10.87
Lease Agreement for Store-Clairemont
CLAIREMONT TOWN SQUARE
LEASE AGREEMENT
BETWEEN
OTR, AN OHIO GENERAL PARTNERSHIP, LANDLORD,
AND
TOYS INTERNATIONAL,
A CALIFORNIA CORPORATION, TENANT
doing business under the trade names of PLAY CO. TOYS or TOYS INTERNATIONAL
DATED ___________________, 1997
TABLE OF CONTENTS
1. Fundamental Lease Provisions............................................................................
2. Premises................................................................................................
3. Lease Term..............................................................................................
4. Rental..................................................................................................
5. Advertising.............................................................................................
6. Construction............................................................................................
7. Use of the Premises......................................................................................
8. Alterations..............................................................................................
9. Mechanics' Liens.........................................................................................
10. Maintenance and Repair...................................................................................
11. Common Areas.............................................................................................
12. Utilities................................................................................................
13. Estoppel Certificates....................................................................................
14. Indemnification; Waiver of Claims........................................................................
15. Insurance................................................................................................
16. Waiver of Subrogation....................................................................................
17. Holding Over.............................................................................................
18. Assignment and Sublease..................................................................................
19. Quiet Enjoyment..........................................................................................
20. Compliance with Laws and with Rules and Regulations......................................................
21. Fire and Casualty........................................................................................
22. Eminent Domain...........................................................................................
23. Default..................................................................................................
24. Waiver of Default or Remedy..............................................................................
25. Landlord's Lien..........................................................................................
26. Uniform Commercial Code..................................................................................
27. Force Majeure............................................................................................
28. Subordination of Lease...................................................................................
29. Notices and Consents.....................................................................................
30. Security Deposit.........................................................................................
31. Miscellaneous Taxes......................................................................................
32. Brokerage Commission.....................................................................................
33. Hazardous Devices and Contaminants.......................................................................
34. Exculpation..............................................................................................
35. Signs....................................................................................................
36. Locks....................................................................................................
37. Employment...............................................................................................
38. Plumbing.................................................................................................
39. Certain Rights Reserved to Landlord......................................................................
40. Guaranty.................................................................................................
41. Miscellaneous............................................................................................
42. Relationship of Parties..................................................................................
43. Gender and Number........................................................................................
44. Topic Headings...........................................................................................
45. Counterparts.............................................................................................
46. Entire Agreement.........................................................................................
47. Attorneys' Fees..........................................................................................
48. Governing Law; Invalidity of any Provisions..............................................................
Exhibit A - Site Plan/Floor Plan
Exhibit B - Legal Description of Property
Exhibit C - Commencement Date Agreement
Exhibit D - Tenant Improvements
Exhibit E - Tenant Estoppel Certificate
Exhibit F - Sign Criteria
Exhibit G - Guaranty of Lease
Exhibit H - Access and Rental Payment Agreement
LEASE AGREEMENT
THIS LEASE AGREEMENT ("Lease"), dated ______________, 199_____ ("Effective
Date"), is between OTR, an Ohio general partnership ("Landlord"), acting as the
duly authorized nominee of the BOARD OF THE STATE TEACHERS RETIREMENT SYSTEM OF
OHIO ("STRBO"), and TOYS INTERNATIONAL, a California corporation, doing business
under the trade names of PLAY CO. TOYS or TOYS INTERNATIONAL ("Tenant").
1. Fundamental Lease Provisions. This Lease contains the following
fundamental provisions. If any fundamental provision is marked "not applicable,"
it shall be deemed not applicable in the balance of the Lease.
(a) Landlord's Address:
275 E. Broad Street
Columbus, Ohio 43215
Attention: Real Estate Manager
and the address given in (b) below
(b) Address for
Payment of Rent:
Clairemont Town Square Management Office
4186 Clairemont Mesa Boulevard
San Diego, CA 92117
Attention: Operations Manager
(c) Tenant's Address: Toys International Attn: Rich Brady
550 Rancheros Drive San Marcos, CA 92069 (619) 471-4505
(d) Net Rentable Square Feet in the Premises: 10,156
(e) Unit Number of the Premises: Space #38
(f) Name and Address of the Premises.
Clairemont Town Square
4615A Clairemont Drive
San Diego, CA 92117
(g) Net Rentable Square Feet in Shopping Center: 325,459. The
parties acknowledge that (i) the preceding number is the
actual Net Rentable Square Feet in the Shopping Center on the
Effective Date, (ii) the preceding number does not include the
area designated "Space #38" on Exhibit A, of which the
Premises are a part, and (iii) the preceding number will be
revised from time to time in accordance with Paragraph 4(c) of
the Lease.
(h) Initial Term: Five (5) Lease Years.
Option Terms:
Three (3) Five (5)-Year Options per Paragraph 3(c)
(i) Base Rental:
------------
Lease Years Annual Base Rent Monthly Base Rent
1 thru 3 $ 88,053.00 $7,337.75
4 thru 5 $108,365.00 $9,030.42
Notwithstanding anything to the contrary contained in this
Lease, Tenant's obligation to pay Base Rental hereunder shall be abated
until November 1, 1997. It is expressly understood that Tenant shall
pay all other charges under this Lease in full from the date Tenant
opens for business through October 31, 1997, and that Tenant shall be
obligated to commence payment of Base Rental in full beginning on
November 1, 1997. If at any time during the Initial Term (as
hereinafter defined) the Lease is terminated as a result of Tenant's
default as described in Article 23 hereof, then the Base Rental due
under this Lease shall revert to the rent schedule provided herein as
though no abatement had been provided. Further, the abatement provided
herein shall not be available to any assignee or subtenant of this
Lease, and upon any such assignment or sublease, such abatement shall
become null and void except as otherwise provided in Paragraph 18(a).
(j) Percentage for Percentage Rent:
Zero (0%)
(k) Percentage Base:
Not applicable.
(l) Minimum Gross Sales:
Not applicable.
(m) Tenant's Proportionate Share of Operating Expenses:
See Paragraph 4(c) hereof.
(n) Marketing Charge: An annual charge of $2,000.00, payable
in equal monthly installments provided, however, that Tenant shall have
the right to terminate its obligation to pay such charge at the end of
the first twelve months of the Lease Term. (See Paragraph 5(a) hereof).
(o) Estimated Commencement Date:
June 1, 1997.
p) Use: Tenant shall use the Premises solely for the operation
of a toy store, and for no other use or purpose without Landlord's
prior reasonable approval. Tenant shall sell a large variety of toys
and agrees that Tenant shall not use the Premises in violation of any
of the Restricted Uses (hereinafter defined). Without limiting the
foregoing preclusions, Tenant specifically agrees that Tenant shall not
sell pets or charge the public for entertainment (machines or
activities or otherwise). Tenant agrees that its sale of bicycles shall
be generally children's and family quality bicycles (and shall
therefore not include high-end bicycles). Tenant further agrees that to
the extent Tenant sells consumer electronics which are consistent with
the operation of a toy store, the display of said electronics shall not
exceed 400 square feet of the Premises. Tenant further agrees that in
the event Tenant sells computer software, prerecorded audio and/or
video records, discs, tapes and/or related devices, Tenant's Gross
Sales from such items shall be less than fifteen percent (15%) of
Tenant's total Gross Sales, and Tenant agrees that Tenant shall not
rent such items.
Landlord shall give its reasonable approval if Tenant's
proposed alternative use is (i) consistent with a "first-class
promotional retail center", and (ii) not a Restricted Use at the time
of request, and (iii) not the primary use of another tenant on the
Property at the time of request where "primary use" shall mean that
such other tenant operates fifty percent (50%) or more of its floor
area for such use, or derives fifty percent (50%) or more of its Gross
Sales from such use.
Restricted Uses are any exclusive or restricted or
objectionable uses ("Restricted Uses") Landlord has agreed to preclude
or restrict pursuant to written agreement with another tenant or owner
in the Property as of the Effective Date hereof or at any time prior to
Tenant's addition of said use or Tenant's notice to Landlord of
Tenant's proposed alternative use, and as such uses may be amended or
expanded from time to time; provided, however, that Landlord shall not
create a Restricted Use after the Effective Date that is inconsistent
with Tenant's exclusive use described hereinbelow.
Exclusive: So long as (i) Tenant's use of the Premises is for
such purpose and (ii) Tenant is at such time open and operating in the
Premises, Landlord shall not authorize the use of any space in the
Shopping Center, other than the Premises, for the operation of any
Competing Business.
The foregoing restriction shall not be construed to prohibit
any tenants existing in the Shopping Center as of the Effective Date
from handling and selling any of the items which their respective
leases permit them to sell. Landlord represents and warrants that none
of the existing tenants have use clauses which specifically authorize
the operation of a toy store although the following stores have general
use clauses not restricted by future exclusives: Burlington Coat,
McDonald's, Michael's, Pic N Save, Sav-On, T. J. Maxx, Von's and Radio
Shack.
Competing business shall, for purposes hereof, mean: a toy
store such as Play Co. Toys is operating as of the Effective Date, or
such as is operated as of the Effective Date by stores like, but not
limited to Toys R Us and Kabee Toys. "Toy store" for purposes hereof
means a store selling a wide variety of toys and toy-type items but
excludes (1) any business which specializes in selected items or
categories of items sold in a toy store such as, but not limited to:
bicycle stores, game stores, hobby stores, doll stores,
records/tapes/CD stores, computer stores, electronics stores (such as
Radio Shack), or consumer electronics stores (such as Circuit City),
sports cards stores, crafts stores and teacher's supply stores; and (2)
any store which operates 1,500 square feet or less of its floor area
for the sale of toys, provided that the sale of toys shall not be the
primary business of said store.
(q) Radius Restriction:
Three (3) miles.
(r) Security Deposit: None.
Prepaid Base Rent: None.
(s) Landlord's Broker: Atwater Realty, Inc.
(t) Tenant's Broker: None.
(u) Guarantors: None.
2. Premises. In consideration of the rents, terms, provisions and
covenants of this Lease, Landlord hereby leases unto Tenant, and Tenant hereby
rents and accepts from Landlord, those certain premises containing approximately
the net rentable square feet set forth in Paragraph 1(d) above, known as the
unit number set forth in Paragraph 1(e) above (the "Premises"). The Premises are
outlined on the site plan attached hereto as Exhibit A and incorporated herein
by reference. The Premises are contained in that certain shopping center (the
"Shopping Center") located on the Property (defined below), which Shopping
Center contains approximately the net rentable square feet of space set forth in
Paragraph 1(g) above, as of the Effective Date, as may change from time to time
in Landlord's discretion. The land on which the Shopping Center is situated,
together with all improvements located thereon (collectively, the "Property"),
is more particularly described on Exhibit B, attached hereto and incorporated
herein by reference. The Premises do not include the use of the roof (except for
the repair or replacement of any heating or air conditioning equipment thereon
serving the Premises pursuant to Paragraph 10(a) below) or extend beyond the
exterior faces of the walls which enclose the Premises.
3. Lease Term.
a. Initial Term. Subject to and upon the terms and conditions
set forth below, the initial term of this Lease shall be for the number of Lease
Years (as hereinafter defined) for "Initial Term" set forth in Paragraph 1(h)
above (hereinafter defined as "Initial Term"), commencing on the Commencement
Date (as hereinafter defined) and ending on last day of such number of Lease
Years.
b. Definitions. For purposes of this Lease, the following
terms shall have the following meanings:
(i) "Commencement Date" shall mean the earlier of (A)
the Estimated Commencement Date (as defined in Paragraph 1[o]) or (B)
the date that Tenant opens for business on the Premises. Promptly upon
determination of the Commencement Date, Landlord and Tenant shall
execute a memorandum, setting forth
the Commencement Date and the expiration date of this Lease,
in form and substance substantially similar to that attached hereto as
Exhibit C and incorporated by reference.
(ii) "Lease Year" shall mean each twelve (12) month
period commencing on the first day of the first February after the
Commencement Date and each anniversary thereafter during the Lease Term
(as hereinafter defined). The first Lease Year shall commence on the
Commencement Date and end on the last day of January of the first Lease
Year regardless of whether the first Lease Year is longer than twelve
(12) months.
(iii) "Lease Term" shall mean the Initial Term of this Lease and any
renewals or extensions thereof.
Notwithstanding anything to the contrary contained in this Lease, in
the event that Tenant's Gross Sales during the twenty-fifth (25th) through
thirty-sixty (36th) full months of the Lease Term do not equal or exceed One
Million Three Hundred Thousand Dollars ($1,300,000), Tenant shall have the right
to terminate this Lease by written notice to Landlord given, if at all, before
the last day of the thirty-seventh (37th) full month of the Lease Term. Such
notice shall include a statement of Tenant's Gross Sales during such 12-month
period. Any such termination shall be effective at the end of the third Lease
Year. The foregoing right to terminate shall only apply to the original Tenant,
and shall be null and void in the event of any assignment or sublease of the
Premises during the first three (3) years of the Lease Term, or in the event
Tenant does not continuously operate in the Premises as provided in Paragraph 7a
hereof.
In the event Tenant delivers the termination notice described
hereinabove, Landlord shall be entitled during the period from the date of
Landlord's receipt of Tenant's termination notice until the end of the third
Lease Year to audit Tenant's Gross Sales for the period from the twenty-fifth
through thirty-sixth months of the Lease Term. Such audit shall be limited to
the determination of Tenant's "Gross Sales" as defined in this Lease and shall
be conducted during normal business hours at the Premises. If it shall be
determined as a result of such audit that Tenant's Gross Sales during the
twenty-fifth through thirty-sixth months of the Lease Term were greater than One
Million Three Hundred Thousand Dollars ($1,300,000.00), Tenant's termination
notice and Tenant's right to terminate the Lease as provided hereinabove shall
be null and void, and Tenant shall pay to Landlord all reasonable costs and
expenses which were incurred by Landlord in performing said audit.
During no less than the first three (3) Lease Years, Tenant shall keep
accurate books and records of all business conducted on the Premises and all
Gross Sales generated from the Premises, which books and records shall be
maintained in accordance with generally accepted accounting principles
consistently applied. Such books and records shall include, without limitation,
all cash register tapes and other point of sale records, sales slips, bank
deposit records and all other primary data, all federal, state and local sales
and use tax returns of Tenant, and all other books, records and materials which
would normally be examined by an independent accountant in auditing Tenant's
Gross Sales.
c. Option Term(s). Provided Tenant is not in default of the
Lease at the time of exercise, Tenant shall have three (3) successive options to
extend the Lease Term for an additional period of five (5) years each (each such
five (5)-year period being hereinafter referred to as an "Option Term") subject
to the following conditions:
(i) Tenant shall exercise such option by delivering to Landlord written
notice of its intent to exercise the option not earlier than four (4) months,
and not later than three (3) months, prior to commencement of the Option Term;
provided, however, that, notwithstanding the foregoing timeframes, Tenant's
right to exercise the option shall not lapse unless Tenant has failed to deliver
said written notice to Landlord within thirty (30) days following Tenant's
receipt of written notice from Landlord of such possible lapse.
(ii) If the option is exercised pursuant hereto, the Option Term shall
commence upon the expiration of the preceding term, whether it be the initial
term or an Option Term.
(iii) Base Rental during the entire five (5)-year period of any Option Term
shall be the Base Rental in effect as of the Commencement Date (in the case of
the first Option Term) or as of the commencement of the immediately preceding
Option Term (in the case of the second and of subsequent Option Terms), as
appropriate, increased by the percentage increase, if any, in the Price Index
(as defined hereinbelow) from the Base Price Index (which shall be the Price
Index in effect for the month in which the Commencement Date occurs in the case
of the first Option Term, or the Price Index in effect for the month in which
the commencement of the previous Option Term occurs in the case of the second
and of subsequent Option Terms, as appropriate) to the Price Index in effect at
the beginning of the month immediately preceding the commencement of the Option
Term, provided, however, that in no event shall the Base Rental be less than the
Base Rental in effect immediately prior to commencement of the Option Term or
more than a twelve and one-half percent (12.5%) increase over the Base Rental in
effect immediately prior to commencement of the Option Term. The Price Index
shall be defined as the Consumer Price Index for all Urban Consumers (CPI-U)
issued by the Bureau of Labor Statistics of the United States Department of
Labor for San Diego, California (1982-84=100). If at any time said Consumer
Price Index is no longer issued then the term "Price Index" shall mean an index
selected by Landlord that is reasonably comparable to said Consumer Price Index.
(iv) In the event Tenant exercises the Option, Tenant agrees to take the
Premises in an "as is" condition with no obligation on the part of the Landlord
to undertake any work with regard to the Premises.
(v) The option granted herein shall be personal to the original Tenant, may
be exercised only by the original Tenant while it is occupying the Premises, and
may not be exercised by or assigned to any party (including, but not limited to,
any sublessee or lender) without the express written consent of Landlord except
that such option shall be available to any assignee or sublessee permitted by
Article 18 hereof, or to any assignee or sublessee specifically approved by
Landlord pursuant to the provisions of said Article.
(vi) All terms and conditions of the Lease shall remain in full force and
effect during the Option, and, except for this Paragraph 3c, or where the
context otherwise indicates, all references in the Lease to the Lease Term shall
mean the Lease Term as extended.
4. Rental.
a. Base Rental. Tenant shall pay to Landlord, as base rental
(the "Base Rental") during the Lease Term, the annual Base Rental amounts,
payable in equal monthly installments, which are set forth in Paragraph 1(i)
above; provided, however, that notwithstanding the foregoing, Tenant's
obligation to pay Base Rental during the Initial Term shall be abated from the
Commencement Date until November 1, 1997, as provided in Paragraph 1(i) hereof.
b. Percentage Rental.
(i) Tenant shall pay no Percentage Rental.
(ii) The term "Gross Sales" as used in this Lease
means the aggregate dollar amount of all business done in, on or
resulting from the Premises, including, but not limited to, the price
of all merchandise, wares and goods sold and all charges for services
performed in, upon or resulting from the Premises by Tenant or by any
licensee, concessionaire or vendor, whether such sales are evidenced by
cash, check, charge account, exchange or otherwise, regardless of
whether (A) such sales evidenced by credit or charge account are
collected, (B) such sales are for wholesale or retail, (C) such sales
are made to persons present at the Premises, or by mail or telephone
orders or by means of any mechanical or other vending device or
otherwise or (D) such merchandise or services may be delivered,
supplied or rendered from another location. No deduction or reserve
shall be allowed for uncollected or uncollectible accounts. No
franchise or capital stock tax and no income or similar tax based upon
income or profits shall be deducted from Gross Sales in any event
whatsoever. Gross Sales shall, however, exclude the following:
(A) Returns or refunds, or credits received in settlement of
claims for loss or damage to goods, wares or merchandise, provided that
such sales of goods, wares or merchandise were originally included in
Gross Sales and provided, further, that if such refunds are in the form
of credits to customers, such credits shall be included in Gross Sales
when used;
(B) All sales taxes, excise taxes, gross receipt taxes and
other similar taxes, now or hereafter imposed by any and all
governmental authorities, but only if the amount thereof is expressly
charged to the customer at the time of sale and thereafter paid by
Tenant to the taxing authority; and
(C) Sales of all trade fixtures or store operating equipment
after use thereof in the conduct of Tenant's business in the Premises
and which are not part of Tenant's stock in trade.
(iii) Tenant shall deliver to Landlord within
forty-five (45) days after the end of each Lease Year, a written
statement of Gross Sales for the preceding Lease Year or portion
thereof ("Annual Statement"). Further, if, under "Use" in Paragraph
1(p) hereof, there is any limitation on the percentage of Gross Sales
which may be generated from any particular item listed in said
provision, Tenant shall, upon request of Landlord, specifically show
the percentage of Tenant's total Gross Sales which was derived from the
sale of such item(s).
(iv) [Intentionally Omitted]
(v) If Tenant shall fail to prepare and deliver,
within the time periods herein specified, any statement of Gross Sales
required hereunder, Landlord may elect to treat such failure as a
default under the terms of this Lease.
(vi) [Intentionally Omitted]
(vii) [Intentionally Omitted]
(viii) [Intentionally Omitted]
(c) Additional Rental. Portions of the Shopping Center are or
will be owned or leased by "Major Tenants" (herewith defined as any entity which
owns or leases greater than 10,000 square feet in the Shopping Center, such
definition being subject to expansion or revocation by Landlord), or "Pad
Tenants" (herewith defined as any entity which owns or leases all of a
freestanding pad). The contributions of Major Tenants and Pad Tenants towards
the Operating Expenses (as hereinafter defined), shall be credited toward
payment of the entirety of the Operating Expenses of the Property, and Tenant
shall pay to Landlord, as Additional Rental, Tenant's Proportionate Share (as
hereinafter defined) of the balance of the Operating Expenses. If this Lease
commences or terminates on a date other than January 1, the annual Operating
Expenses shall be prorated by multiplying one-twelfth (1/12) of the annual
Operating Expenses by the number of full or partial months between the
Commencement Date and December 31 of the year of commencement or between January
1 of the year of termination and the termination date, as the case may be. As
used in this Lease, "Proportionate Share" shall mean the proportion which the
number of net rentable square feet of the Premises bears to the total net
rentable square feet of the buildings in the Shopping Center which are occupied
and open for business as of the commencement of such calendar year, exclusive of
the net rentable square feet owned or leased by Major Tenants or Pad Tenants;
provided, however, that:
(W) Tenant's Proportionate Share of Operating Expenses shall not
exceed:
$2.24 per square foot for the period from the Commencement
Date through 12/31/97; $3.84 per square foot for the period
1/1/98 through 12/31/98; $1.60 per square foot for the period
1/1/99 through 5/31/99;
(X) Tenant's Proportionate Share of Operating Expenses (excluding taxes
and insurance described in clauses 4(c)(i)(A) and (B) hereof) shall not exceed
$1.62 per square foot for the period 6/1/99 through 12/31/99;
(Y) Tenant's Proportionate Share of Operating Expenses (excluding taxes
and insurance described in clauses 4(c)(i)(A) and (B) hereof) shall not exceed
$2.91 per square foot for calendar year 2000; and
(Z) Tenant's Proportionate Share of Operating Expenses (excluding taxes
and insurance described in clauses 4(c)(i)(A) and (B) hereof) shall not increase
in any one calendar year by more than five percent (5%) over Tenant's
Proportionate Share of said expenses in the immediately preceding calendar year.
(i) Operating Expenses. "Operating Expenses" shall include those expenses
paid by or on behalf of Landlord in respect to the management, operation,
service and maintenance of the Property, including the Premises, in accordance
with generally accepted principles of shopping center management as applied to
the operation and maintenance of shopping centers similar to the type and nature
of the Property and in the general market area as the Property, but excluding
all expenses of other tenants of the same kind as those for which Tenant is
responsible under Paragraph 10(a). Operating Expenses shall include, but not be
limited to, (A) Real Estate Taxes (as hereinafter defined); (B) premium costs
for liability, boiler, extended coverage, casualty and other insurance covering
the Property to be maintained by Landlord and required by the terms of this
Lease; (C) electricity, gas, water and other utility charges for the Common
Areas (as hereinafter defined); (D) wages, salaries and fees of on-site
operating, auditing, accounting, maintenance and management personnel in
connection with the Property; (E) all payroll charges for such on-site
personnel, such as unemployment and social security taxes, workers'
compensation, health, accident and group insurance, and other so-called fringe
benefits; (F) rental charges for office space chargeable to the operation and
management of the Property; (G) license permits and inspection fees; (H)
supplies and materials used in the operation and management of the Property; (I)
furnishings and equipment not treated by Landlord as capital expenditures of the
Property; (J) depreciation and the cost of any labor saving devices that may,
from time to time, be placed in operation as a part of Landlord's maintenance
program; (K) personal property taxes on property used in the operation,
maintenance, service and management of the Property; (L) the cost, as reasonably
amortized by Landlord, with interest at the rate of ten percent (10%) per annum
on the unamortized amount, of any capital improvement made after completion of
initial construction of the Shopping Center which reduces Operating Expenses,
but in an amount not to exceed such reduction for the relevant year; (M)
management fees relating to the Property; (N) the cost, as reasonably amortized
by Landlord, with interest at the rate of ten percent (10%) per annum on the
unamortized amount, of any installation, renovation or improvement required by
reason of any law, ordinance or regulation, which requirement did not exist on
the date of the Lease and is generally applicable to properties similar to the
Property; and (O) all other expenses necessary for the operation and management
of the Property.
(ii) Real Estate Taxes. "Real Estate Taxes" shall
include all taxes, including state equalization factor, if any, and
assessments, special or otherwise, exclusive of penalties or discounts
levied upon or with respect to the Property, including the Premises,
imposed by any federal, state or local governmental agency, and
including any use, occupancy, excise, sales or other like taxes (other
than general income taxes on rent or other income from the Shopping
Center computed in the case of a graduated tax, as if Landlord's rent
and other income from the Shopping Center was Landlord's sole taxable
income).
Real Estate Taxes also shall include the expense of
contesting the amount or validity of any such taxes, charges or
assessments, such expense to be applicable to the period of the item
contested. Real Estate Taxes shall not, however, include income,
franchise, capital stock, estate or inheritance taxes unless Landlord
reasonably determines that such taxes are in lieu of real estate taxes,
assessments, rental, occupancy and other like excise taxes. For
purposes of this Lease, Real Estate Taxes for any calendar year shall
be those taxes the last timely payment date for which occurs within
such calendar year. In case of special taxes or assessments payable in
installments, only the amount of the installment(s) the last timely
payment date for which occurs on or after the first day and on
or before the last day of such calendar year shall be included in Real
Estate Taxes for that calendar year.
Landlord shall retain the sole right to participate
in any proceedings to establish or contest the amount of Real Estate
Taxes. If a complaint against valuation, protest of tax rates or other
action increases or decreases the Real Estate Taxes for any calendar
year, resulting in an increase or decrease in rent hereunder, the Real
Estate Taxes including the expenses incurred in connection with such
contest for the affected calendar year shall be recalculated
accordingly and the resulting rent shall be paid simultaneously with or
applied as a credit against, as the case may be, the rent next becoming
due.
(iii) Payment of Proportionate Share. To provide for
current payments of Operating Expenses, Tenant shall pay Tenant's
Proportionate Share of the Operating Expenses, as estimated by Landlord
from time to time, in twelve (12) monthly installments, commencing on
the Commencement Date. Landlord and Tenant intend to estimate the
amount of Operating Expenses for a calendar year and then to reconcile
such estimated expenses in the following year based on actual Operating
Expenses for such calendar year paid by Landlord. If Tenant's
Proportionate Share of the actual Operating Expenses shall be greater
than or less than the aggregate of all installments so paid on account
to Landlord for such twelve (12) month period, then within ten (10)
days of Tenant's receipt of Landlord's statement of reconciled
Operating Expenses, Tenant shall pay to Landlord the amount of such
underpayment, or Landlord shall credit Tenant for the amount of such
overpayment against the next maturing installment(s) of rent, as the
case may be. The obligation of Tenant with respect to the payment of
Tenant's Proportionate Share of the Operating Expenses shall survive
the termination of this Lease. Any payment, refund, or credit made
pursuant to this Paragraph 4(c) shall be made without prejudice to any
right of Tenant to dispute the statement as hereinafter provided, or of
Landlord to correct any item(s) as billed pursuant to the provisions
hereof. Landlord's failure to give such statement shall not constitute
a waiver by Landlord of its right to recover rent that is due and
payable pursuant to this Paragraph 4(c).
(iv) Dispute of Operating Expenses. If Tenant
questions in writing any such notice of reconciled Operating Expenses
(or revised notice thereof), and if the question is not amicably
settled between Landlord and Tenant within thirty (30) days after said
notice of reconciled Operating Expenses (or revised adjusted) has been
given, Tenant may, within the next ninety (90) days, upon no less than
ten (10) days prior written notice to Landlord, appoint a certified
public accountant (CPA) from a nationally recognized CPA firm, or other
CPA approved by Landlord, experienced in auditing Shopping Center
records, to audit books pertaining to the Operating Expenses, provided,
however, that before conducting any audit, Tenant must pay the full
amount of Operating Expenses billed and must not be in default of any
other lease provision. Such audit shall be conducted at the management
office on the Property, shall be performed in such manner as to not
unreasonably disturb Landlord's business, and shall be during usual
business hours. Said right to audit shall be restricted to one (1) per
calendar year, shall only include Operating Expenses from the
immediately preceding calendar year, and shall be at the sole cost and
expense of Tenant (including all reasonable costs incurred by Landlord
in connection with such audit). The audit shall be conducted in
accordance with generally accepted auditing standards. Upon receipt of
the audit report, Tenant shall deliver to Landlord a copy of the report
and all accompanying data. Tenant will keep confidential all agreements
involving the rights provided in this paragraph and the results of any
audits conducted hereunder, unless otherwise specifically authorized or
requested by Landlord. In the event that Tenant, after having
reasonable opportunity to examine the Operating Expense records, shall
disagree with Landlord's determination, then Landlord and Tenant shall
attempt to adjust such disagreement,
and if they are unable to agree within thirty (30) days following
Landlord's receipt of the audit, Landlord and Tenant shall each
designate an independent certified public accountant within ten (10)
days, and the two accountants shall within the next ten (10) days
appoint a third independent certified public accountant (the
"Arbiter"), whose determination shall be binding upon the parties and
the cost of such Arbiter shall be borne equally by Landlord and Tenant.
If Tenant does not, in writing, question the reconciled Operating
Expenses within thirty (30) days after such notice has been given or
audit performed, Tenant shall be deemed to have approved and accepted
such reconciled Operating Expenses.
(v) Adjustments to Operating Expenses. If a clerical
error occurs or Landlord or Landlord's accountants discover new facts,
which error or discovery causes Operating Expenses for any period to
increase or decrease, upon notice by Landlord to Tenant of the adjusted
additional Operating Expenses for such calendar year, the adjusted
additional Operating Expenses shall apply and any deficiency or
overpayment of Tenant's Proportionate Share of the Operating Expenses,
as the case may be, shall be paid by Tenant or taken as a credit by
Tenant according to the provisions set forth above. This provision
shall survive the termination of the Lease.
(d) Other Charges. All costs, expenses and other sums that
Tenant assumes or agrees to pay to Landlord pursuant to this Lease ("Other
Charges") shall be deemed rental and, in the event of nonpayment thereof,
Landlord shall have all the rights and remedies herein provided for in case of
nonpayment of Base Rental. Should any rental period commence on a day other than
the first day of a calendar month or, for any reason, end on a day other than
the last day of a calendar month, then (except as otherwise provided in
Paragraph 4(b)(i) hereof with respect to determining the Percentage Base for a
partial year), the rental for such fractional month shall be computed on a daily
basis in the event of a partial month at the beginning of the Lease Term, for
the period from the Commencement Date to the end of such calendar month or, in
the event of a partial month at the end of the Lease Term, from the first day of
such partial month until the last day of such month during which the Lease is in
effect, and at an amount equal to one three-hundred sixtieth (1/360th) of said
annual rental for each such day. If a monthly installment of rent is not
received on or before the tenth (10th) day of the month in which it is due,
other remedies for nonpayment of rent notwithstanding, such past due rent shall
bear interest at the lesser of (i) a rate of interest equal to ten percent (10%)
per annum; or (ii) the maximum rate allowed by law (the "Default Rate"), for
each day from the first day of the month through the date such monthly
installment of rent is received by Landlord, and Tenant shall pay to Landlord, a
late charge of five percent (5%) of such installment as rent for the purpose of
defraying Landlord's administrative expenses incident to the handling of such
overdue payment, provided, however, that such late charge shall not apply to the
first two occurrences in any calendar year if Tenant pays said monthly
installment within ten (10) days of receipt of Landlord's written notice that
such installment is overdue. For purposes of this Lease, "rent" shall mean Base
Rental, Additional Rental, the Marketing Charge (as hereinafter defined) and
Other Charges.
(e) Time and Place of Payment. Each monthly installment of
rent shall be due and payable in advance, on or before the first day of each and
every month during the Lease Term, without notice, demand or set-off; provided,
however, that the first month's rent shall be due and payable upon execution of
this Lease. Tenant shall pay all rent and other charges due under this Lease at
the address set forth in Paragraph 1(b) or at such other place as Landlord may
designate from time to time hereafter by written notice to Tenant.
5. Advertising.
(a) Marketing Charge. Tenant agrees to pay to Landlord, as
additional rental, a marketing charge (the "Marketing Charge") at the annual
rate set forth in Paragraph 1(n) above. The Marketing Charge shall be paid in
equal monthly installments at such time and place as provided in Paragraph 4(e)
above. Notwithstanding anything in this Lease to the contrary, in the event at
any time following the first twelve months of the Lease Term Tenant is
dissatisfied for any reason with the promotions and advertising for which such
Marketing Charge is used by Landlord, Tenant shall have the right in Tenant's
sole discretion, upon delivery of written notice to Landlord, to terminate its
obligation to pay any further Marketing Charge.
(b) Increases in Marketing Charge. [Deleted.]
(c) Promotion and Advertising. Landlord shall provide, or
cause to be provided, promotions and advertising for the Shopping Center, the
type, quantity, character and duration of which shall be at the Landlord's sole
discretion and the purpose of which shall be to assist the business of the
tenants and occupants of the Shopping Center. The Marketing Charge shall be used
by Landlord for such promotions and advertising. In connection with any
promotions and advertising provided by Landlord, or caused to be provided by
Landlord, Tenant hereby grants to Landlord a license to use the Tenant's trade
name, together with a description of the nature of Tenant's business in the
Demised Premises, and Tenant shall cooperate with Landlord in the carrying out
of such promotions and advertising and shall loan, for reasonable periods of
time, merchandise of Tenant to Landlord so as to permit Landlord to effect such
promotions and advertising.
(d) Special Marketing Charge. [Deleted.]
6. Construction.
(a) Improvements to be Constructed. Except as expressly set forth in
Exhibit D, Landlord has made no promise to alter, remodel or improve the
Premises, the Shopping Center or the Property. Tenant, at its own cost and
expense, shall perform the work and make the installations in the Premises that
are described as Tenant's Work in Exhibit D attached hereto and incorporated
herein by reference, in accordance with the plans and specifications to be
approved by Landlord. Tenant's plans and specifications shall conform to the
architectural and accessibility regulations issued by the United States Attorney
General's office pursuant to Title III of the Americans with Disabilities Act of
1990 and comply with the Minimum Guidelines and Requirements for Accessible
Design issued by the Architectural and Transportation Barriers Compliance Board.
Tenant shall commence the installation of the improvements promptly upon
Tenant's receipt of the Notice of Substantial Completion (defined in Paragraph 8
of Exhibit D). Tenant's installation shall be subject to the provisions of
Exhibit D and Paragraphs 7(b)-(c) below. Subject to Paragraph 27, Tenant shall
complete the fixturization of the Premises and use its best reasonable efforts
to open for business, fully stocked and staffed on or before the redevelopment
opening date as such redevelopment opening date is designated by Landlord in a
written notice to Tenant, provided, however, that the redevelopment opening date
shall not be deemed to be earlier than the Estimated Commencement Date. Tenant
acknowledges that the financial success of the Shopping Center depends, in part,
on Tenant's opening the Premises for business contemporaneously with the
redevelopment opening date as designated by Landlord and, in any event, no later
than the Estimated Commencement Date, and that Landlord's damages arising from
Tenant's failure to do so are extremely difficult and impracticable to fix.
Therefore, should Tenant fail to open for business by August 1, 1997, and
otherwise in compliance with this Paragraph 6(a), Tenant shall pay to Landlord,
as additional rental, a sum equal to Five Hundred Dollars ($500.00) multiplied
by the number of days after said date Tenant is in breach of the foregoing
covenant to open which sum Tenant agrees is fair compensation to Landlord for
said damages, provided, however, that notwithstanding the foregoing, Tenant
shall not be required to pay said $500.00 charge before August 1, 1997, that
such date shall be subject to the provisions of Paragraph 27 hereof, and that
for purposes hereof, Paragraph 27 shall be be understood to include governmental
delay.
(b) Condition of Premises. Except as otherwise agreed to in
writing, Tenant's taking possession of the Premises shall be conclusive evidence
against Tenant that the Premises were in good order and satisfactory condition
when Tenant took possession. Landlord has made no representation respecting the
condition of the Premises, the Shopping Center or the Property, except as is
expressly set forth in Exhibit D. At the termination of this Lease, by lapse of
time or otherwise, Tenant shall remove all Tenant's property, including, but not
limited to, trade fixtures, from the Premises, and shall return the Premises
broom-clean and in as good a condition as when Tenant took possession or as same
may thereafter have been put by Landlord, except for ordinary wear, loss by fire
or other casualty, and repairs that Landlord is required to make under this
Lease. If Tenant fails to remove any or all of its property upon termination of
this Lease, such property shall be deemed to be abandoned and shall become the
property of Landlord.
7. Use of the Premises.
(a) Use. Upon the commencement of the Lease Term, Tenant shall
open for business on the Premises and shall thereafter continuously, actively
and diligently operate its business on the Premises for a period of no less than
three (3) Lease Years. During all periods of Tenant's operation in the Premises,
Tenant shall operate in a high grade and reputable manner in the whole of the
Premises, maintaining in the Premises a full staff of employees and a full and
complete stock of merchandise during business hours. Notwithstanding anything to
the contrary in this Lease, provided that Tenant continues to fulfill all of its
other obligations hereunder, including without limitation, its obligation to pay
Base Rental and Additional Rental for the remainder of the Lease Term, Tenant
may, by written notice to Landlord ("Cessation Notice") elect to discontinue
operations in the Premises commencing on a date specified in such notice (the
"Cessation Date") provided, however, that the Cessation Date shall be no earlier
than the later to occur of (i) ninety (90) days after Landlord's receipt of such
notice and (ii) the last day of the third Lease Year. At any time after
Landlord's receipt of the Cessation Notice, whether or not Tenant has re-opened
for business in the Premises, Landlord may terminate this Lease by no less than
30 days' prior written notice to Tenant ("Termination Notice"); provided,
however, that the Lease shall not terminate prior to expiration of the period
specified in Tenant's Cessation Notice, and provided, further that if Tenant has
delivered said Cessation Notice, but continues to operate its business in the
Premises without interruption for at least ninety (90) days after the Cessation
Date, and Landlord shall not have delivered its Termination Notice within said
ninety (90) day period, Landlord's right to terminate the Lease in response to
the Cessation Notice shall terminate without prejudice to Landlord's right to
deliver another Termination Notice (and terminate the Lease pursuant to the
provisions hereof) if Tenant serves another Cessation Notice. Upon any such
termination, neither Tenant nor Landlord shall have any further liability to the
other hereunder, except for obligations which accrued prior to the date of such
termination.
During such periods as Tenant is operating in the Premises as
provided hereinabove, Tenant shall use the Premises for the conduct of the
business set forth in Paragraph 1(p) above and for no other purpose whatsoever.
During the first three (3) Lease Years, Tenant shall do business under either of
the trade names set forth in the first paragraph of this Lease and under no
other trade name unless specifically agreed to in writing by Landlord. Tenant
shall use and occupy the Premises so that no other occupant of any adjoining
premises will be unreasonably disturbed and shall create no nuisance in, upon or
about the Premises. Tenant will not make or permit to be made any use of the
Premises or any part thereof, and will not bring into or keep anything in the
Premises or any part thereof, that (i) violates any of the covenants,
agreements, terms, provisions and conditions of this Lease; (ii) directly or
indirectly is forbidden by public law, ordinance or regulation of any
governmental or public authority (including zoning ordinances) or by any
restrictive covenants to which the Property is subject; (iii) is dangerous to
life, limb or property; (iv) increases the risk to Landlord or any other tenant
or invalidates or increases the premium cost of any policy of insurance carried
on the Shopping Center or covering its operation; or (v) in the sole judgment of
Landlord, in any way impairs or tends to impair the character, reputation or
appearance of the Property as a first-class shopping center, or impairs or
interferes with any of the services performed by Landlord for the Property.
(b) Noise; Odors. Tenant shall not use, keep or permit to be
used or kept any foul or noxious gas or substance in the Premises; permit or
suffer the Premises to be occupied or used in a manner offensive or
objectionable to Landlord or other occupants of the Shopping Center by reason of
noise, odors and/or vibrations; interfere in any way with other tenants or those
having business therein; or bring in or keep any animals or birds in the
Premises. Tenant shall not use the Premises for housing accommodations, lodging
or sleeping purposes, or do any cooking therein, or use any illumination other
than electric light.
(c) Care. Subject to the provisions of Paragraph 10(b), Tenant
shall take good care of the Premises, the fixtures and appurtenances thereto,
and all alterations, additions and improvements thereto.
(d) Minimum Operating Hours. During the first three (3) Lease
Years, Tenant will keep the Premises continuously and uninterruptedly open for
business at least from 10:00 A.M. to 6:00 P.M. Monday through Saturday (legal
holidays only excepted), and keep same, including display or show windows and
canopies thereof, fully illuminated from dusk to approximately 11:00 P.M. of
each business day, unless prevented from doing so by strikes, fire, casualty or
other causes beyond Tenant's control.
(e) Merchandise and Staff. Tenant will carry sufficient
merchandise in the Premises at all times during the first three (3) Lease Years,
and shall at all times warehouse, store and/or stock only such quantities of
goods, wares and merchandise as are reasonably required by Tenant for sale at
retail at, in, on or from the Premises. During the first three (3) Lease Years,
Tenant will fully and adequately staff the Premises with sufficient employees
for the purpose of selling its merchandise or providing its services, and at all
times during the Lease Term will use for office, clerical or other non-selling
purposes only such space in the Premises as is reasonably required for Tenant's
business therein, not including any other business of Tenant in locations other
than the Premises. Tenant will not conduct any auction, fire, bankruptcy or
going out of business sale in the Premises without Landlord's prior written
consent, or otherwise in conflict with documents recorded prior to the date
hereof. Landlord shall execute an Access and Rental Payment Agreement in the
form attached hereto as Exhibit H, and hereby consents to the sale of personal
property from the Premises as described therein.
(f) Radius Restriction. Tenant agrees that Tenant, including
any corporation (but not any shareholder, director or other individual) that is
an Affiliate (as defined in Paragraph 18(a)), shall not, within the radius set
forth in Paragraph 1(q) above of the perimeter of the Shopping Center, either
directly or indirectly, own, operate or be financially interested in, with or
without others, a business like or similar to the business permitted to be
conducted pursuant to this Lease, nor shall Tenant permit any like or similar
business within said radius to be operated under a name which shall be the same
or similar to the name under which Tenant's business in the Premises is
conducted. The provisions of this Paragraph shall survive the termination of
this Lease or the re-entry into the Premises by Landlord resulting from a breach
of this Lease by Tenant; provided, however, that the Tenant's obligations under
this Paragraph shall terminate on the later to occur of the date Tenant shall
vacate the Premises or the expiration of the Lease Term.
8. Alterations.
(a) Prohibition. Tenant shall not make any alterations,
additions or improvements (collectively, the "Alterations") in or to the
Premises, or in or to the Shopping Center without the express prior written
consent of Landlord; provided, however, Landlord's consent shall not be required
for interior nonstructural Alterations so long as Tenant notifies Landlord in
writing at least fifteen (15) days prior to commencement of said nonstructural
Alterations, and provided that Tenant shall comply with all other provisions of
this Article 8 with respect thereto. Landlord consents to Tenant's Work
described in Exhibit D. Before commencing any work in connection with the
Alterations, Tenant shall furnish to Landlord for its approval the following:
(i) detailed plans and specifications therefor, (ii) names and addresses of each
of the contractors and subcontractors, (iii) copies of all contracts,
subcontracts and necessary permits, (iv) a payment and performance bond, or
other indemnification, in form and amount satisfactory to Landlord, protecting
Landlord against any and all claims, costs, damages, liabilities and expenses
that may arise in connection with the Alterations, (v) certificates of
insurance, in form and amount satisfactory to Landlord, from all contractors and
subcontractors who will perform labor or furnish materials, insuring Landlord
against any and all liability for personal injury, including workers'
compensation claims and for property damage that may arise out of or be in any
manner connected with the Alterations. Notwithstanding the foregoing, in the
event Tenant is only making nonstructural Alterations to the interior of the
Premises, Tenant shall only be required to furnish the items described in
clauses (iii) and (v) above.
(b) Indemnification. In addition to the indemnity set forth in
Paragraph 14(a) below, Tenant hereby specifically agrees to indemnify and hold
harmless Landlord from and against any and all liabilities, costs and expenses
of every kind and description, including attorneys' fees, that may arise out of
or in any manner be connected with any Alterations made by Tenant. Tenant shall
pay the cost of all such Alterations and all costs associated with decorating
the Premises that may be occasioned thereby. Upon completion of any such
Alterations, Tenant shall furnish Landlord with (i) receipted bills covering all
labor and materials used, together with copies of all mechanics' lien releases
or other releases on account of such Alterations, which are notarized,
unconditional and in recordable form, plus a copy of Tenant's recorded, valid
"Notice of Completion;" (ii) a true and correct copy of the certificate of
occupancy, if one is issued; and (iii) a certificate of Tenant's architect or
engineer stating that such Alterations were made in accordance with the plans
and specifications and in compliance with the Americans with Disabilities Act of
1990. Notice is hereby given that Landlord shall not be liable for any labor or
materials furnished or to be furnished to Tenant upon credit, and that no
mechanic's or other lien for such labor or material shall attach to or affect
the reversion or other estate or interest of Landlord in and to the Premises.
(c) Compliance and Supervision of Alterations. All Alterations
made by Tenant hereunder shall be installed in a good and workmanlike manner,
using only materials of the same or higher quality as those installed in the
Shopping Center. All Alterations shall comply with all requirements of
Landlord's insurance carriers and with all laws, rules, ordinances and
regulations of any lawful authority, including, but not limited to, the
Americans with Disabilities Act of 1990. Tenant shall permit Landlord to
supervise construction operations in connection with any such Alterations, if
Landlord requests the right to do so (but Landlord shall have no obligation to
make such requests, or having done so, to supervise construction). Landlord's
supervision of construction shall be done solely for the benefit of Landlord and
shall not alter Tenant's liability and responsibility under this Paragraph 8.
(d) Landlord's Property. All Alterations, whether temporary or
permanent, including hardware, non-trade fixtures and wall and floor coverings,
whether placed in or upon the Premises by Landlord or Tenant, shall become
Landlord's property and shall remain with the Premises at the termination of
this Lease, whether by lapse of time or otherwise, without compensation,
allowance or credit to Tenant; provided, however, notwithstanding the foregoing,
Landlord may request that any or all of said Alterations in or upon the Premises
made by Tenant be removed by Tenant at the termination of this Lease except that
Tenant shall not be required to remove structural or exterior Alterations
Landlord has approved pursuant to Paragraph 8(a) hereinabove unless Landlord
required such removal when Landlord approved said Alterations. If Landlord
requests such removal or if Tenant removes its trade fixtures, Tenant shall
remove the same prior to the end of the Lease Term and shall repair all damage
to the Premises, the Shopping Center or the Property caused by such removal.
Tenant shall not, however, be required to remove pipes and wires concealed in
floors, walls or ceilings, provided that Tenant properly cuts and caps the same,
and seals them off in a safe, lawful and workmanlike manner, in accordance with
Landlord's reasonable requirements and all applicable building codes. If Tenant
does not remove any Alterations when requested by Landlord to do so, Landlord
may remove the same and repair all damage caused thereby, and Tenant shall pay
to Landlord the cost of such removal and repair immediately upon demand therefor
by Landlord, plus fifteen percent (15%) of the cost of such removal to reimburse
Landlord for its administrative expense. Tenant's obligation to observe or
perform this covenant shall survive the expiration or termination of this Lease.
9. Mechanics' Liens.
(a) Prohibition. If, because of any act or omission of Tenant,
any mechanic's lien or other lien, charge or order for the payment of money
shall be filed against any portion of the Premises, Tenant, at its own cost and
expense, shall cause the same to be discharged of record or bonded against via
statutory procedures within sixty (60) days of the filing thereof unless Tenant
shall contest the validity of such lien by appropriate legal proceedings
diligently conducted in good faith and without expense to Landlord; and Tenant
shall indemnify and save harmless Landlord against and from all costs,
liabilities, suits, penalties, claims and demands, including attorneys' fees, on
account thereof.
(b) Landlord's Right to Discharge. If Tenant shall fail to
cause such liens to be discharged of record or bonded against within the
aforesaid sixty (60) day period or shall fail to satisfy such liens within
thirty (30) days after any judgment in favor of such lien-holders from which no
further appeal might be taken, then Landlord shall have the right to cause the
same to be discharged. All amounts paid by Landlord to cause such liens to be
discharged, plus interest on such amounts at the Default Rate shall constitute
Other Charges payable by Tenant to Landlord.
10. Maintenance and Repair.
(a) Tenant's Maintenance. Tenant, at its sole cost and
expense, shall maintain, repair, and replace during the Lease Term the Premises
and every part thereof and any and all appurtenances thereto, including but not
limited to, the doors (including frames and all hardware), windows (including
plate glass and interior casements and frames) and interior walls of the
Premises; light fixtures; kitchen fixtures; private bathroom fixtures and any
other type of special equipment, together with all meters, pipes, conduits,
equipment, components, and facilities (whether or not within the Premises) that
supply the Premises exclusively with utilities (except as the appropriate
utility company has assumed these duties), specifically including the repair and
replacement of the heating, ventilation and air conditioning system but
excluding the maintenance thereof; and rugs, carpeting, wall coverings, and
drapes within the Premises, whether installed by Tenant or by Landlord on behalf
of Tenant, and whether or not such items will become Landlord's property upon
expiration or termination of this Lease. Notwithstanding the provisions hereof,
in the event that repairs required to be made by Tenant become immediately
necessary to avoid possible injury or damage to persons or property, Landlord
may, but shall not be obligated to, make repairs to such items at Tenant's
expense, which shall constitute Other Charges payable by Tenant to Landlord.
Within ten (10) days after Landlord renders a bill for the cost of said repairs,
Tenant shall reimburse Landlord.
(b) Landlord's Maintenance. Subject to Paragraph 10(a) above,
Landlord shall maintain, repair and replace the Shopping Center (including the
roof and structural members, the Common Areas (as hereinafter defined),
mechanical and electrical equipment that supply the Premises or the Common Area
on a non-exclusive basis, the exterior and architectural finish, and all items
except those excepted elsewhere in this Lease) of which the Premises are a part,
and the lawn, shrubs and other landscaping on the Property, all in good and
tenantable condition during the Lease Term; in addition, Landlord shall maintain
(but shall not be required to repair or replace) the heating, ventilating, and
air conditioning equipment. Landlord shall, in addition, supply reasonable snow
removal for the walkways and parking areas of the Property. Tenant shall notify
Landlord immediately when any repair to be made by Landlord is necessary. If any
portion of the Shopping Center or the Premises is damaged through the fault or
negligence of Tenant, its agents, employees, invitees or customers, then Tenant
shall promptly and properly repair the same at no cost to Landlord; provided,
however, that Landlord may, at its option, make such repairs and Tenant shall,
on demand, pay the cost thereof, as Other Charges. Tenant shall immediately give
Landlord written notice of any defect or need for repairs, after which notice
Landlord shall have reasonable opportunity to repair same or cure such defect.
For the purposes of making any repairs or performing any maintenance, Landlord
may temporarily block, close or change any entrances, doors, corridors,
elevators, or other facilities in the Shopping Center or in the Premises, and
may close, block or change sidewalks, driveways or parking areas of the
Property, provided, however, that during any period of time that access to the
Premises is blocked or closed,
Landlord shall provide reasonable alternative access to the Premises at all
times. Landlord shall not be liable to Tenant, except as expressly provided in
this Lease, for any damage or inconvenience and Tenant shall not be entitled to
any abatement of rent by reason of any repairs, alterations or additions made by
Landlord under this Lease.
(c) Inspection. Tenant shall permit Landlord, its agents,
employees and contractors, at any time in the event of an emergency, and
otherwise at reasonable times, to take any and all measures, including
inspections, repairs, alterations, additions and improvements to the Premises or
to the Shopping Center, as may be necessary or desirable to safeguard, protect
or preserve the Premises, the Shopping Center or Landlord's interests; to
operate or improve the Shopping Center; to comply on behalf of Tenant with all
laws, orders and requirements of governmental or other authority (if Tenant
fails to do so); to examine the Premises to verify Tenant's compliance with all
of the terms, covenants, obligations and conditions of this Lease; or to
exercise any rights with respect to the Premises that Landlord may exercise in
the event of default by Tenant.
11. Common Areas.
(a) Grant. During the Lease Term, Landlord grants to Tenant,
its employees, customers and invitees, a nonexclusive license to use, in common
with all others to whom Landlord has granted or may hereafter grant a license to
use, the common areas of the Property, including but not limited to, the
sidewalks, exits, entrances, restrooms, parking areas below), driveways and
landscaped areas (collectively, the "Common Areas") subject to reasonable rules
and regulations respecting the Common Areas as Landlord may from time to time
promulgate. The Common Areas shall not be obstructed by Tenant or used for any
purpose other than for ingress to and egress from the Premises, except as
provided in 11(d) hereinbelow. The Common Areas are not for the use of the
general public and Landlord shall in all cases retain the right to control and
prevent access thereto by all persons whose presence, in the judgment of
Landlord, shall be prejudicial to the safety, character, reputation and
interests of the Shopping Center and its tenants, provided that nothing herein
contained shall be construed to prevent such access to persons with whom Tenant
normally deals in the ordinary course of Tenant's business unless such persons
are engaged in illegal activities.
(b) Employee Parking Areas. Tenant and its employees shall
park their cars only in such areas designated for that purpose by Landlord,
provided, however, that such employee parking area shall be within the southern
half of the Shopping Center unless otherwise approved in advance by Tenant.
Tenant shall furnish Landlord with automobile license numbers assigned to
Tenant's car(s) and cars used by its employees within five (5) days after taking
possession of the Premises and shall thereafter notify Landlord of any changes
in such information within five (5) days after such changes occur. If Tenant or
its employees shall fail to park their cars in such designated parking areas,
Landlord shall have the right to charge Tenant, as Other Charges under this
Lease, the sum of Ten Dollars ($10.00) per day per car parked in violation of
the provisions of this Paragraph 11. Tenant shall notify its employees in
writing of the provisions of this Paragraph 11.
(c) Right to Change Common Areas. Landlord may do and perform
such acts in and to the Common Areas as, Landlord, in its sole discretion, shall
determine to be advisable. Landlord hereby reserves the right to make
alterations, additions, deletions or changes to the Common Areas, including, but
not limited to, changes in its size and configuration.
(d) Food Zone. Landlord intends to provide a portion of the
Common Area for tables and chairs primarily but not exclusively for customers of
restaurant-type tenants in the Shopping Center to eat and drink food and
beverages purchased at the Shopping Center ("Food Zone"). The use of the Food
Zone may, at the election of each such restaurant-type tenant and as their sole
liability, include the consumption of alcoholic beverages, subject to the rules
and regulations imposed by governing authorities (including but not limited to
the Alcohol Beverage Control Board). As between Landlord and Tenant, Landlord
shall at all times have the right and privilege of determining the nature and
extent of the Food Zone and of any and all fixtures, property and equipment
furnished to or installed therein and making such changes, rearrangements,
additions or reductions (including elimination thereof) therein and thereto from
time to time, which, in its reasonable opinion, are deemed to be desirable and
for the best interest of a significant number of persons using the Food Zone or
the Shopping Center or which are made as a result of any federal, state or local
environmental or other law, rule, regulation, guideline, judgment or order.
Notwithstanding the foregoing, so long as alcohol is allowed to be served in the
Food Zone, the boundaries thereof shall be clearly marked, and initially the
Food Zone will be clearly marked on site in the area approximately cross-hatched
on Exhibit A hereto. Tenant acknowledges that Landlord may at any time elect to
discontinue the operation of the Food Zone and that Tenant is not entitled to an
interest in the Food Zone area.
From time to time during the term of this Lease, Landlord shall have
the right to promulgate (or revise) reasonable rules and regulations relating to
the operation and maintenance of the Food Zone as Landlord deems appropriate and
in the best interests of Landlord and tenants of the Shopping Center. Such
reasonable rules and regulations shall be binding upon delivery to Tenant. As a
part of such rules and regulations, Landlord shall have the right to establish
hours of operations of the Food Zone.
12. Utilities.
(a) Payment. Tenant shall promptly pay for utilities rendered
or furnished to the Premises from the date Landlord delivers possession of the
Premises to Tenant and continuing throughout the term of this Lease, including
water and sewage charges (if separately metered), electricity, telephone and gas
("Utility Expenses"). Landlord shall not be liable for any permanent or
temporary interruption of utility services nor shall any of Tenant's obligations
under this Lease be affected by any such interruption of utility services.
(b) Indemnification. Tenant shall indemnify and hold Landlord
harmless from and against any and all costs, liabilities, suits, penalties,
claims and demands, including attorneys' fees, as a result of a lien being
imposed upon the Premises by virtue of Tenant's failure to pay all or any part
of Utility Expenses.
(c) Energy Curtailment. Landlord and Tenant specifically
acknowledge that energy shortages in the region in which the Property is located
may from time to time necessitate reduced or curtailed energy consumption on the
Property. Tenant shall comply with all such rules and regulations as may be
promulgated from time to time by any governmental authority with respect to
energy consumption, and during such period of time as such governmental
authority may so require, Tenant shall reduce or curtail operations in the
Premises as shall be directed by Landlord or such governmental authority.
Compliance with such rules and regulations and/or such reduction or curtailment
of operation shall not constitute a breach of Landlord's covenant of quiet
enjoyment or otherwise invalidate or affect this Lease, and Tenant shall not be
entitled to any diminution or abatement in Base Rental during the periods of
reduction or curtailment of operations.
13. Estoppel Certificates. Within twenty (20) days after written
request by Landlord, Tenant shall execute, acknowledge and deliver to Landlord
or to Landlord's mortgagee, prospective mortgagee, land lessor or prospective
purchaser of the Property or any part thereof, an estoppel certificate, in form
and substance substantially similar to that attached as Exhibit E and
incorporated herein by reference. Tenant shall make such modifications to such
estoppel certificate as may be necessary to make such certificate true and
accurate, it being intended that any such statement delivered pursuant to this
Paragraph 13 may be relied upon by any such mortgagee, prospective mortgagee,
prospective purchaser, or land lessor of the Property. If Tenant fails to
provide such estoppel certificate with twenty (20) days after Landlord's
request, Tenant shall be deemed to have approved the contents of any such
certificate submitted to Tenant by Landlord and Landlord is hereby authorized to
so certify.
14. Mutual Indemnification. Subject to Paragraph 16 hereof, Landlord
shall Indemnify Tenant from and against all claims, losses, costs, damages, and
expenses, including attorneys' fees and costs of suit ("Losses and Liabilities")
arising from injury to any person or property, or loss of life arising out of
Landlord's use, operation or maintenance of the Common Area, and Tenant shall
Indemnify Landlord from and against Losses and Liabilities arising from injury
to any person or property, or loss of life, arising out of Tenant's use,
operation or maintenance of the Premises. The parties' indemnity obligations
hereunder shall survive the expiration or earlier termination of this Lease.
Indemnify means that a party (Indemnitor) shall indemnify, protect and
defend the other party (Indemnitee) from and against all Losses and Liabilities,
resulting from the death, bodily injury or personal injury of any person or
physical damage to, or (in case of a mechanic's lien) economic loss of, any
property arising out of the specified duties or conduct of the Indemnitor or its
agents and employees. An Indemnitee includes a party and its representatives. No
party shall be obligated to indemnify a proposed Indemnitee where the Losses and
Liabilities (a) are caused, in whole or in part, by the Indemnitee's act,
omission or negligence, or (b) has been released and waived in accordance with
Paragraph 16.
15. Insurance.
(a) Tenant's Insurance. Tenant, at its sole cost and expense,
shall carry from the earlier of the date Tenant enters the Premises with
Landlord's consent or the Commencement Date and continuing during the entire
Lease Term, the following types of insurance:
(i) Commercial general liability insurance on an
occurrence basis against injuries to persons occurring in, upon or
about the Premises, with minimum coverage of Two Million Dollars
($2,000,000.00) per occurrence, and One Million Dollars ($1,000,000.00)
for property damage;
(ii) Fire, extended coverage, vandalism and malicious
mischief, and sprinkler damage and all-risk insurance coverage on all
personal property, trade fixtures, floor coverings, wall coverings,
furnishings, furniture, and contents for their full insurable value on
a replacement cost basis;
(iii) Business interruption insurance, against loss
or damage resulting from the same risks as are covered by the insurance
mentioned in Paragraph (i) above in an amount equal to the aggregate of
one (1) year's requirement of (A) Base Rental, (B) the amounts payable
by Tenant for Additional Rental as provided in Paragraph 4(c), and (C)
insurance premiums necessary to comply with this Paragraph 15; and
(iv) Workers' Compensation or similar insurance, if
and to the extent required by law and in form and amounts required by law.
(b) Landlord as Additional Insured. All such insurance
required to be maintained by Tenant shall name Landlord, and at Landlord's
request, Landlord's property manager, as an additional insured and shall be
written with a company or companies reasonably satisfactory to Landlord, having
a policyholder rating of at least "A" and be assigned a financial size category
of at least "Class XIV" as rated in the 1996 edition of "Best's Key Rating
Guide" for insurance companies, and authorized to engage in the business of
insurance in the state in which the Premises are located. Tenant shall deliver
to Landlord copies of such policies and customary insurance certificates
evidencing such paid-up insurance. Such insurance shall further provide that the
same may not be canceled, terminated or modified unless the insurer gives
Landlord and Landlord's mortgagee(s) at least sixty (60) days' prior written
notice thereof.
(c) Landlord's Insurance. Landlord shall maintain in force, at
all times during the Lease Term, a policy or policies of all risk insurance
covering the Shopping Center, exclusive of any items insured by Tenant, in an
amount equal to one hundred percent (100%) of its replacement cost (exclusive of
the cost of excavations, foundations and footings). Further, Landlord shall
maintain in force, at all times during the Lease Term, a commercial general
liability insurance policy or policies for liability for bodily injury to
persons and damage to property occurring in or about the Common Area. Said
insurance policy or policies shall be in an amount not less than a combined
single limit liability of Two Million Dollars ($2,000,000) per occurrence.
(d) Increase in Premiums. If insurance premiums payable by
Landlord or any other tenant are increased as a result of any breach of Tenant's
obligations under this Lease or as a result of Tenant's use and occupancy of the
Premises, Tenant shall pay to Landlord an amount equal to any increase in such
insurance premiums.
16. Waiver of Subrogation. Neither Landlord nor Tenant shall be liable
to the other for any business interruption or any loss or damage to property or
in any manner growing out of or connected with Tenant's use and occupation of
the Premises, the Shopping Center or the Property or the condition thereof, or
of the adjoining property, whether or not caused by the negligence or other
fault of Landlord or Tenant or of their respective agents, employees,
subtenants, licensees or assignees; provided, however, that this release shall
apply only to the extent that such business interruption or loss or damage is
covered by insurance, regardless of whether such insurance is payable to or
protects Landlord or Tenant or both. Nothing in this Paragraph 16 shall be
construed to impose any other or greater liability upon either Landlord or
Tenant than would have existed in the absence hereof. Because this Paragraph 16
will preclude the assignment of any claim mentioned in it by way of subrogation
(or otherwise) to an insurance company (or any other person), each party to this
Lease agrees immediately to give to each insurance company that has issued to it
policies of fire and extended coverage insurance, written notice of the terms of
the mutual waivers contained in this paragraph, and to have the insurance
policies properly endorsed, if necessary, to prevent the invalidation of the
insurance coverages because of the mutual waivers contained in this Paragraph
16.
17. Holding Over. If Tenant retains possession of the Premises or any
part thereof after the termination of this Lease, Tenant shall, from that day
forward, be a tenant from month to month and Tenant shall pay Landlord rent at
two (2) times the monthly rate in effect immediately prior to the termination of
this Lease for the time the Tenant remains in possession. No acceptance of rent
by, or other act or statement whatsoever on the part of Landlord or its agent or
employee, in the absence of a writing signed by Landlord, shall be construed as
an extension of or as a consent for further occupancy. Tenant shall indemnify
Landlord for all damages, consequential as well as direct, sustained by reason
of Tenant's retention of possession. The provisions of this Paragraph 17 do not
exclude pursuit of Landlord's right of re-entry or any other right hereunder.
18. Assignment and Sublease.
(a) Prohibition. Provided Tenant is not then in default, upon
thirty (30) days' notice to Landlord, Tenant shall have the right to assign this
Lease, or sublet all or any portion of the Premises, with Landlord's reasonable
prior written approval. Landlord shall not withhold its approval of such
transfer if (i) the transferee's proposed use of the Premises is consistent with
a "first-class promotional retail center", transferee will be operating the
proposed use in substantially all of the Premises (provided, however, that the
foregoing clause shall not imply any greater requirement to operate than is
otherwise described in Paragraph 7a hereof), and the proposed use is not a
Restricted Use at the time of the proposed transfer, or an existing primary use
of another tenant on the Property (where "primary use" shall mean such other
tenant operates fifty percent (50%) or more of its floor area for such use or
derives fifty percent (50%) or more of its Gross Sales from such use), and (ii)
the proposed transferee has a reasonably acceptable net worth and business
experience respecting its proposed use of the Premises. Tenant shall not require
Landlord's approval, and shall be released from all obligations and liabilities
accruing and arising under the Lease from and after the date of an assignment of
the Lease, provided that Tenant notifies Landlord in writing as described in
Paragraph 18(b) hereof, and provided that the assignee, in addition to
satisfying the requirements of subpart (i) of this Paragraph 18(a) (A) has a net
worth equal to or greater than One Million Three Hundred Thousand Dollars
($1,300,000.00), and (B) has earned a profit during each of the past three (3)
full fiscal years in operating its retail business. If Tenant is not released
because all of the foregoing criteria are not satisfied, Tenant shall remain
fully responsible, and jointly and severally liable for the payment of the rent
and for compliance with all other obligations imposed upon Tenant under the
terms, provisions and covenants of the Lease, notwithstanding that Landlord
approves the assignment. Any single transfer of, or successive transfers
cumulating, fifty percent (50%) or more of the stock or ownership interest in
Tenant shall be an assignment of this Lease for purposes of this Paragraph 18.
Notwithstanding anything in this Lease to the contrary, none
of the following events shall be an assignment of the Lease or sublease of the
Premises ("transfer") that is subject to Landlord's approval or right to cancel
under Paragraph 18(c), and the transferee in each event shall be entitled to
exercise (subject to the terms and conditions of the Lease) all rights of the
original Tenant, including without limitation, those under Paragraphs 1(i) (rent
abatement), 3(b) (Lease termination), and 3(c) (Option Terms), provided that
Tenant shall notify Landlord as described in Paragraph 18(b) (excluding the
first sentence thereof):
(i) a transfer to an Affiliate (as hereinafter defined);
(ii) a transfer in connection with a merger or consolidation with, or sale
to, a buyer of substantially all of the assets of at least three (3) toy stores
of Tenant and its Affiliates in Southern California;
(iii) Tenant or any Affiliate becomes a public corporation pursuant to
California law and regulations of the California Commissioner of Corporations.
"Affiliate" is any individual, corporation, partnership, firm,
association or entity that, directly or indirectly, Controls, is Controlled by,
or is under common ownership or Control with, Tenant.
"Control" is the power, exercisable jointly or severally to
manage and direct any individual, corporation, partnership, firm, association or
entity through direct or indirect ownership of corporate stock, voting rights or
partnership interest.
(b) Notice/Documentation. Tenant's notice of an assignment or
sublease shall include evidence of the transferee's net worth and past business
profit (as shown in financial statements and tax returns) and copies of all
proposed agreements and documents (collectively, the "Transfer Documents")
memorializing, facilitating and/or evidencing the proposed assignment or
sublease. The Transfer Documents shall expressly provide that an assignee
assumes the Lease and agrees to be bound by all of the terms, covenants,
conditions, provisions and agreements of the Lease to the extent applicable and
a subtenant is bound by all of Tenant's duties under the Lease except payment of
rent; provided, however, that upon the occurrence of an "event of default" as
set forth in Paragraph 23 hereof, if all or any part of the Premises is then
assigned, sublet, transferred or occupied by someone other than Tenant, then, in
addition to any other remedies provided in this Lease or provided by law,
Landlord, at its option, may collect directly from the assignee, subtenant,
transferee or occupant all rent becoming due to Tenant by reason of the
assignment, sublease, transfer or occupancy. Any collection directly by Landlord
from the assignee or subtenant shall not be construed to constitute a novation
of the Lease or a release of Tenant's duties under the Lease. Upon consummation
of the assignment or sublease, Tenant shall promptly deliver a copy of the
executed Transfer Documents to Landlord and Landlord shall not be required to
acknowledge a transfer (whether or not Landlord has consented thereto) prior to
receiving a copy of said executed documents. Any purported transfer,
encumbrance, pledge, mortgage, assignment or subletting not in compliance
herewith shall be void and of no force or effect.
(c) Option to Cancel. After receiving notice of Tenant's
intended assignment or sublease, Landlord shall have the right to approve or
disapprove the transfer as provided hereinabove, or to terminate this Lease on
thirty (30) days' notice to Tenant unless Tenant rescinds its prior notice of
assignment or sublease within said thirty (30) day period. If the Lease so
terminates, Tenant shall be released from all unaccrued liabilities.
(d) Excess Rent. On the effective date of transfer by
assignment of this Lease or sublease of the Premises, the Base Rental for the
portion of the Premises transferred shall be increased by one-half (1/2) of all
rent and other consideration the transferee shall pay to Tenant (as and when so
paid) pursuant to the executed Transfer Documents in excess of the total rent
otherwise payable under this Lease. In no event shall the Base Rental, after
such assignment or subletting, be less than the Base Rental payable immediately
prior to such assignment or subletting.
19. Quiet Enjoyment. If Tenant shall pay the rents and other sums due
to be paid by Tenant hereunder as and when the same become due and payable, and
if Tenant shall keep, observe and perform all of the other terms, covenants and
agreements of this Lease on Tenant's part to be kept, observed and performed,
Tenant shall, at all times during the Lease Term herein granted, peacefully and
quietly have and enjoy possession of the Premises without any encumbrance or
hindrance by, from or through Landlord, except for regulations imposed by any
governmental or quasi-governmental agency on the occupancy of Tenant or the
conduct of Tenant's business operations.
20. Compliance with Laws and with Rules and Regulations.
(a) Laws. Tenant, at its sole cost and expense, shall procure any permits
and licenses required for the transaction of Tenant's business in the Premises.
Tenant, at its sole cost and expense, shall promptly observe and comply with all
present and future laws, ordinances, requirements, orders, directives, rules and
regulations, including, but not limited to, the Americans With Disabilities Act
of 1990, of all state, federal, municipal and other agencies or bodies having
jurisdiction relating to the use, condition and occupancy of the Premises, the
Shopping Center and the Property at any time in force, applicable to the
Premises or to Tenant's use thereof (collectively, "Applicable Laws"), except
that Tenant shall not be under any obligation to comply with any Applicable Law
requiring any structural alteration of the Premises, unless such alteration is
required because of a condition that has been created by, or at the instance of,
Tenant, or is required by reason of a breach of any of Tenant's covenants and
agreements under this Lease. Landlord shall not be required to repair any injury
or damage by fire or other cause, or to make any repairs or replacements of any
panels, decoration, office fixtures, railing, ceiling, floor covering,
partitions, or any other property installed in the Premises by Tenant. Tenant
shall provide Landlord with written notice if Tenant is aware of, or has
received a communication regarding, an actual or alleged violation of Applicable
Laws. If Tenant is required to take action to effectuate compliance with
Applicable Laws, Tenant shall have thirty (30) days, or such additional time as
is necessary to cause any necessary improvements and alterations to be made so
long as Tenant diligently and continuously attempts to effectuate the same, to
comply with Applicable Laws. If Tenant fails to comply as aforesaid, Landlord
shall have the right, but not the obligation, to make such improvements and
alterations as is necessary to comply with Applicable Laws and such sums
expended by Landlord shall be immediately due and payable by Tenant as Other
Charges under this Lease.
(b) Rules and Regulations. Tenant shall comply with all rules
and regulations for the Shopping Center that Landlord may from time to time
promulgate and/or modify relating to the use and operation of the Shopping
Center. Notwithstanding anything contained in this Lease, Landlord
shall not be responsible nor liable to Tenant, it agents, representatives,
employees, invitees or licensees, for the nonobservance by any other tenant of
any rules and regulations.
21. Fire and Casualty.
(a) Right to Terminate Lease. If (i) the Premises or the
Building shall be damaged to the extent of more than fifty percent (50%) of the
cost of replacement thereof during the last two years of the Lease Term, or,
(ii) the Premises or the Shopping Center shall be damaged as a result of a risk
which is not required to be covered by Landlord's insurance, then in any such
event, Landlord may terminate this Lease by notice given within ninety (90) days
after such event and upon the date specified in such notice, which shall not be
less than thirty (30) days nor more than sixty (60) days after the giving of
said notice, this Lease shall terminate, and Tenant shall vacate and surrender
the Premises to Landlord; provided, however, that if Landlord elects to
terminate the Lease as a result of damage described in clause (i) hereinabove,
and Tenant notifies Landlord in writing of its election to extend the Lease Term
according to Tenant's rights described in Paragraph 3(c) hereof within thirty
(30) days following receipt of the termination notice from Landlord, Landlord's
notice of termination shall be null and void.
(b) Obligation to Rebuild. If this Lease is not terminated
pursuant to Paragraph 21(a) above, Landlord shall proceed with due diligence to
restore, repair and replace the Premises and the Shopping Center to the same
condition as they were in as of the Commencement Date, to the extent such prior
condition can be achieved by use of available insurance proceeds. If the
casualty, repairing or rebuilding shall render the Premises untenantable, in
whole or in part, a proportionate abatement of the Base Rental shall be allowed
from the date when the damage occurred until completion of the repairs of
rebuilding or, in the event Landlord elects to terminate this Lease, until said
date of termination. Said proportionate abatement shall be computed on the basis
of the ratio which the amount of floor space rendered untenantable bears to the
total floor space of the Premises. Landlord shall be under no duty to restore
any alterations, improvements or additions made by Tenant. In all cases, due
allowance shall be given to Landlord for any reasonable delays caused by
adjustment of insurance loss, strikes, labor difficulties or any cause beyond
Landlord's control.
22. Eminent Domain.
(a) Termination of Lease. If all or substantially all of the
Premises or of the Property shall be taken for at least the unexpired portion of
the Lease Term for any public or quasi-public use under any statute or by rights
of eminent domain or by private purchase in lieu thereof, this Lease shall
terminate on the date when possession of the Premises or the Property, as the
case may be, shall be acquired by the condemning authority.
(b) Right to Terminate Lease. If less than all or
substantially all of the Premises, the leasehold estate or the Property shall be
taken and (i) the part so taken includes thirty percent (30%) or more of the
Premises, or (ii) the part so taken includes fifty percent (50%) or more of the
Shopping Center, or (iii) the part so taken consists of thirty percent (30%) or
more of the total parking area on the Property, or (iv) such part so taken
results in completely cutting off direct access from the primary thoroughfare
providing access to the Premises, then, and in any such event, within a period
of thirty (30) days after notice of such taking, either party may elect to
terminate this Lease by giving written notice to the other party, which
termination shall be effective on the date when possession of the Premises or
the Property, as the case may be, shall be acquired by the condemning authority.
If Tenant does not elect to terminate the Lease following a partial
taking of the leasehold estate, Tenant shall be entitled to the entire
condemnation award related to the leasehold estate. Otherwise, if either
Landlord or Tenant elects to terminate this Lease as described in these
Paragraphs 22(a) and (b), all awards from such taking shall belong to Landlord
and Tenant hereby assigns to Landlord all its right, title and interest to any
such awards; provided, however, that Tenant reserves unto itself the right to
prosecute, in a subsequent apportionment proceeding, any claim for the
unamortized cost of Tenant's Work paid by Tenant, any injury caused to trade
fixtures and equipment or for moving expenses.
(c) Repair. If this Lease is not terminated pursuant to the
provisions of Paragraphs 22(a) or (b) above, then Tenant shall, at its own cost
and expense and with reasonable promptness, restore the remaining portion of the
Premises to the extent necessary to reconstitute the improvements thereon
lien-free and in a good and workmanlike manner as a complete architectural unit,
susceptible to the same use as that which was in effect immediately prior to
such taking; and Landlord shall make available to Tenant for such purpose such
awards as Landlord actually receives, up to, but not to exceed, Tenant's
reasonable expenses incurred in so doing. If Tenant restores the Premises or any
part thereof pursuant to this Paragraph 22, such restoration shall be governed
by, and Landlord shall have the rights set forth in Paragraph 8.
(d) Temporary Requisition. In the event of the temporary
requisition of the use or occupancy of the Premises or any part thereof, by any
governmental authority, civil or military, Tenant shall retain any award or
payment therefor, whether the same shall be paid or payable in respect of
Tenant's leasehold interest hereunder or otherwise; provided, however, that
Tenant shall continue to pay Base Rental during the period of such temporary
requisition.
(e) Notice of Taking. Landlord shall notify Tenant of any
taking of the Premises contemplated by a public authority. No taking or
temporary requisition shall constitute a breach of Landlord's covenant of quiet
enjoyment, nor shall rent abate if this Lease is not terminated.
23. Default.
(a) Events of Default. If (i) Tenant fails to pay when due any
rent, or any other sums required to be paid hereunder by Tenant, and Tenant
shall fail to cure said default within ten (10) days after receipt of written
notice thereof by Landlord; or (ii) Tenant defaults in the performance or
observance of any other agreement or condition on its part to be performed or
observed, and Tenant shall fail to cure said default within thirty (30) days
after receipt of written notice thereof by Landlord; or (iii) Tenant or
Guarantor (any of them if more than one) files a voluntary petition in
bankruptcy or is adjudicated a bankrupt or insolvent, or files any petition or
answer seeking any arrangement, composition, liquidation or dissolution under
any present or future federal, state or other statute, law or regulation
relating to bankruptcy, insolvency or other relief for debtors or seeks or
consents to or acquiesces in the appointment of any trustee, receiver or
liquidator of Tenant or of all or any substantial part of its properties, or of
the Premises, or makes any general assignment for the benefit of creditors, or
admits in writing its inability to pay its debts generally as they become due;
or (iv) a court enters an order, judgment or decree approving a petition filed
against Tenant or Guarantor (any of them if more than one) seeking any
arrangement, composition, liquidation, dissolution or similar relief under any
present or future federal, state or other statute, law or regulation relating to
bankruptcy, insolvency or other relief for debtors, and such order, judgment or
decree shall remain unvacated or unstayed for an aggregate of sixty (60) days
(whether or not consecutive); or (v) Tenant fails to operate or closes its
business upon the Premises during the first three (3) Lease Years, for reasons
other than fire or other casualty or condemnation, for a period of fifteen (15)
consecutive days; or (vi) Tenant abandons the Premises; then any of the
foregoing shall be deemed a default under this Lease.
(b) Termination Remedy. If a default by Tenant occurs, then
and at any time thereafter, in addition to any other rights or remedies
available to Landlord at law or in equity, Landlord shall have the immediate
option, but not the obligation, to terminate this Lease and all rights of Tenant
hereunder without further notice or demand of any kind to Tenant or any other
person, except as required by applicable state law. In the event that Landlord
shall elect to so terminate this Lease, then Landlord, as provided in California
Civil Code Section 1951.2, may recover from Tenant:
(i) The worth at the time of award of any unpaid rent and other charges
which had been earned at the time of such termination; plus
(ii) The worth at the time of the award of the amount by which the unpaid
rent and other charges which would have been earned after termination until the
time of award exceeds the amount of such rental loss which Tenant proves could
have been reasonably avoided; plus
(iii) The worth at the time of award of the amount by which the unpaid rent
and other charges for the balance of the term of this Lease after the time of
award exceeds the amount of such rental loss which Tenant proves reasonably
could be avoided; plus
(iv) The total value at the time of the award of all of the concessions
granted to Tenant at the time of signing this Lease prorated based on the
remainder of the initial term of the Lease; plus
(v) Any other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under this
Lease or which in the ordinary course of things would be likely to result
therefrom, including but not limited to any cost or expense incurred by Landlord
in (i) terminating the Lease or retaking the Premises, including reasonable
attorney fees therefor, (ii) maintaining or preserving the Premises after such
default, (iv) preparing the Premises for reletting to a new tenant, including
repairs or alterations to the Premises for such reletting, (iv) leasing
commissions and (v) any other costs necessary or appropriate to relet the
Premises; plus
(vi) At Landlord's election, such other amounts in addition to or in lieu
of the foregoing as may be permitted from time to time by applicable law.
As used in Paragraphs 23(b)(i) and (ii) above, the "worth at the time
of award" shall be computed by allowing interest at the Default Rate. As used in
Paragraph 23(b)(iii) above, the "worth at the time of award" shall be computed
by discounting such amount at the discount rate of the Federal Reserve Bank of
San Francisco at the time of award plus one percentage point per annum.
All rent, other than Base Rental, including without limitation
Percentage Rental and Operating Expenses shall, for the purposes of calculating
any amount due under the provisions of (b)(3) of this Paragraph 23, be computed
on the basis of the highest annual amount of such rental paid to Landlord during
the three (3) Lease Years immediately preceding termination of the Lease except
that, if it becomes necessary to compute such rental before such a 3-year period
has occurred, then such rental shall be computed on the basis of the highest
annual or annualized amount accruing during such shorter period.
(c) Right to Continue Lease in Force. If Landlord does not
elect to terminate this Lease as provided above, Landlord may from time to time,
without terminating this Lease, enforce all of its rights and remedies under
this Lease, including the right to recover all rent as it becomes due. Tenant
acknowledges that Landlord shall have the remedy described in California Civil
Code Section 1951.4 (Landlord may continue this Lease in effect after Tenant's
breach and abandonment and recover rent as it becomes due, since Tenant
acknowledges Tenant has the right to sublease or assign subject only to
reasonable limitations as set forth in Paragraph 18 hereof.)
(d) No Deemed Termination. Landlord shall not be deemed to
have terminated this Lease, Tenant's right to possession of the Premises or the
liability of Tenant to pay rent thereafter accruing or its liability for damages
under any of the provisions hereof, unless Landlord shall have notified Tenant
in writing that it has so elected to terminate this Lease.
(e) Inducement Recapture in Event of Default. Any agreement by
Landlord for (i) free or abated rent, (ii) payment of any improvement allowance,
(iii) payment of any leasing commission whether or not set forth in the Lease or
(iv) the providing to Tenant of any other bonus, inducement or consideration for
Tenant's entering into this Lease (all of which concessions are hereinafter
referred to as "Inducement Provisions(s)") shall be deemed conditioned upon
Tenant's full and faithful performance of all of the terms, covenants and
conditions of this Lease to be performed or otherwise observed by Tenant during
the Initial Term or during such subsequent Option Term for which said Inducement
Provision was granted. Upon the occurrence of any default (as defined in
Paragraph 23(a) of this Lease) of this Lease by Tenant, any such Inducement
Provisions shall automatically be deemed deleted from this Lease and of no
further force or effect, and any amount paid or concession already given to
Tenant or paid in connection with the Lease or Tenant's occupancy of the
Premises under any Inducement Provisions with respect to the portion of the
Lease Term for which the Inducement Provision was granted shall be immediately
revoked and due and payable by Tenant to Landlord as additional rent under this
Lease, in addition to any other damage or sum which Landlord may be entitled to
recover under the provisions of this Paragraph 23.
(f) Removal of Property. Upon the termination of this Lease or
of Tenant's right to possession of the Premises by lapse of time or earlier
termination as herein provided, Tenant shall remove its property from the
Premises. Any such property of Tenant not removed from the Premises by Tenant
within thirty (30) days after the end of the term or of Tenant's right to
possession of the Premises, however terminated, whichever occurs earlier, shall
be conclusively deemed to have been forever abandoned by Tenant and either may
be retained by Landlord as its property or may be disposed of in such manner as
Landlord may see fit.
(g) Landlord's Right to Pay or Perform. If Tenant at any time fails to make
any payment or perform any other act on its part to be made or performed under
this Lease, Landlord may, but shall not be obligated to, and after reasonable
notice or demand and without waiving or releasing Tenant from any obligation
under this Lease, make such payment or perform such other act to the extent
Landlord may deem desirable, and in connection therewith to pay expenses and
employ counsel. Tenant shall pay upon demand all of Landlord's costs, charges
and expenses, including the fees of counsel, agents and others retained by
Landlord, incurred in enforcing Tenant's obligations hereunder or incurred by
Landlord in any litigation, negotiations or transactions in which Tenant causes
Landlord, without Landlord's fault, to become involved or concerned, which
amount shall be deemed to be rent due and payable by Tenant, upon demand by
Landlord, and Landlord shall have the same rights and remedies for the
nonpayment thereof, as in the case of default in the payment of rent.
(h) Remedies Cumulative. All rights and remedies of Landlord herein
enumerated shall be cumulative, and none shall exclude any other right or remedy
allowed by law. In addition to the other remedies in this Lease provided,
Landlord shall be entitled to the restraint by injunction of the violation or
attempted violation of any of the covenants, agreements or conditions of this
Lease.
24. Waiver of Default or Remedy. No waiver of any covenant or condition
or of the breach of any covenant or condition of this Lease shall be taken to
constitute a waiver of any subsequent breach of such covenant or condition nor
to justify or authorize the nonobservance on any other occasion of the same or
of any other covenant or condition hereof, nor shall the acceptance of rent by
Landlord at any time when Tenant is in default under any covenant or condition
hereof be construed as a waiver of such default or of Landlord's right to
terminate this Lease on account of such default, nor shall any waiver or
indulgence granted by Landlord to Tenant be taken as an estoppel against
Landlord, it being expressly understood that if at any time Tenant shall be in
default in any of its covenants or conditions hereunder an acceptance by
Landlord of rental during the continuance of such default or the failure on the
part of Landlord promptly to avail itself of such rights or remedies as Landlord
may have, shall not be construed as a waiver of such default, but Landlord may
at any time thereafter, if such default continues, terminate this Lease or
assert any other rights or remedies available to it on account of such default
in the manner hereinbefore provided.
25. Landlord's Lien. [Intentionally omitted.]
26. Uniform Commercial Code. [Intentionally omitted.]
27. Force Majeure. If Landlord or Tenant shall be delayed, hindered in
or prevented from the performance of any act required hereunder (other than the
payment of rent and other charges payable by Tenant) by reason of strikes,
lockouts, labor troubles, inability to procure materials or governmental
permits, failure of power, riots, insurrection, the act, failure to act or
default of the other party, war or any other condition beyond the reasonable
control of the party who is seeking additional time for the performance of such
act, then performance of such act shall be excused for the period of the delay
and the period for the performance of any such act shall be extended for a
reasonable period, in no event to exceed a period equivalent to the period of
such delay. No such interruption of any service to be provided by Landlord shall
ever be deemed to be an eviction, actual or constructive, or disturbance of
Tenant's use and possession of the Premises, the Shopping Center or the
Property.
28. Subordination of Lease.
(a) Landlord reserves the right and privilege to subject and
subordinate this Lease to any and all mortgages, deeds of trust or land leases
now existing upon or that may be hereafter placed upon the Premises and the
Property and to all advances made or to be made thereon and all renewals,
modifications, consolidations, replacements or extensions thereof and if such
right is exercised, the lien of any such mortgages, deeds of trust or land
leases shall be superior to all rights hereby or hereunder vested in Tenant, to
the full extent of all sums secured thereby. In confirmation of such
subordination, Tenant shall, on request of Landlord or the holder of any such
mortgages, deed(s) of trust and land leases, execute and deliver to Landlord
within ten (10) days any instrument that Landlord or such holder may reasonably
request.
(b) If the interest of Landlord under this Lease shall be
transferred by reason of foreclosure, deed in lieu of foreclosure, or other
proceedings for enforcement of any first mortgage or deed of trust on the
Premises, Tenant shall be bound to the transferee (the "Purchaser") under the
terms, covenants and conditions of this Lease for the balance of the Lease Term
remaining, and any extensions or renewals, with the same force and effect as if
the Purchaser were the Landlord under this Lease, and at the option of
Purchaser, Tenant shall attorn to the Purchaser (including the mortgagee under
any such mortgage, if it be the Purchaser), as its Landlord, the attornment to
be effective and self-operative without the execution of any further instruments
upon the Purchaser succeeding to the interest of Landlord under this Lease. The
respective rights and obligations of Tenant and the Purchaser upon the
attornment, to the extent of the then remaining balance of the Lease Term, and
any extensions and renewals, shall be and are the same as those set forth in
this Lease.
Notwithstanding the foregoing provisions of this Paragraph 28,
Tenant's obligation to subordinate its rights hereunder or to attorn to any
Purchaser as provided hereinabove is expressly subject to agreement by any such
lienholder or Purchaser to recognize Tenant's Lease and, provided Tenant is not
in default of the Lease beyond any applicable cure periods, not disturb Tenant's
possession of the Premises on foreclosure.
29. Notices and Consents. All notices, demands, requests, consents and
approvals that may or are required to be given by either party to the other
shall be in writing and shall be deemed given when sent by United States
certified or registered mail, postage prepaid, or by overnight courier (a) if
for Tenant, addressed to Tenant at the Shopping Center with a copy to the
address set forth in Paragraph 1(c) above, or at such other place as Tenant may
from time to time designate by notice to Landlord, or (b) if for Landlord, to
the address set forth in Paragraph 1(a) above and to the address set forth in
Paragraph 1(b) above, or at such other place as Landlord may from time to time
designate by notice to Tenant. All consents and approvals provided for herein
must be in writing to be valid. Notice shall be deemed to have been given if
addressed and mailed as above provided on the date two (2) days after deposit in
the United States mail or one (1) day after deposit with an overnight courier.
30. Security Deposit. [Intentionally deleted.]
31. Miscellaneous Taxes. Tenant shall pay, prior to delinquency, all
taxes assessed against or levied upon its occupancy of the Premises, or upon the
fixtures, furnishings, equipment and all other personal property of Tenant
located in the Premises, if nonpayment thereof shall give rise to a lien on the
Premises, and when possible Tenant shall cause said fixtures, furnishings,
equipment and other personal property to be assessed and billed separately from
the property of Landlord. If any or all of Tenant's fixtures, furnishing,
equipment and other personal property, upon Tenant's occupancy of the Premises,
are assessed and taxed with the property of Landlord, Tenant shall pay to
Landlord its share of such taxes within ten (10) days after delivery to Tenant
by Landlord of a statement in writing setting forth the amount of such taxes
applicable to Tenant's fixtures, furnishings, equipment or personal property.
32. Brokerage Commission. Except for any broker, agent or other person
identified in Paragraphs 1(s) and 1(t) above, Landlord and Tenant represent and
warrant each to the other that each has dealt with no broker, agent or other
person in connection with this transaction and that no broker, agent or other
person brought about this transaction. Landlord hereby agrees to pay to
Landlord's broker identified in Paragraph 1(s) above ("Agent") a leasing
commission as set forth in that certain Property Management Agreement between
Landlord and Agent, from which Agent shall pay "co-op" leasing commission to
Tenant's broker identified in Paragraph 1(t) above ("Co-op Broker"). Landlord
and Tenant each agree to indemnify and hold the other harmless from and against
any claims by any other broker, agent or other person (including, without
limitation, Co-op Broker) claiming a commission or other form of compensation by
virtue of having dealt with the indemnifying party with regard to this leasing
transaction. The provisions of this Paragraph 32 shall survive the termination
of this Lease.
33. Hazardous Devices and Contaminants.
(a) Prohibition. Except with the prior written consent of
Landlord, Tenant shall not install or operate any steam or internal combustion
engine, boiler, machinery, refrigerating or heating device or air-conditioning
apparatus in or about the Premises, or carry on any mechanical business therein.
Except for Contaminants (as hereinafter defined) used in the ordinary course of
business and in compliance with Requirements of Law (as hereinafter defined),
Tenant and its agents, employees, contractors and invitees shall not use, store,
release, generate or dispose of or permit to be used, stored, released,
generated or disposed of any Contaminants on or in the Premises.
(b) Indemnification by Tenant. Tenant shall indemnify and hold
harmless Landlord, its agents, servants, employees, officers and directors
forever from and against any and all liability, claims, demands and causes of
action, including, but not limited to, any and all liability, claims,
demands and causes of action by any governmental authority, property owner or
any other third person and any and all expenses, including attorneys' fees
(including, but not limited to, attorneys' fees to enforce Tenant's obligation
of indemnification under this Paragraph 33(b)), relating to any environmental
liability resulting from (i) any Release (as hereinafter defined) of any
Contaminant at the Premises or emanating from the Premises to adjacent
properties or the surrounding environment during the Lease Term; (ii) during the
Lease Term, any generation, transport, storage, disposal, treatment or other
handling of any Contaminant at the Premises, including, but not limited to, any
and all off-site transport, storage, disposal, treatment or other handling of
any Contaminant generated, produced, used and/or originating in whole or in part
from the Premises; and (iii) any activities at the Premises during the Lease
Term that in any way might be alleged to fail to comply with any Requirements of
Law. The provisions of this Paragraph 33(b) shall survive the termination of
this Lease.
(c) Indemnification by Landlord. Landlord shall indemnify and
hold harmless Tenant, its agents, servants, employees, officers and directors
forever from and against any and all liability, claims, demands and causes of
action, including, but not limited to, any and all liability, claims, demands
and causes of action by any governmental authority, property owner or any other
third person and any and all expenses, including attorneys' fees (including, but
not limited to, attorneys' fees to enforce Landlord's obligation of
indemnification under this Paragraph 33(c)), relating to any environmental
liability caused solely by Landlord's actions and resulting from (i) any Release
(as hereinafter defined) of any Contaminant at the Common Area or emanating from
the Common Area to adjacent properties or the surrounding environment during the
Lease Term; (ii) during the Lease Term, any generation, transport, storage,
disposal, treatment or other handling of any Contaminant at the Common Area,
including, but not limited to, any and all off-site transport, storage,
disposal, treatment or other handling of any Contaminant generated, produced,
used and/or originating in whole or in part from the Common Area; and (iii) any
activities at the Common Area during the Lease Term that in any way might be
alleged to fail to comply with any Requirements of Law. The provisions of this
Paragraph 33(b) shall survive the termination of this Lease.
(d) Definitions.
(i) "Contaminant" shall mean any substance or waste
containing hazardous substances, pollutants, and contaminants as those
terms are defined in the federal Comprehensive Environmental Response
Compensation and Liability Act, 42 U.S.C. Section 9601 et seq. and any
substance similarly defined or identified in any other federal,
provincial or state laws, rules or regulations governing the
manufacture, import, use, handling, storage, processing, release or
disposal of substances or wastes
deemed hazardous, toxic, dangerous or injurious to public
health or to the environment. This definition includes friable asbestos
and petroleum or petroleum-based products.
(ii) "Requirements of Law" shall mean any federal,
state or local law, rule, regulation, permit, agreement, order or other
binding determination of any governmental authority relating to the
environment, health or safety.
(iii) "Release" shall have the same meaning as in the
federal Comprehensive Environmental Response Compensation and Liability
Act, 42 U.S.C. Section 9601, et seq.
34. Exculpation. This Lease is executed by certain general partners of
Landlord, not individually, but solely on behalf of, and as the authorized
nominee and agent for STRBO, and in consideration for entering into this Lease,
Tenant hereby waives any rights to bring a cause of action against the
individuals executing this Lease on behalf of Landlord (except for any cause of
action based upon lack of authority or fraud), and all persons dealing with
Landlord must look solely to STRBO's assets for the enforcement of any claim
against Landlord, and the obligations hereunder are not binding upon, nor shall
resort be had to the private property of any of, the trustees, officers,
directors, employees or agents of STRBO.
35. Signs. On or before the date that Tenant opens for business on the
Premises, Tenant, at its sole cost, shall erect an appropriate sign advertising
Tenant's business on the portion of the exterior of the Premises designated by
Landlord for the placement of Tenant's sign in conformity with Exhibit F,
attached hereto and incorporated herein by reference. The size, type, design,
wording, appearance and location of all signs shall require Landlord's written
approval prior to installation. All signs shall comply with Exhibit F, and
Tenant shall obtain all requirements of appropriate governmental authority and
all necessary permits or licenses. Tenant shall maintain all signs in good
condition and repair at all times and shall indemnify and hold Landlord harmless
from injury to person or property (including attorneys' fees and costs of suit)
arising from the erection and maintenance of said signs. Further, Tenant shall
move and reinstall Tenant's sign to a place designated by Landlord in front of
the Premises at Tenant's expense upon notice from Landlord if Landlord elects to
remodel the exterior of the building in which the Premises are located. Also, if
as a part of remodeling specifications, a new exterior tenant sign criteria is
developed by Landlord, then within 60 days after Tenant's receipt of written
notice of said new sign criteria, Tenant shall, at Tenant's expense, remove all
existing signs and replace the same with new signs in accordance with new sign
criteria. Upon vacating the Premises, Tenant shall remove all signs and repair
all damages caused by installation and removal.
36. Locks. No additional locks or similar devices shall be attached to
any door or window without Landlord's prior written consent. Except for those
keys provided by Landlord, no keys for any door shall be made. If more than two
keys for one lock are desired, Landlord will provide the same upon payment by
Tenant. All keys must be returned to Landlord at the expiration or termination
of this Lease. Tenant shall see that the doors and windows, if operable, of the
Premises are closed and securely locked before leaving the Premises.
37. Employment. If either party employs, directly or indirectly,
unionized labor whose activities illegally interfere with (a) in the case of
Tenant, the employees of Landlord or the customers of other tenants at the
Property, or (b) in the case of Landlord, the customers of Tenant, each such
employer party shall, at its sole cost, use all commercially reasonable efforts,
including commencing appropriate administrative or judicial proceedings, to
prevent such interference.
38. Plumbing. Tenant must observe strict care and caution that all
water faucets and water apparatus are shut off before Tenant or its employees
leave the Premises to prevent waste or damage. Plumbing fixtures and appliances
shall be used only for purposes for which constructed, and no sweepings,
rubbish, rags or other unsuitable material shall be thrown or placed therein.
Damage resulting to any such fixtures or appliances from misuse by Tenant shall
be paid by Tenant and Landlord shall not in any case be responsible therefor.
39. Certain Rights Reserved to Landlord. Landlord reserves the
following rights:
(a) To name the Shopping Center and to change the name or street address of
the Shopping Center;
(b) On reasonable prior notice to Tenant, to exhibit the Premises to
prospective tenants during the last twelve (12) months of the Lease Term, and to
exhibit the Premises to any prospective purchaser, mortgagee, or assignee of any
mortgage on the Property and to others having a legitimate interest at any time
during the Lease Term; and
(c) To install vending machines of all kinds on the Property and to receive
all of the revenue derived therefrom; provided, however, that no vending
machines shall be installed by Landlord in the Premises.
40. Guaranty. At Landlord's election, the effectiveness of this Lease
is conditioned upon the Guarantor set forth in Paragraph 1(u) above (i)
executing the Guaranty attached to this Lease as Exhibit G and delivering it to
Landlord before or concurrently with Tenant's execution and delivery of this
Lease to Landlord, and (ii) delivering to Landlord, along with such originally
executed Guaranty, such evidence as Landlord shall require that (A) the Guaranty
has been duly authorized, executed and delivered pursuant to all necessary
corporation actions (if applicable) such as broad-form resolution, if
sufficiently current and specific, (B) the Guaranty is binding on and
enforceable against the Guarantor in accordance with its terms, and (C) the
individual(s) executing and delivering the Guaranty are empowered to do so
pursuant to all necessary corporate authorizations (if applicable) such as a
broad-form resolution and an incumbency certificate, if sufficiently current and
specific.
41. Miscellaneous.
(a) No receipt of money by Landlord from Tenant after the
termination of this Lease or after the service of any notice or after the
commencement of any suit, or after final judgment for possession of the Premises
shall reinstate, continue or extend the Lease Term or affect any such notice,
demand or suit or imply consent for any action for which Landlord's consent is
required.
(b) The term "Landlord" as used in this Lease, so far as
covenants or agreements on the part of Landlord are concerned, shall be limited
to mean and include only the owner (and/or ground lessor, as the case may be)
for the time being of the Premises. If the Premises or the underlying lease, if
any, be sold or transferred, the seller thereof shall be automatically and
entirely released of all covenants and obligations under this Lease from and
after the date of conveyance or transfer, provided the purchaser on such sale
has assumed and agreed to carry out all covenants and obligations contained in
this Lease to be performed on the part of Landlord hereunder, it being hereby
agreed that the covenants and obligations, contained in this Lease to be
performed on the part of Landlord, hereunder it being hereby agreed that the
covenants and obligations contained in this Lease shall be binding under
Landlord, its successors and assigns, only during their respective successive
period of ownership.
(c) It is understood that Landlord may occupy portions of the
Shopping Center in the conduct of Landlord's business. In such event, all
references herein to other tenants of the Shopping Center shall be deemed to
include Landlord as occupant.
(d) All of the covenants of Tenant hereunder shall be deemed
and construed to be "conditions" as well as "covenants" as though the words
specifically expressing or implying covenants and conditions were used in each
separate instance.
(e) In the event of variation or discrepancy among
counterparts, Landlord's original copy of this Lease shall control.
(f) This Lease shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns,
provided that this provision shall in no manner enlarge Tenant's rights of
assignment, which right of assignment has been restricted under the foregoing
provisions of this Lease.
42. Relationship of Parties. Any intention to create a joint venture,
partnership or principal and agent relationship between the parties hereto is
hereby expressly disclaimed. This Lease shall create the relationship of
landlord and tenant between Landlord and Tenant.
43. Gender and Number. Whenever words are used herein in any gender,
they shall be construed as though they were used in the gender appropriate to
the context and the circumstances, and whenever words are used herein in the
singular or plural form, they shall be construed as though they were used in the
form appropriate to the context and the circumstances.
44. Topic Headings. Headings and captions in this Lease are inserted
for convenience and reference only and in no way define, limit or describe the
scope or intent of this Lease nor constitute any part of this Lease and are not
to be considered in the construction of this Lease.
45. Counterparts. Several copies of this Lease may be executed by all of
the parties. All executed copies constitute one and the same Lease, ------------
binding upon all parties.
46. Entire Agreement. This Lease contains the entire understanding
between the parties and supersedes any prior understanding or agreements between
them respecting the subject matter. No representations, arrangement, or
understandings except those fully expressed herein, are or shall be binding upon
the parties. No changes, alterations, modifications, additions or qualifications
to the terms of this Lease shall be made or be binding unless made in writing
and signed by each of the parties.
47. Attorneys' Fees. If either party commences litigation against the
other for the specific performance of this Lease, for damages for the breach
hereof or otherwise for enforcement of any remedy hereunder, the parties hereby
agree that the prevailing party shall be entitled to recover from the other
party such costs and reasonable attorneys' fees as may have been incurred. A
party shall be deemed "prevailing" if such party is entitled by law to recover
its costs in the action, whether or not the action proceeds to final judgment. A
party not entitled to recover its costs shall not recover attorney fees;
provided, however, where a party institutes and then dismisses an action against
a defendant party without the latter's concurrence, such defendant party shall
be the prevailing party. A final judgment shall specify the prevailing party's
right to recover its costs of the action (including attorney fees and costs)
incurred in enforcing, perfecting and executing such judgment, including all
costs incurred in connection with postjudgment motions, contempt proceedings,
garnishment, levy and debtor/third party examinations, discovery, and bankruptcy
litigation. The term "attorney fees" includes fees of outside legal counsel and
reasonable costs allocable to a party's in-house legal counsel.
48. Governing Law; Invalidity of any Provisions. This Lease shall be
subject to and governed by the laws of the state in which the Premises are
located. 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
other terms 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 be enforced to the fullest extent permitted by
law.
IN WITNESS WHEREOF, the parties have executed this Lease as of the day
and year first above written.
LANDLORD:
OTR, an Ohio general partnership, acting as the duly authorized nominee of the
BOARD OF THE STATE TEACHERS RETIREMENT SYSTEM OF OHIO
- --------------------------------
By:____________________, a general partner
TENANT: TOYS INTERNATIONAL, A CALIFORNIA CORPORATION
By: ________________________________
Title: ______________________________
By: ________________________________
Title: ______________________________
EXHIBIT A
SITE PLAN
EXHIBIT B
LEGAL DESCRIPTION OF PROPERTY
PARCEL 1
Parcels A and C of Parcel Map No. 1228, in the City of San Diego, County of San
Diego, State of California, filed in the Office of the County Recorder of San
Diego County, January 16, 1973, as File No. 73-013497 of Official Records.
PARCEL 3:
That portion of Lot 2 of NORTH CLAIREMONT PLAZA, according to Map thereof No.
3484, filed in the Office of the County Recorder of San Diego County, August 3,
1956, described as follows:
BEGINNING at the Southeasterly corner of Lot 1 of said NORTH CLAIREMONT PLAZA;
thence along the Southerly line of said Lot 2, South 89(degree) 44' 05" East 3
feet; thence North 0(degree) 15' 55" East 165 feet; thence North 89(degree) 44'
05" West 153 feet to the Westerly line of said Lot 2; thence South 0(degree) 15'
55" West 15 feet to the Northwesterly corner of said Lot 1; thence South
89(degree) 44' 05" East 150 feet to the Northeasterly corner of said Lot 1;
thence South 0(degree) 15' 55" West 150 feet to the Point of Beginning.
PARCEL 4:
Lot 2 of NORTH CLAIREMONT PLAZA, in the City of San Diego, County of San Diego,
State of California, according to Map thereof No. 3484, filed in the Office of
the County Recorder of San Diego County, August 3, 1956.
EXCEPTING that portion described as follows:
BEGINNING at the Southeasterly corner of Lot 1 of said NORTH CLAIREMONT PLAZA;
thence along the Southerly line of said Lot 2, South 89(degree) 44' 05" East 3
feet; thence North 0(degree) 15' 55" East 165 feet; thence North 89(degree) 44'
05" West 153 feet to the Westerly line of said Lot 2; thence South 0(degree) 15'
55" West 15 feet to the Northwesterly corner of said Lot 1; thence South
89(degree) 44' 05" East 150 feet to the Northeasterly corner of said Lot 1;
thence South 0(degree) 15' 55" West 150 feet to the Point of Beginning.
PARCEL 5:
That portion of Lot 3 of NORTH CLAIREMONT PLAZA, in the City of San Diego,
County of San Diego, State of California, according to Map thereof No. 3484,
filed in the Office of the County Recorder of San Diego County, described as
follows:
BEGINNING at a point in the Easterly line of said Lot 3, distant along said
Easterly line South 1(degree) 44' 47" West 371.75 feet from the Southerly
terminus of a 956 foot radius curve, concave Easterly in the Easterly line of
said Lot; thence North 89(degree) 44' 05" West 194.58 feet; thence South
0(degree) 15' 55" West 99.97 feet to the TRUE POINT OF BEGINNING; thence North
89(degree) 44' 05" West, 28.07 feet; thence South 0(degree) 15' 55" West 220
feet to a point in the South line of said Lot 3, said point being North
89(degree) 44' 05" West, 202.77 feet from the Southeast corner of said Lot 3;
thence along the South line of said Lot 3 South 89(degree) 44' 05" East 202.77
feet to said Southeast corner, being point in the arc of a 694 foot radius
curve, concave Westerly, a radial line to said point bears South 77(degree) 45'
33" East; thence along the Easterly line of said Lot, Northerly along said
curve, 127.11 feet, and tangent to said curve, North 1(degree) 44' 47" East to
the Northerly line of the Southerly 220 feet, measured at right angles of said
Lot 3; thence along said Northerly line North 89(degree) 44' 05" West to the
TRUE POINT OF BEGINNING.
PARCEL 6:
NON-EXCLUSIVE EASEMENTS FOR PURPOSES DISCLOSED THEREIN OVER A PORTION OF THE
LAND SHOWN THEREIN AS MORE FULLY CONTAINED AND DESCRIBED IN THAT CERTAIN
DOCUMENT ENTITLED "OPERATION AND RECIPROCAL EASEMENT AGREEMENT" DATED JULY 7,
1972, RECORDED JANUARY 5, 1973, AS FILE NO. 73-003772 AND SUBJECT TO THE
CONDITIONS THEREIN CONTAINED IN SAID DOCUMENT.
PARCEL 7:
NON-EXCLUSIVE EASEMENTS FOR PURPOSES DISCLOSED THEREIN OVER A PORTION OF THE
LAND SHOWN THEREIN AS MORE FULLY CONTAINED AND DESCRIBED IN THAT CERTAIN
DOCUMENT ENTITLED "OPERATION AND RECIPROCAL EASEMENT AGREEMENT" DATED MARCH 27,
1972, RECORDED JANUARY 5, 1973, AS FILE NO. 73-003774 AND SUBJECT TO THE
CONDITIONS THEREIN CONTAINED IN SAID DOCUMENT.
EXHIBIT C
COMMENCEMENT DATE AGREEMENT
THIS COMMENCEMENT DATE AGREEMENT ("Agreement") dated __________, 199___ is
between OTR, an Ohio general partnership, whose address is 275 East Broad
Street, Columbus, Ohio 43215, acting as the duly authorized nominee of The State
Teachers Retirement System of Ohio ("Landlord"), whose address is 275 East Broad
Street, Columbus, Ohio 43215, and TOYS INTERNATIONAL, doing business under the
trade names Play Co. Toys or Toys International ("Tenant"), whose address is 550
Rancheros Drive, San Marcos, California 92069.
W I T N E S S E T H:
A. Landlord and Tenant executed a certain Lease dated __________,
199___ (the "Lease").
B. The Lease provides that the Lease will commence on the date that
Landlord delivers possession of the Premises (as defined in the Lease) to
Tenant.
C. Landlord and Tenant now desire to set forth in writing the actual
date of delivery of the Premises and the actual commencement date of the Lease.
NOW THEREFORE in consideration of the mutual covenants and promises
contained herein and other valuable consideration, the parties agree that the
Lease commenced on _________, 199___ and shall terminate on ___________ __,
____.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on the day and year first above written.
LANDLORD: OTR, an Ohio general partnership acting as the duly authorized
nominee of The State Teachers Retirement System of Ohio
- ---------------------------
By:___________________, a general partner
TENANT: TOYS INTERNATIONAL,
A CALIFORNIA CORPORATION
By: ________________________________
Title: ______________________________
By: ________________________________
Title: ______________________________
EXHIBIT E
TENANT ESTOPPEL CERTIFICATE
RE: Premises:
Lease Dated:
Amendment(s) Dated:
Between
and (Tenant)
Square Footage Leased:
Floor(s)/Suite #(s):
The undersigned, Tenant under the above-referenced lease ("Lease"), certifies to
the following:
1. We have taken possession of and accepted the Premises described above, except
as follows:
2. The lease terms as described below are true and accurate, and the lease is in
full force and effect:
Base Rent: __________________________________________ per year
Escalations: ________________________________________
Free Rent: _________________________________________
Commencement Date: ___________________________________
Expiration Date: ______________________________________
Renewals: _________________________________________
3. No part of the Premises has been subleased or assigned except as follows:
4. The rent has been paid through:
5. The security deposit is
There are no tax or insurance escrows
6. We are not in default of our obligations under the Lease. Landlord, to
the best of our knowledge, is not in default of its obligations under
the Lease. There exists no defense or counterclaim to rent or other
sums required to be paid by us under or pursuant to the Lease.
If Tenant is a corporation, the undersigned is a duly appointed officer of the
corporation signing this certificate and is the incumbent in the office
indicated under his/her name. In any event, the undersigned individual is duly
authorized to execute this certificate.
Date:____________________, 199__ Signed:
(Signature)
(Print Name & Title)
LEASE EXHIBIT F
CLAIREMONT TOWN SQUARE
TENANT SIGNAGE
for
Shop Tenants
Major/Pad Tenants
December 27, 1995
OBJECTIVE
It is the purpose of this Lease exhibit to establish the requirements for the
design and fabrication of primary signage for tenants at Clairemont Town Square.
The Tenant Sign Criteria (Attachment A), receipt of which Tenant hereby
acknowledges, provides design standards and specifications that assure
consistency throughout the Shopping Center. Details are provided in such
Attachment A which outline:
o Prohibited Signs
o General Provisions
o Design Guidelines
- Design Objective
- Acceptable Sign Treatments
- Lighting
- Colors
- Typestyles
o Construction Requirements
TERMS AND CONDITIONS FOR SIGNAGE IMPLEMENTATION
In signing the Lease for retail space at Clairemont Town Square, Tenant
acknowledges receipt of Attachment A, and agrees to the requirements contained
therein and specifically the following requirements with regard to signage:
1. Tenant shall provide a minimum of one primary identification wall sign in
accordance with the approved criteria.
2. Tenant shall be responsible for the following expenses relating to signage
for the Premises:
o design consultant's fees per Tenant Order Form attached hereto as page
F-3
o 100% of permit processing costs and application fees
o 100% of costs for sign fabrication and installation including review of
shop drawings and patterns (see Attachment A and Tenant Order Form)
o all costs relating to signage removal, including repair of any damage to
the building
Tenant shall also be responsible for maintaining the appearance and
operating condition of all signs once they are installed.
3. Tenant shall make a sign design submittal to the Landlord in accordance
with the provisions contained herein (see "Submittals and Approvals"
section).
4. The Landlord shall provide Tenant with a list of qualified sign
fabricators. Only pre-qualified sign contractors approved by the
Landlord shall be allowed to fabricate and install signs at Clairemont
Town Square.
5. Tenant agrees to abide by all provisions, guidelines, and criteria
contained within this Lease exhibit, the Tenant Sign Criteria
(Attachment A), as well as with applicable City of San Diego sign
regulations including the approved Sign Program. No banners,
paper signs, flags or other such temporary signs and materials shall be
displayed without Landlord's prior written consent. Further, no signs
shall be affixed directly to the storefront glass except that Tenant
may display hours of operation provided such letters do not exceed one
inch in height.
6. Only those sign types provided for and specifically approved in writing
by the Landlord will be allowed. The Landlord may, in Landlord's sole
discretion, and at the Tenant's expense, correct, replace or remove any
sign that is installed without Landlord's written approval and/or that
is deemed not to be in conformance with the plans as submitted and with
requirements and documents referenced herein.
7. Tenant shall maintain all storefronts in like-new condition. Landlord
may, in Landlord's sole discretion and Tenant's expense, replace,
refurbish or remove any sign that has become deteriorated. Tenant
shall, upon expiration or earlier termination of the Lease and at
Tenant's own expense, remove all signs associated with the Premises and
repair building walls to their original condition; or if Tenant has not
performed such removal and/or repair after expiration or earlier
termination of the Lease, Landlord shall have the right to do so at
Tenant's expense.
SUBMITTALS AND APPROVALS
Tenant shall provide information as requested in the Tenant Order Form attached
hereto as page F-3 and return the completed form to Landlord with the designated
design fee.
Landlord's design consultant shall prepare design concepts and/or signage
treatment recommendations for Tenant's review and approval. Upon approval of
concept design, design intent drawings will be prepared suitable for use by
qualified sign fabricator.
Prior to sign fabrication, Tenant or Tenant's sign contractor shall submit for
Landlord's approval three (3) sets of complete and fully-dimensioned shop
drawings reflecting the sign design approved by Landlord. Shop drawings are to
be submitted to Landlord within twenty (20) calendar days after design intent
drawings have been approved. The shop drawings submittal shall include:
a. elevation of storefront showing design, location, size and layout of
sign, drawn to scale, indicating dimensions, attachment devices and
construction details.
b. sample board showing colors and materials including building fascia,
letter faces, returns, and other details of construction as requested
by Landlord; samples of actual paint colors and finishes.
c. section through letter and/or sign panel showing the dimensioned
projection of the face of the letter and/or sign panel and the
illumination.
d. full-size letter patterns for all graphics and full-size scale neon patterns
for all exposed or sculpted neon.
All Tenant sign submittals shall be reviewed by Landlord and/or its agent for
conformance with the provisions of the Sign Program for the center, Attachment A
and this exhibit, and the design intent drawings approved by Landlord.
Within fifteen (15) business days after receipt of Tenant's shop drawings,
Landlord shall either approve the submittal contingent upon any required
modifications or disapprove Tenant's sign submittal, which approval or
disapproval shall remain the sole right and discretion of Landlord. Tenant must
continue to resubmit rejected plans until approval is obtained. A full set of
final plans must be approved and stamped by Landlord prior to permit application
or sign fabrication.
Following Landlord's approval of proposed signage, Tenant or Tenant's agent
shall submit to the City of San Diego sign plans signed by Landlord and
applications for all permits for fabrication and installation by sign
contractor. Tenant shall furnish Landlord with a copy of said permits prior to
installation of Tenant's sign(s).
Fabrication and installation of all signs shall be performed in accordance with
the standards and specifications outlined in this exhibit and in the final
approved plans and shop drawings. Landlord may, at Landlord's option, perform an
in-shop inspection and buy-off of the signage prior to installation. Any work
deemed unacceptable shall be rejected and shall be corrected or modified at
Tenant's expense as required by the Landlord or its agent.
Tenant shall install the minimum required signage within sixty (60) calendar
days after receipt of permit from the City of San Diego. If signage is not in
place by that date, Landlord may order fabrication and installation on Tenant's
behalf. Tenant shall reimburse Landlord for these costs.
SIGN CONTRACTOR RESPONSIBILITIES
Tenant's sign contractor is responsible to do the following:
o provide to Landlord, prior to commencing fabrication, an original
certificate of insurance naming the Landlord as an additional insured
for liability coverage.
o obtain approved sign permits from the City of San Diego prior to sign
fabrication and deliver copies of same to Landlord.
o prepare for approval prior to fabrication complete and
fully-dimensioned shop drawings along with items a, b, c, and d under
"Submittals and Approvals" section hereof.
MONUMENT SIGN
Tenant shall install its trade name on a Tenant Monument Sign to be located on
Clairemont Mesa Blvd. ("Monument Sign"), and Tenant's share of the sign
("Tenant's Sign") shall be one of the two top positions on both sides of such
sign in the approximate size shown on Exhibit F, page F-5 hereto. Tenant agrees
that Tenant's Sign shall be designed and installed at Tenant's expense in
accordance with the provisions of this Exhibit F and with all governmental laws,
rules and regulations, and that such sign shall be subject to Landlord's
approval.
Tenant shall, within thirty (30) days following receipt of invoice therefor, pay
its pro rata share of the cost of design and construction of the Monument Sign
which share shall be based on the square footage of Tenant's Sign divided by the
square footage of all sign panel space on the Monument Sign. Landlord shall
maintain, repair and, if necessary, replace the Monument Sign and shall maintain
and repair Tenant's Sign. Tenant shall pay its pro rata share of such
maintenance, repair and replacement based on the square footage of Tenant's Sign
divided by the square footage of all sign panels which are occupied on the sign
at the time such expenses are incurred. If Tenant's Sign must be replaced,
Tenant shall replace such sign at Tenant's expense subject to the terms of this
Exhibit F regarding the initial Tenant Sign. If for any reason, for any period
of time Tenant does not display Tenant's trade name on Tenant's Sign, Tenant
shall cover that portion of the sign with white plexiglass or such other
substance as shall be reasonably satisfactory to Landlord. If at any time for
any reason Tenant does not display its trade name on Tenant's Sign for sixty
(60) days or more, Landlord may, upon written notice to Tenant, re-lease such
sign to such party and upon such terms and conditions as Landlord shall choose
in Landlord's sole discretion.
EXHIBIT D
TENANT IMPROVEMENTS
PROVISIONS RELATING TO CONSTRUCTION OF TENANT'S PREMISES
1. As soon as practicable after the final drawings and specifications have been
approved by Landlord and by all applicable governmental agencies, Landlord will,
at its own cost and expense, commence the erection of a building covering the
Premises, unless prevented or delayed by conditions over which Landlord has no
control. It is expressly understood and agreed that the building upon the
Premises may constitute a portion of a larger building. In the event that prior
to commencement of construction of the building of which the Premises are a
part, Landlord elects not to proceed with such construction, Landlord may
terminate this Lease upon notice to Tenant, and both parties shall be forthwith
released.
2. When Landlord's architect (hereinafter "Project Architect") has completed
drawings of the basic shell of the building (or if such drawings have already
been completed, then concurrently with the execution of this Lease), Landlord
shall deliver a floor plan of the Premises ("Floor Plan") to Tenant showing
thereon the columns and other structural work in the Premises. Tenant
acknowledges receipt of a copy of said Floor Plan.
3. Tenant's plans shall be prepared with full knowledge of and in compliance
with the Floor Plan, this Exhibit D and all City, County, and State ordinances,
rules and regulations relating thereto including, without limitation, the energy
conservation and handicap access requirements, if applicable, of the State in
which the Shopping Center is located. All drawings for Landlord's Work and
Tenant's Work, as described below, are to be prepared at Tenant's expense by
Tenant's architect who shall be licensed in the State in which the Shopping
Center is located. All such drawings are subject to Landlord's and Project
Architect's approval and in the event said drawings are not approved, for any
reason whatsoever, within sixty (60) days after Tenant's receipt of the Floor
Plan, this Lease shall, at the option of Landlord, be null and void and of no
further force or effect.
Tenant agrees to submit to Landlord, within twenty (20) days after
receipt of the Floor Plan, fully dimensioned and detailed 1/4" scale preliminary
drawings showing general layout of the interior space ("preliminary plans")
including without limitation stub-out locations and sizes for electrical,
plumbing, gas and telephone service, and shall outline specifications of all
materials and locations thereof for all Landlord's Work. Said plans shall also
include Tenant's sign drawings.
Within forty-five (45) days after receipt of the Floor Plan, Tenant
agrees to submit to Landlord two (2) sets of fully detailed and dimensioned
one-quarter inch (1/4") scale construction drawings in conformance with the
approved preliminary plans. These drawings shall indicate the specific
requirements of Tenant's space showing clearly, without limitation, all work
listed hereafter under "Landlord's Work."
4. Tenant shall submit to Landlord plans for all work described hereinafter as
"Tenant's Work" simultaneously with, and in accordance with the same standards
provided hereinabove for, Landlord's Work, but Tenant's plans for Tenant's Work
shall be separate from Tenant's plans for Landlord's Work. The plans for
Tenant's Work shall include the interior partitions, trade fixture plans,
lighting, electrical outlets, signs, size and locations of equipment to be
installed on the roof, if any, and all other items set forth under "Tenant's
Work", and which are not a part of Landlord's Work.
5. Tenant shall be responsible for submitting improvement plans, including but
not limited to drawings, specifications, California Title 24 calculations,
structural calculations, samples, etc., for both Landlord's Work and Tenant's
Work to the proper building authority (or health authority as applicable) to
obtain a building permit. Fees for plan checking, processing, permitting, and
any other fees relating to Landlord's Work and Tenant's Work shall be paid by
Tenant. Landlord's Work shall be constructed by Landlord's contractor in
accordance with the drawings for Landlord's Work; Tenant's Work shall be
constructed by Tenant's contractor, subject to the provisions hereinafter titled
"Tenant's Use of a Contractor Other than Landlord's Contractor." Both parties
agree to pursue the construction work of the building diligently to completion,
complying with all City, County and State ordinances, rules and regulations.
Upon completion of all Tenant's Work, Tenant shall file for record in the Office
of the County Recorder where the Shopping Center is located a Notice of
Completion, as permitted by law.
6. Prior to commencement of construction, Landlord shall provide Tenant with a
written estimate of the cost of all Landlord's Work. Tenant shall have the prior
right of approval of all costs to be borne by Tenant as a part of Landlord's
Work pursuant to the provisions of this Exhibit D. If Tenant fails to deliver
written notice of disapproval to Landlord within ten (10) business days after
receipt of a notice of costs from Landlord, Tenant shall be deemed to have
approved such costs. Tenant shall pay all costs of Landlord's Work which exceed
Forty-Two Thousand Nine Hundred Dollars ($42,900.00). The total amount of such
estimated costs to be paid by Tenant shall be delivered to Landlord prior to the
date specified by Landlord for commencement of construction of Landlord's Work.
7. Any additional charges, expenses, or costs arising by reason of any
subsequent change, modification, or alteration in the approved general plans and
specifications made at the request of Tenant or approved by Tenant including
architect's fees, shall be at the sole cost and expense of Tenant, and Landlord
shall have the right to demand payment for such change, modification, or
alteration, prior to its performance of any work in the Premises. No such
changes, modifications, or alterations in the said approved plans and
specifications can be made without the written consent of Landlord. No part of
the cost of any trade fixture or personal property of Tenant shall be payable by
Landlord.
8. The parties agree to cooperate with each other and to respond with required
approvals or disapprovals with reasonable diligence in order to complete
Landlord's Work and Tenant's Work by the Commencement Date described in
Paragraph 3(b) of the Lease. Notwithstanding any provision in the Lease to the
contrary, prior to occupancy of the Premises, Tenant shall pay Base Rental at
the rate specified in Paragraph 1(i), prorated for the number of days completion
is delayed for any of the following reasons:
a. Tenant's failure to submit drawings within the time periods specified in
Paragraph 3, 4 or 5 of this Exhibit D. ---------
b. Tenant's request for changes in the plans and specifications or in the
construction of the work; and/or
c. Tenant's failure to pay any costs required of Tenant pursuant to this
Exhibit D, within the time periods specified herein.
9. Tenant may not require an exterior design, finish or construction other than
one that has been approved by Landlord; and Landlord shall be entitled to erect
and construct such exteriors in keeping with the overall plans and design of the
Project Architect. Tenant shall not be permitted to maintain or place on the
building or upon the Premises any awnings or other exterior appendage except
with written consent of Landlord.
10. Landlord will construct for Tenant an improved shell, all in conformity with
and to the extent hereinafter set forth as "Building Shell by Landlord" and
"Landlord's Work." Said work, as to the building of which the Premises is a
portion, shall be deemed substantially complete when it has been completed or
performed per the terms and conditions of the Lease and this Exhibit D, subject
only to Tenant's reasonable, good faith acceptance thereof and a "punchlist" of
minor and immaterial items which are capable of completion within thirty (30)
days thereafter. Landlord shall certify to Tenant in writing when Building Shell
by Landlord and Landlord's Work is substantially complete(such certification
shall be referred to as the "Notice of Substantial Completion"). Tenant agrees
that upon receipt of the Notice of Substantial Completion and no later than
three (3) business days following receipt of said notice, Tenant shall inspect
and accept the Premises or notify Landlord otherwise in writing. If Tenant has
not notified Landlord in writing within three (3) business days following
receipt of the Notice of Substantial Completion, Tenant shall be deemed to have
accepted the Premises in the condition which it may then be (except with respect
to the "punchlist" items) and Tenant thereafter waives any right or claim
against Landlord for any cause, directly or indirectly, arising out of the
condition of the Premises, appurtenances thereto, the improvements thereon and
the equipment thereof, and Tenant shall thereafter indemnify and hold harmless
Landlord from liability as provided in Paragraph 14 of the Lease. Landlord shall
not be liable for any latent or patent defects therein; provided, however, that
Landlord warrants the Building Shell by Landlord and Landlord's Work against
latent defects for a period of one year from completion.
11. Tenant shall be responsible, at its own cost and expense, to complete the
work hereinafter set forth as the "Tenant's Work" in a good and workmanlike
condition and shall not enter into the Premises prior to receiving the Notice of
Substantial Completion from Landlord for the purpose of performing Tenant's Work
or for any other reason without Landlord's prior written consent, which may be
withheld in Landlord's sole discretion. If Landlord consents to Tenant's early
entry, Tenant shall hold Landlord harmless and shall indemnify Landlord from any
loss (including attorneys' fees) or damage to Tenant's property, fixtures,
equipment and merchandise and for injury to any persons, unless such loss or
damage is caused by the sole active negligence of Landlord.
12. During the construction of Landlord's Work, Landlord agrees at Landlord's
expense to obtain and maintain public liability and workers' compensation
insurance adequate to fully protect Tenant as well as Landlord from and against
any and all liability for death of or injury to person or damage to property
caused in or about or by reason of the construction of Landlord's Work. Tenant
agrees at Tenant's expense to obtain or maintain public liability insurance and
workers' compensation insurance as set forth in Paragraph 15(a) of the Lease
adequate to fully protect Landlord as well as Tenant from and against any and
all liability for death of or injury to person caused in or about or by reason
of the construction of Tenant's Work.
13. Where final drawings are in conflict with this Exhibit D, the provisions of
Exhibit D shall prevail.
14. Upon actual completion of the building shell of which the Premises are a
part, Landlord agrees to file for record in the Office of the County Recorder
where the Shopping Center is situated a Notice of Completion, as permitted by
law.
BUILDING SHELL BY LANDLORD
The following is a description of the building shell, and limitations
of same, which will be provided by Landlord:
A. STRUCTURE
1. Frame: The building shall be of steel or wood frame,
reinforced concrete, or bearing wall construction designed in
accordance with governing building codes.
2. Exterior Walls: The exterior walls shall be of masonry or such other
material or materials as selected by the Project Architect.
3. Roof: The roof shall be builtup composition type, as selected by the
Project Architect.
4. Partitions: Partitions between areas shall be of wood frame, metal
stud, or masonry.
5. Stairways and Exits: Stairways and exits shall be in accordance with
governing building codes.
6. Door Frames: Rear exit exterior door frames will be hollow metal
construction. Interior door frames shall be wood or metal at the option of the
Landlord.
7. Doors: (a) Interior doors wood, hollow core; (b) Exterior service doors
hollow metal.
B. STORE FRONTS
1. Design and Installation: A standard store front shall be designed by
Project Architect and installed by Landlord.
2. Parapets, Etc.: Heights and locations of parapets and facings of
parapets and bulkheads shall be approved by Landlord. Landlord reserves the
right to provide a neutral strip between all stores, centered on the line
defining the Premises.
The cost of the foregoing work shall be paid by Landlord except to the
extent said work is more specifically described in Landlord's Work hereinbelow.
All costs described in Landlord's Work and which exceed $42,900.00 shall be paid
by Tenant prior to commencement of construction.
DESCRIPTION OF LANDLORD'S WORK
The following is a description of the construction, and limitations of
same, which will be provided by Landlord as "Landlord's Work".
DESCRIPTION OF TENANT'S WORK
The work to be done by Landlord in satisfying its obligations to
construct Tenant's store under the Lease shall be limited to that described in
the foregoing paragraphs. All other items of work not therein provided for to be
done by Landlord shall be provided by Tenant at Tenant's expense and are herein
referred to as "Tenant's Work". Tenant's Work shall include, but not be limited
to, the purchase and/or installation and/or performance of the following:
1. Electric Fixtures and Equipment: All electrical work for the Premises
not specifically stated under Landlord's Work to be performed by Tenant.
2. Utility Meters and Connections: All utility meters, connections and
hookup fees, assessments, front footage charges and any other fees or charges
for utilities serving the Premises shall be paid by Tenant. If, in Landlord's
sole opinion, Tenant uses significantly more water or other utilities than other
tenants in the Shopping Center, Landlord may require Tenant to install a
separate meter at Tenant's expense, for such utility. For all utilities which
are master metered, Tenant shall pay its pro rata share of such costs.
3. Telephones: All wiring from the main telephone room to the Premises and
within the Premises. All conduits for Tenant's telephone system in the Premises.
Tenant shall make all arrangements for telephone service.
4. Walls: All interior partitions and curtain walls within the Premises,
except as provided by Landlord under Landlord's Work.
5. Coves and Ceilings: All special coves, ceilings, furring, etc.
6. Furniture and Fixtures: All store fixtures, cases, wood paneling,
cornices, etc.
7. Show Window Background, Floors, Etc.: All show window floors, show
window background, show window lighting fixtures, and show window doors.
8. Floor Coverings: All floor coverings and floor materials (including wall
base) other than concrete.
9. Ornamental Stairs: All ornamental or other stairs not required by
governing building codes.
10. Alarm Systems, Etc.: All alarm systems or other protective devices.
11. Plumbing: All plumbing, either roughing in fixtures, or equipment
required for Tenant's needs except as provided by Landlord under Landlord's
Work.
12. Special Ventilation: All ventilation systems, hoods, ducts, and chases,
including show window's ventilation.
13. Special Equipment: All special equipment such as conveyors, elevators,
escalators, dumb waiters, etc., including installation and connection.
14. Interior Painting and wall coverings.
15. Tenant's exterior sign. All Tenant signs shall be designed,
constructed, and located in accordance with the procedures established by the
Project Architect, and shall be subject to the approval of the Project
Architect, Landlord, and local governing agency.
16. Concrete Floors: Any special reinforcing, raised areas, or depressions.
17. Roof: All flashing, counterflashing and roof repairs and any
penetration required in connection with the installation of Tenant's equipment
shall conform to the project's roofing specifications and such work shall be
paid for by Tenant, but shall be performed by the project's original roofing
contractor.
TENANT'S USE OF A CONTRACTOR
OTHER THAN LANDLORD'S CONTRACTOR
It is further understood and agreed that the items set forth below
shall be incorporated as "Special Conditions" into the contract between Tenant
and its contractor as follows (with a copy of the contract to be furnished
Landlord for Landlord's reasonable approval prior to the commencement by Tenant
of Tenant's Work):
1. Prior to start of Tenant's Work, Tenant's contractor shall provide
Landlord with a construction schedule in "bar graph" form indicating the
completing dates of all phases of Tenant's Work.
2. Tenant's contractor shall perform said work in a manner and at times
which do not impede or delay Landlord's contractor in the completion of the
Premises as provided in this Lease. Any delays in the completion of the Premises
caused by Tenant's contractor shall be at the sole cost and expense of Tenant
and shall not delay the commencement of Base Rent.
3. Tenant's contractor shall be responsible for the repair, replacement
or cleanup of any damage done by him to other contractors' work which
specifically includes accessways to the Tenant's Premises which may be currently
used by others.
4. Tenant's contractor shall accept the Premises prior to starting any
trenching operations. Any rework of subbase or compaction required after
Tenant's contractor's initial acceptance of the Premises shall be done by
Tenant's contractor, which shall include the removal from the Shopping Center of
any excess dirt or debris.
5. Tenant's contractor shall contain his storage of materials and his
operations within the Premises and such other space as he may be assigned by
Landlord's contractor. Should he be assigned space outside of the Premises, he
shall move to such other space as Landlord's contractor shall direct from time
to time to avoid interference or delays with other work.
6. All trash and surplus construction materials shall be stored within
the Premises and shall be promptly removed from the Shopping Center at the sole
cost of the Tenant's contractor. Once the Shopping Center is open and operating,
no Common Area trash containers shall be used for construction debris.
7. Tenant's contractor shall provide temporary utilities, portable
toilet facilities and potable drinking water as required for his work within the
Premises and shall pay to Landlord's contractor the cost of any temporary
utilities and facilities provided by Landlord's contractor at Tenant's
contractor's request.
8. Tenant's contractor shall notify Landlord or Landlord's project
Manager of any planned work to be done on weekends or other than normal job
hours.
9. Tenant and Tenant's contractor are responsible for compliance with
all applicable codes and regulations of duly constituted authorities having
jurisdiction insofar as the performance of the work and completed improvements
are concerned for all work performed by Tenant or Tenant's contractor and all
applicable safety regulations established by the general contractor for the
Shopping Center, and Tenant further agrees to indemnify and hold Landlord
harmless for said work as provided in Paragraph 14 of the Lease. Prior to
commencement of construction, Tenant shall submit to Landlord evidence of
insurance as required in Paragraph 15 of the Lease.
10. Tenant's contractor or subcontractors shall not post signs on any
part of the Shopping Center or on the Premises.
11. Notwithstanding the provisions herein, Tenant shall be responsible
for and shall obtain and record a Notice of Completion promptly following
completion of Tenant's Work.
12. Prior to the commencement of construction, Tenant shall obtain or
cause its contractor to obtain payment and performance bonds covering the
faithful performance of the contract for the construction of Tenant's Work and
the payment of all obligations arising thereunder. Such bonds shall be for the
mutual benefit of both Landlord and Tenant and shall be issued in the names of
both Landlord and Tenant as obligees and beneficiaries. Prior to the date Tenant
commences construction of Tenant's Work, Tenant shall submit evidence
satisfactory to Landlord that such bonds have been issued. Notwithstanding the
foregoing, in the event Tenant is only making nonstructural improvements to the
interior of the Premises, Tenant shall not be required to provide the bonds
described herein.
EXHIBIT G
GUARANTY OF LEASE
WHEREAS, a certain lease of even date herewith has been, or will be,
executed between OTR, an Ohio General Partnership ("Landlord") acting as the
duly authorized nominee of the Board of the State Teachers Retirement System of
Ohio ("STRBO"), and TOYS INTERNATIONAL, a California corporation ("Tenant")
doing business under the trade names Play Co. Toys or Toys International with
respect to Space No. 38, of that certain shopping center commonly known as
Clairemont Town Square located in San Diego, California:
WHEREAS, the Landlord under said Lease requires as a condition to its
execution of said Lease that the undersigned (herein referred to as "Guarantor")
guarantee the full performance of the obligations of Tenant under said Lease,
and
WHEREAS, Guarantor, is desirous that Landlord enter into said Lease with
Tenant,
NOW THEREFORE, in consideration of the execution of said Lease by
Landlord, Guarantor hereby unconditionally guarantees the complete and timely
performance of each and all of the terms, covenants and conditions of said Lease
to be kept and performed by said Tenant, including the payment of all rentals
and other charges to accrue thereunder. Guarantor further agrees as follows:
1. That this Guaranty shall continue in favor of Landlord
notwithstanding any extension, modification, or alteration of said Lease entered
into by and between the parties thereto, or their successors or assigns,
notwithstanding any assignment of said Lease, with or without the consent of
Landlord, and no extension, modification, alteration or assignment of the above
referred to Lease shall in any manner release or discharge Guarantor and it does
hereby consent thereto.
2. This Guaranty will continue unchanged by any bankruptcy,
reorganization or insolvency of Tenant or any successor or assignee thereof or
by any disaffirmance or abandonment by a trustee of Tenant;
3. Landlord may, without notice, assign this Guaranty of Lease in whole
or in part and no assignment or transfer of the Lease shall operate to
extinguish or diminish the liability of Guarantor hereunder.
4. The liability of Guarantor under this Guaranty shall be primary and,
in any right of action which shall accrue to Landlord under the Lease, Landlord
may, at its option, proceed against Guarantor without having commenced any
action or obtained any judgment against Tenant;
5. Guarantor shall pay Landlord's reasonable attorney fees and all
costs and other expenses incurred in any negotiations, action or proceeding
commenced to enforce this Guaranty; and
6. Guarantor hereby waives notice of any demand by Landlord as well as
any notice of Tenant's default in the payment of rent or any other amounts
contained or reserved in the Lease; provided, however, prior to commencing any
judicial action against Guarantor, Landlord shall give Guarantor ten (10) days'
written notice of, and opportunity to cure, Tenant's default under the Lease.
7. If Guarantor is a corporation, trust or general or limited
partnership, each individual executing this Guaranty of Lease on behalf of such
entity represents and warrants that he or she is duly authorized to execute and
deliver this Guaranty of Lease on behalf of said entity.
The use of the singular shall include the plural. The obligation of two (2) or
more parties shall be joint and several. The terms and provisions of this
Guaranty shall be binding upon and inure to the benefit of the respective heirs,
legal representatives, successors and assigns of the parties herein named.
IN WITNESS WHEREOF, Guarantor has caused this Guaranty of Lease to be
executed as of the Effective Date of the above-mentioned Lease.
GUARANTOR OF LEASE:
PLAY CO. TOYS & ENTERTAINMENT CORP.
By:
Title:
By:
Title:
Address:
Telephone:
EXHIBIT H
EXHIBIT A TO
ACCESS AND RENTAL PAYMENT AGREEMENT
LEGAL DESCRIPTION
Space #38 within the Shopping Center described as:
PARCEL 1
Parcels A and C of Parcel Map No. 1228, in the City of San Diego, County of San
Diego, State of California, filed in the Office of the County Recorder of San
Diego County, January 16, 1973, as File No. 73-013497 of Official Records.
PARCEL 3:
That portion of Lot 2 of NORTH CLAIREMONT PLAZA, according to Map thereof No.
3484, filed in the Office of the County Recorder of San Diego County, August 3,
1956, described as follows:
BEGINNING at the Southeasterly corner of Lot 1 of said NORTH CLAIREMONT PLAZA;
thence along the Southerly line of said Lot 2, South 89(degree) 44' 05" East 3
feet; thence North 0(degree) 15' 55" East 165 feet; thence North 89(degree) 44'
05" West 153 feet to the Westerly line of said Lot 2; thence South 0(degree) 15'
55" West 15 feet to the Northwesterly corner of said Lot 1; thence South
89(degree) 44' 05" East 150 feet to the Northeasterly corner of said Lot 1;
thence South 0(degree) 15' 55" West 150 feet to the Point of Beginning.
PARCEL 4:
Lot 2 of NORTH CLAIREMONT PLAZA, in the City of San Diego, County of San Diego,
State of California, according to Map thereof No. 3484, filed in the Office of
the County Recorder of San Diego County, August 3, 1956.
EXCEPTING that portion described as follows:
BEGINNING at the Southeasterly corner of Lot 1 of said NORTH CLAIREMONT PLAZA;
thence along the Southerly line of said Lot 2, South 89(degree) 44' 05" East 3
feet; thence North 0(degree) 15' 55" East 165 feet; thence North 89(degree) 44'
05" West 153 feet to the Westerly line of said Lot 2; thence South 0(degree) 15'
55" West 15 feet to the Northwesterly corner of said Lot 1; thence South
89(degree) 44' 05" East 150 feet to the Northeasterly corner of said Lot 1;
thence South 0(degree) 15' 55" West 150 feet to the Point of Beginning.
PARCEL 5:
That portion of Lot 3 of NORTH CLAIREMONT PLAZA, in the City of San Diego,
County of San Diego, State of California, according to Map thereof No. 3484,
filed in the Office of the County Recorder of San Diego County, described as
follows:
BEGINNING at a point in the Easterly line of said Lot 3, distant along said
Easterly line South 1(degree) 44' 47" West 371.75 feet from the Southerly
terminus of a 956 foot radius curve, concave Easterly in the Easterly line of
said Lot; thence North 89(degree) 44' 05" West 194.58 feet; thence South
0(degree) 15' 55" West 99.97 feet to the TRUE POINT OF BEGINNING; thence North
89(degree) 44' 05" West, 28.07 feet; thence South 0(degree) 15' 55" West 220
feet to a point in the South line of said Lot 3, said point being North
89(degree) 44' 05" West, 202.77 feet from the Southeast corner of said Lot 3;
thence along the South line of said Lot 3 South 89(degree) 44' 05" East 202.77
feet to said Southeast corner, being point in the arc of a 694 foot radius
curve, concave Westerly, a radial line to said point bears South 77(degree) 45'
33" East; thence along the Easterly line of said Lot, Northerly along said
curve, 127.11 feet, and tangent to said curve, North 1(degree) 44' 47" East to
the Northerly line of the Southerly 220 feet, measured at right angles of said
Lot 3; thence along said Northerly line North 89(degree) 44' 05" West to the
TRUE POINT OF BEGINNING.
H-5
Exhibit A-1
EXHIBIT A TO
ACCESS AND RENTAL PAYMENT AGREEMENT
Page 2
PARCEL 6:
NON-EXCLUSIVE EASEMENTS FOR PURPOSES DISCLOSED THEREIN OVER A PORTION OF THE
LAND SHOWN THEREIN AS MORE FULLY CONTAINED AND DESCRIBED IN THAT CERTAIN
DOCUMENT ENTITLED "OPERATION AND RECIPROCAL EASEMENT AGREEMENT" DATED JULY 7,
1972, RECORDED JANUARY 5, 1973, AS FILE NO. 73-003772 AND SUBJECT TO THE
CONDITIONS THEREIN CONTAINED IN SAID DOCUMENT.
PARCEL 7:
NON-EXCLUSIVE EASEMENTS FOR PURPOSES DISCLOSED THEREIN OVER A PORTION OF THE
LAND SHOWN THEREIN AS MORE FULLY CONTAINED AND DESCRIBED IN THAT CERTAIN
DOCUMENT ENTITLED "OPERATION AND RECIPROCAL EASEMENT AGREEMENT" DATED MARCH 27,
1972, RECORDED JANUARY 5, 1973, AS FILE NO. 73-003774 AND SUBJECT TO THE
CONDITIONS THEREIN CONTAINED IN SAID DOCUMENT.
H-6
Exhibit A-2