|
|
|
Legal Resources
Business Contracts
MCLE Courses
Projects
Friends
|
LEASE ABSTRACT
Mall: Galleria
Store Name: The Build-A-Bear Workshop
Store Address: store 1440
Landlord: Hycel Partners I L.P.
Address: 164 Crestwood Plaza, Suite 200
St. Louis, Missouri 63126-1794
Rent Paid To: Same
Total square footage: A 2,251
Annual Rent: $74,328 yrs 1 to 2 ($33.02/sq. ft.)
$78,780 yrs 3 to 4 ($35.00/sq. ft.)
$83,292 yrs 5 to 6 ($37.00/sq. ft.)
$87,816 yrs 7 to 8 ($39.01/sq. ft.)
$92,268 yrs 9 to 10 ($40.99/sq. ft.)
Lease Commencement: Section 1.03 10/1/97 if space is delivered by 7/1/97;
if not extended day for day
Rent Commencement: Section 1.03 Earlier of 10/1/97 or date store opens
Lease Expiration: Section 1.03 Ten years after Commencement Date
Early Termination: Section 2.02 Landlord's option
Sales Amount: Breakpoint
Period: Any year after 3rd Lease Year
Notice date: 30 days Remedy: Terminate lease or increase minimum rent
by 15%
Gross Sales Reports: Section 3.02 Yes
Monthly by 15th Annually 30 days after anniversary of Commencement Date
Percentage Rent: 6%
Breakpoint: Yrs 1 & 2 $929,100; yrs 3 & 4 $984,750;
yrs 5 & 6 $1,041,150; yrs 7 & 8 $1,097,700;
yrs 9 & 10 $1,153,350
Payable: Section 2.02 Monthly after Breakpoint
CAM: Prorata (with 80% floor)
HVAC: Prorata
Tax: Section 2.04 Prorata (with 80% floor)
Advertising & Promotion: Section 17.01(b) $7,000/yr. ($3.12/sq. ft.)
adjusted annually by advertising rates in St. Louis but not to exceed 5%
increase in years 1 and 2, and then the greater of 5% or actual.
Radius Restriction: Section 6.03 5 miles
Security Deposit: Section 8.01 $7,000.00
Remodel: Section 5.06 First 3 months of 6th year
Plan Approval Fee: Section 5.03 $1,000.00 maximum
Completion Deposit: Section 5.03(d) $12,500.00
Modification of Signs: Section 10.03 $250 maximum for plan review
<PAGE>
LEASE
SAINT LOUIS GALLERIA
TENANT: SMART STUFF, INC.
DATE: May 5, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE A BASIC LEASE PROVISIONS.................................................... 1
ARTICLE I GRANT AND TERM ........................................................... 3
SECTION 1.01. Leased Premises and Shopping Center....................................... 3
SECTION 1.02. Use of Additional Areas................................................... 3
SECTION 1.03. Commencement and Ending Date of Term...................................... 3
SECTION 1.04. Failure of Tenant to Open................................................. 3
SECTION 1.05. Joint Opining ............................................................ 3
ARTICLEII RENT AND REAL ESTATE TAXES................................................ 4
SECTION 2.01. Minimum Rent.............................................................. 4
SECTION 2.02. Percentage Rent........................................................... 4
SECTION 2.03. Gross Sales Defined....................................................... 4
SECTION 2.04. Real Estate Taxes......................................................... 5
SECTION 2.05. Additional Rent.......................................................... 6
SECTION 2.06. Late Charge............................................................... 6
SECTION 2.07. Governmental Limitation on Rents and Other Charges ....................... 6
SECTION 2.08. Automatic Transfer........................................................ 7
ARTICLE III RECORDS AND BOOKS OF ACCOUNT.............................................. 7
SECTION 3.01. Tenant's Records ......................................................... 7
SECTION 3.02. Reports by Tenant ........................................................ 8
ARTICLE IV AUDIT..................................................................... 8
SECTION 4.01. Right to Examine Books ................................................... 8
SECTION 4.02. Audit .................................................................... 8
ARTICLE V CONSTRUCTION, ALTERATION, RELOCATION AND REMODELING ...................... 9
SECTION 5.01. Construction Provided by Owner............................................ 9
SECTION 5.02. Parking Facilities........................................................ 9
SECTION 5.03. Tenant's Work............................................................. 10
SECTION 5.04. Fire Prevention Systems................................................... 11
SECTION 5.05. Changes and Additions to Buildings........................................ 11
SECTION 5.06. Remodeling of Leased Premises............................................. 12
SECTI0N 5.07. Construction Reimbursement Cost........................................... 12
ARTICLE VI CONDUCT OF BUSINESS BY TENANT ............................................ 12
SECTION 6.01. Use of Premises........................................................... 12
SECTION 6.02. Operation of Business..................................................... 13
SECTION 6.03. Competition .............................................................. 14
SECTION 6.04. Storage, Office Space, Display of Merchandise, Solicitation of Business .. 14
SECTION 6.05. Maintain Character of Shopping Center..................................... 14
SECTION 6.06. Waste .................................................................... 14
SECTION 6.07. Hazardous Substances...................................................... 14
ARTICLE VII OPERATION OF CONCESSIONS.................................................. 15
SECTION 7.01. Consent of Owner.......................................................... 15
ARTICLE VIII SECURITY DEPOSIT.......................................................... 15
SECTION 8.01. Amount of Deposit ........................................................ 15
SECTION 8.02. Use and Return of Deposit ................................................ 16
SECTION 8.03. Transfer of Deposit ...................................................... 16
SECTION 8.04. Additional Security Deposit............................................... 16
ARTICLE IX COMMON AREAS ............................................................. 17
SECTION 9.01. Control of Common Areas by Owner.......................................... 17
SECTION 9.02. License .................................................................. 17
SECTION 9.03. Tenant's Share of Expenses ............................................... 17
ARTICLE X SIGNS, CANOPlES, FIXTURES, ALTERATIONS.................................... 20
SECTION 10.01. Installation and Alteration by Tenant..................................... 20
SECTION 10.02. Tenant Discharge of Liens................................................. 20
SECTION 10.03. Signs, Displays and Canopies ............................................. 21
<PAGE>
ARTICLE XI MAINTENANCE OF LEASED PREMISES.............................................. 21
SECTION 11.01. Maintenance by Tenant ...................................................... 21
SECTION 11.02. Maintenance by Owner ....................................................... 22
SECTION 11.03. Rules and Regulations ...................................................... 22
ARTICLE XII SURRENDER OF PREMISES....................................................... 22
SECTION 12.01. Surrender of Premises and Ownership of Certain Property .................... 22
SECTION 12.02. Ownership of Property on Premises........................................... 23
ARTICLE XIII INSURANCE AND INDEMNITY..................................................... 23
SECTION 13.01. Tenant's Insurance.......................................................... 23
SECTION 13.02. Increase in Insurance Premium............................................... 24
SECTION 13.03. Identification of Owner .................................................... 25
SECTION 13.04. Glass ...................................................................... 25
SECTION 13.05. Boiler Insurance.................. ......................................... 25
SECTION 13.06. Owner's Insurance........................................................... 25
ARTICLE XIV UTILITIES................................................................... 26
SECTION 14.01. Utility Charges ............................................................ 26
SECTION 14.02. Maintenance of Meters ...................................................... 26
SECTION 14.03. Discontinuance of Services.................................................. 26
SECTION 14.04. Energy Shortage ............................................................ 27
SECTION 14.05. No Overloading ............................................................. 27
ARTICLE XV ESTOPPEL CERTIFICATE, ATTORNMENT, SUBORDINATION............................. 27
SECTION 15.01. Estoppel Certificate ....................................................... 27
SECTION 15.02. Attornment ................................................................. 27
SECTION 15.03. Subordination .............................................................. 28
SECTION 15.04. Attorney-in-Fact ........................................................... 28
ARTICLE XVI ASSIGNMENT AND SUBLETTING .................................................. 28
SECTION 16.01. Consent Required ........................................................ 28
SECTION 16.02. Owner's Right to Assign Lease............................................... 29
SECTION 16.03. Change in Ownership........................................................ 30
SECTION 18.04. Continuing Liability of Tenant.............................................. 30
ARTICLE XVII PROMOTIONS FUND, ADVERTISING................................................ 30
SECTION 17.01. Promotions and Advertising Fund............................................. 30
SECTION 17.02. Mall Credit Card Program ................................................... 31
ARTICLE XVIII DESTRUCTION AND RESTORATION................................................. 31
SECTION 18.01. Total or Partial Destruction of Leased Premises ............................ 31
SECTION 18.02. Partial Destruction of Shopping Center......... ............................ 32
SECTION 18.03. Waiver of Subrogation, Limitation of Liability.............................. 32
ARTICLE XIX EMINENT DOMAIN.............................................................. 33
SECTION 19.01. Total Condemnation of Leased Premises 33
SECTION 19.02. Partial Condemnation of Leased Premises..................................... 33
SECTION 19.03. Condemnation of Shopping Center............................................. 33
SECTION 19.04. Owner's Damages ............................................................ 33
SECTION 19.05. Tenant's Damages............................................................ 33
ARTICLE XX DEFAULT BY TENANT........................................................... 34
SECTION 20.01. Right to Terminate the Lease or Tenant's Possession of the Leased Premises.. 34
SECTION 20.02. Right to Relet.............................................................. 34
SECTION 20.03. Payment of Expenses......................................................... 35
SECTION 20.04. Owner's Right to Cure Defaults ............................................ 35
SECTION 20.05. Waiver of Rights of Redemption.............................................. 35
SECTION 20.06. Waiver and Subsequent Defaults.............................................. 35
SECTION 20.07. Injunctive Relief .......................................................... 36
SECTION 20.08. Cumulative Remedies ........................................................ 36
SECTION 20.09. Tenant's Bankruptcy or Insolvency........................................... 36
ARTICLE XXI DEFAULT BY OWNER............................................................ 37
SECTION 21.01. Notice to Owner............................................................. 37
SECTION 21.02. Liability of Owner ......................................................... 38
<PAGE>
LEASE
WITNESSETH:
In consideration of the payment of the rents and other charges provided
for herein and the covenants and conditions hereinafter set forth, Owner and
Tenant agree as follows:
ARTICLE A BASIC LEASE PROVISIONS
DATE: May 5, 1997
OWNER: HYCEL PARTNERS I, L.P., a Delaware limited partnership,
164 Crestwood Plaza, Suite 200
St.Louis, Missouri 63126-1794
EIN: 43-1530514
TENANT: SMART STUFF, INC., a Missouri corporation
ADDRESS OF TENANT: 1964 Innerbelt Business Center Drive
St. Louis, Missouri 63114
TENANT'S TRADE NAME: THE BUILD-A-BEAR WORKSHOP
LEASED PREMISES: Store 1440; Mall Level 1; containing approximately
2,251 square feet of Floor Area and hatched in black
on Exhibit 'A'.
ADDRESS OF LEASED PREMISES: Commonly known as 1440 Saint Louis Galleria
St Louis, Missouri 63117
LEASE TERM: Ten (10) Lease Years
OUTSIDE DATE: October 1,1997
MINIMUM RENT: ANNUAL MONTHLY PER S.F.
Lease Year 1 thru 2 $ 74,328.00 $ 6,194.00 $ 33.02
Lease Year 3 thru 4 $ 78,780.00 $ 6,565.00 $ 35.00
Lease Year 5 thru 6 $ 83,292.00 $ 6,941.00 $ 37.00
Lease Year 7 thru 8 $ 87,816.00 $ 7,318.00 $ 39.01
Lease Year 9 thru 10 $ 92,268.00 $ 7,689.00 $ 40.99
<PAGE>
PERCENTAGE RATE : Six percent (6%)
PERCENTAGE BREAKPOINT:
During the first (1st) Lease Year through and including the second (2nd) Lease
Year, an amount per annum equal to $929,100.00
During the third (3rd) Lease Year through and including the fourth (4th) Lease
Year, an amount per annum equal to $984,750.00
During the fifth (5th) Lease Year through and including the sixth (6th) Lease
Year, an amount per annum equal to $1,041,150.00
During the seventh (7th) Lease Year through and including the eighth (8th) Lease
Year, an amount per annum equal to $1,097,700.00
During the ninth (9th) Lease Year through and including the tenth (10th) Lease
Year, an amount per annum equal to $1,153,350.00
PERMITTED USES:
The display, assembly and sale at retail of make it yourself plush bears and
other animals and accessories related to such bears and other animals such as
clothes, books, shampoo, jewelry and stickers and for no other purposes.
SECURITY DEPOSIT: Seven Thousand Dollars ($7,000.00)
See Section 8.01.
PROMOTION AND ADVERTISING CHARGE: Seven Thousand Dollars ($7,000.00)
See Section 17.01 (b).
REMODELING PERIOD: The first three (3) months of the sixth (6th)
Lease Year. See Section 5.06.
2
<PAGE>
ARTICLE I GRANT AND TERM
SECTION 1.01. Leased Premises and Shopping Center
Owner hereby demises and leases to Tenant, and Tenant hereby rents from
Owner those certain premises described as the "Leased Premises" in Article A of
this Lease (the "Leased Premises"), together with the appurtenances specifically
herein granted. The term "Shopping Center" shall mean the Saint Louis Galleria,
City of Richmond Heights, St. Louis County, Missouri, together with the
buildings and other improvements from time to time located on the land
thereunder.
SECTION 1.02. USE OF ADDITIONAL AREAS
The use and occupation by Tenant of the Leased Premises during the term of
this Lease shall include the nonexclusive use in common with others entitled
thereto of the "Common Areas", as that term is hereinafter defined; subject,
however, to the terms and conditions of this Lease and to reasonable rules and
regulations for the use thereof as prescribed from time to time by Owner.
SECTION 1.03. COMMENCEMENT AND ENDING DATE OF TERM SEE RIDER, PARAGRAPH 1
(a) The term of this Lease and Tenant's obligation to pay rent hereunder
shall commence upon the earlier of the following dates (the "Commencement
Date"); (ii) the date on which Tenant shall first open the Leased Premises for
business to the public; or (iii) the "Outside Date" set forth in Article A. The
Commencement Date shall not be postponed due to any delays by Tenant in mailing
or delivery of any of the plans described in Exhibit "B" or due to any changes
made to or required by such plans. If requested by Owner, Tenant shall execute
an agreement confirming the Commencement Date and expiration date of this Lease.
(b) If the term of this Lease shall not have commenced within one (1)
year of the date hereof, then Owner shall have the right to cancel this Lease by
giving Tenant thirty (30) days' notice. If this right is exercised, this Lease
shall become null and void, and neither party shall have any further liability
or obligation to the other hereunder, and Tenant shall execute an instrument in
recordable form containing a release and surrender of all right, title and
interest in and to the Leased Premises.
(c) The term of this Lease shall end on the last day of the last Lease
Year provided under the heading "Lease Term" in Article A, unless sooner
terminated pursuant to the terms of this Lease.
SECTION 1.04. FAILURE OF TENANT TO OPEN
Subject to Article XVIII and Section 27.04, in the event that Tenant fails
to open the Leased Premises for business fully fixtured, stocked and staffed by
the commencement of the term of this Lease as provided in Section 1.03(a), then
Tenant shall, in recognition of the difficulty or impossibility of determining
Owner's damages, pay to Owner as liquidated damages and not as a penalty, in
addition to the Minimum Rent and other charges payable hereunder, a separate
charge, payable upon demand, equal to fifty percent (50%) of the Minimum Rent
(prorated on a per diem basis, and irrespective of whether payment of Minimum
Rent is then abated by other provisions of this Lease) during the period
beginning with the Commencement Dale and ending on the date Tenant opens the
Leased Premises for business with the public.
SECTION 1.05. JOINT OPENING
3
<PAGE>
ARTICLE XXII ACCESS BY OWNER........................................... 38
SECTION 22.01. Right of Entry............................................ 38
SECTION 22.02. Excavation................................................ 38
ARTICLE XXIII PROPERTY WITHIN THE LEASED PREMISES....................... 38
SECTION 23.01. Payment of Taxes and Fees ................................ 38
SECTION 23.02. Loss and Damage........................................... 38
SECTION 23.03. Notice by Tenant.......................................... 38
ARTICLE XXIV HOLDING OVER, SUCCESSORS................................ 39
SECTION 24.01. Holding Over.............................................. 39
SECTION 24.02. Successors................................................ 39
ARTICLE XXV QUIET ENJOYMENT......................................... 39
SECTION 25.01. Owner's Covenant.......................................... 39
ARTICLE XXVI DEFINITION OF TERMS....................................... 40
SECTION 26.01. Common Areas.............................................. 40
SECTION 26.02. Owner..................................................... 40
SECTION 26.03. Floor Area................................................ 40
SECTION 26.04. Tenant.................................................... 40
SECTION 26.05. Tenant's Agents........................................... 40
SECTION 26.06. Lease Year and Partial Lease Year......................... 40
SECTION 26.07. Guarantor................................................. 41
SECTION 26.08. Major Store and Major Store Premises...................... 41
SECTION 26.09. Tenant Design Guide....................................... 41
ARTICLE XXVII MISCELLANEOUS ............................................ 41
SECTION 27.01. Accord and Satisfaction................................... 41
SECTION 27.02. Entire Agreement ......................................... 41
SECTION 27.03. Relationship of the Parties............................... 42
SECTION 27.04. Force Majeure............................................. 42
SECTION 27.05. Notices................................................... 42
SECTION 27.06. Captions and Section Numbers ............................. 42
SECTION 27.07. Use of Pronoun............................................ 42
SECTION 27.08. Brokerage................................................. 42
SECTION 27.09. Partial Invalidity........................................ 43
SECTION 27.10. Applicable Law............................................ 43
SECTION 27.11. No Option................................................. 43
SECTION 27.12. Reimbursement............................................. 43
SECTION 27.13. Recording................................................. 43
SECTION 27.14. Liquidated Damages........................................ 43
SECTION 27.15. Tenant's Financial Information............................ 43
SECTION 27.16. Authority................................................. 43
SECTION 27.17. Consent .................................................. 44
SECTION 27.18. Right to Change Shopping Center Name...................... 44
SECTION 27.19. Adding and Withdrawing Property........................... 44
SECTION 27.20. Additional Major Store.................................... 44
SECTION 27.21. Gift Certificates......................................... 44
SECTION 27.22. Survival of Tenant's Obligations.......................... 44
SECTION 27.23. Trial by Jury Waiver and Counterclaims.................... 44
SECTION 27.24. Rider..................................................... 45
SECTION 27.25. Exhibits ................................................. 45
RIDER........................................................................... 1
EXHIBIT "A" SITE PLAN................................................. 1
EXHIBIT "B" IMPROVEMENT OF LEASED PREMISES............................ 1
ARTICLE B-1 CONSTRUCTION REQUIREMENTS................................. 1
SECTION 1. Structure of Building..................................... 1
SECTION 2. Interior Finish .......................................... 1
SECTION 3. Utilities................................................. 1
SECTION 4. Tenant's Work............................................. 2
<PAGE>
ARTICLE B-II PLANS........................................................ 2
SECTION 1. Preliminary Plans............................................ 2
SECTION 2. Working Plans................................................ 2
SECTION 3. Changes in Working Plans..................................... 3
SECTION 4. Construction by Tenant....................................... 4
SECTION 5. Miscellaneous................................................ 4
EXHIBIT "C" RULES AND REGULATIONS........................................ 1
EXHIBIT "C-1" FORM OF LETTER OF CREDIT..................................... 1
<PAGE>
ARTICLE II RENT AND REAL ESTATE TAXES
SECTION 2.01. MINIMUM RENT
Tenant agrees to pay to Owner at the address specified In Section 27.05 or
at such other place designated by Owner (including without limitation by way of
a lock box), without any prior notice or demand therefor and without any
deduction or setoff whatsoever, the "Minimum Rent" specified in Article A, in
equal monthly installments on or before the first day of each calendar month in
advance. Minimum Rent for a fractional calendar month (including the fractional
calendar month at the commencement of the term, if any) shall be prorated on a
per diem basis. If the term of this Lease includes any Partial Lease Year, as
defined in Section 26.06, then Tenant shall pay as Minimum Rant for any Partial
Lease Year, the then applicable Minimum Rent payable per annum prorated on a per
diem basis with respect to such Partial Lease Year.
SECTION 2.02. PERCENTAGE RENT
(a) In addition to the payment of Minimum Rent, Tenant agrees to pay to
Owner for each Lease Year as "Percentage Rent" hereunder, an amount equal to the
"Percentage Rate" set forth in Article A for the "Gross Sales", as that term is
hereinafter defined, for each such Lease Year in excess of the applicable
"Percentage Breakpoint" set forth in Article A for each such Lease Year. With
respect to each Lease Year, the Percentage Rent shall be due and payable
commencing with the calendar month during such Lease Year in which the aggregate
Gross Sales for such Lease Year shall first have exceeded the applicable
Percentage Breakpoint and thereafter shall be paid monthly on all additional
Gross Sales made during the remainder of such Lease Year. Such payments shall be
made to Owner not later than the fifteenth (15th) day following each month in
which any such excess Gross Sales are made and without any prior notice or
demand therefor and without any setoff or deduction whatsoever.
(b) For the purpose of computing the Percentage Rent payable hereunder
with respect to any Partial Lease Year or Lease Year in which there has been an
abatement of Minimum Rent as provided in this Lease, the applicable Percentage
Breakpoint shall be adjusted to equal the product obtained by multiplying the
applicable Percentage Breakpoint by a fraction, the numerator of which is the
Minimum Rent paid by Tenant for such Partial Lease Year or Lease Year, and the
denominator of which is the Minimum Rent otherwise payable by Tenant had such
Partial Lease Year or Lease Year constituted three hundred sixty-five (365) days
or had the Minimum Rent been payable without abatement.
SECTION 2.03. GROSS SALES DEFINED SEE RIDER PARAGRAPH 2
The term "Gross Sales" as used herein shall be defined to mean the
aggregate amount of the price charged for all goods sold, services rendered and
other operations in, on, at or from the Leased Premises by Tenant and all
others, whether such sales are evidenced by cash, check, credit charge account,
exchange or otherwise and regardless of the amount, if any, of profits realized
on any transaction. Gross Sales shall include, but not be limited to, the entire
amount of the price charged, whether wholly or partially in cash or credit, from
the sale, lease, licensing or delivery of goods, wares and merchandise, whether
such sales be made by means of merchandise or other vending
4
<PAGE>
or video devices in the Leased Premises, rentals, lottery tickets, food, drinks,
sales to Tenant's employees, deposits not refunded to purchasers, service
charges for layaway sales, receipts from the sale of gift certificates and
merchandise vouchers at the time of sale, not at the time of redemption for
merchandise, and for service performed in, on or from the Leased Premises,
together with the amount of all orders taken or received, including mail,
catalog, telephone, telegraph, electronic mail, at home, or other orders
received at the Leased Premises, whether such orders be filled from the Leased
Premises or elsewhere and the amounts received from interest on charge accounts
and other finance charges, and, if any one or more departments or other
divisions of Tenant's business shall be sublet by Tenant or conducted by any
person, firm or corporation other than Tenant pursuant to this Lease, for all
receipts of gross sales of such departments or divisions in the same manner and
with the same effect as if the business or sales of such departments and
divisions of Tenant's business had been conducted by Tenant itself. Gross Sales
shall not include sales of merchandise for which cash has been refunded or
allowances made on merchandise claimed to be defective or unsatisfactory,
provided they shall have been included in Gross Sales and provided that if such
refunds or allowances are in the form of credits to customers, such credits
shall be included in Gross Sales when used; the sales price of merchandise
returned by customers for exchange, provided that the sales price of merchandise
delivered to the customer in exchange shall be included in Gross Sales; the
amount of any sales, use or gross receipts tax imposed by any federal, state,
municipal or other governmental authority directly on sales and collected from
customers, provided that the amount thereof is added to the selling price or
absorbed therein, that the amount is paid by Tenant to such governmental
authority and that a specific record is made at the time of each sale of the
amount of tax. Each charge or sale upon installment or credit shall be treated
as a sale for the full price in the month during which such charge or sale shall
be made, irrespective of the time when Tenant shall receive payment (whether
full or partial) therefor, and no reserve or deduction shall be allowed for
uncollected or uncollectible charge accounts, bad debts, or other items. Each
charge or sale shall be recorded for its full amount, and no deduction or offset
thereto shall be permitted for trade-ins, over-allowances for trade-ins,
coupons, handling charges for coupons or the equivalent.
SECTION 2.04. REAL ESTATE TAXES
(a) Tenant shall pay its proportionate share of the "Real Estate Taxes"
which may be levied or assessed against the land, buildings and other
improvements owned by Owner in the Shopping Center during the term of this
Lease. Said land, buildings and improvements shall hereinafter be referred to as
"Owner's Parcel". For purposes of this Section, the term "Real Estate Taxes"
shall include all real estate taxes, assessments, water and sewer rents (except
water meter charges and sewer rent based thereon) and other governmental
impositions and charges of every kind and nature whatsoever, extraordinary as
well as ordinary, general and special, foreseen and unforeseen, and each and
every Installment thereof (including any interest on amounts which may be paid
in installments) which shall or may, during the term of this Lease, be levied,
assessed, imposed or becomes due and payable with respect to Owner's Parcel, or
which Owner is contractually obligated to pay (including, without limitation,
payments in lieu of Real Estate Taxes to any governmental or quasi-governmental
entity) or which arise in connection with the use, occupancy or possession of or
grow due or payable out of or for Owner's Parcel or any part thereof, or which
may have been assessed by any taxing body on Owner's Parcel in any calendar year
or part thereof during the term of this Lease but which are abated pursuant to
ordinances of any taxing body, plus all costs incurred by Owner (including
reasonable attorney, consultant and appraiser fees) in contesting or negotiating
the Real Estate Taxes, any proposed Real Estate Taxes or any reassessment of
Real Estate Taxes with any governmental authority, plus an administrative fee
equal to two and one-half percent (2 1/2%) of the total of the foregoing costs
and Real Estate Taxes.
(b) Nothing herein contained shall be construed to include as a tax which
shall be the basis of Real Estate Taxes, any inheritance, estate, succession,
transfer, gift, franchise, corporation, income or profit tax or capital levy
that is or may be imposed upon Owner, provided, however, that if, at any time
after the date hereof the methods of taxation shall be altered so that in lieu
of or as a substitute for or in addition to the whole or any part of the Real
Estate Taxes now levied, assessed or imposed on the Owner's Parcel, there shall
be levied, assessed or imposed a tax on the rents received from the Owner's
Parcel, or a tax or license fee imposed upon Owner which is otherwise measured
by or based in whole or in part upon Owner's Parcel or any portion thereof, then
the same shall be included in the computation of Real Estate Taxes hereunder
and computed as if the amount of such tax or fee so payable were that due if
Owner's Parcel were the only property of Owner subject thereto.
(c) Tenant's proportionate share of the Real Estate Taxes shall be the sum
obtained by multiplying the total amount of the Real Estate Taxes assessed each
calender year on the Owner's Parcel (less any contribution thereto by the Major
Stores) by a fraction, the numerator of which shall be the Floor Area of the
Leased Premises and the denominator of which shall be the leased and occupied
Floor Area of the Owner's Parcel (less the Floor Area of the Major Store
Premises) for such calendar year; provided, however, in no event shall such
denominator be less than the amount equal to eighty percent (80%) of the average
of the total Floor Area of the owner's Parcel available for lease on the first
day of each calendar month in such calendar year (less the Floor Area of the
Major Store Premises). The Floor Area of the Owner's Parcel in effect for the
whole of any calender year shall be the average of the leased and occupied Floor
Area in affect on the first day of each calendar month in such calendar year.
Tenant hereby waives any right it may have by statute or otherwise to protest
the Real Estate Taxes Imposed on the Owner's Parcel, the building or buildings
of which the Leased Premises form a part or the Leased Premises; it being agreed
that Owner shall have the exclusive right (but not obligation) to contest or
compromise any Real Estate Taxes.
<PAGE>
(d) Tenant shall pay to Owner, as Additional Rent, Tenant's proportionate
share of Real Estate Taxes in estimated (which estimate may be based on the
prior calendar year's actual Real Estate Taxes) equal monthly installments in
advance on the first day of each calender month during the term of this Lease.
If Owner determines that Owner has underestimated Tenant's proportionate share
of Real Estate Taxes, Owner may revise its estimate and adjust Tenant's monthly
payments upon written notice to Tenant and such adjusted estimate shall become
effective as of the next monthly payment. Within a reasonable time after receipt
of the actual tax bill for such calendar year, Owner shall furnish to Tenant a
statement showing Tenant's proportionate share of Real Estate Taxes for such
calendar year and the payments made by Tenant for such calendar year. If
Tenant's aggregate monthly payments are greater than Tenant's proportionate
share of Real Estate Taxes with respect to such calendar year, then Tenant shall
receive a credit for the excess against future payments of Tenant's
proportionate share of Real Estate Taxes becoming due to Owner (or if such
excess occurs at the end Of the term or is otherwise incapable of being credited
against future payments end provided that Tenant is current in the payment of
Minimum Rent, Percentage Rent, Additional Rent and all other sums payable under
any of the terms and provisions of this Lease, such excess shall be refunded to
Tenant within twenty (20) days after said determination). If Tenant's aggregate
monthly payments are less than Tenant's proportionate share of Real Estate Taxes
for such calendar year, then Tenant shall pay to Owner the difference within ten
(10) days after receipt of Owner's statement. If the term of this Lease shall
begin or end other than on the first or last day of a calendar year, Tenant's
proportionate share of the Real Estate Taxes shall be prorated for such calendar
year based on a three hundred sixty-five (365) day year. In the event of any
dispute in the amount of any payment actually due under this Section. Tenant
shall pay the amount according to Owner's bill or statement hereunder. However,
such payment shall be without prejudice to Tenant's position, and if the dispute
shall be determined in Tenant's favour, by agreement or otherwise, Owner shall
issue a credit to Tenant against future payments of Tenant's proportionate share
of the Real Estate Taxes for the amount of Tenant's overpayment resulting from
such compliance by Tenant. Any tax bill or statement sent by Owner shall be
deemed binding and conclusive if Tenant fails to object thereto within thirty
(30) days after receipt thereof.
(e) Tenant shall be solely responsible for and shall pay before
delinquency all taxes, assessments, license fees and public charges levied,
assessed or imposed upon its business operation, as well as upon all trade
fixtures, merchandise and other personal property in or upon the Leased Premises
whether or not owned by Tenant. Should the taxing authorities include in Real
Estate Taxes machinery, equipment, fixtures, inventory or other personal
property or assets of Tenant, then Tenant shall also pay the entire taxes for
such items.
SECTION 2.05. ADDITIONAL RENT
Wherever it is provided In this Lease that Tenant is required to make any
payment to Owner, such payment shall be deemed to be 'Additional Rent, whether
or not the same be designated "Additional Rent". However, such Additional Rent
shall not be deemed to be Minimum Rent and shall not be deducted from Percentage
Rent or be considered in the computation of Percentage Rent If such amounts or
charges are not paid at the time provided in this Lease, they shall nevertheless
be collectible as Additional Rent with the next installment of rent thereafter
falling due hereunder.
SECTION 2.06. LATE CHARGE
Regardless of whether Tenant is in default, if Tenant shall fall to pay
when the same is due and payable, any Minimum Rent, Percentage Rent, Additional
Rent or any other amounts or charges accruing under this Lease, such unpaid
amounts shall bear interest at the lesser of (i) the highest lawful rate of
interest that may be charged Tenant under the laws of the state of Missouri or
(ii) the rate of one and one-half percent (1 1/2%) per month (or any fraction
thereof) from the date Tenant's payments first due to the date of payment;
provided, however, that the payment of such interest shall not excuse or cure
any default upon which such interest may have accrued. Nothing contained herein
shall be deemed to suspend or delay the payment of any amount of money or charge
at the time the same become due and payable hereunder, or limit any other remedy
of Owner.
SECTION 2.07. GOVERNMENTAL LIMITATION ON RENTS AND OTHER CHARGES
If any law, decision, order, rule or regulation (collectively called
"Limiting Law") of any governmental authority shall have the effect of limiting
for any period of time the amount of rant or other amounts payable by Tenant to
any amount less than the amount required by this Lease, then:
(a) Throughout the period of limitation, Tenant shall remain liable for
the maximum amount of Minimum Rent, Percentage Rent and Additional Rent which
are legally payable; and
5
<PAGE>
(b) When the period of limitation ends, or if the Limiting Law is
repealed, or following any order or ruling that substantially restrains or
prohibits enforcement of the Limiting Law, Tenant shall pay to Owner, on demand
(to the extent that payment of such amounts is not prohibited by law), all
amounts that would have been due from Tenant to Owner during the period of
limitation but which were not paid because of the Limiting Law; and thereafter
Tenant shall pay to Owner Minimum Rent, Percentage Rent and Additional Rent due
pursuant to this Lease, all calculated as though there had been no intervening
period of limitation.
SECTION 2.08. AUTOMATIC TRANSFER
Owner may, at its sole option, upon not less than thirty (30) days prior
written notice to Tenant, require Tenant to promptly execute and deliver to
Owner any documents, instruments, authorizations or certificates required by
Owner to permit Owner to receive payment of Minimum Rent, Additional Rent or any
other sums or charges payable under any of the terms and provisions of this
Lease by an automated debiting system, whereby any or all of such payments by
Tenant (as designated from time to time by Owner) shall be debited monthly or
from time to time, as determined by Owner, from Tenant's account in a bank or
financial institution designated by Tenant and credited to Owner's bank account
as Owner shall designate from time to time. Tenant shall promptly pay all
service fees and other charges connected therewith, including, without
limitation, any charges resulting from insufficient funds in Tenant's bank
account or any charges imposed on Owner. In the event Tenant elects to designate
a different bank or financial institution from which any Minimum Rent,
Additional Rent or other sums or charges payable under this Lease are
automatically debited, then Tenant shall notify Owner in writing of such change
and shall deliver to Owner the required documents, instruments, authorizations
and certificates specified in this Section no later than thirty (30) days prior
to the date such change is to become effective, Tenant agrees that it shall
remain responsible to Owner for all payments of Minimum Rent, Additional Rent
and any other sums or charges payable pursuant to the terms and provisions of
this Lease, even if Tenant's bank account is incorrectly debited in any given
month. Such Minimum Rent, Additional Rent and any other sums or charges shall be
immediately payable to Owner upon written demand, Tenant's failure to property
designate a bank or financial Institution or to promptly provide appropriate
information in accordance with the provisions of this Section 2.08 shall
constitute a default of the Lease.
ARTICLE III RECORDS AND BOOKS OF ACCOUNT
SECTION 3.01. TENANT'S RECORDS
(a) For the purpose of ascertaining the amount payable as Percentage Rent,
Tenant agrees to prepare (and cause any assignee, licensee, concessionaire or
subtenant to prepare) and keep on the Leased Premises or at its principal office
for a period of not less than three (3) years following the end of each Lease
Year a complete, adequate and accurate set of books and records in accordance
with generally accepted accounting principles of Tenant's Gross Sales (and all
exclusions therefrom) which shall be sufficient to enable Owner to verify
Tenant's Gross Sales for each such Lease Year. These books and records shall
show Gross Sales, claimed exclusions from Gross Sales, inventories and receipts
of merchandise at the Leased Premises and dally receipts from all sales and
other transactions on or from the Leased Premises by Tenant and any other
persons conducting any business upon or from said premises. All Gross Sales
shall be recorded at the time of sale and in the presence of the customer, and
shall be recorded in a point of sale terminal, computer, cash register or
registers having a cumulative total, which shall be sealed in a manner approved
by Owner and having such other features as shall be approved by Owner. Tenant
further agrees to keep on the Leased Premises or at its principal office for at
least three (3) years following the end of each Lease Year the sales and
occupation tax returns with respect to said Lease Years and all pertinent
original sales records. Pertinent original sales records shall include: (i)
dally dated cash register tapes, including tapes from temporary registers; (ii)
serially numbered sales slips; (iii) the originals of all mail orders at and to
the Leased Premises; (iv) the original records of all telephone or facsimile
orders at and to the Leased Premises; (v) settlement report sheets of
transactions with subtenants, concessionaires and licensees; (vi) original
records showing that merchandise returned by customers was purchased at the
Leased Premises by such customers; (vii) memorandum receipts or other records of
merchandise taken out on approval; (viii) computer disk, tape or other
electronic storage device; (ix) such other sales records, if any, which would
normally be examined by an independent accountant pursuant to accepted auditing
standards in performing an audit of Tenant's sales; and (x) the records
specified in (i) to (ix) above of subtenants, assignees, concessionaires or
licensees. The aforementioned books and records shall be open to inspection and
audit by Owner and/or Owner's authorized representatives during regular business
hours at any time during the term of this Lease and for a period of at least one
(1) year after the termination of this Lease.
7
<PAGE>
(b) If In the opinion of Owner's Independent certified accountant Tenant's
books and records are inadequate to determine Gross Sales (or any Lease Year,
Tenant shall promptly pay to Owner the examination fee, Owner's in-house
processing costs, and all other costs associated with any audit and
Investigation in accordance with Article IV, and if Tenant falls to provide
adequate books and records for any Lease Year within twenty (20) days after
notice of such inadequacy, Tenant shall pay Owner, as liquidated damages and not
as a penalty (in recognition of the difficulty or impossibility of determining
Owner's damages), as Additional Rent for such Lease Year, an amount equal to
twenty-five percent (25%) of the amount of the Minimum Rent payable by Tenant
for such Lease Year,
(c) In the event that Owner should commence an audit of Tenants books and
records with respect to Gross Sales in accordance with Article IV, then in such
case all of such audited books and records shall be kept until such audit is
completed, but not to exceed an additional one (1) year, except in the event of
litigation concerning any deficiency in Percentage Rent in which case such books
and records shall be kept until such litigation Is finally determined by a
final, unappealable order of court.
SECTION 3.02. REPORTS BY TENANT
(a) Tenant shall submit to Owner monthly on or before the fifteenth (15th)
day of each month during the term hereof (including the fifteenth (15th) day of
the month following the end of the term of this Lease) at the place then fixed
for the payment of rent or such place as designated from time to time by Owner,
together with the remittance of Percentage Rent (if any is then due), a written
statement signed by Tenant, certified by it to be true and correct and showing
in reasonably accurate detail the amount of Gross Sales for the preceding month
or fractional month, if any. Tenant shall submit to Owner on or before the
thirtieth (30th) day following the end of each Lease Year at the place then
fixed for at the place then fixed for the payment of rent a written statement
signed by Tenant, duly certified to be true and correct by Tenant and by
independent certified public accountants of recognized standing, in a form
satisfactory to Owner in scope and substance, and showing in reasonable accurate
detail satisfactory in scope to Owner the amount of Gross Sales during the
preceding Lease Year or Partial Lease Year and an itemization of all claimed
exclusions therefrom. The statements referred to herein shall be In such form
and style end contain such details and breakdown as the Owner may reasonably
determine. Tenant shall require all concessionaires, licensees and subtenants to
furnish similar statements to Owner as part of Tenant's own monthly reports.
(b) If Tenant shall fall to prepare and deliver any statement of Gross
Sales required herein, Owner, in addition to other rights or remedies it may
have, shall collect from Tenant Fifty Dollars ($50,00) for each day that any
Gross Sales statement is late and may elect to make an audit of all books and
records of Tenant, including Tenant's bank accounts, pursuant to Section 4.02,
and prepare any statement which Tenant has failed to prepare and deliver. Such
audit shall be made and such statement prepared by an accountant selected by
Owner. Any statement so prepared shall be conclusive on Tenant, and Tenant shall
pay on demand all expenses connected with such audit and the preparation of any
such statement and all sums as may be shown by such audit to be due as
Percentage Rent.
ARTICLE IV AUDIT
SECTION 4.01. RIGHT TO EXAMINE BOOKS
The acceptance by Owner of payments of Percentage Rent shall be without
prejudice to Owner's right is examine the books and records of Tenant and all
concessionaires, licensees and subtenants of Tenant as may be permitted
hereunder, in order to determine the Gross Sales and Inventories of merchandise
at the Leased Premises and to verify the amount of annual Gross Sales in and
from the Leased Premises.
SECTION 4.02. AUDIT
At its option, Owner may cause at any reasonable time, upon forty-eight
(48) hours' prior notice to Tenant. a complete audit to be made of all business
affairs at the Leased Premises and all books and records referred to in Section
3.01 relating to the Gross Sales for the period covered by any statement issued
by Tenant as above set forth. If any such audit shall disclose a liability for
Percentage Rent to the extent of two percent (2%) or more in excess of the
Percentage Rent theretofore computed and paid by Tenant for such period, and/or
disclose that the amount of Gross Sales on any statement was understated by two
percent (2%) or more of the Gross Sales, then Tenant shall promptly pay to
Owner, the examination fee, Owner's in-house processing fee, and all other costs
associated with said audit and investigation, the deficiency (which shall be
payable in any event) and the appropriate late charge computed according to
Section 2.06. In addition, if any such audit shall disclose ability for
Percentage Rent to the extent of
8
<PAGE>
four percent (4%) or more or disclose an understatement of the amount of Gross
Sales by four percent (4%) or more, or if Tenant shall fail to permit inspection
in accordance with the terms of this section, then owner, at its option, may
terminate this Lease upon thirty (30) days notice to Tenant of Owner's election
to do so, Any information obtained by Owner as a result of such audit shall be
held in strict confidence by Owner except as may be necessary for the
enforcement of Owner's rights under this Lease (including, without limitation,
disclosure to the holder or prospective holder of any encumbrance affecting the
Shopping Center or to any bona fide prospective purchaser thereof) or in
connection with any tax proceedings or other legal requirements.
ARTICLE V CONSTRUCTION, ALTERATION, RELOCATION AND REMODELING
SECTION 5.01. CONSTRUCTION PROVIDED BY OWNER SEE RIDER PARAGRAPH. 3
(a) The construction provided by Owner in, of and for the Leased Premises
has been or shall be, within a reasonable time hereafter, completed in
conformity with Owner's obligations under Article B-l of Exhibit 'B', annexed
hereto and made a part hereof; subject, however to delays beyond its reasonable
control as described in Section 27.04. Upon completion, Owner will make the
Leased Premises available to Tenant for its construction and completion as
hereinafter provided. Tenant agrees that Owner may make any changes in the
construction provided by Owner which may become reasonably necessary or
advisable without the approval of Tenant,
(c) Owner has made no representations, covenants or warranties with
respect to the condition of the Leased Premises and no promises to decorate,
alter, repair or improve the Leased Premises before or after the execution
hereof except as expressly set forth in this Lease. Tenant further agrees that
no representations or promises have been made to Tenant that any other tenants
will lease space within the Shopping Center or that Tenant has any exclusive
right to sea merchandise, goods or services of any type and character.
(d) Tenant has inspected the Leased Premises and deems it to be suitable
for the type of business to be conducted during the Lease term. Owner has made
no warranty of fitness concerning the suitability of the Leased Premises for
Tenant's business. Within the four-week period after delivery of possession,
Tenant shall give Owner notice of any contended defects in the construction
provided by Owner and of any contended variances from the requirements of this
Lease. Any defect or variance not so set forth shall be deemed waived by Tenant
if Tenant shall fail to give such notice, it shall waive all rights with respect
to any defects or variances, and upon the expiration of the four-week period,
the Leased Premises shall be conclusively deemed to have been accepted by
Tenant, if Tenant shall notify Owner of any contended defects during the
four-week period, the Leased Premises shall be conclusively deemed accepted by
Tenant subject to the defects or variances set forth in the notice. At any time
after the expiration of the four-week period, upon request of Owner, Tenant
shall execute a certificate certifying that the Leased Premises were accepted in
accordance with the foregoing.
SECTION 5.02. PARKING FACILITIES
Subject to Articles XVII and XIX, the Shopping Center shall contain
parking areas having such number of parking spaces for passenger type
automobiles as Owner deems appropriate. Owner reserves the right at any time to
implement a pay parking system or to revert to free parking on all or any part
of the parking lots or facilities, Owner may designate certain portions of the
parking areas as reserved for the use of certain tenants or customers of certain
tenants.
9
<PAGE>
SECTION 5.03. TENANT'S WORK
(a) Tenant shall prepare and submit to Owner for written approval its
Preliminary Plans as provided in Exhibit "B". Following Owner's approval of
Tenant's Preliminary Plans, which approval shall not be unreasonably withheld or
delayed, Tenant shall prepare and submit to Owner for written approval complete
Working Plans for the Leased Premises as provided in Exhibit "B", prepared by
Licensed Missouri Registered Architects and engineers and describing all work
which is to be performed by Tenant under this Lease. Such Plans shall be
prepared in conformity with the applicable provisions of Exhibit "B" and shall
show in sufficient detail the locations of all utilities and partitions, the
storefront, all materials and finishes to be used and any other matters which
may affect the construction work in the Leased Premises and/or the building of
which it forms a part in the event Tenant's said Plans, in the reasonable
judgment of Owner or Owner's architect, are incomplete, inadequate or
inconsistent with the terms of this Lease, and/or do not conform to the high
standards of quality design, motif, decor or quality established or adopted by
Owner, and/or would tend to create an imbalance with or be incompatible with
Owner's design of the adjoining premises, and/or would subject Owner to
additional costs or expenses in the performance of any of its construction,
and/or would provide for or require any installation of work which is or might
be unlawful or create an unsound or dangerous condition or adversely affect the
structural soundness of the Leased Premises or the building of which the same
forms a part, and/or would interfere with or abridge the use and enjoyment of
any adjoining space in the building in which the Leased Premises are located,
Owner may, without any obligation for increased costs or any delay, deny
approval of Tenant's proposal Plans. Tenant agrees that within twenty (20) days
after written notification of Owner's decision to deny such approval it will
submit revised and/or corrected Plans to Owner remedying the objections
previously noted. Further, Tenant agrees to pay to Owner within ten (10) days
after receipt of an invoice therefor, the reasonable costs incurred by Owner for
the review of Tenant's Plans, not to exceed Other Thousand Dollars ($1,000.00).
(b) Promptly after Owner notifies Tenant that the Leased Premises are
ready for commencement of Tenant's Work, Tenant shall commence and thereafter
complete at to sole cost and expense, with due diligence and in accordance with
good construction practices and applicable legal and insurance requirements, all
work required of it under Exhibit "B" and in accordance with its approved
Working Plans. If Tenant shall neglect, fail or refuse to commence its work as
aforesaid or thereafter neglects, fails or refuses to diligently proceed with
and complete its work, then Owner, in addition to other rights or remedies it
may have and, after thirty (30) days' notice to Tenant, may (i) complete
Tenant's Work at Tenant's expense and thereupon commence the term of this Lease,
(ii) commence the term of this Lease and all of Tenant's payment obligations
hereunder, notwithstanding the incompletion of Tenant's Work, or (iii) declare
this Lease cancelled and of no further force and offset.
(c) Tenant may but only with the written consent of Owner, enter the
Leased Premises for preliminary work prior to the completion by Owner of its
construction, provided that Tenant's Work shall be done in such manner so as not
to interfere with any construction being performed or to be performed by Owner
and provided also that Tenant's Work does not interfere with any of Owner's
labor agreements. Tenants entry on and occupancy of the Leased Premises prior to
the commencement of this Lease shall be governed by and subject to all the
provisions, covenants and conditions of this Lease other than those requiring
the payment of Minimum Rent and other charges, except utility charges.
(d) All entry on the Leased Premises by Tenant and all work done by Tenant
shall be at Tenant's sole risk. Tenant shall furnish to Owner all certificates
and approval with respect to work done by Tenant or on Tenant's behalf that may
be required from an authority for the issuance of a certificate of occupancy,
and Owner shall have no responsibility or liability whatsoever for any loss or
damage to any fixtures or equipment installed or left in the Leased Premises.
Before entering on the Leased Premises for the performance of Tenant's Work,
Tenants shall furnish Owner for the mutual benefit of both Tenant and Owner and
its designees a bond naming both Owner and Tenant as beneficiaries and obligees
in an amount satisfactory to Owner written by a surety company licenses and
authored to issue such bonds in the State of Missouri, guaranteeing the payment
and performance of Tenant's Work, free of mechanics', or other liens or in lieu
of such bond, Tenant shall deposit with Owner the sum of Twelve Thousand Five
Hundred Dollars ($12,500,00), which may be in the form of cash or an irrevocable
letter of credit from a national bank in the Metropolitan St. Louis area,
payable in St. Louis, Missouri, running in favor of Owner which shall be
irrevocable for a period ending not earlier than six (6) months after Tenant has
completed Tenant's Work, including the completion of any punchlist items,
construction performance guarantee, the same to be held by Owner without
liability for interest until Tenant has completed Tenant's Work in conformance
with the Working Plans, including the completion of any punchlist items, has
received its final occupancy permit, has provided full and final mechanic's
and/or materialmen's lien waivers from all contractors, subcontractors and
materialmen used in performing Tenant's Work, and has opened for business in the
leased Premises. Should Tenant fail to so complete Tenant's Work, obtain such
occupancy permit, provide such then waivers, or open for business, Owner may, in
addition to any other remedies available to Owner at law or in equity or under
this lease, retain said deposit.
(e) If it shall be necessary or Owner shall deem it consistent to perform
any item of Tenant's Work in the Leased Premises in order to permit to continue
and complete any of its construction, then Tenant shall cause such work to be
commenced on the date fixed by Owner in a written notice to Tenant given at
least ten (10) days prior thereto, and Tenant shall thereafter cause such work
to be completed with
10
<PAGE>
due diligence. If Tenant shall fail to comply with the foregoing, Owner may, at
its election, proceed with its construction and, upon the completion thereof or
so much thereof as can be completed in the absence of such work by Tenant, Owner
shall be deemed to have fulfilled all of Its construction obligations hereunder.
(f) Tenant and Tenant's Agents agree to use bast efforts during the
performance of any construction work to cause no interference to the Shopping
Center or any person, firm or corporation doing business in the Shopping Center.
During construction of Tenant's Work, Owner shall have the right to reasonably
control the usage of the Common Areas by Tenant, Tenant's Agents and contractors
for parking, storage, and otherwise. Tenant agrees to employ only union labor
and to cause its Independent contractors to employ only union labor (who shall
be members of labor unions affiliated and not in conflict with labor unions
whose members are employed in connection with construction at the Shopping
Center) for all construction work performed by Tenant in the Leased Premises.
(g) Time is of the essence with respect to Tenant's performance of each of
the provisions concerning construction and the opening of the Leased Premises
tor business.
(h) Notwithstanding anything to the contrary contained in this Lease,
Tenant shall not have the right to open the Leased Premises for business with
the public until (i) Tenant shall have submitted to Owner an affidavit
certifying the names of all contractors, subcontractors and materialmen used in
performing Tenant's Work In the Leased Premises, and (ii) Tenant shall have
delivered to Owner a permanent certificate of occupancy or its equivalent for
the Leased Premises. Nothing contained in this paragraph (h) shall be deemed to
delay the Commencement Date or Tenant a obligation to commence paying rent as
required by Section 1.03 of this Lease. Within ninety (90) After Tenant opens
the Leased Premises for business with the public, Tenant shall deliver to Owner
duly executed full mechanic's and/or materialmen's lien waivers from all
contractors, subcontractors and materialman used in performing Tenant's Work
SECTION 5.04. FIRE PREVENTION SYSTEMS
(a) If the National Board of Fire Underwriters or any local Board of Fire
Underwriters or Insurance Exchange (or other bodies hereafter exercising similar
functions) shall require or recommend the installation of fire extinguishers, a
"sprinkler system", fire detection and prevention equipment (including, but not
limited to, smoke detectors and heat sensors), or any changes, modifications,
alterations, or the installation of additional sprinkler heads or other
equipment for any existing sprinkler, fire extinguishing system, and/or fire
detection system for any reason, whether or not attributable to Tenants use of
the Leased Premises or alterations performed by Tenant; or
(b) If any law, regulation, or order or if any bureau, department, or
official of the Federal, State, and/or Municipal Governments shall require or
recommend the Installation of fire extinguishers, a 'sprinkler system," fire
detection and prevention equipment (including, but not limited to, smoke
detectors and heat sensors), or any changes, modifications, alterations, or the
installation of additional sprinkler heads or other equipment for any existing
sprinkler system, fire extinguishing system, and/or fire detection system for
any reason, whether or not attributable to Tenant's use of the Leased Premises
or alterations performed by Tenant; or
(c) If any such installation, changes, modifications, alterations,
sprinkler heads, or other equipment become necessary to prevent the imposition
of a penalty, an additional charge, or an increase in the fire insurance rate as
fixed by said Board or Exchange, from time to time, or by any fire insurance
company as a result of the use of the Leased Premises whether or not the same is
a permitted use under Section 6.01;
then Tenant shall, at Tenant's sole cost and expense, promptly make such
Installations within the Leased Premises and make such changes, modifications,
alterations, or the installation of additional sprinkler heads or other required
or recommended equipment. If Tenant fails to perform its obligation under this
Section, Owner may, at Owner's option after giving Tenant fifteen (15) days
prior written notice, enter upon the Leased Premises and put, provide same or
place same in good order, condition and repair; and the cost thereof plus a
fifteen percent (15%) administrative charge shall become due and payable as
Additional Rent by Tenant to Owner upon demand, but nothing contained in this
sentence shall be deemed to impose any duty upon Owner or affect in any manner
the obligations placed upon Tenant by this Section.
SECTION 5.05. CHANGES AND ADDITIONAL TO BUILDINGS SEE RIDER. PARAGRAPH. 4.5
Owner hereby reserves the right at any time to make alterations, additions
or diminutions to, and to build additional stories on, any building in the
Shopping Center, including the building in which the Leased Premises are
contained, and to build adjoining the same. Owner also reserves the right to
construct other buildings or improvements in the Shopping Center from time to
time and to make alterations, additions or diminutions thereto, to build
additional stories on any such building or buildings, to build adjoining same
and to construct multi-deck, elevated or subsurface parking facilities. Owner
shall have the right to erect in connection with any of the foregoing temporary
scaffolds and
11
<PAGE>
other aids to construction on the exterior of the Leased Premises, provided that
access to the Leased Premises shall not be denied. Owner may make any use it
desires of the side or rear walls of the Leased Premises, provided that such use
shall not encroach on the interior of the Leased Premises. Owner also reserves
the right to install, maintain use, repair and replace pipes, ducts, mains,
columns, conduits, wires and appurtenant fixtures leading through the Leased
Premises in locations which will not materially interfere with Tenant's use
thereof. The purpose of the site plan attached hereto as Exhibit "A" is to show
the approximate location of the Leased Premises. Owner reserves the right at any
time to relocate the premises of any tenant (excluding Tenant), buildings,
automobile parking areas, and other Common Areas shown on said site plan.
SECTION 5.06. REMODELING OF LEASED PREMISES
(a) Provided that Tenant has not completed a substantial remodeling of the
Leased Premises by the end of the fifth (5th) Lease Year, then during the
"Remodeling Period", set forth in Article A, Tenant shall, at its sole cost and
expense remodel the Leased Premises (meaning painting wall, surfaces, replacing
carpeting and floor covering, replacing wall covering, repairing and
refurbishing display fixtures, to like new condition, cleaning and relamping
light fixtures, replacing or repainting ceiling tiles and such other items that
have experienced more than ordinary wear and tear so that the Leased Premises
has a new and "fresh" look in keeping with the first class quality of the
Shopping Center) in accordance with plans and specifications approved by Owner
(the 'Remodeling Work'). Tenant shall not commence the Remodeling Work until the
plans and specifications for the Remodeling Work have been approved by Owner.
For purposes of performing the Remodeling Work, Tenant may, with Owner's prior
approval, close the Leased Premises during the Remodeling Period as is necessary
to perform the Remodeling Work; provided, however, there shall be no abatement
of the Minimum rent and the other charges payable under the Lease during such
period Tenant shall close the Leased Premises to perform such Remodeling Work.
Tenant shall reimburse Owner (or the reasonable costs incurred by Owner for the
review of Tenant's plans and specifications for the Remodeling Work within ten
(10) days after receipt of an invoice therefor.
(b) If Tenant shall fall to complete the remodeling Work prior the
expiration of the Remodeling Period then, without limiting Owner's other
remedies and in consideration of the failure to realize increased Gross Sales
which the parties anticipate would be generated by reason of the Remodeling
Work, at Owner's option, (i) the Minimum Rent (as the same may have been
increased pursuant to the other provisions of this Lease) otherwise payable by
Tenant during the balance of the term, shall be deemed automatically increased
by twenty-five percent (25%) commencing with the first month after the
expiration of the Remodeling Period, and continuing thereafter throughout the
remainder of the term, or (ii) Owner shall have the right to terminate into
Lease; by giving notice thereof to Tenant within ninety (90) days after the
expiration of the Remodeling Period. If Owner so elects to terminate this Lease,
then this Lease shall terminate sixty (60) days alter such notice to Tenant.
SECTION 5.07. CONSTRUCTION REIMBURSEMENT COAT
The cost of operating, maintaining, repairing and replacing the central
ventilating and all conditioning service shall be allocated according to the
provisions of Section 9.03.
ARTICLE VI CONDUCT OF BUSINESS BY TENANT
SECTION 6.01. USE OF PREMISES
(a) Tenant shall use the Leased Premises solely for the "Permitted Uses"
set forth In Article A and for no other purposes whatsoever. Tenant shall
conduct business in the Leased Premises solely under the "Trade Name" set forth
in Article A and under no other name whatsoever. Tenant shall use the name
"Saint Louis Galleria" in its local business address and advertising. Tenant
shall not sell lottery tickets, raffle tickets or any kind of gaming tickets
from the Leased Premises.
(b) In the event that Tenant, at any lime during the term of this Lease,
shall use or permit others to use the Leased Premises for any purpose other than
the Permitted Uses without obtaining the prior written consent of Owner, and
Tenant shall not cease using the Leased Premises for such non-permitted use
within ten (10) days after written notice from Owner. In addition to Owner's
other rights and remedies hereunder or at law or in equity, it is hereby
mutually agreed that the Minimum Rent during the period Tenant shall use the
Leased Premises for such non-permitted use shall be automatically increased to
one hundred twenty-five percent (125%) of the Minimum Rent otherwise payable for
such period.
12
<PAGE>
(c) Tenant will not use, permit or suffer the use of the Leased Premises
for any business or purpose which is in violation of any law or the rules or
regulations of any public authority. Tenant shall, at its sole cost and expense,
promptly comply with all present and future laws, regulations or rules of any
county, state, federal and other governmental authority and any bureau or
department thereof, and of the National Board of Fire Underwriters, or any other
body exercising similar function, which may be applicable to the Leased
Premises, including the making of any required structural changes thereto and
including the making of any changes, alterations, or additions in the fire
detection and prevention system or equipment. If Tenant shall install any
electrical equipment that overloads the lines in the Leased Premises, Tenant
shall make whatever changes are necessary to comply with the requirements of the
insurance underwriters and governmental authorities having jurisdiction
thereover. Tenant shall not conduct catalogue sales in or from the Leased
Premises, except of merchandise which Tenant is permitted to sell "over the
counter" in or at the Leased Premises pursuant to the provisions of this
Section.
(d) The plumbing facilities of the Leased Premises shall not be used for
any purpose other than that for which they were constructed, nor shall any
substances be disposed of in such facilities which may clog, erode, or damage
the plumbing, pipes, lines or conduits of the Shopping Center, whether through
the utilization of "garbage disposal" units or otherwise. If Tenant is
permitted to use and uses the Leased Premises for the sale, preparation, or
service of food, Tenant shall install and maintain all grease traps that may be
necessary or desirable to prevent the accumulation of grease or other wastes in
the plumbing facilities servicing the Leased Premises, shall install all fire
extinguishing devices required by local codes and/or Owner's insurance carrier
and keep such devices in good working order and repair, shall install all
necessary exhaust systems, filters and ducts, and shall install a garbage
disposal system. Tenant shall clean all grease traps at least monthly and, if
provided by Owner, Tenant shall participate in and pay to Owner within ten (10)
days after receipt of an invoice therefor, the cost of providing cleaning or
treatment services to the plumbing facilities to prevent the accumulation of
grease and other wastes in the plumbing facilities servicing the Leased
Premises. If Tenant fails to perform its obligations under this Section, Owner
may, at Owner's option after giving Tenant fifteen (15) days notice, enter upon
the Leased Premises and put the same in good order, condition and repair; and
the cost thereof plus a fifteen percent (15%) administrative charge shall
become due and payable as Additional Rent by Tenant to Owner upon demand, but
nothing contained in this sentence shall be deemed to impose any duty upon
Owner or affect in any manner the obligations placed upon Tenant by this
Section. Tenant shall not place a load on any floor exceeding the floor load
per square foot which such floor was designed to carry. Tenant shall not
install, operate or maintain any heavy item of equipment in the Leased
Premises, except in such manner as to achieve a proper distribution of weight.
Tenant shall not use the roof of the Leased Premises for any purposes. Tenant
shall not use any exterior walls of the Leased Premises other than the
storefront as provided herein. Tenant shall be responsible for the expense of
any breakage, stoppage or damage resulting from a violation of these provisions
where it is caused by Tenant, Tenant's Agents, customers or invitees.
SECTION 6.02. Operation of Business
(a) Tenant shall continuously and uninterruptedly use, occupy and operate
all of the Leased Premises during the entire term of this Lease for the
Permitted Uses with due diligence and efficiency and in a high grade and
reputable manner so as to produce the optimum amount of Gross Sales which may
be produced by such manner of operation, unless prevented from doing so by
causes listed in Section 27.04. Subject to inability by reason of strikes or
labor disputes, Tenant shall provide adequate personnel and shall carry at all
times in the Leased Premises a full and complete stock of seasonable
merchandise of such size, character and quality as shall be reasonably designed
to produce the maximum amount of Gross Sales. Tenant shall keep the Leased
Premises open for business to the public continuously during all business hours
and days designated by owner from time to time as the hours for the Shopping
Center, which designated hours shall at a minimum require Tenant to be open for
business Monday through Saturday 10:00 A.M. to 9:30 P.M. and Sunday 11:00 A.M.
to 6:00 P.M., and for such additional hours as may be designated by Owner from
time to time. Tenant shall install and maintain at all times displays of
merchandise in the display windows (if any) of the Leased Premises. Tenant
shall keep the display windows and the signs on the Leased Premises well
lighted during the hours commencing one-half (1/2) hour before through one-half
(1/2) hour after the hours for the Shopping Center. Tenant shall not, during
the hours and days that the Leased Premises are required to be open for
business under this Lease, lock, barricade or otherwise prevent access into the
Leased Premises through any door opening onto the mall or sidewalk adjacent to
the Leased Premises.
(b) If Tenant fails to (i) keep the Leased Premises open during the hours
and days that the Leased Premises are required to be open for business to the
public under this Lease, (ii) operate all of the Leased Premises in the manner
required under this Lease, or (iii) adequately stock or staff the Leased
Premises, then Tenant shall, in recognition of the difficulty or impossibility
of determining Owner's damages, pay to Owner, upon demand, as liquidated
damages and not as a penalty and in addition to the Minimum Rent and other
charges payable under this Lease, a separate charge equal to one-thirtieth
(1/30th) of the monthly Minimum Rent for each and every day that the Leased
Premises are not open or are not fully operated or in which such hours are not
maintained in accordance with the provisions of this Section.
13
<PAGE>
SECTION 6.03. COMPETITION
In consideration of the fact that Owner has agreed to accept a percentage
of Tenant's Gross Sales as a portion of the rent during the term of the Lease,
neither Tenant nor any of Tenant's affiliates, subsidiaries or parent
corporations (collectively "Tenant's Affiliates") shall directly or indirectly
engage in any similar or competing business within a radius or five (5) miles
from the outside boundary of the Shopping Center, in the event that Tenant or
Tenant's Affiliates, during the term of this Lease, directly or indirectly,
owns, operates, acquires, engages in, or is in any manner interested in, any
such business in violation of this provision, it is hereby mutually agreed that
if said improper competition occurs within the first five (5) years of the
term of this Lease, then for the remainder of the term, the annual Minimum Rent
(for the unexpired term) shall be the greater sum of the following; (i) the
highest annual Minimum Rent and Percentage Rent paid by Tenant during any Lease
Year that Tenant has been a tenant in the Leased Premises, or (ii) the sum of
one hundred fifty percent (150%) of the then applicable annual Minimum Rent and
that if said improper competition occurs after the first five (5) years of the
term of this Lease (if any), then for the remainder of the term, the annual
Minimum Rent (for the unexpired term) shall be the greater sum of the following:
(i) the highest annual Minimum Rent and Percentage Rent paid by Tenant during
any Lease Year that Tenant has been a tenant in the Leased Premises, or (ii) the
sum of one hundred twenty-five percent (125%) of the then applicable annual
Minimum Rent. The provisions of this Section shall not apply to any business
operated by Tenant or Tenant's Affiliates under another trade name for an
unrelated use or existing businesses of Tenant operated for the same use as the
Leased Premises on the date of this Lease.
SECTION 6.04. STORAGE, OFFICE SPACE, DISPLAY OF MERCHANDISE, SOLICITATION OF
BUSINESS
(a) Tenant shall warehouse, store and/or stock in the Leased Premises only
such goods, wares and merchandise as Tenant intends to offer for sale at retail
at, in, from or upon the Leased Premises. This shall not preclude occasional
emergency transfers of merchandise to the other stores of Tenant not located in
the Shopping Center.
(b) Tenant shall use for office, clerical or other non-selling purposes
only such space in the Leased Premises as is from time to time reasonably
required for Tenant's business in the Leased Premises.
(c) Neither Tenant nor Tenant's Agents shall display any merchandise
outside the Leased Premises in the Common Areas or in any way obstruct the malls
or sidewalks adjacent thereto or conduct any sale or similar undertaking in
these areas.
SECTION 6.05. MAINTAIN CHARACTER OF SHOPPING CENTER
Tenant shall not permit the Leased Premises, or any part thereof, to be
used as sleeping quarters or for any immoral purposes or in any manner which
causes odors, excessive noises or otherwise constitutes a nuisance or which may
injure the building or the reputation, character or appearance of the Shopping
Center or which may disturb, inconvenience, annoy or cause complaints by other
tenants of the Shopping Center. No auction, fire, going out of business,
liquidation, distress or bankruptcy sales or any other similar practices may be
conducted in the Leased Premises without the previous written consent of Owner.
SECTION 6.06. WASTE
Tenant shall not commit or suffer to be committed any waste upon the
Leased Premises or use the Leased Premises for any extra-hazardous purpose or in
any manner that will violate, suspend, void, or serve to increase the premium
rate of or make inoperative any policy or policies of insurance of any kind
whatsoever at any time carried on any property, buildings or improvements in the
Shopping Center, or any part thereof, including the Leased Premises.
SECTION 6.07. HAZARDOUS SUBSTANCES SEE RIDER PARAGRAPH 6
Tenant and Tenants Agents shall not (i) use, store, generate, treat, sell
or dispose in, on, from or about the Leased Premises, any "Hazardous Substances"
(hereinafter defined), or (ii) permit the use, storage, generation, treatment,
selling or disposal in, on, from or about the Leased Premises or the Shopping
Center of any Hazardous Substances, except Hazardous Substances in such amounts
and of such types that are commonly and customarily used in the cleaning and
maintenance of retail stores and in a manner that complies with all laws, rules,
regulations, ordinances, codes and any other governmental restriction or
requirement of all federal, state and local government authorities having
jurisdiction thereof regulating such Hazardous Substances ("Governmental
Regulations"), permits issued for any such Hazardous Substances (which permits
Tenant shall obtain prior to bringing any Hazardous
14
<PAGE>
Substances in, on or about the Leased Premises or the Shopping Center) and all
producers' and manufacturers' instructions and recommendations to the extent
they are stricter than Governmental Regulations. "Hazardous Substances" or
"Hazardous Substance" as used in this lease shall mean any substances or
substance now or hereafter designated as, or containing components designated
as, hazardous, dangerous, toxic or harmful and/or subject to any Governmental
Regulations, Including, without limitation, asbestos in any form, urea
formaldehyde foam insulation, transformers or other equipment which contains
dielectric fluid or other fluids containing levels of polychlorinated biphenyls
in excess of fifty (50) parts per million and petroleum products in any form.
Tenant shall: (i) promptly, timely, and completely comply with all Governmental
Regulations now or hereafter pertaining to the use, discharge, handling,
transportation, disposal, treatment, generation, storage, sale or presence on
the Leased Premises of Hazardous Substances; and (ii) allow Owner or Owner's
agents or representatives to enter onto the Leased Premises at all times to
check Tenant's compliance with all applicable Governmental Regulations regarding
Hazardous Substances. Any and all costs incurred by Owner and associated with
Owner's inspection of the Leased Premises and Owner's monitoring of Tenant's
compliance with this Section, including Owner's attorneys' fees and costs, shall
be deemed Additional Rent and shall be due and payable to Owner immediately upon
demand by Owner, Tenant shall indemnify, defend and save Owner, its partners,
managers, agents and employees harmless from and against any and all damages,
penalties, costs and other liabilities (including Owner's attorneys' fees and
costs and the cost of any remedial or abatement activities), arising during the
term of this Lease or anytime thereafter, directly or indirectly, from the use,
discharge, handling, transportation, disposal, treatment, generation, storage,
existence or sale of Hazardous Substances, during the term of this Lease in on
from or about the Leased Premises except to the extent such use, discharge,
handling, transportation, disposal, treatment, generation, storage, existence or
sale of Hazardous Substances resulted solely from the actions of Owner. Tenant's
obligations under this Section shall survive the expiration or termination of
this Lease.
ARTICLE VII OPERATION OF CONCESSIONS
SECTION 7.01. CONSENT OF OWNER
Tenant shall not permit any business to be operated in or from the Leased
Premises by any concessionaire, licensee or franchisee without the prior written
consent of Owner, which Owner may in Its sole and absolute discretion elect to
give or withhold despite any statutory provision to the contrary.
ARTICLE VIII SECURITY DEPOSIT
SECTION 8.01. AMOUNT OF DEPOSIT
(a) Tenant, contemporaneously with the execution of this Lease (except as
hereinafter otherwise provided), shall deposit with Owner the "Security Deposit"
set forth in Article A (the "Deposit"), which may be In the form of
either (i) Cash Deposit (the "Cash Deposit"), or (ii) an automatically renewable
irrevocable Letter of Credit (the "LC Deposit").
(b) If Tenant elects the Cash Deposit, the Cash Deposit shall be held by
Owner, without liability for interest, as security for the faithful performance
by Tenant of all of the terms, covenants and conditions of this Lease by Tenant
to be performed. Owner shall not be required to hold the Cash Deposit as a
separate fund, but may commingle it with other funds.
(c) If Tenant elects the LC Deposit, Tenant shall deposit with Owner an
Irrevocable Letter of Credit from a national bank in the metropolitan St Louis,
Missouri area payable in St. Louis, Missouri, running in favor of Owner. The
Letter of Credit shall be irrevocable for the term of this Lease and shall
provide that it is automatically renewable for a period ending not earlier than
sixty (60) days after the expiration of the term of this Lease without any
action whatsoever on the part of Owner, provided that the issuing bank that have
the right not to renew the Letter of Credit by giving written notice to Owner
not less than sixty (60) days prior to the expiration of the then current term
thereof (it being understood, however, that the privilege of the issuing bank
not to renew the letter of Credit shall not, in any event, diminish the
obligation of Tenant to maintain the Letter of Credit with Owner through the
date which is sixty (60) days after the expiration of the term of this Lease).
The form and terms of the Letter of Credit (and the bank issuing the Letter of
Credit) shall be in the form attached to this Lease at Exhibit "C-1". Tenant,
contemporaneously with the
15
<PAGE>
execution of this Lease shall deliver to Owner a copy of the form of Letter of
Credit to be issued by Tenant's bank for approval by Owner, and Tenant shall
deliver the actual Letter of Credit to Owner within five (5) days after the
execution of this Lease. Tenant further covenants that it will not assign or
encumber the Letter of Credit or any part thereof and that neither Owner nor its
successor or assigns will be bound by any such assignment, encumbrance,
attempted assignment or attempted encumbrance. Without limiting the generality
of the foregoing, if the Letter of Credit expires earlier than sixty (60) days
after the expiration of the term of this Lease or the issuing bank notifies
Owner that it will not renew the Letter of Credit, Owner will accept a renewal
thereof or substitute Letter of Credit (such renewal or substitute Letter of
Credit to be effective not later than sixty (60) days prior to the expiration of
the existing Letter of Credit), irrevocable and automatically renewable as above
provided to sixty (60) days after the end of the term of this Lease upon the
same terms as the expiring Letter of Credit or such other terms as may be
acceptable to Owner. However, (i) if the Letter of Credit is not timely renewed
or a substitute Letter of Credit is not timely received, or (ii) If Tenant fails
to maintain the Letter of Credit the amount and terms set forth in this Article
VIII, Tenant, at least sixty (60) days prior to the expiration of the Letter of
Credit, or immediately upon its failure to comply with each and every term of
this Article VIII, shall deposit with Owner cash security in the amount required
by and to be held subject and In accordance with, all the terms and conditions
set forth in this Article VIII, failing which the Owner may present such Letter
of Credit to the bank, in accordance with the terms of this Article VIII and the
entire sum secured thereby shall be paid to Owner, to be held by Owner as
provided in this Article VIII.
SECTION 8.02. USE AND RETURN OF DEPOSIT
In the event of the failure of Tenant to keep and perform any of the
terms, covenants and conditions of this Lease to be kept and performed by
Tenant, Owner at its option may appropriate and apply the entire Deposit, or so
much thereof as may be necessary, to compensate Owner for loss or damage
sustained or suffered by Owner due to such breach on the part of Tenant. Should
the entire Deposit, or any portion thereof, be appropriated and applied by Owner
for the payment of overdue rent or other sums due end payable to Owner by Tenant
hereunder, then Tenant shall, upon the written demand of Owner, forthwith remit
to Owner in cash a sufficient amount to restore the Deposit to the original sum
deposited. Tenant's failure to do so within five (5) days after receipt of such
demand shall constitute a breach of this Lease. The use application or
retention of the Deposit by Owner shall not prevent Owner from exercising any
other right or remedy provided for under this Lease or at law or in equity and
shall not limit any recovery to which Owner may otherwise be entitled. Should
Tenant comply with all of the terms, covenants and conditions of this Lease and
promptly pay all of the rental and other charges herein provided or as it falls
due and all other sums payable by Tenant to Owner here under, the Deposit shall
be returned in full to Tenant within sixty (60) days of the end of the term of
this Lease.
SECTION 8.03. TRANSFER OF DEPOSIT
Owner may assign its Interest in the Deposit or deliver the Deposit to any
mortgagee of the Shopping Center. Further, Owner may deliver the Deposit to the
purchaser or other transferee of Owner's interest in the Leased Premises, and
thereupon Owner shall be discharged from any further liability with respect to
the Deposit. Tenant agrees to look solely to the purchaser or transferee for the
return of the Deposit. Tenant may not mortgage, assign or encumber the Deposit,
and Tenant agrees that neither Owner nor any of its successors shall be bound by
any such mortgage, assignment or encumbrance. In the event of the foreclosure of
any first mortgage encumbering the Shopping Center or any part thereof or a
conveyance in lieu of foreclosure, the party who succeeds to title by reason
thereof shall have no obligation for return of the Deposit
SECTION 8.04. ADDITIONAL SECURITY DEPOSIT
If Tenant commits a default (either monetary or non-monetary) more than
two (2) times in any three hundred sixty-five (365) day period, irrespective of
whether or not such default is cured, then (i) If Tenant was not initially
required to provide a Deposit with the execution of this Lease, Tenant shall,
within ten (10) days after written demand by Owner, deliver to Owner a Deposit
in the amount of three (3) times the then applicable monthly Minimum Rent to be
held in accordance with the provisions of this Article VIII or (ii) If Tenant
initially provided a Deposit to Owner with the execution of this Lease, Tenant
shall, within ten (10) days after written demand by Owner, deliver to Owner the
amount necessary to increase the Deposit to four (4) times the then applicable
monthly Minimum Rent.
16
<PAGE>
ARTICLE IX COMMON AREAS
SECTION 9.01. CONTROL OF COMMON AREAS BY OWNER SEE RIDER, PARAGRAPHS 4, 5
All Common Areas shall at all limes be subject to the exclusive control
and management of Owner and to such rules and regulations as Owner may from time
to time establish, modify and enforce. Owner shall have the right to make
changes, additions, deletions, alterations or improvements in and to the size,
shape or both of said Common Areas and in the number, type, style and location
of any or all aspects of the facilities, fixtures, equipment, signs or other
property therein or thereon; to construct, maintain and operate lighting
facilities on all said areas; to construct and lease kiosks on any part of said
areas; to permit entertainment events, advertising displays, artistic displays,
educational displays and other displays in said areas; to police the same; from
time to time to change the area, level, location and arrangement or parking
areas and other facilities herein referred to; to restrict parking by tenants,
their officers, agents and employees to designated parking areas; to loss all or
any portion of the Common Areas or facilities to such extent as may, in the
opinion of Owner's counsel, be legally sufficient to prevent a dedication
thereof or the accrual of any rights to any person or the public therein; to
close temporarily all or any portion of the parking areas or facilities; to
discourage non-customer parking; and to do and perform such other acts in and to
said areas and improvements as, in the use of good business judgment, Owner
shall determine to be advisable with a view to the improvement of the
convenience and use thereof by Owner, tenants, their officers, agents, employees
and customers. Tenant, Tenant's Agents, customers and other invitees shall not
use the Common Areas for the solicitation of business, the distribution of
advertisements, filers or handbills of any nature; for sound trucks or other
amplifying devices; or for solicitation for membership in or contributions to
any organization or association of any kind without the prior written approval
of Owner, which Owner may in its sole and absolute discretion elect to give or
withhold. The right of Tenant's Agents to use such Common Areas shall be limited
to the periods during which such Agents shall be engaged in the pursuit of
Tenant's business. Owner will operate and maintain the Common Areas In such
manner as Owner, in its sole discretion, shall determine from time to time.
Without limiting the scope of such discretion, Owner shall have the full right
and authority to employ all personnel and to make all rules and regulations
pertaining to and necessary for the proper operation and maintenance of the
Common Areas. Nothing contained herein shall be deemed to create any liability
upon Owner for any damage to or loss of motor vehicles of Tenant's customers or
Agents or for loss of property, from within such motor vehicles, unless caused
by the negligence of Owner.
SECTION 9.02. LICENSE
All Common Areas not within the leased Premises, which Tenant may be
permitted to use and occupy, are to be used and occupied under a revocable
license, and if the amount of such areas be diminished, Owner shall not be
subject to any liability, nor shall Tenant be entitled to any compensation or
diminution or abatement of rent, nor shall the diminution of such areas be
deemed a constructive or actual eviction.
SECTION 9.03. TENANT'S SHARE OF EXPENSES SEE RIDER, PARAGRAPH 7
(a) During each calendar year during the term hereof, Tenant shall pay to
Owner, in addition to the rentals specified In Article II, as Additional Rent,
and at the times and In the manner hereinafter set forth, its prorata share of
the "Net CAM Costs" for such calendar year. For purposes of this Lease, "Net CAM
Costs" shall be defined as the costs included In Paragraph (l)-(3) below for
each such calendar year less the contribution received by Owner, if any, from
any Major Store in the Shopping Center as a reimbursement to Owner for "Net CAM
Costs" for each such calendar year.
Net CAM Costs shall include:
(1) Operating Costs: All sums incurred by Owner in connection with
operating, maintaining, equipping, inspecting, protecting,
repairing, replacing, insuring, cleaning, improving, altering and
lighting the Common Area, including but not limited to the
following: the maintenance, repair, replacement, rental,
depreciation, cost recovery and/or reserve for replacement of the
following: all property, furniture, fixtures, plantings,
landscaping, security devices, equipment and systems and other
equipment located on or used in the operation of the Common Area;
any heating, ventilating, air conditioning, emergency water,
sprinkler, escalators, elevators, telephone, cable television,
electrical, gas, domestic water, storm drainage and sewer systems;
all identification, directional and other signs and markers; all
other items serving the Common Areas; all personal property taxes
and other charges relating to the Common Area; all salaries, fees,
wages, payroll and social security taxes, workers' compensation and
unemployment insurance and other benefits of all personnel,
including without limitation supervisory personnel and all
independent contractors engaged in the
17
<PAGE>
operation, management, maintenance and/or security of the Common
Areas; on-site management, accounting and attorneys' fees; all
necessary tools, materials, and supplies; supplying and cleaning
employees' uniforms and/or work clothes; the cost of, installation
and maintenance of Christmas and other seasonal decorations;
periodic depreciation calculated in accordance with generally
accepted accounting principles of the cost or expense of any repair,
maintenance, renovation or replacement of any part of the Common
Area, including fixtures, furnishings and equipment therein, the
cost of which is not paid out of insurance proceeds, plus interest
thereon at the then applicable interest rate therefor (as determined
by Owner); all costs relating to separate employee parking areas,
including, but not limited to the cost of any shuttle services Owner
may provide and the cost of transportation services; resurfacing,
restriping, repair and maintenance of the parking decks and other
parking areas; repair end maintenance of the roof of the Shopping
Center, and the cost for pest extermination and removal of ice,
snow, trash, rubbish, debris, garbage and other refuse.
(2) Utility Costs: The cost of providing all utility services to
the Common Area, including, without limitation, the charges,
surcharges and other costs or taxes levied or imposed for
electricity to operate the lighting, exhaust, signage, heating,
ventilating, elevator, escalator and air conditioning systems; and
the charges for water, sprinkler, telephone, cable television, gas,
sewer and refuse services to the Common Area.
(3) Administrative Costs: Owner's administrative, office and
overhead costs In an amount equal to fifteen percent (15%) of the
total of all of the Operating Costs and Utility Costs.
(b) Tenant's prorata share of the Net CAM Costs shall be determined by
multiplying the total amount of Net CAM Costs for each calendar year during the
term by a fraction the numerator of which shall be the Floor Area of the Leased
Premises and the denominator of which shall be the leased and occupied Floor
Area of the Shopping Center (less the Floor Area of the Major Store Premises and
any promises which do not front on the enclosed mall) for such calendar year in
which such costs ware incurred; provided, however, in no event shall such
denominator be less than the amount equal to eighty percent (80%) of the average
of the total Floor Area of shopping center available for lease on the first day
of each calendar month in such calendar year (less the Floor Area of the Major
Store Premises and any premises which do not front on the enclosed mall). The
Floor Area of the Shopping Center in effect for the whole of any calendar year
shall be the average of the leased and occupied Floor Area in effect on first
day of each calendar month in such calendar year.
(c) In addition to the payment of its share of Net CAM Costs, Tenant
shall also pay to Owner during each calendar year during the term hereof, as
Additional Rent and at the times and in the manner hereinafter set forth, its
prorata share of the "Tenant VAC Costs." For purposes of the Lease, Tenant VAC
Costs shall mean all costs of operating, maintaining, altering, improving,
repairing and replacing the central ventilating and air conditioning equipment
serving the Leased Promises and other areas in the Shopping Center concurrently
using said service. Tenant's prorata share of the Tenant VAC Costs shall be
determined by multiplying the total monthly amount of said costs by a fraction,
the numerator of which shall be the Floor Area of the Leased Premises and the
denominator of which shall be the Floor Area of all premises in the Shopping
Center fronting on the enclosed mall which concurrently use said service as of
the last day of the calendar month in which such costs were incurred. Said
monthly payments shall be due to Owner within ten (10) days after Owner has
billed Tenant for the same and shall be paid without any deduction or setoff
whatsoever. The costs included in Tenant VAC costs are not duplicative of the
costs included in Net Cam Costs.
(d) Payment of Tenant's prorata share of the Net CAM Costs and the
Tenant VAC Costs shall be made as follows:
(1) Tenant shall pay to Owner upon the Commencement Date of the
term and on the first day of each calendar month during the term
thereafter such amounts estimated by Owner to be Tenant's monthly
prorata share of the Net CAM Cost. Owner may adjust said estimated
monthly amounts upon written notice to Tenant on the basis of
Owner's experience and reasonably anticipated costs and said
adjusted estimates shall become effective as of the next monthly
payment.
(2) Within ninety (90) days following the end of each calendar
year, Owner shall furnish to Tenant a statement covering such year
just expired, certified as correct by an independent public
accountant or by an authorized representative of Owner, showing the
Net CAM Costs for such year and the payments made by Tenant with
respect to such year. If Tenant's aggregate monthly payments are
greater than Tenant's prorata share of the Net Cam Costs with
respect to such year, then Tenant shall receive a credit for the
excess against future payments of Tenant's share of Net CAM Costs
becoming due to Owner (or such excess occurs at the end of the term
or is otherwise incapable of being credited against future payments
and provided that Tenant is current in the payment of Minimum Rent,
Percentage Rent, Additional Rent and all other sums payable under
any of the terms and provisions of this Lease, such excess shall be
refunded to Tenant within twenty (20) days after said
determination). If said payments are less than man Tenant's prorata
share, then Tenant shall pay to Owner the difference within twenty
(20) days after said determination.
18
<PAGE>
(3) Within ninety (90) days following the end of each calendar
year, Owner may furnish to Tenant a statement covering such year
just expired, certified as correct by an independent public
accountant or by an authorized representative of Owner, showing the
Tenant VAC Costs for such year end the payments made by Tenant with
respect to such year. If Tenant's aggregate monthly payments are
greater than Tenant's prorate share of the Tenant VAC Costs with
respect to such year, then Tenant shall receive a credit for the
excess against future payments of Tenant's share of the Tenant VAC
Costs becoming due to Owner (or if such excess occurs at the end of
the term or is otherwise incapable of being credited against future
payments and provided that Tenant is current in the payment of
Minimum Rent, Percentage Rent, Additional Rent and all other sums
payable under any of the terms and provisions of this Lease, such
excess shall be refunded to Tenant within twenty (20) days after
said determination). If said payments are less than Tenant's prorata
share, then Tenant shall pay to Owner the difference within twenty
(20) days after said determination. If no adjustment is required,
Owner will not furnish a statement
(e) Provided that Tenant is not in default under any terms or provisions
of this Lease, Owner shall make its records relating to the Net CAM Costs and to
the calculation of Tenant's prorata share thereof for the immediately preceding
calendar year available for Tenant's Inspection at Owner's principal place of
business or at another place designated by Owner during normal business hours
and within thirty (30) business days after receiving a written request from
Tenant to Inspect the same. Tenant shall deliver to Owner a copy of the results
of such inspection within fifteen (15) days of its receipt by Tenant. Tenant
agrees that it will not engage a contingent fee auditor of perform Tenant's
inspection and that Tenant's auditor will be an independent certified public
accountant or a qualified full-time employee of Tenant. Tenant, its auditor, and
the officers, employees and agents of each, shall treat such records and the
results of such inspection, including any compromise, settlement or adjustment
between Owner and Tenant, in strict confidence and shall not divulge the
information contained in such records or the results of such inspection to any
other person, entity, tenant or Major Store at any time. Prior to exercising its
right to inspect Owner's records, Tenant shall cause its auditor to execute a
confidentiality and indemnification agreement acknowledging that the records and
results of the inspection of such records including any compromise, settlement
or adjustment between Owner and Tenant, shall be held in strict confidence and
shall not be disclosed in any manner whatsoever without the prior written
consent of Owner, which consent may be withheld in Owner's sole discretion,
unless disclosure is required pursuant to any litigation between Owner and
Tenant in which the subject matter of the litigation involves the records or the
inspection of such records, or if required by law. Tenant understands end
acknowledges that the foregoing provisions concerning confidentiality are of
material importance to Owner and that any violation of these provisions shall
result in immediate and irreparable harm to Owner. If Tenant, its officers,
employees and agents and/or the auditor violate the provisions of this
subparagraph (e), Owner, in addition to any rights and remedies at law or In
equity, shall have the right to terminate Tenant's right to audit in the future
pursuant to this subparagraph (e). Tenant shall indemnity and hold Owner
harmless from and against all claims, suits, proceedings, actions, damages,
liabilities, losses, costs and expenses, inducing reasonable attorney's fees,
arising out of or related to any breach of the provisions of this subparagraph
(e) by Tenant and/or its auditor. Tenant's obligations under this subparagraph
(e) shall survive the expiration or earlier termination of this Lease.
(f) If the term of this Lease shall begin or end other than on the first
or last day of the calendar year or a calendar month, all charges which apply to
a full calendar year or a calendar month shall during those fractional years
and/or months be billed and adjusted on the basis of such fraction. Tenant's
obligation to pay its prorata share of the Net CAM Costs and the Tenant VAC
Costs for the period under the Lease (and any interest or late charge which
might apply) shall survive the termination of the Lease, and Tenant recognizes
that for the final Lease Year the final reconciliation of this charge may occur
after the termination date,
(g) In the event of any dispute in the amount of any payment actually
due under this Section. Tenant shall pay the amount according to Owner's bill or
statement hereunder. However, such payment shall be without prejudice to
Tenant's position, and if the dispute shall be determined in the Tenant's favor,
by agreement or otherwise, Owner shall credit Tenant the amount of Tenant's
overpayment resulting from such compliance by Tenant. A bill or statement
setting forth the amount of any payment due Owner under this Section shall be
deemed binding and conclusive if Tenant fails to object thereto within thirty
(30) days after receipt thereof.
(h) Notwithstanding anything to the contrary contained in this Lease,
(i) any security service that may be provided by Owner is intended solely for
the operation and benefit of the Common Areas and not for the benefit or
protection of the Leased Premises or any other premises occupied by Tenant and
(ii) Owner shall not be liable in any manner whatsoever to Tenant or to any
third party by reason of Owner's act or failure to act in providing or
maintaining any security In the Shopping Center,
19
<PAGE>
ARTICLE X SIGNS, CANOPIES, FIXTURES, ALTERATIONS
SECTION 10.01. Installation and Alterations by Tenant
(a) All fixtures installed by Tenant shall be completely new or like new
and installed by Union Labor, Tenant shall not make or cause to be made any
alterations, additions or improvements of any kind or nature to the Leased
Premises or install or cause to be installed any trade fixtures, signage, floor
coverings, interior or exterior lighting or plumbing fixtures or make any
changes to the storefront without first obtaining Owner's written approval and
consent, which Owner may in its sole and absolute discretion elect to give or
withhold. Tenant shall make no adjustment, alteration or repair to any part of
the sprinkler or fire alarm system in or serving the Leased Premises without the
prior approval of Owner and Owner's property insurance carrier or
representative. Tenant shall present to Owner plans and specifications for such
work at the time approval is sought in a form satisfactory to Owner.
(b) Insofar as is possible, any work done pursuant to this Section shall
be performed so as not to interfere with the operations of other tenants in the
Shopping Center or with the operations of Owner. Activities that in Owner's
judgment do interfere with other tenants or Owner shall be conducted at times
other than during normal store hours and in the manner reasonably specified by
Owner. All alterations, Improvements and additions to the Leased Premises shall
be made in a good and workmanlike manner and in accordance with all applicable
laws and insurance requirements. Immediately when made or installed,
alterations, improvements and additions shall be deemed to have attached to the
freehold and to have become the property of Owner and shall remain for the
benefit of Owner at the end of the term, or other expiration of this Lease, in
as good order and condition as they were when installed, reasonable wear and
tear excepted; provided, however, if prior to the termination of this Lease, or
within twenty (20) days thereafter, Owner so directs. Tenant shall promptly
remove the additions, improvements, fixtures and installations which were placed
in the Leased Premises by Tenant or Tenant's Agents and which are designated in
said notice and shall repair any damage occasioned by such removal and repairs
at Tenant's expense. In the event of making such alterations, improvements
and/or additions as herein provided. Tenant shall indemnify and save Owner
harmless from all expense, liens, claims or damages to either persons or
property arising out of or resulting from undertaking or making of said
alterations, additions and improvements.
(c) Tenant shall not decorate, paint or in any other manner alter, and
shall not Install or affix any device, fixture or attachment upon or to the
exterior of the Leased Promises or of any building or any part thereof in the
Shopping Center, including the roof or canopy thereof, without the prior written
consent thereto of Owner, which Owner may in its sole and absolute discretion
elect to give or withhold. If Tenant shall do any of the foregoing acts in
contravention of this provision, Owner shall have the right to remove any such
decoration, paint, alteration, device, fixture or attachment and restore the
Leased Premises to the condition thereof prior to such act, and the cost of such
removal and restoration shall be paid by Tenant as Additional Rent payable in
the month next following such removal and restoration.
(d) All store fixtures or trade fixtures, wall coverings, carpets and
drapes shall remain the property of Tenant.
(e) Tenant shall not make any alterations, repairs or installations, or
perform any other work to the Leased Premises unless, prior to the commencement
of such work, Tenant shall obtain (and during the performance of the work keep
in force) public liability and workers' compensation insurance to cover every
contractor to be employed. The policies shall be non-cancelable without thirty
(30) days' notice to Owner and shall be carried with companies reasonably
satisfactory to Owner. Prior to the commencement of the work, Tenant shall
deliver duplicate originals or certificates of such Insurance policies to Owner.
SECTION 10.02. Tenant Discharge of Lions
Tenant shall not permit to be created nor to remain undischarged any lien,
encumbrance or charge arising out of any work of any contractor, mechanic,
laborer or materialmen which might be or become a lien, encumbrance or charge
upon the Leased Premises or the income therefrom, and Tenant shall not suffer
any other matter or thing whereby the estate, right and interest of Owner in the
Leased Premises or in the Shopping Center might be impaired. If any lien or
notice of lien on account of an alleged debt of Tenant or Tenant's Agents or any
notice of contract by a party engaged by Tenant or Tenant's Agents to work in
the Leased Premises shall be filed against the Leased Premises or the Shopping
Center, Tenant shall, within twenty-four (24) hours of receipt thereof, give
notice to Owner of such lien and shall within ten (10) days after notice of the
filing thereof, cause the same to be discharged of record by payment, deposit,
bond, order of a court of competent jurisdiction or otherwise. If Tenant shall
that to cause such lien or notice of lien to be discharged with the period
provided, then Owner, in addition to any other rights or remedies
20
<PAGE>
may, after giving Tenant notice of its intention, but shall not to obligated to,
discharge the same by either paying the amounts claimed to be due or by
procuring the discharge of such lien by deposit or by bonding proceedings
without inquiring into the validity thereof; and in any such event, Owner shall
be entitled, if Owner so elects, to defend any prosecution of any action for
foreclosure of such lien by the lienor and to pay the amount of the judgment in
favor of the lienor with interest, costs and allowances. Any amount paid by
Owner and all costs and expenses, including attorneys' fees, incurred by Owner
in connection therewith, together with interest thereon at the rate specified
in Section 2.06 from the respective dates of Owner's making of the payment or
incurring of the cost and expense shall be paid by Tenant to Owner on demand, as
Additional Rent.
SECTION 10.03. Signs, Displays and Canopies
(a) Tenant shall not erect, install, maintain or permit any signs,
insignias, decals or other advertising or display devices, illuminated or
otherwise, on the exterior of the Leased Premises or of any building or part
thereof in the Shopping Center, or on, in or about the windows or doors of any
such building or elsewhere within a distance of seven (7) feet from the
storefront which shall be visible to public view outside the Leased Premises
without the prior approval thereof in writing by Owner, which Owner may in its
sole and absolute discretion elect to give or withhold. Tenant shall not erect,
install, maintain or permit any easel signs, pedestal signs or banners on the
interior or exterior of the Leased Premises, Tenant shall promptly, on notice
from Owner, remove the sign or advertising or display device erected or
maintained in violation of this provision. If Tenant fails to remove same
promptly upon receipt of notice from Owner to such effect, Owner may enter upon
the Leased Premises and cause such sign or advertising or display device to be
removed, and the cost of such removal and restoration shall be paid by Tenant as
Additional Rent for the month next following such removal. Tenant shall, at its
own expense, maintain and keep in good repair all signs, advertising and display
devices in or about the Leased Premises and shall save Owner harmless from any
loss, cost or damage as a result of the erection, maintenance, existence or
removal of the same. All signs shall be in accordance with Owner's sign
specifications referred to as "Graphic & Signage Criteria" in the Tenant Design
Guide. Upon vacating the Leased Premises, Tenant shall remove all signs and
repair all damage caused by such removal. If Tenant requests Owner's consent
during the term of this Lease to modify, change or install a new storefront
sign, then Tenant shall pay Owner (whether or not Owner consents thereto) the
reasonable costs incurred by Owner for the review of the plans and
specifications for such new or modified storefront sign wi |
