Trade Name/Trade Style without the written permission of
Landlord, which Landlord shall not unreasonably withhold
or delay. Tenant, in all advertising, shall identify
that the Premises are located in the Shopping Center by
specifically setting forth the name of the Shopping
Center in all written and oral advertising engaged in by
Tenant concerning the Premises.
Solicitation of Tenant and Tenant's employees and agents shall not
Business: solicit business in the Common Areas, nor shall Tenant
place any handbills or other advertising matter in or on
automobiles parked in the parking area or in the Common
Areas.
SECTION 21 - General Provisions
Successors: Subject to Section 15, all of the provisions hereof
shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, legal
representatives, successors and assigns.
No Option: The submission of this Lease for examination
does not constitute an offer to enter into a lease, and
this Lease shall become effective only upon execution
and delivery hereof by Landlord and Tenant.
No Joint Venture: The relationship of the parties is that
of Landlord and Tenant only, and nothing in this Lease
shall be construed as creating a partnership, joint
venture, principal-agent or any other relationship.
Except as expressly otherwise provided herein, neither
party shall have any right or power to create any
expense or liability chargeable to the other party.
Broker: Tenant represents and warrants to Landlord that Tenant
has not dealt with any broker or finder entitled to any
commission, fee or other compensation by reason of the
execution of this Lease except the Broker, if any,
specified in Section 1, and Tenant agrees to indemnify
and hold Landlord harmless from any charge,
25
liability or expense (including attorney's fees)
Landlord may suffer, sustain or incur in respect to any
claim for a commission, fee or other compensation by a
broker or finder claiming by, through or under Tenant,
other than Broker. Landlord will satisfy any obligation
to Broker in respect to this Lease.
Financial and At the request of Landlord, Tenant shall, not later than
Other ninety (90) days following the close of each fiscal year
Information: of Tenant during the Term, furnish to Landlord a balance
sheet of Tenant as of the end of such fiscal year and a
statement of income and expense for the fiscal year then
ended together with an opinion of an Independent
certified public accountant of recognized standing to
the effect that said financial statements have been
prepared in conformity with generally accepted
accounting principles consistently applied and fairly
present the financial condition and results of
operations of Tenant as of and for the periods covered.
Tenant warrants that financial and other information
provided and to be provided by Tenant to landlord (and
which will be relied upon by Landlord) relating to this
Lease does not and will not contain any statement which
at the time and in the light of circumstances under
which it is made, is false or misleading with respect to
any material fact, or omits to state any material fact
(which is known, or should have been known) necessary in
order to make any statement contained therein not false
or misleading in any material respect.
Headings and The headings and captions contained in this Lease are
Captions: inserted for convenience of reference only, and are not
to be deemed part of or to be used in construing this
Lease.
Use of Pronoun, The necessary grammatical changes required to make the
Join and Several provisions of this Lease apply in the plural sense where
Liability: there is more than one Tenant and to either
corporations, associations, partnerships, or
individuals, males or females, shall in all instances be
assured as though in each case fully expressed. If there
be more than one Tenant, the liability of all such
parties for compliance with and performances of the
terms and covenants of this Lease shall be joint and
several.
Partial Invalidity If any term or provision of this Lease or the
application thereof to any person or circumstance shall,
to any extent, be invalid or unenforceable, the
remainder of this Lease, or the application of such term
or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each term and
provision of this Lease shall be valid and enforced to
the fullest extent permitted by law.
Survival: Any provision of this Lease which obligates the Landlord
or the Tenant to pay an amount or perform an obligation
before the commencement of the Term or after the
expiration of the Term shall be binding and enforceable
notwithstanding that payment or performance is not
within the Term, and the same shall survive.
Definition of The term Landlord as used in this Lease, so far as the
Landlord, Exculpation: covenants or obligations on the part of Landlord are
concerned, shall be limited to mean and include only the
owner or owners of the Premises at the time in question.
In event of any transfer or transfers of title thereto,
Landlord named herein (and in case of any subsequent
transfer or conveyance, the then grantor) shall be
automatically relieved from the performance of any
covenants or obligations of Landlord accruing after said
transfer date. It is expressly understood and agreed by
and between the parties hereto, anything herein to the
contrary notwithstanding, that all of the
representations, warranties, covenants, undertakings and
agreements herein made on the part of Landlord while in
form purporting to be the representations, warranties,
undertakings and agreements of Landlord are nevertheless
each and every one of them made and intended, not as
personal representations, warranties, covenants,
undertakings and agreements by Landlord or for the
purpose or with the intention of binding Landlord
personally, but are made and intended for the purpose
only of subjecting Landlord's interest in the Premises
to the terms of this Lease and for no other purpose
whatsoever, and that in the case of default hereunder by
Landlord, the Tenant shall look solely to the interest
of Landlord in the Premises for satisfaction of any
obligation of Landlord to Tenant.
Time of Essence: Time is of the essence of this Lease, and all provisions
herein relating thereto shall be strictly construed.
Accord and No payment by Tenant or receipt by Landlord of a lesser
Satisfaction: amount than the rent or other amounts herein stipulated
shall be deemed to be other than on account of the
stipulated rent and amounts due, nor shall any
endorsement or statement on any check or any letter
accompanying any check or payment thereof be deemed an
accord and satisfaction, and Landlord may accept such
check of payment without prejudice to Landlord's right
to recover the balance of such amounts or pursue any
other remedy provided in this Lease.
Notices: All notices, demands, requests, consents, approvals and
other instruments required or permitted to be
26
given pursuant to the terms of this Lease shall be in
writing and shall be deemed to have been properly given
if sent by registered or certified mail, postage
prepaid, return receipt required, or by recognized
overnight courier (such as United Parcel Service or
Federal Express, e.g.), addressed to Tenant at Tenant's
address or Landlord at Landlord's address, as the case
may be, and notice shall be deemed to have been
delivered on the second business day following deposit
in the mails in the case of registered or certified
mail, and shall be deemed to have been delivered on the
next business day in the case of overnight courier,
Landlord and Tenant shall each have the right from time
to time to specify as its address for the purposes of
this Lease any other addresses in the United States of
America upon three days' notice thereon, similarly
given, to the other party.
To Landlord at: Sequel Investors Limited Partnership c/o Great Eastern Management Company
P.O. Box 5526
Charlottesville, VA 22905-5526
To Tenant at: 43717 John Mosby Highway
Chantilly, Virginia 22021
(Contact Name) Reynolds Young (telephone) (703) 327-4423
Registered Agent in the Commonwealth of Virginia: Name ____________________________________
Address: _____________________________________(telephone) _________________________________
I.R.S. Tax I.D. Number 54-1297372 Social Security Number
###-##-####
Rental Payment Address (if different from Landlord)
Entire Agreement: This Lease and the Exhibits, Riders, Addenda and
Guaranty, if any, attached hereto and forming a part
hereof, set forth all the covenants, promises,
agreements, conditions, and understandings between
Landlord and Tenant concerning the Premises, and there
are no covenants, promises, agreements, conditions or
understandings, either oral or written, between Landlord
and Tenant concerning the Premises except those herein
set forth, Except as otherwise provided herein, no
subsequent alteration, amendment, change or addition to
this Lease shall be binding upon Landlord or Tenant
unless reduced to writing and signed by them.
Recordation: Tenant shall not record this Lease without the written
consent of Landlord.
Governing Law: This Lease shall be construed and enforced in accordance
with the laws of the state where the Premises are
located.
Corporate Tenants: In the event the Tenant hereunder is a
corporation, the persons executing this Lease on behalf
of the Tenant hereby covenant and warrant that: (i) the
Tenant is a duly constituted corporation qualified to do
business in the state in which the Shopping Center is
located; (ii) all Tenant's franchise and corporate taxes
have been paid to date; (iii) all future forms, reports,
fees and other documents necessary for Tenant to comply
with applicable laws will be filed by Tenant when due;
(iv) and such persons are duly authorized by the
governing body of such corporation to execute and
deliver this Lease on behalf of the corporation.
IN WITNESS WHEREOF, Landlord and Tenant have signed this Lease as of the
day and year first written above.
LANDLORD: SEQUEL INVESTORS LIMITED PARTNERSHIP
ATTEST WITNESS: By: GREAT EASTERN MANAGEMENT COMPANY, AGENT
By:___________________________________________
- --------------------------
Title:____________________ Title: V.P.
Date: 6-4-97 Date: 6-4-97
ATTEST/WITNESS: TENANT: Old Dominion Enterprises, Inc.
By: /s/ Reynolds Young
- -------------------------- ------------------------------------
27
Title:____________________ Title: President
Date: 5-30-97 Date: 5-30-97
ATTEST/WITNESS: GUARANTOR:
__________________________
By: /s/ Reynolds Young
--------------------------------
Reynolds Young
Date: 5-30-97 Date: 5-30-97
28
EXHIBIT A
SHOPPING CENTER SITE PLAN
29
EXHIBIT A-1
THE PREMISES
30
FIRST ADDENDUM TO LEASE
This agreement evidences a First Addendum to an Agreement of Lease for Shopping
Center Space dated May 20, 1997, by and between Sequel Investors Limited
Partnership, a Virginia limited partnership ("Landlord") and Old Dominion
Enterprises, Inc. d/b/a Dominion Saddlery ("Tenant") and Reynolds Young
("Guarantor") for the Premises located at 242 Zan Road in the Seminole Square
Shopping Center, in Charlottesville, Virginia, 22901 (the "Lease").
Landlord and Tenant agree as follows:
(1) Renewal Options. Tenant shall have the option to renew the Lease for
one (1) thirty-six- (36) month term ("Renewal Term"), provided that
the Lease shall not have been previously terminated and that Tenant
is not in violation or default either at the time of the exercise or
at the effective date of such option, nor with the passage of time
would Tenant be in violation or default under any of the terms,
covenants and conditions in the lease; and, further provided, that
Tenant shall have given Landlord written notice as set forth in the
Lease of its election to exercise said option at least 190 days, but
not more than 270 days prior to the expiration of the initial Term.
The thirty-six- (36) month Renewal Term will commence upon the next
day following the expiration of the initial Term.
First Renewal Term Minimum Rent:
Months 37 through 48 $3,625.00 per month
Months 49 through 72 $3,875.00 per month
(2) Landlord for the first three years of the Lease shall provide
repairs to heating and cooling units, (excluding all Tenant
appliances and/or fixtures) in excess of $250.00 per occurrence
except for damage occasioned by negligence of Tenant, its agents or
employees or items not covered by manufacturers' warranties. Tenant
shall obtain Landlord's permission before incurring repair bills in
excess of Two Hundred Fifty Dollars ($250.00). Should the Landlord
elect to replace the heating and cooling system, Tenant will
thereafter be responsible for the maintenance and repair of the
systems as outlined in Section 9.
THIS SPACE INTENTIONALLY LEFT BLANK
(3) A violation of any of the provisions in this First Addendum shall
constitute a Default under the terms of the Lease.
(4) Unless otherwise defined herein, all capitalized terms shall have
the meaning set forth in the lease.
(5) In the event of a conflict between the terms of this First Addendum
and any other provisions of the Lease as amended, the terms of this
First Addendum shall prevail.
(6) Except as amended by this First Addendum, the provisions of the
Lease shall remain in full force and effect.
WITNESS, the following signatures:
LANDLORD:
Sequel Investors Limited Partnership
By: Great Eastern Management Company,
Agent
Date: 6/4/97 By: ______________________________
Its: _________________________
TENANT:
Old Dominion Enterprises, Inc.
Date: 5/31/97 By: ______________________________
Its: ________________________
GUARANTOR:
Date: 5/30/97 __________________________________
Reynolds Young
EXHIBIT B
1. LANDLORD'S WORK
Landlord will construct the building shell including outside walls, roof
and ceiling/floor structure in multistory areas and windows and doors as
shown on building shell plans. Landlord will also provide standard "grey
box" interior finish for a typical retail space as outlined herein:
a. Use existing steel stud wall with a 3'0" x 6'8" walk door to
separate the "sales area" (80% of Leasable Space) from the
"service area" (20% of the Leasable Space). All wall surfaces
surrounding the sales area are to be hung and finished, ready
for painting, using 5/8" fire-rated gypsum board (regular 1/2"
on masonry walls). (Any additional walls located within the
sales area may utilize regular 1/2" gypsum or other
materials.) The back side of the dividing wall between the
sales and service areas and any additional walls built to
enclose the bathroom facilities are also to be hung and
finished using 5/8" fire-rated gypsum board. The interior
walls of the bathroom facilities will be either masonry or
gypsum, ready for paint.
b. The sales and bathroom areas will use existing acoustic
ceiling using 2' x 4' tile in a standard grid system.
c. Concrete floor slab ready to receive tenant floor covering or
finished.
d. Use existing 200-amp three-phase electrical service.
e. Receptacles will be provided at storefronts as required by
Code, and on approximate 20" centers on other walls in the
sales area. One outlet will be provided in the service area,
and one in each bathroom. Exit signs and emergency lights will
be installed as required by Code.
f. In the sales area, use existing overhead lighting. Use
existing fixture in the bathroom. In spaces with an exterior
rear door, a vandal-resistant light will be provided.
g. Use existing Heating, Ventilating and Air Conditioning (HVAC)
System, including all controls, duct work, diffusers and
grills. The cooling capacity shall be 1 ton per 400 square
feet of sales area.
h. Plumbing supplies will include a minimum of one utility or
janitor's sink, one water fountain, one five-gallon electric
water heater, one hand sink (lavatory) and one water closet.
If the size of Tenant's space is such that Code would require
additional plumbing facilities for retail use of the space,
the additional facilities will be furnished by the Landlord.
If, however, additional plumbing is desired or required
because of Tenant's use of the space, or if Tenant's use
requires that plumbing be located at other than the area most
convenient to the Landlord, such additional plumbing or cost
of relocation shall be at Tenant's expense.
i. Remove and cap plumbing fixtures from second bathroom and
extending wall approximately 5' into the sales area. Also, on
this wall provide and install a glass opening (approximately
3' x 3') into the sales area. This area is to be known as the
office.
j. Provide and construct two handicap dressing rooms. Use 3-5/8"
metal studs and 1/2" gypsum.
k. Provide and construct shelving and cabinets under front
windows.
l. Provide and install approximately 10 sheets of slotwall on
right demising wall. Remove small existing pieces of slotwall
above existing slotwall.
m. Use existing floor covering. (NOTE: Tenant to notify Great
Eastern Management Co. of carpet replacement near the right
window display area.)
n. Adapt existing overhead lighting to dressing rooms. Provide
and install electrical wall outlets in the area of the sales
counter.
o. Paint space.
p. Tenant shall not alter or modify the construction items
described herein during the Term of the Lease without
Landlord's prior written approval. For example, after
installation of floor slab, Tenant shall not install any "in
floor" items without prior written permission from Landlord.
If permission is granted, Landlord shall determine the method
of cutting and repairing. Any such work shall be at Tenant's
expense, which will include Landlord's cost of supervision of
such work.
q. If sprinklers are required by Code or otherwise installed by
Landlord, the standard system design shall be in accordance
with Code for the division of space into sales area and
service area as defined herein.
r. The above work is to be charged against the Tenant's $12,000
allowance. The estimated cost for the above work is between
$7,300 - $7,829.
2. TENANT'S WORK
Subject to Landlord's prior written approval as outlined herein, Tenant
may, at its expense, construct within the Premises or furnish for the
Premises:
a. deviations from standard storefront provided by Landlord.
b. ceiling material, other than that provided by Landlord.
c. wall material, other than that provided by Landlord.
d. paint and interior decoration of store space.
e. additional partitions.
f. enclosing of columns.
g. installation of all floor covering (no asbestos containing
material is permitted).
h. the penetration and flashing of all roof openings, which work
shall be performed by the Landlord's contractor at Tenant's
expense.
i. lighting fixtures, including lamps not provided by Landlord.
Surface-mounted or suspended fluorescent lights are not
permitted in sales area.
j. all signs, including such marquee, canopy, door signs or other
signs as may be required by Landlord and in accordance with
criteria as set forth in this Manual.
k. such fire extinguishers as required by Code and approved by
the fire preventions official having jurisdiction.
3. STORE ARCHITECTS AND DESIGNERS
Within ten (10) days after the date the Lease is fully executed by all
parties, Tenant shall identify to Landlord the licensed architect or
interior designer engaged by the Tenant to prepare its plans for the
construction in the demised Premises by Tenant (herein "Tenant's Work").
4. The Tenant and its contractor are responsible for compliance with all
local, state and federal building code and all other applicable laws. It
is strongly recommended that the Tenant's architect, designer and /or
contractor consult with local building officials.
5. CONTRACTOR
Before entering into a contract for construction, Tenant must become
familiar with the requirements of this Manual, all applicable local
ordinances, the statewide building code, and all applicable federal
regulations included but not limited to ADA, OSHA, and environmental
requirements. Prior to commencement of construction, Tenant must notify
Landlord of the identity of the contractor(s) engaged for construction in
the Premises. Contractors employed by Tenant will not be permitted to
start construction until all approvals required by this Manual are
obtained and document submittals are complete. Contracts for construction
are solely between Tenant and its contractor(s). The Landlord shall in no
way be held liable for errors, omissions or performance by either Tenant
or its Contractor(s).
EXHIBIT C
OPERATING HOURS
Tenant agrees to keep the Premises open as specified in Section 5 paragraph (b)
of the Lease from 8 o'clock a.m. to 5 o'clock p.m., Monday through Saturday.
Such minimum hours of operation are subject to change from time to time by
Landlord so long as any such change is applicable to substantially all tenants
of the Shopping Center.
EXHIBIT D
SIGN CRITERIA
A. The advertising content of all signs shall be limited to individual
letters designating the store name only and shall contain no advertising
devices, slogans, symbols or marks other than logos, crests, or corporate
seals universally used by national or regional tenants on all signs.
Logos, crests or corporate shield designs must be submitted to Landlord
for approval, which approval shall not be unreasonably withheld, provided
that the proposed sign or symbol is compatible with the design intent of
the shopping center.
B. The location, character, design, color and layout of all signs shall be
subject to Landlord's written approval and no sign will be placed in final
position without same.
C. All signs must be professional made, carry a U.L. approved label and be
constructed of individual neon lit letters. The maximum letter height
shall be 30" unless written exception is granted by Landlord. Each letter
shall be fabricated from 22-gauge point grip steel with spot-welded
construction, be 4" deep and mounted on an 8" by 8" raceway and use 15 mm.
neon with 30 hertz normal power factor 120-volt transformers. Distance
between tube and sign fact shall be no less than 1/2 the distance between
the rows of neon. Plastic faces shall be 3/16" acrylic plastic. Exterior
and interior of all letters shall be painted white; returns shall be baked
enamel (bronze). The raceway shall be painted to match the color of the
building. The following four letter styles will be acceptable.
1. Helvetica medium
2. Script
3. Optima semi-bold
4. Goudy
D. Drawings submitted for approval by Landlord shall include:
1. dimensions of the sign as a whole and of each letter or symbol.
2. type of illumination. All signs shall be lit from the interior
unless specific exception is granted by Landlord.
3. necessary electrical requirements. All sign circuits shall be tied
into a clock-timer controlled from inside the premises to facilitate
lighting of signs at night until the time specified by Landlord.
4. the name and/or stamp of the sigh contractor or sign company which
shall not be exposed to view.
E. The following are expressly prohibited:
1. Animation, moving signs or moving lights.
2. Temporary signs, irrespective of the composition of the sign or
material used.
3. Box or cabinet type signs or signs with formed plastic letters.
4. Painted on or luminous letters.
5. Back-lit signs or letters.
6. Rooftop signs or banners or projection signs.
7. Free-standing signs or sandwich board signs.
8. Noise making devices, boxes, cabinets or frames.
9. Wooden backed signs or letters.
10. Signs above the roof line or on the roof.
11. Pop rivet contraction of signs.
F. One sign is allowed per storefront unless there are two or more angled
faces, such as a corner storefront, in which case a second sign may be
allowed, subject to Landlord's approval.
G. There will be one authorized suspended sign under the canopy. All Tenants
will be required to install a suspended double-faced sign from the canopy
ceiling over the store entry. The design, material and letter type is as
follows:
1. Each sign shall be oval shaped 8 inches high by 40 inches long made
from Dupont Lucite, Color BR 2418 (a medium brown).
2. The store name, which shall be the "trading as" name in the lease,
(letters and numerals as appropriate) shall be written in Times
Bold, using 2 .m. Arlon Cast #68 Beige (a beige color to match the
drivit of the fascias).
3. East side of each sign shall carry a reproduction of the shopping
center logo, located centrally along the length of the sign and
rising vertically from the lower edge of the sign to a height of 1.5
inches. The logo shall be Arlon Vinyl Cal-Plus #11 Green.
4. The sign shall have an oval border, one-half inch thick and of the
same beige vinyl as the store name.
5. All sign requests and specifications shall be presented to the
Landlord in writing for approval prior to the installation of any
sign.
EXHIBIT E
TENANT'S COVENANTS RELATING TO INDUSTRIAL
DEVELOPMENT BOND FINANCING
If Tenant is deemed to be a "principal user" of Sequel Investors Limited
Partnership's portion of Seminole Square Shopping Center with respect to the
hereinafter described Bonds, as the term "principal user" is defined in Section
103 of the Internal Revenue Code of 1954, as amended, Paragraph 1 hereof is
incorporated herein. If Tenant is not deemed to be a "principal user" of such
Bonds for the purposes hereof, Paragraph 2 hereof is incorporated herein.
Paragraph 1: Tenant acknowledges that Landlord is financing or may in the future
finance the shopping center (the demised Premises being a part thereof) through
the use of industrial development bonds (including refunding bonds) (the
"Bonds") to be issued by the local Industrial Development Authority of the
City/County of _________________ (the Authority). Tenant agrees that it shall
promptly upon a request from Landlord, submit and file all certificates,
representations and reports as may be, from time to time, required by Landlord,
the Authority, any letter of credit institution, or any purchaser of underwriter
of the Bonds. All quoted terms in this Section shall have the same meaning as
set forth in Section 103 of the Internal Revenue Code of 1954, as amended; and
in the regulations, rulings and pronouncements of the Internal Revenue Service
issued from time to time pursuant thereto (the "Code").
a. Tenant agrees that at no time within three years from the date of
the issuance by the Authority of the Bonds will Tenant or any
"related person" of Tenant pay or incur; or consent to the paying or
incurring by others of "capital expenditures" with respect to the
leased premises or any other facilities within City/County of
___________________________, "principal user" of which is Tenant or
any "related person" of Tenant, or with respect to any facilities
which are referred to as the "Restricted Facilities"), if the
aggregate amount of such "capital expenditures" during a period
beginning three years before the date of issuance of the Bonds and
ending three years after the date of issuance of the Bonds (the
"restricted Period") will be in excess of a total of _____________.
b. Tenant represents that other than the Bonds, there are, on the date
of the execution of this Lease, no outstanding issues of obligations
of any State, Territory or possession of the United States, or any
political subdivision of the foregoing, or of the District of
Columbia, the proceeds of which have been or will be used primarily
with respect to facilities:
i. a "principal user" of which is or will be Tenant or a "related
person" of Tenant, and,
ii. which
(1) are located in the City/County of __________________ or
(2) are "contiguous or integrated" facilities located on
both sides of the border between the City of
Charlottesville and any adjoining political jurisdiction
(hereinafter collectively referred to as the "Restricted
Area").
c. Tenant further agrees that it shall file
i. with the income tax return of Tenant for the current taxable
year, a copy of the Authority's election required pursuant to
Section 103 (b) (6) (D) of the Code, and
ii. annually for three years following the date of the issuance of
the Bonds, with the office of the Internal Revenue Service
where Tenant's income tax return is required to be filed on
the date required for such filing, (without regard to any
extension of time), a supplemental statement showing all
"capital expenditures" paid or incurred by Tenant with respect
to any Restricted facilities (including any such "capital
expenditures" by each "related person" of Tenant) during the
preceding fiscal year of Tenant;
d. Neither Tenant nor any Related Person of tenant, within three years
after the later of the date the project is placed in service or the
date of issuance of the Bonds (the "Extended Restricted period"),
will become an owner (in whole or in part) or Principal User of any
facility ("new facility"), wherever located, financed (whether or
not by or for the benefit of Tenant) in whole or in part by
tax-exempt industrial development bonds unless Tenant's becoming
such an owner or Principal User will not cause interest on the Bonds
to become taxable because the inclusion of the "aggregate face
amount" of all tax-exempt industrial development bonds allocated to
Tenant and outstanding on the date of issuance of the Bonds in the
calculation provided for in Section 103 (b)(15)(A) of the Code would
not cause the authorized face amount of the Bonds to exceed
$40,000,000.
e. In connection with the issuance of the Bonds, Tenant agrees to
provide landlord; promptly upon a request, a list of all "capital
expenditures" paid or incurred by Tenant or any "related person" of
Tenant with respect to any Restrict Facilities within a period
beginning three years before the date of the issuance of the Bonds
and ending on the date of the issuance of the Bonds, such list to be
broken down by date and amount of each such "capital expenditure."
f. Tenant agrees to provide Landlord with such information as may be
necessary in order to make timely and proper filing of the
Authority's election required pursuant to Section 103(b)(6)(D) of
the Code. If required by Bond Counsel in order to determine the
tax-exempt status of the Bonds, Tenant also agrees to provide
Landlord information with respect to the aggregate outstanding
amount of tax-exempt industrial development bonds allocated to
Tenant as beneficiary.
g. If Tenant shall for any reason fail to file the information required
in paragraphs C and E, above, or if Tenant's "capital expenditures"
during the Restricted Period of the Extended Restricted Period
(including any such capital expenditures by each "related person" of
Tenant) shall exceed the amount specified in paragraphs A or D
above, then Tenant shall, without further notice, immediately be in
default of this lease and Landlord shall have the right, but not the
obligation, in addition to all of its other rights and remedies, to
terminate this lease. It is the understanding of the parties that
the foregoing covenants by tenant are a material part of the
consideration given to induce Landlord to execute this lease and
that any breach thereof shall entitled Landlord to a claim for
damages in addition to those set forth in the lease Agreement
including
i. any prepayment of redemption penalty or premium;
ii. any increased interest expense to be incurred by Landlord in
the refinancing of all or portion of the outstanding Bonds
(calculated as an amount equal to the difference between the
interest on the Bonds which would have been paid by Landlord
on the Bonds and the interest to be paid by Landlord at the
per annum interest rate at which Landlord is able to refinance
the outstanding principal balance of the Bonds), which shall
be computed based on the principal balance and remaining term
of the Bonds outstanding at the time of the refinancing and
iii. all other costs of refinancing, including reasonable
attorneys' fees.
Paragraph 2: Tenant acknowledges that landlord is financing or may in the future
finance the shopping center (the Demised Premises being a part thereof) through
the use of industrial development bonds (including refunding bonds) (the
"Bonds") to be issued by the Industrial Development Authority of the City of
Charlottesville (the "Authority"). Tenant agrees that it shall, promptly upon
request from Landlord, submit and file all certificates, representations and
reports as may be, from time to time, required by landlord, the Authority, any
letter of credit institution, or any purchaser or underwriter of the Bonds. All
quoted terms in this Section shall have the same meaning as set forth in Section
103 of the Internal Revenue Code of 1954, as amended, and in the regulations,
rulings and pronouncements of the Internal Revenue Service issued from time to
time pursuant thereto (the "Code").
a. Tenant agrees that at no time within three years from the date of
the issuance by the Authority of the bonds (the "Restricted Period")
will Tenant or any "related person" of Tenant pay or incur, or
consent to the paying or incurring by others of "capital
expenditures" for improvements for which are deemed to be fixtures
under Virginia law and which are made with respect to the Demised
Premises without the prior written consent which shall be at the
sole discretion of Landlord.
b. Tenant further agrees that it shall provide to landlord, annually,
for three years following the date of issuance of the Bonds, a
statement showing all "capital expenditures" paid or incurred by
Tenant with respect to the Demised Premises during the preceding
fiscal year of Tenant, such statement to be provided to Landlord
within thirty days after the end of such fiscal year.
c. Tenant agrees to provide Landlord with such information as may be
necessary in order to make timely and proper filing of the
Authority's election required pursuant to Section 103(b)(6)(D) of
the Code. If required by Bond Counsel in order to determine the
tax-exempt status of the bonds, Tenant also agrees to provide
Landlord information with respect to the aggregate outstanding
amount of tax-exempt industrial development bonds allocated to
Tenant as beneficiary.
d. If Tennant shall for any reason fail to provide Landlord with the
information required in paragraphs B and C above, or if Tenant or
any related person incurs "capital expenditures" with respect to the
Demised Premises during the
Restricted Period in violation of paragraph A above, then Tenant
shall be in default of this Lease and Landlord shall have the right,
but not the obligation, in addition to all of its other rights and
remedies, to terminate this Lease. It is the understanding of the
parties that the foregoing covenants by tenant are a material part
of this consideration given to induce Landlord to execute this lease
and that any breach thereof shall entitled Landlord to a claim for
damages in addition to those set forth in the Lease Agreement
including
i. any prepayment or redemption penalty or premium
ii. any increased interest expense to be incurred by Landlord in
the refinancing of all or portion of the outstanding Bonds
(calculated as an amount equal to the difference between the
interest on the Bonds which would have been paid by Landlord
at the per annum interest rate at which Landlord is able to
refinance the outstanding principal balance of the Bonds),
which shall be computed based on the time of the refinancing
and
iii. all other costs of refinancing, including reasonable
attorneys' fees.
e. If at any time during the term of this lease (including any
renewals), the interest payable by Landlord on the Bonds increases
as a result of changes in the Federal or State income tax laws, the
Minimum Rent payable under Section 3 of the lease shall increase
with Tenant responsible for a pro-rata amount of such increase
determined by dividing Tenant's leasable space by the total amount
of leasable space in the Shopping Center that is being financed with
the Bonds. Landlord may elect to bill this increased rent on a
quarterly or annual basis or estimate an amount to be payable by
Tenant monthly in the same manner as taxes, insurance and common
area maintenance, subject to year end adjustment.
EXHIBIT F
PACKAGE C FOR 3,000 SQUARE FT RETAIL TENANTS
Orientation: Consultation to introduce shopping center marketing, promotion
calendar, and grand opening package and to review the
individual tenant's projected marketing plans
2 hours, no charge
Media Kit: $296 Value (16 hours @ $18.50) Plus expenses up to $120.00
Billable
Based on Interview and sent to all relevant local and regional
media and regional and national trade journals (min=12,
max=20)
Includes fact sheet, owner bio, business brief, background
color, if possible, list of story ideas, press release, and
photo
Follow-up phone calls to editors
Announcements: Sent to all other Great Eastern Management
Company Tenants
Temporary sign mention for one week
Media Campaign: Value $555 (30 hours @ $18.50) plus up to $1,200 billable
media expense.
Concept, design, copywriting, typesetting, layout, supervision
of audio and video production, media planning for:
3 25" ads in Daily Progress, with one-half price pick-up rate
OR
30 30-second radio ads on 3 stations, each to include on-air
giveaways of Remotes if offered at no additional charge
OR
Approximately 80 30-second spots on up to 4 networks on
Adelphia Cable
OR
Direct mailing of 6,000 coupon flyers 8-1/2" X 11"
Grand Opening Event: Value $296 (16 hours @ $18.50) plus up to $500.00
billable expenses
Grand Opening Banner (2 weeks on location)
AND ONE OF THE FOLLOWING
Concept Development, coop negotiation, coordination, booking
of talent, Requisition of promotional items
OR
Consultation, Print, TV or Radio Ad Format Development, Design
camera ready.
Computer Generated Logo and slicks: $296.00 Value (16 Hours @
$18.50)
OR
Media Purchase or Promotional Event expenses as deemed appropriate for Grand
Opening by Landlord not to exceed $296.00 (to include 3 hours @ $18.50 for media
planning and placement) plus media time or space ($240.50).
PACKAGE C Value: $3,263.00
Cost for PACKAGE C to Tenant - $1,200.00 Check due at the time of execution of
the Lease.
Cost of PACKAGE C to Landlord - $2,063.00
Provided the Tenant is not in violation or default, the Marketing Fund will
reimburse Tenant One Thousand Two Hundred ($1,200.00) Dollars during the
thirteenth (13th) month of the Lease following the Commencement Date.
EXHIBIT G
LEASE GUARANTY
In consideration of making a lease by and between Sequel Investors Limited
Partnership "Landlord" and Old Domain Enterprises, Inc. as "Tenant" dated as of
May 20, 1997 ("Lease") at the request of the guarantor(s) and in reliance on
this guarantee, the guarantor(s), hereby waive(s) the obligations of the
Homestead exemption laws as to the Lease and jointly and severally (if there is
more than one guarantor), guarantee the payment of all rent to be paid by the
Tenant and the performance by Tenant of all the terms, covenants and conditions
of the Lease including any extensions or renewals thereof. The guarantor(s)
promise(s) to pay all the Landlord's expenses, including reasonable attorney's
fees, incurred by the Landlord in enforcing all obligations of the Tenant under
the Lease or incurred by the Landlord in enforcing this guarantee. The
Landlord's consent to any assignment or assignments and successive assignments
by the Tenant and Tenant's assigns, of the Lease, made either with or without
notice to the guarantor(s) or a change or different use of the Premises, or
Landlord's forbearance delays or extensions of time or any other reason whether
similar to or different from the foregoing shall in no way or manner release the
undersigned from the liability as guarantor. The guarantor(s) agree(s) that the
default by Tenant or its successors or assigns shall create an immediate
liability on the part of the undersigned to Landlord and its successors or
assigns. Landlord does not need to first exhaust its legal remedies against
Tenant or successors or assigns before proceeding against the guarantor(s).
Landlord is not required to notify the undersigned of any default of Tenant
under the provisions of this Lease.
IN WITNESS WHEREOF, the undersigned has executed this lease Guaranty in the
presence of competent witness(es) as of this 30th day of May, 1997.
Witness: Guarantor(s):
________________________________ ______________________________
Exhibit I
PRINT OR TYPE ALL INFORMATION
THE SECURED PARTY DESIRES THIS FINANCING STATEMENT TO BE INDEXED AGAINST THE
RECORD OWNER OF THE REAL ESTATE NO (X) YES ( ) NAME OF RECORD OWNER
__________________________
STATE CORPORATION COMMISSION
(Uniform Commercial Code Division, Box 1197, Richmond,
Virginia 23209) FORM FOR ORIGINAL FINANCING STATEMENT
AND SUBSEAUENT STATEMENTS
The Commission stamps the File
Number on the Original Financing
Statement. The secured Party must
place this same number on all
subsequent statements.
Index numbers of subsequent
statements (For office use only)
Name & mailing address of all Check the box indicating the kind
debtors, trade styles, etc. of statement.
No other name will be indexed. Check only one box.
Mailing Address: (X) ORIGINAL FINANCING STATEMENT
Mr. Reynolds Young
43717 John Mosby Highway ( ) CONTINUATION-ORIGINAL STILL
Chantilly, VA 22021 EFFECTIVE
( ) AMENDMENT
Physical address of Secured
Premises:
Dominion Saddlery ( ) ASSIGNMENT
242 Zan Road
Charlottesville, VA 22901 ( ) PARTIAL RELEASE OF COLLATERAL
( ) TERMINATION
Name & Address of Secured Party Names & address of Assignee
Sequel Investors Limited Partnership
P.O. Box 5526 Charlottesville, VA
22905-5526
Date of maturity if less than five years Check if proceeds of collateral are
covered. (X)
Description of collateral covered by original financing statement
Space to record an amendment, assignment, release of collateral or a statement
to cover collateral brought into Virginia from another jurisdiction.
_________ Real Estate if applicable.
/s/ Reynolds Young 5/31/97
Signature of Debtor if applicable (Date) Signature of Secured Party if
applicable (Date)
SECOND ADDENDUM TO LEASE
This agreement evidences a Second Addendum to an Agreement of Lease for Shopping
Center Space dated May 20, 1997, for the Premises located at 242 Zan Road in the
Seminole Square Shopping Center, in Charlottesville, Virginia, 22901 ("Lease"),
by and between Sequel Investors Limited partnership, a Virginia limited
partnership ("Landlord"), and Old Dominion Enterprises, Inc. d/b/a Dominion
Saddlery ("Tenant") and Reynolds Young ("Guarantor"), as amended on June 4, 1997
by a First Addendum to Lease.
The Lease is hereby amended as follows:
(1) The Term of the Lease is extended for an additional thirty-six (36) months
to expire on May 31, 2003, subject to the provisions herein.
(2) Minimum Rent shall be as follows:
June 1, 2000 through May 31, 2002 $3,500.00 per month
June 1, 2002 through May 31, 2003 $3,562.50 per month
(3) If required by the City of Charlottesville, or any of its agencies or
departments, or by any other authority having jurisdiction, the Tenant
shall have the responsibility at its expense to provide, install and have
inspected, a water backflow preventor. Tenant shall also be responsible
for all future maintenance and annual inspections thereof.
(4) A violation of any of the provisions in this Second Addendum shall
constitute a Default under the terms of the Lease.
(5) Unless otherwise defined herein, all capitalized terms shall have the
meaning set forth in the Lease.
(6) In the event of a conflict between the terms of this Second Addendum and
any other provisions of the Lease as amended, the terms of this Second
Addendum shall prevail.
(7) Except as amended by this Second Addendum, the provisions of the Lease
shall remain in full force and effect.
WITNESS, the following signatures:
LANDLORD:
Sequel Investors Limited Partnership
By: Great Eastern Management Company,
Agent
Date: 6/12/2000 By /s/
------------------------------
Its: V.P.
TENANT:
Old Dominion Enterprises, Inc.
Date: 6/1/00 By: /s/ Reynolds Young
----------------------------
Its: President
GUARANTOR:
Date: 6/1/00 /s/ Reynolds Young
-------------------------------------
Reynolds Young
THIRD ADDENDUM TO LEASE
This agreement evidences a Third Addendum to an Agreement of Lease for Shopping
Center Space dated May 20, 1997, for the Premises located at 242 Zan Road in the
Seminole Square Shopping Center in Charlottesville, Virginia 22901, by and
between Sequel Investors Limited Partnership, a Virginia limited partnership
("Landlord"), and Old Dominion Enterprises, Inc. d/b/a Dominion Saddlery
("Tenant") and Reynolds Young ("Guarantor"), as amended on June 4, 1997 by a
First Addendum to Lease and on June 12, 2000 by a Second Addendum to Lease
(collectively, the "Lease").
The Lease is hereby amended as follows:
1) The Term of the Lease is extended for an additional twenty-four (24)
months to expire on May 31, 2005, subject to the provisions herein.
2) Minimum Rent shall be as follows:
June 1, 2003 through May 31, 2004 $3,562.50 per month
June 1, 2004 through May 31, 2005 $3,675.00 per month
3) Tenant shall have the option, to be exercised as hereinafter provided, to
extend this lease for one additional two (2) year term ("Renewal Term"),
provided no violation is existing or continuing, nor with the lapse of
time or the giving of notice or both would there be a violation, in the
performance of any of the terms or conditions of this lease at the time of
exercise, or at any time through the commencement of the Renewal Term.
Tenant shall provide written notice of its intent to exercise the Renewal
Term option not later than 180 days nor earlier than 360 days prior to the
end of the Term of the Lease.
Minimum Rent, during the Renewal Term shall be as follows:
June 1, 2005 through May 31, 2006 $3,675.00 per month
4) Disclosure: Rivanna Realty represents the Landlord in this transaction.
The General Partner of the Landlord, Great Eastern Management Company
("Great Eastern"), is a licensed real estate brokerage firm. Mr. Everett
S. Hopkins, Jr., an employee of Great Eastern with an active real estate
license, is an officer of Great Eastern. Mrs. Hopkins and Mrs. Dotty N.
Hopkins, who is also employed by Great Eastern and has an active real
estate license, are both limited partners in a partnership which owns a
limited partnership interest in Landlord.
5) Unless otherwise defined herein, all capitalized terms shall have the
meaning set forth in the Lease.
6) Except as amended by this Third Addendum, the provisions of the lease
shall remain in full force and effect.
7) A violation of any of the provisions in this Third Addendum shall
constitute a Default under the terms of the lease.
8) In the event of a conflict between the Terms of this Third Addendum and
any other provisions of the Lease, the terms of this Third Addendum shall
prevail.
WITNESS, the following signatures:
LANDLORD:
Sequel Investors Limited Partnership
By: Great Eastern Management Company,
Agent
Date: 6/10/03 By: /s/
---------------------------------
Its: Pres.
TENANT:
Old Dominion Enterprises, Inc.
Date: 6/5/03 By: /s/Reynolds Young
---------------------------------------------
Its: President
GRANTOR:
Date: 6/5/03 /s/Reynolds Young
-------------------------------------------------
Reynolds Young
FOURTH ADDENDUM TO LEASE
This agreement evidences a Fourth Addendum to an Agreement of Lease for Shopping
Center Space dated May 20, 1997, for the Premises located at 242 Zan Road in the
Seminole Square Shopping Center in Charlottesville, Virginia 22901, by and
between Sequel Investors Limited Partnership, a Virginia limited partnership
("Landlord"), and Old Dominion Enterprises, Inc. d/b/a Dominion Saddlery
("Tenant") and Reynolds Young ("Guarantor"), as amended on June 4, 1997 by a
First Addendum to lease, on June 12, 2000 by a Second Addendum to Lease and on
June 10, 2003 by a Third Addendum to Lease (collectively, the "Lease").
The Lease is hereby amended as follows:
1) Tenant acknowledges that it has an outstanding past due balance in the
amount of $759.07 as outlined in the attached Delinquency/Aging Report
dated April 15, 2005.
2) The Term of the Lease is extended for an additional twelve (12 months to
expire on May 31, 2006, subject to the provisions herein.
3) Minimum Rent shall be as follows:
June 1, 2005 through May 31, 2006 $3,737.50 per month
4) Upon Tenant's written request, on or before December 31, 2005, Landlord
will reimburse Tenant up to $250.00 spent by the Tenant for media
advertising purposes which shall have included mention of Tenant's
location in the Seminole Square Shopping Center. Tenant shall provide
receipts and tear sheets from newspaper, notarized statements from radio
stations, paid contracts from television stations, or evidence of direct
costs associated with a direct mail campaign to Landlord or its agent
prior to the above deadline in order to be reimbursed.
5) Tenant acknowledges it has an affirmative duty to provide Landlord with
written notice of a change in domicile thirty (30) days in advance of any
such change. Change in domicile for this provisions refers to the location
requirements for UCC filings which shall be one of the following: i) for
an entity created by a filing with a state, the entity's location is that
state; ii) for an entity not created by a filing, the entity's location is
the place of its chief executive office; or iii) for an individual, the
person's location is her/his principal residence. Failure of Tenant to
provide this notice shall stop Tenant or any person or entity ascertaining
claims on behalf of Tenant from raising the issue of location in any
dispute concerning the priority of a UCC filing involving Tenant and
Landlord.
6) Disclosure: Rivanna Realty and Investment Company represents the Landlord
in this transaction. The General Partner of the Landlord, Great Eastern
Management Company ("Great Eastern"), is a licensed real estate brokerage
firm and Mr. Everett S. Hopkins, Jr., holds an active real estate license
and is employed by and is an officer of Great Eastern. Mr. Hopkins and
Mrs. Dotty N. Hopkins, who is also employed by Great Eastern and holds an
active real estate license, are limited partners in a partnership which
owns a limited partnership interest in Landlord.
7) Unless otherwise defined herein, all capitalized terms shall have the
meaning set forth in the Lease.
8) Except as amended by this Fourth Addendum, all other provisions of the
Lease shall remain in full force and effect.
INTENTIONALLY LEFT BLANK
9) A violation of any of the provisions in this Fourth Addendum shall
constitute a Default under the terms of the Lease.
10) In the vent of a conflict between the Terms of this Fourth Addendum and
any other provisions of the Lease, the terms of this Fourth Addendum shall
prevail.
WITNESS, the following signatures:
LANDLORD:
Sequel Investors Limited Partnership
By: Great Eastern Management Company,
Agent
Date: 5/17/05 By: /s/
----------------------------------------
its: V.P.
TENANT:
Old Dominion Enterprises, Inc.
Date: 5/10/05 By: /s/Reynolds Young
--------------------------------------------
its: President
GUARANTOR:
Date: 5/10/05 /s/Reynolds Young
--------------------------------------------------
Reynolds Young
FIFTH ADDENUDM TO LEASE
EXTENSION AGREEMENT
This Fifth Addendum to Lease ("Extension Agreement"), dated as of this 12th day
of June, 2006 by and between Old Dominion Enterprises, Inc. d/b/a Dominion
Saddlery ("Tenant"), Dover Saddlery Retail, Inc. ("New Guarantor"), and Sequel
Investors Limited Partnership, a Virginia limited partnership ("Landlord"),
amends the Agreement of Lease for Shopping Center Space for the Premises in the
Seminole Square Shopping Center, Chartlottesville, Virginia dated May 20, 1997,
which was modified on June 4, 1997 by a First Addendum to Lease, on June 12,
2000 by a Second Addendum to Lease, on June 10, 2003 by a Third Addendum to
Lease, and on May 17, 2005 by a Fourth Addendum to Lease for the Premises (which
shall hereafter collectively be referred to as the "Lease"):
WITNESSETH
WHEREAS, the Lease is in full force and effect and by its terms expires on May
31, 2006; and,
WHEREAS, Landlord and Tenant desire that the Lease be extended:
NOW, THEREFORE, in consideration of the mutual promises and obligations set
forth herein and in the Lease, the parties agree as follows:
1. The Terms of the Lease is hereby extended for an additional eight (8)
months to expire January 31, 2007, subject to the provisions herein.
2. The Fiscal Period shall remain as the Lease year and shall run from June 1
of any year through May 31st of the next. If Tenant does not exercise its
option to renew as outlined in Paragraph 8 below, then the last Fiscal
Period of the Lease shall be from June 1, 2006 through January 31, 2007,
and any Percentage Rent due for this period shall be defined as follows:
Percentage Rent: Six percent (6%) of the Gross Sales (as defined in
Section 3) occurring in the last Fiscal period which exceed six-hundred
sixty-seven thousand dollars ($667,000.00).
3. The monthly Minimum Rent shall be $3,737.50.
4. Tenant shall have the option, to be exercised as hereinafter provided, to
extend this Lease for one additional two (2) year term ("Renewal Term"),
provided no violation is existing or continuing, nor with the lapse of
time or the giving of notice or both would there be a violation, in the
performance of any of the terms or conditions of this Lease at the time of
exercise, or at any time through the commencement of the Renewal Term.
Tenant shall provide written notice of its intent to exercise the Renewal
Term option not later than ninety (90) days prior to the end of the
extended Term of the Lease.
Renewal Term:
From the first day of the 1st month through the last day of the 24th month
of the Term, Minimum Rent shall be $3,775.00 per month.
5. New Guarantor unites in this Extension Agreement to evidence its agreement
to guarantee as Guarantor, the full and complete performance by Tenant of
all of the terms and conditions of the Lease, as it may be amended.
Reynolds Young, individually, is hereby removed as Guarantor under the
Lease, such removal to be effective as of the date of final execution of
this Extension Agreement by all parties, but shall continue to be
responsible for any liability that may have occurred under this Lease
prior to such date.
6. SECTION 1, Definitions, "Permitted Uses:" is hereby amended in its
entirety to read as follows:
The sale of equipment and apparel for the rider and horse both
customer and stock, equestrian gifts, horse care products,
equestrian consignment items, books, magazines, videotapes and such
other uses as may be hereinafter approved in writing by Landlord to
be conducted under the Trade Name/Trade Style Dominion Saddlery or
Dover Saddlery.
7. Landlord agrees that Tenant may conduct a liquidation (but not
going-out-of-business) sale commencing on or before August 1, 2006, and
extending no longer than forty-five (45) days.
8. Section 3, Percentage Rent, Paragraph (b) of the Lease shall be stricken
in its entirety and replaced with the following:
(b) The term "Gross Sales" as used herein for the purpose of
determining Percentage Rent shall mean the dollar aggregate of
the entire amount of receipts from gross sales of Tenant and
of all licensees, concessionaires and tenants of Tenant, from
all business conducted upon or from the Premises by Tenant and
all others, whether such sales be evidenced by check, credit,
charge account, exchange or otherwise, and shall include, but
not be limited to, the amounts received from the sale of
goods, wares and merchandise and for services performed on or
at the Premises (including the value of all goods accepted in
lieu of cash payment), together with the amount of all orders
taken or received at the Premises, mail or telephone orders
received or filled on the Premises, whether such orders are
filled from the Premises or elsewhere, and whether such sales
be made by means of merchandise or other vending devices in
the Premises and shall also include, without limitation, all
orders by means of electronic, telephonic, video, computer, or
other technology-based system, whether existing now or
developed in the future, that are taken at or made from the
Premises, whether or not filled at the Premises, and all other
such orders received or filled at the Premises. At Tenant's
request, Landlord shall put a link to Tenant's web site on
Shopping Center's web site, which shall remain for the
duration of the Lease. Notwithstanding the foregoing, Landlord
reserves the right to remove such a link if Tenant breaches
the Lease or fails, in Landlord's sole judgment, to operate a
professional-looking web site focused on the sale of
merchandise from the Premises. If any one or more departments
or other divisions of Tenant's business shall be sublet by
Tenant or conducted by any person, firm, or corporation other
than Tenant, then there shall be included in Gross Sales all
the gross sales of such departments or divisions, whether such
sales be filled at the Premises or elsewhere, in the same
manner and with the same effect as if the business or sales of
such departments and divisions of Tenant's business had been
conducted by Tenant. Gross Sales shall not include sales of
merchandise for which, and to the extent that, cash has been
refunded, or allowances made on merchandise claimed to be
defective or unsatisfactory, provided they shall have
originally been included in Gross Sales; and there shall be
deducted from Gross Sales the sale price of merchandise
returned by customers for exchange, provided that the sale
price of merchandise delivered to the customer in exchange
shall be included in Gross Sales.
If Tenant charges its customers a restocking fee or any other
kind of fee, cost, or expense as part of processing a return
of an item of merchandise, then Tenant shall deduct from Gross
Sales the amount equal to the value of the refunded item minus
the total of such fees, costs, or expenses. Gross Sales shall
not include the amount of any sales, use, service, gross
receipts or other like tax imposed by any federal, state,
municipal or governmental authority directly on sales and
collected from customers, provided that the amount thereof is
added to the selling price or absorbed therein, and paid by
the Tenant to such governmental authority. No franchise,
capital stock or personal property tax and no income or
similar tax based upon income or profits as such shall be
deducted from Gross Sales in any event whatsoever. Each charge
or sale upon installment or credit shall be treated as a sale
for the full price in the calendar month during which such
charge or sale shall initially be made, irrespective of the
time when Tenant shall receive payment (whether full or
partial) therefor. There shall be no deduction for uncollected
or uncollectible credit accounts or for bad debts or other
losses.
9. The following shall be added to Section 7 of the Lease:
(1) If Tenant's Use of the Premises includes any of the
following (restaurant, food preparation, sale of food prepared
in or from the Premises, catering or automotive service or
supply), Tenant shall be responsible for the installation,
servicing, maintenance and any replacement of a grease trap
system, the size of which shall effectively contain all grease
generated from the Premises. Tenant shall contract with a
recognized grease removal contractor approved by the Landlord
and ensure that the Landlord is at all times during the Term
or any extensions thereof provided with a copy of the then
current contract. Should a blockage occur because of the
discharge of fats, petroleum oil, non
biodegradable cutting oil, products of mineral oil origin or
grease from the Premises, Tenant shall be liable for all costs
to clean and clear the sewer line as well as the costs for
damage done to adjoining tenants' property. If Tenant's sewer
discharges violate any of the local, state or federal stream
standard ordinances regarding prohibited waste discharges or
creates a public nuisance, Tenant shall be solely responsible
for any and all fines levied against the Landlord, its Agent
or neighboring tenants. Noncompliance with any of the above
regulations shall result in a Default of the Lease and shall
be subject to monetary penalties contained herein.
And the following shall replace the remainder of this Section:
The term "Landlord" as used in (a) through (1) above shall be
deemed to include Landlord's Managing Agent.
In the event any violation of any of the above rules and
regulations continues after five (5) days following notice to
the Tenant of such violation, beginning on such fifth day
Tenant shall, in addition to any and all other remedies of
Landlord provided in this lease for default by tenant, pay
liquidated damages of Fifty Dollars ($50.00) per day for each
such violation for each day such violation continues. Landlord
reserves the right to adopt additional rules and regulations
in respect to the conduct of Tenant's activities in the
Premises and the Shopping Center, which upon adoption shall be
deemed incorporate herein, provided that Tenant is given
notice thereof.
10. The first sentence of SECTION 15, Assignment, Subletting and Encumbrance
is hereby deleted in its entirety and replaced with the following:
Tenant has the right to assign this Lease or any interest
therein to any affiliate of Dover Saddlery, Inc. without the
necessity of obtaining written consent from the Landlord.
Tenant shall not assign this lease or any interest therein,
whether voluntarily, involuntarily or by operation of law, or
sublet the Premises or any portion thereof to any person or
entity other than an affiliate of Dover Saddlery, Inc. without
the prior written consent of the Landlord, which consent may
be granted or withheld in the sole discretion of the Landlord,
and no permitted assignment or subletting shall relieve Tenant
of Tenant's covenants and agreement hereunder.
11. Paragraph Notices: Section 21 of the Lease is hereby deleted in its
entirety and replaced with the following:
All notices, demands, requests, consents, approvals and other
instruments required or permitted to be given pursuant to the
terms of this Lease shall be deemed sufficiently given or
rendered if in writing and hand delivered, sent by registered
or certified mail, postage prepaid, return receipt required,
or deposited with a recognized overnight courier (such as
United Parcel Service or Federal Express, e.g.,), addressed to
Tenant at Tenant's address or Landlord at Landlord's address,
as the case may be, and any such notice shall be deemed to
have been delivered on the date received, refused or returned
for insufficient address. Landlord and Tenant shall each have
the right from time to time to specify as its address for the
purposes of this Lease any other addresses in the United
States of America upon three days' notice thereof, similarly
given, to the other party.
LANDLORD'S ADDRESS: c/o Great Eastern Management Company, P.O.
Box 5526, Charlottesville, VA 22905-5526 (Physical Address:
2619 Hydraulic Road, Charlottesville, VA 22901)
TENANT'S ADDRESS: Old Dominion Enterprises, Inc. c/o Dover
Saddlery, 525 Great Road, Littleton, MA 01460
(Contact Name) Stephen Day
(Telephone) 978-952-8062
Tax I.D. Number 20-4417762 Social Security Number N/A
ORGANIZATIONAL NUMBER FROM VIRGINIA SCC: F166762-7
Registered Agent in the Commonwealth of Virginia: CT
Corporation System
Address: 4701 Cox Road, Suite 301, Glen Allen, VA 23060-6820
Phone: 804-217-7255
12. Rivanna Realty and Investment Company represents the Landlord in this
transaction. The General Partner of the Landlord, Great Eastern Management
Company ("Great Eastern"), is a licensed real estate brokerage firm. Mr.
Everett S. Hopkins, Jr., an employee and officer of Great Eastern, holds
an active real estate license. Mr. Hopkins and Mrs. Dotty N. Hopkins, who
is also employed by Great Eastern and holds an active real estate license,
are limited partners in a partnership which owns a limited partnership
interest in Landlord.
13. The persons executing this Extension Agreement on behalf of the Tenant
hereby covenant and warrant that with respect to such Extension, (i) the
Tenant is a duly constituted corporation in good standing and currently
qualified to do business in the state in which the Shopping Center is
located; (ii) all Tenant's franchise and corporate taxes have been paid to
date; (iii) all future forms, reports, fees and other documents necessary
for Tenant to comply with applicable laws will be filed by Tenant when
due; and (iv) such persons are duly authorized by the governing body of
such corporation to execute and deliver the Extension Agreement on behalf
of the corporation.
14. Except as amended by this Extension Agreement, the provisions of the Lease
shall otherwise remain in full force and effect.
15. A violation of any of the provisions in this Extension Agreement shall
constitute a Default under the terms of the Lease.
16. Unless otherwise defined herein, all capitalized terms shall have the
meaning set forth in the Lease.
17. In the event of a conflict between the terms of this Extension Agreement
and any other provisions of the Lease, the terms of this Extension
Agreement shall prevail.
18. This document may be signed via facsimile and/or in counterparts with the
same full force and effect as if all signatures were original and on one
document.
WITNESS, the following signatures:
LANDLORD:
Sequel Investors Limited Partnership,
a Virginia limited partnership
By: Great Eastern Management Company, Agent
Witness/Attest:_______________ by:_________________________________________
Date:_________________________ its:_____________________________________
TENANT:
Old Dominion Enterprises, Inc.
Witness/Attest:_______________ By:________________________________________
Date:_________________________ its:____________________________________
GUARANTOR:
Witness/Attest:_______________
Date:_________________________ _____________________________________________
Reynolds Young
NEW GUARANTOR:
Dover Saddlery Retail, Inc.
Witness/Attest:______________ By:____________________________________________
Date:________________________ its:________________________________________