(The Above Space for Recorder's Use Only)
ASSIGNMENT AND ASSUMPTION OF LEASE AND GUARANTY
THIS ASSIGNMENT AND ASSUMPTION OF LEASE AND GUARANTY
("Assignment") is made and entered into this 22 day of November,
2005 by and among LAFAYETTE VILLAGE, L.L.C., a Virginia limited
liability company ("Assignor") and AEI AEI INCOME & GROWTH FUND
25 LLC, a Delaware limited liability company ("Assignee").
RECITALS
WHEREAS, Captec Ster Aurora, LLC, a Illinois limited
liability company (collectively "Tenant") is the tenant under
that certain lease, dated as of October 14, 1999 (as the same may
have been modified, supplemented, amended or assigned, the
"Lease"), between Duke-Weeks Realty Limited Partnership, an
Indiana limited partnership ("Original Landlord") and Tenant and
pursuant to which Lease, Tenant leases that certain premises
described on Exhibit A attached hereto and incorporated herein by
this reference, in Aurora, DuPage County, Illinois (the
"Premises").
WHEREAS, Sterling Jewelers Inc., a Delaware corporation
("Guarantor") has executed a Unconditional Guaranty of Lease
dated October 8, 1999 (the "Guaranty");
WHEREAS, a Memorandum of Lease was recorded on June 12, 2000
as Document R2000-087967, in the DuPage County Recorder's Office;
WHEREAS, Tenant merged with Commercial Net Lease Realty,
Inc., a Maryland corporation, and Commercial Net Lease Realty,
Inc. is now Tenant under the Lease because of such merger.
WHEREAS, Original Landlord conveyed the Premises to Assignor
on March 27, 2003 in that certain Special Warranty Deed recorded
on April 4, 2003 at R2003-127961, in the DuPage County Recorder's
Office, and assigned the Lease to Assignor by that Assignment and
Assumption of Lease dated March 27, 2003.
WHEREAS, on the date hereof, Assignor is conveying the
Premises to Assignee pursuant to the terms and conditions of that
certain Agreement of Purchase and Sale Agreement dated as of
September 21, 2005 between Assignor, as Seller, and Assignee, as
Purchaser (as subsequently amended, collectively the "Purchase
Agreement").
WHEREAS, in connection with Assignor's conveyance of the
Premises, Assignor desires to assign its right, title and
interest in and to the Lease and the Guaranty to Assignee and
Assignee desires to accept the assignment thereof and assume
Assignor's right, title and interest in and to the Lease and the
Guaranty.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Assignor
and Assignee agree as of the date hereof (the "Effective Date"),
as follows:
1. As of the Effective Date, Assignor hereby gives, grants,
bargains, sells, conveys, transfers and sets over unto Assignee,
its successors and assigns, all of Assignor's right, title and
interest in and to the Lease and the Guaranty.
2. Assignee hereby accepts the foregoing assignment, and hereby
assumes and agrees to be bound by and perform all of Assignor's
obligations and liabilities to be performed and/or occurring
under the Lease or the Guaranty on or after the Effective Date.
3. Assignor hereby agrees to indemnify, defend and hold
Assignee harmless from any liability, loss, cost or expense
arising out of a failure to perform the obligations of Landlord
under the Lease accruing prior to the Effective Date. Assignee
hereby agrees to indemnify, defend and hold Assignor harmless
from any liability, loss, cost or expense arising out of a
failure to perform the obligations of Landlord under the Lease
accruing from and after the Effective Date.
4. Assignee hereby agrees that Assignor may, at Assignor's
election and expense, proceed at law or equity to collect any
delinquent rents accruing under the Lease prior to the Effective
Date. Assignor hereby agrees that Assignee shall have no
obligation to collect any rent due prior to the Effective Date
under the Lease; provided, however, that in the event Assignee is
paid rent from a tenant that has delinquent rent accruing prior
to the Effective Date, and such payment is in excess of current
rent due and payable under the Lease and any collection costs
incurred by Assignee to collect such rents, then Assignee agrees
to pay such excess amount to Assignor as soon as reasonably
practicable after the date of receipt by Assignee. In the event
that Assignor is paid any rents after the Effective Date,
Assignor agrees to pay such to Assignee as soon as reasonably
practicable after the date of receipt by Assignor.
5. If any action is instituted by Assignor or Assignee for the
purpose of enforcing or interpreting any provision of this
Assignment, the prevailing party in such action shall be entitled
to its reasonable attorneys' fees, costs and other expenses,
provided, however, there shall be no prevailing party in a
pretrial motion, voluntary dismissal, favorable settlement or
otherwise, other than entry of a final judgment and such fees,
costs and expenses may be recovered in the same action or in a
separate proceeding.
6. This Assignment shall be governed and construed in
accordance with the laws of the State of Illinois.
7. This Assignment shall be binding on the parties hereto and
their respective successors and assigns.
8. This Agreement may be executed in several counterparts, each
of which shall be deemed an original, and all of which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, Assignor and Assignee have executed this
Assignment as of the date and year first above written.
"ASSIGNOR" LAFAYETTE VILLAGE, LLC,
a Virginia limited liability company
By: /s/ Larry D Silver
Larry D. Silver, Member/CEO
STATE OF Virginia )
) ss.
COUNTY Fredericksburg )
The foregoing instrument was acknowledged before me this 28 day
of October, 2005, by Larry D. Silver, Member/CEO, of LaFayette
Village, L.L.C., a Virginia limited liability company, on behalf
of said company.
[Seal] /s/ Joyce B Marsh
Print Name: Joyce B Marsh
My Commission Expires: 10-31-05
"ASSIGNEE" AEI INCOME & GROWTH FUND 25 LLC,
a Delaware limited liability company
By: AEI Fund Management XXI, Inc.,
a Minnesota corporation, its
Managing Member
By: /s/ Robert P Johnson
Name: Robert P Johnson
Title: President
STATE OF MINNESOTA )
) ss.
COUNTY OF RAMSEY )
The foregoing was acknowledged before me this ____ day of
November, 2005, by Robert P Johnson, in his/her capacity as the
President of AEI Fund Management XXI, Inc., a Minnesota
corporation, the Managing Member of AEI Income & Growth Fund 25
LLC, a Delaware limited liability company, who acknowledged the
execution of the foregoing instrument to be the voluntary act and
deed of said corporation by authority of its board of directors
on behalf of the company.
[Seal] /s/ Jennifer L Schreiner
Print Name: Jennifer L Schreiner
My Commission Expires: 1-31-2010
EXHIBIT A
(Legal Description)
Parcel 1:
Lot 1 in Meridian Business Campus Phase 2 Unit 8, being a
Subdivision in Section 16, Township 38 North, Range 9, East of
the Third Principal Meridian, according to the Plat thereof
recorded October 30, 1998 as Document R98-226549, in DuPage
County, Illinois.
Parcel 2:
Easement for the benefit of Parcel 1 as created by Declaration of
Covenants, Conditions and Restrictions recorded January 6, 1999
as Document R99-002872 made by MBC Partners, L.P. for access
between adjoining lots and public highways as shown as 32'
ingress and egress easement on the Plat recorded October 30, 1998
as Document R98-226549, in DuPage County, Illinois.
(Building and improvements excluded)
PIN 07-16-400-026
Common Address: 1016 North Route 59
Aurora, Illinois
NET GROUND LEASE
DUKE WEEKS RALTY LIMITED PARTNERSHIP
An Indiana limited partnership
"LANDLORD"
and
CAPTEC STER AURORA LLC
An Illinois limited liability company
Index
ARTICLE I -LEASE OF PREMISES
1
Section 1.01 Basic Lease Provisions
Section 1.02 Lease of Premises.
ARTICLE 2 -TERM, DELIVERY AND POSSESSION
Section 2.01 Tenn.
Section 2.02. Option to Renew
Section 2.03. Landlord's Delivery Obligations
Section 2.04. Holding Over
ARTICLE 3 -TENANT'S CONSTRUCTION WORK
Section 3.01. Inspection Period.
Section 3.02. Plan Approval Period.
Section 3.03. Construction 7
Section 3.04. Ownership of Improvements upon Lease
Tennination. :
ARTICLE 4 -RENT
Section 4.01. Minimum Annual Rent
Section 4.02. Late Charges.
Section 4.03. Partial Payment.
Section 4.04. Net Lease.
ARTICLE 5 -PAYMENT OF TAXES, ASSESSMENTS, ETC 10
Section 5.01. Tenant's Payment Obligations.
Section 5.02. Taxation Method.
Section 5.03. Payment Statement.
Section 5.04. Contesting Impositions.
ARTICLE 6- SURRENDER
Section 6.01. Condition of Leased Premises
Section 6.02. Repair Obligations.
Section 6.03. Abandonment.
Section 6.04. Survival.
ARTICLE 7 -INSURANCE
Section 7.01. Pre-construction and Construction
Requirements.
Section 7.02. Lease Tenn Requirements.
Section 7.03. Mortgagees
ARTICLE 8 -LANDLORD'S RIGHT TO PERFORM TENANT'S COVENANTS
Section 8.01. Landlord's Rights.
Section 8.02. Mortgagees' Rights
ARTICLE 9- REPAIR AND MAINTENANCE OF THE LEASED PREMISES
Section 9.01. Tenant's Obligations
Section 9.02. Landlord's Non-responsibility.
ARTICLE 10- COMPLIANCE WITH LA WS, ORDINANCES, ETC
Section 10.01. Compliance with Applicable Laws and
Ordinances
Section 10.02. Compliance with Insurance Policies.
ARTICLE 11 DISCHARGE OF LIENS
Section 11.01. Liens Prohibited. ,
Section 11.02. Discharge of Liens.
ARTICLE 12 USE OF LEASED PREMISES
Section 12.01. Use Allowed.
Section 12.02. Uses Not Allowed.
Section 12.03. Exclusive Use.
ARTICLE 13 -UTILITIES
ARTICLE 14- AL TERA TIONS TO THE LEASED PREMISES
Section 14.01. Alterations.
Section 14.02. Tenant Requirements
ARTICLE 15 .LANDLORD'S ENTRY
Section 15.01. Inspection, Repairs, and Compliance
ARTICLE 16 -INDEMNIFICA TION
Section 16.01. Indemnification.
Section 16.02. Obligation to Defend
ARTICLE 17 CONDEMNATION AND CASUAL TY
Section 17.01. Award
Section 17.02. Termination of Lease
Section 17.03. Partial Taking.
Section 17.04. Repair Obligations.
ARTICLE 18 .ASSIGNMENT
Section 18.01. Landlord's Consent Required.
Section 18.02. Documentation.
ARTICLE 19 DEFAULT AND REMEDIES
Section 19.01. Events of Default
Section 19.02. Remedies.
ARTICLE 20. TRANSFERS BY LANDLORD
Section 20.01. Sale of the Leased Premises.
Section 20.02. Subordination and Estoppel Certificate.
Section 20.03. limitation of Landlord's liability.
ARTICLE 21- TENANT'S AND LANDLORD'S RESPONSIBILITY REGARDING
ENVIRONMENTAL
LAWS AND HAZARDOUS SUBSTANCES
Section 21.01. Environmental Definitions.
Section 21.02. Compliance.
Section 21.03. Restrictions on Tenant :
Section 21.04. Notices, Affidavits, Etc.
Section 21.05. Landlord's Rights
Section 21.06. Indemnification.
Section 21.07. Existing Conditions.
ARTICLE 22- MORTGAGE FINANCING
Section 22.01. Leasehold Mortgage
Section 22.02. Rights of Leasehold Mortgagee
Section 22.03. Tenant's Mortgage Obligations
ARTICLE 23 -MISCELLANEOUS
Section 23.01. Benefit of Landlord and Tenant.
Section 23.02. Governing Law.
Section 23.03. Guaranty.
Section 23.04. Examination of Lease.
Section 23.05. Indemnification for Leasing Commissions.
Section 23.06. Notices
Section 23.07. Partial Invalidity; Complete Agreement
Section 23.08. Financial Statements.
Section 23.09. Representations and Warranties.
Section 23. 10. Agency Disclosure.
Section 23./1. Memorandum of Lease.
Section 23.12. Security Deposit.
Section 23. 13. Development Common Areas.
Section 23.14. Quiet Enjoyment
Section 23.15. Easement for Ingress and Egress
Section 23.16. Costs and Attorneys' Fees.
Section 23.17. Cooperation
Section 23.18. Representations and Covenants of Landlord.
Section 23.19. Breach of Covenant by the Parties.
Section 23.20. Tenants Continuous Use Obligation.
Section 23.21. Force Majeure
Section 23.22. Tenant's Continuous Use Obligation.
Exhibits
Exhibit A: Site Plan
Exhibit A-I : Leased Premises Legal Description (to be attached
after Lease execution)
Exhibit B: Initial Estoppel Certificate
Exhibit C: Declaration
Exhibit D: [Intentionally Omitted.]
Exhibit E: Unconditional Guaranty of Lease
Exhibit F: Tenants Prototypical Plans and Specifications
NET GROUND LEASE
THIS NET GROUND LEASE ("Lease"), made this 14th day of
October 1999, by and between DUKE- WEEKS REALTY LIMITED
PARTNERSHIP, an Indiana limited partnership ("Landlord"), and
CAPTEC STER AURORA LLC, an Illinois limited liability company
("Tenant").
WITNESSETH:
ARTICLE 1 -LEASE OF PREMISES --
SECTION 1.01. BASIC LEASE PROVISIONS.
The following constitute the "Basic Lease Provisions" of this
Lease:
A. Development Name and Address: Meridian Shopping Center
Northwest comer of Route 59
and Meridian Pkwy.
Aurora, IL 60504
B. Leased Premises: Certain real estate consisting of
approximately 2.1 acres, as further described in Section
1.02 below
C. Lease Term: The Lease Term shall consist of the Preliminary
Term, the Initial Term, and any Extension Terms pursuant to
Section 2.02:
Preliminary Term: The period commencing on the Lease
Commencement Date and expiring on the Rental
Commencement Date unless earlier terminated as
provided in Section 3.01D;
Initial Term: The period commencing on the Rental Commencement
Date and expiring twenty (20) years and zero (0)
months thereafter unless earlier terminated as
provided herein;
C-l. Options to Renew: Four (4) options to renew for periods
of five (5) years each;
D. Minimum Annual Rent:
Preliminary Term: See Item E below;
Initial Term: Years 1-5 $120,000.00 per year;
Years 6-10 $132,000.00 per year;
Years 11-15 $145,200.00 per year;
Years 16-20 $159,720.00 per year;
Extension Terms: Years 21-25 $175,692.00 per year;
Years 26-30 $193,261.20 per year;
Years 31-35 $212,587.32 per year;
Years 36-40 $233,846.05 per year;
E. Monthly Rental Installments:
Preliminary Term:
Lease Commencement Date to Rental Commencement Date: $0.00
per month;
Initial Term: Months 1-60 $10,000.00 per month;
Months 61-120 $11,000.00 per month;
Months 121-180 $12,100.00 per month;
Months 181-240 $13,310.00 per month;
Extension Terms: Months 241-300 $14,641.00 per month;
Months 301-360 $16,105.10 per month;
Months 361-420 $17,715.61 per month;
Months 421-470 $19,487.17 per month;
F . LEASE COMMENCEMENT DATE: The date on which the later of
the parties hereto executes this Lease;
G. RENTAL COMMENCEMENT DATE: The date which is the earlier of
(i) the initial opening of Tenant's business on the Leased
Premises, or (ii) one hundred twenty (120) days after
expiration of the Inspection Period, as hereinafter defined;
H. SECURITY DEPOSIT: None;
I. BROKERS: Duke- Weeks Realty Limited Partnership
representing Landlord and Allen R. Joffe, Baum Realty Group,
Inc./Pacific Realty Partners representing Tenant;
J. PERMITTED USE: The construction of not more than two
(2) retail buildings, which buildings shall not exceed
10,000 total square feet, for the retail sale of jewelry,
diamonds, gold, silver, colored gemstones, watches, clocks,
crystal, porcelain and gift items, and such other related
items normally sold in other "Jared-The Galleria of Jewelry"
stores, and, as incidental thereto, the repairs, handling,
and/or the appraisal of the same, or any lawful retail use
which does not conflict with any existing exclusive uses or
the restrictions set forth in the declaration affecting the
Leased Premises attached hereto and incorporated herein as
Exhibit C ("Declarations"). Notwithstanding the foregoing,
in no event shall the Leased Premises be used for the
operation of a restaurant.
K. ADDRESS FOR PAYMENTS AND NOTICES AS FOLLOWS:
Landlord: Duke-Weeks Realty Limited Partnership
Attn: Retail Property Management
4555 Lake Forest Drive, Suite 400
Cincinnati, OH 45242
With a Copy to: Duke-Weeks Realty Limited Partnership
Attn: Legal Department
8888 Keystone Crossing, Suite 1200
Indianapolis, IN 46240
With Rental
Payments to: Duke-Weeks Realty Services Limited Partnership
P .0. Box 66259
Indianapolis, IN 46266
Tenant: Captec Ster Aurora LLC
Attn: Gary Bruder, Senior Vice President
24 Frank Lloyd Wright Drive
Lobby L 4th Floor
P.O. Box 544
Ann Arbor, MI 48106-0544
With a Copy to: Baker & Hostetler LLP
Attn: William L. Arnold, Esq.
3200 National City Center
1900 East North Street
Cleveland, OH 44114
Sterling Jewelers Inc.
Attn: Real Estate Department
375 Ghent Road
Akron, OH 44333
Turner, Brown & Knezevic PC
Attn: David A. Lum, E,sq. -
12th Floor National City'Bank Building 629
Euclid A venue
Cleveland, OH 44114
SECTION 1.02. LEASE OF PREMISES.
Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord, subject to all of the terms and conditions
hereinafter set forth, certain real estate located in the City of
Aurora,
DuPage County, lllinois, consisting of approximately 2.1 acres as
designated on the "Site Plan" attached hereto as Exhibit A (the
"Leased Premises"), the legal description of which is attached
hereto as Exhibit A-l. The Leased Premises are part of Landlord's
development commonly known as Meridian Shopping Center (the
"Development").
ARTICLE 2 .TERM. DELIVERY AND POSSESSION
Section 2.01. Term.
The term of this Lease (the "Original Term") shall be the
period of time specified in Section 1.01(C). The Rental
Commencement Date and the "Expiration Date" shall be confirmed by
Tenant in writing within thirty (30) days after the Rental
Commencement Date by Tenant's execution of an Initial Estoppel
Certificate in substantially the same form as that attached
hereto as Exhibit B.
Section 2.02. Option to Renew
Provided Tenant is not then in default beyond any applicable
notice and cure period, Tenant shall have the option to extend
the Term of this Lease for periods of five (5) years each
("Extension Term(s)") for up to four (4) Extension Terms if
Tenant delivers to Landlord on or before the one hundred
eightieth (180th) day prior to the expiration of the Initial Term
or an .c Extension Term, as the case may be, notice of its
election to extend this Lease. The terms and conditions for each
Extension Term shall be the same terms and conditions contained
in this Lease for the immediately preceding Term except that (A)
this provision giving four (4) extension options shall be amended
to reflect the remaining options to extend, if any, and (B) the
Minimum Annual Rent shall be adjusted as set forth in Section
1.01(D). If Tenant does not properly exercise its right to extend
this Lease, this Lease, as it may be amended from time to time,
shall automatically terminate on the expiration of the then
current Term or Extension Term.
Section 2.03. Landlord's Delivery Obligations.
In the event Tenant does not terminate this Lease pursuant
to Section 3.01(D), Landlord shall deliver the Leased Premises to
Tenant upon expiration of the Inspection Period in as-is
condition with all utilities as shown on the Survey (hereinafter
defined) and with all access drives serving the Leased Premises
as shown on the Site Plan fully constructed and open subject to
the following:
(i) The Inspection Period.
(ii) The Notice of Objection (hereinafter defined).
(iii) Any matters which would be disclosed by an
accurate survey of the Leased Premises. .
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(iv) Present and future zoning laws, ordinances,
resolutions, and regulations of the City of Aurora, Illinois, and
all present and future ordinances, laws, regulations and orders
of all boards, bureaus, commissions and bodies of any municipal,
county, state, or federal sovereigns now or hereafter having or
acquiring jurisdiction of the Leased Premises and the use and
improvement thereof.
(v) All taxes, assessments, water charges and sewer rents,
accrued or unaccrued, fixed or not fixed, subject to
apportionment as provided herein.
(vi) Condition and state of repair of the Leased
Premises as the same may be on the date hereof with respect to
which Tenant does not object or waives the right to object. THE
LEASED PREMISES IS LEASED SUBJECT TO ITS CONDITION AS OF THE
COMMENCEMENT OF THIS LEASE AND WITHOUT REPRESENTATIONS OR
WARRANTIES OF ANY KIND BY LANDLORD EXCEPT AS EXPRESSLY PROVIDED
HEREIN .
(vii) Future easements to be granted by Landlord or
current easements to benefit the rest of the Development,
including but not limited to, ingress and egress, and parking
easements and more specifically, the II Access Drives," and the
"Utility Easement Area," all as generally designated on the Site
Plan. If any such future easements shall affect Tenant's use or
occupancy of the Leased Premises or impose any additional
financial obligation on Tenant, Landlord must first obtain
Tenant's consent, which consent shall not be unreasonably
withheld, conditioned or delayed, before granting such easement.
Section 2.04. Holding Over.
If Tenant retains possession of the Leased Premises after the
expiration or earlier termination of this Lease, Tenant shall
become a tenant from month to month at One Hundred Fifty Percent
( 150% ) of the Monthly Rental Installment for the Leased
Premises in effect upon the date of such expiration or earlier
termination, and otherwise upon the terms, covenants and
conditions herein specified, so far as applicable. Acceptance by
Landlord of rent after such expiration or earlier termination
shall not result in a renewal of this Lease. In the event of a
holdover consented to by Landlord, Tenant shall vacate and
surrender the Leased Premises to Landlord upon Tenant being given
thirty (30) days' prior written notice from Landlord to vacate
whether or not said notice is given on the rent paying date. This
Section 2.04 shall in no way constitute a consent by Landlord to
any holding over by Tenant upon the expiration or earlier
termination of this Lease, nor limit Landlord's remedies in such
event.
ARTICLE 3 -TENANT'S CONSTRUCTION WORK
Section 3.01. Inspection Period.
A. Landlord's Materials. Within fifteen (15) days of the
execution of this Lease, Landlord shall deliver to Tenant all
documents and information respecting the Leased Premises within
its possession including its existing survey, title policy,
environmental report and geotechnical report
-5-
(collectively the "Materials"). Within thirty (30) days of
Tenant's receipt of the Materials, Tenant shall provide written
notice to Landlord describing any title objections or objections
regarding the environmental report.
B. Inspection of the Leased Premises. Tenant and its agents
shall have the right to enter upon the Leased Premises and make
all engineering, environmental and other tests and inspections
deemed necessary to satisfy Tenant as to the condition of the
Leased Premises upon the date first to occur of the following:
(i) Tenant executes a right of entry and indemnification
agreement, or (ii) this Lease is fully executed. All such tests
shall be at Tenant's cost and expense. Tenant agrees to
immediately repair any and all damage to the Leased Premises
arising or resulting from such inspection by Tenant or its
agents, and Tenant shall defend, indemnify and hold the Landlord
harmless from all claims arising or resulting from such
inspection or from the entry of Tenant or its agents onto the
Leased Premises for any purpose.
C. Title and Survey. During the Inspection Period (as
hereinafter defined), Tenant, at its expense, may obtain a
leasehold policy of title insurance (the "Title Commitment"), and
may, at its expense, obtain a staked boundary survey of the
Leased Premises (the "Survey") prepared by a registered land
surveyor selected by Tenant. In the' event Tenant obtains a Title
Commitment and/or Survey pursuant to this Section, Tenant shall
provide written notice of any objections to the Title Commitment
and Survey pursuant to Section 3.01(E). Notwithstanding the
foregoing, Tenant may only object to matters that: (i) in
Tenant's sole discretion, adversely affect the Leased Premises
or. Tenant's use or occupancy thereof; and (ii) did not appear
in the Materials.
D. Inspection Period. Tenant's obligations under this Lease are
subject to Tenant's inspection and review of the Leased Premises.
The term "Inspection Period" shall mean and refer to the period
commencing on the Lease Commencement Date and expiring on
December 31,1999. Prior to the expiration of the Inspection
Period, Tenant shall satisfy or waive any conditions relating to
governmental consents, approvals, and permits needed in
connection with Tenant's construction of improvements on the
Leased Premises or Tenant's use thereof or terminate the Lease as
provided below. At any time before the expiration of the
Inspection Period, in the event Tenant is unable to obtain the
governmental consents, approvals, or permits needed in connection
with Tenant's construction of improvements on the Leased Premises
or Tenant's use thereof Tenant may notify Landlord in writing
that this Lease is terminated. Upon Landlord's receipt of notice
of termination on or before the expiration of the Inspection
Period, this Lease shall become null and void and neither party
shall have any further liabilities or obligations under this
Lease except for those which, as expressly provided herein,
survive the termination of this Lease. If Tenant does not notify
Landlord in writing of its election to declare this Leas~ null
and void on or before the expiration of the Inspection Period,
this Lease shall no longer be contingent upon Tenant's
satisfaction of any conditions relating to governmental consents,
approvals, and permits needed in connection with Tenant's
construction of improvements on the Leased Premises or Tenant's
use thereof .
E. Notice of Objection. At any time before the expiration of
the Inspection Period, Tenant may notify Landlord in writing
("Notice of objection") that Tenant objects to any matters which
prevent Tenant, in its sole discretion, from using or occupying
the Leased Premises as intended hereunder. Landlord may, within
thirty (30) days after receipt of a Notice of Objection, use
reasonable efforts to
-6-
resolve such objection or, if such objection concerns any matter
disclosed on the Title Commitment or Survey (a "Title Defect"),
obtain affirmative title insurance coverage insuring and
defending against any loss, cost or expense arising out of or
related thereto to the satisfaction of Tenant ("Affirmative
Coverage"). If Landlord is unable to correct or obtain
satisfactory Affirmative Coverage over all defects set forth in
the Notice of Objection to Tenant's reasonable satisfaction
within said thirty (30) days, then Landlord shall, at any time
before the end of said thirty-day period, so notify Tenant in
writing, and Tenant shall, within ten (10) days after the
Landlord has given said written notice, notify Landlord in
writing that it shall either (i) waive said defect(s), or (ii)
terminate this Lease. Upon Landlord's timely receipt of notice of
termination (whether after Notice of Objection or otherwise),
this Lease shall become null and void and no party shall be
liable to the other for damages or otherwise, and neither party
shall have any further liabilities or obligations under this
Lease except for those which, as expressly provided herein,
survive the termination of this Lease.
Section 3.02. Plan Approval Period.
Prior to the expiration of the Inspection Period, Tenant
shall submit to Landlord for Landlord's approval a full and
complete set of the architectural and landscape plans and
specifications for the building shell (the "Shell") and the site
work for the building (the "Site Work") which shall include a
site dimension plan, site grading plan, site lighting plan,
proposed building pad elevations, and exterior building
elevations for Tenant's building, parking lot layout, and
pavement design, which plans and specifications shall be
substantially similar to Tenant's prototypical plans for a "Jared-
The Galleria of Jewelry" store as attached hereto as Exhibit F
(the "Preliminary Plans"). Landlord shall review the Preliminary
Plans and return the same to Tenant marked with Landlord's
reasonable objections within fifteen (15) days of Landlord's
receipt thereof from Tenant (the "Plan Approval Period"). Tenant
shall make reasonable changes to address Landlord's objections
and return the revised Preliminary Plans to Landlord for
Landlord's final review and approval. If Landlord shall fail to
return the Preliminary Plans to Tenant with marked changes before
the expiration of the Plan Approval Period, the Preliminary Plans
as submitted by Tenant shall be deemed approved by Landlord. The
plans and specifications for the building Shell and Site Work as
approved by Landlord shall be referred to as the "Final Plans."
For purposes of this Section 3.02, "reasonable changes" shall
include changes that are necessary so that Tenant's Preliminary
Plans do not (i) materially reduce the market value of the Leased
Premises or the Development below its value immediately before
such work, (ii) adversely affect the usefulness of the Leased
Premises or the Development, or (iii) are in compliance with the
Declarations. In the event Landlord and Tenant are unable to
agree on the Preliminary Plans, after good faith efforts by the
parties, then either party shall have the right to terminate this
Lease prior to the expiration of the Inspection Period.
Section 3.03. Construction
A. Tenant, at its sole cost and expense, shall construct in a
good workmanlike manner all of the improvements and supply all
work~ labor, materials and equipment necessary to complete the
Shell and Site Work and all improvements in accordance with the
Final Plans. All building and parking improvements shall be self-
contained within the Leased Premises. All architectural and
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engineering costs associated with the site design, public
improvements, and the Shell and Site Work shall be paid for by
Tenant.
B. Tenant shall, at its sole cost and expense, construct the
improvements for Tenant's use and occupancy of the Leased
Premises other than the Shell and Site Work (the "Finish Work")
including without limitation interior finishes, electric,
plumbing and heating, ventilating and air- conditioning work,
architectural and engineering fees for space and all other work,
labor and materials necessary to complete the Finish Work, all as
more particularly set forth in plans and specifications to be
prepared by Tenant and delivered to Landlord (the "Interior
Plans"). Tenant represents that the Shell and Site Work and the
Finish Work (together, "Tenant's Work") shall be constructed and
shall be in compliance with all applicable local, state and
federal laws, rules, orders, regulations, ordinances, the Final
Plans, and the Interior Plans.
C. Subject to Force Majeure (as hereinafter defined), Tenant's
Work shall be completed and Tenant's business shall be opened by
October 31, 2000.
D. Tenant shall have the right to make changes from time to
time in the Interior Plans without Landlord's consent so long as
such changes shall not have a material adverse affect on the
value of the Leased Premises. Tenant shall not make any other
changes to the Final Plans without Landlord's prior review and
written approval, which approval shall not be unreasonably
withheld or delayed.
E. Tenant shall deliver to Landlord copies of as-built plans
and specifications showing the reasonable detail of major
improvements after completion of such improvements.
F. On completion of any building, or of any other improvement
requiring the same, Tenant will procure a final Certificate of
Occupancy and deliver to Landlord a copy thereof.
G. Upon completion of Tenant's Work, Tenant shall restore any
and all portions of the Development damaged during performance of
Tenant's Work by Tenant or its contractors, agents or employees
to substantially the same condition as existed before Tenant
commenced Tenant's Work.
Section 3.04. Ownership of Improvements upon Lease Termination.
Any and all buildings, structures, alterations, addition~ and
improvements (specifically excluding Tenant's personal property,
inventory, trade fixtures and signage) upon the Leased Premises
(the "Improvements") shall be the property of Landlord and shall
be surrendered to Landlord in accordance with the provisions of
Article 6 hereof.
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ARTICLE 4-RENT Section 4.01
Minimum Annual Rent.
Commencing on the Rental Commencement Date, Tenant shall pay to
Landlord as Minimum Annual Rent for the Leased Premises the sum
specified in Item D of the Basic Lease Provisions payable in
equal consecutive Monthly Rental Installments as specified in
Item E of the Basic Lease Provisions in advance and, except as
otherwise provided herein, without demand, deduction,
counterclaim or offset and without relief from valuation and
appraisement laws, on or before the first day of each and every
calendar month during the term of this Lease. If the Rental
Commencement Date shall be a day other than the first day of a
calendar month or the Expiration Date shall be a day other than
the last day of a calendar month, the Monthly Rental Installment
for such first or last fractional month shall be prorated on the
basis of the number of days during the month this Lease was in
effect in relation to the total number of days in such month.
Section 4.02. Late Charges.
In the event any Monthly Installment Rent or any other monetary
obligation required to be paid by Tenant to Landlord under this
Lease is not received by Landlord within five (5) days of the
date the same shall be due and payable, Tenant shall pay a late
charge to Landlord in the amount of five percent (5%) per month
of any overdue amount. In addition, in the event that any check
or other deposit item given by Tenant to Landlord is returned
unpaid or dishonored by the financial institution upon which it
is drawn, Tenant shall pay to Landlord, upon demand, a service
charge of One Hundred Dollars ($100.00). Landlord and Tenant
agree that the above- stated charges are designed to reimburse
Landlord for additional costs and expenses incurred by Landlord
in connection with the collection, handling and processing of
overdue installments of Rent and additional rent and of returned
deposit items;
Section 4.03. Partial Payment.
No payment by Tenant or receipt and acceptance by Landlord of a
lesser amount than the Minimum Annual Rent or other payments to
Landlord required hereunder shall be deemed to be other than part
payment on account of the full amount then due and payable, nor
shall any endorsement or statement on any check or any letter
accompanying any check, payment of rent or other payment be
deemed an accord and satisfaction; and Landlord may accept such
part payment without prejudice to Landlord's right to recover the
balance due and payable or pursue any other remedy in this Lease
or at law provided.
Section 4.04. Net Lease.
It is the purpose and intent of Landlord and Tenant that this is
a net lease and that the Minimum Annual Rent and all other sums
payable by Tenant under this Lease shall, except as herein
otherwise provided, be absolutely net to Landlord so that this
Lease shall yield, net, to Landlord all sums specified to be
received by Landlord, and that all costs, expenses and
obligations of every kind and nature whatsoever relating to the
Leased Premises or any improvements thereon, except as herein
otherwise provided, which may arise or become due during the term
of this
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Lease Term shall be paid by Tenant and that Landlord shall be
indemnified and saved harmless by Tenant from and against the
same.
ARTICLE 5 -PAYMENT OF TAXES. ASSESSMENTS. ETC.
Section 5.01. Tenant's Payment Obligations.
Tenant shall payor cause to be paid, before any fine,
penalty, interest or cost may be added thereto for the non-
payment thereof, all taxes (or service payments made in lieu of
taxes), assessments, water and sewer rents, rates and charges,
license fees or rentals, levies, and permit fees and other
governmental charges, general and special, ordinary and
extraordinary, foreseen and unforeseen, of any kind and nature
whatsoever (all such taxes, assessments, water and sewer rents,
rates and charges, levies, license and permit fees and other
governmental charges being hereinafter referred to as
"Impositions" and any of the same being hereinafter referred to .
as an "Imposition") which at any time during the term of this
Lease are incurred or becom6 due and payable out of or in respect
of the Leased Premises or any part thereof or any improvements
thereon.
Section 5.02. Taxation Method.
If at any time during the Lease Term the methods of taxation
prevailing at the commencement of the Lease Term hereof shall be
altered so that in lieu of or as a substitute for the whole or
any part of the Impositions imposed on real estate and the
improvements thereon, there shall be levied, assessed and imposed
an Imposition or charge, wholly or partially as a capital levy or
otherwise, on the rents received there from, or measured by or
based in whole or in part upon the Leased Premises and imposed
upon Landlord, then all such Impositions or charges or the part
thereof so measured or based, shall be deemed to be included
within the term "Impositions" for the purpose hereof, and Tenant
shall pay and discharge the same as herein provided with respect
of the payment of Impositions. Tenant shall, in addition to the
foregoing, pay any new tax of a nature not presently in effect
but which may be hereafter levied, if such tax shall be based on
or arise out of the ownership, use or operation of the Leased
Premises. Notwithstanding the above, nothing herein contained
shall require Tenant to pay (i) any transfer, documentary, or
stamp tax of Landlord; (ii) any tax upon the income, profits, or
business of Landlord, or (iii) any personal taxes, payroll taxes,
capital levy, franchise taxes, inheritance, or estate taxes of
Landlord, even though such taxes may become a lien against the
Leased Premises or the Development.
Section 5.03. Payment Statement.
Tenant shall furnish to Landlord ( or if requested by Landlord,
to any fee mortgagee) at least ten (10) days prior to the date
when any Imposition on the Leased Premises would become
delinquent, evidence reasonably satisfactory to Landlord or such
mortgagee, evidencing the payment thereof.
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Section 5.04. Contesting Impositions.
Notwithstanding Section 5.03, Tenant shall have the right to
contest in good faith by appropriate proceedings, at Tenant's
expense, the amount or validity in whole or in part of any
Imposition on the Leased Premises; and Tenant may defer payment
thereof to the extent that such deferral is permitted by law. If
such deferral is not permitted by law then Tenant shall pay such
Imposition prior to contesting it.
ARTICLE 6-SURRENDER
Section 6.01. Condition of Leased Premises.
Tenant shall, on the last day of the term or upon any earlier
termination of this Lease, promptly and peaceably surrender and
deliver up the Leased Premises to Landlord in good order,
condition and repair (normal wear and tear, casualty and
condemnation excepted), free and clear of all lettings and
occupancies, and free and clear of all liens and encumbrances
other than those, if any, of Landlord's or existing at the Lease
Commencement Date, without any payment or allowance whatever by
Landlord on account of any improvements which may be on the
Leased Premises.
Section 6.02. Repair Obligations.
Any trade fixtures installed on the Leased Premises by Tenant at
its own expense, such as movable partitions, counters, shelving,
showcases, mirrors, furniture and the like, may be removed on the
expiration or earlier termination of this Lease, provided that
Tenant bears the cost of such removal, and repairs at its own
expense any and all damage to the Leased Premises resulting from
such removal.
Section 6.03. Abandonment.
Any personal property or trade fixtures of Tenant which remains
in the Leased Premises after the termination of this Lease and
the removal of Tenant from the Leased Premises may, in Landlord's
sole discretion and upon five (5) days' written notice to Tenant,
be deemed to have been abandoned by Tenant and retained by
Landlord as its property or disposed of by Landlord, without
accountability to Tenant, in such manner as Landlord sees fit.
Upon written notice to Tenant to such effect, any such disposal
shall be at Tenant's sole cost and expense- Landlord shall not be
responsible for any loss or damage occurring to any such property
owned by Tenant or any other person or entity which remains on
the Leased Premises after the expiration or earlier termination
of this Lease, regardless of whether such loss is caused by
negligence of Landlord or its employees, officers, licensees,
invitees or contractors, but Landlord shall be responsible for
its intentional misconduct or those of its employees, officers,
or contractors.
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Section 6.04. Survival.
The provisions of this Article 6 shall survive any termination of
this Lease.
ARTICLE 7-INSURANCE
Section 7 .01. Pre-construction and Construction Requirements.
Before commencing construction of the improvements on the Leased
Premises in accordance with the provisions of this Lease, Tenant
shall procure and keep in effect during the period of such
construction insurance as will protect it and Landlord from
claims for damages, including coverage for premises/operations,
underground explosion, collapse hazard, completed operations,
contractual liability and all risk property damage with a single
combined public liability limit of not less than Three Million
and 00/100 Dollars ($3,000,000.00), and property. damage
liability limits of not less than Three Million and 00/100
Dollars ($3,000,000.00), whether such operations be by Tenant,
its contractor or by any subcontractor, materialmen or anyone
directly or indirectly employed by any of them.
Section 7.02. Lease Term Requirements.
A. All Risk Insurance. Tenant shall at all times during the
term of this Lease carry a policy of insurance which insures the
Leased Premises and all improvements of any kind and nature
(including but not limited to any additions, replacements,
alterations or improvements made fr9m time to time), against loss
or damage by fire or other casualty (namely, the perils against
which insurance is afforded by a standard fire insurance policy
and extended coverage, " All Risk" endorsement) for the full
replacement value thereof. Tenant shall cause Landlord and its
mortgagee of which Tenant has been given notice, if any
("Landlord's Mortgagee"), to be named as a loss payee and
additional insured on such insurance and shall provide that such
insurance may not be cancelled on less than thirty (30) days'
prior written notice to Landlord or Landlord's Mortgagee. Tenant
shall provide Landlord with a certificate of insurance evidencing
such coverage.
B. Liability Insurance. Tenant shall at all times during the
term of this Lease carry, at its own expense, one or more
policies of general public liability and property damage
insurance, issued by one or more insurance companies licensed to
do business in the State of Illinois, with the following minimum
coverages against loss of or damage or injury to any person
(including death resulting therefrom) or property occurring in,
on" or about the Leased Premises:
(i) Worker's Compensation minimum statutory amount.
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(ii) Commercial General not less than $3,000,000
Liability Insurance, Combined Single Limit
including Blanket, for both bodily injury
Contractual Liability and property damage.
Broad Form Property
Damage, Personal Injury
Completed Operations,
Products Liability,
Fire Damage.
(iii) Fire and Extended Coverage, Vandalism and Malicious
Mischief, and Sprinkler Leakage insurance, for the full cost of
replacement of Tenant's Property.
(iv) Boiler and Machinery limits reasonably required
Insurance by Landlord from time to
time.
C. Such insurance policy or policies shall protect Tenant and
Landlord as their interests may appear, naming Landlord and
Landlord's Mortgagee as additional insureds and shall provide
that they may not be cancelled on less than thirty (30) days'
prior written notice to Landlord. Tenant shall furnish Landlord
with Certificates of Insurance evidencing such coverage. Should
Tenant fail to carry such insurance required to be obtained by
Tenant hereunder and furnish Landlord with certificates of
insurance after a request to do so, Landlord shall have the right
to obtain such . insurance and collect the cost thereof from
Tenant as additional rent.
D. Waiver of Subrogation. Notwithstanding any provision to the
contrary, Landlord and Tenant do hereby waive any and all right
of recovery, claim, action or cause of action against the other,
their respective agents and employees, for any loss or damage
that may occur to the Leased Premises or the Development or any
additions or improvements thereto, or any contents therein, by
reason of fire, the elements or any other cause which is or would
be covered by any insurance required to be maintained under this
Lease, regardless of cause or origin, including the negligence of
Landlord or Tenant, or their respective agents and employees. All
insurance policies carried by either party covering the Leased
Premises and/or the Development, including but not limited to
contents, fire and other casualty insurance, shall expressly
waive any right on the part of the insurer against the other
party for damage to or destruction of the Leased Premises and/or
the Development resulting from the acts or omissions of the other
party.
E. Self-Insurance. Notwithstanding anything to the contrary
contained in this Article 7, Tenant may, at its option, elect at
any time during the term of this Lease not to carry insurance
required under this Article, and to "self-insure" against such
risks provided that (i) Tenant or its parent corporation has in
effect a program of "self insurance" insuring Tenant as a named
insured against such risks, which program complies with any and
all applicable laws with respect to self insurance in the State
of lllinois; (ii) Tenant or its parent corporation has and
maintains a net worth sufficient to sustain a self insurance
program as evidenced by documentation reasonably satisfactory to
Landlord; and (iii) the failure to carry such insurance does not
violate any law.
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statute, code, act, ordinance, order, judgment, decree,
injunction, rule, regulation, permit, license, authorization or
other requirement which is issued by any government or
governmental agency with jurisdiction over the Leased Premises or
which is applicable to Tenant in the conduct of its business.
Section 7.03.Mortgagees.
Any mortgagee of the leasehold estate or of the fee estate shall
have the right to be named as an additional insured and on any or
all policies required of Tenant in this Article 7 shall have the
right to participate in the settlement of losses as their
interests appear. The Leasehold Mortgagee (as defined in Article
22 below) shall be entitled to control the proceeds from any of
the foregoing insurance coverages; provided, however, that the
proceeds will be used in accordance with the provisions of this
Lease; and provided further that Landlord's Mortgagee identified
in writing to Leasehold Mortgagee prior to the casualty shall be
consulted with respect to the appropriate application of such
proceeds, but such consultation shall not afford any consent
rights to Landlord's Mortgagee.
ARTICLE 8 -LANDLORD'S RIGHT TO PERFORM TENANT'
Section 8.01. Landlord's Rights.
If Tenant shall at any time fail to pay any Imposition in
accordance with the provisions of hereof; or to take out, pay
for, maintain or deliver any of the insurance policies or
certificates therefor, as provided for herein; or shall fail to
make any payment of insurance required hereby; or shall fail to
make any other payment or perform any other act on its part to be
made or performed pursuant to the terms and conditions of this
Lease, then Landlord and/or the fee mortgagee, without waiving or
releasing Tenant from any obligation of Tenant contained in this
Lease or from any default by Tenant and without waiving
Landlord's right to take such action as may be permissible under
this Lease as a result of an Event of Default, may (but shall be
under no obligation to), after any notice required by this Lease:
A. Pay any Imposition payable by Tenant pursuant to the
provisions hereof; or
B. Take out, pay for, and maintain any of the insurance
policies required hereby; or
C. Make any other payment or perform any other act on Tenant's
part to be made or
performed as in this Lease provided.
Section 8.02. Mortgagees' Rights
Landlord or its fee mortgagee may enter upon the Leased Premises
at reasonable times and
upon prior written notice for any of the above purposes in
accordance with Section 15.01, and Landlord or its fee mortgagee
may take all such action thereon as may be necessary therefor.
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ARTICLE 9- REPAIR AND MAINTENANCE OF THE LEASED PREMISES
Section 9.01. Tenant's Obligations.
Throughout the term of this Lease, Tenant, at its sole cost and
expense, shall take good care of the Leased Premises and shall
keep the same in good order and condition pursuant to its
obligations hereunder and make all necessary repairs thereto,
interior and exterior, structural and non-structural, ordinary
and extraordinary, and foreseen and unforeseen. All repairs made
by Tenant shall be performed in a good and workmanlike manner.
Tenant shall put, keep and maintain all portions of the Leased
Premises and the sidewalks, curbs, alleyways and passageways
thereon in a clean and orderly condition, substantially free of
dirt, rubbish, trash, litter, snow, ice and unlawful
obstructions.
Section 9.02. Landlord's Non-responsibility
Except as specifically set forth in this Lease, Landlord shall
not be required to furnish to Tenant any facilities or services
of any kind whatsoever during the term, such as, but not limited
to, domestic or fire water, steam, heat, gas, electricity, light
and power. Landlord shall in no event be required to make any
alterations, rebuilding, replacements, changes, additions,
improvements or repairs during the term of this Lease, unless
caused by the negligence or intentional misconduct of Landlord or
its employees, officers, or contractors or invitees, except in
the case of Landlord's exercising its rights pursuant to Sections
8.01 (C) and 15.01 (A)(ii), in which event Landlord shall be
liable only in the event of its gross negligence or intentional
misconduct.
ARTICLE 10 -COMPLIANCE WITH LA WS. ORDINANCES. ETC
Section 10.01. Compliance with Applicable Laws and Ordinances.
Except as otherwise provided herein, throughout the term of this
Lease, Tenant at its sole cost and expense shall promptly comply
with all present and future laws, ordinances, orders, rules,
regulations and requirements of all federal, state and municipal
governments, departments, commissions, boards and offices,
foreseen or unforeseen, ordinary as well as extraordinary,
including but not limited to all environmental requirements of
any kind which may be applicable to the Leased Premises and the
sidewalks, alleyways, passageways, curbs, and vaults within the
same or to the use or manner of use of the Leased Premises.
Section 10.02. Compliance with Insurance Policies.
Tenant shall likewise observe and comply with the requirements of
all policies of public liability insurance, fire and all other
policies of insurance required to be maintained by Tenant at any
time in force with respect to the Leased Premises, whether or not
such observance or compliance is required by reason of any
condition, event or circumstance existing prior to or after the
commencement of the Lease Term.
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ARTICLE 11 DISCHARGE OF LIENS
Section 11.01. Liens Prohibited.
Tenant shall not create or permit to be created or to remain, and
shall discharge, insure over, or bond over any mechanic's,
laborer's or materialman's lien or any other lien, claim or
damage which might be or become a lien, encumbrance or charge
upon the Leased Premises. Tenant shall not have the power to
subject the interest of Landlord in the Leased Premises or any
part thereof to any mechanic's, laborer's or materialmen's lien
or any other lien of any kind.
Section 11.02. Discharge of Liens.
If any mechanic's, laborer's, materialman's, or other similar
lien shall at any time be recorded against the Leased Premises or
any part thereof, Tenant, within thirty (30) days after the
filing thereof, shall cause the same to be discharged of record
by payment, deposit, bond, insurance over, or order of a court of
competent jurisdiction or otherwise. In the event Landlord
receives notice of any lien filed with respect to the Leased
Premises, Landlord shall send such notice to Tenant and to any
Leasehold Mortgagee of which Tenant has provided notice to
Landlord pursuant to Article 22. If Tenant shall fail to cause
such lien to be discharged within the period aforesaid, then, in
addition to any other right or remedy, Landlord may, but shall
not be obligated to, discharge the same either by paying the
amount claimed to be due or by procuring the discharge of such
lien by deposit or by bonding proceedings, and in any such event,
Landlord shall be entitled, if Landlord so elects, to compel the
prosecution of an action for the foreclosure of such lien by the
lienor and to pay the amount of the judgment in favor of the
lienor with interest, reasonable costs and allowances. Any amount
so paid by Landlord and all reasonable costs and expenses,
including but not limited to attorneys' fees, incurred by
Landlord in connection therewith, together with interest thereon
at the rate of twelve percent (12%) per annum from the respective
dates of Landlord's making of the payment or incurring of the
cost and expense, shall constitute additional rent payable by
Tenant under this Lease and shall by paid by Tenant to Landlord
within ten (10) days after notice.
ARTICLE 12 USE OF LEASED PREMISES
Section 12.01. Use Allowed.
A. Tenant shall use and maintain the Leased Premises and
conduct its business thereon in a safe, careful, reputable manner
and in compliance witt1 all laws, rules, regulations, orders,
ordinances, directions and requirements of any governmental
authority or agency, now in force or which may hereafter be in
force, including without limitation those which shall impose upon
Landlord or Tenant any duty with respect to or triggered by a
change in the use or occupation of, or any improvement or
alteration to, the Leased Premises.
B. Tenant shall not use or allow the Leased Premises to be used
for any unlawful purpose or in violation of any existing and
recorded restrictive covenants or easements burdening the Leased
Premises from time to time, a certificate of occupancy issued for
the Leased Premises or
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any part thereof, or which shall, in law, constitute a nuisance,
public or private, or which shall make void or voidable any
insurance then in force with respect thereto. Tenant shall abide
by all current and future zoning provisions and any successive
laws or requirements of any kind.
C. The Leased Premises shall be used only for the purposes
stated in Item J of the Basic Lease Provisions unless Landlord
gives its prior written consent to a different use. Tenant shall
open and operate the Leased Premises for business to the public
as a "Jared -The Galleria of Jewelry" store for at least one (1)
day within one hundred fifty (150) days of the expiration of the
Inspection Period.
Section 12.02. Uses Not Allowed.
Tenant shall not suffer or permit the Leased Premises or any
portion thereof to be used by the public, as such, without
restriction or in such manner as might reasonably make possible a
claim or claims of adverse usage, adverse possession or
prescription by the-public, as such; or of implied dedication, of
the Leased Premises or any portion thereof. Tenant hereby
acknowledges that Landlord does not hereby consent, expressly or
by implication, to the unrestricted use or possession of the
whole or any portion of the Leased Premises by the public, as
such.
Section 12.03. Exclusive Use.
During the Lease Term, so long as Tenant is not in material
default hereunder, Landlord covenants and agrees that it will not
operate or lease any portion of the Development to a tenant whose
primary business is the retail sale of jewelry, diamonds, gold,
silver, and colored gemstones (the "Covenant"). Notwithstanding
the foregoing, this provision does not prohibit (i) such
operation to exist under any current leases, including renewals
or expansions thereof; or (ii) the incidental sale of jewelry.
Landlord shall not be in default under this Section 12.03 unless
and until (i) Landlord fails to cure any breach hereof within
thirty (30) days after written notice from Tenant to Landlord, or
such longer period of time as may be required, so long as
Landlord commences to cure such default within such thirty (30)
day period and thereafter diligently pursues such cure to
completion; and (ii) Tenant's Gross Sales during the period of
Landlord's breach hereof decrease, due to Landlord's breach (and
not due to any other cause or reason, including without
limitation, Tenant's failure to be open and operating with a full
staff and full inventory during all Regular Business Hours,
without exception), by more than ten percent (10% ) of the amount
of Tenant's Gross Sales for the like period immediately preceding
Landlord's breach. In the event of Landlord's uncured default,
Tenant shall have as its sole and exclusive remedies,
notwithstanding anything to the contrary contained in this Lease,
the following: (i) injunctive relief; and (ii) the right to
terminate this Lease upon written notice to Landlord delivered
within thirty (30) days after the date of Landlord's default. In
the event Tenant does not exercise its right to terminate within
such thirty (30) day period, Tenant's right to terminate the
Lease shall expire and Tenant shall be deemed to have waived
Landlord's default with respect to the particular offending
tenant, occupant or user of space within the Shopping Center, but
shall not be deemed to have otherwise waived or released its
rights hereunder with respect to any other future tenant,
occupant or user of space in the Shopping Center. With respect to
the remedy provided in subparagraph (i) above, Landlord and
Tenant
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understand and agree that the covenants, obligations and
agreements contained in this paragraph 12.03 are of a special,
unique, and extraordinary character, which gives them a peculiar
value, the loss of which cannot be reasonably or adequately
compensated in damages in an action at law, and that a breach of
the provisions contained in this paragraph will cause Tenant
great and irreparable injury and damage. Further, Landlord and
Tenant agree that Tenant shall be entitled to the remedies of
temporary restraining order, preliminary and permanent
injunction, specific performance and other equitable relief to
prevent any breach or potential breach of this paragraph.
Landlord and Tenant further covenant and agree that Landlord is
not and shall not be obligated to enforce the Covenant against
any person if by so doing it shall be in breach of any laws,
rules, regulations or enactments from time to time in force and
no provision of this Lease is intended to apply or to be
enforceable to the extent that it would give rise to any offense
under any relevant statute, or any statute that may be enacted
with similar intent, as from time to time amended. Tenant
acknowledges that the Covenant has been granted solely at the
request of Tenant, and accordingly Tenant shall promptly
indemnify and hold harmless Landlord from and against any claims
made against Landlord in connection therewith, whether of a
criminal or civil nature, and Tenant shall reimburse Landlord for
any and all costs and expenses incurred in connection with any
such claims, including all legal fees (on a solicitor and his own
client basis) and expenses.
ARTICLE 13 -UTILITIES
Tenant shall pay all costs of obtaining utilities to serve the
Leased Premises, including but not limited to connection fees,
tap fees, usage fees, and the like. Landlord does not represent
or warrant the uninterrupted availability of such utilities, and
any such interruption shall not be deemed an eviction or
disturbance of Tenant's right to possession, occupancy and use of
the Leased Premises or any part thereof, or render Landlord
liable to Tenant for damages by abatement of rent or otherwise,
or relieve Tenant from the obligation to perform its covenants
under this Lease.
ARTICLE 14 -ALTERATIONS TO THE LEASED PREMISES
Section 14.01. Alterations.
After completion of Tenant's work, Tenant shall not permit any
alterations in or to the Leased Premises unless and until the
plans have been approved by Landlord in writing, such approval
not to be unreasonably withheld, conditioned or delayed.
Notwithstanding, Landlord's consent shall not be required for
interior non-structural alterations. Landlord shall not
unreasonably withhold, condition or delay its consent to any
alterations for which Landlord's consent is required, provided
such are in compliance with all applicable laws, and Tenant
complies with the requirement set forth in this Article 14. As a
condition of such approval if approval is required, Landlord may
require Tenant to remove the alterations and restore the Leased
Premises upon termination of this Lease, provided Landlord and
Tenant agree in writing at the time of approval upon such
eventual removal; otherwise, all such alterations shall become a
part of the realty and the property of Landlord, and shall not be
removed by Tenant. Tenant shall ensure that all alterations shall
be made in accordance with all applicable laws, regulations and
building codes,
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in a good and workmanlike manner and of quality equal to or
better than the original construction of the Leased Premises and
Tenant's Work.
Section 14.02. Tenant Requirements.
A. Before beginning any permitted demolition or construction of
any improvements on the Leased Premises, or letting any contract
relating to the construction of a new building or other
improvement, Tenant will comply with Article 11 hereof.
B. Before making any permitted alteration or before beginning
the demolition of any improvements which may at any time be on
the Leased Premises, or letting any contracts relating to the
construction of a new building or improvement, Tenant shall
supply Landlord with such endorsement to the existing insurance
policies as shall be necessary to cover the contemplated work.
ARTICLE I5 LANDLORD'S ENTRY RIGHTS
Section 15.01. Inspection. Repairs. and Compliance.
A. Tenant shall permit Landlord and its authorized
representatives to enter the Leased Premises in the presence of
Tenant's on-site manager at all reasonable times upon twenty-four
(24) hours ' prior notice to Tenant except in the event of an
emergency, in which event Landlord shall use good faith efforts
to give reasonable notice under the circumstances for the purpose
of:
(i) Inspecting the same;
(ii) Making any necessary repairs thereto and
performing any work therein that may be permitted by the terms of
Section 8.01 hereto. Nothing herein shall imply any duty upon the
part of Landlord to do any such work; and performance thereof by
Landlord shall not constitute a waiver of an Event of Default in
failing to perform the same;
(iii) Complying with the restrictive covenants and rules
and regulations affecting the Leased Premises, if any, including
making repairs, providing utilities, and placement of signage;
provided, however, that Landlord shall (a) give Tenant reasonable
advance notice (except in an emergency) that Landlord intends to
perform such work, (b) repair any damage to the Leased Premises
resulting from such work, and (c) protect, indemnify and save
harmless Tenant and Tenant's successors and assigns against and
from all liabilities, obligations, damages, penalties, mechanic's
liens, claims, costs, charges and expenses (including without
limitation attorneys' fees and expenses) of whatever kind or
nature, which may be imposed upon or incurred by or asserted
against Tenant, or Tenant's successors and assigns, directly or
indirectly, by reason of Landlord's entry on the Leased Premises
and performance of such work; and (d) not unreasonably interfere
with Tenant's use of the Leased Premises.
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(iv) Showing the same (a) to prospective purchasers of
the Leased Premises at any time prior to the expiration of the
term of this Lease, and (b) to prospective tenants of the Leased
Premises at any time within one (1) year prior to the expiration
of the term of this Lease.
B. In performing any work on the Leased Premises, Landlord
shall minimize any disruption of the use of the Leased Premises
by Tenant, and Landlord shall not unreasonably impair the access
to the improvements, if any, constructed on the Leased Premises.
Notwithstanding the foregoing, except in the case of an
emergency, Landlord shall not perform any work hereunder on the
Leased Premises during the period of time between Thanksgiving
and Christmas.
c. During the progress of any work in the Leased Premises
performed by Landlord pursuant to the provisions of this Section
15.01; Landlord may keep and store thereon all necessary
materials, tools, supplies and equipment at a reasonable location
designated by Tenant. Landlord shall not be liable for
inconvenience, annoyance, disturbance, loss of business or other
damage of Tenant by reason of making such repairs or the
performance of any such work which is performed in accordance
with the requirements of this Section 15.01, or on account of
bringing materials, tools, supplies and equipment into the Leased
Premises during the course thereof, except to the extent caused
by the gross negligence or intentional misconduct of Landlord or
its employees, contractors or invitees and the obligations of.
Tenant under this Lease shall not be affected thereby.
ARTICLE 16 -INDEMNIFICATION
Section 16.01. Indemnification.
Tenant shall protect, indemnify and save harmless Landlord and
Landlord's successors and assigns against and from all
liabilities, obligations, damages, penalties, claims, costs,
charges and expenses (including without limitation attorneys'
fees and expenses), of whatever kind or nature, which may be
imposed upon or incurred by or asserted against Landlord, or
Landlord's successors and assigns, directly or indirectly, by
reason of any loss of or damage or injury, caused by Tenant, or
Tenant's agents, employees, or invitees, to any person (including
death resulting therefrom) or property occurring in, on, or about
the Leased Premises and Tenant hereby releases Landlord from any
and all liability for the same.
Landlord shall protect, indemnify and save harmless Tenant and
Tenant's successors and assigns against and from all liabilities,
obligations, damages, penalties, claims, costs, charges and
expenses (including without limitation attorneys' fees and
expenses), of whatever kind or nature, which may be imposed upon
or incurred by or asserted against Tenant, or Tenant's successors
and assigns, directly or indirectly, by reason of any loss of or
damage or injury caused by Landlord to any person (including
death resulting therefrom) or property occurring in, on, or about
the Development (excluding the Leased Premises and any property
not owned by Landlord) and Landlord hereby releases Tenant from
any and all liability for the same.
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Section 16.02. Obligation to Defend.
If any action, suit or proceeding is brought against Landlord by
reason of any such occurrence, Tenant, upon request of Landlord
or any such successor or assign, shall at Tenant's expense,
resist and defend such action, suit or proceeding by counsel
approved by Landlord in writing, which approval Landlord agrees
not unreasonably to withhold. The obligations of this Article 1Q
shall survive the expiration or other termination of this Lease.
If any action, suit or proceeding is brought against Tenant by
reason of any such occurrence, Landlord, upon request of Tenant
or any such successor or assign, shall at Landlord's expense,
resist and defend such action, suit or proceeding by counsel
approved by Tenant in writing, which approval Tenant agrees not
unreasonably to withhold. The obligations of this Article 16
shall survive the expiration or other termination of this Lease.
ARTICLE 17 CONDEMNATION AND CASUALT'Y
Section 17.01. Award.
If at any time during the term hereof the Leased Premises or any
portion thereof shall be taken for any public or quasi-public
use, under any statute or by right of eminent domain, then in
such event, Landlord and Tenant shall share in the purchase price
or award paid therefor in . accordance with their respective
interests in the Leased Premises as provided hereinafter.
Section 17.02. Termination of Lease.
If the entire Leased Premises shall be taken for any public or
quasi-public use under any statute or by right of eminent domain,
or if so much of the property shall have been taken for such
purposes as to render the continued conduct of the business then
being conducted by the Tenant at the Leased Premises impractical,
then in that event the Lease Term shall cease and terminate when
Tenant surrenders possession of the Leased Premises to the
condemning authority, and the rent shall be effectively
apportioned to such time. If (i) the building or any substantial
portion of the jewelry store located therein, on the Leased
Premises; or (ii) any common areas within the Leased Premises
which materially or detrimentally affect access or utilities; or
(iii) more than ten percent (10%) of parking or such other number
which is below zoning requirements for the Leased Premises shall
be taken or condemned and Landlord cannot provide comparable
common areas or parking within the Development, and Tenant, in
its reasonable discretion, determines that the business then
being conducted by Tenant upon the Leased Premises cannot be
continued, then, upon written notice from Tenant to Landlord the
Lease Term shall terminate when Tenant surrenders possession of
the Leased Premises to the condemning authority, and the rent
shall cease as of the effective date of such termination.
Section 17.03. Partial Taking.
If any portion of the Leased Premises shall be taken or condemned
and such taking or condemnation does not result in a termination
of this Lease in accordance with Section 17.02
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hereof, then, in such event, Tenant shall have the obligation of
making such repairs, alterations or changes to the buildings,
improvements and parking areas upon the Leased Premises as may be
necessary to render the Leased Premises suitable for continued
use, and the proceeds of any condemnation shall be first applied
to the cost of effecting such repairs, alterations or changes.
The remaining proceeds, if any, shall be distributed among
Landlord and Tenant in an equitable manner, with due
consideration given to Landlord's loss of fee estate and the non-
diminution in Landlord's rent therefrom pursuant to this Lease,
and to the damages suffered by Tenant by virtue of improvements
which Tenant may have caused to be made or erected upon the
Leased Premises and the costs of restoring the Leased Premises.
In the event of such partial taking or of any temporary taking,
the rent and all other amounts payable hereunder shall not be
reduced or in any way abated.
Section 17.04. Repair Obligations.
In the event the Leased Premises or the improvements thereon are
damaged or destroyed by fire or other casualty and subject to the
Leasehold Mortgagee (as defined in Article 22), if any, making
any insurance proceeds available to Tenant (which Tenant shall
diligently pursue with the Leasehold Mortgagee using Tenant's
reasonable efforts), Tenant shall promptly and with reasonable
diligence and in no event later than one hundred eighty (180)
days after such fire or other casualty, commence to repair,
rebuild and restore such to substantially the same condition in
which they were immediately prior to the happening of such
casualty (the "Restoration Work"), and continue with due
diligence until completion thereof. Rent and all other amounts
payable to Landlord shall not be abated or reduced as a result of
fire or other casualty. Notwithstanding anything contained in
this Lease to the contrary, Tenant shall not execute a Leasehold
Mortgage (as defined in Article 22) of its interest in this Lease
with any Leasehold Mortgagee unless such Leasehold Mortgage (i)
provides that the Leasehold Mortgagee shall make all insurance
proceeds available to Tenant for repair, rebuilding and/or
restoration provided that Tenant is not then in default of its
Leasehold Mortgage and (ii) provides that in the event that such
Leasehold Mortgagee elects, pursuant to its rights under such
Leasehold Mortgage, not to make insurance proceeds available for
the restoration, repair or rebuilding of the improvements on the
Leased Premises, then such Leasehold Mortgage shall provide that
before the Leasehold Mortgage applies any such insurance proceeds
against its loan balance, the Leasehold Mortgagee shall first use
such portion or all such insurance proceeds as may be necessary
to demolish and remove the remaining portion of the improvements
from the Leased Premises to return the Leased Premises to
essentially the condition that existed on the date hereof.
If Tenant shall fail or refuse to commence the Restoration Work
as provided above, Landlord may, at its option, (A) terminate
this Lease, or (B) raze (or cause to be razed) any improvements
on the Leased Premises, rough grade (or cause to be rough graded)
the land on which the improvements had been built and restore (or
cause to be restored) the cleared area to either a hard surface
condition or a landscaped condition until a replacement building
is erected, if ever, in accordance with the terms of this lease.
Tenant shall reimburse Landlord for any costs associated with (b)
above within thirty (30) days after Landlord's demand for payment
thereof.
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In addition to all rights to terminate this Lease granted to the
parties in this Section, if the Leased Premises (or improvements
thereon) are destroyed or damaged during the last two (2) years
of the Term to the extent that the cost to repair and restore the
same is fifty percent (50% ) or more of the value of the Leased
Premises immediately prior to such damage or destruction, then
Tenant shall have the right to terminate this Lease as of the
date of such damage or destruction by giving written notice
thereof within thirty (30) days after the date of said damage or
destruction. If this Lease shall be terminated pursuant to this
Subsection, any annual minimum rental and other charges paid in
advance shall be immediately refunded to Tenant.
ARTICLE 18 -ASSIGNMENT
Section 18.01. Landlord's Consent Required.
A. Tenant may not assign or sublet this Lease without the
prior written consent of Landlord, which consent shall not be
unreasonably withheld, conditioned, or delayed. Landlord's
consent to such assignment shall not operate to relieve Tenant
from liability hereunder and Tenant shall nevertheless at all
times remain fully responsible and liable for the payment of rent
and the performance and observance of all of Tenant's other
obligations under the terms, conditions and covenants of this
Lease. No assignment where Landlord's consent is required shall
be binding upon Landlord unless and until Landlord has consented
thereto in writing and such assignee shall deliver to Landlord an
instrument (in recordable form, if requested) pursuant to which
assignee assumes all of Tenant's obligations under this Lease. No
sublease where Landlord's consent is required shall be binding
upon Landlord unless and until Landlord has consented thereto in
writing and unless and until Landlord has received a fully
executed sublease consistent with the terms hereof. If Tenant
enters into a sublease of the Leased Premises, Landlord shall be
entitled to collect directly from the subtenant all amounts owed
by Tenant to Landlord hereunder.
Notwithstanding the foregoing and provided that at the time of
such assignment or sublease, there has been no material or
substantial adverse change in the Guarantor's financial position
and the guaranty remains in full force and effect, Tenant may
assign this Lease or sublease all or any portion of the Leased
Premises without Landlord's consent to any of the following (a
"Permitted Transferee"): (i) any successor corporation or other
entity resulting from a merger or consolidation of Tenant or
Guarantor; (ii) any purchaser of all or substantially all of
Tenant's assets; (iii) any entity (including a joint venture or
limited partnership) which controls, is controlled by, or is
under common control with Tenant; (iv) to the Guarantor (as
defined in Section 23.03 hereof); or (v) an affiliate or
franchisee of Tenant or the Guarantor. Tenant shall give Landlord
thirty (30) days prior written notice of such assignment or
sublease. Any Permitted Transferee shall assume in writing all of
Tenant's obligations under this Lease. Tenant shall nevertheless
at all times remain fully responsible and liable for the payment
of rent and the performance and observance of all of Tenant's
other obligations under this Lease; unless such assignment is to
a limited liability company comprised of one (1) single asset,
this Lease, in which event Tenant shall be relieved of its
obligations under this Lease effective as of the date Landlord
recieves sufficent notice that such assignee assumes full
responsibility and liability for Tenant's obligations under this
Lease.
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B. The foregoing notwithstanding, Landlord shall consent to an
assignment of this Lease provided the assignee shall (i) operate
the Leased Premises with a use permitted under Item J of the
Basic Lease Provisions and which does not conflict with the
primary use of any of the tenants in the Development at the time
of the assignment, (ii) have a tangible net worth at least equal
to $20,000,000.00, (iii) be a national or regional retail
operator, and (iv) agree in writing for the express benefit of
Landlord to assume all of the duties and provisions of the Lease
required of Tenant hereunder. Such consent shall not operate to
relieve Tenant from liability hereunder and Tenant shall
nevertheless at all times remain fully responsible and liable for
the payment of rent and the performance of all of Tenant's other
obligations under this Lease.
Section 18.02. Documentation.
Tenant shall promptly provide Landlord with copies of all
assignments and other agreements relating to any assignment or
sublet of the Leased Premises by Tenant.
ARTICLE 19 DEFAULT AND REMEDIES
Section 19.01. Events of Default.
The occurrence of anyone or more of the following events shall be
an Event of Default and
breach of this Lease by Tenant:
A. Tenant shall fail to pay any Monthly Rental Installment of
Minimum Annual Rent when such payments are due and payable, or
any other amounts due Landlord from Tenant as additional rent or
otherwise within five (5) days after the same shall be due and
payable.
In the event of a default under subparagraph (A) above,
Landlord shall provide Tenant with written notice of such default
two (2) times during each successive twelve (12) month period of
the Lease Term and Tenant shall have an additional five (5) days
to cure such default before Landlord shall exercise its remedies
herein.
B. Tenant shall fail to perform or observe any term, condition,
covenant or obligation, other than the payment of rent, required
to be performed or observed by it under this Lease for a period
of thirty (30) days after receipt of written notice thereof from
Landlord; provided, however, that if the term, condition,
covenant or obligation to be performed by Tenant is of such
nature that the same cannot reasonably be performed within such
30-day period, such default shall be deemed to have been cured if
Tenant commences such performance within said 30-day period and
thereafter diligently undertakes to complete the same.
C. Tenant shall abandon (which shall not include reasonable
periods of remodeling, repair due to condemnation or casualty, or
Tenant's right to cease operations in accordance with Section
23.20) for a period of thirty (30) days, the Leased Premises or
any substantial portion thereof.
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D. A trustee or receiver shall be appointed to take possession
of substantially all of Tenant's assets in or about the Leased
Premises or of Tenant's interest in this Lease (and Tenant does
not regain possession within sixty (60) days after such
appointment); Tenant makes an assignment for the benefit of
creditors; or substantially all of Tenant's assets in, on or
about the Leased Premises or Tenant's interest in this Lease are
attached or levied upon under execution (and Tenant does not
discharge the same within sixty (60) days thereafter).
E. A petition in bankruptcy, insolvency, or for reorganization
or arrangement is filed by or against Tenant pursuant to any
federal or state statute {and, with respect as any such petition
filed against it, Tenant fails to secure a stay or discharge
thereof within sixty (60) days after the filing of the same).
Section 19.02. Remedies.
A. Upon the occurrence and continuance of any Event of Default
set forth in Section 19.01 , Landlord shall have the following
rights and remedies, in addition to those now or hereafter
allowed by law or equity, anyone or more of which may be
exercised without further notice to or demand upon Tenant:
(i) Landlord may re-enter the Leased Premises and cure
any default of Tenant, in which event Tenant shall reimburse
Landlord as additional rent for any cost and expenses which
Landlord may incur to cure such default; and Landlord shall not
be liable to Tenant for any loss or damage which Tenant may
sustain by reason of Landlord's action, unless caused by
Landlord's gross negligence or intentional misconduct.
(ii) Landlord may terminate this Lease as of the date
of such Event of Default, in which event: (1) neither Tenant nor
any person claiming under or through Tenant shall thereafter be
entitled to possession of the Leased Premises, and Tenant shall
immediately thereafter surrender the Leased Premises to Landlord;
(2) Landlord may re-enter the Leased Premises and dispossess
Tenant or any other occupants of the Leased Premises by force,
summary proceedings, ejectment or otherwise, and may remove their
effects, without prejudice to any other remedy which Landlord may
have for possession or arrearages in rent; and (3)
notwithstanding the termination of this Lease: {a) Landlord may
recover from Tenant the worth, at the time of the award, of the
amount by which unpaid rent exceeds the fair rental value of the
Leased Premises over the same period, discounted to present value
together with all reasonable loss or damage which Landlord may
sustain by reason of such termination and re- entry; or (b)
Landlord may re-let all or any part of the leased Premises for a
term different from that which would otherwise have constituted
the balance of the term of this Lease and for rent and on terms
and conditions as are commercially reasonable although different
from those contained herein, whereupon Tenant shall be obligated
to pay to Landlord the difference between the rent provided for
herein and that provided for in any lease covering a subsequent
re-letting of the Leased Premises, for a period which would
otherwise have constituted the balance of the term of this Lease,
together with all of Landlord's costs and expenses for preparing
the Leased Premises for re-letting, including all repairs, and
reasonable broker's and attorneys' fees, and all reasonable loss
or damage which Landlord may sustain by reason of such
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termination, re-entry and re-letting, it being expressly
understood and agreed that the liabilities and remedies specified
in clauses (a) and (b) hereof are mutually exclusive of each
other and shall survive the termination of this Lease.
(iii) Landlord may sue for injunctive relief or to
recover damages for any loss resulting from the breach.
B. All rights and remedies accruing to Landlord shall be
cumulative; that is, Landlord may pursue such rights as the law
and this Lease afford to Landlord in whatever order Landlord
desires and the law permits, without being compelled to resort to
anyone remedy in advance of any other.
C. Landlord shall in no event be charged with default in the
performance of any of its obligations under this Lease unless and
until Landlord shall have received written notice from Tenant
specifying wherein Landlord has failed to perform such obligation
or remedy such default, and such default has not been cured after
thirty (30) days (or such additional time as is reasonably
required to correct any such default) from Landlord's receipt of
such notice from Tenant. In the event of a default by Landlord
under this Section, Tenant shall be entitled to pursue any and
all remedies available to Tenant at law or in equity, except as
otherwise expressly provided herein.
ARTICLE 20 -TRANSFER BY LANDLORD
Section 20.01. Sale of the Leased Premises.
Landlord shall have the right to sell the Leased Premises at any
time during the Lease Term; and such sale shall operate to
release Landlord from liability hereunder first incurred after
the date of such conveyance; provided that the purchaser fully
assumes all of Landlord's obligations hereunder.
Section 20.02. Subordination and Estoppel Certificate.
Landlord hereby represents that the Leased Premises are and will
be as of the Lease Commencement Date, unencumbered. Landlord
shall have the right to subordinate this Lease to the lien of any
mortgage hereafter placed upon the Leased Premises by so
declaring in such mortgage, provided such mortgagee gives Tenant
a written non-disturbance agreement. The subordination and non-
disturbance agreement is to be signed by the mortgagee, Tenant
and Landlord in fonn reasonably acceptable to the parties. Within
ten (10) days following receipt of a written request from either
party, the parties shall execute and deliver to each other,
without cost, such subordination and non-disturbance agreement
and estoppel certificates in a mutually acceptable form
certifying (i) that this Lease is in full force and effect and
unmodified or stating the nature of any modification, (ii) the
date to which rent has been paid, (iii) that there are not, to
the party's knowledge, any uncured defaults or specifying such
defaults if any are claimed, (iv) the date of expiration of the
current term, (v) the amount of the Minimum Annual Rent then
payable and (vi) any other matters or state of facts reasonably
required respecting the Lease.
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Such estoppel may be relied upon by the parties and by any
purchaser or mortgagee of the Leased Premises. Notwithstanding
the foregoing, if the mortgagee shall take title to the Leased
Premises through foreclosure or deed in lieu of foreclosure,
Tenant shall be allowed to continue in possession of the Leased
Premises as provided for in this Lease so long as Tenant shall
not be in default.
Section 20.03. Limitation of Landlord's Liability.
If Landlord shall fail to perform or observe any term, condition,
covenant or obligation required to be performed or observed by it
under this Lease and if Tenant shall, as a consequence thereof,
recover a money judgment against Landlord, Tenant agrees that it
shall look solely to Landlord's right, title and interest in and
to the Development and the rental income therefrom and/or
proceeds from the sale thereof, for the collection of such
judgment; and Tenant further agrees that no other assets of
Landlord shall be subject to levy, execution or other process for
the satisfaction of Tenant's judgment.
ARTICLE 21 -TENANT'S AND LANDLORD'S RESPONSIBILITY REGARDING
ENVIRONMENTAL LA WS AND HAZARDOUS SUBSTANCES
Section 21.01. Environmental Definitions.
A. "Environmental Laws" -All present or future federal, state
and municipal laws, ordinances, rules and regulations applicable
to the environmental and ecological condition of the Leased
Premises, the rules and regulations of the Federal Environmental
Protection Agency or any other federal, state or municipal agency
or governmental board or entity having jurisdiction over the
Leased Premises. B. "Hazardous Substances" -Those substances
included within the definitions of "hazardous substances,"
"hazardous materials," "toxic substances" "solid waste" or
"infectious waste" under Environmental Laws.
Section 21.02. Compliance.
Tenant, at its sole cost and expense, shall promptly comply with
the Environmental Laws as the same relates to Tenant's
construction activities, use, or possession of the Leased
Premises, including any notice from any source issued pursuant to
the Environmental Laws or issued by any insurance company which
shall impose any duty 4pOn Tenant with respect to the use,
occupancy, maintenance or alteration of the Leased Premises by
Tenant whether such notice shall be served upon Landlord or
Tenant. As provided below in Section 21.07, Tenant shall have no
obligation with respect to any violation of the Environmental
Laws or Hazardous Substances present at the Leased Premises at
the date of execution hereof, which violation or Hazardous
Substances shall be Landlord's obligation except and only to the
extent caused by Tenant.
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Section 21.03. Restrictions on Tenant.
Tenant shall operate its business and maintain the Leased
Premises in compliance with all Environmental Laws. Tenant shall
not cause or permit the use, generation, release, manufacture,
refining, production, processing, storage or disposal of any
Hazardous Substances on, under or about the Leased Premises, or
the transportation to or from the Leased Premises of any
Hazardous Substances, except as necessary and appropriate for its
Permitted Use in which case the use, storage or disposal of such
Hazardous Substances shall be performed in compliance with the
Environmental Laws and normal standards prevailing in the
industry.
Section 21.04. Notices. Affidavits. Etc.
Tenant shall immediately notify Landlord of (i) any violation by
Tenant, its employees, agents, representatives, customers,
invitees or contractors of the Environmental Laws on, under or
about the Leased Premises, or (ii) the presence or suspected
presence of any Hazardous Substances on, under or about the
Leased Premises not otherwise permitted herein and shall
immediately deliver to Landlord any notice received by Tenant
relating to (i) and (ii) above from any source.
Section 21.05. Landlord's Rights.
Landlord and its agents shall have the right, but not the duty,
to inspect the Leased Premises and conduct tests thereon to
determine whether or the extent to which there has been a
violation of Environmental Laws by Tenant or whether there are
Hazardous Substances on, under or about the Leased Premises in
accordance with Section 15.01 hereof.
Section 21.06. Indemnification.
Tenant shall indemnify Landlord from any and all reasonable
claims, losses, liabilities, costs, expenses and damages,
including reasonable attorneys' fees, costs of testing and
remediation costs, incurred by Landlord in connection with any
breach by Tenant of its obligations under this Article 21. The
covenants and obligations under this Article 21 shall survive the
expiration or earlier termination of this Lease.
Landlord shall indemnify Tenant from any and all reasonable
clams, losses, liabilities, costs, expenses and damages,
including reasonable attorneys' fees, costs of testing and
remediation costs, incurred by Tenant in connection with any
breach by Landlord of its obligations and representations under
this Article 21. The covenants ~d obligations under this Article
21 shall survive the expiration or earlier termination of this
Lease.
Section 21.07. Existing Conditions.
Notwithstanding anything contained in this Article 21 to the
contrary, Tenant shall not have any liability resulting from any
conditions existing, or events occurring, or any Hazardous
Substances existing or generated, at, in, on, under or in
connection with the Leased Premises prior to the
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Lease Commencement Date of this Lease and Landlord agrees to be
responsible for any such Hazardous Substances except to the
extent Tenant caused the same.
Landlord represents that to the best of its knowledge, there are
no Hazardous Substances at, in, on, under, or about the Leased
Premises and the Development in violation of the Environmental
Laws as of the date of this Lease, except as otherwise disclosed
in the Materials.
ARTICLE 22 -MORTGAGE FINANCING
Section 22.01. Leasehold Mortgage.
Tenant shall have the absolute right, without Landlord's consent,
to mortgage its leasehold interest in the Leased Premises
("Leasehold Mortgage") on terms it deems appropriate and
consistent with this Lease. Any such Leasehold Mortgage shall be
subject and subordinate. to the rights of Landlord and Landlord's
Mortgagee referenced hereunder, and no such Leasehold Mortgage
shall extend to or affect the fee, the reversionary interest, or
the estate of Landlord in and to the Leased Premises. The
Leasehold Mortgage shall be a lien on the rights of Tenant under
this Lease insofar as they relate to the property mortgaged.
Consistent with the foregoing, Landlord will, upon request,
execute and deliver such further instruments as may be reasonably
requested by the holder of the Leasehold Mortgage (the "Leasehold
Mortgagee"). Upon Landlord's receipt of written notice containing
the name and post office address of such Leasehold Mortgagee,
Landlord shall thereafter give to such Leasehold Mortgagee, in
the manner provided in Article 19, a copy of each and every
notice (including, without limitation, notice of default)
thereafter given under this Lease by Landlord to Tenant. Such
copy shall be given to such Leasehold Mortgagee at the same time
as the original of such notice is given to the Tenant. No such
notice shall be deemed to have been given to the Tenant unless
and until a copy thereof shall have been given to each Leasehold
Mortgagee of which Tenant has notified Landlord in writing. The
holder of any Leasehold Mortgage or of Tenant's interest
hereunder, and anyone claiming by, through or under such
Leasehold Mortgagee or holder, shall not acquire any greater
rights hereunder than the Tenant has.
Section 22.02. Ri1!hts of Leasehold Mortgagee.
A. Each Leasehold Mortgagee shall have the right but not the
obligation to perform on behalf of the Tenant any of the Tenant's
obligations under this Lease, and performance by a Leasehold
Mortgagee will be deemed to be performance by the Tenant insofar
as Landlord is concerned.
B. During all times as of which the Leased Premises shall be
subject to a Leasehold Mortgage, unless such Leasehold Mortgagee
reasonably consents in writing, (i) this Lease shall not be
modified; (ii) this Lease shall not be cancelled or terminated
except as specifically permitted herein; (iii) Tenant shall not
surrender to Landlord this Lease or the improvements to the
Leased Premises except as otherwise provided in this Lease; and
(iv) Landlord shall not accept a surrender of the Leased
Premises, this Lease or the improvements to the Leased Premises
except as otherwise provided in this Lease.
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C. Landlord, prior to exercising any right to terminate this
Lease as a result of any Event of Default under Article 19, shall
give any Leasehold Mortgagee notice of Landlord's intent to
terminate (herein called "Notice of Intent") which Notice of
Intent shall describe with specificity the Event of Default.
Thereafter, the following shall be applicable:
(i) If such Event of Default may be cured by a monetary
payment and is not a failure to protect, defend, indemnify or
save harmless under Article 16, said Leasehold Mortgagee may cure
such Event of Default and stay termination by making such payment
on behalf of Tenant within fifteen ( 15) days after receipt by
the Leasehold Mortgagee of such Notice of Intent.
(ii) If such Event of Default may not be cured by the making
of payment and is not a failure to protect, defend, indemnify or
save harmless under Article 16, but can be cured by said
Leasehold Mortgagee without taking possession of the Leased
Premises, said Leasehold . Mortgagee may stay such termination by
commencing action to cure such default within thirty (30) days
after receipt of the Notice of Intent and thereafter diligently
proceeding with such action until the Event of Default is cured.
(iii) If the Event of Default may not be cured by this
Leasehold Mortgagee unless the Leasehold Mortgagee has possession
of the Leased Premises, the Leasehold Mortgagee may stay such
termination if (a) it takes the action with respect to such Event
of Default that is described in the immediately preceding
subsection C(ii), or (b) within sixty (60) days of receipt of the
Notice of Intent, such Leasehold Mortgagee files a complaint to
foreclose the Leasehold Mortgage and thereafter diligently
prosecutes such foreclosure action until the interest in the
Leasehold is transferred or (c) within thirty (30) days after
transfer of the Leasehold to a Leasehold Mortgagee or a purchaser
at a sale upon foreclosure, the owner thereof commences
appropriate action to cure such Event of Default and thereafter
diligently prosecutes such action until said Event of Default is
cured.
(iv) For all defaults not described in paragraphs (i), (ii),
or (iii) above, the Leasehold Mortgagee may stay termination if
the Leasehold Mortgagee files within sixty (60) days after
receipt of the Notice of Intent a complaint to foreclose the
Leasehold Mortgage and diligently prosecutes such foreclosure
until title to the Leasehold is transferred. In the event of such
transfer of title, Landlord shall recognize the new owner thereof
as a new tenant and such Event of Default shall cease to be an
Event of Default for the purpose of this Lease provided that the
Leasehold Mortgagee or other purchaser cures all mo~etary and
other defaults.
(v) If no Leasehold Mortgagee, after receipt of the Notice
of Intent, shall take the action required in paragraphs (i),
(ii), (iii) or (iv) above to stay termination, Landlord may
exercise its right to terminate this Lease as provided herein.
(vi) In the case of any non-monetary default as outlined in
paragraphs (ii), (iii) and (iv) above, the stay of termination
shall only occur if all monetary payments required to be made
under the Lease continue to be made and are kept current by not
later than the thirtieth
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(30th) day after all Leasehold Mortgagees shall have received a
Notice of Intent with respect to a failure to make such payment.
D. If (i) this Lease shall be cancelled or terminated, other
than as permitted by this Section ~, and (ii) any Leasehold
Mortgagee so desires, the Landlord shall enter into a new lease
for the Leased Premises with the Leasehold Mortgagee or any
assignee pursuant to Article 18 having the highest priority,
provided such Leasehold Mortgagee cures all monetary defaults
relating to the Leased Premises (except any obligation to pay an
indemnification amount incurred by the Tenant under this Lease)
and if there exists a non-monetary default which can be cured by
a Leasehold Mortgagee, commences action and diligently proceeds
to cure such default. Any such new lease shall be for the
remainder of the term of this Lease and shall be upon the same
terms and conditions of this Lease.
Section 22.03. Tenant's Mortgage Obligations.
Tenant hereby agrees, for the benefit and protection of Landlord,
to fully and timely to perform each and every covenant and
obligation under any mortgage given pursuant to this Article 22,
and each and every covenant and obligation, the failure to
perform which may result in acceleration of the indebtedness
secured by such mortgage and/or the foreclosure thereof.
ARTICLE 23 -MISCELLANEOUS Section 23.01. Benefit of Landlord and
Tenant.
This Lease shall inure to the benefit of and be binding upon
Landlord and Tenant and their
respective successors and assigns. Section 23.02. Governing Law.
This Lease shall be governed in accordance with the laws of the
State where the Leased Premises
is located.
Section 23.03. Guaranty.
In consideration of Landlord's leasing the Leased Premises to
Tenant, Tenant shall provide Landlord with an Unconditional
Guaranty of Lease, executed by Sterling Jewelers Inc., a Delaware
corporation ("Guarantor"), in such form as i$: attached hereto
and incorporated herein as Exhibit E.
Section 23.04. Examination of Lease.
Submission of this instrument for examination or signature to
Tenant does not constitute a reservation of or option for Lease,
and It is not effective as a Lease or otherwise until execution
by and delivery to both Landlord and Tenant.
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Section 23.05. Indemnification for Leasing Commissions.
The parties hereby represent and warrant that the only real
estate brokers involved in the negotiation and execution of this
Lease are the Brokers. Each party shall indemnify the other from
any and all liability for the breach of this representation and
warranty on its part and shall pay any compensation to any other
broker or person who may be entitled thereto. Landlord shall pay
the Brokers pursuant to a separate agreement.
Section 23.06. Notices.
Any notice required or permitted to be given under this Lease or
by law shall be deemed to have been given if it is written and
delivered in person or by overnight courier or mailed by
certified mail, postage prepaid, to the party who is to receive
such notice at the address specified in Item K of the Basic Lease
Provisions. If sent by overnight courier, the notice shall be
deemed to have. been given one (I) day after sending. If mailed,
the notice shall be deemed to have been given on the date which
is three (3) business days following mailing. Either party may
change its address by giving written notice thereof to the other
party.
Section 23.07. Partial Invalidity: Complete Agreement.
If any provision of this Lease shall be held to be invalid, void
or unenforceable, the remaining provisions shall remain in full
force and effect. This Lease represents the entire agreement
between Landlord and Tenant covering everything agreed upon or
understood in this transaction. There are no oral promises,
conditions, representations, understandings, interpretations or
terms of any kind as conditions or inducements to the execution
hereof or in effect between the parties. No change or addition
shall be made to this Lease except by a written agreement
executed by Landlord and Tenant and agreed to in writing by
Guarantor. In the event any change or addition to this Lease is
requested, Tenant shall be solely responsible for obtaining
Guarantor's consent.
Section 23.08. Financial Statements.
During the Lease Term and any extensions thereof, Tenant shall
provide to Landlord within thirty (30) days after written request
of Landlord, a copy of Tenant's most recent financial statements,
prepared as of the end of Tenant's fiscal year. Such financial
statements shall be certified by an authorized officer of Tenant
who shall attest to the truth and accuracy of the information set
forth in such statements. All financial statements provided by
Tenant to Landlord hereunder shall be prepared in conformity with
generally accepted accou~ting principles, consistently applied.
Section 23.09. Representations and Warranties.
The undersigned represent and warrant that (i) such party is duly
organized, validly existing and in good standing (if applicable)
in accordance with the laws of the state under which it was
organized; and {ii) the individual executing and delivering this
Lease has been properly authorized to do so, and such execution
and delivery shall bind such party.
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Section 23.10. Agency Disclosure. [Intentionally Omitted]
Section 23.11. Memorandum of Lease.
The parties agree that this Lease may not be recorded but that
either party may request that the other execute a Memorandum of
Lease which may be recorded. The Memorandum of Lease may be
amended to reflect the addition of additional land to the Leased
Premises. The parties agree to remove the Memorandum of Lease of
record upon the expiration or earlier termination of this Lease.
Section 23.12. Security Deposit.
[Intentionally Omitted.]
Section 23.13. Development Common Areas.
Pursuant to the Declarations, Tenant shall pay a proportionate
share of the costs of maintaining certain common areas of the
Development for which Tenant or the Leased Premises benefit.
Tenant's proportionate share of the costs of such maintenance
shall be determined in accordance with the provisions of the
Declarations.
Landlord shall construct and maintain the access drive to the
Leased Premises located on Common Areas (the" Access Drive") in
accordance with the Declarations. Landlord's obligations with
respect to the Access Drive shall be as specifically set forth in
the Declarations. Landlord may close any part of the Access Drive
temporarily, at such times as to cause the least possible
interruption or interference with Tenant's business, to make
repairs or changes, to prevent the acquisition of public rights
in such Access Drive; provided, however, in no event shall the
crosshatched on the Site Plan (designated thereon and hereinafter
referred to as the "Protected Area") be closed (except in the
event of an emergency), and, altered or damaged in any way
(including any construction thereon) without the prior reasonable
consent of Tenant. In no event shall Landlord designate the
Protected Area as an employee parking area or otherwise permit
the Protected Area to be used for employee parking.
Section 23.14. Quiet Enjoyment.
Landlord covenants and agrees with Tenant that, except as
otherwise provided in this Lease, upon the continuing full and
timely compliance by Tenant with all of the terms, covenants and
provisions of this Lease to be performed by Tenant, Tenant shall
and may peaceably and quietly have, hold and enjoy the Leased
Premises for the Lease Term, free from any interference
whatsoever by, from or through Landl<:>rd or anyone claiming by,
from or through Landlord.
-33-
Section 23.15. Easement for Ingress and Egress.
Landlord shall and hereby does grant and convey to Tenant and to
Tenant's officers, directors, partners, lenders, agents,
employees, lessees, licensees, concessionaires, customers,
business guests, and invitees (such persons or entities are
collectively called "Permittees") a perpetual, non-exclusive
easement appurtenant to the Leased Premises for vehicular and
pedestrian ingress and egress, to and from the Leased Premises,
over, upon, and across the driveways, exits and entrances of the
adjacent Development as are more particularly identified on the
Survey.
Section 23.16. Costs and Attorneys' Fees.
If Landlord or Tenant shall bring any action against the other,
arising out of this Lease, the prevailing party shall be
reimbursed by the other party for reasonable attorneys' fees and
costs incurred in such suit, at trial and on appeal, and such
attorneys' fees and costs shall be deemed to have accrued on the
commencement of such action.
Section 23.17. Cooperation.
Landlord and Tenant agree to use reasonable efforts to cooperate
with one another in their examination of the Leased Premises and
in any municipal application process, meeting or hearing
regarding zoning of the Leased Premises or permit approval for
Tenant's use of the Leased Premises.
Section 23.18. Representations and Covenants of Landlord.
On the date hereof and hereafter during the Term, Landlord
represents that no addition or alteration shall be made of the
Development which permanently, materially, and adversely
diminishes the accessibility of the Leased Premises to and from
the Shared Roadway, as more particularly identified in the
Declarations. The foregoing representation is a material
consideration and inducement to Tenant in executing this Lease,
the breach of which will cause irreparable and severe harm to
Tenant. In addition, Landlord represents that it has fee simple
title to the Leased Premises.
Section 23.19. Breach of Covenant by the Parties.
In the event either party fails to keep and perform any of the
covenants or agreements in this Lease contained on the part of
said party to be kept and performed, the non-breaching party, in
addition to all other remedies now or hereafter afforded or
provided by this Lease, unless otherwise specifically provided
herein, at law or in equity, may, at its election, perform such
covenant or agreement for or on behalf of the breaching party or
make good any such default, and any amount or amounts which the
non-breaching party shall advance on behalf of the breaching
party shall be repaid by the breaching party to the non-breaching
party on demand, together with interest thereon at the rate of
twelve percent (12%) per annum from the date of such advance to
the repayment thereof in full.
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Section 23.20. Tenant's Continuous Use Obligation.
Anything contained in this Lease, expressly or impliedly, to the
contrary notwithstanding, except as specifically provided in
Section 3.03(C), and notwithstanding the agreement herein
contained for the payment by Tenant of Rent (including Substitute
Rent), as hereinbefore provided, it is specifically and expressly
understood and agreed that Tenant shall be under no duty or
obligation, either express or implied, to continuously conduct
its business in the Leased Premises at any time during the Term
after opening pursuant to Section 3.03(C). However, the right to
cease to operate its business under this Section shall not affect
Tenant's obligations to pay rent due hereunder or to perform all
of its covenants and obligations hereunder.
Notwithstanding the foregoing, if Tenant fails for more than one
hundred fifty days (150) days within any period of twelve (12)
consecutive months to keep the Leased Premises open and
operating, then, as Landlord's sole remedy for such failure,
Landlord may terminate this Lease upon thirty (30) days prior
written notice to Tenant after which all obligations of Tenant
and Landlord under this Lease shall terminate and be of no
further force or effect except for those which expressly survive
termination. In the event Landlord terminates the Lease pursuant
to this provision, then upon such termination date, Landlord
shall reimburse Tenant for the unamortized costs of the Shell and
the Site Work.
Section 23.21. Force Majeure.
For purposes of this Lease, force majeure shall mean a period of
delay, except with respect to the payment of any monetary
obligation, in the performance of any obligation hereunder when
such delay is occasioned by causes beyond its control, including
but not limited to work stoppages, boycotts, slowdowns or
strikes; shortages of materials, equipment, labor or energy;
unusual weather conditions; or acts or omissions of governmental
or political bodies.
Section 23.22. Tenant's Continuous Use Obligation.
Landlord acknowledges and consents to the sublease of the Leased
Premises to Sterling Jewelers, Inc.; provided, however, such
sublease does not affect or release any obligation of Tenant
under this Lease. Furthermore, Landlord's consent herein shall
not constitute a consent by Landlord to any further assignments
or subletting of the Leased Premises.
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IN WITNESS WHEREOF, the parties hereto have executed this Lease
as of the day and year first above written.
LANDLORD
DUKE-WEEKS REALTY LIMITED
PARTNERSHIP, an Indiana
limited partnership
By: Duke-Weeks Realty
Corporation, Inc
Its general partner
By: /s/ Michael L Myrvold
Senior Vice President
Retail Group
TENANT:
CAPTEC STER AURORA LLC
An Illinois limited liability
company
By: Captec Net Lease Realty Inc
Its Member
By /s/ Gary A Barker
Printed Gary A Barker
Title VP
STATE OF INDIANA )
)SS
COUNTY OF MARION )
Before me, a Notary Public in and for said County and State,
personally appeared Michael L Myrvold, by me known and by me know
to be the Senior Vice President, Retail Group, of Duke-Weeks
Realty Corporations, general partner of Duke-Weeks Realty Limited
Partnership, an Indiana limited partnership, who acknowledged the
execution of the foregoing "Net Ground Lease" on behalf of said
partnership.
WITNESS my hand and Notarial Seal this 14th day of October 1999.
/s/ Linda Ruth Phillips
Notary Public
[notary seal]
STATE OF MI )
)SS
COUNTY OF WASHTENAW )
Before me, a Notary Public in and for said County and State,
personally appeared Gary A Barker by me known and by me known to
be the VP of Captec Net Lease Realty Inc the sole member of
Captec Ster Aurora LLC an Illinois limited liability company who
acknowledged the execution of the foregoing "Net Ground Lease" on
behalf of said company.
WITNESS my hand and Notarial Seal this 13 day of October 1999.
/s/ David A Eby Jr
Notary Public
[notary seal]