LONG BEACH
LOS ALTOS
GROUND LEASE
THIS GROUND LEASE ("Lease"), dated for reference purposes only as of the
30th day of April, 1998 (the "Execution Date"), is made by and between
CALIFORNIA DRIVE-IN THEATRES, INC., a California corporation ("Landlord"), and
EAGLE HARDWARE & GARDEN, INC., a Washington corporation ("Tenant").
LEASE SUMMARY
The following summary (the "Lease Summary") sets forth the definitions and
meanings of the following terms for all purposes of this Lease, unless otherwise
specifically provided or modified herein.
1. INTENTIONALLY OMITTED.
2. SHOPPING CENTER: That certain complex of retail stores commonly known as
the "Los Altos Centre" located at the southeast corner of Bellflower Boulevard
and Spring Street in the City of Long Beach, California, together with the
Tenant "Building(s)" and all "Common Areas" (as that term is hereinafter
defined) and the land underlying the Buildings and Common Areas (collectively,
the "Shopping Center"). The Shopping Center is comprised of Lots 1 through 7,
inclusive, and 11, as more particularly set forth on that certain Tentative
Tract Map which has been submitted to the City of Long Beach for approval (the
"Tentative Map"), a copy of which is attached as EXHIBIT "A-1". EXHIBIT "A",
which depicts the general layout of the Shopping Center, shall not be deemed a
warranty, representation or agreement on the part of Landlord that the Shopping
Center will be (or has been) constructed exactly as indicated on said site plan,
or that it will continue in the future to be exactly as indicated thereon.
3. PREMISES: That certain real property within the Shopping Center as depicted
on EXHIBIT "D" attached hereto and referred to as Lot 2 on EXHIBIT "A-1",
containing approximately five hundred ninety-one thousand three hundred
(591,300) square feet (the "Premises"), upon which a building will be
constructed containing approximately one hundred thirty-three thousand five
hundred square feet (133,500) square feet with a garden yard containing
approximately thirty thousand one hundred (30,100) square feet (collectively,
the "Building"). The land on which the Building is situated is referred to as
the "Pad" and is shown on EXHIBIT "D," and consists of approximately one hundred
sixty-three thousand six hundred (163,600) square feet. The EXHIBIT "D" Plot
Plan is the one Tenant will submit for its "Governmental Approvals" under
Paragraph 9.3.
4. FIXED RENT: Seven Hundred Thousand Dollars ($700,000) per year, subject to
periodic increases as provided in Article 3.
5. INTENTIONALLY OMITTED.
6. TERM: Twenty-five (25) years, with one ten-year option, followed by two
five-year options, as provided in Article 2.
7. COMMENCEMENT DATE: See Article 2.
8. SECURITY DEPOSIT: See Article 6.
9. TENANT'S PROPORTIONATE SHARE OF COMMON AREAS OPERATING COSTS: Fifty-two
percent (52%), as adjusted from time to time as provided in Paragraph 4.2.
(Art. 4)
10. USE OF PREMISES: For the retail sale of home improvement and gardening
products and other items customarily carried in Eagle Hardware and Garden stores
from time to time and for no other use or purpose, including without limitation
the prohibited uses set forth in the "Prior Restrictions" (defined in Paragraph
1.4). (Art. 8)
11. ADDRESSES:
(a) Landlord For Notices:
California Drive-In Theatres, Inc.
120 N. Robertson Boulevard, Third Floor
Los Angeles, California 90048
Attention: Property Management
Fax: (310) 652-8538
Telephone:(310) 855-8453
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(b) Landlord for Payments:
California Drive-In Theatres, Inc.
120 N. Robertson Boulevard, Third Floor
Los Angeles, California 90048
Attention: Real Estate Accounting
(c) Tenant For Notices:
Eagle Hardware & Garden
981 Powell Avenue S.W.
Renton, Washington 98055
Attention: Richard T. Takata
Fax: (425) 204-5169
(Art. 32)
12. BROKER(S): Pacific Retail Partners, on behalf of Landlord, and Majestic
Realty, on behalf of Tenant. (Art. 36)
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LOS ALTOS
GROUND LEASE
In addition to each of the provisions contained in the Lease Summary,
all of the provisions, covenants and conditions set forth in the succeeding
Articles, Addends, if any, and Exhibits attached hereto are incorporated in
this Lease and by this reference made a part hereof. Landlord and Tenant
hereby agree that this Lease shall be deemed binding and in full force and
effect upon the Execution Date, and further covenant and agree as follows:
ARTICLE I
PREMISES, COMMON AREAS, PARKING
1.1 PREMISES. In consideration of and subject to each and all of the
covenants, terms and conditions hereinafter set forth, Landlord hereby leases
to Tenant and Tenant hereby hires from Landlord the Premises located in the
Shopping Center.
1.2 COMMON AREAS. Tenant and its employees, customers and invitees
shall have the non-exclusive license to use that portion of the Shopping
Center designated by Landlord for the common use of tenants of the Shopping
Center and any other persons permitted by Landlord to use same (the "Common
Areas"), which Common Areas include a portion of the Premises. The Common
Areas, including the Common Areas on the Premises, are designated on EXHIBIT
"A-2" and shall be subject to the terms and conditions of the Prior
Restrictions and reasonable non-discriminatory rules and regulations
governing use as promulgated from time to time by Landlord and uniformly
applied (the "Rules and Regulations"), including the designation of specific
areas within the Shopping Center for specific purposes or common uses. A copy
of the current Rules and Regulations are attached hereto as EXHIBIT "B".
1.3 PARKING. During the term hereof, Landlord hereby grants Tenant and
its employees, customers, and invitees, subject to availability, the
non-exclusive license to use that portion of the Common Areas designated on
EXHIBIT "A-2" by Landlord for parking, subject to the Prior Restrictions and
the Rules and Regulations (which may include the designation of specific
areas in which vehicles owned by Tenant, its employees, subtenants and
invitees shall be parked). Tenant agrees to furnish to Landlord a complete
list of its motor vehicles and license numbers and the names of Tenant's
employees at the Premises who have automobiles and of their respective
license numbers.
1.4 RECORD PRIOR RESTRICTIONS. This Lease is and shall at all times be
subordinate to the following:
(a) that certain Reciprocal Easement and Operation Agreement
(version 01/14/97) by and between Kmart Corporation, a Michigan corporation
("Kmart") and Landlord, which REA is to be recorded in the Official Records
of Los Angeles County, California (the "REA");
(b) that certain Declaration of Covenants, Conditions, and
Restrictions (version 12/12/96) by and between Kmart and Landlord, which
Declaration is to be recorded in the Official Records of Los Angeles County,
California (the "Declaration");
(c) a Development Agreement by and between Landlord and Kmart (the
"Development Agreement"), a memorandum of which is to be recorded in the
Official Records of Los Angeles County, California;
(d) that Certain Cross-Access Agreement (version 07//10/97)
between Kmart and Landlord, which Cross-Access Agreement is to be recorded in
the Official Records of Los Angeles County, California (the "Kmart Lot &
Cross-Access Agreement");
(e) that Certain Cross-Access Agreement (version 01/14/97) between
Kmart and Landlord which Cross-Access Agreement is to be recorded in the
Official Records of Los Angeles County, California, (the "Kmart Lot 9
Cross-Access Agreement");
(f) that certain Cross-Access Agreement among Argonaut Holdings
Inc., a Delaware corporation ("Argonaut")(Argonaut is the tenant of certain
premises adjacent to the Shopping Center), Kmart, and Landlord, which
Cross-Access Agreement is to be recorded in the Official Records of Los
Angeles County, California (the "Argonaut Lot 9 Cross-Access Agreement");
(g) that Certain Cross-Access Agreement (version 01/14/97) between
Kmart and Landlord, which allows, among other things parking and storage on
Lot 10 for a tenant of premises adjacent to
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the Shopping Center and which is to be recorded in the Official Records of Los
Angeles County, California (the "Lot 10 Cross-Access/Parking Agreement");
The Kmart Lot 8 Cross-Access Agreement, the Kmart Lot 9 Cross-Access Agreement,
the Argonaut Lot 9 Cross-Access Agreement, and the Lot 10 Cross-Access/Parking
Agreement are collectively referred to herein as the "Cross-Access Agreements").
The REA, Declaration, Development Agreement, and Cross-Access Agreements (which
documents are collectively referred to as the "Prior Restrictions") contain,
among other things: restrictions on use, development, design and construction;
maintenance obligations; grants of easements; requirements for payment of taxes
and liens; insurance requirements; indemnity obligations; assessment and lien
rights; and other terms and conditions, with which Tenant agrees to comply.
Landlord agrees not to further amend the Prior Restrictions in a way that would
materially and adversely affect Tenant's operations from the Premises or
Tenant's benefits under this Lease without obtaining Tenant's prior written
consent, which consent shall not be unreasonably withheld or delayed.
ARTICLE 2
TERM
2.1 TERM. Unless sooner terminated or extended as provided herein, the
term of this Lease shall be for the period specified in Paragraph 6 of the Lease
Summary and shall commence on the Commencement Date referred to in Paragraph 7
of the Lease Summary. Should no date be specified as the Commencement Date in
Paragraph 7 of the Lease Summary, the Commencement Date shall be the date of the
first to occur of either of the following two events:
(a) The later to occur of (I) one hundred and eighty (180) days after
Landlord (or Landlord's supervising architect or other authorized agent) tenders
possession of the Pad to Tenant pursuant to Paragraph 4 of EXHIBIT "C" -
Construction Exhibit, or (II) one hundred and eighty (180) days after permits
are available for Tenant to start the Tenant its construction of the "Tenant
Improvements" (as defined in EXHIBIT "C"); or
(b) Upon the date Tenant actually commences to do business in, upon
or from the Premises.
Landlord shall deliver possession of the Pad to Tenant when all of the
conditions to Landlord's performance under this Lease have been satisfied or
waived. If Landlord is delayed in the delivery of possession of the Pad to
Tenant for any reason other than Tenant-caused delays (in which event there
shall be no change in the Commencement Date), the "Commencement Date" shall be
adjusted, accordingly. Notwithstanding anything in this Lease expressed or
implied to the contrary, the Construction Exhibit attached as EXHIBIT "C" to
this Lease shall be in full force and effect as of the Execution Date of this
Lease.
2.2 SUPPLEMENTAL AGREEMENT. When the Commencement Date is not specified in
Paragraph 7 of the Lease Summary and, as a consequence, has been determined as
hereinabove set forth, then within five (5) days after Tenant's receipt of
Landlord's written request therefor, Tenant agrees to execute a Supplemental
Agreement in the form attached hereto as EXHIBIT "F" and to become a part
hereof, setting forth the Commencement Date and the expiration date and the date
by which Tenant must give Landlord notice of intent to exercise an extension
option.
2.3 IMPROVEMENT WORK. Landlord shall at its sole cost and expense,
promptly and diligently perform and complete all site preparation and Site
Improvements duties that are Landlord's responsibilities under and in accordance
with EXHIBIT "C" and shall deliver possession of the Pad to Tenant substantially
in accordance with the terms of Paragraphs 2.1(a) and EXHIBIT "C". Any
construction and/or installation of Tenant's Improvements, fixturization or
other work on the Premises that is to be performed by Tenant shall be the sole
responsibility of Tenant. Tenant acknowledges and agrees that Landlord's receipt
of all governmental approvals and entitlements for its intended development of
the Shopping Center is a precondition to Landlord's obligations hereunder.
2.4 LANDLORD'S FAILURE TO COMPLETE. Notwithstanding anything to the
contrary herein, should Landlord fail to deliver possession of the Pad
substantially in accordance with the terms of EXHIBIT "C" by the first
anniversary of the Execution Date, this Lease shall then be voidable, at the
option of Tenant, upon ten (10) days written notice to Landlord, provided that
Tenant gives such notice by the tenth (10th) day after such anniversary. If the
work required to be preformed by Landlord pursuant to EXHIBIT "C," if any, in
order to deliver possession of the Pad to Tenant, depends in whole or in part
upon work to be performed in connection therewith by Tenant, then the Pad shall
be deemed to have been delivered to Tenant on the date that the Pad would have
been delivered if Tenant had performed the work required of Tenant in a diligent
and timely manner and in accordance with the schedule for the performance of
said work established by Landlord's project architect. The reasonable
determination by Landlord's project architect as to the date possession of the
Pad is delivered to Tenant in accordance with the terns of Paragraph 2.1(a),
taking into consideration delays, if any, caused by Tenant, as aforesaid, shall
be conclusive upon the parties hereto. If through no fault of
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Landlord, Landlord fails to deliver possession of the Pad within two (2) years
after the Execution Date (and Tenant has not otherwise canceled this Lease as
provided in this Paragraph 2.4), either Landlord or Tenant may cancel this
Lease. In the event of any such termination, neither party shall have any
liability or obligation whatsoever to the other, except for any obligations
hereunder that expressly survive termination and that any deposit by Tenant
shall promptly be refunded, without interest, by Landlord.
2.5 OPENING OF TENANT'S PREMISES. Promptly after delivery of possession of
the Pad, Tenant agrees to, at its sole cost and expense, (i) perform all of
Tenant's work set forth in EXHIBIT "C"; (ii) equip the Building with new trade
fixtures and all new personal property necessary or proper for the operation of
Tenant's business; and (iii) open for business as an Eagle Hardware store. If
Tenant fails to comply with its obligations under this Paragraph 2.5, Landlord
may, in addition to and without limiting any other remedies available at law or
in equity, terminate this Lease.
2.6 LEASE YEAR. The term "Lease Year" shall refer to each successive
twelve (12) month period following the Commencement Date.
2.7 OPTIONS TO EXTEND TERM. Landlord hereby grants to Tenant the right to
extend the term of this Lease (the "Extension Option") for one (1) additional
term of ten (10) years followed by two (2) additional successive terms of five
(5) years each by giving Landlord written notice of its intention so to do in
each instance at least one (1) year (but not more than two years) prior to the
expiration of the then-current term. The term as so extended shall be upon the
same terms and conditions as set forth in this Lease, except that the Fixed Rent
during the extended term shall be determined in the manner provided in Paragraph
3.2, below. Should Tenant in any instance fail to give timely written notice of
its intention to exercise its option to extend the term, Tenant shall be deemed
to have elected not to exercise its said right to extend the term, and this
Lease shall expire in accordance with its terms. Time is of the essence with
respect to the requirement that Tenant give timely notice of its election to
exercise its right to extend the term, and Tenant's failure timely to exercise
any option shall constitute a material, irredeemable and incurable failure to
satisfy a condition precedent to the vesting of such right, and Tenant hereby
expressly waives any right to claim relief from forfeiture, or any other
equitable relief, from the consequences of any untimely exercise of its right to
extend the term of this Lease. The implied covenant of good faith and fair
dealing under this Lease shall not be construed to impose upon Landlord any
obligation to notify Tenant in advance of the impending deadline for the
exercise of any option, nor shall it obligate Landlord to excuse the tardy
exercise of any option, however slight. Notwithstanding anything to the contrary
set forth above, Tenant shall not have the right to exercise any option to
extend the term of this Lease (i) during the time commencing from the date
Landlord gives Tenant a written notice that Tenant is in default under any
material provision of this Lease and continuing until the default described in
said notice is cured, (ii) during the period of time commencing on the day after
a monetary obligation to Landlord is due from Tenant and unpaid and continuing
until the obligation is paid, or (iii) as to the second and third Extension
Options, if the prior options were not timely exercised. The period of time
within which any option may be exercised shall not be extended or enlarged by
reason of Tenant's inability to exercise such option prior to satisfaction of
the foregoing conditions precedent. The Extension Option may not be exercised or
assigned involuntarily by or to any person or entity other than Tenant except as
provided in Article 17, nor shall the Extension Option be assignable apart from
this Lease.
ARTICLE 3
FIXED RENT
3.1 PAYMENT. From and after the Commencement Date during the term of this
Lease, Tenant shall pay to Landlord, at the address in the Lease Summary or such
other address as Landlord designates in writing, the fixed rent, as set out in
Paragraph 4 of the Lease Summary and adjusted pursuant to Paragraph 3.2, below
(the "Fixed Rent"), on the first day of each month, in advance. If the
Commencement Date occurs on a day other than the first day of a month, then the
Fixed Rent for the fraction of the month starting with the Commencement Date
shall be paid on the Commencement Date, prorated on the basis of the actual
number of days in such month. If the term hereof ends on a day other than the
last day of a month, then the Fixed Rent for the month during which the
expiration occurs shall be prorated on the basis of the actual number of days in
such month. In addition to the Fixed Rent, Tenant agrees to pay "Common Areas
Operating Costs" (as described in Paragraph 4.1, below). The Fixed Rent, Common
Areas Operating Costs, Landlord's Taxes and any other monetary obligations due
Landlord under the Lease are hereinafter referred to collectively as the "Rent."
The Rent shall be payable to Landlord, in lawful money of the United States of
America, in currently available funds at the address for Landlord set forth in
the Lease Summary (or to such other person or at such other place as Landlord
may from time to time designate in writing), without notice, demand, offset,
deduction or setoff. In no event shall the Rent be reduced by any other
provision of this Lease for sums payable by Landlord. "Force Majeure" (as
defined in EXHIBIT "C") shall be deemed to impact the Commencement Date under
this Lease.
3.2 COST OF LIVING ADJUSTMENT. The Fixed Rent payable for each Lease Year,
including during the Extension Options, shall be increased every five (5) years
during the term of this Lease, including the option terms, by the product of (a)
2.50, multiplied by (b) the percentage increases, if any, in the Consumer
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Price Index--All Urban Consumers (Los Angeles-Anaheim-Riverside Area; Base:
1982-84=100) (the "Index") as published by the United States Department of
Labor, Bureau of Labor Statistics (the "Bureau"). Notwithstanding the foregoing,
with respect to each five (5) year period of this Lease term, including the
Extension Options, in no event shall the percentage increase in the Fixed Rent
exceed a cumulative increase of ten percent (10%) from the prior five (5) year
period. For example, the Fixed Rent for the second five (5) years shall not
exceed $770,000 per year. The Index for the calendar month preceding the first
calendar month of each Lease Year in which an adjustment in the Fixed Rent is
required, as aforesaid, shall be compared with the Index for the calendar month
sixty (60) months earlier, and Fixed Rent shall be increased in accordance with
the percentage increase, if any, between such two (2) monthly Indexes. In no
event shall Fixed Rent be decreased. Landlord shall calculate and give Tenant
written notice of any such increase in Fixed Rent, and the same shall be due and
payable by Tenant, retroactively, as of the first day of the Lease Year in which
the adjustment went into effect. Pending the calculation of the increase of
Fixed Rent as provided herein, Tenant shall continue to pay the same Fixed Rent
which it had been paying during the immediately preceding period and shall
promptly pay the deficiencies, if any, upon demand therefor by Landlord. No
delay or failure by Landlord to enforce this provision or any part thereof as to
Tenant, or to enforce similar or dissimilar provisions in other leases in use as
to any other tenants in the Shopping Center, shall be deemed to be a waiver
hereof, or prevent any subsequent or other enforcement hereof. If the Bureau
shall change the base reference period from 1982-84=100 or otherwise changes its
method of computing the Index, the successor Index so published shall be used by
applying an appropriate conversion formula or table as may be supplied by the
Bureau. If the region covered by the Index is changed, the renamed local Index
covering the region in which the Shopping Center is located shall be used. If
the publication frequency is changed, so that a monthly Index figure is not
available to make a cost of living adjustment in the Fixed Rent as specified
herein, the increase shall be based on the percentage difference between the
Index for the closest preceding calendar month for which a monthly Index figure
is available and the Index for the closest preceding calendar month prior to the
Commencement Date for which a monthly Index figure was available. Should the
Bureau discontinue the publication of the Index, or publish the same less
frequently, or alter the same in some other manner, Landlord, in its reasonable
discretion, shall adopt a substitute Index or procedure which reflects and
monitors consumer prices. Tenant shall promptly pay the deficiencies, if any,
upon demand therefor by Landlord.
ARTICLE 4
ADDITIONAL RENT
4.1 COMMON AREAS OPERATING COSTS: DEFINITIONS.
(a) The term "Common Areas Operating Costs" shall mean the sum of
all expenses paid or incurred by or on behalf of Landlord (or, if under the
terms of the Prior Restrictions, a Maintenance Director other than Landlord
is appointed to maintain the Common Areas, then those expenses paid or
incurred by such Maintenance Director) in connection with the operation,
maintenance, repair, alteration and periodic replacement of any part or
portion of the improvements maintained by Landlord in the Common Areas (that
are not paid directly by, or separately metered or otherwise chargeable to,
individual tenants) during the twelve-month period (currently July 1 through
June 30) utilized by Landlord as the fiscal year for the Shopping Center
("Fiscal Year"), less the fixed contributions to such costs, if any, made by
or on behalf of particular tenants or occupants of the Shopping Center.
Without limiting the generality of the foregoing, the Common Areas Operating
Costs shall include:
(i) electricity, water, gas, sewers, refuse collection and
all other utilities and utility services;
(ii) all utility taxes, charges, or similar impositions;
(iii) programs instituted to comply with governmental
transportation management requirements, and all repairs, improvements and
alterations required by any Federal, State and/or local law, regulation or
ordinance, or necessary to ensure that the Common Areas remain in compliance
with all laws and regulations applicable thereto;
(iv) all periodic replacements of capital improvements in
the Common Areas required as a result of wear and tear or to improve
efficiency of operation, amortized on a straight line basis over their useful
life as determined in the reasonable judgment of Landlord (or over the period
of cost recovery or depreciation permitted by the U.S. Internal Revenue Code,
if shorter), with interest thereon at the rate being paid by Landlord, from
time to time, in connection with the financing of the improvements in
question;
(v) periodic replacements and/or installation of personal
property used in connection with the Common Areas (the "Associated Personal
Property"), amortized over a period of five (5) years on a straight line
basis with interest thereon at the rate currently being paid by Landlord in
connection with the financing of such Associated Personal Property;
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(vi) rental paid for leased machinery, tools, equipment, and
motor vehicles used in connection therewith;
(vii) maintenance and repair of electrical services and
resurfacing and repainting of parking lots, restriping, repairs to parking
lots, sidewalks and pedestrian passageways, cleaning, sweeping and janitorial
services, landscaping, light fixture and bulb replacement, trash and refuse
receptacles, directional signs and markers, and car stops. Tenant shall not
be responsible for its Proportionate Share for replacements of the parking
lot asphalt more than once every ten (10) years (unless more frequent
replacements of such asphalt are required to meet the standards set forth in
the Prior Restrictions, in which case Tenant shall be responsible for its
full Proportionate Share);
(viii) insurance premiums and deductibles (for the Common Areas
policies referred to in Paragraph 16.3 herein), and alterations or replacements
of capital improvements in the Common Areas required by Landlord's insurance
carriers, or any of them, as a condition to the issuance or continuance of such
insurance;
(ix) the services of independent contractors including, without
limitation, the services of any person, firm or corporation selected by Landlord
to maintain the Common Areas or to provide security, on such terms and
conditions and for such duration as Landlord shall, in its sole judgment, deem
reasonable and appropriate;
(x) compensation (including, without limitation, employment
taxes, workers' compensation premiums, and fringe benefits) of all persons,
whether or not directly employed by Landlord, to the extent they perform duties
in connection with the operation, maintenance, repair and periodic replacement
of any part or portion of the improvements and/or Associated Personal Property
in the Common Areas;
(xi) legal and accounting services engaged by Landlord for the
Common Areas;
(xii) "Landlord's Taxes" (as hereinafter defined);
(xiii) costs to construct, install, operate, and maintain tenant
signage; Tenant and each tenant included on any freeway Shopping Center pylon
sign shall pay its proportionate share of the costs;
(xiv) any other expenses or charges of whatsoever kind, whether
or not hereinabove described, which, in accordance with generally accepted
accounting or management principles, would be considered an expense of
operating, maintaining, repairing and periodically replacing any part or portion
of the Common Areas and/or Associated Personal Property located or used in the
Common Areas, plus ten percent (10%) of all of said costs to cover Landlord's
administrative and overhead costs, and to compensate Landlord for supervision of
the operation, maintenance and repair and periodic replacement of any part or
portion of the Common Areas. Said ten percent (10%) of costs shall be reduced by
amounts paid by Landlord to a management company performing some or all of the
management of the Common Areas. The ten percent (10%) shall not be applied to
Common Areas insurance premiums, Common Areas real property taxes, Common Areas
capital expenditures, or any third party management fees or other costs
associated with third party management of the Shopping Center.
(b) Common Areas Operating Costs shall NOT include:
(i) the costs of special services rendered to tenants
(including Tenant) for which a special charge is made to such tenants;
(ii) any costs borne directly by Tenant under this Lease;
(iii) Landlord's ground rent, if any;
(iv) interest or amortization paid by Landlord in connection
with any loan or loans secured by the real property of which the Premises or
Common Areas are a part, unless said loans are made to finance costs expressly
included above in the definition of Common Areas Operating Costs; and
(v) expenses associated with the initial construction of
the Center, the Common Areas or any Common Areas improvements, including
expenses of correcting any defects in initial design or construction;
(c) The term "Estimated Common Areas Operating Costs" shall mean the
monthly estimates of Tenant's Proportionate Share of Common Areas Operating
Costs for each Lease Year to be given by Landlord to Tenant pursuant to the
terms hereof.
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(d) The term "Landlord's Taxes" shall mean and include all real
and personal property taxes, charges and assessments, water and sewer rents
and taxes on parking of any description, which are levied, assessed upon or
imposed by any governmental authority of every kind and nature whatsoever,
general and special, during any Fiscal Year with respect to the Common Areas
and all improvements thereon, fixtures and equipment and all other property
of Landlord, real or personal, located in the Shopping Center and used in
connection with the operation, maintenance, repair and periodic replacement
of any part or portion of the Common Areas (computed as if paid in permitted
installments regardless of whether actually so paid), and any tax which shall
be levied or assessed to or in lieu of such real or personal property taxes
(including without limitation, any value added tax or municipal income tax),
and any license fees, commercial rental tax or other tax upon rents, the
entering into of leases, or Landlord's business of leasing or operating the
Shopping Center, including all costs and fees (including reasonable
attorneys' fees) incurred by Landlord in contesting taxes, assessments and/or
negotiating with the public authorities as to same; PROVIDED, however, that
the term "Landlord's Taxes" shall not include any federal, state, or local
income tax, or any franchise, estate or inheritance taxes. The term
"Landlord's Taxes" shall also include any tax, fee, levy, assessment or
charge (i) in substitution, partially or totally, of any tax previously
included within the definition of Landlord's Taxes, or (ii) which is imposed
for a service or right not charged prior to June 1, 1978, or, if previously
charged, has been increased since June 1, 1978, or (iii) which is imposed as
a result of a transfer, either partial or total, of Landlord's interest in
the Shopping Center or any part thereof or which is added to a tax or charge
hereinbefore included within the definition of Landlord's Taxes by reason of
such transfer (provided that this subclause (iii) is meant to apply to
increases in property taxes resulting from any such transfer, but not to the
imposition of any documentary transfer tax which may be assessed upon any
such transfer), or (iv) which is imposed by reason of this transaction, any
modifications or changes hereto, any transfers hereof, or any modifications
of the Common Areas or any portion thereof.
4.2 PAYMENT OF TENANT'S PROPORTIONATE SHARE. Tenant shall pay Tenant's
Proportionate Share of the Common Areas Operating Costs as set forth in
Paragraph 9 of the Lease Summary. Tenant shall pay to Landlord, in advance,
on the first day of each calendar month commencing on the Commencement Date,
an amount estimated by Landlord, from time to time, as being one-twelfth
(1/12) of Tenant's Proportionate Share for such Fiscal Year. Thereafter,
within sixty (60) days after the end of each Fiscal Year, Landlord shall
deliver to Tenant a written statement setting forth the amount of Tenant's
Proportionate Share of the actual Common Areas Operating Costs for such
Fiscal Year. If the aggregate payments made by Tenant for any such Fiscal
Year exceed the amount of Tenant's Proportionate Share for such Fiscal Year,
such excess shall be applied as a credit against future payments to be made
by Tenant under this Paragraph. If the aggregate payments made by Tenant for
any such Fiscal Year are less than the amount of Tenant's Proportionate Share
for such Fiscal Year, Tenant shall, immediately upon demand therefor, pay
Landlord the amount of any such deficiency. Notwithstanding the foregoing,
subsequent adjustments may be made by Landlord as a result of information not
available or expenses not determined or determinable at the time any
particular adjustment is made. In the event that the Commencement Date is
other than the first day of a full calendar month, the first monthly payment
shall be a PRO RATA amount of a full monthly contribution. In the event that
this Lease should end on any date other than the last day of a Fiscal Year,
Tenants Proportionate Share shall be adjusted on the basis of the ratio which
the number of days which have elapsed from the commencement of the said
Fiscal Year to the later of the date on which this Lease terminates or Tenant
otherwise surrenders possession of the Premises bears to 365. Tenant's
obligation to pay Tenant's Proportionate Share shall survive termination or
earlier expiration of this Lease. The term "Tenant's Proportionate Share" is
subject to adjustment from time to time, and Landlord expressly reserves the
right to adjust Tenant's Proportionate Share as is necessary to conform
as-built square footage, to reflect changes in the size of the Shopping
Center subject to Common Areas Operating Costs, or to reasonably operate the
Shopping Center. Tenant's Proportionate Share is the ratio, stated as a
percentage, which the "Floor Area" of Tenant's Building (as defined in
Paragraph 3 of the Lease Summary and shown on Exhibit D and as may be
adjusted by verification subsequent to the completion of construction) bears
to the total Floor Area of buildings subject to Common Areas Operating Costs.
For purpose of this Paragraph, the term "Floor Area" means the area within
the exterior surface of exterior walls of any building or structure, measured
from the exterior surface of such exterior walls and from the center of
common walls (if any), but excluding mezzanines (if any) unless such
mezzanines are used as sales areas. Should the gross leasable area of the
Shopping Center ever vary from what it is as of the Commencement Date,
Tenant's Proportionate Share shall be adjusted so it is the ratio, stated as
a percentage, which the Floor Area of Tenant's Building bears to the total
Floor Area of all buildings in the Shopping Center then subject to Common
Areas Operating Costs.
4.3 LANDLORD'S RECORDS. Landlord shall keep and maintain customary
records of all expenses incurred in connection with the operation, maintenance,
repair and periodic replacement of any part or portion of the improvements in
the Common Areas, and the same shall, upon at least ten (10) days' written
notice, be made available for inspection by Tenant at Tenant's expense during
regular business hours at the offices of Landlord, provided that such inspection
shall not occur more than once during any twelve (12) month period. If Tenant
does not dispute the same in writing within one (1) year of receiving the annual
written statement setting forth the amount of Tenant's Proportionate Share of
the actual Common Areas Operating Costs for such Fiscal Year, Tenant shall have
irrevocably waived its right to dispute such determination or calculation.
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ARTICLE 5
INTENTIONALLY OMITTED
ARTICLE 6
SECURITY DEPOSIT
Tenant shall deposit with Landlord one (1) month's rent (the "Deposit") as
security for the full and faithful performance of each and every obligation of
Tenant pursuant to the provisions of this Lease to be performed by Tenant, and
any renewals or extensions of this Lease, if any. In each instance when the
Fixed Rent increases during the Lease Term, Tenant shall, within five (5)
business days after written demand therefor, deposit with Landlord an additional
sum so that the amount of the Deposit held by Landlord shall at all times be the
equivalent of one month's rent. If Tenant defaults with respect to any provision
of this Lease, including, without limitation, the provisions relating to the
payment of Rent, the reimbursement of all costs incurred by Landlord in the
enforcement of its remedies under this Lease, including, without limitation,
attorneys' fees and expenses, the repair of damage to the Premises or the Common
Areas and/or the cleaning of the Premises upon termination of this Lease,
Landlord may, to the full extent permitted by law, use, apply or retain all or
any portion of the Deposit for payment of any Rent or other sum in default, for
reimbursement of such costs and expenses, the repair of such damage, the cost of
such cleaning or the payment of any other amount which Landlord may spend or
become obligated to spend by reason of Tenant's default or to compensate
Landlord for any other loss or damage which Landlord may suffer by reason of
Tenant's default. If any portion of the Deposit is so used or applied, Tenant
shall, within five (5) business days after written demand therefor, deposit cash
with Landlord in an amount sufficient to restore the Deposit to its original
amount, and Tenant's failure to do so shall constitute a material breach of this
Lease. Landlord's obligations with respect to the Deposit are those of a debtor
and not a trustee. Landlord shall not be required to keep the Deposit separate
from its general funds, and Tenant shall not be entitled to interest on the
Deposit. If Tenant shall fully and faithfully perform each and every provision
of this Lease to be performed by it, the Deposit or any balance thereof shall be
returned to Tenant (or, at Landlord's option, to the last assignee of Tenant's
interest hereunder) within a reasonable period following the expiration of the
Lease term. The Deposit shall not constitute advance rent or liquidated damages,
nor shall Landlord's application of the Deposit in any way limit or restrict the
remedies which would otherwise be available to Landlord. Notwithstanding
anything to the contrary contained herein, so long as Tenant is the original
tenant named herein, Tenant shall not be required to deposit the Deposit.
ARTICLE 7
UTILITIES AND SECURITY SERVICES
7.1 INSTALLATION. Tenant shall install and use the utilities (including
water, gas, electricity, sewers and telephone supplied to or serving the
Premises) in accordance with the criteria set forth in EXHIBIT "C" hereof, and
Landlord's reasonable rules and regulations and the rules and regulations of the
public utility company or the governmental agency supplying the same. Landlord
shall not be responsible for providing any meters or other devices for the
measurement of utilities supplied to the Premises. Tenant shall make application
for and arrange for the installation of all meters or other devices.
7.2 UTILITIES. Tenant, at Tenant's sole cost and expense, shall pay
directly, prior to delinquency, all charges, duties and rates of every
description for water, gas, telephone and trash removal services, and all other
services and utilities supplied to the Premises together with any taxes or
surcharges thereon during the entire term of this Lease. Landlord shall not be
liable for, and Tenant shall not be entitled to, any abatement or reduction of
Rent by reason of any interruption or reduction in the amount or level of any of
the foregoing when such failure or reduction is caused or mandated by accident
breakage, repairs, strikes, lockouts or other labor disturbances or labor
disputes of any character, or any law, regulation, rule, ordinance or court
order limiting or restricting the availability, use or consumption of utility
items, or by any other cause, similar or dissimilar. Landlord shall not be
liable under any circumstances for any loss of or damage or injury (including
death) to the person, property, or business of Tenant, any "Tenant Agent" (as
that term is defined in Paragraph 28(h)) or any other person, however occurring,
through or in connection with or incidental to the interruption or
discontinuance of any of the utilities or services described in this Article 7.
7.3 SECURITY SERVICES. Landlord may, but shall be under no obligation
to, provide one or more security guards or a security service for the
Shopping Center; PROVIDED, however, that in no event shall Landlord by liable
or responsible for any loss of or damage or injury (including death) to the
person, property or business of Tenant, any Tenant Agent or any other person
suffered by reason of the absence of any such security service or of any
negligence, failure, act or omission on the part of any security guard or
service so provided. The costs of any such security guard(s) or service(s)
shall be included in Common Areas Operating Costs.
7.4 UTILITY SERVICES BY LANDLORD. Should Landlord elect or be required by
any governmental authority to supply any utility services used or consumed in
the Premises, Tenant agrees to purchase and pay Landlord, as Additional Rent for
the same, at a cost not to exceed that which the utility company would have
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charged Tenant for furnishing such utilities directly to Tenant. Tenant shall
pay such utilities costs to Landlord upon demand. If Landlord, as an
accommodation to Tenant, furnishes Tenant any utility hereunder, Landlord may,
at any time, at Landlord's sole option and upon not less than thirty (30) days
prior notice to Tenant, discontinue such service to the Premises, and Tenant
shall arrange for such service as provided in Paragraph 7.1, above. In the event
any of Tenant's utility charges are not separately metered, Tenant shall pay its
share of such charges based upon Tenants use as determined by Landlord, in its
best judgment, as Additional Rent, upon written notice thereof from Landlord to
Tenant.
ARTICLE 8
USE OF PREMISES, COMPLIANCE WITH LAW
8.1 USE. Tenant shall use and occupy the Premises, as set forth in
Paragraph 8.2 herein, for the use specified in Paragraph 10 of the Lease
Summary, and Tenant shall not use or occupy the Premises for any other purpose
whatsoever (and including, without limitation, any of the restricted or
prohibited uses included in the Prior Restrictions), it being understood and
agreed that the restrictions on Tenant's use hereunder are to and for the
benefit solely of Landlord and are part of the consideration for Landlord's
execution of this Lease. Without limiting the above, Tenant shall not use or
occupy the Premises or the Common Areas in violation of law, and shall
immediately discontinue any use of the Premises or the Common Areas which is
declared by any governmental authority having jurisdiction to be a violation of
law or regulation. Landlord's failure to object to such use shall not constitute
a consent to a use which constitutes such a violation. Tenant, at its sole cost
and expense, shall comply, promptly, with any directive of any governmental
authority having jurisdiction which shall impose any duty upon Tenant or
Landlord with respect to the Premises, or the use or occupation thereof.
8.2 OBLIGATION TO OPEN AND OPERATE. Tenant shall construct the Tenant's
Improvements and shall open for business as a fully-stocked, fully-staffed Eagle
Hardware & Garden store in accordance with the terms and conditions of this
Lease, and (except for reasonable periods of continuous and diligent remodeling
or repairs, or "events of delay" beyond the reasonable control of Tenant
described in Paragraph 28(i)) shall during the term of this Lease keep the
Premises open for business on such days and during such hours as are reasonable
and customary for Tenant's operations from time to time.
8.3 INCREASED RISK. Tenant agrees that Tenant will not do anything in
or upon the Premises which may be prohibited by any insurance policy in force
carried by Landlord or Tenant, from time to time, covering the Shopping
Center or any portion thereof. In the event Tenant's occupancy or conduct of
business in or upon the Premises (whether or not Landlord has consented to
the same) results in any increase in premiums for (or cancellation of) the
insurance carried from time to time by landlord with respect to the Shopping
Center, Tenant shall, at Landlord's option, either cease such use or conduct,
immediately, or pay any resulting increase in premium upon demand therefor
from Landlord. In determining whether increased premiums or cancellation are
a result of Tenant's occupancy of the Premises, the written determination of
the insurer shall be conclusive. Tenant shall promptly comply with all
reasonable requirements of the insurance authority or of any insurer now or
hereafter in effect relating to the use and/or maintenance of the Premises.
8.4 LANDLORD'S RECAPTURE RIGHTS. Landlord shall have the option to
terminate this Lease and recapture the Premises by giving Tenant written notice
thereof following the date of one of the following events:
(a) The failure of Tenant to keep the Premises open for business for
any sixty (60) consecutive-day period, excluding any closures for continuous and
diligent rebuilding, restoration, additions, remodeling, or repairs, or events
of delay as described in Section 28(i) below; or
(b) One hundred eighty (180) days following commencement of
demolition of the Premises and failure to diligently and continuously rebuild,
replace or use the Premises for commercial purposes.
In the event Landlord elects to terminate the Lease, such
termination shall be effective on the date thirty (30) days from the date of
Tenant's receipt of Landlord's notice of termination, unless within such
thirty (30) days, Tenant informs Landlord in writing that Tenant intends to
rebuild or reopen the Premises for business, and diligently commences to
rebuild and does in fact reopen, the Premises for business. Upon Tenant's
surrender of the Premises, Landlord shall pay Tenant an amount equal to its
unamortized cost of the improvements to the Premises less all costs incurred
by Landlord to lease the Premises, including without limitation, costs of
removal and/or demolition of improvements, alterations to the Premises, and
marketing costs and brokers' commissions. Upon termination, this Lease
(except for any obligations occurring prior to such termination or that
expressly survive termination or, if requested by Landlord, Tenant's
obligations to remove improvements, and restore the Premises) will be of no
further force or effect, and Landlord and Tenant shall be released from all
future obligations under this Lease.
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8.5 RESTRICTIVE COVENANT. Landlord shall not lease or sell any portion of
the Shopping Center, other than the Kmart parcel (Lot 1), (a) to an entity
operating more than 10,000 square feet from the Shopping Center and that carries
more than 25% of its on-site inventory in any home improvement, garden, nursery,
and building materials products typically provided by Tenant, or (b) to an
entity operating less than 10,000 square feet from the Shopping Center and that
carries more than 40% of its on-site inventory in any home improvement, garden,
nursery, and building materials products typically provided by Tenant.
ARTICLE 9
ACCEPTANCE OF PREMISES
9.1 AS-IS ACCEPTANCE. Tenant acknowledges that neither Landlord nor any
agent of Landlord has made any representation or warranty with respect to the
Premises and the Shopping Center or any portion or aspect thereof, or with
respect to the suitability or fitness thereof for the conduct of Tenant's
business or for any other purpose. There have been no representations or
warranties made by or on behalf of Landlord in connection with this Lease or as
to any matters concerning the Shopping Center, including but not limited to the
condition, acreage, topography, climate, water, water rights, utilities, present
or future zoning, soil, subsoil, any "Hazardous Substance" (as defined in
Article 40), the purposes for which the Shopping Center is suited, drainage,
access to public roads, or proposed routes of roads or extensions thereof. The
Premises and Pad are being leased to Tenant "as is," "where is," and "with all
faults." Tenant represents to Landlord that Tenant is relying solely on its own
independent investigation of the Shopping Center and has had sufficient time and
opportunity to make such independent investigations, inquiries, and evaluations
as Tenant deems necessary or appropriate to decide for itself the degree and
scope of risk which exists in connection with this Lease. Notwithstanding the
above, Landlord will deliver Tenant a certification executed by Landlord's
engineer with respect to the compaction of the buildable Pad area. There shall
be a conclusive presumption that the Premises and the Shopping Center were in
good and satisfactory condition on the date Landlord delivered possession of the
Pad to Tenant.
9.2 OTHER SHOPPING CENTER TENANTS. Tenant hereby acknowledges that the
Shopping Center is subject to certain use restrictions as set forth in the Prior
Restrictions. Tenant further acknowledges that it has read the Prior
Restrictions and agrees to be bound by all of the terms and conditions set forth
therein, and Tenant is hereby prohibited from using the Premises in any manner
whatsoever which could in any way be deemed to be in violation of any of the use
restrictions contained in the Prior Restrictions. It is expressly understood and
agreed by the parties hereto that except as otherwise herein set forth and in
the Prior Restrictions, nothing contained in this Lease, or in any manner
expressed or implied, is to be construed as in any way prohibiting, restricting
or limiting Landlord's right to use, rent or lease any portion, or all, of the
Shopping Center, or of any other property owned, managed or leased by Landlord
or any affiliate, partner, director or employee thereof, for any purpose, or
use, whether or not such purpose or use be in competition, direct or otherwise,
with the use for which the Premises herein are to be operated by Tenant, and
that the Prior Restrictions may be modified from time to time as may be
permitted thereunder. Landlord makes no warranties or representations as to the
present occupants or occupancy level of the Shopping Center, or of future
occupancy commitments. Landlord shall have the right to add or to remove major
stores or kiosks, from time to time, from the Shopping Center. Tenant waives any
duty or obligation, expressed or implied, on the part of Landlord, to keep the
Shopping Center leased or occupied, or partially leased or occupied, or to lease
(or to not lease) portions of the Shopping Center for major stores or for any
other specific purpose, use or type of use. Moreover, except as otherwise set
forth in Paragraph 8.5 or in the Prior Restrictions, Tenant acknowledges that
nothing contained in this Lease, or in any manner expressed or implied, is to be
construed as imposing any duty or obligation on the part of Landlord to prohibit
or discourage the conduct of other tenants in the Shopping Center, or that of
any other third parties, that may result in a loss or reduction of gross sales
or profitability by Tenant.
9.3 GOVERNMENTAL APPROVAL PERIOD. Commencing on the date Landlord delivers
written notice to Tenant that Landlord has received all entitlements necessary
for Landlord to develop the Shopping Center, Tenant shall have one hundred and
eighty (180) days within which at its sole cost expense or risk, to obtain any
and all necessary governmental approvals and permits, including but not limited
to those relating to planning, zoning, development, building, fire protection,
roads, signage and utilities, as may be required by those governmental
authorities having jurisdiction in order for Tenant to use the Premises for the
construction and operation of Tenant's proposed Building ("Governmental
Approvals"). Such 180-day period, which may be extended by Landlord in its
discretion for an additional ninety (90) days, is hereinafter referred to as the
"Approval Period"; the last day of the Approval Period is referred to as the
"Approval Termination Date". During the Approval Period, all Governmental
Approvals desired by Tenant to construct its Building and operate its business
shall be obtained, issued, transferred and delivered to Tenant. Landlord shall
obtain all approvals for development of the Shopping Center (other than approval
of Tenant's specific site plan) on or before the date Tenant submits its
application for its building permit to the appropriate governmental agency.
(a) Tenant shall, in good faith, diligently and expeditiously pursue
obtaining of the Governmental Approvals and shall keep Landlord informed of
Tenant's efforts in connection therewith.
9
(b) In the event that any governmental agency having jurisdiction
thereof shall fail to approve the "Plans and Specifications" defined in EXHIBIT
"C" or shall fail to issue any Governmental approvals which shall be required in
connection with the construction and/or occupancy of the Premises within the
Approval Period, either party shall have the right, within five (5) business
days after the Approval Termination Date, to terminate this Lease by giving
written notice thereof to the other party, in which event this Lease shall
terminate and the parties shall have no further obligations to each other with
respect to the Premises or this Lease (except those that expressly survive
termination). In the event that either party shall fail to terminate this Lease
within the time and manner provided for herein, the Lease shall remain in full
force and effect. Notwithstanding anything to the contrary contained in this
Lease, if any governmental agency, as a condition to granting any Governmental
Approval, requires any change in the Plans and Specifications or to the EXHIBIT
"D" Plot Plan which Landlord or Tenant determines, in its reasonable discretion,
is material and unacceptable or which violate the Prior Restrictions, Tenant or
Landlord shall have the right to terminate this Lease by giving written notice
thereof to the other party promptly upon receipt of such information from said
governmental agency, and this Lease shall immediately terminate and be of no
further force or effect, in which event the parties shall have no further
obligations to each other with regard to this Lease and/or the Premises (except
those that expressly survive termination). Notwithstanding the above requirement
of prompt notice, Landlord and Tenant shall each have a reasonable period of
time (not to exceed thirty (30) days) after receipt of any such information from
such governmental agency to negotiate with such agency over any such required
change before having to give notice of termination to the other party.
(c) The failure of Tenant to timely deliver notice of termination to
Landlord on or before the Approval Termination Date shall be deemed to
constitute Tenant's satisfaction or waiver of this contingency and a waiver of
Tenant's right to terminate this Lease prior to the Commencement Date.
9.4 LANDLORD REPRESENTATIONS. Landlord represents and warrants that,
except as otherwise disclosed to Tenant in writing, as of the date of this
Lease:
(a) Landlord has full and lawful right and authority to execute this
Lease and to deliver it to Tenant;
(b) To Landlord's actual knowledge (limited to the actual knowledge
of the corporate officers of the general partner of Landlord and with no duty to
inquire), there are no pending or threatened actions, suits, arbitrations,
claims, or proceedings, at law or in equity, affecting the Premises; and
(c) To Landlord's actual knowledge (limited to the actual knowledge
of the corporate officers of Landlord and with no duty to inquire), the Premises
is in compliance with all applicable laws, codes, and ordinances.
ARTICLE 10
ALTERATIONS
10.1 ALTERATIONS. Except as provided for in EXHIBIT "C", Tenant shall make
no other alterations, additions or improvements ("Tenant Changes") to the
Premises affecting the outside appearance of the Premises or any other part of
the Shopping Center, structural alterations of any kind, and/or alterations
affecting basic plumbing, air conditioning, electrical or life safety systems
shared with the Common Areas or other tenants' premises, if any, without
Landlord's prior written consent which shall not unreasonably be withheld or
delayed. Whenever Landlord's consent is required for Tenant Changes,
accompanying Tenant's written request for same, Tenant shall provide to Landlord
all plans and specifications related to such alterations. Whether or not
Landlord's consent is required, upon completion of any Tenant Changes, Tenant
shall provide to Landlord a copy of the as-built plans and specifications.
Tenant acknowledges that Landlord's review of the plans is for the sole benefit
of Landlord, and Landlord's approval does not constitute any representation by
Landlord as to the compliance of such plans with any law or fitness of such
alterations for a particular purpose or use. Tenant Changes (including, without
limitation, any air conditioning equipment or devices installed in or upon the
Premises) shall become the property of Landlord and shall be surrendered with
the Premises, as a part thereof, at the end of the term or earlier termination
hereof; except that Landlord may, by written notice to Tenant prior to the
termination hereof or within sixty (60) days after termination for default,
require Tenant to remove all Tenant Changes or such portion thereof as Landlord
may designate, and to repair any damage from such removal, all at Tenant's sole
expense. Landlord may impose such restrictions and conditions it deems
appropriate on the construction of Tenant Changes including, without limitation,
the types and amounts of insurance required to be carried by Tenant's general
contractor for the benefit of Landlord and Tenant; and requiring Tenant to use
contractors that are licensed and bondable; PROVIDED, however, that Tenant's
selection of a general contractor shall not otherwise require Landlord's
approval. Without limiting the generality of the foregoing, Tenant hereby
covenants that, before commencing any Tenant Changes and regardless of whether
or not Landlord's consent is first required, Tenant shall (i) give Landlord at
least fifteen (15) business days' written notice of the proposed commencement of
such work (to afford Landlord an opportunity to post appropriate notices of
nonresponsibility); (ii) secure, at Tenant's sole cost and expense, a completion
and lien indemnity bond, in an amount equal to the cost of such Tenant Changes,
and in
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all other respects satisfactory to Landlord for such work, and (iii) furnish
Landlord with properly executed certificates of insurance in accordance with
Paragraph 16.2 evidencing the types and amounts of insurance coverage required
to be carried by Tenant's general contractor for the benefit of the Landlord and
Tenant. Tenant covenants and agrees that all alterations done by or pursuant to
the direction of Tenant shall be performed expeditiously, in a good and
workmanlike manner, strictly in accordance with any plans and specifications
related to such alterations that were approved by Landlord, in full compliance
with all laws, rules, orders, ordinances, directions, regulations and
requirements of all governmental agencies, offices, departments, bureaus and
boards having jurisdiction, in full compliance with the rules, orders,
directions, regulations, and requirements of the Insurance Service Office or any
similar body, and in a manner so as to minimize interference with pedestrian and
vehicular traffic and other businesses in the Shopping Center. Tenant shall
procure and maintain in full force and effect during the course of such work, at
Tenant's sole cost and expense, builder's risk insurance in an amount reasonably
satisfactory to Landlord. The provisions of this Lease are intended fully to
govern the rights and obligations of Landlord and Tenant as they relate to the
need for repairs to the Premises. Accordingly, Tenant waives and releases any
rights it may have to make repairs at Landlord's expense or to quit the Premises
under Sections 1941, 1942(a), and 1932(1) of the California Civil Code or under
any similar any law, ordinance or regulation which may now exist or hereafter be
enacted or enforced which confers upon Tenant the right to make any repairs to
the Premises of the type allocated to Landlord by this paragraph, whether or not
for the account of Landlord, or to terminate this Lease because of Landlord's
failure to keep the Premises or the Shopping Center in good order, condition and
repair.
10.2 OTHER TENANT CHANGES. If any alteration, addition, replacement or
change shall be required by law or the requirements of any insurance company (as
a condition to the issuance or continuation of insurance coverage without
increase in Premium) to be made to the Premises for any reason including,
without limitation, (i) Tenant's failure to maintain the Premises in the manner
required hereby, (ii) Tenant's use of the Premises, a change in the manner or
mode of Tenant's use of the Premises, or the location of partitions, trade
fixtures, merchandise or other contents of the Premises, or (iii) any
requirement of law or ordinance or other requirement of any government or other
authority, then, such alterations, additions, replacements or changes shall be
promptly made and paid for solely by Tenant in accordance with Paragraph 10.1,
above.
ARTICLE 11
LIENS AND ENCUMBRANCES
11.1 TENANT'S COVENANTS. Tenant covenants and agrees to keep the Premises,
the Shopping Center, and Tenant's leasehold interest therein, free from any
mechanics' liens or other encumbrances, and that any such liens or encumbrances
for any obligation or for work claimed to have been furnished, done for,
obligations incurred for or materials claimed to have been furnished to Tenant
or any other party, will be discharged by Tenant, by bond or otherwise, within
ten (10) days after Tenant learns of the filing thereof, at the cost and expense
of Tenant, and Tenant further agrees to defend, indemnify and hold harmless
Landlord from and against any such liens or claims or actions thereon, together
with costs of suit and attorneys' fees incurred by Landlord in connection with
any such claims or actions. If any such liens are filed and Tenant fails to
discharge such liens, by bond or otherwise, within such ten (10) days after
Tenant learns of the filing thereof, Landlord may, without waiving its rights
and remedies based on such breach of Tenant and without releasing Tenant from
any of its obligations, cause such liens to be released by any means it shall
deem proper, including payment in satisfaction of the claims giving rise to such
liens. Tenant shall reimburse Landlord, within ten (10) days after demand
therefor, for any sum paid or incurred by Landlord to remove such liens. Tenant
shall have the right to contest any such liens or claims and not be in violation
of this Article 11, and Landlord shall cooperate with Tenant in the prosecution
of such contest (at no cost or expense to Landlord); PROVIDED, however, that
Tenant must first pay, bond over, or otherwise discharge any such liens as a
condition to initiating and pursuing such contest.
11.2 LANDLORD'S COVENANTS. Tenant has acknowledged that, pursuant to the
terms of that certain Development Agreement dated __________, 199_, between
Landlord and Kmart for the Shopping Center (a memorandum of which is to be
recorded in the Official Records of Los Angeles County, California), Kmart has
the right to place a lien against the Premises in the event Landlord fails to
comply with certain site development obligations. Landlord shall, prior to the
Commencement Date, discharge (by payment, bond, or otherwise) any such lien from
the Premises. Landlord further agrees to defend, indemnify and hold harmless
Tenant from and against any such lien or claims or actions thereon, together
with costs of suit and attorneys' fees incurred by Tenant in connection with
any such claims or actions. Landlord shall have the right to contest any such
liens or claims and not be in violation of this Article 11, and Tenant shall
cooperate with Landlord in the prosecution of such contest (at no cost or
expense to Tenant); PROVIDED, however, that Landlord must first pay, bond
over, or otherwise discharge any such liens as a condition to initiating and
pursuing such contest.
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ARTICLE 12
TAXES ON THE PREMISES AND TENANT'S PROPERTY
12.1 PERSONAL PROPERTY TAXES. Tenant shall be liable for, and shall pay not
later than ten (10) days before delinquency, all taxes levied against Tenant's
Property (as that term is defined below) and any other personal property of
whatsoever kind and to whomsoever belonging, located or installed in or about
the Premises commencing on the date Tenant's Property or such other personal
property is placed in or about the Premises (and, upon demand by Landlord,
Tenant shall furnish Landlord with evidence to Landlord's satisfaction of
payment thereof). The term "Tenant's Property" shall mean all interior signs,
trade fixtures, furniture and equipment and other moveable items installed or
placed on the Premises by or at the direction or with the consent of Tenant,
regardless of ownership, exclusive of fixtures paid for by Landlord, if any,
pursuant to EXHIBIT "C." If any such taxes on Tenant's Property or other
personal property are levied against Landlord or Landlord's property and if
Landlord pays the same (which Landlord shall have the right to do regardless of
the validity of such levy, but only under proper protest if requested in writing
by Tenant), or if the assessed value of Landlord's property is increased by the
inclusion therein of a value placed upon Tenant's Property or such other
personal property, and if Landlord pays the taxes based upon such increased
assessment (which Landlord shall have the right to do regardless of the validity
thereof, but only under proper protest in writing if requested by Tenant),
Tenant shall repay to Landlord, within ten (10) days after demand therefor, the
taxes so paid by Landlord and any expenses incurred by Landlord in connection
therewith, together with interest thereon at the Lease Rate (as defined in
Paragraph 22.11). In any such event Tenant shall have the right, in the name of
Landlord and with Landlord's full cooperation, but at no cost to Landlord, to
bring suit in any court of competent jurisdiction to recover the amount of any
such taxes so paid under protest, any amount so recovered belonging to Tenant.
12.2 REAL PROPERTY TAXES. From and after the Execution Date, Tenant shall
pay the real property taxes, as defined below, applicable to the Premises
through the entire term of this Lease, including all option terms. All such
payments shall be made at least five (5) business days prior to the delinquency
date. Tenant shall promptly furnish Landlord with satisfactory evidence that
such taxes have been paid. If any such taxes paid by Tenant covers any period of
time after the expiration of the term hereof, Tenant's share of such taxes shall
be equitably prorated to cover only the period of time within the tax fiscal
year during which this Lease shall be in effect, and Landlord shall reimburse
Tenant to the extent required. If Tenant shall fail to pay any such taxes,
Landlord shall have the right to pay the same, in which case Tenant shall repay
such amount to Landlord with Tenant's monthly installment of Fixed Rent together
with interest on such amounts at the Lease Rate (as defined in Paragraph 22.11,
below). If the Premises are not separately assessed, Landlord shall pay all real
property taxes on the Premises, and Tenant shall pay the Landlord, within thirty
(30) days after request therefor, Tenant's Proportionate Share of the real
property taxes imposed upon the entire Shopping Center and all of the buildings
and structures located on the Shopping Center. Tenant shall pay to Landlord as
Additional Rent, together with the payment of Fixed Rent, or other payments
required hereunder which are subject to any excise tax on gross income derived
by Landlord under this Lease, regardless of how designated, excluding federal
and state income taxes, imposed by any governmental body having jurisdiction, an
amount which, when first added to such Fixed Rent, or other payments shall, then
yield to Landlord, after deduction of such taxes payable by Landlord with
respect to all such payments, a net amount equal to that which Landlord would
have received from such payments had no such tax been imposed. As used herein,
the term "real property taxes" shall include any form of real estate tax or
assessment general, special, ordinary or extraordinary, and any license fee,
commercial rental tax, improvement bond or bonds, levy or tax (other than
inheritance, personal income or estate taxes) imposed on the Premises by any
authority having the direct or indirect power to tax, including any city, state
or federal government, or any school, agricultural, sanitary, hospital, fire,
street drainage or other improvement district thereof, as against any legal or
equitable interest of Landlord in the Premises or in the real property of which
the Premises are a part, as against Landlord's right to rent or other income
therefrom, and as against Landlord's business of leasing the Premises. The term
"real property taxes" shall also include any tax, fee, levy, assessment or
charge, in substitution, partially or totally, of any tax, fee, levy, assessment
or charge hereinabove included within the definition of "real property taxes".
The term "real property taxes" shall also include any and all assessments for
services generally provided without charge to owners and/or occupants of real
property prior to the adoption of Proposition 13 by the voters of the State of
California in the June 1978 election. Without limiting the generality of the
foregoing, Tenant shall be responsible for, and the term "real property taxes"
shall include, any increase in real property taxes which is caused due to (i)
any "change in ownership" of the Premises or any portion of the real property
of which the Premises constitute a part (as defined in Sections 60-69 of the
California Revenue and Taxation Code, the regulations promulgated thereunder
and any amendments or successor statutes or regulations thereto) or (ii) any
construction or work of improvement in the Premises or the Shopping Center.
All assessments (excluding those relating specifically to the Tenant
Improvements on the Premises) shall be paid in full by Landlord on or before
the Commencement Date (or, if any such assessments may be paid in
installments without penalty and without additional cost to Tenant, Landlord
may pay them as and when they become due). Landlord shall take no action to
convert the off-site improvement costs incurred for the Shopping Center (or
any such future costs) to assessments.
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ARTICLE 13
MAINTENANCE AND REPAIR
13.1 OBLIGATIONS OF LANDLORD. Subject to Article 4 hereof and except as set
forth as a Tenant obligation under Paragraph 13.2, below, Landlord agrees to
maintain the Common Areas (or, if a Maintenance Director other than Landlord is
appointed under the REA, Landlord agrees to cause the Maintenance Director to
maintain the Common Areas) in good order, condition and repair, except those
portions of the Common Areas which the Tenant is obligated to maintain pursuant
to Paragraph 13.2 hereof. Landlord shall not be responsible for any maintenance,
repairs, replacements or improvements of any kind to the Premises, except as may
be expressly set out elsewhere in this Lease. If the Common Areas or any other
portion of the Shopping Center is damaged or destroyed, either partially or
totally, Tenant shall continue the operation of its business in the Premises to
the extent practicable from the standpoint of good business and, in the event
Landlord is required or elects to make any repairs, reconstruction or
restoration of any damage or destruction to the Common Areas, Tenant shall not
be entitled to any damages by reason of any inconvenience or loss sustained by
Tenant as a result thereof, nor shall the Rent and other charges due hereunder
be abated. Damage or destruction to the Shopping Center (whether or not
affecting the Premises) shall not entitle Tenant to terminate its Lease, under
any circumstances unless as a consequence of such damage and destruction the
parking required for Tenant's customers and/or the access to the Shopping Center
for pedestrian and vehicular traffic (necessary for the operation of Tenant's
business) has been materially and adversely impaired, and Landlord has failed to
cure or remedy such deficiencies substantially within one (1) year after written
notice from Tenant of its intent to cancel this Lease.
13.2 TENANT'S OBLIGATION TO MAINTAIN AND REPAIR PREMISES. Tenant shall keep
in good order, condition and repair, the building and all of the other
improvements constituting the Premises, structural and non-structural (whether
or not such portion of the Premises requiring repair, or the means of repairing
the same, are reasonably or readily accessible to Tenant, and whether or not the
need for such repairs occurs as a result of Tenant's use, any prior use, the
elements or the age of such portion of the Premises) including, without limiting
the generality of the foregoing, all plumbing, heating, air conditioning,
ventilating, electrical, lighting facilities and equipment within the Premises,
fixtures, walls (both interior and exterior), foundations, ceilings, roofs (both
interior and exterior), floors, windows, doors, plate glass and skylights
located within or upon the Premises, and all landscaping, driveways, parking
lots, fences and signs, if any, located on the Premises and on the sidewalks and
parkways immediately adjacent to the same. Tenant waives and releases any right
it may have to make repairs at Landlord's expense or to quit the Premises under
Sections 1941, 1942(a), and 1932(1) of the California Civil Code. If Tenant
fails to perform Tenant's maintenance and repair obligations as set forth above
or under any other paragraph of this Lease, Landlord may at its option (but
shall not be required to) enter upon the Premises after fifteen (15) days' prior
written notice to Tenant (except in the case of an emergency, in which case no
notice shall be required) perform such obligations on Tenant's behalf and put
the same in good order, condition and repair, and the cost thereof together with
interest at the Lease Rate (as defined in Paragraph 22.11, below) shall become
due and payable as Additional Rent to Landlord together with the Tenant's next
installment of Fixed Rent. It is clearly intended by the parties hereto that
Landlord have no obligation, in any manner whatsoever, to repair or maintain the
Premises or the equipment therein, whether structural or non-structural; all of
which obligations are intended to be assumed and performed solely by Tenant and
at Tenant's sole cost and expense. Tenant expressly waives the benefit of any
statute now or hereafter in effect which would otherwise afford Tenant the
right to make repairs at Landlord's expense or to terminate this Lease because
of Landlord's failure to keep the Premises in good order, condition and repair.
13.3 TENANT'S OBLIGATION TO PAY FOR MAINTENANCE AND REPAIRS TO AREAS OTHER
THAN THE PREMISES. Tenant, in all cases, shall also have the obligation
hereunder for the cost of maintenance and the cost of repairing any damage
caused by Tenant, its employees, agents, invitees, contractors, and customers to
those portions of the Shopping Center other than the Premises, such costs to be
paid as part of Additional Rent, except to the extent that the cost of
restoration is recovered from the proceeds of the property insurance carried by
Landlord pursuant to Paragraph 16.3.
13.4 COMMON AREAS. Tenant acknowledges that the Premises and each Lot in
the Shopping Center contain portions of the Common Areas, as shown on EXHIBIT
"A-2," which Common Areas shall be maintained by or on behalf of Landlord in
accordance with Paragraph 13.1. Tenant is prohibited from making any
alterations, additions, or improvements to any Common Areas, including the
landscaping, located on its Lot. Landlord's costs to maintain the Common Areas
located on each Lot shall constitute Common Areas Operating Costs of which
Tenant will pay its Proportionate Share in accordance with Paragraph 4.2.
ARTICLE 14
ENTRY AND INSPECTION
Tenant will permit Landlord, its employees, partners, directors, officers,
representatives, agents and affiliates, at all reasonable times during normal
business hours and at any time in case of emergency, (i) to enter into and upon
the Premises for the purpose of inspecting the same, or for the purpose of
protecting the
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interest therein of Landlord, or to post notices of nonresponsibility; and (ii)
to take all required materials and equipment into the Premises, and perform all
required work therein, including the erection of scaffolding, props or other
mechanical devices, for the purpose of making alterations, repairs or additions
to the Premises (after the failure or refusal of Tenant to cure a default) or to
any portion of the Common Areas or for maintaining any service provided by
Landlord to Tenant hereunder, without any payment, rebate or abatement of Rent
to Tenant (although Landlord is under no obligation to make such alterations,
repairs or additions to the Premises or to maintain or provide any services to
the Premises, except to the extent provided elsewhere in this Lease). Tenant
shall also permit Landlord and its employees, partners, directors, officers,
representatives, agents and affiliates, upon request, to enter and/or pass
through the Premises or any part thereof, at reasonable times during normal
business hours, to show the Premises to prospective purchasers, mortgagees or
master or ground lessors of the Shopping Center or any portion thereof. Landlord
and its employees, partners, directors, officers, representatives, agents and
affiliates shall have no liability to Tenant for any disturbance to Tenant (and
Tenant shall have no right to abate Rent) as a consequence of Landlord's
exercise of its rights hereunder.
ARTICLE 15
WAIVER AND INDEMNIFICATION
15.1 WAIVER. From and after the Commencement Date or the date Landlord
gives Tenant possession of the Premises, whichever first occurs, Tenant, as a
material part of the consideration to Landlord, hereby assumes all risk of
damage to Tenant's property or injury to Tenant's employees, agents, visitors,
invitees and licensees anywhere in the Shopping Center, including the Premises,
and Tenant hereby waives all claims in respect thereof from any cause whatsoever
against Landlord, its agents or employees, except claims for personal injury or
property damage not covered by the insurance required to be carried by Tenant
pursuant to Paragraph 16.1 (and only to the extent covered by the liability
insurance carried by Landlord pursuant to Paragraph 16.3) which are caused by
the failure of Landlord to observe any of the terms and conditions of this Lease
(and such failure persists for an unreasonable period of time after written
notice of such failure) or which arise from any neglect, fault or omission of
Landlord, or of its agents or employees. Landlord shall not be liable to Tenant
for any unauthorized or criminal entry of third parties into the Premises or the
Shopping Center, or for any damage to persons or property, or loss of property
in or about the Premises or the Shopping Center, the parking lot and the
approaches, loading docks, entrances, streets, sidewalks or corridors thereto,
by or from any unauthorized or criminal acts of third parties, regardless of
any breakdown, malfunction or insufficiency of any security measures, practices
or equipment that may be provided by Landlord. Tenant shall immediately notify
Landlord in writing of any breakdown or malfunction of any security measures,
practices or equipment provided by Landlord as to which Tenant has or should
have knowledge. Landlord shall not be liable to Tenant for interference with
light or incorporeal hereditaments or for damage therefrom to Tenant or Tenant's
Agents or to Tenant's property from any cause beyond Landlord's reasonable
control. Tenant hereby agrees that in no event shall Landlord be liable for
consequential damages, including injury to Tenant's business or any loss of
income therefrom, nor shall Landlord be liable to Tenant for any damages caused
by the act or neglect of any other tenant or their invitees in the Shopping
Center.
15.2 INDEMNIFICATIONS.
(a) TENANT'S INDEMNIFICATION OF LANDLORD. From and after the Commencement
Date or the date Landlord gives Tenant possession of the Premises, whichever
first occurs, Tenant hereby agrees to indemnify, defend and hold Landlord
harmless against and from any and all claims for damages or injury occurring on
the Premises, or in connection with the conduct of its business on the Premises,
or from any activity, work, or other thing permitted or suffered by Tenant on
the Premises, and shall further indemnify, defend and hold Landlord harmless
against and from any and all claims arising from any breach or default in the
performance of any obligation on Tenant's part to be performed under the terms
of this Lease, or arising from any act, neglect, fault, or omission of Tenant,
or of its agents, employees, visitors, invitees, and licensees occurring on the
Premises or any part or portion of the Shopping Center, and from and against all
reasonable costs, attorneys' fees, expenses, and liabilities incurred in
connection with any such claims or any actions or proceedings brought thereon;
and in case any action or proceeding be brought against Landlord by reason of
such claim, Tenant, upon notice from Landlord, shall defend the same at Tenant's
expense by counsel reasonably satisfactory to Landlord. When the claim is caused
by the joint negligence or willful misconduct of Landlord and Tenant or Tenant
and a third party unrelated to Tenant (except Tenant's agents or employees),
Tenant's duty to indemnify and save harmless Landlord shall be in proportion to
Tenant's allocable share of the joint negligence or willful misconduct.
(b) LANDLORD'S INDEMNIFICATION OF TENANT. From and after the Commencement
Date or the date Landlord gives Tenant possession of the Premises, whichever
first occurs, Landlord shall indemnify and save harmless Tenant from and against
any and all suits, liabilities, obligations, damages, penalties, claims, costs,
charges, and expenses, including reasonable attorneys' fees, from third parties
which may be imposed upon or incurred by or asserted against Tenant (i) as a
result of or arising out of Landlord's failure to perform any covenant or
agreement required to be performed by Landlord under this Lease, (ii) caused by
the negligence or willful misconduct of Landlord, its agents and employees, or
(iii) in connection with the Landlord's performance of its site preparation work
and Site Improvements work under EXHIBIT "C" hereto. When the
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claim is caused by the joint negligence or willful misconduct of Landlord and
Tenant or Landlord and a third party unrelated to Landlord (except Landlord's
agents or employees), Landlord's duty to indemnify and save harmless Tenant
shall be in proportion to Landlord's allocable share of the joint negligence or
willful misconduct.
15.3 SURVIVAL. The provisions of this Article 15 shall survive the
expiration or sooner termination of this Lease.
ARTICLE 16
INSURANCE
16.1 INSURANCE TO BE PROVIDED BY TENANT. From and after the Commencement
Date or the date Landlord gives Tenant possession of the Premises, whichever
first occurs, and continuing thereafter until the expiration or sooner
termination of the term hereof (or the date on which Tenant has completely
vacated the Premises, if that occurs subsequent to the expiration or termination
of the term), Tenant shall carry and maintain, at its sole cost and expense, the
following types of insurance (affording primary coverage) in the amounts
specified and in the form hereinafter provided for:
(a) Property damage insurance covering (i) the Premises, including all
improvements as may be made by Tenant pursuant to EXHIBIT "C" and Article 10
hereof, and (ii) Tenant's Property, including all trade fixtures, inventory,
merchandise and other personal property from time to time in the Premises, both
in amounts not less than one hundred percent (100%) of their replacement cost
valuation from time to time during the term of this Lease (with a value
endorsement deleting any coinsurance provisions), providing "all risk coverage"
(also known as "special causes of loss"), including sprinkler leakage and plate
glass coverage and coverage for flood and earthquake. Unless this Lease is
terminated pursuant to Paragraph 19.2, the proceeds of such insurance shall be
used for the repair or replacement of the property so insured, and any
deficiency (whether due to inadequacy of coverage, a deductible, or otherwise)
shall be paid for by Tenant. Following a casualty (and regardless of whether or
not this Lease is terminated pursuant to Paragraph 19.2), the proceeds under (i)
above shall be paid to Landlord and Landlord's lenders, as their respective
interests may appear, and the proceeds under (ii) above shall be paid to Tenant.
Except in the event this Lease is terminated under Paragraph 19.2, the proceeds
so paid to Landlord (or Landlord's lenders) shall be made available to Tenant
for payment of the costs and expenses of repair incurred by Tenant; PROVIDED,
however, that such proceeds shall be allocated to Tenant subject to reasonable
conditions including, but not limited to, an architect's certification of costs,
retention of a percentage of such proceeds pending recordation of a notice of
completion, and other customary builder's disbursement controls, all at the sole
expense of Tenant. In the event that the insurance proceeds are insufficient to
cover the cost of repair, then any amounts required over the amount of the
insurance proceeds received necessary to complete said repair shall be paid by
Tenant prior to the release of any insurance proceeds.
(b) Business automobile liability insurance, or equivalent form, with a
combined single limit of not less than Five Million Dollars ($5,000,000) per
occurrence. Such insurance shall include coverage for owned, non-owned and hired
automobiles.
(c) Commercial or comprehensive general liability insurance (including
bodily injury and property damage) in an amount of not less than a combined
single limit of Five Million Dollars ($5,000,000), insuring against any and all
liability of the insured with respect to the Premises and the Shopping Center
arising out of the use or occupancy thereof (including the construction of
improvements on the Premises or any portion thereof), and under which the
insurer agrees to cover and protect Tenant and all additional insured parties
from and against all costs, expenses and/or liability arising out of or based
upon Tenant's indemnification obligations pursuant to Paragraph 15.2 of this
Lease.
(d) Liquor liability; if this Lease covers premises in which alcoholic
beverages are sold and/or consumed, Tenant's liability insurance shall not
exclude liability for violation of any governmental statute, ordinance,
regulation or rule pertaining to the sale, gift, distribution or use of any
alcoholic beverages, or liability by reason of the selling, serving or giving of
any alcoholic beverages to a minor or to a person under the influence of
alcohol, or which causes or contributes to the intoxication of any persons.
Accordingly, the indemnification obligations of Tenant under Paragraph 15.2
shall extend, as well, to damage occurring elsewhere than in, on or upon the
Premises, resulting from risks insurable by so-called dram shop liability
insurance.
(e) Workers' compensation as required by law and employer's liability
insurance for at least One Million Dollars ($1,000,000) in coverage.
(f) Business interruption insurance covering loss of income and extra
expense in such amounts as will reimburse Tenant for direct or indirect loss of
earnings, income and extra expense for at least one (1) year attributable to all
perils commonly insured against by prudent tenants, or attributable to the
15
inaccessibility of or to the Premises or the Shopping Center as a result of such
perils, or otherwise, preferably by the same insurance carrier that issues
Tenant's property insurance.
(g) Intentionally Omitted.
(h) Any other form of insurance for risks and/or perils against which
a prudent tenant would customarily protect itself (and/or increases in the
amounts of coverage under any or all of the liability insurance policies
hereinabove required to be carried by Tenant) in such form and amounts as
Landlord or Landlord's lender may reasonably require from time to time.
Tenant's insurance coverage under this Paragraph 16.1 may be subject to a
commercially reasonable deductible (which deductible shall not exceed $100,000
for fire and extended coverage, or $50,000 for liability, without Tenant's
having first obtained Landlord's prior written consent in each case).
16.2 EVIDENCE OF INSURANCE. Tenant shall furnish properly executed
policies or certificates of insurance to Landlord prior to Tenant's
occupancy. Such policies or certificates shall clearly evidence all coverage
required of Tenant, shall have commercially reasonable deductibles, and shall
provide that such insurance shall not be materially changed, terminated or
allowed to expire except after thirty (30) days prior written notice to
Landlord. All policies required hereunder (except as described in
Subparagraph 16.1(e), above) shall name Landlord and Landlord's lenders as
additional insureds and the certificate thereof shall evidence such coverage.
Certificates of insurance shall be replaced with new binders or certificates
prior to the termination of any policy of insurance required of Tenant. In
Landlord's discretion, Landlord may request complete copies of Tenant
insurance policies in lieu of such certificates. Tenant shall have the right
to provide such insurance coverage pursuant to blanket policies obtained by
Tenant; provided such blanket policies expressly afford coverage to the
Premises and to Tenant as, in Landlord's opinion, is required by this Lease.
All policies required by this Paragraph 16 shall be issued by insurers
qualified to do business in the State of California, whose financial strength
is reasonably acceptable to Landlord, and in form satisfactory to Landlord,
from time to time.
16.3 LANDLORD'S INSURANCE. During the term of this Lease, Landlord shall
maintain in effect such policies of insurance as are at least in such amounts
(and are subject to no larger deductibles) as are customarily carried by
landlords in similar shopping centers in the State of California; the premiums
and deductibles for commercial or comprehensive general liability insurance
covering the Common Areas shall be included in Common Areas Operating Costs.
16.4 MAINTENANCE OF INSURANCE. If Tenant, for any reason, fails to maintain
insurance coverage which is required pursuant to this Lease, the same shall be
deemed a material default and breach of this Lease. Landlord, at its sole
option, may immediately terminate this Lease and obtain damages from Tenant
resulting from said breach. Election by Landlord not to terminate this Lease
shall not be deemed a waiver by Landlord of Tenant's breach, nor of any of
Landlord's rights and remedies pursuant to the terms of this Lease. Landlord may
(but is under no obligation to do so) at any time and from time to time, and
without notice, procure such insurance and pay the premiums therefor, in which
event Tenant shall, within ten (10) days after demand therefor, reimburse
Landlord for all amounts paid and costs and expenses incurred by Landlord to
procure and pay for such insurance, plus interest on such amounts at the Lease
Rate (as defined in Paragraph 22.11). Tenant shall not stock, use or sell any
article of merchandise that would increase insurance rates and premiums on the
Shopping Center, or on any of the individual improvements in the Shopping Center
other than the Premises.
16.5 WAIVER OF SUBROGATION. Any policy or policies of property insurance
which either party obtains in connection with the Premises, shall include a
clause or endorsement denying the insurer any rights of subrogation against the
other party to the extent rights have been waived by the insured prior to the
occurrence of injury or loss. Landlord and Tenant waive any rights against the
other for injury or loss due to hazards covered by such insurance, whether or
not containing such a waiver of subrogation clause or endorsement, to the extent
of the loss covered thereby, or if either party does not for any reason, have
valid enforceable insurance, then, this waiver shall apply to the extent of all
property insurance which was required to be carried hereunder.
ARTICLE 17
ASSIGNMENT AND SUBLETTING
17.1 GENERAL LIMITATIONS. Except as expressly provided in Paragraphs 17.3
and 17.4 of this Article, without Landlord's written consent first had and
obtained, Tenant (including without limitation any subsequent assignee or
subtenant) shall not either voluntarily or by operation of law, assign,
mortgage, hypothecate or encumber this Lease, or any interest in this Lease,
permit the use of the Premises by any person or persons, franchises,
affiliated companies, licensees or concessionaires, other than Tenant, or
sublet the Premises or any part of the Premises. Any transfer of this Lease
from Tenant by merger, reorganization, liquidation, or the sale, conveyance,
transfer by bequest or inheritance, or other transfer of a controlling
16
interest in Tenant (whether by transfer of stock, partnership interest or
otherwise) shall constitute an assignment for the purposes of this Lease.
Notwithstanding the foregoing, if Tenant is a corporation whose stock is
regularly traded on a national stock exchange, or is regularly traded in the
over-the-counter market and quoted on NASDAQ, the transfer of stock, regardless
of quantity, shall not constitute an assignment for the purposes of this Lease.
A consent to one assignment, subletting, occupation or use shall not constitute
a waiver of the necessity of such consent to a subsequent assignment or
subletting, whether by Tenant or any subsequent assignee or subtenant. Tenant
shall not be released from liability for the full performance of all the terms,
conditions and covenants of this Lease on Tenant's part to be performed, whether
occurring before or after such consent, assignment or subletting. Any requests
for consent to a sublease or assignment hereunder shall be accompanied by a
check payable to Landlord in the sum of Two Hundred Fifty Dollars ($250) as a
charge for the processing of such documents. In addition, Tenant shall reimburse
Landlord its actual costs and expenses for attorneys' fees incurred in
connection with any proposed sublease or assignment. If so requested by
Landlord, Tenant shall deposit with Landlord the Landlord's estimate of such
legal fees prior to the commencement by Landlord of any review of the proposed
request for consent.
17.2 NO UNREASONABLE WITHHOLDING OF CONSENT. Landlord shall not
unreasonably withhold its consent to an assignment or subletting for the same
use as provided in Paragraph 10 of the Lease Summary, notwithstanding anything
in this Article 17 to the contrary. The foregoing is not intended to imply any
waiver of Landlord's reservation of the absolute right to (a) disapprove
assignments or subleases for uses that differ in any material respect from the
use expressly permitted in Paragraph 10 of the Lease Summary or that violate the
standards set forth in Paragraph 8.1, or (b) terminate this Lease in accordance
with Paragraph 8.4. In determining whether or not to consent to the proposed
assignment or subleasing, Landlord may consider, among other factors, the
experience of the proposed sublessee or assignee in operating a business in a
shopping center for the use set forth in Paragraph 10 of the Lease Summary,
whether or not any exclusives granted by Landlord will be impacted, and whether
the proposed sublessee or assignee is financially sound and has a net worth that
is adequate in the circumstances. Landlord shall be deemed to be reasonable in
refusing consent if such refusal is based upon a violation of any exclusive
granted by Landlord. If Tenant does assign or sublease all or any portion of the
Premises on a basis such that the value of the consideration for same to be
received by Tenant will exceed the Rent or prorated portion thereof, as the case
may be, for such space reserved in this Lease, Tenant shall pay to Landlord
when received, as Additional Rent, at the same time as the monthly installments
of Rent are due hereunder, fifty percent (50%) of the excess of the Rent and all
other consideration paid in connection with or pursuant to the assignment or
sublease, over the Rent as reserved in this Lease applicable to the assigned or
subleased space. Notwithstanding the foregoing, Landlord's right to share in
"all other consideration" shall not, when added to Landlord's share of the
excess Rent, exceed fifty percent (50%) of the difference between the then fair
market rental for the Premises (or a prorated portion thereof) and the Rent for
such space reserved in this Lease. The acceptance of Rent by Landlord from any
other person shall not be construed as a waiver by Landlord of any provision of
this Lease, or as a waiver of the requirement of Landlord's consent to any
assignment, subletting or other transfer, or to be a release of Tenant from any
obligation under this Lease. Each assignee or subtenant shall jointly assume all
obligations of the Tenant under this Lease, and shall be and remain liable
jointly and severally with Tenant for the payment of Rent, and for the due
performance of all the terms, covenants and conditions and agreements herein
contained on Tenant's part to be performed during the Lease term; provided,
however, that a subtenant shall be liable to Landlord for Rent only in the
amount set forth in the sublease. Whether or not Landlord's consent is required,
no assignment shall be effective or binding on Landlord unless such assignee or
sublessee shall deliver to Landlord a counterpart of such assignment or sublease
(and any related collateral agreements) and an instrument in recordable form
which contains a covenant of assumption by the assignee or sublessee
satisfactory in substance and form to Landlord, consistent with the above
requirements. The failure or refusal of the assignee or sublessee to execute
such an instrument of assumption shall not waive, release or discharge the
assignee or sublessee from its liability.
17.3 REORGANIZATIONS AND MERGERS. Tenant shall be entitled to assign and
transfer this Lease to the surviving corporation in the event of a merger or a
sale of assets transaction to which Tenant shall be a party; PROVIDED, however,
that such subsidiary, affiliated firm or surviving corporation shall in writing
expressly assume all of the provisions, covenants and conditions of this Lease
on the part of Tenant to be kept and performed; and PROVIDED further (unless
Tenant shall thereafter cease to exist) that no such assignment or transfer
shall act as a release of Tenant from any of the provisions, covenants and
conditions of this Lease on the part of Tenant to be kept and performed. This
Paragraph 17.3 shall not apply in the event of a sale of less than substantially
all (meaning, for purposes of this Paragraph 17.3. less than 75%) of the assets
of Tenant
17.4 ASSIGNMENT AS A RESULT OF TENANT'S BANKRUPTCY.
(a) In the event this Lease is assigned to any person or entity
pursuant to provisions of the United States Bankruptcy Code, 11 U.S.C. Section
101 ET SEQ. (the "Bankruptcy Code"), any and all monies or other consideration
payable or otherwise to be delivered in connection with such assignment shall be
paid or delivered to Landlord, shall remain the exclusive property of Landlord,
and shall not constitute property of Tenant or of the estate of Tenant within
the meaning of the Bankruptcy Code. Any and all monies
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or other consideration constituting Landlord's property under the preceding
sentence not paid or delivered to Landlord shall be held in trust for the
benefit of Landlord and be promptly paid to or turned over to Landlord.
(b) If Tenant, pursuant to this Lease, proposes to assign the same
pursuant to the provisions of the Bankruptcy Code, to any person or entity who
shall have made a bona fide offer to accept an assignment of this Lease on terms
acceptable to Tenant, then, notice of the proposed assignment setting forth (i)
the name and address of such person, (ii) all of the terms and conditions of
such offer, and (iii) the assurances referred to in Section 365(b)(3) of the
Bankruptcy Code, shall be given to the Landlord by the Tenant no later than
twenty (20) days after receipt of such offer by the Tenant, but in any event no
later than ten (10) days prior to the date that Tenant shall make application to
a court of competent jurisdiction for authority and approval to enter into such
assignment and assumption, and Landlord shall thereupon have the prior right and
option, to be exercised by notice to the Tenant given at any time prior to the
effective date of such proposed assignment, to accept an assignment of this
Lease upon the same terms and conditions and for the same consideration, if any,
as the bona fide offer made by such person, less any brokerage commissions which
may be payable out of the consideration to be paid such person for the
assignment of this Lease.
(c) Any person or entity to which this Lease is assigned pursuant to
the provisions of the Bankruptcy Code shall be deemed without further act or
deed to have assumed all of the obligations arising under this Lease on or after
the date of such assignment. Any such assignee shall, upon demand, execute and
deliver to Landlord an instrument confirming such assumption.
(d) The following factors may be considered by the Landlord as
necessary in order to determine whether or not the proposed assignee has
furnished Landlord with adequate assurances of its ability to perform the
obligations of this Lease:
1. The adequacy of a security deposit.
2. Net worth and other financial elements of the proposed assignee;
and
3. Demonstration that assumption or assignment will not disrupt
substantially the tenant mix or balance in the Shopping Center.
(e) It is hereby acknowledged that this is a "shopping
center lease" within the meaning of Section 365(b)(3) of the Bankruptcy Code.
(f) In the event Landlord rejects the proposed assignee, the rights
and obligations of the parties hereto shall continue to be governed by the
terms of this Lease, and Tenant shall have all the rights of a Tenant under
applicable California law.
17.5 EFFECT OF VIOLATION. Except as may be expressly permitted without
Landlord's consent elsewhere in this Lease, any assignment, mortgage, pledge,
hypothecation, encumbrance, subletting or license of this Lease, the leasehold
estate hereby created, or the Premises or any portion thereof, either
voluntarily or involuntarily, whether by operation of law or otherwise, or any
other action by Tenant in violation of the restrictions set forth in this
Article 17, without the prior written consent of Landlord first had and obtained
therefor, shall be null and void and shall, at the option of Landlord,
constitute a material default under this Lease.
17.6 NO RELEASE. Tenant is not and shall not be released from liability for
the full and complete performance of the terms, conditions, and covenants of
this Lease upon any assignment, sublease, or other transfer, regardless of
whether or not Landlord's consent was first required.
ARTICLE 18
TRANSFER OF LANDLORD'S INTEREST
In the event of any transfer or transfers of Landlord's interest in the
Premises or in the Shopping Center, other than a transfer for security purposes
only, the transferor shall automatically be relieved of, and Tenant shall
release such transferor from, any and all obligations and liabilities on the
part of Landlord accruing from and after the date of such transfer, including
without limitation the obligation of Landlord under Article 6 hereof to return
the Deposit as provided therein; provided, with respect to security deposits,
that the transferor transfers to or appropriately credits the transferee for the
Deposit.
ARTICLE 19
DAMAGE OR DESTRUCTION
19.1 OBLIGATION TO REBUILD. Should any or all of the improvements on the
Premises be damaged or destroyed, partially or totally, from any cause covered
(or required to be covered) by any insurance required to be maintained under
Paragraph 16.1 hereof, or if the Premises are damaged from a cause not required
to be
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covered by insurance under Paragraph 16.1 and the cost of repair or restoration
is less than twenty-five percent (25%) of the then-replacement value, then
Tenant shall repair, restore and rebuild said improvements on the Premises to at
least the condition existing immediately prior to such damage or destruction,
and this Lease shall remain in full force and effect. Such repair, restoration
and rebuilding (all of which are herein called "repair") shall be commenced
promptly after such damage or destruction has occurred and shall be diligently
pursued to completion. Without limiting Landlord's other available remedies,
Tenant's failure to rebuild, replace or use the Premises for commercial purposes
shall give Landlord a right to recapture the Lease as provided in Paragraph 8.4.
19.2 LAST TWO YEARS. If the Premises are damaged or destroyed, either
partially or totally, during the last two (2) years of the term of this Lease,
Landlord and Tenant shall each have the right to cancel and terminate this Lease
as of the date of occurrence of such damage by giving written notice to the
other of its election to do so within thirty (30) days after the date on which
such damage occurred. Notwithstanding the foregoing, should Tenant have the
right to extend the term pursuant to Paragraph 2.7, above, Tenant shall have the
right to exercise its next option right for a period of ten (10) days after
receipt of Landlord's written notice to cancel and terminate this Lease as a
consequence of such damage or destruction near the end of the term. If Tenant so
exercises its option to extend the term, Landlord's purported cancellation and
termination of this Lease shall be deemed null and void; PROVIDED, however, that
Tenant shall promptly proceed with the repair, restoration and rebuilding of the
Premises in accordance with Paragraph 19.1 at Tenant's expense, whereupon this
Lease shall continue in full force and effect. If Tenant fails to exercise its
said option during said ten (10) day period, then this Lease shall be deemed
canceled and terminated in accordance with Landlord's said notice.
19.3 EFFECT OF TERMINATION. In the event this Lease is terminated under the
provisions of Paragraph 19.2, such termination shall become effective at the
time and in accordance with the respective provisions herein contained for the
termination of this Lease; PROVIDED, however, that all Rent and other charges on
the part of Tenant to be paid hereunder shall be prorated and paid either as of
the date of such damage or destruction, or as of the date Tenant ceases doing
business in, upon or from the Premises, whichever last occurs. Tenant shall have
no claim to the proceeds of property damage insurance, except to the extent of
any unamortized construction costs of the Building which were paid by Tenant at
its own expense pursuant to EXHIBIT "C."
19.4 UNINSURED CASUALTY. Should any or all of the improvements on the
Premises be damaged or destroyed from any cause not covered (or required to be
covered) by insurance required to be maintained under Paragraph 16.1 hereof in
excess of twenty-five percent (25%) of its then-replacement value, then Tenant
shall have the option to either
(a) repair, restore and rebuild said improvements on the Premises to
at least the condition existing immediately prior to such damage or destruction
per the terms and conditions of Paragraph 19.1, above, or
(b) demolish and remove the improvements and hydroseed the Pad so that
it is visually harmonious with the remainder of the Shopping Center.
In the event of such an uninsured casualty so that Tenant has the option
under Subparagraphs 19.4(a) and (b), above, following its exercise of such
option Tenant may assign or sublet the Premises in accordance with Paragraph
17.2, above, and unless and until Tenant re-opens under the use set forth in
Paragraph 10 of the Lease Summary, Tenant may assign or sublet the Premises
under Paragraph 17.2 without being limited to the use set forth in Paragraph 10
of the Lease Summary (notwithstanding anything to the contrary in Paragraph
17.2); PROVIDED, however, that such other use may not be in conflict with the
Prior Restrictions, any then-existing uses at the Shopping Center, or with any
exclusives granted for the Shopping Center.
19.5 NO ABATEMENT OF RENT. Notwithstanding the partial or total destruction
of the Premises or any part thereof, and notwithstanding whether or not the
casualty is insured, there shall be no abatement of Rent or any other obligation
of Tenant hereunder by reason of such damage or destruction (unless Landlord
recaptures the Premises as permitted under Paragraph 19.1).
ARTICLE 20
EMINENT DOMAIN
20.1 TERMINATION. If the whole of the Premises shall be taken under power
of eminent domain (or by deed in lieu of condemnation), this Lease shall
automatically terminate. If any portion of the total square footage of the
Premises is so taken under the power of eminent domain (or by deed in lieu of
condemnation), and such partial taking reasonably may be construed to render the
remainder of the Premises unsuitable for Tenant's business, this Lease may be
terminated by Tenant by written notice given within thirty (30) days after such
taking, in either case such termination to be effective as of the date
possession is taken by the condemning authority. No award for any partial or
entire taking shall be apportioned, and Tenant hereby
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assigns to Landlord any award which may be made in such taking or condemnation,
together with any and all rights of Tenant now or hereafter arising in or to the
same or any part thereof, except to the extent of any unamortized construction
costs of the Building which were paid by Tenant at its own expense pursuant to
EXHIBIT "C"; provided, however, that nothing contained herein shall be deemed to
give Landlord any interest in or to require Tenant to assign to Landlord any
award specifically made to Tenant for goodwill and relocation benefits. Any
liability of Tenant to Landlord having already accrued under this Lease shall
survive its early termination, as aforesaid.
20.2 PARTIAL TAKING. In the event of a partial taking of the Premises under
the power of eminent domain (or by deed in lieu of condemnation) which does not
result in a termination of this Lease, if such taking materially and adversely
impacts access to or from or visibility of the Premises, the Fixed Rent shall be
equitably adjusted to reflect any diminution in business revenue incurred by
Tenant as a direct result of the partial taking. Landlord and Tenant hereby
waive the provisions of Code of Civil Procedure Section 1265.130 allowing either
party to petition the Superior Court, or any right either may have, to terminate
this Lease in the event of a partial taking of the Premises.
20.3 TEMPORARY TAKING. No temporary taking of the Premises and/or of
Tenant's rights therein or under this Lease shall terminate this Lease or give
Tenant any right to any abatement of Rent hereunder. Any award made to Tenant by
reason of any such temporary taking shall belong entirely to Tenant, and
Landlord shall not be entitled to share therein.
20.4 TAKING OF COMMON AREAS.
(a) If any part of the Common Areas is taken by condemnation, this
Lease shall remain in full force and effect, except that if twenty-five percent
(25%) or more of the parking in the Common Areas required for Tenant's customers
is taken by condemnation, either party shall have the right to terminate this
Lease pursuant to this paragraph. If a party elects to terminate this Lease, it
must terminate pursuant to this paragraph by giving notice to the other party
within thirty (30) days after the nature and the extent of the taking have been
finally determined. The party terminating this Lease also shall notify the other
party of the date of termination, which date shall not be earlier than thirty
(30) days or later than ninety (90) days after the terminating party has
notified the other party of its election to terminate; except that this Lease
shall terminate on the date of taking if the date of taking falls on a date
before the date of termination designated in the notice from the terminating
party. Any liability of Tenant to Landlord having already accrued under this
Lease shall survive its early termination, as aforesaid. If this Lease is not
terminated within the thirty-day period, it shall continue in full force and
effect.
(b) Except as provided in Paragraph 20.2, unless this Lease is
terminated pursuant to the terms hereof, there shall be no abatement of Rent as
a result of any taking under the power of eminent domain.
ARTICLE 21
SIGNS AND AUCTIONS
21.1 SIGNAGE. Provided Tenant complies with the City of Long Beach's
conditions of approval, the Prior Restrictions and the Lease, Tenant may have
its sign "can" placed on each side of the pylon sign for the Shopping Center.
Tenant's position on the pylon shall be immediately below the panel for the
tenant occupying "Major A" on the Site Plan and Tenant's sign "can" shall be of
a size based upon the relative square footage of the Premises compared to the
square footage of the "Major A" tenant's premises. Tenant acknowledges that
others may have the right to place their sign "cans" on the pylon sign as well.
As provided in Article 4, Tenant shall pay its proportionate share of the cost
of construction, installation, operation, maintenance and repair of the pylon
sign; Tenant's proportionate share is the ratio, stated as a percentage, which
the number of square feet in Tenant's panel bears to the total number of square
feet of all panel area in the pylon sign, and is subject to adjustment. Except
as set forth in Tenant's plans and specifications for the Building approved by
Landlord pursuant to EXHIBIT "C," Tenant shall not place or suffer to be placed
on the exterior of the Premises or any exterior door or wall or the exterior or
interior of any window of the Premises any sign, awning, canopy, grates or
other security devices, marquee, advertising matter, decoration, lettering or
other thing of any kind without the prior written consent of Landlord, which
consent shall not unreasonably be withheld or delayed. Any exterior signage so
approved by Landlord shall be in accordance with the Prior Restrictions and sign
criteria as set forth in EXHIBIT "C" hereto, and shall be installed, maintained
and repaired at Tenant's sole cost and expense. Landlord hereby reserves the
exclusive right to the use of the roofs and the exterior of the walls of the
rest of the Shopping Center. Except as otherwise herein provided, Tenant shall
have the right, at its sole cost and expense, to erect and maintain within the
interior of the Premises all signs and advertising matter customary or
appropriate in the conduct of Tenant's business which cannot be seen from the
exterior of the Premises. In this connection, Tenant acknowledges that the
Premises are a part of a shopping center, and agrees that control of all signs
and exterior appearance by Landlord is essential to the maintenance of aesthetic
and commercial values in or pertaining to the Shopping Center. Tenant shall at
all times during the term of this Lease, at its sole cost and expense, keep its
window displays, signs and advertising devices adequately illuminated
continuously during such days and hours as Tenant is required to
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be open for business herein and during such additional hours as Landlord may
request, from time to time. Upon expiration or earlier termination of this
Lease, all signage affixed to the exterior of the Premises or on any portion
of the Shopping Center shall be surrendered in good condition and repair
unless Landlord requires Tenant to remove same, at Tenant's expense, upon
surrender of the Premises, and Tenant shall repair at Tenant's cost any
damage occasioned by such removal.
21.2 AUCTION OR SALE. Tenant shall not conduct or permit to be conducted
any sale by auction in, upon or about the Premises or the Common Areas, whether
said auction be voluntary, involuntary or pursuant to any assignment for the
benefit of creditors, or pursuant to any bankruptcy or other insolvency
proceeding.
ARTICLE 22
DEFAULT AND REMEDIES
22.1 DEFAULT DEFINED. The occurrence of any of the following shall
constitute a material default and breach of this Lease by Tenant:
(a) the failure by Tenant to pay any Rent or make any other
payment required to be made by Tenant hereunder within three (3) days after
Tenant's receipt of written notice from Landlord that any such payment is
past due; PROVIDED, however, that notwithstanding the notice prerequisite for
a default under this Subparagraph 22.1(a), Landlord shall be entitled to
receive, as more particularly set forth in Paragraph 22.11, below, a late
charge and interest at the Lease Rate on any payments not paid as and when
due;
(b) The abandonment (which is deemed to include absence from the
Premises for more than ten (10) days while in default of any material
provision of this Lease) or vacation (except to facilitate an assignment or
subletting permitted pursuant to Article 17) of all or any portion of the
Premises by Tenant;
(c) Tenant's failure to adequately bond or cause to be released
any mechanics' liens filed against the Premises within ten (10) days after
the date same shall have been filed (unless Tenant contests such liens in
accordance with Article 11);
(d) The failure by Tenant to observe or perform any other
provision of this Lease (including the Rules and Regulations attached hereto
as EXHIBIT "B" and made a part hereof) to be observed or performed by Tenant,
other than those described in Subparagraphs (a), (b) and (c) above, where
such failure continues for thirty (30) days after written notice thereof by
Landlord to Tenant; PROVIDED, however, that if the nature of such default is
such that the same cannot reasonably be cured within such thirty (30) day
period. Tenant shall not be deemed to be in default if Tenant shall within
such period commence such cure and thereafter diligently pursues the
completion of same. Such thirty-day notice shall be in lieu of and not in
addition to any notice required under Section 1161 of the California Code of
Civil Procedure;
(e) The making by Tenant or Tenant's guarantor, if any, of a
general assignment for the benefit, of creditors; the filing by or against
Tenant, or Tenant's guarantor of a petition to have Tenant or Tenant's
guarantor adjudged a bankrupt or of a petition for reorganization or
arrangement under any law relating to bankruptcy (unless, in the case of a
petition filed against Tenant, the same is dismissed within sixty (60) days);
the appointment of a trustee or receiver to take possession of substantially
all of Tenant's assets located at the Premises or of Tenant's interest in
this Lease, where possession is not restored to Tenant within thirty (30)
days; the attachment, execution, or other judicial seizure of substantially
all of Tenant's assets located at the Premises or of Tenant's interest in this
Lease, where such seizure is not discharged within thirty (30) days; or the
failure or admission by Tenant or Tenant's guarantor of its inability,
generally, to pay its debts as they become due;
(f) Any attempted transfer, conveyance, assignment, hypothecation
or subletting of this Lease, or any part thereof, otherwise than as
expressly permitted hereunder; or
(g) The failure of Tenant to timely complete and deliver to
Landlord the Estoppel Certificate required in Article 34 hereof, the
Subordination and Attornment Agreement required in Article 27 hereof, or any
other documentation required hereunder.
22.2 REMEDIES; TERMINATION. In the event of any default by Tenant
hereunder as set forth in Paragraph 22.1 hereof, and in addition to any other
remedies available to Landlord at law, in equity or elsewhere under this
Lease, all of which rights and remedies shall be cumulative, with the
exercise of one or more rights or remedies not to impair Landlord's right to
exercise any other right or remedy (and which may be exercised with or
without legal process as then may be provided or permitted by the laws of the
State of California), Landlord shall have the immediate option to terminate
this Lease and all rights of Tenant hereunder by giving Tenant written notice
of such election to terminate. In the event that Landlord shall elect to so
terminate this Lease, then Landlord may recover from Tenant:
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(a) the worth at the time of award of any unpaid Rent or other
charges which had been earned at the time of such termination; plus
(b) the worth at the time of 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 Tenant proves could have
been reasonably avoided; plus
(c) the worth at the time of award of the amount by which the unpaid
Rent and other charges for the balance of the term after the time of award
exceeds the amount of such rental loss that Tenant proves could reasonably be
avoided; plus
(d) any other amount necessary to compensate, Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligation under
this Lease, or which in the ordinary course of things would be likely to result
therefrom, including attorneys fees and costs; and
(e) 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 Subparagraphs (a) and (b) above, the "worth at the time of award" is
computed by allowing interest at the Lease Rate (as defined in Paragraph 22.11,
below). As used in Subparagraph (c) above, the "worth at the time of award" is
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%). The amount
recoverable by Landlord pursuant to Subparagraph (d) above shall include, but is
not limited to, any costs or expenses incurred by Landlord in maintaining or
preserving the Premises after such default, preparing said Premises for
reletting to a new tenant, accomplishing any repairs or alterations to the
Premises for the purpose of such reletting, rectifying any damage thereto
occasioned by the act or omission of Tenant, and any other costs reasonably
necessary or appropriate to relet the Premises.
22.3 REMEDIES; RE-ENTRY. In the event of any such default by Tenant
and termination of this Lease by Landlord, Landlord shall also have the right to
re-enter the Premises and remove all persons and property from the Premises as
provided in Paragraph 23.3. Tenant hereby waives all claims for damages that may
be caused by Landlord's re-entering and taking possession of the Premises or
removing and storing the property of Tenant as provided in Paragraph 23.3.
22.4 REMEDIES; NON-TERMINATION AND COLLECTION OF RENT. In the event
Landlord elects not to terminate this Lease as provided in Paragraph 22.2
hereof, this Lease shall continue in full force and effect. In that event,
Landlord may enforce all of its rights and remedies hereunder and at law,
including the right to recover Rent and other charges as they come due. However,
Tenant shall continue to have the right to possession of the Premises, and
Tenant shall have the right to sublet the same with Landlord's written consent,
which consent (for the purposes of this Paragraph 22.4) shall not unreasonably
be withheld. Likewise for the abandonment by Tenant, no re-entry or taking
possession of the Premises by Landlord shall be construed as an election to
terminate this Lease, nor shall it cause a forfeiture of Rent or other charges
remaining to be paid during the balance of the term herein, unless a written
notice of such intention to terminate be given to Tenant by Landlord.
22.5 INTENTIONALLY OMITTED.
22.6 NO EFFECT ON INDEMNIFICATION OBLIGATION. Nothing in this Article 22
shall be deemed to affect or waive Landlord's rights to indemnification for
liability or liabilities arising prior to termination of this Lease for personal
injury or property damage under Paragraph 15.2 or any other indemnification
provision contained in this Lease.
22.7 INTENTIONALLY OMITTED.
22.8 LANDLORD'S DEFAULT. Landlord shall not be deemed in default hereunder
unless Tenant shall have given Landlord written notice of such default
specifying such default with particularity, and Landlord shall thereupon have
thirty (30) days in which to cure any default unless such default cannot
reasonably be cured within such period, in which case Landlord shall not be
in default if it commences to cure the default within the thirty (30) day
period and diligently pursues the completion of same.
22.9 LIMITATION ON RECOURSE. If Landlord is in default of this Lease
and, as a consequence, Tenant recovers a money judgment against Landlord, the
judgment shall be satisfied only out of the proceeds of sale received on
execution of the judgment and levy against the right, title and interest of
Landlord in the Shopping Center, other improvements and land of which the
Premises are part, and out of rent or other income from the Shopping Center
receivable by Landlord, or out of the consideration received by Landlord from
the sale or other disposition of all or any part of Landlord's right, title
and interest in the Shopping Center.
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22.10 NOTICE TO MORTGAGEES AND OTHERS. Should Landlord fail to observe or
perform any of the covenants or conditions contained in this Lease and, before
taking any action asserting the right to terminate this Lease (whether or not
Tenant actually has such a right under this Lease), Tenant shall give written
notice to all ground lessors, mortgagees and/or beneficiaries of deeds of trust
(collectively "lenders") under instruments recorded against the Shopping Center
or any part thereof and/or of which Tenant has received written notice, setting
forth the nature of Landlord's default. Such lenders shall have a reasonable
period of time to cure the default and perform any act which may be necessary to
prevent the forfeiture of this Lease. All payments made, and all acts performed
by such lenders in order to cure, shall be effected to prevent a forfeiture of
the rights of Landlord under this Lease and a termination of this Lease, as if
the payments and acts were performed by Landlord instead of by the lenders. If
the lenders cannot reasonably take the action required to cure Landlord's
default without terminating or foreclosing Landlord's interest and acquiring
possession of the Shopping Center, the time within which the default must be
cured to avoid a termination or forfeiture of the Lease shall be extended to
include the period of time reasonably required for such lenders to obtain
possession and to effect a cure with due diligence, provided such lenders give
Tenant a written undertaking to cure the default. In the absence of the lenders'
express written consent, such an undertaking by the lenders shall not be
considered an assumption by the lenders of Landlord's other obligations under
the Lease, and Landlord shall remain solely liable for the performance of all
terms, covenants and conditions of the Lease both prior and subsequent to the
lenders' exercise of any right to cure or related remedy. A lender's exercise of
any right to cure or related remedy shall not in any way constitute a cure or
waiver of a breach or default under a ground lease, note, mortgage, deed of
trust, or any other instrument given as security.
22.11 REMEDIES; INTEREST AND LATE CHARGES. Any payment not made when due
shall bear interest at that fluctuating rate (the "Lease Rate") equal to the
discount rate announced from time to time by the Federal Reserve Bank of San
Francisco plus 500 basis points, or the maximum amount allowed by law, whichever
is less. Any payment of Rent not paid when due shall be subject to a late charge
of Two Hundred Fifty Dollars ($250) or five percent (5%) of the Rent then due
and payable, whichever is more, to reimburse Landlord for its administrative
costs and expenses in notating and processing such late payment. Such late
charge will not limit Landlord's right to recover its actual costs of collection
or the exercise of its remedies under this Lease, at law or in equity, in the
event of a default, which costs Tenant agrees to pay upon demand. The provisions
of this Paragraph 22.11 shall apply regardless of whether or not the Landlord
has declared a default by Tenant under this Lease.
ARTICLE 23
SURRENDER OF PREMISES; REMOVAL OF PROPERTY
23.1 NO MERGER. The voluntary or other surrender of this Lease by Tenant to
Landlord, or a mutual termination thereof, shall not work a merger, and shall at
the option of Landlord operate as an assignment to it of any or all subleases or
subtenancies affecting the Premises. Furthermore, no termination of any ground
lease or master lease shall work a merger and shall, at the option of the ground
lessor or master lessor, operate as an assignment of any subleases or
subtenancies.
23.2 CONDITION UPON SURRENDER. Upon the expiration or earlier
termination of this Lease, Tenant shall quit and surrender possession of the
Premises to Landlord in broom-clean condition, free of all refuse, trash and
garbage, and in as good order and condition as the same were in at the
Commencement Date or as the same thereafter may be improved by Landlord or
Tenant reasonable wear and tear excepted. Tenant shall, without expense to
Landlord, prior to expiration (or earlier termination not due to a Tenant
default), remove or cause to be removed from the Premises all Tenant's
Property (as that term is defined in Paragraph 12.1) and all similar articles
of any other persons claiming under Tenant (unless Landlord exercises its
option to have any subleases or subtenancies assigned to it), and Tenant
shall fully repair all damage to the Premises resulting from such removal. In
the event of termination prior to the expiration of the term hereof, Tenant
shall nevertheless remove Tenant's Property from the Premises in the manner
aforesaid within sixty (60) days after receipt of written direction to do so
from Landlord, provided that Tenant shall remain liable for Rent for the
Premises until the completion of such removal. Notwithstanding the foregoing,
Tenant may remove the heating, ventilation, and air conditioning units,
plumbing fixtures and the floor coverings in the Premises ONLY if directed in
writing to do so by Landlord, in which event Tenant shall do so and shall
repair all damages to the Premises resulting from such removal. In the event
Tenant shall fail to remove any of Tenant's Property as provided herein,
Landlord may, but is not obligated, at Tenant's expense, to remove all of
Tenant's Property as provided in Paragraph 23.3. Tenant shall not be entitled
to remove any items paid for by Landlord.
23.3 REMOVAL OF PROPERTY UPON RE-ENTRY. Whenever Landlord shall re-enter
the Premises as provided in this Lease, any Tenant's Property and any other
personal property belonging to Tenant (or any person claiming through or under
Tenant) and not removed by Tenant (or such person claiming through or under
Tenant) upon the expiration of the term of this Lease (or upon a judicial
determination that the Tenant's right to possession of the Premises is
terminated by reason of Tenant's default) shall be considered abandoned
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(PROVIDED, however, that Tenant may have up to sixty days to remove such
property if Tenant pays to Landlord, upon such judicial termination, Rent for
such time period). Landlord shall give Tenant whatever notice may legally be
required of its right to reclaim any abandoned property (currently,
California Civil Code Section 1980 ET SEQ.) and may thereafter remove any or
all of such items and dispose of the same in any manner or store the same in
a public warehouse or elsewhere for the account and at the expense and risk
of Tenant. If Tenant shall fail to pay the cost of storing any such property
after it has been stored for a period of ninety (90) days or more, Landlord
may sell any or all of such property at public or private sale, in such
manner and at such times and places as Landlord, in its sole discretion, may
deem proper, without notice to or demand upon Tenant, for the payment of all
or any part of such charges or the removal of any such property, and shall
apply the proceeds of such sale: first, to the cost and expenses of such
sale, including attorneys' fees and costs actually incurred; second, to the
payment of the cost or charges for storing any such property; third, to the
payment of any such sums of money which may then or thereafter be due to
Landlord from Tenant under any of the terms hereof plus interest at the Lease
Rate; and fourth, the balance, if any, to Tenant.
23.4 TENANT'S RIGHT TO REMOVE PROPERTY. All of Tenant's Property (as
defined in Paragraph 12.1) shall remain the property of Tenant and, subject to
the provisions of Paragraph 23.2, may be removed by Tenant at any time during
the term, provided Tenant is not in default hereunder, and provided further that
Tenant shall repair any damage caused by such removal.
ARTICLE 24
ATTORNEYS' FEES
24.1 LITIGATION BETWEEN THE PARTIES. In the event suit is brought to
enforce or interpret any part of this Lease, the prevailing party shall be
entitled to recover, as an element of its costs of suit, and not as damages,
reasonable attorneys' fees and costs incurred therein, and in any appeal in
connection therewith, to be fixed by the court. The "prevailing party" shall be
entitled to recover its costs of suit (whether or not allowable under California
Code of Civil Procedure Section 1033.5) whether or not the suit proceeds to
final judgment. No sum for attorneys' fees and costs shall be counted in
calculating the amount of a judgment for purposes of determining whether a party
is entitled to recover its costs or attorneys' fees and costs. The prevailing
party shall further be entitled to recover all costs and fees incurred in
connection with the enforcement of any judgment or order issued in connection
with such litigation (including without limitation attorneys' fees, Marshall
fees, garnishment, third party examination, levy fees and costs,
bankruptcy-related fees and costs, and post-judgment motions), and this
provision shall not merge with such judgment and shall survive the entry
thereof. Any judgment entered in such action shall contain a specific provision
providing for the recovery of such fees and costs incurred in enforcing such
judgment.
24.2 LITIGATION WITH THIRD PARTIES. Should Landlord, for any reason other
than its exclusive gross negligence or willful misconduct be made a party to any
litigation instituted by Tenant or by any third party against Tenant, or by or
against any person holding under or using the Premises by license, assignment or
sublease of Tenant, or for the foreclosure of any lien for labor or material
furnished to or for Tenant or any such other person or otherwise arising out of
or resulting from any act, omission or transaction of Tenant or of any such
other person, Tenant covenants, at Landlord's election and upon written tender
of defense, to defend (with legal counsel of Landlord's choosing) and to save
and hold Landlord harmless from any liability and any judgment rendered against
Landlord or the Premises or the Shopping Center or any part thereof, including,
without limitation, all costs and expenses (including attorneys' fees and
costs), incurred by Landlord in connection with such litigation, plus interest
at the Lease Rate.
ARTICLE 25
WAIVER
The waiver by Landlord or Tenant of any breach of any term, covenant or
condition herein contained shall not be deemed to be a waiver of such term,
covenant or condition as to any subsequent breach of the same or any other term,
covenant or condition herein contained. The subsequent acceptance or payment of
Rent hereunder by Landlord or Tenant, as the case may be, shall not be deemed to
be a waiver of any preceding breach by the other of any term, covenant or
condition of this Lease (other than the failure of Tenant to pay the particular
Rent so accepted) regardless of Landlord's or Tenant's knowledge of such
preceding breach at the time of acceptance or payment of such Rent.
ARTICLE 26
HOLDING OVER
If Tenant holds over after the expiration of the term (as defined in
Article 28), which or without the express or implied consent of Landlord,
such tenancy shall be from month to month only, and not a renewal hereof or
an extension for any further term, and in such case Rent shall be payable in
an amount equal to twice the amount payable by Tenant during the last month
of the term hereof pursuant to and at the times specified in Articles 3, 4
and 5 herein, and such month to month tenancy shall be subject to every other
term, covenant and agreement contained herein. Nothing contained in this
Article 26 shall be construed as a consent by Landlord
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to any holding over by Tenant, or as relieving Tenant from liability for any
damages which such holding over may cause Landlord, and Landlord expressly
reserves the right to require Tenant to surrender possession of the Premises to
Landlord as provided in Article 23 herein forthwith upon the expiration or other
termination of the term of this Lease.
ARTICLE 27
SUBORDINATION, ATTORNMENT AND NONDISTURBANCE
This Lease is subject and subordinate to all ground or master leases,
mortgages, and deeds of trust which now affect the Premises and the Shopping
Center, and to all renewals, modifications, consolidations, replacements, and
extensions thereof. If the lessor under any such lease or the holder or holders
of any such mortgage or deed of trust shall advise Landlord that they desire or
require this Lease to be prior and superior thereto, upon written request of
Landlord to Tenant, Tenant agrees promptly to execute, acknowledge, and deliver
any and all documents or instruments which Landlord or such lessor, holder, or
holders deem necessary or desirable for purposes thereof. Landlord shall have
the right to cause this Lease to be and become and remain subject and
subordinate to any and all ground or master leases, mortgages or deeds of trust
which may hereafter be executed covering the Premises and/or the Shopping
Center, or any renewals, modifications, consolidations, replacements or
extensions thereof, for the full amount of all advances made or to be made
thereunder and without regard to the time or character of such advances,
together with interest thereon and subject to all the terms and provisions
thereof. Tenant agrees, within ten (10) business days after Landlord's written
request therefor to execute, acknowledge, and deliver any and all documents or
instruments requested by Landlord that do not materially diminish or impair
Tenant's rights or materially increase Tenant's obligations or duties under this
Lease and that are necessary or proper to assure the subordination of this Lease
to any such mortgages, deeds of trust, or leasehold estates; PROVIDED, however,
the foregoing provisions with respect to such election of subordination by
Landlord shall not be effective unless and until after the owner or holder of
any such mortgage, deed of trust, or the lessor under any such leasehold estate
shall execute with Tenant a nondisturbance agreement reasonably acceptable to
Tenant under which such owner, holder, or lessor shall agree, in the event of
termination of such leasehold estate or upon the foreclosure of any such
mortgage or deed of trust, that Tenant's quiet enjoyment of the Premises will
not be disturbed so long as Tenant pays Rent and observes and performs all of
the obligations under this Lease to be observed and performed by Tenant.
Tenant's failure to deliver such a document or instrument of subordination
within such ten (10) business day period, if required, shall at the option of
Landlord constitute a material breach or default under this Lease; PROVIDED,
however, that Tenant shall have such additional time to respond following such
10-business day period as may be reasonably necessary under the circumstances to
negotiate the specific terms of any such subordination, non-disturbance and
attornment agreement). Notwithstanding anything to the contrary set forth in
this Article 27, Tenant hereby attorns and agrees to attorn to any Person (as
that term is defined in Article 28) purchasing or otherwise acquiring the
Shopping Center or the Premises at any sale or other proceeding or pursuant to
the exercise of any other rights, powers, or remedies under such mortgages, or
deeds of trust, or ground or underlying leases, at their option, as if such
Person had been named as Landlord herein; PROVIDED, however, that the owner or
holder of any such mortgage or deed of trust or the lessor under any such
leasehold estate shall have executed with Tenant a non-disturbance agreement
under which such owner, holder or lessor has agreed, in the event of termination
of such leasehold estate or upon the foreclosure of any such mortgage or deed of
trust, that Tenant's quiet enjoyment of the Premises will not be disturbed so
long as Tenant pays Rent and observes and performs all the obligations under
this Lease to be observed and performed by Tenant; it being intended hereby that
if this Lease is terminated, cut-off or otherwise defeated by reason of any act
or actions by the owner or holder of any such mortgage or deed of trust or the
lessor under any such leasehold estate, then, subject to the execution and
delivery of said non-disturbance agreement, this Lease shall continue in full
force and effect.
ARTICLE 28
DEFINITIONS
The following words and phrases shall have the following meanings:
(a) The words "Landlord" and "Tenant," as used herein, shall
include the plural as well as the singular. Words used in neuter gender
include the masculine and feminine and words in the masculine or feminine
gender include the neuter. If more than one person executes this Lease as
Tenant, (i) each of them is jointly and severally liable for the keeping.
observing and performing of each and all of the obligations hereunder imposed
upon Tenant and (ii) the act or notice from, or notice or refund to, or the
signature of, any one or more of them with respect to the tenancy or this
Lease shall be binding upon each and all of the persons executing this Lease
as Tenant with the same force and effect as if each and all of them had so
acted or so given or received such notice or refund or so signed.
(b) Unless otherwise specified: whenever the term "day(s),"
"month(s)" or "year(s)" is used herein, it shall refer to calendar day(s),
month(s) or year(s) (as the case may be).
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(c) Whenever the words "term," "lease term" or "term of this Lease"
are used herein, it shall refer to the term of this Lease and any prior
exercised extensions and renewals thereof.
(d) "Consent" shall mean the prior written consent of a party, which
may not be unreasonably withheld or delayed unless expressly indicated to the
contrary.
(e) "Landlord's Agent" means any officer, director, servant or
employee of Landlord or of any affiliate (as such term is defined in Rule l2b-2
promulgated under the Securities Exchange Act of 1934, as amended) of Landlord.
(f) "Parent" shall mean any Person who owns more than 50% of the
equity or beneficial interest of any other Person.
(g) "Person" shall mean any one or more human beings, or legal
entities or other artificial persons, including, without limitation,
partnerships, corporations, limited liability companies, trusts, estates,
associations, joint ventures, and any other combination of human beings and/or
legal entities.
(h) "Tenant Agent" shall mean any officer, director, servant,
employee, agent, contractor, licensee, assignee, invitee or guest of Tenant, and
"tenant agent" shall have the same meaning but with respect to any other tenant
in the Shopping Center.
(i) "Events of delay" shall mean strikes, lockouts, labor disputes,
power outages, riots, restrictive governmental laws and other events beyond the
control of Landlord or Tenant.
ARTICLE 29
HEIRS AND ASSIGNS/TIME OF ESSENCE
Subject to the provisions of Article 17 above, this Lease is intended to
and does bind and accrue to the benefit of the heirs, executors, administrators,
successors, and assigns of any and all of the parties hereto. Time is of the
essence of this Lease.
ARTICLE 30
INTERPRETATION
30.1 SEVERABILITY. If any term or provision of this Lease, the deletion of
which would not adversely affect the receipt of any material benefit by either
party hereunder, shall be held invalid or unenforceable to any extent, the
remainder of this Lease shall not be affected thereby and each term and
provision of this Lease shall be valid and enforceable to the fullest extent
permitted by law.
30.2 INTEGRATION. This Lease along with any exhibits and attachments or
other documents affixed hereto or referred to herein constitutes the entire and
exclusive agreement between Landlord and Tenant relative to the Premises herein
described. Landlord and Tenant hereby agree that all prior or contemporaneous
oral agreements and understandings relative to the leasing of the Premises are
superseded by this Lease.
30.3 AMENDMENT. This Lease may be altered, amended or revoked only by an
instrument in writing signed by both Landlord and Tenant and making specific
reference to this Lease.
30.4 SECTION HEADINGS. The headings included in this Lease are for
convenience only, and shall not be used to interpret this Lease.
30.5 INTENTIONALLY OMITTED.
30.6 LEASE DRAFTSMAN. This Lease was negotiated between the parties and
their respective counsel and professional advisors, and the parties agree that
such provisions shall be interpreted without reference to the draftsman of the
Lease or any portion thereof, because this Lease is a product of all their
efforts.
ARTICLE 31
RIGHT OF LANDLORD TO PERFORM
All covenants and agreements to be performed by Tenant under any of the
terms of this Lease shall be performed by Tenant at Tenant's sole cost and
expense and without any abatement of Rent. If Tenant shall fail to pay any sum
of money, other than Rent, required to be paid by it hereunder, or shall fail to
perform any other act on its part to be performed hereunder, and such failure
shall continue beyond any applicable grace period set forth in Article 22 above,
Landlord may, but shall not be obligated so to do, and without waiving or
releasing Tenant from any obligations of Tenant, make any such payment or
perform any such other act on Tenant's part to be made or performed as in this
Lease provided. All sums so paid by Landlord and all necessary incidental costs,
together with interest thereon at the Lease Rate from the date of such payment
by
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Landlord until the date paid in full by Tenant, shall be payable to Landlord
within ten (10) days of demand. Tenant covenants to pay any such sums, and
Landlord shall have (in addition to any other right or remedy of Landlord) the
same rights and remedies in the event of the nonpayment thereof by Tenant as in
the case of default by Tenant in the payment of Rent.
ARTICLE 32
NOTICES
Unless otherwise specified, all notices which Landlord or Tenant may be
required or may desire to be served on the other shall be in writing and may be
served, as an alternative to personal service, by mailing the same by registered
or certified mail, return receipt requested, postage prepaid, or by "Federal
Express" or other overnight air courier service, fee prepaid, addressed to
Landlord at the address for Landlord set forth in the Lease Summary, and to
Tenant at the address for Tenant set forth in the Lease Summary, or addressed to
such other address or addresses as either Landlord or Tenant may from time to
time designate to the other in writing. Any such notice shall only be deemed to
have been given for purposes of this Lease at the time such writing is
personally delivered or, in the case of certified or registered mailing thereof,
upon actual receipt or the date of refusal to accept such mailing, or on the
first business day after deposit with an overnight air courier service.
ARTICLE 33
QUIET ENJOYMENT
Landlord covenants and agrees that Tenant, upon paying the Rent and all
other charges herein provided for and observing and keeping the covenants,
agreements and conditions of this Lease on its part to be observed and kept,
shall lawfully and quietly hold, occupy and enjoy the Premises during the term
of this Lease without hindrance or molestation of anyone lawfully claiming by,
through or under Landlord, subject, however, to the matters set forth in this
Lease. Landlord shall not be liable for any acts of other tenants, their
employees, invitees or customers or any other third party.
ARTICLE 34
ESTOPPEL CERTIFICATE
Tenant agrees at any time and from time to time upon not less than ten (10)
business days' prior notice by Landlord, to execute, acknowledge and deliver to
Landlord a statement in writing certifying that this Lease is unmodified and in
full force and effect (or if there have been modifications, that the same are in
full force and effect as modified and stating the modifications), the dates to
which the Fixed Rent, Additional Rent, and other charges have been paid in
advance, if any, stating whether or not to the best knowledge of the signer of
any such certificate, Landlord is in default in performance of any covenant,
agreement or condition contained in this Lease and, if so, specifying each such
default of which the signer may have knowledge, and setting forth such other
information as Landlord may reasonably request; it being intended that any such
statement delivered pursuant hereto may be relied upon by any prospective
purchaser of the Premises or any interest of Landlord therein, or any
prospective mortgagee thereof or any prospective assignee of any mortgagee
thereof or any prospective master or ground lessor. In the event that Tenant
fails to return such estoppel certificate in accordance with the above, then
Tenant shall be in default hereunder pursuant to Article 22; and at Landlord's
option, the copy of the estoppel certificate as delivered to Tenant for
execution shall be deemed to be correct and may be relied upon.
ARTICLE 35
AUTHORITY
If Tenant is a corporation, each individual executing this Lease on
behalf of said corporation represents and warrants that he or she is duly
authorized to execute and deliver this Lease on behalf of such corporation in
accordance with a duly adopted resolution of the Board of Directors of such
corporation or in accordance with the bylaws of such corporation, and that
this lease is binding upon such corporation in accordance with its terms. If
Tenant is a partnership or joint venture, each individual executing this
Lease on behalf of said partnership or joint venture represents and warrants
that he or she is duly authorized to execute and deliver this Lease on behalf
of such partnership or joint venture in accordance with the partnership or
joint venture agreement of such partnership or joint venture, and that this
Lease is binding upon such partnership or joint venture in accordance with
its terms. If Tenant is a limited liability company, each individual
executing this Lease on behalf of such entity represents that he or she is
duly authorized to execute and deliver this Lease on behalf of such entity in
accordance with the articles of organization and the operating agreement of
such entity and that this Lease is binding on such entity in accordance with
their terms.
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ARTICLE 36
BROKERS
Landlord and Tenant each hereby represent and warrant to the other that it
has had no dealings with any real estate broker, agent or finder in connection
with this Lease other than as specified in Paragraph 12 of the Lease Summary,
and knows of no real estate broker, agent or finder who is entitled to a
commission or finder's fee in connection with this Lease other than as specified
in Paragraph 12 of the Lease Summary. Landlord and Tenant shall each bear the
cost of their respective brokers. Landlord and Tenant hereby each indemnify,
hold harmless, and shall defend the other against either's breach of its
representation and warranty.
ARTICLE 37
ACCORD AND SATISFACTION
37.1 ACCORD AND SATISFACTION. No payment by Tenant or receipt by Landlord
of a lesser amount than the Rent herein stipulated shall be deemed to be other
than on account of the earliest stipulated Rent, nor shall any endorsement or
statement on any check or any letter accompanying any check or payment as Rent
be deemed an accord and satisfaction, and Landlord may accept such check or
payment without prejudice to Landlord's right to recover the balance of such
Rent or pursue any other remedy in the Lease provided.
37.2 APPLICATION OF PAYMENTS. In the event Tenant submits a payment of less
than the total combined amount of all payments required under this Lease, then
Landlord shall have the option to credit said payment towards any of said items
it so desires, notwithstanding any specification of Tenant.
ARTICLE 38
LANDLORD RESERVATIONS
LANDLORD reserves the right from time to time in Landlord's sole and
absolute discretion:
(a) To make changes to the structure, location, size and
configuration of the Common Areas, and to grant exclusive licenses and/or
leases with respect to the use of and/or occupancy of any portions of the
Common Areas.
(b) To close temporarily any of the Common Areas for maintenance
purposes or to construct additional improvements or to demolish existing
improvements, so long as reasonable access to the Premises remains available in
the Common Areas;
(c) To expand or contract the Shopping Center by adding buildings and
improvements or demolishing buildings and improvements, even though such
additions or deletions may vary the availability of parking spaces within the
Common Areas or to change street entrances to the Shopping Center;
(d) To use the Common Areas while engaged in making additional
improvements, repairs or alterations to buildings in the Shopping Center, or any
portion thereof;
(e) To do and perform such other acts and make such other changes in,
to or with respect to the Common Areas and the Shopping Center as Landlord may,
in its sole discretion, deem to be desirable and appropriate;
(f) To establish, promulgate and enforce rules and regulations
concerning the Shopping Center, in addition to those already adopted and
attached as EXHIBIT "B" hereto, for the proper and efficient management,
operation, maintenance and use thereof, or in order to comply with new or
superseding governmental laws, rules or regulations. Such Rules and Regulations
may be canceled, changed, modified and/or supplemented from time to time by
Landlord. Upon dissemination of the same to Tenant, such Rules and Regulations
shall be deemed fully incorporated herein, and a breach of the same by Tenant
shall constitute a default hereunder. Landlord agrees to enforce the Rules and
Regulations without discrimination and impartially among all tenants similarly
affected. However, in the event of any disagreement or inconsistency between the
Rules and Regulations and this Lease as interpreted without such incorporation,
the Lease as so interpreted shall control;
(g) To use portions of the Common Areas for carnival-type shows, rides
and entertainment, outdoor shows, displays, automobiles and other product shows,
the leasing of kiosks and other uses which, in Landlord's sole judgment, tend to
attract the public or benefit the Shopping Center in any way;
(h) To use the Common Areas for advertising purposes and (subject to
Article 21) to move or remove any signage at any time; and
(i) To change the name of the Shopping Center.
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ARTICLE 39
LENDER'S APPROVAL
The Lease is subject to the approval of all mortgagees and master or ground
lessors having such approval rights, and if any such entity disapproves of this
Lease within twenty (20) days after the execution hereof, Landlord shall have
the right to cancel this Lease, without any liability whatsoever, by written
notice of cancellation given to Tenant within ten (10) days after such
disapproval. If no written notice of cancellation is given to Tenant within
thirty (30) days after the execution of this Lease, this Lease shall continue in
full force and effect. The delivery of a recognition and non-disturbance
agreement signed by the mortgagee, if any, may serve as evidence of its approval
of this Lease.
ARTICLE 40
HAZARDOUS OR INFECTIOUS SUBSTANCES
40.1 COVENANTS OF TENANT REGARDING HAZARDOUS OR INFECTIOUS SUBSTANCES.
Tenant represents, warrants and covenants as follows:
(a) No "Hazardous Substance" (as defined hereinbelow) will be
brought upon, used, kept or stored in, on, about or under the Premises or
anywhere else in the Shopping Center by Tenant, its agents, representatives,
employees, contractors or invitees, without the prior written consent of
Landlord (which consent Landlord shall not unreasonably withhold as long as
Tenant demonstrates to Landlord's satisfaction that such Hazardous Substance
is necessary or useful to Tenant's business and will be brought upon, used,
kept and stored in a manner which complies with all "Environmental, Health
and Safety Requirements" (as defined hereinbelow) regulating such Hazardous
Substance, and with the highest standards prevailing in the industry for such
Hazardous Substance). Notwithstanding this restriction, Tenant may bring,
use, keep, and store in the Premises merchandise and supplies customarily
used and found in other Eagle Hardware and Garden stores that would otherwise
fall within the description of Hazardous Substances, provided that any such
items that would be classified as a Hazardous Substance may be brought upon
the Premises, and used, kept, and stored only in a manner which complies with
all Environmental, Health and Safety Requirements and with the highest
standards prevailing in the industry for such Hazardous Substance.
(b) If any Hazardous Substance is brought upon, used, kept or stored
in, on, about or under the Premises or Shopping Center by Tenant, then Tenant
shall do so in a manner which complies with all Environmental, Health and Safety
Requirements regulating such Hazardous Substance and with the highest standards
prevailing in the industry for such Hazardous Substance. Without limiting any of
the other obligations of Tenant set forth in this Lease, Tenant shall, at its
own cost and expense, procure, maintain in effect and comply with all conditions
and requirements of any and all permits, licenses and other governmental and
regulatory approvals or authorizations required under any Environmental, Health
or Safety Requirement in connection with the bringing, use, keeping and storage
of such Hazardous Substance in, on, about or under the Premises or Shopping
Center. Tenant shall submit to Landlord copies of all such permits, licenses, or
other governmental or regulatory approvals or authorizations within five (5)
business days of its receipt thereof.
(c) Upon written demand by Landlord in any instance in which the
presence of any Hazardous Substance on the Premises or in the Shopping Center
was caused or permitted by Tenant without Landlord's prior written consent,
Tenant shall promptly remove and dispose of the same at Tenant's sole cost
and expense and in compliance with all applicable Environmental, Health and
Safety Requirements. If the presence of any Hazardous Substance in, on, about
or under the Premises or Shopping Center caused or permitted by Tenant
results in any contamination of the Premises or Shopping Center or the
surrounding environment, Tenant shall promptly take all actions at its sole
cost and expense as are necessary to return the Premises or Shopping Center
or the surrounding environment to the condition existing prior to such
contamination (the "Remediation"); provided, however, that Tenant shall not
undertake any Remediation without first providing Landlord with written
notice thereof and obtaining Landlord's approval therefor. Tenant shall carry
out any Remediation in a manner which will minimize the impact on the
businesses conducted by other tenants in the Shopping Center and in a manner
which complies with all Environmental, Health and Safety Requirements.
Further, Tenant shall not undertake any Remediation, nor enter into any
settlement agreement, consent decree or other compromise with respect to any
claims relating to any Hazardous Substance in any way connected with the
Premises or Shopping Center without first notifying Landlord of Tenant's
intention to do so and affording Landlord ample opportunity to appear,
intervene or otherwise appropriately assert and protect Landlord's interest
with respect thereto.
(d) Upon the expiration or early termination of the term of this
Lease, Tenant shall cause to be removed from the Premises or Shopping Center, as
appropriate, all Hazardous Substances brought upon, used, kept or stored in, on,
about or under the Premises or Shopping Center by Tenant, as well as all
receptacles or containers therefor, and shall cause such Hazardous Substances
and such receptacles or containers to be stored, treated, transported and/or
disposed of in compliance with all applicable Environmental, Health and Safety
Requirements. Any Hazardous Substances or receptacles or containers
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therefor which Tenant causes to be removed from the Premises or Shopping Center
shall be removed solely by duly licensed haulers and transported to and disposed
of at duly licensed facilities for the final disposal of such Hazardous
Substances and receptacles or containers therefor. Tenant shall deliver to
Landlord copies of any and all manifests and other documentation relating to the
removal, storage, treatment, transportation and/or disposal of any Hazardous
Substances or receptacles or containers therefor reflecting the legal and proper
removal, storage, treatment, transportation and/or disposal thereof. Tenant
shall, at its sole cost and expense, repair any damage to the Premises or
Shopping Center resulting from Tenant's removal of such Hazardous Substances and
receptacles or containers therefor. Tenant's obligation to pay Fixed Rent and
all other charges shall continue until such removal by Tenant has been completed
to Landlord's satisfaction, notwithstanding the expiration or early termination
of the term of this Lease.
(e) Tenant shall, from time to time, execute such affidavits,
certificates or other documents as may be requested by Landlord concerning
Tenant's best knowledge and belief regarding the presence of Hazardous
Substances in, on, about or under the Premises or Shopping Center. Further, each
year throughout the term of this Lease, on the anniversary date hereof, Tenant
shall deliver to Landlord a letter stating that during the preceding year Tenant
has complied with the provisions of this Article 40 or, if Tenant has not so
complied, a letter setting forth the details concerning its noncompliance.
(f) Tenant shall notify Landlord in writing immediately upon becoming
aware of: (i) any enforcement, cleanup, remediation or other action threatened,
instituted or completed by any governmental or regulatory agency or private
person with respect to the Premises or Shopping Center relating to Hazardous
Substances; (ii) any claim threatened or made by any person against Tenant or
the Premises or Shopping Center for personal injury, property damage, other
losses, contribution, cost recovery, compensation or any other matter with
respect to the Premises or the Shopping Center relating to Hazardous Substances;
(iii) any reports made by or to any governmental or regulatory agency with
respect to the Premises or Shopping Center relating to Hazardous Substances,
including without limitation any complaints, notices or asserted violations in
connection therewith; and (iv) any other information with respect to the
Premises or Shopping Center relating to Hazardous Substances. Further, Tenant
shall also supply to Landlord as promptly as possible, and in any event within
five (5) business days after Tenant first receives or sends the same, copies of
all claims, reports, complaints, notices, warnings, asserted violations or other
documents relating in any way to the foregoing.
(g) Landlord and its agents and representatives shall have the right
to communicate, verbally or in writing, with any governmental or regulatory
agency or any environmental consultant on any matter with respect to the
Premises or Shopping Center relating to Hazardous Substances. Landlord shall be
entitled to copies of any and all notices, inspection reports or other documents
issued by or to any such governmental or regulatory agency or consultant with
respect to the Premises or Shopping Center relating to Hazardous Substances.
40.2 INDEMNIFICATION. If Tenant breaches any of its covenants or
obligations in this Article 40, or if the presence of Hazardous Substances on
the Premises or Shopping Center caused or permitted by Tenant results in
contamination of the Premises or Shopping Center, or if contamination of the
Premises or Shopping Center by Hazardous Substances otherwise occurs for which
Tenant is legally liable to Landlord for damage resulting therefrom, or if any
lender or governmental agency requires an investigation to determine whether
there has been any contamination of the Premises or Shopping Center, then,
Tenant shall indemnify, defend and hold harmless Landlord, any subsidiary or
other affiliate of Landlord, and any director, officer, shareholder, employee,
agent, attorney or partner of any of the foregoing, from any and all claims,
damages, penalties, fines, costs, liabilities and losses (including, without
limitation, diminution in value of the Premises or Shopping Center, damages for
the loss or restriction on use of rental or useable space or of any other
amenity of the Premises or Shopping Center, damages arising from any adverse
impact on marketing of space in the Premises or Shopping Center, other
consequential damages and sums paid in settlement of claims, attorneys' fees,
consultants' fees and experts' fees) which arise during or after the term of
this Lease as a result of such contamination. This indemnification of Landlord
by Tenant includes, without limitation, costs incurred in connection with any
investigation of site conditions or any cleanup, remedial, removal or
restoration work required by any governmental or regulatory agency or any
private person due to the presence of Hazardous Substances at the Premises or
Shopping Center or in the soil or groundwater in, on, about or under the
Premises or Shopping Center.
40.3 INSPECTION. If Tenant breaches its covenants or obligations in this
Article 40, or if the presence of Hazardous Substances on the Premises or
Shopping Center caused or permitted by Tenant results in contamination of the
Premises or Shopping Center, or if contamination of the Premises or Shopping
Center by Hazardous Substances otherwise occurs for which Tenant is legally
liable to Landlord for damage resulting therefrom, or if Landlord, any lender or
governmental agency requires an investigation to determine whether there has
been any violation of this Article 40, then, Landlord and its agents and
representatives shall have the right, at any reasonable time and from time to
time during the term of this Lease, to enter upon the Premises to perform
monitoring, testing or other analyses, and to review any and all applicable
documents, notices, correspondence or other materials which may be in the
possession of Tenant. Further, Tenant shall be obligated to provide Landlord,
within five (5) business days of Landlord's request therefor, with copies of all
30
such applicable documents which may be in Tenant's possession but are not at the
Premises. All costs and expenses reasonably incurred by Landlord in connection
therewith shall become due and payable by Tenant upon Landlord's presentation to
Tenant of an invoice therefor.
40.4 DEFINITION OF HAZARDOUS SUBSTANCE. As used herein, the term "Hazardous
Substance" shall mean any substance, material, waste, contaminant or pollutant
determined by any local, regional, state or federal governmental agency, court,
judicial or quasi-judicial body or legislative or quasi-legislative body
pursuant to any Environmental, Health and Safety Requirement to be hazardous,
toxic, infectious, radioactive, ignitable or flammable, corrosive, persistent or
bioaccumulative, explosive, reactive or otherwise dangerous, including but not
limited to crude oil and its fractions, including petroleum and petroleum
products, gasoline and waste oil.
40.5 DEFINITION OF ENVIRONMENTAL, HEALTH AND SAFETY REQUIREMENT. As used
herein, the term "Environmental, Health and Safety Requirement" shall mean any
law, statute, ordinance, rule, regulation, order, judgment or decree promulgated
by any local, regional, state or federal governmental agency, court, judicial or
quasi-judicial body or legislative or quasi-legislative body which relates to
matters of the environment, health, industrial hygiene or safety.
40.6 ANY AND ALL LIABILITIES ARISING FROM THE MANUFACTURING, GENERATION,
HANDLING, USE, STORAGE, TREATMENT, TRANSPORTATION OR DISPOSAL OF HAZARDOUS
SUBSTANCES PERFORMED OR CAUSED TO BE PERFORMED BY TENANT, OR ITS AGENTS,
REPRESENTATIVES, EMPLOYEES, CONTRACTORS OR INVITEES, SHALL AT ALL TIMES REMAIN
THE SOLE RESPONSIBILITY OF TENANT AND TENANT SHALL RETAIN ANY AND ALL
LIABILITIES ARISING THEREFROM. NOTWITHSTANDING ANYTHING TO THE CONTRARY SET
FORTH IN THIS ARTICLE 40, ANY ACT BY LANDLORD OR ITS AGENTS OR REPRESENTATIVES
HEREUNDER SHALL NOT CONSTITUTE AN ASSUMPTION BY LANDLORD OF ANY OBLIGATIONS,
DUTIES, RESPONSIBILITIES OR LIABILITIES OF TENANT HEREUNDER, INCLUDING WITHOUT
LIMITATION TENANT'S COMPLIANCE WITH ANY ENVIRONMENTAL, HEALTH OR SAFETY
REQUIREMENT, WHICH TENANT SHALL RETAIN UNDER ALL CIRCUMSTANCES AND SHALL
INDEMNIFY, DEFEND AND HOLD HARMLESS LANDLORD AS PROVIDED HEREIN. FURTHER,
NOTWITHSTANDING ANYTHING TO THE CONTRARY SET FORTH IN THIS ARTICLE 40, EVEN
THOUGH HAZARDOUS SUBSTANCES REMOVED, TRANSPORTED AND DISPOSED OF BY TENANT MAY
ORIGINATE FROM THE PREMISES OR SHOPPING CENTER, IF TENANT IS RESPONSIBLE FOR
SUCH HAZARDOUS SUBSTANCES UNDER THIS LEASE, THEN TENANT SHALL REMAIN FULLY
LIABLE FOR THEIR REMOVAL, TRANSPORTATION AND DISPOSAL AND SHALL INDEMNIFY,
DEFEND AND HOLD HARMLESS LANDLORD AS PROVIDED HEREIN.
40.7 TENANT'S LIABILITY. The representations, warranties, covenants,
agreements and indemnities of Tenant set forth in this Article 40 shall survive
the expiration or earlier termination of this Lease and shall not be affected by
any investigation, or information obtained as a result of any investigation, by
or on behalf of Landlord or any prospective lessee.
ARTICLE 41
UTILITY RATIONING
Tenant acknowledges that the Premises may become subject to the rationing
of utility services, or restrictions on use. Notwithstanding any such rationing
or restrictions on use of any such utility services, Tenant acknowledges and
agrees that its tenancy and occupancy hereunder shall be subject to such
rationing restrictions as are now or which may hereafter be imposed upon
Landlord, Tenant, the Premises or the Shopping Center, and Tenant shall in no
event be excused or relieved from any covenant or obligation to be kept or
performed by Tenant by reason of any such rationing or restrictions. Tenant
further agrees to pay and discharge, prior to delinquency, any amount, tax,
charge, surcharge, assessment or imposition levied or assessed or imposed upon
the Premises, or Tenant's use and occupancy thereof, or the utility services
therein, or the delivery or use thereof, or as a result, whether directly or
indirectly, of any such rationing or restrictions.
ARTICLE 42
TITLE
Landlord is aware of no claims, rights, easements, or restrictions
governing the Premises except for those listed on the Preliminary Title Report
No. 4083399-67 issued by Lawyers Title Insurance Company dated as of May 30,
1997 (the "Title Report"), a copy of which has been provided to Tenant, and the
Prior Restrictions. Landlord shall have no obligation to change, remove, alter,
or add any items to record title to the Premises (except for a short form
memorandum of lease as provide in Article 43, below). Landlord shall be
responsible for the cost of a CLTA leasehold policy of title insurance insuring
title in the policy amount of $5,000,000, which policy shall be subject to all
items reflected on the Title Report, the Prior Restrictions, and any other such
items caused to be of record by or on behalf of Tenant. If Tenant desires an
ALTA policy,
31
Tenant shall be responsible for the incremental premium cost and the cost of any
additional survey (or supplement to Landlord's existing survey).
ARTICLE 43
MEMORANDUM OF LEASE
Landlord agrees to execute and deliver to Tenant a short form memorandum of
this Lease which Tenant may record at Tenant's sole cost and expense. Upon
recordation, Tenant shall deliver a recorder-stamped copy of such Memorandum to
Landlord. If Tenant elects to record such a memorandum prior to the
parcelization of the property of which the Premises are a part, Tenant shall,
upon completion of the parcelization and creation of a legal lot comprising the
Premises (Lot 2), reconvey the initial memorandum and may, at its sole cost and
expense, record a replacement memorandum of this Lease, in form reasonably
satisfactory to Landlord, against the Premises (Lot 2). Upon expiration (or
earlier termination) of this Lease, Tenant agrees to deliver to Landlord a
memorandum of termination of lease, signed on behalf of the Tenant, with
signatures notarized and in recordable form.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
Execution Date.
LANDLORD:
CALIFORNIA DRIVE-IN THEATRES, INC.,
a California corporation
By: /s/ Ira Levine
------------------------------------
Name: Ira Levine
---------------------------------
Title: SENIOR VICE PRESIDENT
--------------------------------
By: /s/ James Vaudever
------------------------------------
Name: James Vaudever
---------------------------------
Title: VICE PRESIDENT
--------------------------------
TENANT:
EAGLE HARDWARE & GARDEN, INC.,
a Washington corporation
By: /s/ Richard T. Takata
------------------------------------
Name: RICHARD T. TAKATA
---------------------------------
Title: PRESIDENT & CEO
--------------------------------
By: /s/ Ronald Maccarone
------------------------------------
Name: RONALD MACCARONE
---------------------------------
Title: EXECUTIVE VICE PRESIDENT - CFO
---------------------------------
32
EXHIBIT "A"
LOS ALTOS CENTRE
SITE PLAN OF SHOPPING CENTER
EXHIBIT "A"
EXHIBIT A
---------
SITE PLAN
[FLOOR PLAN]
EXHIBIT "A-1"
LOS ALTOS CENTRE
TENTATIVE TRACT MAP
EXHIBIT "A-1"
VESTING
TENTATIVE TRACT MAP
NO. 52310
LONG BEACH - CALIFORNIA
[MAP]
EXHIBIT "A-2"
LOS ALTOS SITE PLAN (COMMON AREAS IDENTIFIED)
EXHIBIT "A-2"
EXHIBIT A-2
--------
SITE PLAN
[FLOOR PLAN]
EXHIBIT A-3
[DIAGRAM]
EXHIBIT A-3
[DIAGRAM]
EXHIBIT "B"
LOS ALTOS CENTRE
RULES AND REGULATIONS
1. Neither Tenant nor its employees shall use any roadway, walkway, or parking
area except as a means of egress from or ingress to store areas or parking areas
within the Shopping Center. Such use shall be in an orderly manner in accordance
with directional or other signs or guides. Roadways shall not be used for
parking or stopping, except as posted for the immediate loading or unloading of
passengers.
2. The employees of Tenant shall not use any parking area, except for the
parking of motor vehicles during the period of time they are in fact employees
of Tenant. All motor vehicles shall be parked in an orderly manner within the
painted lines defining the individual parking places.
3. In connection with any use of the Common Areas, unless the Lease expressly
provides otherwise, Tenant shall not, without the express prior written consent
of Landlord (which may be withheld in Landlord's sole discretion): (a) vend,
peddle, display, place or solicit orders for sale or distribution of any
merchandise, device, service, periodical, book, pamphlet or other matter
whatsoever (except for sidewalk sales adjacent to Tenant's Premises); (b)
exhibit any sign, placard, banner, notice or other written material; (c)
distribute any circular, booklet, handbill, placard or other material; (d)
solicit membership in any organization (except for membership in Tenant's
business), group or association or contribution for any purpose; (e) parade,
patrol, demonstrate or engage in any conduct that might tend to interfere with
or impede the use (except as allowed herein) of the Common Areas by Landlord or
any tenant or any employee or invitee of any tenant, or create a disturbance,
attract attention or harass, annoy, or disparage business establishments within
the Shopping Center; (f) deface, damage or demolish any sign, light standard or
fixture, landscaping material or other improvement or property situated within
the Shopping Center; or (g) permit any portion of the Shopping Center to be
utilized for lodging or care taking purposes.
4. Each Lot in the Shopping Center contains portions of the Common Areas, as
shown on EXHIBIT "A-2," which Common Areas shall be maintained by or on behalf
of Landlord in accordance with this Lease. All tenants in the Shopping Center
(excluding the occupant of Lot 1 of the Shopping Center, currently Kmart
Corporation) are prohibited from making any alterations, additions, or
improvements to any Common Areas, including the landscaping, located on their
respective Lots without the prior written consent of Landlord which may be
withheld in Landlord's commercially reasonable judgment.
EXHIBIT "B"
EXHIBIT "C"
LOS ALTOS CENTRE
CONSTRUCTION EXHIBIT
1. GENERAL. The building which is a part of the Premises ("Building") shall be
constructed by Tenant in accordance with this EXHIBIT "C". The Building
shall have an area of approximately one hundred thirty-three thousand five
hundred (133,500) square feet and shall be located within an area of real
property consisting of approximately five hundred ninety-one thousand three
hundred (591,300) square feet (the "Premises"). The buildable "Pad",
consisting of one hundred sixty-three thousand six hundred (163,600) square
feet, shall be deemed to include the area of the Premises containing the
Building, a garden yard containing approximately thirty thousand one
hundred (30,100) square feet, and sidewalks and landscaping at the
perimeter of the Building. The Pad shall be located as outlined by the
heavy-dashed line, which is also the approximate "Building Limit Line" (as
hereinafter defined), on EXHIBIT "D" Plot Plan attached to the Lease to
which this EXHIBIT "C" is attached ("Lease"), subject to modification as
provided for by the Lease. The following improvements are collectively
referred to as the "Tenant Improvements" and to be constructed on the Pad
by Tenant at its expense: the Building, garden yard, signage, trash
enclosures, adjacent sidewalks, and landscaping (within the Building Limit
Line), plus all improvements such as furniture, fixtures, equipment, trade
fixtures, and other improvements necessary for Tenant's operations. For
purposes hereof, the term "Building Limit Line" means the area outlined by
the outside curb face of any building perimeter sidewalk; five (5) feet
from all exterior walls, garden yard enclosures and truck wells (in the
absence of a perimeter sidewalk); five (5) feet outside the vertical "drip"
line of all canopies, roof overhangs and covered area roof lines; and the
distance customarily allowed by standard industry practices and applicable
building codes where any exterior walls are abutted by an adjoining
building.
2. EXTERIOR DESIGN APPROVAL. Landlord shall have the right to approve an
exterior building design plan for the Tenant Improvements ("Exterior
Design Plan"). Within seven (7) working days after the date of execution
of the Lease, Tenant at Tenant's sole cost and expense, shall cause to be
prepared and delivered to Landlord for Landlord's approval three (3)
copies of an Exterior Design Plan. The Exterior Design Plan and Tenant's
Site Plan (MCG Architects, Eagle Hardware Site Study, version dated
April 18, 1998) are attached to the Lease as EXHIBITS "A-3 and "D"
respectively. Landlord shall review the Exterior Design Plan within
five (5) days after receipt from Tenant. Landlord's review shall be
based upon, among other things, Landlord's determination, in Landlord's
reasonable discretion, of the aesthetic compatibility of the Exterior
Design Plan with the remainder of the Shopping Center. Tenant's exterior
(internally illuminated) sign design (logo) and colors and other
exterior building signs used typically by Tenant on a chain-wide basis
shall be excluded from Landlord's Exterior Design Plan approval process
(but shall nonetheless comply with all applicable governmental regulations
and the Prior Restrictions). Should the Exterior Design Plan be disapproved
by Landlord, Tenant, at its sole cost, shall make such changes Tenant is
willing to make and resubmit the corrected Exterior Design Plan to Landlord
within five (5) working days following Landlord's notice of disapproval.
If, following the same review process, Landlord fails to then approve the
revised Exterior Design Plan, Tenant may at its option cancel the Lease or
the foregoing process shall be repeated until the Landlord approves the
Exterior Design Plan (or until Tenant cancels the Lease). Tenant
acknowledges that the approval of other "Responsible Owners" of the
Shopping Center (as identified and defined in the REA) may also be required
for Tenant's Exterior design Plan. The Exterior Design Plan, once approved,
shall be referred to as the Final Exterior Design Plan.
3. PLANS AND SPECIFICATIONS. Tenant, at Tenant's sole cost and expense,
shall cause to be prepared and delivered to Landlord for Landlord's review
three (3) sets of complete working drawings and specifications for the
Tenant Improvements in the form of reproducible prints. Such working
drawings and specifications shall be in conformance with the Final Exterior
Design Plan, and shall also be in conformance with the overall design and
concept criteria established by the Landlord with respect to the Shopping
Center. Such working drawings and specifications shall be prepared by a
licensed architect and/or engineer and shall include drawings and
specifications of such scope as to completely delineate the nature and
extent of the Tenant Improvements. Technical specifications shall be
prepared in accordance with A.I.A. and/or C.S.I. standard format(s).
The working drawings and specifications shall also include final plans
for all Pad landscaping and hardscaping per the design theme approved by
Landlord's architect or the City of Long Beach. The following must be
shown on the working drawings and specifications for the Building:
a. CONCRETE SLAB
i. Locate any floor drains, restroom or other plumbing connections.
EXHIBIT "C"
Page 1 of 7
ii. Locate any grease traps, floor safe, etc. requiring canouts in
slab.
iii. Indicate any particular finish to slab, E.G. smooth trowel
finish, etc.
iv. Indicate any slab depressions required for ceramic tiles,
brick pavers, etc.
v. Indicate column pads, if any, and interior bearing footings.
vi. Show any exterior wall footing. Show if any cold joints are
required.
vii. Locate electrical floor outlets.
viii. Indicate underslab sleeves and raceways, for special or future
uses.
b. ELECTRICAL
i. Show total connected load. Indicate size of panels to be
required including sub-panel arrangements.
ii. Show any floor outlets and underground conduit.
iii. Provide interior circuitry diagrams showing location of
ceiling outlets and wall switches.
iv. Locate light fixtures.
v. Indicate any motors or special circuits affecting the
sub-panel or meter panel.
vi. EMT or rigid conduit must be employed. Romex is not permitted.
vii. Indicate safety switches if required.
viii. Location of all electrical items on plans.
C. PLUMBING
i. Indicate any hot water equipment; show whether electric or
gas, and indicate venting.
ii. Indicate any gas operated equipment, size of piping and vents.
iii. Note on plans any Health Department requirements.
iv. Locate sewer connection and cleanout, if required.
v. Gas piping shall be located at roof height; indicate water
lines underground or overhead.
d. CEILING
i. Indicate ceiling material, I.E., drywall, exposed wood,
acoustical, etc.
ii. Indicate exposed or concealed grid, finish on exposed grid.
iii. Show direction of panels.
iv. Show fire clips.
v. Name, brand and pattern of inlay tiles.
vi. Indicate ceiling height above finish floor.
vii. Show any track lights or requirement for special treatment of
tiles.
e. FIRE SPRINKLERS
Indicate that sprinklers shall be per code.
EXHIBIT "C"
Page 2 of 7
f. INSULATION
Provide R-19 at ceiling line, R-11 in all perimeter walls or
insulation so as to meet minimum code requirements, whichever is the
higher R-value.
g. AIR CONDITIONING
Provide complete plans showing name, weight, and size of equipment as
well as complete layout for distribution system.
h. PAINTING
i. Indicate special surface preparation.
ii. Provide color schedule per approved Final Exterior Design
Plan.
i. FINISH CARPENTRY
Indicate any special treatment, pattern and milling number (if
applicable).
j. Glass and Glazing
i. Specify if tempered, thickness, color, heat resistant, etc.
ii. If metal extrusions, show pattern number, finish.
iii. If wood, name material, detail the stops and other trim.
k. FLOOR COVERING
i. Hard Floor - specify material and base.
ii. Carpet - specify carpet and pad (if applicable).
l. CERAMIC TILE
Name material, pattern, mastic or mud-set. If a Health Department
requirement, show approval.
m. LIGHT FIXTURES
i. Show any special requirements for installation.
ii. Indicate specific manufacture and brand name.
n. UTILITIES
i. Indicate utilities within pad and coordinate locations with
respective utilities for ultimate offsite utility services.
o. SIGNAGE
Indicate locations and specifications of signage.
Landlord shall notify Tenant within ten (10) days of Landlord's receipt of
such drawings and specifications of the respects, if any, in which such
drawings and specifications fail to conform to the Final Exterior Design
Plan or the overall design and concept criteria established by the Landlord
with respect to the Shopping Center, and Tenant shall, at Tenant's cost and
expense, within fifteen (15) days after receipt of such notification, make
such revisions as Tenant is willing to make so that the Final Exterior
Design Plan or the drawings and specifications conform to such concept
criteria. The foregoing procedure shall be repeated until the drawings and
specifications are reasonably in conformance satisfactory to Landlord;
PROVIDED, however, that if Landlord disapproves Tenant's improvement plans
more than once and Tenant thereafter declines to make the changes requested
by Landlord, Tenant shall so notify Landlord in writing and Landlord shall
have the option, exerciseable by written notice to Tenant within five (5)
days after the date that Tenant informs Landlord that it will not further
revise the drawings and specifications, to either withdraw its disapproval
and allow Tenant to proceed, or to terminate the Lease by delivering a
thirty (30) day written notice to Tenant. If
Page 3 of 7
Landlord fails to exercise its option, Landlord will be deemed to have
withdrawn its disapproval and Tenant may proceed. Landlord shall initial
and date one (1) set of the approved working drawings and specifications
and return them to Tenant. The working drawings and specifications as
approved by Landlord shall be referred to as "the Working Drawings and
Specifications" or, in the alternative, shall be referred to as "Plans and
Specifications". Tenant shall send to Landlord, at Landlord's cost and
expense, one (1) reproducible set of the Working Drawings and
Specifications.
4. SITE PREPARATION BY LANDLORD. Subject to Landlord's receipt of all
requisite permits and approvals for its development of the Shopping
Center, Landlord shall tender possession to Tenant of the buildable
Pad with all utilities required per the Plans and Specifications stubbed to
the Building Limit Line at the locations identified on the Plans and
Specifications. Landlord shall also be responsible for the construction of
on-site improvements outside of the Building Limit Line (including site
drainage to handle Tenant's surface water (roof and ground) drainage) and
for all site fees related thereto (subject to Tenant's PRO RATA
reimbursement in accordance with Section 4(c), below). Landlord shall have
no further obligation to Tenant as to the condition of the Pad. Without
limiting the generality of the foregoing, Tenant agrees that Landlord shall
have no obligation to perform any further grading, demolition, compaction,
or other site preparations other than is set forth in the Lease and in this
EXHIBIT "C," nor shall Landlord have any further obligation with regard to
the installation of any utilities or for the payment of any assessments,
connection fees, usage fees or hook-up fees. Except as expressly set forth
in this Lease, Landlord makes no representation or warranty of any kind,
whether at the present time or at any time in the future, with regard to
the condition of the Pad, the fitness or acceptability of the Pad for any
particular purpose, the condition of the soil, the suitability of the
Tenant Improvements to be placed upon the Pad, or the ability of the Pad to
support the Tenant Improvements, all such representations and warranties,
express or implied, whether by operation of law or otherwise, being hereby
expressly disclaimed by Landlord, and Tenant assumes all risk, cost
and expense with regard thereto. Without in any way limiting the generality
of the foregoing, Tenant shall, upon commencing construction on the Pad, be
deemed conclusively to have inspected and investigated the Pad and to have
accepted the Pad in an "as is" condition.
a. LANDLORD'S SITE IMPROVEMENTS NECESSARY FOR TENANT TO COMMENCE CONSTRUCTION
OF THE TENANT IMPROVEMENTS.
(i) Access shall be provided to Tenant's Pad for construction
purposes, but strictly in accordance with the routes identified on Exhibit
"D-1" for construction traffic;
(ii) Utilities shall be installed by Landlord to a point at the
Building Limit Line for each utility as identified on the Plans and
Specifications;
(iii) Utility locations shall be staked and identified on the Pad,
and shall be illustrated by Landlord on a copy of the Site Plan provided to
Tenant; and
(iv) Landlord shall deliver the Pad to Tenant graded to within
two-tenths (2/10) of one foot (1') of the finished grade elevation per
Landlord's grading plan (which grading has already been completed) and at
ninety percent (90%) compaction of the Pad in accordance with the soils
report and the soils engineer of record. To confirm such grading and
compaction, and before Landlord may deliver the Pad to Tenant, Landlord
must first provide Tenant with a Pad grading certification and a soils
compaction certification and five (5) business days to reasonably approve
or disapprove such certifications in writing. During such five (5) business
days, and provided Tenant has first provided Landlord with its requisite
insurance certificate as required by Paragraph 6b, below, Tenant may have
access to the Pad to do such testing and inspections reasonably necessary
to confirm the information in such certifications. If Tenant fails to give
Landlord notice of approval or disapproval, Tenant shall be deemed to have
approved the certifications and Landlord may deliver the Pad to Tenant. If
Tenant reasonably disapproves the certifications, Tenant shall state with
specificity in its written notice of disapproval the condition that does
not match the certification and Landlord shall promptly take all reasonable
steps to correct the non-complying condition.
b. LANDLORD'S SITE IMPROVEMENTS NECESSARY FOR TENANT TO OPEN THE PREMISES
FOR BUSINESS. The Site Improvements necessary for Tenant to open the
Premises for business are the substantial completion of all Common Areas of
Site Improvements in and around the Premises, in accordance with the Site
Plan as shown on EXHIBIT "A-2" and EXHIBIT "D" to the Lease, and applicable
conditions to governmental approval of the Site Plan. Common Areas
Improvements are all crubs, gutters, paving, striping, landscaping and
irrigation systems, storm drainange, retaining walls, driveways, walkways,
driveway aprons, and lighting facilities. Site improvements shall include
the parking lot on the Premises, striping, paving, lighting facilities,
Shopping Center driveway and landscaping. In no event shall Common Areas
Improvements or Site Improvements include any curb face of sidealks around
the perimeter of Tenant's Building or any improvements within five (5) feet
of any wall, yard enclosure, or canopy or roof overhang "drip" line of
Tenant's Building, all of which shall
Page 4 of 7
be Tenant's sole responsibility. Upon Tenant's commencement of Tenant's
Building construction, Tenant shall notify Landlord of Tenant's projected
opening date so as to allow Landlord to schedule and timely complete
Landlord's Site Improvements. Landlord shall use reasonable efforts to
ensure that paved delivery truck access is available to the Premises at
least ninety (90) days before Tenant's projected opening and that the
remainder of the Common Areas and Site Improvements are completed at least
thirty (30) days before Tenant's projected opening.
c. TENANT CONTRIBUTION TO SITE IMPROVEMENTS AND COMMON AREAS
IMPROVEMENTS. Tenant shall pay to Landlord Tenant's PRO RATA share of the
cost of Site Improvements and Common Areas Improvements on the Premises in
an amount equal to $4.00 per square foot of the Premises. Tenant shall pay
Landlord its PRO RATA share within five (5) working days after receipt of
written notice from the Landlord confirming that the first permit for
Tenant's construction of the Tenant Building is available to be issued.
5. PRE-CONSTRUCTION OBLIGATIONS OF TENANT.
a. SITE CERTIFICATION. Within seven (7) days after the last to occur of
the date of the delivery of the possession of the Pad to the Tenant
pursuant to Paragraph 4 hereof or the date of the approval of the Working
Drawings and Specifications, Tenant shall cause, at its sole cost and
expense, the corners of the Tenant Improvements to be set on the Pad by a
licensed land surveyor. Tenant shall notify Landlord when the corners are
set. Landlord shall confirm Landlord's acceptance of the corner staking in
writing to Tenant. Notwithstanding anything to the contrary contained
herein, Landlord shall not be liable to Tenant for any errors or omissions
made in the setting of corners.
b. GOVERNMENTAL APPROVALS OF PLANS AND SPECIFICATIONS. Tenant shall, at
its sole cost and expense, comply with all applicable laws, ordinances,
governmental rules, regulations and permits pertaining to governmental
approvals of the Working Drawings and Specifications. Tenant shall be
responsible for all fees related to the construction of the Tenant
Improvements and for its operations from the Premises. If any governmental
agency, as a condition to granting any approval or permit requires any
change in the Working Drawings and Specifications, Tenant shall, within
fifteen (15) days thereafter, cause the Working Drawings and Specifications
to be revised to make such change and shall submit two (2) sets of such
drawings and specifications, as revised, to Landlord. Landlord shall
initial and date one (1) set of such Working Drawings and Specifications
containing the revisions required by any governmental agency and return one
set to Tenant. Within forty-five (45) days after receipt of all
governmental approvals for Tenant's intended project, Tenant shall submit
and apply for all requisite permits for Tenant's Improvements and
diligently pursue the issuance of all such permits.
6. CONSTRUCTION CONTRACT AND COMMENCEMENT OF CONSTRUCTION.
a. CONSTRUCTION CONTRACT.
(i) Tenant shall enter into a construction contract with a duly
licensed contractor reasonably acceptable to Landlord for completion of
Tenant's Improvements on the Premises. Landlord may require that any
contractor is bondable with a surety satisfactory to Landlord in an amount
sufficient to insure complete and timely construction of the Tenant
Improvements and prompt payment of all labor and materials. No bond,
however, shall be required.
(ii) Tenant shall coordinate its construction on the Pad with other
construction work being performed or to be performed by the Landlord on the
Premises or elsewhere in the Shopping Center. Tenant shall ensure that its
contractor will agree to cooperate with Landlord in coordinating all
construction on the Premises and the Shopping Center. Tenant acknowledges
that the Shopping Center may be in operation at the time of Tenant's
construction and that Tenant may not interfere with the operation of the
Shopping Center or of any of its tenants. Tenant's construction areas shall
be limited to those areas on Tenant's Premises delineated on EXHIBIT "D-1"
to the Lease (the "Construction Areas") and shall be fenced in. Tenant
shall endeavor to the greatest extent possible to minimize the impact of
its construction on the operation of the Shopping Center. Tenant agrees to
comply with the Construction Areas made available to Tenant for the
staging, storage, parking of construction vehicles, and the routes of
access for all construction traffic, as well as for location of any field
office or other facilities for contractor's personnel, all as delineated on
EXHIBIT "D-1" to the Lease. Any areas which Tenant desires to use outside
of the Construction Areas are subject to Landlord's prior written approval,
which may be withheld in Landlord's sole and ablsolute discretion. Once
Landlord has commenced its Site Improvements within the Common Areas, or
upon any tenant's opening for business in the Shopping Center, Tenant
agrees to comply with the re-routing of construction traffic and relocation
of staging areas as designated by Landlord and any other measures
reasonably designated by Landlord to minimize impact on the operations
at the Shopping Center or on any finished improvements.
Page 5 of 7
(iii) Tenants contractor and all subcontractors shall be licensed by
the State of California and in the County of Los Angeles for the work to be
performed by such contractor or subcontractors and shall be required to
perform all work in a thoroughly first class and workerlike manner in
strict conformance with the Working Drawings and Specifications. Tenant's
contractor and all subcontractors shall be required to obtain approval (as
set forth in Paragraph 6a(ii), above) from Landlord for any space outside
of the fenced Construction Areas but in the Shopping Center generally,
which is needed for storage, handling and moving of materials and
equipment, as well as for location of any field office or other facilities
for contractor's personnel (which approval, except as set forth in
Paragraph 6a(ii) as to the staging, storage, and access routes delineated
on EXHIBIT "D-I" to the Lease, may be withheld in Landlord's sole
discretion). Parking of construction vehicles within the Shopping Center
other than within the Construction Areas shall be strictly prohibited,
and access of such vehicles over the Shopping Center to and from the
Construction Areas shall be as directed by Landlord on EXHIBIT "D-1".
Tenant's contractor or subcontractors shall be required to make
appropriate arrangements with Landlord for temporary utility connections
as may be available within the Shopping Center generally, and shall pay
the cost of such connections, including the cost of maintenance and
removal thereof, and shall pay all utility charges incurred. The
construction contract shall also provide that the contractor and all
subcontractors shall work in a cooperative spirit with Landlord's site
work superintendent.
(iv) Tenant's contractor and all subcontractors shall carry Workers
Compensation Insurance covering all of their respective employees, as well
as Commercial Liability Insurance, including replacement coverage property
damage, and Comprehensive Automobile Liability Insurance. Tenant's
contractor shall also carry Builder's All-Risk Insurance. All such
liability insurance shall provide single limit coverage of at least Two
Million Dollars ($2,000,000) for Tenant's contractor (except for Workers'
Compensation, which shall have limits as provided by law), and shall be in
a form, and carried by companies, approved by Landlord. All insurance shall
contain provisions prohibiting cancellation or reduction in coverage prior
to the giving of at least thirty (30) days prior written notice to
Landlord. All insurance shall name Tenant as the named insured and shall
also name Landlord and Landlord's Lender (if any) as an additional
insureds.
b. COMMENCEMENT OF CONSTRUCTION. Prior to the commencement of any
construction, Tenant shall provide Landlord with certificates of insurance
evidencing insurance coverage required to be carried by Tenant under the
terms of the Lease, and by Tenant and the contractor under the terms of
this EXHIBIT "C". Thereupon, Tenant shall promptly commence construction of
the Tenant Improvements pursuant to the provisions of the construction
contract. Notwithstanding the fact that Landlord has completed the site
preparation work described in Paragraph 4 hereof prior to the execution of
the construction contract and the delivery of such insurance certificates,
only after the delivery of such insurance certificates shall Tenant be
entitled to have possession of the Pad and cause the construction of the
Tenant Improvements to be located on the Pad to be commenced and completed
by the contractor pursuant to the provisions of the construction contract.
7. COMPLETION OF CONSTRUCTION. Tenant shall diligently prosecute construction
of the Tenant Improvements until completion. Within one hundred eighty
(180) days after the commencement of construction of the Tenant
Improvements (subject to delays caused by "force majeure" as defined
below), Tenant shall cause the construction to be completed in strict
accordance with the Plans and Specifications. Landlord shall have no
obligation to Tenant with regard to the design, quality of construction,
utility, or otherwise, of the Plans and Specifications, or any
modifications thereto or deviations therefrom, nor shall Landlord have any
obligation to construct the Tenant Improvements, or any portion thereof.
8. DAMAGE DURING CONSTRUCTION. Tenant acknowledges that at the time Tenant
commences its construction of the Tenant's Improvements, portions of the
Shopping Center may already be complete and in use, including without
limitation driveways and other hardscape and landscaping. Tenant agrees to
use all reasonable efforts to ensure that no damage is caused to any
portion of the Shopping Center by virtue of the performance of the Tenant's
Improvements. Tenant shall be responsible for the cost of repair or
replacement of any items at the Shopping Center damaged or destroyed
provided such damage or destruction is attributable to Tenant or Tenant's
agents, employees, contractors, or subcontractors during or in connection
with the performance of the Tenant's work hereunder.
9. REQUIREMENTS FOR CONTRACTORS AND SUBCONTRACTORS
a. Construction of the Tenant Improvements shall be performed in a
thoroughly first class and workerlike manner and in strict conformity with
the approved Working Drawings and Specifications, and shall be in good and
usable condition and repair at the date of completion. Landlord's on-site
representative shall be provided at all times with a current schedule of
Tenant's construction work and shall be invited to attend all job site
meetings (and provided with adequate notice of same).
EXHIBIT "C"
Page 6 of 7
b. Tenant's contractor shall be required to pay for all necessary permits
and/or fees with respect to the Tenant improvements.
c. The contractor, and all subcontractors, shall be required to move and
dispose of, at least once a week and more frequently as Landlord may
direct, all debris and rubbish caused by or resulting from construction,
and upon completion of the Tenant Improvements, shall remove all temporary
structures, surplus materials, debris and rubbish of whatever kind
remaining in or on the Premises, the Building, the Pad, or within the
Shopping Center generally, which had been brought in as an adjunct of, or
created in the performance of, the construction of the Tenant Improvements.
Should Tenant or Tenant's contractor have an excess of dirt on the site
once Tenant has finished all of its fine grading, Tenant shall, at its sole
cost and expense, cause such excess dirt to be removed. If after the
completion of all of Tenant's Improvements, as determined solely by Tenant,
the contractor or any subcontractor shall neglect, refuse, or fail to
remove any such debris, rubbish, surplus materials, or temporary structures
within two (2) days after notice to Tenant from Landlord, Landlord may
cause the same to be removed by contract or otherwise as Landlord may
determine expedient, and charge the cost thereof to Tenant, which amount
shall be reimbursed by Tenant to Landlord, as additional rent, upon demand
therefor by Landlord.
d. Landlord shall have no responsibility for any loss or damage to any of
Tenant's property or any property of the contractor, and all
subcontractors, installed or left in or on the Premises, the Building, the
Pad or the Shopping Center, and Tenant shall indemnify, defend, and hold
Landlord harmless from any and all claims, demands, debts, liabilities,
causes of action, costs or expenses, including without limitation
attorneys' fees, which Landlord may sustain (or which may be alleged
against Landlord) in connection with the construction activities for the
Tenant Improvements.
10. UTILITIES. Landlord shall obtain all approvals with respect to any and all
electrical, gas, water, telephone and other utility work as may be required
by the utility company supplying utilities to Tenant's Pad. Tenant shall
install all requisite connections to such utilities and shall obtain
utility service, including meters, from the utility company supplying
service.
11. FORCE MAJEURE. If the date for the completion of an obligation of either
Landlord or Tenant hereunder is delayed at any time by labor disputes,
fire, unusual delays in transportation or materials, adverse weather
conditions which could not be reasonably anticipated, unavoidable
casualties, delays caused by governmental authorities or the inability to
obtain required governmental approvals or other causes beyond the control
of such party or by any other unavoidable causes (other than lack of
funds), then the date of completion for such obligation shall be extended
(but not excused) by the period of time taken by any such delay.
12. COMPLIANCE WITH PRIOR RESTRICTIONS. In connection with their respective
work under this EXHIBIT "C", Landlord and Tenant shall comply with the
terms and conditions in the Prior Restrictions.
13. INTENTIONALLY OMITTED.
14. OWNERSHIP OF TENANT IMPROVEMENTS. Notwithstanding any other provision of
the Lease, title to all of the Tenant Improvements, whether under
construction or completed, and all alterations, improvements and additions
thereto, excluding "Tenant's Property" (as defined in Paragraph 12.1),
shall vest in Landlord upon expiration or termination of the Lease, and
Tenant shall have no rights thereto or interest therein (except for
Tenant's leasehold interest under this Lease).
15. SIGNING AND FIXTURIZATION. Either at such time prior to completion of the
Tenant Improvements as may be convenient, or promptly upon completion of
the Tenant Improvements, Tenant shall, at Tenant's cost and expense, and
without any reimbursement therefor, or payment or contribution on account
thereof by Landlord, place or install, or cause to be placed or installed,
in and upon the Premises, such equipment, partitions, furniture and
fixtures as Tenant, in Tenant's sole discretion, shall deem necessary or
appropriate for the purpose of carrying on Tenant's business on the
Premises; PROVIDED however, that in any event such equipment, furniture,
partitions and fixtures shall be sufficient to make the Premises suitable
for the purpose intended, and shall be such so as to enable Tenant to
obtain a Certificate of Occupancy covering the Premises. All exterior
signs shall be subject to compliance with applicable local ordinances and
the Prior Restrictions and shall otherwise be subject to the terms of the
Lease (including, without limitation, the exclusion contained in Section 2
of this EXHIBIT "C").
EXHIBIT "C"
Page 7 of 7
EXHIBIT "D"
LOS ALTOS CENTRE
PLOT PLAN OF PREMISES
EXHIBIT "D"
EXHIBIT D
PARTIAL PLOT PLAN
EXHIBIT D-1
[FLOOR PLAN]
EXHIBIT "E"
[INTENTIONALLY OMITTED]
EXHIBIT "E"
EXHIBIT "F"
LOS ALTOS CENTRE
SUPPLEMENTAL AGREEMENT
THIS SUPPLEMENTAL AGREEMENT, made and agreed, as of the ____________ day of
________________, 19__, by and between CALIFORNIA DRIVE-IN THEATRES, INC., a
California corporation, hereinafter referred to as "Landlord", and EAGLE
HARDWARE & GARDEN, INC., a Washington corporation, hereinafter referred to as
"Tenant";
WITNESSETH:
The Landlord and Tenant entered into a certain lease dated as of April 30,
1998, covering certain Premises which are a portion of the Shopping Center,
located in Long Beach, California, as more particularly described in said Lease.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto
hereby mutually agree as follows:
1. For the purpose of confirming the establishment of the Commencement
Date, as required by the provisions of Article 2, "Term", of said Lease,
Landlord and Tenant hereby agree that:
a. The date of __________, 19__, is hereby established as the
"Commencement Date" referred to in said Lease, and
b. The date of __________, 19__, is hereby established as the
"Expiration Date" of the term of said Lease.
2. Tenant hereby confirms the following:
a. That it has accepted possession of the Premises pursuant to the
terms of said Lease;
b. That the improvements required to be furnished by Landlord in
accordance with EXHIBIT "C" to said Lease have been completed;
c. That Landlord has fulfilled all of its duties of an inducement
nature;
d. That said Lease has not been modified, altered or amended except
as follows:
________________________________________________________________________________
_____________________;
e. That there are no off-sets or credits against rentals, nor has
any security deposit been paid except as provided by the Lease terms;
f. That said rentals commence to accrue on the ________ day of
____________, 19__;
g. That Tenant has no notice of a prior assignment, hypothecation or
pledge of rents or said Lease;
h. That said Lease is in full force and effect; and
i. The dates by which Tenant must, if at all, exercise its options
to extent the term of the Lease are as follows:
First option: (i) __________________;
Second Option: (ii) __________________; and
Third Option: (iii) __________________.
j. That Tenant's Proportionate Share of Common Areas Operating Costs
is _________ percent (___%), subject to adjustment as provided in Paragraph 4.2
of the Lease.
3. This Supplemental Agreement, and each and all of the provisions hereof
shall inure to the benefit, or bind, as the case may require, the parties hereto
and their respective heirs, successors and assigns.
EXHIBIT "F"
Page 1 of 2
IN WITNESS WHEREOF, the parties hereto have executed this instrument as of
the day and year first above written.
"LANDLORD": CALIFORNIA DRIVE-IN THEATRES, INC.,
a California corporation
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
"TENANT": EAGLE HARDWARE & GARDEN, INC.,
a Washington corporation
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
By:
--------------------------------
Name:
---------------------------
Title:
--------------------------
EXHIBIT "F"
Page 2 of 2
LOS ALTOS CENTRE
GROUND LEASE
TABLE OF CONTENTS
Article Title Page
- ------- ----- ----
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . i
1 PREMISES, COMMON AREAS, PARKING . . . . . . . . . . . . . . . 1
2 TERM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3 FIXED RENT. . . . . . . . . . . . . . . . . . . . . . . . . . 3
4 ADDITIONAL RENT . . . . . . . . . . . . . . . . . . . . . . . 4
5 INTENTIONALLY OMITTED . . . . . . . . . . . . . . . . . . . . 6
6 SECURITY DEPOSIT. . . . . . . . . . . . . . . . . . . . . . . 6
7 UTILITIES AND SECURITY SERVICES . . . . . . . . . . . . . . . 7
8 USE OF PREMISES, COMPLIANCE WITH LAW. . . . . . . . . . . . . 8
9 ACCEPTANCE OF PREMISES. . . . . . . . . . . . . . . . . . . . 9
10 ALTERATIONS . . . . . . . . . . . . . . . . . . . . . . . . .10
11 LIENS AND ENCUMBRANCES. . . . . . . . . . . . . . . . . . . .11
12 TAXES ON THE PREMISES AND TENANT'S PROPERTY . . . . . . . . .12
13 MAINTENANCE AND REPAIR. . . . . . . . . . . . . . . . . . . .13
14 ENTRY AND INSPECTION. . . . . . . . . . . . . . . . . . . . .13
15 WAIVER AND INDEMNIFICATION. . . . . . . . . . . . . . . . . .14
16 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . .15
17 ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . . .16
18 TRANSFER OF LANDLORD'S INTEREST . . . . . . . . . . . . . . .18
19 DAMAGE OR DESTRUCTION . . . . . . . . . . . . . . . . . . . .18
20 EMINENT DOMAIN. . . . . . . . . . . . . . . . . . . . . . . .19
21 SIGNS AND AUCTIONS. . . . . . . . . . . . . . . . . . . . . .20
22 DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . .21
23 SURRENDER OF PREMISES; REMOVAL OF PROPERTY. . . . . . . . . .23
24 ATTORNEYS' FEES . . . . . . . . . . . . . . . . . . . . . . .24
25 WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . . .24
26 HOLDING OVER. . . . . . . . . . . . . . . . . . . . . . . . .24
27 SUBORDINATION AND ATTORNMENT. . . . . . . . . . . . . . . . .25
28 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . .25
29 HEIRS AND ASSIGNS/TIME OF ESSENCE . . . . . . . . . . . . . .26
30 INTERPRETATION. . . . . . . . . . . . . . . . . . . . . . . .26
31 RIGHT OF LANDLORD TO PERFORM. . . . . . . . . . . . . . . . .26
32 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . .27
33 QUIET ENJOYMENT . . . . . . . . . . . . . . . . . . . . . . .27
34 ESTOPPEL CERTIFICATE. . . . . . . . . . . . . . . . . . . . .27
35 AUTHORITY . . . . . . . . . . . . . . . . . . . . . . . . . .27
36 BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . .28
37 ACCORD AND SATISFACTION . . . . . . . . . . . . . . . . . . .28
38 LANDLORD RESERVATIONS . . . . . . . . . . . . . . . . . . . .28
39 LENDER'S APPROVAL . . . . . . . . . . . . . . . . . . . . . .29
40 HAZARDOUS OR INFECTIOUS SUBSTANCES. . . . . . . . . . . . . .29
41 UTILITY RATIONING . . . . . . . . . . . . . . . . . . . . . .31
42 TITLE . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
43 MEMORANDUM OF LEASE . . . . . . . . . . . . . . . . . . . . .32
SCHEDULE OF EXHIBITS
Exhibit "A" Site Plan of Shopping Center
Exhibit "A-1" Tentative Tract Map
Exhibit "A-2" Site Plan (With "Common Areas" identified)
Exhibit "A-3" Exterior Design Plan
Exhibit "B" Rules and Regulations
Exhibit "C" Construction Exhibit
Exhibit "D" Plot Plan of Premises (with "Pad" identified;
MCG Architects version 04/18/98)
Exhibit "D-1" Site Plan (with construction areas, material
storage areas, and construction vehicle
access routes identified)
Exhibit "E" Intentionally Omitted
Exhibit "F" Supplemental Agreement