EXHIBIT 10.15
LEASE AGREEMENT
THIS LEASE made and entered into as of the 1st day of March, 1996, by and
between THE MARTIN W. SPECTOR IRREVOCABLE TRUST, DOROTHY JOY SPECTOR, TRUSTEE,
MICHAEL J. SPECTOR, TRUSTEE, ROSALIND S. ZACKS, TRUSTEE, BAYARD SPECTOR, TRUSTEE
AND ANN S. LIEFF, TRUSTEE, hereinafter referred to as "Landlord," "Lessor," or
"Owner" and SPEC'S MUSIC, INC., a Florida corporation, hereinafter referred to
as "Tenant" or "Lessee":
W I T N E S S E T H:
ARTICLE I - PREMISES, TERM & OCCUPANCY
SECTION 1.1 - LEASED PREMISES:
The Landlord does hereby lease unto Tenant and Tenant does hereby hire and
take from Landlord, those certain premises, now erected in Coral Gables, Dade
County, Florida located at 1570 - 1574 South Dixie Highway, Coral Gables,
Florida 33146 hereinafter sometimes referred to as "the leased premises" or the
"premises" or the "demised premises". The legal description for the leased
premises is more particularly described as :
LOTS C,D,E, F, G, AND H TO REPLAT OF A PORTION OF BLOCK 199 OF CORAL
GABLES RIVIERA SECTION PART 14, ACCORDING TO THE PLAT THEREOF AS RECORDED
IN PLAT BOOK 53 AT PAGE 97 OF THE PUBLIC RECORDS OF DADE COUNTY, FLORIDA
The Building located on property taxed under Dade County Folio Numbers:
03 4130 010 0020, 03 4130 010 0030, 03 4130 010 0040, 03 4130 010 0050.
It is understood and agreed that such description of the leased premises
is intended to and shall be construed to include the store front, all exterior
walls of the Building, the roof, soffits, exterior doors, display windows.
Tenant shall have the right to use the parking lot and any alleyways surrounding
the Building, for employee and customer ingress and egress to and from the
leased premises, loading and unloading and for other reasonable purposes, in
common with others entitled by law to use the Alley and/or parking lot.
Landlord reserves the right from time to time to make changes, additions
and eliminations to the Building, including the alleyways and parking lot
surrounding the Building, sometimes referred to in this Lease as the "Alley" or
"Alleyway") provided that these changes, additions and eliminations do not
unreasonably and materially interfere with the leased premises or with the
Tenant's use of the leased of the leased premises and provided that any such
modification does not eliminate more than 5% (Five ) percent of the parking for
the premises without the Tenants approval and provided that any such
modification does not modify access through the frontage of the premises .
Landlord and Tenant agree to execute the necessary documents and to
acknowledge such modifications, and such modifications shall in no way
invalidate this lease, provided that these modifications do not violate the
conditions set forth in the immediately preceding paragraph.
SECTION 1.2 - TERM:
(a) BASE TERM. This Lease shall commence as of March 1, 1996 (the Lease
Commencement Date). The base term is that period of time from the Lease
Commencement Date through and including the close of business on the 31st day of
January, 1999.
(b) OPTION TERM. There are no renewal options granted hereunder.
SECTION 1.3 - OCCUPANCY:
Except as hereinafter in this Lease specifically provided, Landlord shall
deliver possession of the leased premises in "AS IS" condition, without warranty
or representation on the part of the Landlord as
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Lessor Tenant
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to the condition of the premises. Landlord shall have no responsibility or
liability for loss or damage to fixtures, facilities or equipment installed or
left on the premises, except as otherwise specifically provided in this Lease.
By occupying the leased premises, Tenant shall be deemed to have accepted the
same and to have acknowledged that the premises are in the initial condition
required by this Lease. The parties acknowledge that the Tenant is currently in
possession of the premises pursuant to the terms and conditions of a prior lease
between the parties.
ARTICLE II - MINIMUM RENT AND RENT PROVISIONS,
SECURITY DEPOSIT, ADDITIONAL RENT AND PERCENTAGE RENT
SECTION 2.1
A. MINIMUM RENTAL IN BASE YEAR:
Lessee shall pay to the Lessor (subject to Article VII, "Eminent Domain"
or any other section of this Lease, if any, that may specifically provide for a
change in Minimum Rent), a total minimum rental of FOUR HUNDRED SEVENTY EIGHT
THOUSAND EIGHT HUNDRED and no/100 ($478,800.00) Dollars, plus applicable sales
tax for the term of this lease, together with all other amounts payable by the
Lessee pursuant to the terms of this lease. Said rental shall be paid in
installments in advance on or before the first day of each month during the base
term of this lease, each installment to be paid in the amount of THIRTEEN
THOUSAND SIX HUNDRED EIGHTY and no/100 ($13,680.00) dollars per month, PLUS
APPLICABLE FLORIDA SALES TAX. Lessee shall pay the minimum rent herein reserved,
without any demand, deduction or set off, promptly upon the days the same
becomes due and payable, to the Lessor at 6900 Barquera Street, Coral Gables,
Florida 33146-3818 or at such other address or to such other person as may from
time to time be designated by the Lessor.
Should the Rent Commencement Date occur on a day other than the first day
of a calendar month, then the Rent for the period from such date to the first
day of the first full month shall be prorated on a per-diem basis.
B. PERCENTAGE RENT: (as hereinafter defined) calculated and paid as
provided in Section 2.4.
C. SURVIVAL OF RENTAL OBLIGATION: Tenant's obligation to pay rent and all
other amounts due hereunder shall survive the expiration or termination of this
Lease due to the lapse of time or otherwise.
D. ALL PAYMENTS DUE AS RENT: Notwithstanding anything in this Lease to the
contrary, all amounts payable by Tenant to Landlord under this Lease, whether
denominated as other charges and whether or not expressly denominated as rent
shall constitute rent for purposes of this Lease and for purposes of the
Bankruptcy Code.
SECTION 2.2 - SECURITY DEPOSIT:
A. AMOUNT OF SECURITY DEPOSIT.
1. The Landlord agrees to waive the requirement of a security
deposit from the Tenant subject to the provisions of Section 2.2 A.
2. In the event the Tenant transfers or sells its leasehold interest
herein, any successive Tenant shall post a security deposit with the Landlord
equal to three months rent based upon the monthly amount of the maximum base
rent due under this lease, which shall be treated by the Landlord as the rent
for the last month of this Lease, with the balance thereof applied as a
"Security Deposit" for the faithful performance by the Tenant of each and every
obligation under the terms of this Lease Agreement.
3. In the event the Tenant is in default in the performance of any
material monetary obligation pursuant to the terms of this Lease which remain
uncured for a period of 30 days after written notification has been given to the
Tenant, then and in those events, the Landlord may demand that the Tenant post a
security deposit equal to 2 months rent with the Landlord.
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4. Any Security Deposit made hereunder may be commingled with other
funds of Lessor, and Lessor shall have no liability for the accrual or payment
of any interest thereon. In the event of the failure of Tenant to keep and
perform any of the terms, covenants and conditions of this Lease to be kept and
performed by Tenant, then Lessor, at its option, may apply said Security
Deposit, or as much thereof as Lessor may deem necessary, to compensate Lessor
for all loss or damage sustained or suffered by Lessor due to such default or
failure on the part of Tenant, and Tenant shall remit to Lessor, within five
days of Lessor's demand, such additional funds as is necessary to restore
Tenant's Security Deposit to its previous level and failure to do so shall
constitute a breach of this Lease. Provided however that this provision is not
intended to be construed to mean that the Tenant is authorized to transfer or
sell its leasehold interest.
B. LANDLORD'S TRANSFER OF SECURITY DEPOSIT.
Lessor may deliver any Security Deposit it may be holding to the
assignee of Lessor's interest in the BUILDING PREMISES, in the event that such
interest be sold, and upon the transferee's receipt Lessor shall be discharged
from any further liability with respect to such Security Deposit.
C. TENANT'S ENCUMBERING OR TRANSFER OF SECURITY DEPOSIT.
Tenant shall not pledge, assign or encumber said Security Deposit.
SECTION 2.3 - LATE RENT CHARGES:
Lessee acknowledges that late payment by Lessee to Lessor of rent will
cause Lessor to incur costs not contemplated by this lease, the exact amount of
such costs being extremely difficult and impractical to fix. Such costs include,
without limitation, processing and accounting charges, and late charges that may
be imposed on Lessor for late payment of obligations paid out of the cash flow
from Lessee. Therefore, if any installment of rent due from Lessee is not
received by Lessor when due, or within 15 days thereafter, Lessee shall pay to
Lessor, as a late charge, an additional sum of one per cent (1%) of the minimum
monthly rent due. Provided, however, that the Tenant shall be entitled to two
(2) late payments per annum before any fee is charged. The parties agree that
this late charge represents a fair and reasonable estimate of the costs that the
Lessor will incur. Acceptance of a late charge shall not constitute a waiver of
Lessee's default with respect to the overdue amount, or prevent Lessor from
exercising any of the other rights and remedies available to Lessor.
SECTION 2.4 - PERCENTAGE RENT:
A. PERCENTAGE RENT RATE: Four percent (4%) of Gross Sales.
B. PERCENTAGE RENT PERIOD: Calendar year.
C. TRADE AREA: A radius of one (1) mile from the premises. Tenant
covenants and agrees at all times during the term and such further time as the
Tenant occupies the premises or any part thereof that in the event it competes
directly or indirectly with the premises by operating, managing or having any
interest in any other store located within the stated Trade Area, which is used
for the same or a similar use as any one of the uses which is a "USE" hereunder
or which utilizes the same or a similar Trade Name as that specified herein; or,
if Tenant is a corporation, if any officer or director or any other shareholder
owning a controlling interest in Tenant or any entity affiliated with Tenant in
any manner whatsoever, having any such interest, directly or indirectly operates
or manages such store; or, if Tenant is a Partnership, if any partner owning
more than 10% of the Partnership interests owned by all Partners have any such
interest, directly or indirectly operates or manages such store, then and in
that event, the parties agree that the Annual Minimum Rental shall be increased
by the percentage rent paid by the Tenant to the Landlord pursuant to Section
2.4 herein for the preceding twelve (12) month period and such Minimum Rental
shall in no event during the remaining term of this Lease Agreement be less than
the Annual Minimum Rental plus the Percentage Rent paid for the preceding twelve
month (12) month period. In the event of any increase in the Minimum Rental due
to the infringement by the Tenant of the "Trade Area" in accordance with this
Article II Section 2.4 C., Percentage Rental shall continue, however the
"Breakpoint" shall be adjusted as set forth below in Article II Section 2.4 F.
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Tenant hereby represents and warrants that as of the date of this Lease there is
no store existing within Tenants Trade Area of the type described above.
D. OPERATING YEAR: The term "Operating Year" means a period of twelve (12)
consecutive calendar months with the first Operating Year commencing on the
Commencement Date, unless the Commencement Date does not fall on the first day
of a calendar month, in which event the first Operating Year shall commence on
the first day of the first calendar month immediately following the Commencement
Date and each succeeding Operating Year commencing upon the anniversary date of
the first day of the first Operating Year.
E. DEFINITION OF GROSS SALES: The term "Gross Sales" is defined to mean
the total amount in dollars of the actual sales price, or in the event of trade
or barter, the fair market value at retail of any item or service traded or
bartered, whether for cash, credit, trade, barter or otherwise or partly for
cash, partly on credit, partly for trade and/or partly for barter, of all goods,
wares and merchandise sold, charges for all services performed and all other
receipts of business conducted in or from the Premises without deduction or
reserve for uncollected or uncollectible amounts, including, without limitation,
all catalogue, mail, telephone, telegraph and/or electronic sales and orders
received or filled at or from the Premises, all deposits not refunded to
purchasers, all orders taken in and from the Premises whether or not such orders
are filled elsewhere, receipts or sales through any vending machine or other
coin or token operated device, receipts from any rentals made from the Premises
and receipts or sales by any sublessee, concessionaire, licensee and any other
person or entity doing business in or from the Premises. Nothing contained in
this Article shall be deemed to permit Tenant to sublease all or a portion of
the Premises or allow a concessionaire to conduct business therein, without
Landlord's prior written consent. Gross Sales shall not include any sums
collected and paid out by Tenant for any sales or retail excise tax imposed by
any duly constituted governmental authority, any exchange of goods or
merchandise between the stores of Tenant where such exchange of goods or
merchandise is made solely for the convenient operation of the business of
Tenant and not for the purpose of consummating a sale which has been made at, in
or from the Premises, the amount of returns to shippers or manufacturers, the
amount of any cash or credit refund made with respect to any sale where the
merchandise sold at or from the Premises, or some part hereof, is thereafter
returned by the purchasers and accepted by Tenant, nor sales of fixtures which
are not a part of Tenant's stock-in-trade. Each sale upon installment or credit
shall be treated as a sale for the full price in the month during which such
sale is made, irrespective of the time when Tenant may receive payment from its
customer and no deduction shall be allowed for uncollected or uncollectible
credit accounts. No deduction shall be made from Gross Sales for any franchise,
income or gross receipts taxes, or for any other taxes based upon income of
Tenant or for any use, intangible or property tax assessed against Tenant.
Notwithstanding the foregoing, Gross Sales shall not include, or if included in
the calculation of Gross Sales, there shall be deducted, as the case may be,
provided that specific record is made at the time of each transaction: (I) the
actual net amount of refunds, credits or allowances actually made or allowed by
Tenant in accordance with reasonable business practices upon transactions
included within Gross Sales where the item is returned by the purchaser to and
accepted by the Tenant (provided that anything given in exchange for returned
items and any such credits to customers shall be included in Gross Sales when
used): (ii) sales or retailers excise taxes which are separately added by Tenant
to the sales price, paid directly by the customer, collected by Tenant and
actually paid over to the governmental taxing authorities, but not deducting
from Gross Sales any other tax of any nature: (iii) the exchange of merchandise
between stores of Tenant where such exchanges are made solely for the convenient
operation of Tenant's business and not for the purpose of consummating a sale
which has been made at, on, in or from the Leased Premises herein: (iv) returns
to shippers or manufacturers for credit: (v) sales of fixtures which are not
part of Tenant's stock in trade: (vi) bulk sales or wholesale transfers of
merchandise not in the ordinary course of business: and (vii) the following,
only to the extent that they do not, in the aggregate, exceed two percent (2%)
of Gross Sales in any Lease Year or Partial Lease Year: (a) sales to employees
of Tenant at a discount: (b) Tenant's accounts receivable consisting of bad
checks and bad debts; provided, however, if such accounts are actually collected
later, the amounts shall be included in Gross Sales at such time, and further
provided Tenant shall use reasonable efforts within the retail trade to collect
such bad checks and bad debts: (c) service charges levied against sales through
the use of national bank cards or other similar third party credit services such
as Visa or MasterCard and check verification charges: (d) the amount received
from the sale of gift certificates at the Leased Premises pursuant to Tenant's
bookkeeping practices: (e) the cost of Special Event Tickets less the amount of
commission earned thereon (provided, however, that Tenant shall keep separate
records evidencing the cost of such tickets and the commission
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earned and all such commission shall be included in Gross Sales): and (f)
discounts received by Tenant from the State of Florida taxing authority for T
enant's payment of sales tax.
F. PERCENTAGE RENT DEFINED: During each calendar year and partial calendar
year during the Term, Tenant shall pay Landlord, as additional rent, percentage
rent (the "Percentage Rent") in an amount equal to the product of the Percentage
Rent Rate multiplied by the amount, if any, by which Tenant's total Gross Sales
for such calendar year or partial calendar year exceeds the sum of the total
Monthly Base Rent due and payable for such calendar year or partial year divided
by the Percentage Rent Rate (the "Breakpoint"). The Percentage Rent shall first
be paid within the earlier of: (I) 30 days after the expiration or termination
of this Lease or (ii) 30 days after the first calendar month in which Tenant's
total Gross Sales for such calendar year or partial calendar year shall first
have exceeded the Breakpoint and thereafter shall be paid on all additional
Gross Sales made during the remainder of such calendar year or partial calendar
year within the earlier of: (I) 30 days after each remaining calendar month for
such calendar year or partial calendar year or (ii) 30 days after the expiration
or termination of this Lease. Promptly after receipt by landlord of Tenant's
Annual Statement of Tenant's Gross Sales, as provided in paragraph "G" below,
there shall be an adjustment between Landlord and Tenant, with payment to or
credit by Landlord, as the case may require, to the end that Landlord shall be
paid with respect to each calendar year or partial calendar year, an amount
equal to the product of the Percentage Rent Rate multiplied by an amount equal
to the excess, if any, of Tenant's Gross Sales during each calendar year or
partial calendar year over the Breakpoint. Each party's obligations under this
Section shall survive the expiration or termination of this Lease due to the
lapse of time or otherwise. Anything else to the contrary notwithstanding, the
parties agree that in the event the Monthly Base Rent is increased in accordance
with the terms of Article II Section 2.4 C., the "Breakpoint" shall also be
readjusted up-ward to correspond with the definition established in this
Subparagraph (F).
G. MAINTENANCE OF RECORDS AND EXAMINATION: Tenant shall utilize cash
registers equipped with sealed continuous, cumulative totals, or such other
method as may be first approved by Landlord in writing, to record all Gross
Sales during the Term. During and for at least thirty-six (36) months after the
expiration of each calendar year or partial calendar year, Tenant shall keep at
Tenants main corporate office in Florida all original books and records
conforming to generally accepted accounting practices showing all of the Gross
Sales and such other information with respect to such Gross Sales, at, from and
upon the Premises for such calendar year or partial calendar year, including,
but not limited to, all tax reports, sales slips, sales checks, bank deposit
records and other supporting data. Tenant shall notify Landlord of the
manufacturer, model and serial number of all cash registers used on the Premises
and of any changes or additions within five (5) days after the use thereof has
commenced. If Landlord contends there may be an error with respect to any of
Tenant's books, records, papers or files and Landlord so notifies Tenant prior
to the expiration of such thirty-six (36) month period, such period shall be
extended until Landlord's contention has been finally determined. Within fifteen
(15) days after the end of each calendar month or partial calendar month during
the Term, Tenant shall furnish Landlord with a written statement, sworn to by
Tenant, if an individual, by a general partner of Tenant, if a partnership, or
by one of Tenant's executive officers if a corporation, of Tenant's Gross Sales
during such month or partial calendar month. Within sixty (60) days after the ed
of each calendar year or partial calendar year during the Term, Tenant shall
furnish Landlord with a written statement prepared and certified by Tenant's
Chief Financial Officer, of Tenant's Gross Sales during such calendar year or
partial calendar year (the "Annual Statement"). Landlord shall have the right
from time to time to audit or have its accountants or other representatives
audit all Annual Statements of Gross Sales and in connection with such audits to
examine all of Tenant's records (including any supporting data) of Gross Sales
and Tenant shall make all such records available for such examination at the
Tenants main corporate office in Florida. If any audit discloses that the actual
Gross Sales by Tenant exceeded those reported, Tenant shall pay the Percentage
Rent due with respect to the excess plus interest thereon at the Default Rate,
as hereinafter defined, from the date such amount should have been paid to
Landlord. If such audit discloses that the actual Gross Sales exceeded those
reported by Tenant by more than two percent (2%), Tenant shall also pay, in
addition to any deficiency in Percentage Rent plus interest at the Default Rate,
the cost of such audit and examination. If such audit discloses that the actual
Gross Sales exceeded those reported by Tenant by more than five percent (5%),
Landlord shall have, in addition to all other available rights and remedies, the
remedies provided for in this Section and the balance of this Lease Agreement
and the Tenant shall promptly pay Landlord, the cost of such audit along with
the deficiency in such Percentage Rate plus interest at the Default Rate. If any
such audit discloses that actual Gross Sales by Tenant were less than those
reported, and, as a result thereof, Tenant paid more Percentage Rent than was
due hereunder,
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Landlord shall refund to Tenant the amount of the excess Percentage Rent. If
Tenant shall fail to furnish the Annual Statement within sixty (60) days after
each calender or partial calender year, or if Tenant's Gross Sales cannot be
verified due to the insufficiency or inadequacy of Tenant's records, then the
Landlord shall have the right to cause a Certified Public Accountant to audit,
at Tenant's expense, Tenant's records and prepare and certify therefrom the
Annual Statement and Tenant shall make all records available for such audit. Any
information obtained by Landlord pursuant to the provisions of this Section
shall be treated as confidential except in any dispute, litigation or
arbitration proceedings between the parties, provided that Landlord may disclose
such information to its mortgagees and to prospective buyers, brokers, lenders,
tax authorities and pursuant to legal requirements. Landlord's right to audit
Tenant's books and records as provided herein shall be limited to the books,
records, entries and other data relating to Tenant's business in and from the
Premises only and Landlord shall not have the right to inspect or audit any
books and records relating to other business locations of Tenant. The Default
Rate is defined in Article X Section 10.11 below.
ARTICLE III - USE OF PREMISES
SECTION 3.1 - COMPLIANCE WITH REGULATIONS
Tenant shall promptly comply with all laws, ordinances and governmental
regulations relating to Tenant's use of the leased premises, unless the Tenant
is prevented from doing so by the action or inaction of the Landlord.
Tenant shall have the right upon giving notice to Landlord to diligently
contest in good faith any obligation imposed upon Tenant pursuant to the
provisions of this Section 3.1 and to defer compliance during the pendency of
such contest, provided that the failure of Tenant to so comply will not subject
Landlord to prosecution or penalty, nor delay the payment of Rent and other sums
due to Landlord when otherwise due. Any penalties or fines shall be paid by the
Tenant. Landlord shall cooperate with Tenant in such contest and shall execute
any documents reasonably required in furtherance of such purpose.
SECTION 3.2 - CARE OF PREMISES:
Tenant shall not perform any acts or carry on any practices which may
injure the building or be a nuisance or menace in the community and shall keep
the premises under its control including the sidewalks adjacent to the premises
and loading areas allocated for the use of the Tenant, clean and free from
rubbish and dirt at all times, and shall store all trash and garbage within the
leased premises or special areas provided for such use. Tenant shall not burn
any trash or garbage of any kind in or about the building or the alley behind
the building. Tenant agrees that the plumbing facilities will not be misused and
any damage so caused is to be borne by the Tenant. Tenant further agrees that it
will not create a waste or nuisance on the premises, and will do nothing and
perform no act upon the premises which would materially and adversely affect the
business of surrounding merchants in the building.
SECTION 3.3 - MISCELLANEOUS USE PROVISIONS:
(a). In the operation of its business, the tenant shall not use or
obstruct the sidewalks adjacent to the demised premises.
(b). Tenant agrees not to indulge in or to permit any fraudulent or
misleading advertisement or promotion concerning its business.
(c). Tenant agrees that no auction, fire, bankruptcy or any other sales of
any kind may be conducted in the demised premises without prior written consent
of Landlord, which said consent shall not be unreasonably withheld.
(d). Tenant shall not permit any business to be operated in or from the
leased premises by any concessionaire or licensee without the prior written
consent of Landlord, which consent shall not be unreasonably withheld.
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SECTION 3.4 - PERMITTED PURPOSE, USE, AND CHANGE OF USE, OF PREMISES:
(a) The sale to the general public of all forms of prerecorded music,
which include LP's, cassettes, digital compact cassette, compact discs, mini
discs, digital audio tape, and similar products. The sale and rental of
pre-recorded movies and videos on VHS, beta, laser disc on CLV and DCV formats,
and the retail sale of all music, video, video books and magazines (as a use
incidental to the other uses listed herein) computer software including CD-I and
CD-ROM, and accessories, which include but are not limited to blank audio and
video tape, personal electronics, sheet music, video games, cleaning kits,
related boutique items such as T-shirts, buttons, carrying cases, headphones,
radios, boom boxes, entertainment industry related products, posters and
concert, show and sporting event tickets, and for such other purposes as the may
be specifically approved by the Landlord from time to time.
(b) No change of use from that described in ss.3.4(a), above, or from
another use that has been previously and duly approved in writing by the
Landlord, is permitted under this Lease without the prior written consent of the
Landlord, which consent may be unreasonably withheld.
ARTICLE IV - REPAIRS AND ALTERATIONS
SECTION 4.1 - REPAIRS:
(a) Tenant shall be solely responsible for and shall keep and repair at
its own expense entire premises, including but not limited to the roof, the
exterior walls of the leased premises (including but not limited to: painting,
graffiti removal, vandalism and damage), the ventilating, plumbing, electrical
wiring, lights, fixtures, glass, doors, floors and floor coverings, sewage
facilities, grease traps, air conditioning and heating and all other structural
and non-structural parts of the premises, interior and exterior in good
condition including exterior painting and roof repairs. Landlord may, but IS NOT
REQUIRED TO MAKE any such repairs which become necessary or desirable by reason
of the neglect or negligence of the Tenant, its agents, servants, employees or
customers. The Tenant shall be responsible to maintain the roof (in a watertight
condition), gutters, foundation, exterior walls of the Building (including glass
and doors) down spouts and all other major structural portions of the premises,
the parking and alleyways surrounding the building and the building including
the concrete floors in good condition. In no event shall the Landlord shall be
liable to tenant for any water damage caused by any defect or required repair to
the roof or any portion of the premises. Notwithstanding that the Lessee shall
be responsible for all repairs to the premises, the Tenant agrees to give
Landlord immediate notice in writing of any major repairs required and/or being
performed.
(b) Lessee agrees to keep and maintain the parking lot and the alleyways
immediately surrounding the leased premises and to keep the Premises, free from
its trash and debris. In the event the Tenant fails or refuses to so maintain
the premises or any portion thereof, the Landlord may, at its option, do so at
the expense of the Tenant.
SECTION 4.2 - ALTERATIONS:
Tenant shall not make any substantial alterations or substantial additions
to the leased premises without first procuring Landlord's written consent and
delivering to Landlord the plans and specifications therefor, and furnishing
indemnification against liens, costs, damages and expenses as may be required by
Landlord, which consent shall not be unreasonably withheld.
All alterations, additions, improvements and fixtures, other than
removable trade fixtures, which may be made or installed by upon the premises by
the Tenant unless same are in any manner attached to the floors, walls or
ceiling, shall remain upon and be surrendered with the premises as a part
hereof, without disturbance, molestation or injury at the expiration of this
Lease and any extensions hereof. Any linoleum or other floor covering of similar
character which may be cemented or otherwise adhesively affixed to the floor of
the herein leased premises shall be and become the property of the Landlord
absolutely.
The tenant shall not subject the premises to the lien of any mechanic or
materialman.
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ARTICLE V - UTILITY SERVICES AND CHARGES
SECTION 5.1 - ELECTRICITY & TELEPHONE, ETC.:
The Tenant shall be responsible for, at its own cost, and shall make its
own arrangements with utility service companies for telephone, water, gas,
electric, garbage and sanitation, and such other services as may be required by
the Tenant.
Landlord shall have no responsibility for the discontinuance of any of the
above services contracted for by the Tenant, unless due to Landlord's actions,
and the discontinuance or interruption of services shall not be construed as an
eviction or disturbance of possession by the Landlord.
ARTICLE VI - INSURANCE
SECTION 6.1 - COVENANT TO HOLD HARMLESS:
With the exception of the Landlords gross negligence, the Tenant agrees to
indemnify and save Landlord harmless against and from any and all claims for
bodily injury and property damage and all costs and expenses, including
reasonable attorney's fees, arising from the conduct or management of the
business conducted by Tenant in the leased premises, or from any act of
negligence of Tenant, its agents, contractors, servants, employees, sublessees,
concessionaires or licensees in or about the leased premises. In case any action
or proceeding is brought against Landlord by reason of any such claim, Tenant
upon notice from Landlord, covenants to defend such action or proceeding by
counsel satisfactory to Landlord. It is further understood and agreed that
Landlord shall not be liable, and Tenant waives all claims for damage to person
or property sustained by Tenant or Tenant's employees agents, servants, invitees
and customers resulting from the building in which the leased premises are
situated or the leased premises, or any equipment or appurtenance, becoming out
of repair, or resulting from any accident in or about said building or the
leased premises, or resulting directly or indirectly from any act or negligence
of any subtenant.
SECTION 6.2 - LIABILITY INSURANCE:
Tenant shall, during the entire term hereof, keep in full force and effect
a policy of public and/or commercial general liability with bodily injury and
property damage insurance, with respect to its property in the demised premises
and the business operated by the Tenant and/or any subtenants or concessionaires
of Tenant in the demised premises which will fully cover the Tenants contractual
liability to the Landlord under this lease, and which the limits of public
liability for bodily injury shall be not less than $500,000.00 PER PERSON AND
$1,000,000.00 PER ACCIDENT, and property damage liability shall not be less than
$1,000,000.00 per accident. Tenant agrees to maintain insurance coverage as
required above naming Landlord as an additional insured and agrees to provide a
copy of said insurance to the Landlord.
SECTION 6.3 - PLATE GLASS INSURANCE:
Tenant shall carry plate glass insurance at the full insurable value
thereof on all exterior plate glass and other glass in the demised premises and
in the storefront. In the alternative, provided the Tenant is not in default in
the payment of rent or in the performance of other covenants and obligations
under this Lease, the Tenant may self insure for any casualty provided for in
this section.
SECTION 6.4 - INSURANCE ON TENANT'S FIXTURES:
Tenant will carry fire and extended coverage insurance on all fixtures in
the leased premises for at least eighty (80%) per cent of their insurable value.
SECTION 6.5 - COPIES OF POLICIES:
A copy of all policies or certificates of insurance, which shall include
protection of Landlord's interests as required by this Lease, shall be delivered
to Landlord with a commitment from the insurance carrier endorsed thereon, which
provides that said policy will remain in force and effect until at least
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after thirty (30) days notice in writing is given to the Landlord of any change
and/or cancellation of coverage.
SECTION 6.6 - FIRE AND EXTENDED COVERAGE INSURANCE ON THE BUILDING:
Landlord shall obtain fire and extended coverage insurance (or
substantially similar insurance denominated in the insurance trade by any other
name or label such as Special or All Risk) on the Building and premises, the
cost of same shall be paid by the Tenant.
SECTION 6.7 - BUSINESS INTERRUPTION INSURANCE:
Tenant shall at its own expense carry business interruption insurance for
the purpose of insuring that Landlord shall suffer no loss of rent in the event
of fire or other such casualty.
SECTION 6.8 - LANDLORD'S RIGHT TO PLACE INSURANCE:
If, after Ten (10) days written notice, Tenant refuses or neglects to
place insurance required by this Lease, and/or refuses or neglects to furnish
Landlord with copies of such policies as required by this article, Landlord may
place and pay for such insurance or any part thereof, and in that event Tenant
will pay to Landlord, on demand, the amount of the premiums paid by Landlord.
SECTION 6.9 - RELEASE BY TENANT:
Notwithstanding any other provision of this Lease, Landlord shall not be
liable or responsible for, and Tenant hereby releases the Landlord and its
partners, officers, directors, agents, employees and beneficiaries from, any and
all liability or responsibility to Tenant or any Person claiming by, through or
under Tenant, by way of subrogation or otherwise, for any injury, loss or damage
to Tenant's property covered by valid and collectible fire insurance policy with
extended coverage endorsement.
ARTICLE VII - LOSS OF FACILITIES BY EMINENT DOMAIN
SECTION 7.1 - IF WHOLE TAKEN:
If the whole of the demised premises should be taken under the power of
eminent domain then the term of this Lease shall cease as of the day possession
shall be so taken.
SECTION 7.2 - IF ANY TAKEN:
If any of the floor area of the demised premises shall be taken under the
power of eminent domain and the portion not so taken will not be reasonably
adequate for the operation of Tenant's business after the Landlord completes
such repairs or alterations as the Landlord is obligated or elects to make,
Tenant shall have the right to elect either to terminate this Lease or, subject
to landlord's right of termination as set forth in Section 7.4 of this Article,
to continue in possession of the remainder of the demised premises, and shall
notify Landlord in writing within ten (10) days after such taking of Tenant's
election. In the event Tenant elects to remain in possession, all of the terms
herein provided shall continue in effect, except that the minimum rent shall be
adjusted as provided in Section 7.3, below, but such work shall not exceed the
scope of the work done in originally constructing said building.
SECTION 7.3 - DAMAGES, HOW ALLOCATED:
Anything in this Lease to the contrary notwithstanding, all damages and
proceeds awarded for such taking (full or partial) under the power of eminent
domain or taken under threat of eminent domain, whether for the whole or a part
of the demised premises, shall be just and equitable under the circumstances,
and in the event of a partial taking, rent shall be abated as shall be just and
equitable under the circumstances. If the Parties hereto are unable to agree
upon what division, annual abatement of rent or other adjustments are just and
equitable within thirty (30) days after the fruits of any award have been
received by Lessor, then the matters in dispute shall, by appropriate
proceedings, be submitted to the court having jurisdiction over the subject
matter of such a controversy in Dade County, Florida, for its decision and
adjudication of the matters in dispute.
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SECTION 7.4 - OPTION OF LANDLORD AND TENANT TO TERMINATE:
(a) If fifty per cent (50%) or more of the floor area of the building in
which the demised premises are located or twenty per cent (20%) of the parking
shall be taken under power of eminent domain, or if any portion shall be taken
within ninety (90) days prior to the expiration date of this Lease, Landlord
may, by written notice to Tenant delivered within thirty (30) days after the
date of surrendering possession to public authority pursuant to such taking,
terminate this Lease.
(b) If either a part of the parking area for the Premises is condemned and
taken (not including the Building) or part of the Building itself is condemned
and taken, to such an extent as to render Tenant's utilization of the Tenant's
Premises "commercially impracticable" (e.g., materially affecting gross volume),
then Tenant shall have the right, at its sole discretion, and without prejudice
to its other rights herein, to cancel and terminate this Lease upon the date of
possession of the premises which are the subject of the partial taking, and all
rentals shall be paid up to the date of such cancellation.
SECTION 7.5 - RENT ADJUSTMENT:
If this Lease is terminated as provided in this Article, the rent shall be
paid up to the date that possession is so taken by public authority and Landlord
shall make an equitable pro-rata refund of any rent paid by Tenant in advance
and not yet earned.
ARTICLE VIII - LOSS OF FACILITIES BY DAMAGE
SECTION 8.1 - LOSS BY INSURABLE CASUALTY:
If the demised premises should be damaged or destroyed during the demised
term by any casualty insurable under the required Special/All Risk insurance
policies Landlord shall maintain, Landlord shall (except as hereafter provided),
subject to any unavoidable delay, repair and/or rebuild the same to
substantially the condition in which the same were immediately prior to such
damage or destruction. Landlord's financial obligation to pay for the repairs
required by Lessor under this Section 8.1 shall in no event exceed the proceeds
of its aforementioned casualty insurance policy on building and the demises
premises. Landlord agrees to keep the building and the demised premises insured
against loss or damage caused by fire or any other casualty covered by said
policy to the extent of the replacement value of the Building, from responsible
insurance companies licensed to do business in Florida. Tenant shall, in the
event of any such damage or destruction, caused by said fire or other covered
casualty, unless this Lease shall be terminated as hereinafter provided,
forthwith replace or fully repair all exterior signs, trade fixtures, equipment,
display cases, and other installations originally installed by the Tenant.
Landlord shall have no interest in the proceeds of any insurance carried by
Tenant on Tenant's interest in this Lease and Tenant shall have no interest in
the proceeds of any insurance carried by Landlord.
SECTION 8.2 - OPERATION AND RENT DURING REPAIR PERIOD:
Tenant agrees during any period of reconstruction or repair of the demised
premises and/or of said building to continue the operation of its business in
the demised premises to the extent reasonably practicable from the standpoint of
good business. The rent and all other charges payable by Tenant under this
lease, shall not be abated during any period in which by reason of any such
damage or destruction there is a substantial interference with the operation of
the business of Tenant in the demised premises. However, in the event the Tenant
shall be forced to cease operations due to repairs, this lease shall be extended
for a period of time equal to the time the Tenant ceased operations.
SECTION 8.3 - OPTION TO TERMINATE:
If the building in which the demised premises are located should be
damaged or destroyed to the extent of fifty per cent (50%) or more of the then
monetary value thereof by any cause, and if any such damage occurs at a time
when there is less than two (2) years remaining on this Lease prior to the
expiration date hereof, then the Landlord may either terminate this Lease or
elect to repair or restore said damage or destruction in which latter event
Landlord shall, within six months of the cause of the
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10
damage or destruction, repair and/or rebuild the same as provided in Section 8.1
and the minimum rent shall be abated proportionately as provided in Section 8.2.
If such damage or destruction occurs and this Lease is not so terminated by the
Landlord, this Lease shall remain in full force and effect and the parties waive
the provisions of any law to the contrary. The Landlord's obligation under this
paragraph shall in no event exceed the scope of the work to be done by the
Landlord in the original construction of said building and the demised premises,
or the proceeds received from any insurance policy or policies in effect,
whichever amount shall be less.
SECTION 8.4 - TYPE OF TENANT INSURANCE:
Tenant agrees to comply with all of the rules and regulations of Rating
Bureaus having jurisdiction with respect to the types of insurance carried by
Tenant in accordance with the requirements of this Lease and will not do,
suffer, or permit an act to be done in or about the demised premises which will
increase any insurance with respect thereto existing upon substantial completion
of said building.
ARTICLE IX - REMEDIES
SECTION 9.1 - BANKRUPTCY:
Neither this Lease, nor any interest therein nor any estate thereby
created shall pass to any trustee or receiver or assignee for the benefit of
creditors or otherwise by operation of law.
In the event the estate created hereby shall be taken in execution or by
other process of law, or if Tenant shall be adjudicated insolvent or bankrupt
pursuant to the provisions of any state or federal insolvency or bankruptcy act,
or if Tenant voluntarily petitions for bankruptcy, or if a receiver or trustee
of the property of Tenant shall be appointed by reason of Tenant's property
being taken, attached or operated for the benefit of creditors, then and in any
such events, Landlord may at its option terminate this Lease and all rights of
Tenant hereunder, by giving to Tenant notice in writing of the election of
Landlord to so terminate.
SECTION 9.2 - DEFAULT BY TENANT:
If any rent payable by Tenant to Landlord shall not be paid on its due
date and shall be and remain unpaid for five (5) days after written notice is
given to Tenant, or if Tenant shall violate or default any of the other
covenants, agreements, stipulations or conditions herein, and such violation or
default shall continue for a period of thirty (30) days after written notice of
such violation or default, then it shall be optional for Landlord to declare
this Lease forfeited and the term thereof ended. Any property belonging to
Tenant or any person holding by, through or under it or otherwise found upon the
demised premises may be removed therefrom and stored in any public warehouse at
the cost of and for the account of Tenant. If Tenant abandons, vacates or
surrenders said premises or be dispossessed by process of law, any personal
property left upon said premises shall be deemed abandoned at the option of
Landlord.
SECTION 9.3 - RE-ENTRY BY LANDLORD:
Upon any such termination of the estate as aforesaid, Landlord may
re-enter the leased premises with due process of law using such force as may be
necessary, and remove all persons and chattels therefrom and Landlord shall not
be liable for damages or otherwise by reason of such re-entry or termination of
the term of this Lease. Notwithstanding such termination, the liability of
Tenant for the rent herein provided for shall not be extinguished for the
balance of the term remaining after such termination, and Landlord, and except
as otherwise specifically provided in this Lease, shall be entitled to recover
immediately as liquidated damages an amount equal to the minimum rent for the
balance of the term as provided in Article II. In the event it becomes necessary
for the Landlord to re-enter the premises in the event of a default by the
Tenant the parties specifically agree that the Landlord shall have the right,
but not the obligation, to re-rent the premises (at the option of the Landlord)
and to hold the Tenant liable for any and all sums due including rental
deficiencies, costs including but not limited to real estate brokerage
commissions and reasonable attorney's fees relating to such re-rental.
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SECTION 9.4 - LANDLORD'S PERFORMANCE OF TENANT'S COVENANTS:
In the event upon written demand by Landlord, Tenant fails, neglects, or
refuses to perform within a reasonable time any covenant, agreement or condition
in this Lease provided by it to be done, the Landlord may perform such covenant,
condition or agreement, and any money expended thereon shall be charged to the
account of the Tenant, payable forthwith, on demand, as additional rent, and the
failure of the Tenant to repay Landlord for any money so paid out and expended
shall constitute a default under this Lease.
SECTION 9.5 - RIGHTS CUMULATIVE:
All rights and remedies of Landlord and Tenant herein enumerated shall be
cumulative and none shall exclude any other right or remedy allowed by law, and
said rights and remedies may be exercised and enforced concurrently and whenever
and as often as occasion therefor arises.
SECTION 9.6 - ATTORNEY'S FEES:
If on account of any failure of either party to perform, or violation or
default in the performance of any obligation to pay rent, or any other term,
provision, agreement, covenant, stipulation, obligation or condition hereof, it
shall become necessary for either party to employ an attorney or attorneys to
enforce any of its rights or remedies hereunder, or to defend itself in any
controversy or litigation with the other party, whether or not suit be
instituted, then in any such event, reasonable attorneys' fees shall be
recovered by the prevailing party.
ARTICLE X - MISCELLANEOUS
SECTION 10.1 - SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT:
Tenant agrees that this Lease is, and shall be, subordinate to any
mortgage, deed or trust or any other hypothecation for security which may
hereafter be placed upon said premises or the land or building of which they are
a part and such subordination is hereby effective without any further act by
Tenant PROVIDED that any lender encumbering the Building shall recognize the
interest of the Tenant and execute a Subordination, Non-Disturbance and
Attornment Agreement, along with Lessor, in a form reasonably acceptable to any
lender requiring same, unless this Lease has been terminated, in which case the
Tenant agrees provide written confirmation of same.
SECTION 10.2 - SURRENDER:
On the last day of the term demised or on the sooner termination thereof,
Tenant shall peaceably and quietly surrender the leased premises in good order,
condition and repair, fire (and other unavoidable casualty) and reasonable wear
and tear, and casualty covered by insurance, excepted. All alterations,
additions, improvements and fixtures (other than trade fixtures and signs
installed at Tenant's expense, all of which shall be removed by Tenant) which
may be made or installed by either Landlord or Tenant upon the leased premises,
all air conditioning systems and equipment, ceiling treatments and lights, and
all hard surface bonded or adhesively affixed flooring and tiles shall become
the property of Landlord and shall remain upon and be surrendered with the
leased premises as a part without disturbance, molestation or injury at the
termination of the term of this Lease, whether by the elapse of time or
otherwise, all without compensation or credit to Tenant. Tenant shall also
surrender all keys for the leased premises to Landlord at the place then fixed
for payment of rent and shall inform Landlord of combinations on any locks,
safes and vaults, if any, on the leased premises.
SECTION 10.3 - HOLDING OVER:
In the event Tenant remains in possession of the demised premises after
the expiration of this Lease and without the execution of a new lease, it shall
be deemed to be occupying said premises as a tenant from month-to-month, subject
to all the conditions, provisions and obligations of this Lease insofar as the
same are applicable to a month-to-month tenancy.
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SECTION 10.4 - SALE OF PROPERTY
Landlord shall have the right at any time to sell, transfer and convey the
real estate, improvements and building of which the leased premises are a part
to any person, firm or corporation whatsoever, and upon any such sale, transfer
or conveyance, Landlord shall cease to be liable under any covenant, condition
or obligation imposed upon it by this Lease accruing subsequent to such sale,
transfer or conveyance; provided however, that any such sale, transfer or
conveyance shall be subject to this Lease and that all of the Landlord's
covenants and obligations contained herein shall run with the land and be
binding upon the subsequent owner or owners thereof.
SECTION 10.5 - EXCAVATIONS:
In case any excavation shall be made for buildings or improvements or for
any other purpose upon the land adjacent to or near the leased premises, Tenant
will afford to Landlord, or the person or persons, firms or corporations causing
or making such excavation, license to enter upon the leased premises for the
purpose of doing such work as Landlord or such person or persons, firms or
corporation shall deem to be necessary to preserve the walls or structures of
the building from injury, and to protect the building by proper securing of
foundations. Insofar as Landlord may have control over the same, all such work
shall be done in a manner as will not materially interfere with the operation of
Tenant's business in the leased premises. The parties do hereby specifically
agree that all such work to be performed shall be done without any claim for
damages against the Landlord and without a reduction or rebatement of the rent.
SECTION 10.6 - CONSTRUCTION OF RELATIONSHIP BETWEEN THE PARTIES:
Nothing contained herein shall be deemed or construed by the parties
hereto nor by any third party, as creating the relationship of principal and
agent or of partnership or of joint venture between the parties hereto, it being
understood and agreed that neither the method of computation of rent, nor any
other provision contained herein, nor any acts of the parties herein, shall be
deemed to create any relationship between the parties hereto other than the
relationship of Landlord and Tenant. Whenever herein the singular number is
used, the same shall include the plural, and the neuter gender shall include the
masculine gender and the feminine gender.
SECTION 10.7 - ACCESS TO PREMISES:
Landlord shall have the right to enter upon the leased premises at all
reasonable working hours, upon giving reasonable notice to Tenant, for the
purpose of inspecting the same, or of making required repairs, additions or
alterations to the demised premises or any property owned or controlled by
Landlord. If Landlord deems any repairs required to be made by Tenant necessary,
it may demand in writing that Tenant will make the same forthwith, and if Tenant
refuses or neglects to commence such repairs and complete the same with
reasonable dispatch, Landlord may make or cause such repairs to be made, at the
expense of the Tenant, and shall not be responsible to Tenant for any loss or
damage that may accrue to its stock or business by reason thereof, and if
Landlord makes or causes such repairs to be made, Tenant agrees that it will
forthwith, on demand, pay to Landlord the cost thereof. Nothing herein contained
shall obligate the Landlord to make or perform any repairs which are the
obligation of the Tenant.
Landlord may have reasonable access to the premises herein demised for the
purpose of exhibiting the same to prospective tenants and to place on said
premises the usual "For Lease" or "For Sale" signs, all without rebate of rent
to Tenant, and Tenant specifically agrees that said action by the Landlord shall
not constitute an eviction of Tenant, nor a loss or interruption of the Tenant's
business. The Lessor shall have the right to enter the leased premises and place
for rent, signs in the windows or any other appropriate place of the lease
premises within four months (4) prior to the expiration of this Lease.
SECTION 10.8 - NON-LIABILITY:
Except for acts of gross negligence, the Landlord shall not be responsible
or liable to Tenant for any loss or damage that may be occasioned by or through
the acts or omissions of persons occupying
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13
adjoining premises or any part of the premises adjacent to or connected with the
leased premises or any part of the building of which the leased premises are a
part of or any persons transacting any business in said leased premises or
present in said leased premises for any other purpose or for any loss or damage
resulting to Tenant or its property from burst pipes, stopped or leaking water,
gas, sewer or steam pipes or plumbing fixtures or from any failure of a defect
in any electric line, circuit or facility, or on account of the interruption of
any utility or utilities for maintenance or replacement. Landlord shall not be
responsible or liable to Tenant for any loss or damage resulting to Tenant
arising on account of riots, acts of God, acts of declared or undeclared war,
labor disputes or the making of repairs by Landlord.
SECTION 10.9 - SUCCESSORS AND ASSIGNS - ORIGINAL TENANT'S LIABILITY- RENTAL
INCREASES OR PROFITS TO LANDLORD ON ASSIGNMENT:
Tenant shall not have the right to sell, assign, transfer, mortgage,
encumber, pledge, sublease or in any manner dispose of this Lease or any estate
or interest therein, or permit the premises to be occupied by anyone (all the
foregoing hereinafter a "Transfer") without the previous written consent of
Landlord which said consent SHALL NOT BE UNREASONABLY withheld. However,
Landlord's consent shall not be required for a "Transfer" which occurs as a
result of the sale by Tenant of its assets, or by merger, consolidation or
otherwise or by sale or disposition of control or ownership of the Tenant, in
all of which cases, the Landlord agrees to recognize the successor to the
Tenant, although contemporaneous notice shall be given by the Tenant /Assignor
and any such transfer made in accordance with this Section 10.9 shall not serve
to invoke the provisions of Section 2.2 A. 2.
Consent by Landlord to one or more assignments of this Lease or to one or
more sublettings of said premises shall not operate to exhaust Landlord's rights
under this paragraph.
The voluntary or other surrender of this Lease by Tenant or a mutual
cancellation hereof shall not work a merger, and shall, at the option of
Landlord, terminate all or any existing subleases or subtenancies or shall
operate as an assignment to Landlord of such subleases or subtenancies.
In the event of the assignment or "Transfer" of this Lease whether by
assignment, merger, acquisition or otherwise, by the Tenant which results in the
payment of increased rent, a finders fees, key money or which generates any
similar remuneration or profits, all such proceeds shall be and belong to the
Landlord herein notwithstanding the approval or lack thereof by the Landlord of
any such assignment.
SECTION 10.10 - PAYMENT REQUIRED OF TENANT OTHER THAN MINIMUM AND
PERCENTAGE RENTS:
Any payments required to be made to Landlord by Tenant other than as
minimum rent including Landlord advances for repairs and to cure defaults, not
repaid to Landlord within the time period specified for repayment, or if no time
period is specified for repayment, such repayment shall be within ten (10) days
of demand and shall be considered additional rent for so long as the amounts
shall remain unpaid.
SECTION 10.11 - INTEREST ON DELINQUENT PAYMENTS - DEFAULT RATE:
All amounts payable by Tenant to Landlord as minimum rent, percentage rent
(if and when applicable), or additional rent, or other rent, as defined in
Section 10.10 hereinabove and elsewhere, shall bear interest at the highest rate
allowable by the laws of the State of Florida from due date until paid and for
purposes of this Lease Agreement shall be referred to as the Default Rate.
SECTION 10.12 - PLACE OF PAYMENT:
All payments for rent or otherwise due and payable from Tenant to Landlord
shall be paid to Landlord at 6900 Barquera Street, Coral Gables, Florida
33146-3818 or at such other place as might be designated by Landlord in writing.
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SECTION 10.13 - TENANT TO PAY REAL ESTATE TAXES - MONTHLY ESCROW
Commencing on the Rent Commencement Date, and thereafter for the balance
of the term of this Lease Agreement, as additional rent, the Tenant shall pay
all Real Estate Property Taxes, general and specific due on the property upon
which the leased premises are located (the BUILDING PREMISES), which is
currently taxed under folio numbers 03 4130 010 0020, 03 4130 010 0030, 03 4130
010 0040, 03 4130 010 0050. The taxes referred to in this section shall mean the
combined real property taxes levied and assessed by all taxing authorities
against and upon the building enclosing the leasable space and the land
underlying and surrounding such building and shall include any special
improvement assessments. Said taxes shall be paid monthly to Landlord, if
required by the Landlord. A monthly escrow by the Tenant shall be established
which allows the Landlord to take advantage of all discounts allowed by said
taxing authorities. The Landlord shall not be responsible for the payment of
interest on the escrow. Tenant's responsibility for payment of taxes hereunder
is predicated upon Landlord's payment of the taxes when due in time to take
advantage of the maximum discount available, provided however, that the Tenant
shall first have made payment to the Landlord in time for the Landlord to
reasonably take advantage of the maximum discount available. Provided however,
that so long as the Tenant herein is the original Tenant to this Lease and
further provided that said Tenant shall not be in default of any material
monetary obligation under the terms of this Lease, the Landlord agrees that the
Tenant may at the option of the Tenant avoid any monthly escrow by paying said
taxes each year in time to take advantage of the maximum discount which is
currently November, and providing satisfactory proof of payment of same to the
Landlord.
SECTION 10.14 - PRORATIONS:
Whenever in this Lease any amounts are required to be paid or calculated
for a particular period of time and it becomes necessary or equitable to adjust
such amounts for any fractional portion of such period, such adjustment shall be
made by dividing the amount which would be paid for the particular period by the
number of days in such period and then multiplying such result by the number of
days in such fractional period.
SECTION 10.15 - NOTICES:
Any notice required or permitted under this Lease shall be deemed
sufficiently given if sent by registered or certified mail, postage prepaid,
return receipt requested to Tenant at its administrative offices, currently
located at 1666 N.W. 82 Avenue, Miami, Florida 33126, and to Landlord at the
address then fixed for the payment of rent, with a copy of any such notice sent
in the same fashion to Michael J. Spector, currently located at P.O. Box 706,
Dorado, Puerto Rico 00646, and either party may by like written notice at any
time designate a different address to which notices shall subsequently be sent.
SECTION 10.16 - CONDITIONAL LIMITATION:
Each term and provision as provided herein is and shall be construed as
both a covenant and a condition of this Lease.
SECTION 10.17 - WAIVER BY LANDLORD NOT TO APPLY TO SUBSEQUENT DEFAULT:
Landlord's consent to waive any condition or covenant of this Lease shall
not be construed as a waiver of subsequent performance of a similar condition or
covenant or any other condition or covenant of this Lease.
SECTION 10.18 - LIENS:
Tenant agrees that it will pay or cause to be paid all costs for work done
and/or materials supplied to the demised premises by or on behalf of Tenant and
that it will keep the leased premises free and clear of all mechanics' and/or
materialman's liens and other liens on account of work done and/or materials
supplied by or for Tenant or by or for person claiming under Tenant. Tenant
hereby agrees to and shall indemnify and save Landlord free and harmless against
liability, loss, damage, costs, attorney's
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15
fees, and all other expenses on account of claims of lien of laborers and/or
materialmen or others for work performed or materials or supplied furnished for
Tenant or persons claiming under Tenant.
It is hereby expressly prohibited and Tenant shall have no authority
whatsoever to create any liens or claims for labor or material or otherwise on
the Landlord's interest in the demised premises and all persons contracting with
the Tenant for the improvement, alteration, or repair of any building or other
improvements on the demised premises and all materialmen, contractors,
mechanics, laborers and others are hereby charged with notice that they must
look solely to the Tenant and to the Tenant's interest only in the demised
premises to secure the payment of any claim, bill or bills for work done,
material furnished or otherwise during the term of this Lease.
Landlord and Tenant acknowledge and confirm that any work performed by
Tenant to improve the demised premises, including but not limited to Tenant's
work, as hereinabove referenced, is not required by Landlord to be performed,
but any and all such work is and shall be subject to Landlord's approval as
hereinabove set forth which shall not be unreasonably withheld.
SECTION 10.19 - LEASE NOT TO BE RECORDED:
Landlord and Tenant agree that this Lease shall not be recorded and any
attempt to record same shall be null and void, unless mutually agreed to in
writing by both parties hereto.
SECTION 10.20 - SINGULAR, PLURAL AND DEFINITIONS:
The words "Tenant" and/or "Lessee" shall be deemed and taken to mean each
and every person or party mentioned as a Tenant herein, be the same one or more,
and the use of the neuter singular pronoun to refer to Tenant shall be deemed a
proper reference even though Tenant may be an individual, a partnership, a
corporation, or a group of two or more individuals or corporations. The
necessary grammatical changes required to make the provisions of this Lease
apply in the plural sense where there is more than one Tenant and to either
corporations, associations, partnerships, or individuals, males or females,
shall in all instances be assumed as though in each case fully expressed.
SECTION 10.21 - SIGNAGE:
The Lessor agrees not to unreasonably withhold approval of signage. The
Lessee shall have the right to post approved signage upon the premises, provided
that the same shall not violate any state, federal or local municipal ordinance.
The parties agree that the current signage is hereby approved.
SECTION 10.22 - CONSTRUCTION OF TERMS IN THIS LEASE/VENUE:
The paragraph headings, subheadings and captions in this Lease are
inserted for convenience of reference only and shall not be deemed to define,
limit, describe or expand upon any of the provisions of the paragraphs to which
they refer, or of this Lease, nor shall they affect its meaning, construction,
interpretation, scope, effect, or intent.
This Lease has been prepared both by Lessor and its professional advisors
and by Tenant and its professional advisors and has been reviewed by both
Parties. The Parties believe this Lease is the product of all of their efforts,
that it expresses their agreement, and that it (or any part of it) should not be
interpreted in favor of either Lessor or Tenant or against either Lessor or
Tenant, merely because of their efforts in preparing it (or any part of it).
SECTION 10.23 - TITLE OF THE BUILDING PREMISES/TENANT'S ACCEPTANCE OF TITLE
The parties understand and agree that at the time of execution of this
lease agreement, the Tenant has not been provided an abstract or prior title
insurance policy evidencing ownership of the property. The Tenant is relying
upon representations of the Landlord that the Landlord is the owner of the
property. Nothing contained above shall be deemed to prevent Lessor from
executing any mortgage(s) encumbering all or a portion of the BUILDING PREMISES.
In the event of a default by the Lessor in
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the payment of any such mortgage(s), the Tenant shall have the right to cure any
such default and receive credit for any advances made therefor.
SECTION 10.24 - LESSOR'S DEFAULT:
Subject to any shorter time frames specifically provided for elsewhere in
this Lease, if Lessor shall breach any of its warranties in this Lease or fail
to perform any covenant required to be performed by Lessor under the terms of
this Lease or otherwise fails to perform any of its obligations under this Lease
and such breach or failure shall continue for thirty (30) days after receipt by
Lessor from Tenant of notice thereof duly given (provided that if such breach or
failure cannot reasonably be cured within thirty (30) days, then if Lessor is
making bona fide efforts and diligent efforts to cure the same, a reasonable
time beyond thirty (30) days shall be allowed Lessor, and provided further that
Lessor's time for cure shall be extended by any delay occasioned by Force
Majeure), then Lessor shall be considered in default of this lease.
SECTION 10.25 - SUCCESSORS:
All rights, liabilities, covenants, indemnities, agreements, in this Lease
(or exhibits) given to, or imposed upon, the respective Parties hereto, shall
extend to and bind, and inure to the benefit of, the Parties, and their
respective heirs, executors, administrators, successors, legal representatives,
and permitted assigns, of said Parties; if there shall be more than one Lessor
or Tenant, they shall be bound jointly and severally by the terms, covenants and
agreements herein. In the event Lessor conveys its interest in the BUILDING
PREMISES and the purchaser assumes Lessor's obligations and covenants, Lessor
shall thereupon be relieved of all further obligations hereunder which arise
subsequent, but not prior, to the date of conveyance. The terms Lessor and
Tenant in this Lease include any successors to or assigns of the original Lessor
and Tenant.
SECTION 10.26 - LESSOR'S COVENANT OF QUIET ENJOYMENT:
Lessor hereby covenants and agrees that it has the lawful right to make
this Lease. Upon the observance, performance, and keeping, of all the covenants,
terms, agreements and conditions, in this Lease, on Tenant's part to be
observed, kept and performed, Tenant shall peaceably and quietly have, hold and
enjoy the Tenant's Premises for the Lease Term (which includes any exercised
Option Term) without hindrance or interruption by Lessor or any other person or
entity lawfully or equitably claiming by, through or under, Lessor, subject
however, to the exceptions, reservations and conditions contained in this Lease.
SECTION 10.27 - ENTIRE AGREEMENT:
This Lease with all its Exhibits, which are deemed incorporated as part of
this Lease whether or not they are physically attached hereto, constitutes and
embodies all agreements, conditions and understandings, between Lessor and
Tenant. All representations, either oral or written, shall be deemed to be
merged into this Lease Agreement. No subsequent alteration, waiver, change,
modification, or addition, to this Lease shall be binding upon Lessor or Tenant
unless reduced to writing and signed by the Party against whom the enforcement
of any such change, alteration or modification is sought.
SECTION 10.28 - EXCUSE OR POSTPONEMENT OF PERFORMANCE OF COVENANTS
("FORCE MAJEURE"):
The Parties to this Lease shall not be deemed in default with respect to
failure to perform any of the terms, covenants and conditions of this Lease if
such failure to perform shall be due to any strike, lockout, civil commotion,
national defense preemption, war like operation, extreme weather conditions,
invasion, rebellion, military power, sabotage, government regulations or
controls, inability to obtain any material or utilities, Act of God, or any
other similar cause beyond the control of such Party which is typically
considered "Force Majeure." Failure to pay rent or any other sums due, by
Tenant, shall be conclusively deemed not to be "beyond the control of" Tenant.
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SECTION 10.29 - TIME OF THE ESSENCE:
The parties agree that in the payment of all sums due hereunder and in the
performance of all covenants and obligations hereunder, time shall be of the
essence.
SECTION 10.30 - TRIPLE NET LEASE:
It is the purpose and intent of the parties hereto, that this lease be a
triple net non-subordinated Lease and that the rent hereinabove provided to be
paid to the Landlord by the Lessee be absolutely net to the Landlord, so that
this Lease shall, except as provided to the contrary, yield net to the Landlord
the rent stated above in Article II. It is further agreed that all costs and
expenses of every kind and nature whatsoever relating to the demised premises,
or any improvements thereon which may arise of become due during the term of
this Lease, shall be paid by the Lessee. However, nothing herein shall be
construed to require the Lessee to pay or discharge any lien or mortgage which
shall be placed upon the premises by the Landlord.
Lessee agrees to cooperate in all reasonable respects with the refinancing
of the premises by the Lessee, providing any such refinancing contains a
non-disturbance provision.
ARTICLE XI - ABANDONING & VACATING
If the Lessee:
(a). Fails to take possession of the Leased Premises; or
(b). Should vacate, abandon, or desert the demised premises after opening
for business to the Public;
then in any such event, Lessee shall be in default, and Lessor may pursue any
remedy pursuant to this Lease, including but not limited to its rights under
Section 9.3 (Re-entry By Landlord) and the rights to use force, consistent with
due process, as described therein.
ARTICLE XII - DEFAULT
SECTION 12.1:
If any one or more of the following events (herein sometimes called
"events of default") shall happen:
(a). If default shall be made in the payment of any rents herein reserved
upon the date the same become due and payable and such default continues for a
period of five (5) days after written notice, unless otherwise specified herein
to be paid within another period of time;
(b). If default shall be made by Lessee in the performance of or
compliance with any of the covenants, agreements, terms or conditions contained
in this lease other than those referred to in the foregoing subparagraph (a) and
such default shall continue for a period of thirty (30) days after written
notice thereof from Lessor to Lessee; or unless otherwise specified herein to be
paid within another period of time;
(c). If Lessee shall: (i) generally not pay its debts as they come due,
(ii) admit in writing its inability to pay its debts, (iii) make a general
assignment for the benefit of creditors, (iv) commence any case, proceeding or
other action, seeking any reorganization, arrangement, composition, adjustment,
liquidation, wage earner's plan, dissolution or similar relief under the present
or any future law relating to bankruptcy, insolvency, reorganization or relief
of debtors, (v) seek or consent to or acquiesce in the appointment of any
trustee, receiver, custodian, or other similar official for Lessee or for all or
any substantial part of Lessee's assets or of the demised property, or (vi) take
any corporate action to authorize any of the actions set forth in clauses (i)
through (v) of this Article XII, Section 12.1 (c);
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(d). Any case, proceeding or other action against Lessee shall be
commenced seeking to have an order for relief entered against it as debtor, or
seeking reorganization, arrangement, adjustment, liquidation, dissolution or
composition of it or its debts under any law relating to bankruptcy, insolvency,
reorganization or relief of debtors, or seeking appointment of a receiver,
trustee, custodian or other similar official for it or for all or any
substantial part of its property, and such case, proceeding or other action (i)
results in the entry of an order for relief against it which is not fully stayed
within 30 days after the entry thereof or (ii) remains undismissed for a period
of 90 days; or
(e). If the demised premises shall be seized under any levy, execution,
attachment or other process of court and the same shall not be promptly vacated
or stayed on appeal or otherwise, or if the Lessee's interest in the demised
premises is sold by judicial sale and the sale is not promptly vacated or stayed
on appeal or otherwise; then, and in any of such events, Lessor may at any time
hereafter terminate this lease and retake possession, declare the balance of the
entire rent for the entire rental term of this lease to be immediately due and
payable, in which event Lessor may then proceed to collect all of the unpaid
rent called for by this lease by distress or otherwise, or pursue any other
remedy afforded by law, provided that such default and all other defaults at the
time existing have not been fully cured, and all expenses and costs incurred by
the Lessor, including reasonable attorneys' fees, in connection with enforcing
this lease, shall not have been fully paid. Any such termination shall apply to
any extension or renewal of the term herein demised, and to any right or option
on the part of the Lessee that may be contained in this lease or any agreement.
Nothing herein contained shall be construed as precluding the Lessor from having
such remedy as may be and become necessary in order to preserve the Lessor's
right or the interest of the Lessor in the premises and in this lease, even
before the expiration of any grace or notice periods provided for in Section
12.1 (b) above, or elsewhere in this lease, if under particular circumstances
then existing the allowance of such grace or the giving of such notice will
prejudice or will endanger the rights and estate of the Lessor in this Lease and
in the demised premises.
ARTICLE XIII - STATEMENT BY LESSEE AND LESSOR-SUBORDINATION TO LENDER
SECTION 13.1:
Upon demand of Lessor, or any prospective purchaser, mortgagee or lessee
of the building of which the demised premises are a part, Lessee agrees to
execute a statement of the condition of this lease, including the amount of
monthly rental and the date to which the same has been paid, the amount of
security held by Lessor, the expiration date of this Lease, and whether any
breach hereof exists.
SECTION 13.2:
Upon demand of Lessee, or any mortgagee of the Lessee, Lessor agrees to
execute a statement of the condition of this lease, including the amount of
monthly rental and the date to which the same has been paid, the amount of
security held by Lessor, the expiration date of this Lease, and whether any
breach hereof exists.
SECTION 13.3 - ESTOPPEL CERTIFICATE:
Tenant and Lessor agree that they will, at any time and from time to time,
within ten (10) days following written notice by Lessor or Tenant or any
mortgagee of Lessor or Tenant, given pursuant to this Section 13.3, execute,
acknowledge and deliver to Lessor or Tenant or such mortgagee a statement in
writing certifying whether or not this Lease is unmodified and in full force and
effect (or, if there have been modifications, whether or not the same is in full
force and effect and stating the modifications), whether or not any option
rights to extend the Lease Term have been exercised and the date on which this
Lease will terminate, and the date to which the Minimum Rent and any other
payments due from Tenant have been paid in advance, if any, and stating whether
or not there are defenses or offsets claimed by Tenant or Lessor, as the case
may be, and whether or not to the best of said Party's knowledge the other Party
to this Lease is in default in performance of any covenant, agreement or
condition contained in this Lease, and if so, specifying each such default,
supply any other facts or information regarding the operation of the Lease which
the requesting Party may reasonably request. The failure of either Party to
execute, acknowledge and deliver a statement in accordance with the provisions
of this Section 13.3 within said ten (10) day period shall constitute a default
under this Lease if not cured within five (5) days from notice from the other
Party. Any certificate issued by either Party
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19
may be relied upon by the other Party and by any other pertinent Party (e.g.,
prospective mortgagee, assignee, purchaser). If one Party submits a completed
certificate to another Party who then fails to object to its contents within ten
(10) days after its receipt of the completed certificate, the matters stated in
the certificate will conclusively be deemed to be correct if not objected after
second notice and five (5) days to object.
SECTION 13.4 - SUBORDINATION TO LENDER:
This lease and every undertaking hereunder is subordinate to the mortgage
loan to the Trustees of the Martin W. Spector Trust from Jefferson Bank of
Florida, its successors and/or assigns which said loan is in the original
principal amount of $600,000.00 and to any increases, modifications and
extensions of said mortgage loan. This subordination shall extend to the lien of
any lender whose loan replaces the loan of Jefferson Bank of Florida. The
Landlord agrees to use reasonable efforts to obtain a Non-Disturbance Agreement
from any lender which encumbers the leased premises.
Any Landlords' lien created hereunder shall be subordinate to any
financing by Tenant on any trade fixtures and inventory.
ARTICLE XIV - WAIVER OF JURY TRIAL AND COUNTERCLAIM
Tenant shall waive with the owner, trial by jury in any action, proceeding
or counterclaim brought by either of the parties against the other on any
matters whatsoever arising out of or in any way connected with this Lease, the
relationship of owner and tenant, tenant's use and occupancy of the premises,
and/or any claim of injury or damage. In the event owner commences any
proceedings for non-payment of rent, minimum rent or additional rent, tenant
shall not interpose any Counterclaim of whatever nature or description in any of
such proceedings, except for a compulsory counterclaim. This shall not, however,
be construed as a waiver of the Tenant's right to assert such claims in any
separate action or actions brought by the tenant.
ARTICLE XV - SEVERABILITY OF CLAUSES
SECTION 15.1:
If any part of this Lease shall be declared unenforceable or invalid by
any court of law having jurisdiction over the subject matter of this Lease, the
remainder of said Lease shall nonetheless be valid and enforceable between the
parties.
ARTICLE XVI - GOVERNING LAW
SECTION 16.1:
This Lease shall be governed by and construed in accordance with the laws
of the State of Florida, and venue shall lie in Dade County, Florida.
ARTICLE XVII- REAL ESTATE BROKERAGE COMMISSION
SECTION 17.1:
Each of the parties warrants and represents that there are no claims for
brokerage commissions, rental fees or finder's fees in connection with the
execution of this Lease and each of the parties agrees to indemnify the other
and hold it harmless from all liabilities arising under any such claim.
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IN WITNESS WHEREOF, the Landlord has caused this instrument to be executed in
its name by its duly authorized officers and its corporate seal to be affixed
and the Tenant has caused this instrument to be executed in its name by its duly
authorized officers and its corporate seal to be affixed this the day and year
first hereinabove written.
Signed, Sealed and Delivered In The Presence TENANT:
of the following witnesses:
/s/ DEBORA A. PARKER SPEC'S MUSIC, INC.
- ----------------------------------
Witness #1 (signature) By: /s/ JEFF CLIFFORD
--------------------------------
DEBORA A PARKER Jeff Clifford, Vice President
- ----------------------------------
Print Name Of Witness #1 Date: 3-18-96
------------------------------
/s/ MICHAEL A. RUBIN Attest:
- ---------------------------------- -----------------------------
Witness #2 (signature)
MICHAEL A. RUBIN Date: _______________________, 1995
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Print Name of Witness #2
Signed, Sealed and Delivered In The Presence LESSOR:
of the following witnesses:
THE MARTIN W. SPECTOR
/s/ MICHAEL A. RUBIN IRREVOCABLE TRUST, DOROTHY
- ---------------------------------- JOY SPECTOR, TRUSTEE, MICHAEL
Witness #1 (signature) J. SPECTOR, TRUSTEE, ROSALIND
S. ZACKS, TRUSTEE, BAYARD
MICHAEL A. RUBIN SPECTOR, TRUSTEE AND ANN S.
- ---------------------------------- LIEFF, TRUSTEE,
Print Name Of Witness #1
/s/ DEBRA M. RUBIN By: /s/ DOROTHY JOY SPECTOR
- ---------------------------------- ---------------------------------
Witness #2 (signature) Dorothy Joy Spector, Trustee
By: /s/ MICHAEL J. SPECTOR
DEBRA M. RUBIN ----------------------------------
- ---------------------------------- Michael J. Spector, Trustee
Print Name of Witness #2
By: /s/ ROSALIND S. ZACKS
----------------------------------
Rosalind S. Zacks, Trustee
By: /s/ BAYARD W. SPECTOR
----------------------------------
Bayard W. Spector, Trustee
By: /s/ ANN S. LIEFF
----------------------------------
Ann S. Lieff, Trustee
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