SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) September 23, 2003
------------------
ONE LIBERTY PROPERTIES, INC.
----------------------------
(Exact name of registrant as specified in charter)
Maryland 0-11083 13-3147497
------------------------------------------------------------------------------
(State or other (Commission file No.) (IRS Employer
jurisdiction of I.D. No.)
incorporation)
60 Cutter Mill Road, Suite 303, Great Neck, New York 11021
-------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 516-466-3100
------------
Item 2. Acquisition or Disposition of Assets
On September 23, 2003 OLP Texas I L.P., which is wholly owned by Registrant
("Subsidiary"), acquired in an arms length transaction from an unaffiliated
person an approximately 112,389 square foot retail furniture store situated on
approximately 6.26 acres located in Plano, Texas. The total purchase price was
$13,471,883 which was paid (i) $2,800,000 in cash and (ii) $10,671,883 by the
assumption of the existing first mortgage on the property held by General
Electric Capital Business Asset Funding Corporation. The property is leased in
its entirety to Robb & Stucky, Ltd., a Florida Limited Partnership. The term of
the lease expires June 23, 2020. The tenant has two five-year options which must
be exercised on at least six months prior notice (a 10-day reminder notice from
the landlord is required). The base rent under the lease is $1,254,098 per annum
through June 30, 2007, (payable in equal monthly installments), with the base
rent increasing to $1,379,507 per annum (payable in equal monthly installments)
on July 1, 2007 through June 30, 2014 and thereafter increasing to $1,517,458
per annum (payable in equal monthly installments) on July 1, 2014 through June
23, 2020. In addition to the base rent, the tenant pays the real estate taxes
applicable to the property. In addition, the tenant is required to carry
specified insurance, and is responsible for all repairs and maintenance.
At closing, the mortgage assumed by the Subsidiary, in the original principal
amount of $11,000,000 had been reduced to $10,671,883. The interest rate of the
mortgage is fixed at 7.7% and the maturity date is August 1, 2016.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) and (b) Financial Statements of Property Acquired and Pro
Forma Financial Statements
Report of Independent Auditors 1
Statement of Revenues and Certain Expenses 2
Notes to Statement of Revenues and Certain Expenses 3-4
One Liberty Pro Forma Consolidated Financial Statements (Unaudited)
Pro Forma Consolidated Financial Statements (Unaudited) 5
Pro Forma Consolidated Balance Sheet (Unaudited) 6
Pro Forma Consolidated Income Statements (Unaudited) 7-8
Notes to Pro Forma Consolidated Balance Sheet and Income Statements (Unaudited) 9-10
(c) Exhibits
1. Lease Agreement dated as of July 29, 1999.
2. First Amendment to Lease Agreement dated August 31, 1999.
3. Second Amendment to Lease Agreement dated July 11, 2001.
4. Third Amendment to Lease Agreement dated August 31, 2001.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ONE LIBERTY PROPERTIES, INC.
Dated: Great Neck, NY By: /s/ David W. Kalish
October 3, 2003 --------------------------------------------
David W. Kalish
Senior Vice President and
Chief Financial Officer
Report of Independent Auditors
Board of Directors and Stockholders
One Liberty Properties, Inc.
We have audited the statement of revenues and certain expenses of Robb & Stucky
Furniture and Design Studio ("Robb & Stucky") as described in Note 1 to be
acquired by OLP Texas I L.P., a wholly owned subsidiary of One Liberty
Properties, Inc. (the "Company") for the year ended December 31, 2002. The
statement of revenues and certain expenses is the responsibility of the
Company's management. Our responsibility is to express an opinion on this
statement of revenues and certain expenses based on our audit.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the statement of revenues and
certain expenses is free of material misstatement. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
statement of revenues and certain expenses. An audit also includes assessing the
accounting principles used and the significant estimates made by management, as
well as evaluating the overall statement of revenues and certain expenses
presentation. We believe that our audit provides a reasonable basis for our
opinion.
The accompanying statement of revenues and certain expenses was prepared for the
purpose of complying with Rule 3-14 of Regulation S-X of the Securities and
Exchange Commission for inclusion in Form 8-K of One Liberty Properties, Inc.
and is not intended to be a complete presentation of Robb & Stucky's revenues
and expenses.
In our opinion, the statement of revenues and certain expenses referred to above
presents fairly, in all material respects, the revenues and certain expenses of
Robb & Stucky as described in Note 1 for the year ended December 31, 2002, in
conformity with accounting principles generally accepted in the United States.
New York, New York /s/ Ernst & Young LLP
July 31, 2003
1
Robb & Stucky Furniture and Design Studio
Statement of Revenues and Certain Expenses
Six months ended Year ended
June 30, December 31,
2003 2002
---- ----
(unaudited)
Revenues:
Base rents $ 688,500 $ 1,376,999
---------- -----------
Total rental revenue 688,500 1,376,999
---------- -----------
Certain expenses:
Property operating expenses - -
---------- -----------
Total certain expenses - -
---------- -----------
Revenues in excess of certain expenses $ 688,500 $ 1,376,999
========== ===========
See accompanying notes.
2
Robb & Stucky Furniture and Design Studio
Notes to Statement of Revenues and Certain Expenses
1. Organization and Basis of Presentation
Presented herein is the statement of revenues and certain expenses related to
the operation of Robb & Stucky Furniture and Design Studio (the "Property"), a
retail furniture building in Plano, Texas. The Property has approximately
112,389 square feet of leasable space. The Property, which is currently owned by
Clearview Legacy, L.P., is not a legal entity, but rather a property which is
under contract for purchase by OLP Texas I, L.P., a wholly owned subsidiary of
One Liberty Properties, Inc. (the "Company").
The accompanying statement of revenues and certain expenses has been prepared in
accordance with the applicable rules and regulations of the Securities and
Exchange Commission for the acquisition of real estate properties. Accordingly,
the statement of revenues and certain expenses exclude certain expenses that may
not be comparable to those expected to be incurred in the future operations of
the aforementioned property. Items excluded consist of interest, depreciation,
and amortization.
2. Use of Estimates
The preparation of the statement of revenues and certain expenses in conformity
with accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the amounts reported in
the statement of revenues and certain expenses and accompanying notes. Actual
results could differ from those estimates.
3. Revenue Recognition
The lease with the tenant is accounted for as an operating lease. Base rent is
recognized on a straight-line basis over the lease term. The excess of the
amount so recognized over the contractual amount due pursuant to the underlying
lease amounted to $122,901 for the year ended December 31, 2002.
4. Risks and Uncertainties
The Property is leased to a single tenant, Robb & Stucky, Ltd. ("the Tenant"),
which occupies 100% of the Property's total gross leasable area under a
triple-net lease. Therefore, the Property's results of operations are
significantly dependent on the overall health of the Tenant and the furniture
industry.
3
Robb & Stucky Furniture and Design Studio
Notes to Statement of Revenues and Certain Expenses (Continued)
5. Future Minimum Rents
Future minimum lease payments to be received by the Property as of December 31,
2002 under a noncancellable operating lease are approximately as follows:
2003 $ 1,254,000
2004 1,254,000
2005 1,254,000
2006 1,254,000
2007 1,319,000
Thereafter 18,045,000
-----------
$24,380,000
===========
6. Interim Unaudited Financial Information
The statement of revenues and certain expenses for the six months ended June 30,
2003 is unaudited, however, in the opinion of management, all adjustments
(consisting solely of normal, recurring adjustments) necessary for the fair
presentation of the statement of revenues and certain expenses for the interim
period have been included. The results of the interim period are not necessarily
indicative of the results to be obtained for a full fiscal year.
4
One Liberty Properties, Inc.
Pro Forma Consolidated Financial Statements
(Unaudited)
On September 23, 2003, OLP Texas I L.P., a wholly-owned subsidiary of One
Liberty Properties, Inc. (the "Company") acquired, in an arms length
transaction, a retail furniture building located in Plano, Texas (the
"Property").
The unaudited pro forma consolidated balance sheet of One Liberty Properties,
Inc. as of June 30, 2003, has been prepared as if the Company's acquisitions of
(i) the Property and (ii) Andrita Stages (also referred to as the Playboy
property) had been consummated on June 30, 2003. The unaudited pro forma
consolidated income statements for the year ended December 31, 2002 and for the
six months ended June 30, 2003, are presented as if the Company's acquisition of
the Property had occurred on January 1, 2002 and the acquisition of Andrita
Stages occurred on September 15, 2002 (commencement of operations) and the
effect was carried forward through the year ended December 31, 2002 and six
month period ended June 30, 2003.
The pro forma consolidated financial statements do not purport to represent what
the Company's financial position or results of operations would have been
assuming the completion of the Company's acquisitions of the Property and
Andrita Stages had occurred on the dates indicated above, nor do they purport to
project the Company's financial position or results of operations at any future
date or for any future period. These pro forma consolidated financial statements
should be read in conjunction with (a) the Company's 2002 annual report on Form
10-K and the Company's Quarterly report on Form 10-Q for the period ended June
30, 2003 and (b) the Company's Form 8-K filed on August 7, 2003, as amended by
Form 8-K/A filed on September 11, 2003 in connection with the acquisition of
Andrita Stages.
5
One Liberty Properties, Inc.
Pro Forma Consolidated Balance Sheet (Unaudited)
As of June 30, 2003
(Amounts in thousands)
Purchase Purchase The
The Company of of Company
Historical Andrita Robb & Pro Forma
(A) Stages(B) Stucky as Adjusted
----------- --------- ------- -----------
Assets
Real estate investments, at cost:
Land $ 32,050 $ 4,300 $ 2,704(C) $ 39,054
Buildings 127,463 17,200 10,814(C) 155,477
---------- ---------- ---------- ----------
159,513 21,500 13,518 194,531
Less accumulated depreciation 12,333 - - 12,333
---------- ---------- ---------- ----------
147,180 21,500 13,518 182,198
Investment in unconsolidated joint ventures 16,630 - - 16,630
Mortgage receivable - 7,000 - 7,000
Cash and cash equivalents 4,969 - - 4,969
Unbilled rent receivable 3,839 - - 3,839
Rent, interest, deposits and other receivables 3,326 - - 3,326
Note receivable - officer 162 - - 162
Investment in BRT Realty Trust (related party) 478 - - 478
Deferred financing costs 1,634 - 53(D) 1,687
Other 687 - - 687
---------- ---------- ---------- ----------
$ 178,905 $ 28,500 $ 13,571 $ 220,976
========== ========== ========== ==========
Liabilities and stockholders' equity
Mortgages payable $ 82,642 $ - $ 10,671(E) $ 93,313
Line of credit 3,000 17,750 2,900(F) 23,650
Dividends payable 2,136 - - 2,136
Accrued expenses and other liabilities 1,510 - - 1,510
---------- ---------- ---------- ----------
Total liabilities 89,288 17,750 13,571 120,609
---------- ---------- ---------- ----------
Commitments and contingencies - - - -
Minority interest - 10,750 - 10,750
Stockholders' equity:
Redeemable convertible preferred stock 10,693 - - 10,693
Common stock 5,687 - - 5,687
Paid-in capital 66,465 - - 66,465
Accumulated other comprehensive income 411 - - 411
Accumulated undistributed net income 6,361 - - 6,361
---------- ---------- ---------- ----------
Total stockholders' equity 89,617 - - 89,617
---------- ---------- ---------- ----------
$ 178,905 $ 28,500 $ 13,571 $ 220,976
========== ========== ========== ==========
See accompanying notes.
6
One Liberty Properties, Inc.
Pro Forma Consolidated Income Statement (Unaudited)
For the Year Ended December 31, 2002
(Amounts in thousands, except per share data)
Andrita Stages (B) Robb & Stucky
------------------ -------------
The Pro Pro The
Company Purchase Forma Purchase Forma Company
Historical of Adjust- of Adjust- Pro Forma
(A) Property ments Property(C) ments as Adjusted
---------- -------- ------- ---------- ------- -----------
Revenues:
Rental income $ 14,879 $ 941 $ - $ 1,377 $ 10(D) $ 17,207
Interest and other income (including
$231 from an affiliated joint venture) 826 - 184 - - 1,010
--------- -------- --------- -------- -------- --------
15,705 941 184 1,377 10 18,217
--------- -------- --------- -------- -------- --------
Expenses:
Depreciation and amortization 2,876 - 125 - 270 (E) 3,271
Interest - mortgages payable 5,964 - - - 820 (F) 6,784
Interest - line of credit 54 - 224 - 129 (G) 407
Leasehold rent 24 - - - - 24
General and administrative 1,675 - - - - 1,675
Public offering expenses 125 - - - - 125
Real estate expenses 174 173 - - - 347
--------- -------- -------- -------- -------- --------
10,892 173 349 - 1,219 12,633
--------- -------- -------- -------- -------- --------
Earnings before equity in earnings of
unconsolidated joint ventures, loss
on sale and minority interest 4,813 768 (165) 1,377 (1,209) 5,584
Equity in earnings of unconsolidated
joint ventures 1,078 - - - - 1,078
Loss on sale of real estate and
available-for-sale securities (11) - - - - (11)
--------- -------- -------- -------- ------- --------
Net income before minority interest 5,880 768 (165) 1,377 (1,209) 6,651
Minority interest - (384) 63 - - (321)
--------- --------- -------- -------- -------- --------
Net income $ 5,880 $ 384 $ (102) $ 1,377 $ (1,209) $ 6,330
========= ======== ======== ========= ========= ========
Calculation of net income
applicable to common stockholders:
Net income $ 5,880 $ 384 $ (102) $ 1,377 $ (1,209) $ 6,330
Less dividends on preferred stock 1,037 - - - - 1,037
--------- -------- --------- --------- -------- --------
Net income applicable to
common stockholders $ 4,843 $ 384 $ (102) $ 1,377 $ (1,209) $ 5,293
========= ======== ========= ========= ========= ========
Net income per common share
Basic (H) $ 1.05 $ 1.15
========= ========
Diluted (H) $ 1.04 $ 1.14
========= ========
See accompanying notes.
7
One Liberty Properties, Inc.
Pro Forma Consolidated Income Statement (Unaudited)
For the Six Months Ended June 30, 2003
(Amounts in thousands, except per share data)
Andrita Stages (B) Robb & Stucky
------------------ -------------
The Pro Pro The
Company Purchase Forma Purchase Forma Company
Historical of Adjust- of Adjust- Pro Forma
(A) Property ments Property (C) ments as Adjusted
---------- -------- ------- ------------ ------- -----------
Revenues:
Rental income $ 8,990 $ 1,333 $ - $ 689 $ 5(D) $ 11,017
Interest and other income (including
$194 from an affiliated joint venture) 236 - 315 - - 551
-------- -------- --------- --------- -------- --------
9,226 1,333 315 689 5 11,568
-------- -------- --------- --------- -------- --------
Expenses:
Depreciation and amortization 1,553 - 215 - 135 (E) 1,903
Interest - mortgages payable 3,172 - - - 405 (F) 3,577
Interest - line of credit 210 - 351 - 57 (G) 618
General and administrative 1,065 - - - - 1,065
Real estate expenses 276 141 - - - 417
-------- -------- --------- --------- -------- --------
6,276 141 566 - 597 7,580
-------- -------- --------- --------- -------- --------
Earnings before equity in earnings of
unconsolidated joint ventures, gain
on sale and minority interest 2,950 1,192 (251) 689 (592) 3,988
Equity in earnings of unconsolidated
joint ventures 1,243 - - - - 1,243
Gain on sale of real estate 14 - - - - 14
-------- -------- --------- --------- -------- --------
Net income before minority interest 4,207 1,192 (251) 689 (592) 5,245
Minority interest - (596) 108 - - (488)
-------- -------- --------- --------- -------- --------
Net income $ 4,207 $ 596 $ (143) $ 689 $ (592) $ 4,757
======== ======== ======== ========= ========= ========
Calculation of net income
applicable to common stockholders:
Net income $ 4,207 $ 596 $ (143) $ 689 $ (592) $ 4,757
Less dividends on preferred stock 518 - - - - 518
-------- -------- -------- --------- -------- --------
Net income applicable to
common stockholders $ 3,689 $ 596 $ (143) $ 689 $ (592) $ 4,239
======== ======== ======== ========= ========= ========
Net income per common share
Basic (H) $ .65 $ .75
======== ========
Diluted (H) $ .65 $ .74
======== ========
See accompanying notes.
8
One Liberty Properties, Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited)
1. Notes to Pro Forma Consolidated Balance Sheet as of June 30, 2003
(A) To reflect the unaudited consolidated balance sheet of One Liberty
Properties, Inc. (the "Company") as of June 30, 2003, as reported on
the Company's Quarterly Report on Form 10-Q.
(B) The Company purchased Andrita Stages on July 24, 2003 in Los Angeles,
California. Refer to the audited financial statements and unaudited pro
forma financial statements relating to this acquisition which were
filed on Form 8-K on August 7, 2003, as amended by Form 8-K/A on
September 11, 2003.
(C) To reflect the purchase allocation of the Company's acquisition of the
property located in Plano, Texas (the "Property"), as of June 30, 2003,
for approximately $13.5 million. There was no independent valuation
performed on the Property. The Company intends to account for the
acquisition in accordance with SFAS 141 and 142. We are currently in
the process of analyzing the fair value of the in-place lease; and,
consequently, no value has yet been assigned to the lease in the
accompanying pro forma balance sheet. Therefore, the purchase price
allocation is preliminary and subject to change.
(D) To reflect financing costs incurred in connection with the assumption
of the mortgage note described in (E) below.
(E) To reflect the assumption of a mortgage note with an outstanding
balance of approximately $10.67 million, which is collateralized
by the Property.
(F) To reflect the funds borrowed under the Company's line of credit used
to purchase the Property.
2. Notes to Pro Forma Consolidated Income Statement for the Year Ended December
31, 2002
(A) To reflect the consolidated income statement of the Company for the
year ended December 31, 2002, as reported on the Company's Form 10-K.
(B) The Company purchased Andrita Stages on July 24, 2003 in Los Angeles,
California. Refer to the audited financial statements and unaudited pro
forma financial statements relating to this acquisition which were
filed on Form 8-K on August 7, 2003, as amended by Form 8-K/A filed on
September 11, 2003.
(C) To reflect the historical operations of the Property for the year ended
December 31, 2002.
9
One Liberty Properties, Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited) - Continued
(D) To reflect incremental straight line rental income amounts for the
period.
(E) To reflect straight line depreciation for the Property based on an
estimated useful life of 40 years for the year ended December 31, 2002.
(F) To reflect the interest expense for borrowings under the mortgage note
assumed and secured by the Property (approximately $10.67 million at
7.7%). Also includes straight line amortization of the financing costs
described in 1-(D) above, over the remaining life of the mortgage note
(approximately thirteen years).
(G) To reflect the interest expense for the year ended December 31, 2002
for borrowings under the revolving line of credit used to fund a
portion of the purchase price ($2.9 million at approximately 4.4%).
(H) Basic net income per common share is calculated based on approximately
4,614,000 weighted average common shares outstanding and diluted net
income per common share is calculated based on approximately 4,644,000
weighted average common shares and common share equivalents
outstanding.
3. Notes to Pro Forma Consolidated Income Statement for the Six Months
Ended June 30, 2003
(A) To reflect the consolidated income statement of the Company for the six
months ended June 30, 2003, as reported on the Company's Quarterly
Report on Form 10-Q.
(B) The Company purchased Andrita Stages on July 24, 2003 in Los Angeles,
California. Refer to the audited financial statements and unaudited pro
forma financial statements relating to this acquisition which were
filed on Form 8-K on August 7, 2003, as amended by Form 8-K/A filed on
September 11, 2003.
(C) To reflect the historical operations of the Property for the six months
ended June 30, 2003.
(D) To reflect incremental straight line rental amounts for the period.
(E) To reflect straight line depreciation for the Property based on an
estimated useful life of 40 years.
10
One Liberty Properties, Inc.
Notes to Pro Forma Consolidated Financial Statements
(Unaudited) - Continued
(F) To reflect the interest expense for borrowings under the mortgage note
assumed and secured by the Property (approximately $10.67 million at
7.7%). Also includes straight line amortization of the financing costs
described in 1-(D) above, over the remaining life of the mortgage note
(approximately thirteen years).
(G) To reflect the interest expense for borrowings under the revolving line
of credit used to fund a portion of the purchase price ($2.9 million at
approximately 3.9%).
(H) Basic net income per common share is calculated based on approximately
5,660,000 weighted average common shares outstanding and diluted net
income per common share is calculated based on approximately 5,691,000
weighted average common shares and common share equivalents
outstanding.
11
EXHIBIT INDEX
Exhibit
Number Exhibit Title
------ -------------
1. Lease Agreement dated as of July 29, 1999.
2. First Amendment to Lease Agreement dated August 31, 1999.
3. Second Amendment to Lease Agreement dated July 11, 2001.
4. Third Amendment to Lease Agreement dated August 31, 2001.
LEASE AGREEMENT
Between
LINCOLN RAS, LTD.,
a Texas limited partnership
as Landlord,
and
ROBB & STUCKY, LTD.
a Florida limited partnership,
as Tenant,
July 29, 1999
LEASE AGREEMENT
TABLE OF CONTENTS
PAGE
ARTICLE I - AGREEMENT TO LEASE..............................................2
1.1 Demise....................................................2
1.2 Condition of the Premises.................................2
1.3 Quiet Enjoyment...........................................2
1.4 Due Diligence; Landlord's Assurances......................2
ARTICLE II - TERM...........................................................3
2.1 Initial Term..............................................3
2.2 Rent Commencement Date....................................3
2.3 Construction and Delivery.................................3
2.4 Option to Renew...........................................6
ARTICLE III - USE AND OPERATION OF PREMISES.................................7
3.1 Permitted Use.............................................7
3.2 Covenant to Open and Continuous Operation.................7
3.3 Compliance with Laws......................................8
3.4 Hazardous Materials and Sewage Prohibited.................8
ARTICLE IV - RENT...........................................................10
4.1 Base Rent.................................................10
4.2 Percentage Rent...........................................11
4.3 Records and Financial Statements..........................12
4.4 Additional Rent; Rent Defined.............................13
4.5 Sales Tax.................................................13
4.6 Payment of Rent...........................................13
4.7 Past Due Rent.............................................13
4.8 No Abatement of Rent......................................14
ARTICLE V - TAXES AND ASSESSMENTS...........................................14
5.1 Payment of Taxes and Assessments..........................14
5.2 Evidence of Payment.......................................14
ARTICLE VI - UTILITIES......................................................15
ARTICLE VII - [INTENTIONALLY DELETED].......................................15
ARTICLE VIII - INSURANCE....................................................15
8.1 Insurance by Tenant.......................................15
8.2 Carriers and Features.....................................16
8.3 Failure to Procure Insurance..............................17
8.4 Waiver of Subrogation.....................................17
ARTICLE IX - DAMAGE OR DESTRUCTION..........................................17
9.1 Restoration and Repair....................................17
9.2 Escrow of Insurance Proceeds..............................18
9.3 Uninsured Losses..........................................18
ARTICLE X - ADDITIONS, ALTERATIONS AND REMOVALS.............................19
10.1 Prohibition...............................................19
10.2 Permitted Renovations.....................................19
10.3 Additions, Expansions and Structural Alterations..........20
ARTICLE XI - MAINTENANCE AND REPAIRS........................................20
11.1 Repairs by Tenant.........................................20
11.2 Landlord's Obligation.....................................21
ARTICLE XII - LANDLORD'S RIGHT TO INSPECT...................................21
ARTICLE XIII - ASSIGNMENT, TRANSFER AND SUBLETTING BY TENANT................21
13.1 Transfers Prohibited Without Consent......................21
13.2 Indirect Transfer Prohibited Without Consent..............22
13.3 Adequate Assurances.......................................22
13.4 Effect of Consent.........................................22
13.5 Permitted Transfers.......................................22
ARTICLE XIV - LANDLORD'S INTEREST NOT SUBJECT TO LIENS......................23
14.1 Liens, Generally..........................................23
14.2 Mechanics Liens...........................................24
14.3 Contest of Liens..........................................24
14.4 Notices of Commencement of Construction...................24
ARTICLE XV - CONDEMNATION...................................................25
15.1 Complete Taking...........................................25
15.2 Partial Taking............................................25
15.3 Award.....................................................25
15.4 Disputes..................................................26
ARTICLE XVI - SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE.................26
16.1 Subordination.............................................26
16.2 Attornment................................................27
16.3 Non-Disturbance...........................................27
16.4 Rights of Mortgagees and Assignees........................27
16.5 Initial Subordination Agreement...........................28
ARTICLE XVII - END OF TERM..................................................28
17.1 Surrender of Premises.....................................28
17.2 Holding Over..............................................28
ARTICLE XVIII - LIABILITY OF LANDLORD, INDEMNIFICATION......................29
18.1 Liability of Landlord.....................................29
18.2 Indemnification of Landlord...............................29
18.3 Notice of Claim or Suit...................................30
ARTICLE XIX - DEFAULT.......................................................30
19.1 Events of Default.........................................30
19.2 Remedies on Default.......................................31
19.3 Landlord May Cure Tenant Defaults.........................32
19.4 Rights Cumulative.........................................33
ARTICLE XX - [INTENTIONALLY DELETED]........................................33
ARTICLE XXI - NOTICES.......................................................33
ARTICLE XXII - MISCELLANEOUS................................................34
22.1 "Net" Lease...............................................34
22.2 Estoppel Certificates.....................................34
22.3 Brokerage.................................................35
22.4 No Partnership or Joint Venture...........................35
22.5 Entire Agreement..........................................35
22.6 Waiver....................................................35
22.7 Time......................................................36
22.8 Costs and Attorneys' Fees.................................36
22.9 Captions and Headings.....................................36
22.10 Severability..............................................36
22.11 Successors and Assigns....................................36
22.12 Applicable Law............................................36
22.13 Recordation of Memorandum of Lease........................36
22.14 Waiver of Jury Trial......................................36
Exhibit "A" - Legal Description
Exhibit "A-1" - Site Plan
Exhibit "B" - Preliminary Construction Plans
Exhibit "B-1" - Development Schedule
Exhibit "C" - Permitted Encumbrances
Exhibit "D" - Subordination, Non-Disturbance and Attornment Agreement
Exhibit "E" - Approved Budget
Exhibit "F" - Tenant Estoppel Certificate
Exhibit "G" - Memorandum of Lease
Exhibit "H" - Monument sign design
LEASE AGREEMENT
THIS LEASE AGREEMENT (the "Lease") made and entered into as of this
29th day of July, 1999, by and between LINCOLN RAS, LTD., a Texas limited
partnership (the "Landlord") and ROBB & STUCKY, LTD., a Florida limited
partnership (the "Tenant");
W I T N E S S E T H
WHEREAS, pursuant to the terms of the Purchase Contract (hereinafter
defined), an affiliate of Landlord has contracted to acquire fee simple title to
that certain parcel of real property located in the City of Plano, Collin
County, Texas, more particularly and legally described on Exhibit "A" attached
hereto (the "Land"); and
WHEREAS, pursuant to and in accordance with the terms of that certain
Contract for the Purchase and Sale of Real Estate (as amended, the "Purchase
Contract") dated April 30, 1999, executed by and between Electronic Data Systems
Corporation ("Seller") and Lincoln Property Company Commercial, Inc. ("LPC"),
Seller is to prepare and submit to LPC for LPC's review and approval a certain
Supplemental Declaration (the "Supplemental Declaration"), which Supplemental
Declaration is intended to supplement and/or amend that certain Master
Declaration of Covenants, Conditions and Restrictions (Legacy Town Center) (the
"Existing CCRs") dated February 16, 1999, executed by Seller, as declarant, and
recorded in Volume 4355, Page 619 of the Real Property Records of Collin County,
Texas (the Existing CCRs, as supplemented and/or amended by the Supplemental
Declaration and as further amended and/or supplemented from time to time, shall
be sometimes referred to herein collectively as the "CCRs"), which Supplemental
Declaration is intended to encumber the Land and subject the Land and the
development, use and occupancy thereof to certain covenants, conditions and
restrictions; and
WHEREAS, Landlord has agreed to accept an assignment of the Purchase
Contract from LPC, acquire fee simple title to the Land (subject to the terms,
provisions and conditions of the Purchase Contract) and construct, or cause to
be constructed, on the Land an approximately 112,389 square foot building
consisting of approximately 95,797 square feet of ground floor retail sales area
and approximately 16,592 square feet of mezzanine administrative office area
(the "Premises"), to be used by Tenant as a Robb & Stucky retail furniture
store, together with related paved parking and appurtenant improvements to be
located on the Land (with the Premises depicted on the site plan attached hereto
as Exhibit "A-1"); and
WHEREAS, Tenant desires to lease from Landlord, and Landlord has agreed
to lease to Tenant, the Premises, upon the terms and conditions as more
particularly hereinafter provided and described.
NOW THEREFORE, for and in consideration of the premises hereof, the
sums of money to be paid hereunder, and the mutual and reciprocal obligations
undertaken herein, the parties hereto do hereby covenant, stipulate and agree as
follows:
ARTICLE I
AGREEMENT TO LEASE
1.1 Demise. Landlord, for and in consideration of the rents herein
reserved and required to be paid by Tenant and of the covenants, promises and
agreements herein contained, does hereby demise, let and lease unto Tenant, and
Tenant, for and in consideration of the foregoing demise by Landlord and of the
covenants, promises and agreements herein contained does hereby hire, lease and
take as Tenant from Landlord the Premises, upon those terms and conditions
hereinafter set forth.
1.2 Condition of the Premises. Landlord hereby agrees to cause such
Premises to be constructed as set forth in Section 2.3 hereinafter, and Landlord
hereby acknowledges and agrees that Tenant's obligations hereunder are subject
to and conditioned upon Landlord's construction of the Premises as set forth in
Section 2.3 below (except as provided otherwise). Tenant agrees that, when
Tenant accepts delivery of the Premises, Tenant shall be representing that
Tenant has examined and approved all things concerning the Premises which Tenant
deems material to Tenant's leasing and use of the Premises (except any latent
defects). Tenant further acknowledges and agrees that neither Landlord nor any
agent of Landlord has made any representation or warranty, express or implied,
concerning the Premises or which has induced Tenant to execute this Lease except
as contained in this Lease.
1.3 Quiet Enjoyment. Landlord covenants and agrees that so long as
Tenant shall timely pay all rents due to Landlord from Tenant hereunder and
keep, observe and perform all covenants, promises and agreements on Tenant's
part to be kept, observed and performed hereunder, Tenant shall and may
peacefully and quietly have, hold and occupy the Premises free of any
interference from Landlord or any other party claiming by, through or under
Landlord; subject to the completion of the Premises, the terms, provisions and
conditions of this Lease, the Permitted Encumbrances attached hereto as Exhibit
"C", but only to the extent the Permitted Encumbrances do not materially and
adversely affect the operation in the Premises of the Permitted Use, and
Tenant's agreement under any attornment and non-disturbance agreement entered
into by Tenant as contemplated in Article XVI hereof.
1.4 Due Diligence; Landlord's Assurances. Landlord has conducted
extensive testing, investigation, and inspection of the Land. Landlord has
provided Tenant with copies of all title information, environmental information,
soil tests, zoning and development information relating to the Land in
Landlord's actual possession. Upon execution of this Lease, Tenant shall be
deemed to have satisfied itself that the Land is suitable for the operations of
a Robb & Stucky retail furniture store. Notwithstanding anything in this Lease
to the contrary, Landlord hereby warrants and represents that there are no
restrictions or other legal impediments, either imposed by law (including
applicable zoning and building ordinances) or by instrument (other than as
provided in this Lease, including the Permitted Encumbrances), which would
prevent the use of the Premises in the manner contemplated in this Lease after
completion of construction thereof by Landlord in accordance with applicable law
and the requirements of applicable governmental authorities.
ARTICLE II
TERM
2.1 Initial Term. The initial term of this Lease shall, unless sooner
terminated as elsewhere provided in this Lease, be for a period commencing on
the date of final execution of this Lease by both Landlord and Tenant and
terminating and expiring at 11:59 p.m. on the date immediately preceding the
twentieth (20th) anniversary of the Rent Commencement Date (as hereinafter
defined). For the purposes of this Lease, the initial term and any applicable
renewal term(s) are sometimes together referred to as the "Term".
2.2 Rent Commencement Date. For the purposes of this Lease, the "Rent
Commencement Date" shall be the earlier of (i) sixty (60) days after the
Delivery Date (as hereinafter defined), or (ii) the date Tenant opens for
business to the public. Notwithstanding the foregoing, except for the payment of
Rent as provided in Article IV below, any use or occupancy of the Premises by
Tenant prior to the Rent Commencement Date shall be governed by and subject to
the terms and conditions of this Lease.
2.3 Construction and Delivery.
(a) Tenant has prepared or caused to be prepared preliminary
plans and specifications for the Premises (the "Preliminary Construction Plans")
which are attached as (or described in) Exhibit "B", and has delivered three (3)
sets of such Preliminary Construction Plans to Landlord. Landlord and Tenant
have reviewed and hereby approve the Preliminary Construction Plans. The
Preliminary Construction Plans have been submitted to the City of Plano, to the
Design Review Board (the "DRB") created under the CCRs and to Seller, as the
declarant under the CCRs, for review and approval. To the extent the City of
Plano, the DRB and/or Seller requires modifications or supplements to the
Preliminary Construction Plans, Tenant shall use commercially reasonable efforts
to promptly cause such modifications or supplements to be made and shall furnish
copies of the Preliminary Construction Plans, as so amended or supplemented, to
the City of Plano, the DRB, Seller and Landlord. Upon final approval of the
Preliminary Construction Plans, as amended and supplemented, by each of the City
of Plano, the DRB, Seller and Landlord, such amended and supplemented
Preliminary Construction Plans (or the description thereof) shall be substituted
as Exhibit "B" to this Lease and shall thereafter be collectively referred to
herein as the "Final Construction Plans." Costs and expenses due to change
orders requested by Tenant which increase the cost of construction of the
Premises (as reflected in the Approved Budget (as hereinafter defined), as
amended from time to time by agreement of Landlord and Tenant) shall be at
Tenant's sole expense. Tenant shall have the right to reasonably review and
approve other changes in the Final Construction Plans, provided that: (i) Tenant
shall review and communicate its approval or disapproval of such changes within
five (5) days of Landlord's request therefor, and (ii) the cost of all changes
to the Final Construction Plans made consistent with this Section 2.3 (a) shall
be included within the Approved Budget (herein so called) for the construction
of the Premises, which Approved Budget, as the same presently exists in
preliminary form, is attached hereto as Exhibit "E" and made a part hereof for
all purposes, and which Approved Budget shall be amended and supplemented by
agreement of Landlord and Tenant following acceptance of a bid from the
Contractor (hereinafter defined) as described below and which Approved Budget
may be further amended and supplemented from time to time by agreement of
Landlord and Tenant and as a result of change orders approved by Landlord and
Tenant. Landlord shall solicit at least three (3) bids (or as many as reasonably
practical) from general contractors unaffiliated with Landlord and shall retain
(with Tenant's approval, which such approval shall not be unreasonably withheld
or delayed) a general contractor (the "Contractor"), and shall cause the
Premises to be constructed in accordance with applicable laws and the terms of
this Lease. The Contractor shall act as the general contractor for the work. All
fees, supervision, costs and charges relating to the Premises shall be charged
against the Approved Budget. If all of the bids received for the work described
in the Final Construction Plans exceed the Approved Budget attached hereto as
Exhibit "E" or if some or all of the bids which have been received meet the
Approved Budget but are otherwise unsatisfactory to Landlord or Tenant, then
Landlord or Tenant may, within seven (7) days after the receipt of the
respective bids, either deliver a written request for modification of the Final
Construction Plans for the subject portion of the Premises or a written request
that Landlord solicit additional contractor bids. If such modifications or
written requests for solicitation of additional bids are made by Tenant that
will result in delays in completion of construction of the Premises, Landlord
shall promptly notify Tenant, in writing, of the amount of anticipated delay.
(b) Subject to Landlord's timely acquisition of the Land
pursuant to the Purchase Contract, Landlord shall commence construction of the
Premises no later than October 1, 1999 and shall use commercially reasonable
efforts to complete the Premises substantially in accordance with the Final
Construction Plans (subject to "punch list" items as described in subsection (d)
below) no later than April 15, 2000. Landlord covenants that it shall give
Tenant written notice at least thirty (30) days prior to completion that the
Premises will be completed and ready for Tenant's occupancy. Landlord shall use
good faith efforts to obtain the street address to be assigned to the Premises
from the authority having, jurisdiction and provide the same to Tenant no later
than thirty (30) days after commencement of construction. Attached hereto as
Exhibit "B-1" and incorporated herein by reference is a preliminary development
schedule (the "Development Schedule") detailing the Premises construction
process, the responsibilities of Landlord and the time periods within which
Landlord's obligations are to be performed. Promptly following acceptance of a
bid from the Contractor as described above, Landlord shall revise the
Development Schedule, as appropriate, to integrate the construction schedule
approved by Landlord and Tenant in the construction contract with the Contractor
and such revised Development Schedule shall be substituted in lieu of Exhibit
"B-1" attached hereto. Both parties acknowledge that strict adherence to the
Development Schedule is essential for an orderly and timely completion of
construction of the Premises and related Improvements; provided, however, each
construction period obligation which is to be performed shall be extended in the
event of a delay in a prior date to the extent caused by Tenant or by force
majeure by the number of days of such delay.
(c) The Premises shall be deemed to have been fully completed
and ready and available for occupancy by Tenant and the "Delivery Date" for the
purposes of this Lease shall be the date on which all of the following have been
accomplished: (i) the architect who prepared the Final Construction Plans shall
have certified in writing to Tenant that the Premises have been completed
substantially in accordance with the Final Construction Plans as provided in
subsection (a) above; (ii) Landlord shall have given thirty (30) days prior
written notice of the completion of construction of the Premises as provided in
subsection (b) above; (iii) Landlord shall have received a certificate of
occupancy from the appropriate government agency; and (iv) Landlord shall have
tendered possession of the Premises to Tenant free from defects in construction
(other than punchlist items), liens or other encumbrances, other than the
Permitted Encumbrances attached as Exhibit "C" hereto and the lien of the first
mortgage of Landlord's construction lender (which lender has or will have
entered with Tenant into the Subordination, Non-Disturbance and Attornment
Agreement attached as Exhibit "D" hereto).
(d) If Landlord fails to deliver the Premises to Tenant in the
manner provided herein (except for "punch list" items which shall be specified
by Tenant not later than the Delivery Date and shall be completed by Landlord
within thirty (30) days thereafter), then if the Delivery Date does not occur on
or before June 30, 2000, for reasons other than force majeure under subsection
(e) below, delays caused by or attributable to Tenant or extensions of time in
the Development Schedule as described in Section 2.3(b) above, then Tenant shall
have the right to impose a penalty against Landlord in the amount of One
Thousand Five Hundred Dollars ($1,500.00) per day for each day between June 30,
2000 and the actual Delivery Date (which penalty amount shall be credited
against the first payment(s) of Base Rent hereunder). Further, if the Delivery
Date does not occur on or before November 1, 2000 (the "Outside Delivery Date")
for reasons other than force majeure under subsection (e) below, delays caused
by or attributable to Tenant or extensions of time in the Development Schedule
as described in Section 2.3(b) above, then Tenant shall have the right either to
(i) enter onto the Premises and perform any task required for delivery of the
Premises which has not been completed and Landlord shall reimburse Tenant for
its actual costs thereof, or (ii) to terminate this Lease by written notice to
Landlord delivered prior to the date that is the earlier to occur of (A) thirty
(30) days after the Outside Delivery Date, and (B) the date Landlord actually
delivers the Premises to Tenant in the manner provided herein (except for
"punchlist" items as provided above).
(e) Anything in this Lease to the contrary notwithstanding,
neither Landlord nor Tenant shall be in default of the performance of any
provisions of this Lease (other than with respect to the payment of Rent by
Tenant) to the extent such performance shall be delayed or prevented by strike,
war, act of God, or other causes (other than financial causes) beyond the
control of the party seeking to excuse such performance. Landlord shall provide
Tenant with written notice of any delays in the construction of the Premises
resulting from the occurrence of a force majeure event with reasonable
promptness after the occurrence of any such event.
(f) At Tenant's sole risk, Landlord will afford Tenant
reasonable access to the Premises prior to the Delivery Date for the purpose of
inspection, measuring and installing or arranging for the installation of
fixtures, but only to the extent that such activity proceeds without
unreasonably interfering with Landlord's agents, contractors, subcontractors,
and their respective employees, or with the delivery of the Premises pursuant to
subsection (c) above. By giving Tenant access to the Premises prior to the
Delivery Date, Landlord assumes no responsibility whatsoever (unless the damage
or loss is otherwise covered by Landlord's or the general contractor's insurance
or is caused by the gross negligence or intentional misconduct of Landlord) for
damage to persons entering the Premises, or injury to property brought in, or
upon, the Premises, nor shall Landlord be entitled to any rent by reason of such
access. Tenant shall indemnify, defend and hold Landlord harmless from and
against any and all losses, costs, expenses, claims and damages arising out of
or in any way related to the negligence or willful misconduct of Tenant or
Tenant's employees, agents or contractors during any such early entry.
Notwithstanding the foregoing, Tenant shall not indemnify or hold harmless
Landlord from and against any expense, claim or cause of action resulting from
the gross negligence or willful misconduct of Landlord or Landlord's agents,
employees or contractors.
(g) On the Delivery Date, Landlord's tender of delivery of the
Premises to Tenant shall constitute Landlord's warranty to Tenant that, as of
the Delivery Date, the Premises shall have been completed in a good and
workmanlike manner, free from construction defects (other than punchlist items),
in conformity with all current applicable governmental laws, ordinances, rules,
orders, regulations, the Permitted Encumbrances, and in substantial compliance
with the Construction Plans. The foregoing warranty in this Section 2.3(g) shall
be valid and in effect for a period of one (1) year after the Delivery Date,
provided that any claims by Tenant for breach of warranty must be made in
writing and mailed or delivered to Landlord prior to the expiration of such one
(1) year period. Notwithstanding anything herein to the contrary, in no event
shall written notice mailed to Landlord within such one (1) year period but
received by Landlord after the expiration of such one (1) year period be deemed
untimely for the purposes of this Section 2.3(g). Further, Landlord shall
warrant and represent to Tenant that the Premises are free of all liens,
encumbrances and claims of any nature, except for the Permitted Encumbrances and
a first mortgage in favor of Landlord's construction lender (which lender has or
will have entered with Tenant into the Subordination, Non-Disturbance and
Attornment Agreement attached as Exhibit "D" hereto).
(h) Landlord acknowledges and agrees that as part of its
development and construction of the Premises, Landlord shall, to the extent
permitted by the CCRs and applicable laws, install a monument sign on the Land
in the approximate location noted on the Site Plan. Subject to compliance with
the terms and provisions of the CCRs and approval by required governmental
authorities, the monument sign shall be substantially similar in design and
dimension to the signage depicted on Exhibit "H" attached hereto. The monument
sign shall be installed on or before the Delivery Date.
2.4 Option to Renew. Tenant shall have and is hereby granted two (2)
options to extend this Lease for additional terms of five (5) years each, upon
the same terms, covenants, conditions and rental as set forth herein; provided
that Tenant is not in default hereunder beyond any applicable curative period at
the commencement of the respective additional period. Tenant may exercise both
of such five (5) year options successively by giving written notice to Landlord
not less than six (6) months prior to the respective expiration of the initial
Term of this Lease and of the then current five (5) year option period. However,
in the event Tenant fails to give Landlord such written notice during the
required period, Tenant's option rights hereunder shall not expire until
Landlord provides Tenant with written notice allowing Tenant ten (10) days from
receipt of said notice to exercise Tenant's renewal option.
ARTICLE III
USE AND OPERATION OF PREMISES
3.1 Permitted Use. Tenant covenants that it shall use and occupy the
Premises for the purpose of operating thereon a Robb & Stucky retail furniture
store and related facilities (the "Permitted Use"). To the limited extent
permitted by the terms, provisions and conditions of the CCRs, Tenant shall have
the right to change the Permitted Use to any other lawful retail use following
not less than thirty (30) days prior written notice to Landlord of such change
in use.
3.2 Covenant to Open and Continuous Operation. Subject to compliance by
Landlord with its obligations hereunder, Tenant agrees to open for business on
or before the date which is ninety (90) days following the Rent Commencement
Date and thereafter continuously operate the Premises as a fully stocked,
fixtured and staffed Robb & Stucky retail furniture store throughout the Term
(subject only to temporary interruptions in operations due to casualty,
condemnation, remodeling, or force majeure). To the limited extent permitted by
the terms, provisions and conditions of the CCRs, following the expiration of
the third (3rd) Lease Year (hereinafter defined), Tenant shall have the right to
cease or reduce operations in the Premises following prior written notice to
Landlord of such cessation or reduction in operations delivered no later than
the date that is thirty (30) days prior to the date of such cessation or
reduction in operations, provided that in no event shall Tenant cease or reduce
operations in the Premises beyond the date that is six (6) months prior to the
date established under the CCRs or otherwise as the date on which Seller, or its
successor(s) under the CCRs, would have the right to recapture the Land and/or
the Premises from Landlord by reason of such a cessation or reduction in
operations. In the event that Tenant fails to continuously operate the Premises
in accordance with the provisions of this Section 3.2, and such failure
continues for a period of thirty (30) days following receipt of written notice
thereof from Landlord, Landlord shall have the right, in addition to all other
rights and remedies which Landlord may have under this Lease or otherwise, to
terminate this Lease and recapture the Premises by written notice to Tenant (the
"Recapture Notice"). The Recapture Notice shall specify the effective date of
such termination. Upon the effective date of such a termination of this Lease,
Tenant shall deliver the Premises to Landlord in accordance with the terms of
this Lease, including, without limitation, the terms and provisions of Article
XVII hereof. Except as provided above in the Section 3.2 and except for those
covenants, duties and obligations of Landlord and Tenant expressly provided to
survive the expiration or earlier termination of this Lease, following a
termination of this Lease by Landlord pursuant to this Section 3.2, Landlord and
Tenant shall have no further obligations or duties hereunder.
3.3 Compliance with Laws. Landlord shall be responsible for any
non-compliance with building requirements or zoning requirements existing on the
Delivery Date (excluding non-compliance resulting from deficiencies in the Final
Construction Plans not actually known to Landlord prior to the commencement of
construction of the Premises), as well as any violation of the CCRs or any other
laws, rules, regulations or statutes of any federal, state or local government,
including, without limitation, any Accessibility Laws (hereinafter defined)
existing on the Delivery Date. Tenant shall at all times after the Delivery Date
keep and maintain the Premises in compliance with the CCRs and with all
applicable laws, ordinances, statutes, rules, regulations, orders, directions
and requirements of all federal, state, county and municipal governments and of
all other governmental agencies or authorities having or claiming jurisdiction
over the Premises or the business activities conducted thereon or therein and of
all of their respective departments, bureaus, agencies or officers, and of any
insurance underwriting board or insurance inspection bureau having or claiming
such jurisdiction or any other body exercising similar functions and of all
insurance companies from time to time selected by Tenant to write policies of
insurance covering the Premises and any business or business activity conducted
thereon or therein; provided, however, that the foregoing shall not relieve
Landlord of any obligations with respect to such matters as a result of
Landlord's warranties and representations set forth in Section 2.3 of this
Lease.
Notwithstanding the generality of the foregoing, Tenant shall, at its
sole expense, after the Delivery Date maintain the Premises in full compliance
with all applicable federal, state or municipal laws, ordinances, rules and
regulations currently in existence or hereafter enacted or rendered governing
accessibility for the disabled or handicapped, including, but not limited to,
any applicable provisions of The Architectural Barriers Act of 1968, The
Rehabilitation Act of 1973, The Fair Housing Act of 1988, The Americans With
Disabilities Act, the accessibility code(s), if any, of the State in which the
Premises is located, and all regulations and guidelines promulgated under any
all of the foregoing, as the same may be amended from time to time (collectively
the "Accessibility Laws"); provided, however, that the foregoing shall not
relieve Landlord of any obligations with respect to such matters as a result of
Landlord's warranties and representations set forth in Section 2.3 of this
Lease.
3.4 Hazardous Materials and Sewage Prohibited. Except for conditions
disclosed to Tenant in writing and specifically accepted by Tenant in writing,
Landlord represents that, to Landlord's knowledge, the Premises are, and as of
the Delivery Date will be, free of any Hazardous Materials. At all times during
the term of this Lease neither Landlord nor Tenant nor any of their respective
employees, agents, invitees, licensees, contractors or subtenants (if permitted)
shall release or dispose of Hazardous Materials in, on or about the Premises or
the groundwater thereof, in violation of any federal, state or municipal law,
decision, statute, rule, ordinance or regulation currently in existence or
hereafter enacted or rendered. Tenant shall give Landlord prompt written notice
of any claim received by Tenant from any person, entity, or governmental agency
that a release or disposal of Hazardous Materials has occurred on the Premises
or the groundwater thereof. As used herein, the term "Hazardous Materials" shall
mean and be defined as any and all toxic or hazardous substances, chemicals,
materials or pollutants, of any kind or nature, which are regulated, governed,
restricted or prohibited by any federal, state or local law, decision, statute,
rule, or ordinance currently in existence or hereafter enacted or rendered, and
shall include (without limitation), all oil, gasoline and petroleum based
substances.
Tenant shall not discharge or permit to be discharged into any septic
facility or sanitary sewer system serving the Premises any toxic or hazardous
sewage or waste other than that which is normal domestic waste water for the
type of business contemplated by this Lease to be conducted by Tenant on, in or
from the Premises. Any toxic or hazardous sewage or waste which is produced or
generated in connection with the use or operation of the Premises shall be
handled and disposed of as required by and in compliance with all applicable
local, state and federal laws, ordinances and rules or regulations or shall be
pre-treated to the level of domestic wastewater prior to discharge into any
septic facility or sanitary sewer system serving the Premises.
Nothing in this Section 3.4 shall be construed to mean that Tenant
shall have any liability to Landlord for any groundwater contamination or other
environmental contamination of the Premises which is not caused by Tenant or
which does not arise out of or in connection with the action or inaction of the
Tenant. Further, Landlord shall indemnify, defend and hold Tenant harmless from
and against any and all losses, costs, expenses, claims and damages arising out
of or in any way related to groundwater contamination or other environmental
contamination of the Premises actually caused by Landlord or Landlord's agents
or employees. Notwithstanding the foregoing, in the event of any Hazardous
Materials are introduced by unrelated third parties, Landlord shall be
responsible for all removal thereof required by applicable law, costs of
removal, and actual costs incurred by Tenant in connection with the removal of
such Hazardous Materials, but Landlord shall not be required to indemnify,
defend or hold Tenant harmless against any claims asserted by third parties
against Tenant arising out of such Hazardous Materials, or be liable for any
claims by Tenant for compensatory and punitive damages, lost profits or other
consequential damages resulting therefrom.
3.5 Compliance With Title Matters. Attached hereto as Exhibit "C" is a
copy of the Permitted Encumbrances (herein so called). After the delivery of the
Premises, Tenant, at its expense, shall comply with the CCRs and with all other
restrictive covenants and other title exceptions contained in the Permitted
Encumbrances and comply with and perform all of the obligations set forth
therein to the extent that the same are applicable to the Premises or the use
and occupancy thereof by Tenant. Further, in addition to Tenant's payment
obligations under this Lease, Tenant shall pay all sums charged, levied or
assessed under the CCRS or under any other restrictive covenants, declaration,
reciprocal easement agreement or other title exceptions affecting the Premises
promptly as the same become due and shall furnish Landlord evidence of payment
thereof. Landlord covenants to Tenant that the Premises shall be in substantial
compliance with the Permitted Encumbrances as of the Delivery Date.
ARTICLE IV
RENT
4.1 Base Rent. Subject to proration as set forth below, Tenant shall
pay as base rent for the Premises for (a) each of Lease Year 1 through 7 (as
hereinafter defined) the sum of One Million Three Hundred Sixty-Two Thousand
Four Hundred Sixty-Three and No/100 Dollars ($1,362,463.00), (b) each of Lease
Years 8 through 14 the sum of One Million Four Hundred Ninety-Eight Thousand
Seven Hundred Nine and No/100 Dollars ($1,498,709.00), (c) each of Lease Years
15 through 20 the sum of One Million Six Hundred Forty-Eight Thousand Five
Hundred Eighty and No/100 Dollars ($1,648,580.00), (d) if applicable, each of
Lease Years 21 through 25 during the first option period the sum of One Million
Eight Hundred Thirteen Thousand Four Hundred Thirty-Eight and No/100 Dollars
($1,813,438.00), and (e) if applicable, each of Lease Years 26 through 30 during
the second option period the sum of One Million Nine Hundred Ninety-Four
Thousand Seven Hundred Eighty-Two and No/100 Dollars ($1,994,782.00) (as
applicable for each Lease Year, "Base Rent"), together with all applicable sales
and use taxes thereon, if any. Base Rent shall be due and payable commencing on
the Rent Commencement Date. Base Rent for each successive Lease Year during the
Term shall be due and payable in equal monthly installments, in advance, on the
first (1st) day of each calendar month commencing on the first (1st) day of the
calendar month immediately following the Rent Commencement Date, it being agreed
that Base Rent payable with respect to the period between the Rent Commencement
Date and the first day of the following calendar month shall be due at the time
that the first payment of Base Rent is due.
Notwithstanding the foregoing, Landlord and Tenant acknowledge that the
amount of the initial Base Rent for Lease Years 1 through 7 is based on the
assumed and budgeted costs to be incurred by Landlord in constructing the
Premises as reflected in the Approved Budget (including without limitation land
costs, building and site development costs, development fee and other applicable
soft costs), multiplied by eleven percent (11%). Upon completion of construction
as contemplated hereunder, the initial Base Rent for Lease Years 1 through 7
shall be adjusted in the event Landlord's actual costs are less than or greater
than the current amount reflected in the Approved Budget, and Base Rent for
subsequent periods shall likewise be proportionately adjusted, as appropriate.
The adjusted Base Rent shall be memorialized in an amendment to this Lease
executed by Landlord and Tenant.
In addition to the foregoing, Landlord agrees that Tenant may elect to
reduce the amount of the initial Base Rent upon completion of the Premises. In
the event Tenant elects to reduce the amount of initial Base Rent, then no later
than thirty (30) days after the Delivery Date, Tenant shall notify Landlord in
writing of its election to reduce the amount of initial Base Rent. The reduction
in initial Base Rent shall be accomplished by means of Tenant paying to Landlord
on or before the Rent Commencement Date an amount to be determined by Tenant
(the "Buy-down Amount"), which Buy-down Amount shall not exceed $1,500,000.00
and shall be deducted from Landlord's total cost of construction of the Premises
and, thereupon, the amount of the Base Rent shall be recalculated in accordance
with the formula described above for the adjustment of the Base Rent.
For the purposes of this Lease, the term "Lease Year" shall mean and be
defined as each twelve (12) month period commencing on the first day of the
calendar month immediately following the Rent Commencement Date; provided,
however, that the first Lease Year shall include the period from the Rent
Commencement Date to the first day of the next following calendar month.
Base Rent shall be prorated for an extended or partial Lease Year (i.e., the
first Lease Year and/or the final Lease Year).
4.2 Percentage Rent.
(a) Tenant shall pay to Landlord for each Lease Year during
the Term, commencing with Lease Year 21 (but not before), as Percentage Rent (as
herein so called), a sum equal to two percent (2%) multiplied by the amount, if
any, by which Gross Sales (hereinafter defined) for the applicable Lease Year
exceeds $68,633,000.00. The Percentage Rent shall be paid in annual installments
as follows: on or before the 45th day of each Lease Year during the Term,
commencing with Lease Year 22 with respect to Percentage Rent payable for Lease
Year 21, if any, Tenant shall pay to Landlord a sum of money equal to the
Percentage Rent for such Lease Year. The term "Gross Sales", as used herein,
shall be defined to mean the aggregate amount of gross sales and other revenue
from all business conducted in, on or from the Premises by Tenant and all other
revenue in connection with all merchandise sold, services provided or other
activities performed in, on or from the Premises by Tenant, whether evidenced by
cash, check, credit, charge account, exchange or otherwise and regardless of the
amount, or profit realized. Gross Sales shall include, but not be limited to,
all amounts received from (i) the sale of goods, wares and merchandise, (ii)
sales made by means of vending devices, (iii) rentals, (iv) services performed
in, on or from the Premises, and (v) all orders taken or received, including
mail, catalog, telephone, telegraph or other orders received at the Premises,
whether such orders be filled from the Premises or elsewhere. Gross Sales shall
further include all sales to Tenant's employees (reduced by the amount of any
discounts actually provided to such employees). If any space within the Premises
shall be sublet by Tenant or business conducted by any person or entity other
than Tenant pursuant to this Lease, then there shall be included in Gross Sales
all the sales and services, and any other activity generated therein. Gross
Sales shall include receipts from the sale of gift certificates at the time of
redemption and not at the time of sale. Except as provided below in this Section
4.2, each charge or sale shall be recorded for its full amount and no deduction
or offset thereto shall be permitted for trade-ins, excess allowances on
trade-ins, coupons, handling charges for coupons or the equivalent. 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) and no reserve
or deduction shall be allowed for uncollected or uncollectible charge accounts,
bad debts or other items. Gross Sales shall also include all deposits not
refunded to purchasers and all service charges for layaway sales.
(b) Notwithstanding the foregoing, Gross Sales shall not
include (i) transfers to other stores or returns to suppliers, (ii) the amount
of actual discounts utilized by customers and employees of Tenant, provided no
compensation is provided to Tenant by such customers or employees in exchange
for such discounts, (iii) sales of merchandise for which cash has been refunded
or allowances made on merchandise claimed to be unsatisfactory, provided they
shall have been previously included in Gross Sales and provided that if such
refunds or allowances are in the form of credits to customers, (iv) the sales
price of merchandise returned by customers and standard credit card fees paid to
the credit card issuer (i.e., Visa, MasterCard, American Express) in the
ordinary course of business for each charge, and (v) 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, and that the amount is
paid by Tenant to such governmental authority.
(c) Commencing with Lease Year 21, on or before the 30th day
of each calendar month during the Term, Tenant shall prepare and deliver to
Landlord at the place designated by Landlord a statement of Gross Sales made
during the preceding calendar month. In addition, within forty-five (45) days
after the expiration of each Lease Year and within forty-five (45) days after
termination of this Lease, if this Lease should not terminate at the end of a
Lease Year. Tenant shall prepare and deliver to Landlord at the place designated
by Landlord a statement of Gross Sales during the preceding Lease Year (or
partial Lease Year), certified to be true, correct and complete by the chief
financial officer of Tenant. Tenant shall furnish similar statements for its
licensees, concessionaires and subtenants, if any. All such statements shall be
in such form as Landlord may reasonably require and shall be consistent with the
present forms of Tenant's financial reporting utilized in the financial reports
heretofore submitted to Landlord. If any such certified statement discloses an
error in the calculation of Percentage Rent for any period, an appropriate
adjustment of Percentage Rent shall be made, subject, however, to Landlord's
rights under this Section 4.2.
(d) Landlord shall have the right from time to time, upon
reasonable prior written notice and during Tenant's regular business hours, by
its accountants or representatives to audit all statements of Gross Sales and in
connection with such audits to examine all records (including all supporting
data and all tax records) of Gross Sales, and Tenant shall make or cause to be
made all such records readily available for such examination. If any such audit
discloses that the actual Gross Sales for any Lease Year differ from those
reported by more than three percent (3%), Tenant shall forthwith pay the
reasonable cost of such audit, Percentage Rent due, if any, along with interest
charges at the maximum rate allowed by applicable law, and if such audit
discloses that said Gross Sales for such Lease Year exceeded those reported by
more than five percent (5%), Landlord shall, in addition to the foregoing
rights, have the right, at Landlord's option, to terminate this Lease (but only
with respect to the second and subsequent occurrences of such under-reporting of
annual Gross Sales by Tenant) or to require that Tenant thereafter cause such
reports to be prepared, at Tenant's sole cost and expense, on an annual basis by
an independent certified public accountant reasonably approved by Landlord. In
the event Tenant over reports its Gross Sales and is due a refund, Tenant will
be granted a credit toward future rents after deducting the reasonable cost of
the examination.
4.3 Records and Financial Statements. Tenant shall keep and maintain at
all times complete and accurate books and records adequate to reflect clearly
and correctly Tenant's annual gross sales, which books and records shall be kept
by Tenant at its office and shall be available for at least one (1) year for
Landlord's review at Landlord's expense during reasonable business hours and
upon reasonable notice. Throughout the Term of this Lease, in addition to the
statements of Gross Sales described above, Tenant shall deliver to Landlord: (1)
audited financial statements of Tenant, delivered no later than four (4) months
after the end of each of Tenant's fiscal years, and (ii) unaudited quarterly
financial statements of Tenant certified to be true, correct and complete by the
chief financial officer of Tenant, delivered no later than two (2) months after
the end of each of Tenant's fiscal quarters.
4.4 Additional Rent; Rent Defined. If Landlord shall make any
expenditure for which Tenant is responsible or liable under this Lease, or if
Tenant shall become obligated to Landlord under this Lease for any sum other
than Base Rent as hereinabove provided, the amount thereof shall be deemed to
constitute additional rent ("Additional Rent") and shall be due and payable by
Tenant to Landlord, together with all applicable sales taxes thereon, if any,
simultaneously with the next succeeding monthly installment of Base Rent or at
such other time as may be expressly provided in this Lease for the payment of
the same.
For the purpose of this Lease, the term "Rent" shall mean and be
defined as all Base Rent, Percentage Rent and Additional Rent due from Tenant to
Landlord hereunder.
4.5 Sales Tax. In addition to the Rent and any other sums or amounts
required to be paid by Tenant to Landlord pursuant to the provisions of this
Lease, Tenant shall also pay to Landlord, simultaneously with such payment of
such Rent or other sums or amounts, the amount of any applicable sales, use or
excise tax on any such Rent or other sums or amounts so paid by Tenant to
Landlord, whether the same be levied, imposed or assessed by the State in which
the Premises is located or any other federal, state, county or municipal
governmental entity or agency. Any such sales, use or excise taxes shall be paid
by Tenant to Landlord at the same time that each of the amounts with respect to
which such taxes are payable are paid by Tenant to Landlord.
4.6 Payment of Rent. Each of the foregoing amounts of Rent and other
sums shall be paid to Landlord without demand and, except as expressly provided
in this Lease, without deduction, set-off, claim or counterclaim of any nature
whatsoever which Tenant may have or allege to have against Landlord, and all
such payments shall, upon receipt by Landlord, be and remain the sole and
absolute property of Landlord. All such Rent and other sums shall be paid to
Landlord in legal tender of the United States at the address to which notices to
Landlord are to be given or to such other party or to such other address as
Landlord may designate from time to time by thirty (30) days' prior written
notice to Tenant. If Landlord shall at any time accept any such Rent or other
sums after the same shall become due and payable, such acceptance shall not
excuse a delay upon subsequent occasions.
4.7 Past Due Rent. If Tenant fails to make any payment of Rent or any
other sums or amounts to be paid by Tenant hereunder on or before the tenth
(10th) day after the date such payment is due and payable, an administrative
late charge of five percent (5%) of the amount of such payment shall accrue and
be due and payable; provided, however, the foregoing administrative late charge
shall not be applicable until the third (3rd) and any subsequent late payments
during any twelve (12) month period are received by Landlord more than ten (10)
days after the date when due. In addition, upon an Event of Default (hereinafter
defined), all past due amounts shall bear interest at the maximum interest rate
then allowable under the laws of the State in which the Premises is located from
the date such amount became due to the date of payment thereof by Tenant. Such
late charge and interest shall constitute Additional Rent and shall be due and
payable with the next installment of Rent due hereunder.
4.8 No Abatement of Rent. Except as expressly provided in this Lease,
no abatement, diminution or reduction (a) of Rent, charges or other
compensation, or (b) of Tenant's other obligations hereunder, shall be allowed
to Tenant or any person claiming under Tenant, under any circumstances or for
any reason whatsoever.
ARTICLE V
TAXES AND ASSESSMENTS
5.1 Payment of Taxes and Assessments. During the original term and all
renewals or extensions of this Lease, Tenant shall pay and discharge, prior to
their becoming delinquent: (i) all real estate ad valorem taxes levied or
assessed after the Delivery Date hereof (except such taxes relating to the first
and last year of this Lease which shall be pro-rated for the period of this
Lease within the tax period) against the Premises, including without limitation,
assessments for public improvements made after the commencement of this Lease,
(ii) all personal property ad valorem taxes levied or assessed against Tenant's
personal property used in or about the Premises, (iii) all assessments levied or
assessed pursuant to the terms of the CCRs which are attributable to the
Premises and/or to Landlord's ownership thereof, and (iv) all payments assessed
against Landlord, Tenant and/or the Premises in lieu of, or as a supplement to,
ad valorem taxes; provided however, in the event any special assessment taxes
shall be levied or assessed against the Premises which are payable or may be
paid in installments, Tenant shall be required to pay only such installments as
shall become due and payable during the Term of this Lease or any option periods
as and when such installments become due and payable. Notwithstanding the
foregoing, in the event of any lump sum special assessment(s) in the amount of
five thousand dollars ($5,000.00) or more accruing when the unexpired Term of
the Lease is five (5) years or less, Tenant shall pay such assessment, but as
between Tenant and Landlord, the assessment shall be treated as amortized over
the estimated life-span of the improvement(s) for which the assessment is made
and any unamortized portion of such assessment upon the expiration of the Lease
shall be treated as a loan from Tenant to Landlord, which shall accrue interest
on the unpaid principal balance at the legal rate upon which judgments accrue
interest and shall be payable in full on demand. All impact fees and development
charges related to the construction of the Improvements shall be paid by
Landlord to the extent reflected in the Approved Budget. Tenant shall have the
right to contest such taxes in good faith provided Tenant posts such security as
is necessary to prevent the imposition of a lien upon the Premises.
5.2 Evidence of Payment. Tenant shall direct the local taxing authority
to send all tax invoices to Tenant with a copy to Landlord; if, however,
Landlord receives the original tax invoice at any time, Landlord shall deliver
the original invoice to Tenant within five (5) business days after receipt.
Tenant shall deliver to Landlord within thirty (30) days after the last day for
payment (without penalty or interest) of the taxes, assessments and other levies
on the Premises, photostatic copies of the receipts showing payment thereof. In
the event Tenant fails to pay any of the foregoing taxes, assessments and other
levies and the Landlord elects to pay the same, the same shall constitute
Additional Rent hereunder.
ARTICLE VI
UTILITIES
In connection with the construction of the Improvements, Landlord
hereby represents to Tenant that all necessary utilities are, or as of the
Delivery Date will be, available at, and will be connected to, the Premises.
Landlord shall be responsible for and shall pay all utility impact fees, charges
and assessments, relating to the development and construction of the
Improvements identified in the Approved Budget, as amended or supplemented from
time to time.
From and after the Delivery Date, Tenant shall be liable for and shall
pay directly all charges and fees (together with any applicable taxes or
assessments thereon) when due for water, gas, electricity, air conditioning,
heat, septic, sewer, refuse collection, telephone and any other utility charges
or similar items in connection with the use or occupancy of the Premises by
Tenant. Landlord shall not be responsible or liable in any way whatsoever for
the quality, quantity, impairment, interruption, stoppage, or other interference
with any utility service, including, without limitation, water, air conditioning
heat, gas, electric current for light and power, telephone, or any other utility
service provided to or serving the Premises unless caused by Landlord's faulty
construction or negligence. No such interruption, termination or cessation of
utility services shall relieve Tenant of its duties and obligations pursuant to
this Lease, including, without limitation, its obligation to pay all Rent as and
when the same shall be due hereunder.
ARTICLE VII
[INTENTIONALLY DELETED]
ARTICLE VIII
INSURANCE
8.1 Insurance by Tenant. Throughout the term of this Lease, Tenant
shall, at its sole cost and expense, maintain in full force and effect the
following types and amounts of insurance coverage:
(a) Hazard Insurance. Tenant shall keep the improvements and
personalty located on and in the Premises, including all permitted alterations,
changes, additions and replacements thereof and thereto, insured against. loss
or damage caused by: (i) fire, windstorm and other hazards and perils generally
included under extended coverage; (ii) sprinkler leakage; (iii) vandalism and
malicious mischief; and (iv) boiler and machinery, all in an amount not less
than one hundred percent (100%) of the insurable replacement cost of such
improvements and personalty with a deductible of not more than Fifty Thousand
Dollars ($50,000.00). All insurance required hereunder, and all other insurance
maintained by Tenant on such improvements and personalty in excess of or in
addition to that required hereunder, shall be carried in favor of Landlord and
Tenant (and Landlord's mortgage lender, if applicable), as their respective
interests may appear.
(b) Liability Insurance. Tenant shall provide and keep in full
force and effect a policy of broad form comprehensive general public liability
and property damage insurance providing coverage against liability for personal
injury, death and property damage having limits of not less than One Million
Dollars ($1,000,000.00) per person and Three Million Dollars ($3,000,000.00) per
occurrence, with an umbrella liability policy in the amount of Fifteen Million
Dollars ($15,000,000.00). Said insurance, and any and all other liability
insurance maintained by Tenant in excess of or in addition to that required
hereunder, shall name Landlord as an additional insured.
(c) Worker's Compensation Insurance. Tenant shall provide and
keep in full force and effect workers' compensation insurance, in a form
prescribed by the laws of the State in which the Premises is located, and
employers' liability insurance.
(d) Builder's Risk Insurance. Tenant shall, prior to the
commencement of and during the construction of any permitted rehabilitation,
replacement, reconstruction, restoration, renovation or alteration to the
Premises, provide and keep in full force and effect builders' risk insurance in
accordance with the requirements of this Article.
(e) Business Interruption Insurance. Tenant shall provide,
keep and maintain in full force and effect business interruption insurance,
without a provision for co-insurance, in an amount sufficient to pay Rent,
maintenance, taxes and insurance for the Premises for a period of at least
twelve (12) months.
(f) Flood Hazard Insurance. Tenant shall maintain flood
insurance in an amount equal to the actual replacement value of the Premises or
the maximum amount available, whichever is less, if the area in which the
Premises are located has been designated by the Secretary of Housing and Urban
Development as having special flood hazards and if flood insurance is available
under the National Flood Insurance Act. Tenant shall cause Landlord and
Landlord's Mortgagee, if any, to be named as a loss payee thereunder. All
policies required to be maintained by Tenant hereunder shall name Landlord as an
additional insured (provided that naming such additional insured shall not
increase Tenant's insurance premiums for such policies).
8.2 Carriers and Features. All insurance policies required to be
carried by Tenant as provided in this Article shall be issued by insurance
companies approved by Landlord authorized and licensed to do business in the
State in which the Premises is located. All such policies: (i) shall be for
periods of not less than one (1) year and Tenant shall renew the same at least
thirty (30) days prior to the expiration thereof, (ii) shall be rated B+-VIII or
better by Best's Insurance Rating Service, and (iii) shall name Landlord as loss
payee and/or additional insured, as appropriate. All such policies shall require
not less than thirty (30) days written notice to Landlord prior to any
cancellation thereof or any change reducing coverage thereunder.
Tenant shall pay the premiums for all insurance policies which Tenant
is obligated to carry under this Article and, at least twenty (20) days prior to
the date any such insurance must be in effect, deliver to Landlord a copy of the
policy or policies, or a certificate or certificates (on ACORD 27) thereof,
along with evidence that the premiums therefor have been paid for at least the
next ensuing quarter-annual period.
8.3 Failure to Procure Insurance. In the event Tenant shall fail to
procure insurance required under this Article and fail to maintain the same in
full force and effect continuously during the term of this Lease, Landlord shall
be entitled to procure the same and Tenant shall immediately reimburse Landlord
for such premium expense as Additional Rent.
8.4 Waiver of Subrogation. Tenant agrees that, if any property owned by
it and located in the Premises shall be stolen, damaged or destroyed by an
insured peril, Landlord shall not have any liability to Tenant, nor to any
insurer of Tenant, for or in respect of such theft, damage or destruction, and
Tenant shall require all policies of risk insurance carried by it on its
property in the Premises to contain or be endorsed with a provision in and by
which the insurer designated therein shall waive its right of subrogation
against Landlord.
ARTICLE IX
DAMAGE OR DESTRUCTION
9.1 Restoration and Repair. If, during the term of this Lease, the
Premises shall be destroyed or damaged in whole or in part by fire, windstorm or
any other cause whatsoever, Tenant shall give Landlord immediate notice thereof
and shall repair, reconstruct or replace the Premises or the portion thereof so
destroyed or damaged (whichever is reasonably required), at least to the extent
of the value and character thereof existing immediately prior to such
occurrence. If the CCRs or applicable laws prevent or preclude reconstruction to
the same extent as the previously existing improvements, Tenant shall
reconstruct to the closest extent possible pursuant to plans and specifications
to be approved by Landlord, which approval shall not be unreasonably withheld,
conditioned or delayed. The building must be susceptible of being reconstructed
to at least ninety percent (90%) of its pre-casualty size; otherwise, Tenant
shall be entitled to terminate this Lease on sixty (60) days prior written
notice to Landlord, in which event Landlord shall be entitled to all insurance
proceeds attributable to the Premises but not to proceeds relating to Tenant's
furniture, fixtures or equipment. Landlord's withholding of approval as to the
plans and specifications shall be deemed reasonable only if same are for
improvements which are materially inconsistent with the materials of the
previously existing improvements or such proposed improvements would diminish
the value of the Premises when reconstructed. All work shall be started as soon
as practicable and completed, at Tenant's sole cost and expense. Tenant shall,
however, immediately take such action as is necessary to assure that the
Premises (or any portion thereof) does not constitute a nuisance or otherwise
present a health or safety hazard.
9.2 Escrow of Insurance Proceeds. In the event of a casualty resulting
in a loss payment for the Improvements in an amount greater than Two Hundred
Thousand Dollars ($200,000.00), the proceeds (attributable to the Improvements)
of all insurance policies maintained by Tenant shall be deposited in an escrow
account in Landlord's and Tenant's names at a bank or other financial
institution designated by Landlord, and shall be used by Landlord and/or Tenant
for the repair, reconstruction or restoration of the Improvements. Such proceeds
shall be disbursed periodically by the escrow holder for work actually completed
and materials installed by or on behalf of Tenant in accordance with the plans
and specifications for such work approved by Landlord, as provided above, upon
certification of Tenant and Tenant's architect or engineer having supervision of
the work that such amounts are the amounts paid or payable for the repair,
reconstruction or restoration. Provided that Tenant shall be obligated to
repair, reconstruct or restore the Premises hereunder, at the time of
establishment of such escrow account and from time to time thereafter until said
work shall have been completed and paid for, Tenant shall furnish Landlord with
adequate evidence that at all times the undisbursed portion of the escrowed
funds, together with any funds made available by Tenant, is sufficient to pay
for the repair, reconstruction or restoration in its entirety. Further, Landlord
and Landlord's representatives (including Landlord's architect and engineer)
shall have the right from time to time to inspect the Premises during the
performance of the repair, reconstruction or restoration, as applicable, to
verify the progress of such work and the compliance of such work with the plans
and specifications for such work approved by Landlord, as provided above. Tenant
shall obtain, and make available to Landlord, as and when disbursements are made
by the escrow holder, receipted bills and partial lien waivers and releases,
and, upon completion of said work, full and final releases and waivers of lien.
In the event of a casualty resulting in a loss payment for the Improvements in
an amount equal to or less than Two Hundred Thousand Dollars ($200,000.00), the
proceeds shall be paid to Tenant, and shall be applied towards repair,
reconstruction and restoration.
9.3 Uninsured Losses. Nothing contained herein shall relieve Tenant of
its obligations under this Article if the destruction or damage is not covered,
either in whole or in part, by insurance, except that Tenant shall have no
responsibility for an uninsured loss resulting from the intentional acts or
omissions of Landlord.
9.4 Last Two (2) Years of Term. Notwithstanding any of the foregoing
provisions of this Article IX to the contrary, if any such damage or destruction
occurs within the last two (2) years of the Term and such damage or destruction
has a material impact on Tenant's ability to conduct business, as reasonably
determined by Tenant, Tenant shall be under no obligation to restore the
Premises, in which case this Lease shall terminate at Tenant's option, such
option to be exercised by Tenant giving not less than thirty (30) days' prior
written notice to Landlord, and Landlord shall receive the proceeds of any
insurance (together with any applicable deductible) which are paid by the
insurance carrier issuing the policy of insurance required to be maintained
hereunder.
ARTICLE X
ADDITIONS, ALTERATIONS AND REMOVALS
10.1 Prohibition. Except as hereinafter expressly provided in Section
10.2 or 10.3, no portion of the Premises shall be demolished or removed by
Tenant in any manner whatsoever without the prior written consent and approval
of Landlord, which may be withheld by Landlord in its sole and absolute
discretion.
10.2 Permitted Renovations. During the Term, Tenant shall have the
right, at its discretion and its sole cost, without Landlord's consent, to make
(i) any alterations or modifications necessary or desirable in order to bring
the Premises into conformity with Tenant's then-current prototype for similarly
sized stores and (ii) any interior nonstructural alterations or modifications it
may desire. With Landlord's consent, which shall not be unreasonably withheld,
conditioned or delayed, Tenant shall have the right, at its sole cost, to alter,
modify or reconstruct the exterior and/or structure of the building. Landlord's
withholding of consent as to any structural alteration or modification shall be
deemed reasonable only if same adversely affects the structural integrity of the
building or such alterations or modifications would diminish the value of the
Premises. The following conditions shall be met prior to any alterations to the
Premises by Tenant, to wit:
(a) Before the commencement of any such work, Tenant shall
obtain the approval thereof by all governmental departments or authorities
having jurisdiction of or over the Premises, if required by such departments or
authorities, and with any public utility companies having an interest therein,
if required by such utility companies. In any such work, Tenant shall comply
with the CCRs and all applicable laws, ordinances, requirements, orders,
directions, rules and regulations of the federal, state, county and municipal
governments and of all other governmental authorities having jurisdiction of or
over the Premises and of all their respective departments, bureaus and offices,
and with the requirements and regulations, if any, of such public utilities, of
the insurance underwriting board or insurance inspection bureau having
jurisdiction, or any other body exercising similar functions, and of all
insurance companies then writing policies covering the Premises or any part
thereof.
(b) All such construction work will be performed in a good and
workmanlike manner and in accordance with the terms, provisions and conditions
of this Lease and all governmental requirements.
(c) Landlord shall have the right to inspect any such
construction work at all times during normal working hours and to maintain at
the Premises for that purpose (at its own expense) such inspector(s) as it may
deem necessary so long as such inspections do not interfere with Tenant's work
(but Landlord shall not thereby assume any responsibility for the proper
performance of the work in accordance with the terms of this Lease, nor any
liability arising from the improper performance thereof).
(d) All such work shall be performed at Tenant's cost and
expense and free of any expense to Landlord and free of any liens on Landlord's
fee simple interest on or Tenant's leasehold interest in the Premises. In the
event any lien is placed on the Premises in connection with such work, Tenant
shall bond over such lien in accordance with applicable law or cause the removal
of such lien within sixty (60) days after the date the lien is recorded.
(e) Upon substantial completion of any such work Tenant shall
procure a certificate of occupancy, if applicable, from the appropriate
governmental authorities verifying the substantial completion thereof.
(f) Tenant shall, and hereby agrees to, indemnify and save and
hold Landlord harmless from and against and reimburse Landlord for any and all
loss, damage, cost and expense (including, without limitation, reasonable
attorneys' fees) incurred by or asserted against Landlord which is occasioned by
or results, directly or indirectly, from any construction or renovation
activities conducted upon the Premises; whether or not the same is caused by or
the fault of Tenant or any contractor, subcontractor, laborer, supplier,
materialman or any other third party.
10.3 Additions, Expansions and Structural Alterations. Except for
Tenant's obligation to make alterations to the Premises required by any
applicable law or ordinance including, without limitation, any alterations
required by Accessibility Laws (provided the Premises complied with all such
laws as of the Delivery Date), nothing in this Article X or elsewhere in this
Lease shall be deemed to authorize Tenant to construct or erect any additions to
or expansions of the Improvements, or perform any alterations of a structural
nature whatsoever; it being understood that Tenant may do so only with the prior
written consent and approval of Landlord, which consent and approval shall not
be unreasonably withheld if the addition, expansion or alteration will not
materially adversely affect the value of the Premises. Landlord shall fully
cooperate, at no cost or expense to Landlord, with Tenant in connection with any
approved addition, expansion or alteration. With respect to funding the cost of
any such expansion, unless otherwise agreed by Landlord in writing, Tenant shall
pay the entire cost of such expansion, addition or alteration. Any additions,
expansions and structural alterations constructed by Tenant pursuant to this
Section 10.3 shall be constructed in a good and workmanlike, lien-free manner
and in compliance with all applicable laws, regulations, rules, ordinances and
statutes promulgated, issued or enacted by any governmental authority having
jurisdiction over the Premises, and otherwise in accordance with the conditions
enumerated in subsections (a) through (g) of Section 10.2 above.
ARTICLE XI
MAINTENANCE AND REPAIRS
11.1 Repairs by Tenant. Tenant shall, at all times during the term of
this Lease and at its sole cost and expense, put, keep, replace and maintain the
Premises (including, without limitation, all portions of the improvements
situated thereon, including without limitation, the roof, plumbing systems,
electric systems and HVAC systems, and personalty) in good repair and in good,
safe and substantial order and condition, shall make all repairs thereto, both
inside and outside, structural and non-structural, ordinary and extraordinary,
howsoever the necessity or desirability for repairs may occur, and whether or
not necessitated by wear, tear, obsolescence or defects, latent or otherwise,
and shall use all reasonable precautions to prevent waste, damage or injury,
except to the extent any such matters arise as a result of a breach by Landlord
of its warranties and representations set forth in Section 2.3 of this Lease. At
the Delivery Date, all contractor, materialmen and vendor warranties shall be
assigned to Tenant on a non-exclusive basis (Landlord hereby authorizes Tenant
to negotiate the terms of all warranties and guaranties). Tenant shall also, at
its own cost and expense, put, keep, replace and maintain all landscaping,
signs, sidewalks, roadways, driveways and parking areas within the Premises in
good repair and in good, safe and substantial order and condition and free from
dirt, standing water, rubbish and other obstructions or obstacles.
11.2 Landlord's Obligation. Landlord shall not be required to make any
alterations, reconstructions, replacements, changes, additions, improvements or
repairs of any kind or nature whatsoever to the Premises or any portion thereof
(including, without limitation, any portion of the Improvements) at any time
during the term of this Lease, except to the extent any such matters arise as a
result of a breach by Landlord of its warranties and representations set forth
in Section 2.3 of this Lease or are caused by the negligent or wrongful acts or
omissions of Landlord after the Delivery Date.
ARTICLE XII
LANDLORD'S RIGHT TO INSPECT
Landlord and its agents shall have the right upon 24-hours notice to
enter upon the Premises or any portion thereof at any reasonable time to inspect
the operation, sanitation, safety, maintenance and use of the same, or any
portions of the same and to assure itself that Tenant is in full compliance with
its obligations under this Lease (but Landlord shall not thereby assume any
responsibility for the performance of any of Tenant's obligations hereunder, nor
any liability arising from the improper performance thereof). In making any such
inspections, Landlord shall not unduly interrupt or interfere with the conduct
of Tenant's business.
ARTICLE XIII
ASSIGNMENT, TRANSFER AND SUBLETTING BY TENANT
13.1 Transfers Prohibited Without Consent. Except as otherwise
expressly provided in Section 13.5 below, Tenant shall not, without the prior
written consent of Landlord in each instance, sell, assign or otherwise transfer
this Lease, or Tenant's interest in the Premises, in whole or in part, or any
rights or interest which Tenant may have under this Lease, or sublet the
Premises, or any part thereof. Tenant's collateral assignment of this Lease or
grant of a leasehold mortgage shall not require Landlord's consent. Landlord
shall subordinate any security interest it may have in any inventory, tangible
personal property, equipment and accounts receivable which may be necessary for
Tenant's financing purposes. If given, the consent of Landlord to an assignment,
transfer, subletting or encumbrance shall in no event be construed to relieve
Tenant or such assignee or subtenant from the obligation of obtaining the
express consent in writing of Landlord to any further assignment, transfer,
subletting or encumbrance. In addition, any such approved assignee shall
expressly assume this Lease by an agreement in recordable form, an original
executed counterpart of which shall be delivered to Landlord prior to any
assignment of the Lease. Any assignment, transfer, sublease or encumbrance in
violation of this Article shall be voidable at Landlord's option.
13.2 Indirect Transfer Prohibited Without Consent. Except as otherwise
expressly provided in Section 13.5 below, a sale, assignment, transfer, exchange
or other disposition of the partnership interests or stock of Tenant or any
general partner interest in Tenant which results in a change or transfer of
management or control of Tenant, or a merger, consolidation or other combination
of Tenant with another entity which results in a change or transfer of
management or control of Tenant, shall be deemed an assignment hereunder.
13.3 Adequate Assurances. Without limiting any of the foregoing
provisions of this Article, if, pursuant to the U.S. Bankruptcy Code, as the
same may be amended from time to time, Tenant is permitted to assign or
otherwise transfer its rights and obligations under this Lease in disregard of
the restrictions contained in this Article, the assignee agrees to provide
adequate assurance to Landlord: (i) of the continued use of the Premises solely
in accordance with the Permitted Use thereof, (ii) of the continuous operation
of the business in the Premises in strict accordance with the requirements of
Article III hereof, and (iii) of such other matters as Landlord may reasonably
require at the time of such assumption or assignment. In addition, adequate
assurance shall mean that any such assignee shall have a net worth (exclusive of
good will) of not less than that of Robb & Stucky, Ltd. as of the date of this
Lease. Any such assignee shall expressly assume this Lease by an agreement in
recordable form, an original executed counterpart of which shall be delivered to
Landlord prior to an assignment of the Lease.
13.4 Effect of Consent. Unless expressly agreed by Landlord in writing
to the contrary, Landlord's consent (where required) to any assignment of this
Lease shall not operate to release any Tenant-assignor from its obligations
hereunder, with respect to which said Tenant-assignor shall remain personally
liable.
13.5 Permitted Transfers. Notwithstanding any provision in this
Article to the contrary:
(a) Without Landlord's consent, Tenant shall be permitted to
assign its interest in this Lease or sublease the Premises to another entity or
individual, provided: (i) Robb & Stucky, Ltd. remains primarily liable for the
obligations of the Tenant under this Lease, (ii) the proposed assignee uses the
Premises for the Permitted Use or for another retail commercial use which is
permitted under the applicable zoning and land use regulations and ordinances
and the other title exceptions contained in the Permitted Encumbrances,
including, without limitation, the CCRs, (iii) if an assignment of this Lease is
made by Tenant, the assignee shall expressly assume this Lease by an assignment
agreement in recordable form, an original executed counterpart of which shall be
delivered to Landlord prior to the effective date of any such assignment, and
(iv) all excess rents paid in connection with a sublease and all consideration
paid in connection with an assignment (other than in connection with a merger of
Tenant with or into another entity or the sale of all or substantially all of
Tenant's assets) shall be delivered to Landlord upon receipt by Tenant.
(b) The sale, transfer or disposition of a general partnership
interest in Robb & Stucky, Ltd. shall not constitute an assignment which is
subject to the terms of this Article provided: (i) Derby Road Investments, Inc.
continues to be a general partner of Robb & Stucky, Ltd.; and (ii) Landlord
receives prior written notice of such proposed change. In the case of a sale,
transfer or disposition of a general partnership interest which does not
constitute an assignment subject to the terms of this Article, the transferor
general partner shall be released from any and all obligations and liability
under this Lease arising after the later of the date of such transfer or the
date the transferee general partner delivers an instrument to Landlord stating
that it has become a general partner and shall be obligated, in its capacity as
a general partner, under this Lease. Further, the sale of ownership interests in
Tenant in connection with a public offering of such ownership interests, the
sale of all or substantially all of Tenant's assets, or the merger of Tenant
into or with an entity shall not constitute an assignment which is subject to
the terms of this Article, provided: (1) Robb & Stucky, Ltd. remains primarily
liable for the obligations of Tenant under this Lease (to the extent Robb &
Stucky, Ltd. is a surviving entity following such an event), (2) Landlord
receives prior written notice of such sale or transfer, and (3) the entity
acquiring all or substantially all of Tenant's assets or the surviving entity in
connection with a merger of Tenant with or into another entity, as applicable,
shall expressly assume in writing and agree to perform and be liable for all
obligations of Tenant under this Lease.
ARTICLE XIV
LANDLORD'S INTEREST NOT SUBJECT TO LIENS
14.1 Liens, Generally. Tenant shall not create or cause to be imposed,
claimed or filed upon the Premises, or any portion thereof, or upon the interest
of Landlord therein, any lien, charge or encumbrance whatsoever. If, because of
any act or omission of Tenant, any such lien, charge or encumbrance shall be
imposed, claimed or filed, Tenant shall, at its sole cost and expense, cause the
same to be fully paid and satisfied or otherwise discharged of record (by
bonding or otherwise) and Tenant shall indemnify and save and hold Landlord
harmless from and against any and all costs, liabilities, suits, penalties,
claims and demands whatsoever, and from and against any and all attorneys' fees,
at both trial and all appellate levels, resulting or on account thereof and
therefrom. In the event that Tenant shall fail to comply with the foregoing
provisions of this Section and such failure shall continue for a period of
fifteen (15) days after written notice from Landlord, Landlord shall have the
option of paying, satisfying or otherwise discharging (by bonding or otherwise)
such lien, charge or encumbrance and Tenant agrees to reimburse Landlord, upon
demand and as Additional Rent, for all sums so paid and for all costs and
expenses incurred by Landlord in connection therewith, together with interest
thereon, until paid. The terms and conditions of this Section 14.1 shall not be
deemed to apply to any liens arising out of the Tenant's collateral assignment
of its leasehold interest hereunder in connection with any Tenant financing.
14.2 Mechanics Liens. Landlord's interest in the Premises shall not be
subjected to liens of any nature by reason of Tenant's construction, alteration,
renovation, repair, restoration, replacement or reconstruction of any
improvements on or in the Premises, or by reason of any other act or omission of
Tenant (or of any person claiming by, through or under Tenant) including, but
not limited to, mechanics' and materialmen's liens. All persons dealing with
Tenant are hereby placed on notice that such persons shall not look to Landlord
or to Landlord's credit or assets (including, Landlord's interest in the
Premises) for payment or satisfaction of any obligations incurred in connection
with the construction, alteration, renovation, repair, restoration, replacement
or reconstruction thereof by or on behalf of Tenant. Tenant has no power, right
or authority to subject Landlord's interest in the Premises to any mechanics' or
materialmen's lien or claim of lien. If a lien, a claim of lien or an order for
the payment of money shall be imposed against the Premises on account of work
performed, or alleged to have been performed, for or on behalf of Tenant, Tenant
shall, within sixty (60) days after written notice of the imposition of such
lien, claim or order, cause the Premises to be released therefrom by the payment
of the obligation secured thereby or by furnishing a bond or by any other method
prescribed or permitted by law. If a lien is released, Tenant shall thereupon
furnish Landlord with a written instrument of release in form for recording or
filing in the appropriate office of land records of the County in which the
Premises is located, and otherwise sufficient to establish the release as a
matter of record.
14.3 Contest of Liens. Tenant may, at its option, contest the validity
of any lien or claim of lien if Tenant shall have first posted an appropriate
and sufficient bond in favor of the claimant or paid the appropriate sum into
court, if permitted by law, and thereby obtained the release of the Premises
from such lien. If judgment is obtained by the claimant under any lien, Tenant
shall pay the same immediately after such judgment shall have become final and
the time for appeal therefrom has expired without appeal having been taken.
Tenant shall, at its own expense, defend the interests of Tenant and Landlord in
any and all such suits; provided, however, that Landlord may, at its election,
engage its own counsel and assert its own defenses, in which event Tenant shall
cooperate with Landlord and make available to Landlord all information and data
which Landlord deems necessary or desirable for such defense.
14.4 Notices of Commencement of Construction. If required by the laws
of the State in which the Premises is located, prior to commencement by Tenant
of any work on the Premises which shall have been previously permitted by
Landlord as provided in this Lease, Tenant shall record or file a notice of the
commencement of such work (the "Notice of Commencement") in the land records of
the County in which the Premises is located, identifying Tenant as the party for
whom such work is being performed, stating such other matters as may be required
by law and requiring the service of copies of all notices, liens or claims of
lien upon Landlord. Any such Notice of Commencement shall clearly reflect that
the interest of Tenant in the Premises is that of a leasehold estate and shall
also clearly reflect that the interest of Landlord as the fee simple owner of
the Premises shall not be subject to mechanics' or materialmen's liens on
account of the work which is the subject of such Notice of Commencement. A copy
of any such Notice of Commencement shall be furnished to and approved by
Landlord and its attorneys prior to the recording or filing thereof, as
aforesaid.
ARTICLE XV
CONDEMNATION
15.1 Complete Taking. If the whole of the Premises shall be taken or
condemned for any public or quasi-public use or purpose, by right of eminent
domain or by purchase in lieu thereof, or if a substantial portion of the
Premises shall be so taken or condemned that the portion or portions remaining
is or are not sufficient and suitable for Tenant's operations, in the mutual
reasonable judgment of Landlord and Tenant, for the continued operation of the
business contemplated by this Lease to be conducted thereon, therein or
therefrom so as to effectively render the Premises untenantable, or provided
that the building cannot be reconstructed to at least eighty-five percent (85%)
of its pre-condemned size, then, at Tenant's option, this Lease and the Term
hereby granted shall cease and terminate as of the date on which the condemning
authority takes possession and all Rent shall be paid by Tenant to Landlord up
to that date or refunded by Landlord to Tenant if Rent has previously been paid
by Tenant beyond that date.
15.2 Partial Taking. If a portion of the Premises is taken, and the
portion or portions remaining can, in the mutual reasonable judgment of Landlord
and Tenant, be adapted and used for the conduct of Tenant's business operation,
such that the Premises are not effectively rendered untenantable, then Tenant
shall promptly restore the remaining portion or portions thereof to a condition
comparable to their condition at the time of such taking or condemnation, less
the portion or portions lost by the taking, and this Lease shall continue in
full force and effect except that the Rent payable hereunder shall, if
necessary, be equitably adjusted to take into account the portion or portions of
the Premises lost by the taking. Notwithstanding the foregoing, in the event
that the building cannot be reconstructed to at least eighty-five percent (85%)
of its pre-condemned size, then, at Tenant's option, this Lease and the Term
hereby granted shall cease and terminate as of the date on which the condemning
authority takes possession and all Rent shall be paid by Tenant to Landlord up
to that date or refunded by Landlord to Tenant if Rent has previously been paid
by Tenant beyond that date.
15.3 Award. The entire award for the Premises or the portion or
portions thereof so taken shall be apportioned between Landlord and Tenant as
follows: (a) if this Lease terminates due to a taking or condemnation, Landlord
shall be entitled to the entire award, except for that portion of the award, if
any, which is specifically allocated to compensate Tenant for the taking of its
fixtures and equipment and loss of business; provided, however, Tenant shall be
entitled to all awards made to Tenant under its separate claim, provided such
claim does not diminish the value of Landlord's award; (b) if this Lease does
not terminate due to such taking or condemnation, Tenant shall be entitled to
the award to the extent required for restoration of the Premises, and Landlord
shall be entitled to the balance of the award not applied to restoration. If
this Lease does not terminate due to a taking or condemnation, Tenant shall,
with due diligence, restore the remaining portion or portions of the Premises in
the manner hereinabove provided. In such event, the proceeds of the award to be
applied to restoration shall be deposited with a bank or financial institution
designated by Landlord as if such award were insurance proceeds, and the amount
so deposited will thereafter be treated in the same manner as insurance proceeds
are to be treated under Section 9.2 of this Lease until the restoration has been
completed and Tenant has been reimbursed for all the costs and expenses thereof.
If the award is insufficient to pay for the restoration, Tenant shall be
responsible for the remaining cost and expense of such restoration.
15.4 Disputes. If Landlord and Tenant cannot agree in respect of any
matters to be determined under this Article, a determination shall be requested
of the court having jurisdiction over the taking or condemnation; provided,
however, that if said court will not accept such matters for determination,
either party may have the matters determined by a court otherwise having
jurisdiction over the parties.
ARTICLE XVI
SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE
16.1 Subordination. Subject to Section 16.3 below, this Lease, Tenant's
interest hereunder and Tenant's leasehold interest in and to the Premises are
hereby agreed by Tenant to be and are hereby made junior, inferior, subordinate
and subject in right, title, interest, lien, encumbrance, priority and all other
respects to any mortgage or mortgages now or hereafter in force and effect upon
or encumbering Landlord's interest in the Premises and/or the Land, or any
portion thereof, and to all collateral assignments by Landlord to any third
party or parties of any of Landlord's rights under this Lease or the rents,
issues and profits thereof or therefrom as security for any liability or
indebtedness, direct, indirect or contingent, of Landlord to such third party or
parties, and to all future modifications, extensions, renewals, consolidations
and replacements of, and all amendments and supplements to any such mortgage,
mortgages or assignments, and upon recording of any such mortgage, mortgages or
assignments, the same shall be deemed to be prior in dignity, lien and
encumbrance to this Lease, Tenant's interest hereunder and Tenant's leasehold
interest in and to the Premises irrespective of the dates of execution, delivery
or recordation of any such mortgage, mortgages or assignments. The foregoing
subordination provisions of this Section shall be automatic and self-operative
without the necessity of the execution of any further instrument or agreement of
subordination on the part of Tenant. If any lender or Mortgagee requires the
execution of a separate document, then the subordination agreement shall include
the provisions of Sections 16.2 and 16.3 below as a condition to Tenant's
obligation to execute such documentation. However, if Landlord or the holder or
proposed holder of any such mortgage, mortgages or assignments shall request
that Tenant execute and deliver any further instrument or agreement of
subordination of this Lease, Tenant's interest hereunder or Tenant's leasehold
interest in the Premises to any such mortgage, mortgages or assignments in
confirmation or furtherance of or in addition to the foregoing subordination
provisions of this Section, Tenant shall promptly execute and deliver the same
to the requesting party. If, within thirty (30) days following Tenant's receipt
of a written request by Landlord or the holder or proposed holder of any such
mortgage, mortgages or assignments, Tenant shall fail or refuse or shall have
not executed any such further instrument or agreement of subordination, for
whatever reason, Tenant shall be in breach and default of its obligation to do
so and of this Lease and Landlord shall be entitled thereupon to exercise any
and all remedies available to Landlord pursuant to this Lease or otherwise
provided by law.
16.2 Attornment. Subject to Section 16.3 below, Tenant shall and hereby
agrees to attorn, and be bound under all of the terms, provisions, covenants and
conditions of this Lease, to any successor of the interest of Landlord under
this Lease for the balance of the term of this Lease remaining at the time of
the succession of such interest to such successor. In particular, in the event
that any proceedings are brought for the foreclosure of any mortgage or security
interest encumbering or collateral assignment of Landlord's interest in the
Premises, or any portion thereof, Tenant shall attorn to the purchaser at any
such foreclosure sale and recognize such purchaser as Landlord under this Lease,
subject, however, to all of the terms and conditions of this Lease.
16.3 Non-Disturbance. Throughout the Term, Landlord shall use its good
faith efforts to deliver to Tenant with regard to any and all Ground Leases (as
defined below) and any and all Mortgages (as defined below) now or hereafter
encumbering the Premises or any portion thereof and placed thereon by Landlord,
a non-disturbance and attornment agreement in a form reasonably acceptable to
Tenant executed by the landlord under any such Ground Lease ("Ground Lessor") or
the Mortgagee, as applicable. Such agreement shall contain, at a minimum, the
following: (i) the Lease shall not terminate by reason of a foreclosure or deed
in lieu thereof ("Foreclosure"), (ii) Tenant's possession of the Premises shall
not be disturbed, (iii) the Mortgagee or purchaser upon such Foreclosure shall
recognize Tenant and all its rights hereunder and shall be obligated to fully
and completely perform Landlord's duties and obligations under the Lease arising
from and after the date of such Foreclosure, including but not limited to, an
obligation to make all payments to Tenant and satisfy all construction
obligations set forth in this Lease, (iv) Tenant shall not be named as a party
in any action for foreclosure, (v) the Mortgagee, whether or not the Mortgage is
foreclosed, shall make all proceeds arising from a casualty or condemnation loss
to the Premises available to Tenant for restoration of the Improvements in
accordance with the terms hereof, (vi) Tenant shall not have prepaid more than
one month's rent in advance of its due date under this Lease, and (vii) Tenant
shall not have entered into any modification or amendment of this Lease without
the prior written consent of the holder or holders of any mortgage or mortgages
now or hereafter in force and effect upon or encumbering any or all, or any
combination of the Premises and/or the Land, or any part thereof. Upon Tenant's
receipt of the non-disturbance and attornment agreement, Tenant shall execute
and deliver such non-disturbance and attornment agreement to Landlord and the
Ground Lessor or Mortgagee, as applicable, and this Lease shall be subordinate
to the corresponding Ground Lease or Mortgage. Without limiting the generality
of the foregoing provisions of this Article XVI, in no event shall this Lease,
Tenant's interest hereunder and Tenant's leasehold interest in and to the
Premises be deemed junior, inferior, subordinate and subject to the interests of
a Ground Lessor under a Ground Lease or a Mortgagee under a Mortgage unless and
until Tenant receives a non-disturbance and attornment agreement substantially
complying in all material respects with the requirements of this Section 16.3 or
otherwise in the form of the Subordination Agreement (as hereinafter defined)
attached hereto as Exhibit "D".
16.4 Rights of Mortgagees and Assignees. At the time of giving any
notice of default or other cause of termination to Landlord, Tenant shall mail
or deliver to the holders of any mortgage on the Premises or holders of any
security interest in or collateral assignment of this Lease who have, in
writing, notified Tenant of their interests (individually a "Mortgagee") a copy
of any such notice. No notice of default or other cause of termination of this
Lease by Tenant shall be effective until any Mortgagee shall have been furnished
a copy of such notice by Tenant. In the event Landlord fails to cure any default
or other cause of termination of this Lease pursuant to such notice, the
Mortgagee shall have, at its option, the same time period afforded Landlord to
cure such default within which to remedy such default of Landlord or to cause
such default or other cause of termination to be remedied. In the event that the
Mortgagee elects to cure any such default or other cause of termination of this
Lease, then Tenant shall accept such performance on the part of such Mortgagee
as though the same had been performed by Landlord, and for such purpose Tenant
hereby authorizes any Mortgagee to enter upon the Premises to the extent
necessary to exercise any of Landlord's rights, powers and duties under this
Lease. If, in the event of any such default or other cause of termination of
this Lease which is reasonably capable of being cured by a Mortgagee, the
Mortgagee promptly commences and diligently pursues to cure the default or other
cause of termination, then Tenant will not terminate this Lease or cease to
perform any of its obligations under this Lease so long as the Mortgagee is,
with due diligence, engaged in the curing of such default or other cause of
termination.
16.5 Initial Subordination Agreement. Notwithstanding anything in this
Article XVI to the contrary, Tenant will enter into the Subordination,
Non-Disturbance and Attornment Agreement attached as Exhibit "D" hereto (the
"Subordination Agreement") with all Mortgagees and Ground Lessors, if any. So
long as the Subordination Agreement remains in effect, the Subordination
Agreement will control to the extent of any conflict between the terms and
conditions of this Article XVI and the Subordination Agreement.
ARTICLE XVII
END OF TERM
17.1 Surrender of Premises. Tenant shall, on or before the last day of
the Term of this Lease or upon the sooner termination thereof, peaceably and
quietly surrender and deliver to Landlord the Premises in good order, condition
and repair, reasonable wear and tear excepted, and free and clear of any liens
and encumbrances created by, through or under Tenant.
17.2 Holding Over. If Tenant or any other person or party shall remain
in possession of the Premises or any part thereof following the expiration of
the Term or earlier termination of this Lease without an agreement in writing
between Landlord and Tenant with respect thereto, this Lease shall continue in
force as a tenancy at will, subject to all of the provisions hereof, except that
during any such holdover, the Rent payable under this Lease by Tenant shall be
one hundred twenty percent (120%) of the rate or rates in effect immediately
prior to the expiration of the Term or earlier termination of this Lease. In no
event, however, shall such holding over be deemed or construed to be or
constitute a renewal or extension of this Lease.
ARTICLE XVIII
LIABILITY OF LANDLORD, INDEMNIFICATION
18.1 Liability of Landlord. Except to the extent of a breach of its
representations, warranties and covenants set forth in Sections 2.3 and 3.4 of
this Lease or loss or damage caused by the grossly negligent or intentional acts
or omissions of Landlord, its agents, employees or contractors, Landlord shall
not be liable to Tenant, its employees, agents, business invitees, licensees,
customers, clients, family members or guests for any damage, injury, loss,
compensation or claim, including, but not limited to, claims for the
interruption of or loss to Tenant's business, based on, arising out of or
resulting from any cause whatsoever, including, but not limited to: (a) repairs
to any portion of the Premises; (b) interruption in Tenant's use of the
Premises; (c) any accident or damage resulting from the use or operation (by
Landlord, Tenant or any other person or persons) of any equipment within the
Premises, including without limitation, heating, cooling, electrical or plumbing
equipment or apparatus; (d) the termination of this Lease by reason of the
condemnation or destruction of the Premises in accordance with the provisions of
this Lease; (e) any fire, robbery, theft, mysterious disappearance or other
casualty; (f) the actions of any other person or persons; and (g) any leakage or
seepage in or from any part or portion of the Premises, whether from water, rain
or other precipitation that may leak into, or flow from, any part of the
Premises, or from drains, pipes or plumbing fixtures in the Improvements. Any
goods, property or personal effects stored or placed by the Tenant or its
employees in or about the Premises shall be at the sole risk of the Tenant.
Without limiting the generality of the foregoing, Landlord's liability under
this Lease shall be limited to Landlord's ownership interest in the Land and the
Premises, such that in no event shall Landlord, or any partner, shareholder,
member, trustee, beneficiary, director, manager, officer or employee of
Landlord, be personally liable under this Lease.
18.2 Indemnification of Landlord. Provided that Landlord is without
material fault and that the matter in question is not a result of Landlord's
breach of any representation, warranty or covenant contained in this Lease, or
is the result of the grossly negligent or intentional acts or omissions of
Landlord, its agents, employees or contractors, Tenant shall defend, indemnify
and save and hold Landlord harmless from and against any and all liabilities,
obligations, losses, damages, injunctions, suits, actions, fines, penalties,
claims, demands, costs and expenses of every kind or nature, including
reasonable attorneys' fees and court costs, incurred by Landlord, arising
directly or indirectly from or out of: (a) any failure by Tenant to perform any
of the terms, provisions, covenants or conditions of this Lease on Tenant's part
to be performed; (b) any accident, injury or damage which shall happen at, in or
upon the Premises, however occurring; (c) any matter or thing growing out of the
condition, occupation, maintenance, alteration, repair, use or operation by any
person of the Premises, or any part thereof, or the operation of the business'
contemplated by this Lease to be conducted thereon, thereat, therein, or
therefrom; (d) any failure of Tenant to comply with any laws, ordinances,
requirements, orders, directions, rules or regulations of any governmental
authority, including, without limitation, the Accessibility Laws; (e) any
contamination of the Premises, or the groundwaters thereof, arising on or after
the date Tenant takes possession of the Premises and occasioned by the use,
transportation, storage, spillage or discharge thereon, therein or therefrom of
any toxic or hazardous chemicals, compounds, materials or substances, by Tenant
or by any agent of Tenant; (f) any discharge of toxic or hazardous sewage or
waste materials from the Premises into any septic facility or sanitary sewer
system serving the Premises arising on or after the date Tenant takes possession
of the Premises, by Tenant or by any agent of Tenant; or (g) any other act or
omission of Tenant, its employees, agents, invitees, customers, licensees or
contractors.
Tenant's indemnity obligations under this Article and elsewhere in this
Lease arising prior to the termination or assignment of this Lease shall survive
any such termination or assignment.
18.3 Notice of Claim or Suit. Tenant shall promptly notify Landlord of
any claim, action, proceeding or suit instituted or threatened against Tenant or
Landlord of which Tenant receives notice or of which Tenant acquires knowledge.
In the event Landlord is made a party to any action for damages or other relief
against which Tenant has indemnified Landlord, as aforesaid, Tenant shall defend
Landlord, pay all costs and shall provide effective counsel to Landlord in such
litigation or, at Landlord's option, shall pay all attorneys' fees and costs
incurred by Landlord in connection with its own defense or settlement of said
litigation.
ARTICLE XIX
DEFAULT
19.1 Events of Default. Each of the following events shall be an
Event of Default hereunder by Tenant and shall constitute a
breach of this Lease:
(a) If Tenant shall fail to pay within ten (10) days after
written notice any Rent, or portion thereof, or any other sum due to Landlord
from Tenant hereunder.
(b) If Tenant shall violate or fail to comply with or perform
any other term, provision, covenant, agreement or condition to be performed or
observed by Tenant under this Lease, and such violation or failure shall
continue for a period of thirty (30) days after written notice thereof from
Landlord, provided that if such violation or failure is not susceptible of cure
within such 30-day period, if Tenant shall fail to promptly commence to cure
such violation or failure during such 30-day period and thereafter diligently
prosecute the same to completion.
(c) If Tenant shall at any time cease to continuously operate
the Premises in violation of the requirements of Section 3.2 of this Lease, and
such cessation of continuous operations shall continue for a period of thirty
(30) days after written notice from Landlord.
(d) Except to the extent actually caused by a breach of
Landlord's covenants and obligations expressly contained in this Lease, if
Tenant shall violate, or cause or permit the Premises or the use, maintenance or
occupancy thereof to violate, the terms, provisions, covenants or restrictions
of the CCRs, and such violation continues for a period of thirty (30) days after
written notice thereof from Landlord.
(e) If any assignment, transfer, sublease or encumbrance shall
be made or deemed to be made that is in violation of the provisions of this
Lease.
(f) If, at any time during the term of this Lease, Tenant
shall file in any court, pursuant to any statute of either the United States or
of any State, a petition in bankruptcy or insolvency, or for reorganization or
arrangement, or for the appointment of a receiver or trustee of all or any
portion of Tenant's property, including, without limitation, its leasehold
interest in the Premises, or if Tenant shall make an assignment for the benefit
of its creditors or petitions for or enters into an arrangement with its
creditors.
(g) If, at any time during the term of this Lease, there shall
be filed against Tenant in any courts pursuant to any statute of the United
States or of any State, a petition in bankruptcy or insolvency, or for
reorganization, or for the appointment of a receiver or trustee of all or a
portion of Tenant's property, including, without limitation, its, leasehold
interest in the Premises, and any such proceeding against Tenant shall not be
dismissed within ninety (90) days following the commencement thereof.
(h) If Tenant's leasehold interest in the Premises or property
therein shall be seized under any levy, execution, attachment or other process
of court where the same shall not be vacated or stayed on appeal or otherwise
within sixty (60) days thereafter, or if Tenant's leasehold interest in the
Premises is sold by judicial sale and such sale is not vacated, set aside or
stayed on appeal or otherwise within sixty (60) days thereafter.
19.2 Remedies on Default. If any of the Events of Default hereinabove
specified shall occur, Landlord, at any time thereafter, shall have and may
exercise any of the following rights and remedies:
Landlord may, pursuant to any prior notice required by law,
and without terminating this Lease, peaceably or pursuant to
appropriate legal proceedings, re-enter, retake and resume possession
of the Premises for the account of Tenant, make such alterations of and
repairs to the Premises as may be reasonably necessary in order to
relet the same or any part or parts thereof and relet or attempt to
relet the Premises or any part or parts thereof for such term or terms
(which may be for a term or terms extending beyond the term of this
Lease), at such rents and upon such other terms and provisions as
Landlord, in its sole, but reasonable, discretion, may deem advisable.
Landlord shall use commercially reasonable efforts to mitigate damage
by attempting to relet the Premises, and Landlord shall be the sole
judge as to the terms and provisions of any new lease or sublease and
of whether or not a particular proposed new tenant or sublessee is
acceptable to Landlord. Upon any such reletting, all rents received by
the Landlord from such reletting shall be applied, (a) first, to the
payment of all costs and expenses of recovering possession of the
Premises, (b) second, to the payment of any costs and expenses of such
reletting, including brokerage fees, attorneys' fees and the cost of
any alterations and repairs reasonably required for such reletting; (c)
third, to the payment of any indebtedness, other than Rent, due
hereunder from Tenant to the Landlord, (d) fourth, to the payment of
all Rent and other sums due and unpaid hereunder, and (e) fifth, the
residue, if any, shall be held by the Landlord and applied in payment
of future Rents as the same may become due and payable hereunder. If
the rents received from such reletting during any period shall be less
than that required to be paid during that period by the Tenant
hereunder, Tenant shall promptly pay any such deficiency to the
Landlord and failing the prompt payment thereof by Tenant to Landlord,
Landlord shall immediately be entitled to institute legal proceedings
for the recovery and collection of the same. Such deficiency shall be
calculated and paid at the time each payment of rent shall otherwise
become due under this Lease, or, at the option of Landlord, at the end
of the term of this Lease. Landlord shall, in addition, be immediately
entitled to sue for and otherwise recover from Tenant any other damages
occasioned by or resulting from any other breach of or default under
this Lease other than a default in the payment of rent. No such
reentry, retaking or resumption of possession of the Premises by the
Landlord for the account of Tenant shall be construed as an election on
the part of Landlord to terminate this Lease unless a written notice of
such intention shall be given to the Tenant or unless the termination
of this Lease be decreed by a court of competent jurisdiction.
Notwithstanding any such re-entry and reletting or attempted reletting,
of the Premises or any part or parts thereof for the account of Tenant
without termination, Landlord may at any time thereafter, upon written
notice to Tenant, elect to terminate this Lease or pursue any other
remedy available to Landlord for Tenant's previous breach of or default
under this Lease.
In addition to the remedies hereinabove specified and enumerated,
Landlord shall have and may exercise the right to invoke any other remedies
allowed at law or in equity as if the remedies of re-entry, unlawful detainer
proceedings and other remedies were not herein provided. Landlord shall never be
entitled to dispossess Tenant from the Premises pursuant to any "lock-out" or
other non-judicial remedy. Accordingly, the mention in this Lease of any
particular remedy shall not preclude Landlord from having or exercising any
other remedy at law or in equity. Nothing herein contained shall be construed as
precluding the Landlord from having or exercising such lawful remedies as may be
and become necessary in order to preserve Landlord's right or the interest of
Landlord in the Premises and in this Lease, even before the expiration of any
notice periods provided for in this Lease, if under the particular circumstances
then existing the allowance of such notice periods will prejudice or will
endanger the rights and estate of Landlord in this Lease and in the Premises.
19.3 Landlord May Cure Tenant Defaults. If Tenant shall default in the
performance of any term, provisions, covenant or condition on its part to be
performed hereunder, Landlord may, after written notice to Tenant and a
reasonable time to perform after receipt of such notice which shall not be less
than the time periods set forth in Section 19.1 above (or without notice if, in
Landlord's reasonable opinion, an emergency exists) perform the same for the
account and at the expense of Tenant. If, at any time and by reason of such
default, Landlord is compelled to pay, or elects to pay, any sum of money or do
any act which will require the payment of any sum of money, or is compelled to
incur any expense in the enforcement of its rights hereunder or otherwise, such
sum or sums, together with interest thereon at the highest rate allowed under
the laws of the State of Texas, shall be deemed Additional Rent hereunder and
shall be repaid to Landlord by Tenant promptly when billed therefor, and
Landlord shall have all the same rights and remedies in respect thereof as
Landlord has in respect of the rents herein reserved.
19.4 Rights Cumulative. The rights and remedies provided and available
to Landlord in this Lease are distinct, separate and cumulative remedies, and no
one of them, whether or not exercised by Landlord, shall be deemed to be in
exclusion of any other.
ARTICLE XX
[INTENTIONALLY DELETED]
ARTICLE XXI
NOTICES
Any notice required or permitted to be given under this Lease shall be
deemed given if delivered personally to an officer or general partner of the
party to be notified or sent by (a) United States registered or certified mail,
postage prepaid, return receipt requested, (b) telecopy or (c) overnight courier
service, and addressed as follows:
If to Landlord: LINCOLN RAS, LTD.
3300 Lincoln Plaza
500 N. Akard
Dallas, Texas 75201
Attention: Robert Dozier
Phone No.: (214) 740-3314
Fax No.: (214) 740-3313
with a copy to: Jenkens & Gilchrist, a Professional Corporation
1445 Ross Avenue, Suite 3200
Dallas, Texas 75202
Attention: William L. Sladek, Esq.
Phone No.: (214) 855-4379
Fax No.: (214) 855-4300
If to Tenant: ROBB & STUCKY, LTD.
13170 S. Cleveland Avenue
Ft. Myers, Florida 33907
Attention: Craig Nesvick
Phone No.: (941) 437-7997
Fax No.: (941) 437-5950
with a copy to: Kane, Russell, Coleman & Logan, P.C.
3700 Thanksgiving Tower
1601 Elm Street
Dallas, Texas 75201-7207
Attention: David N. Condon, Esq.
Phone No.: (214) 777-4224
Fax No.: (214) 777-4299
or such other address as may be designated by either party by written notice to
the other. Except as otherwise provided in this Lease, every notice, demand,
request or other communication hereunder shall be deemed to have been given or
served upon actual receipt thereof. Accordingly, a notice shall not be effective
until actually received. Notwithstanding the foregoing, any notice mailed to the
last designated address of any person or party to which a notice may be or is
required to be delivered pursuant to this Lease shall not be deemed ineffective
if actual delivery cannot be made due to a change of address of the person or
party to which the notice is directed or the failure or refusal of such person
or party to accept delivery of the notice.
ARTICLE XXII
MISCELLANEOUS
22.1 "Net" Lease. Landlord and Tenant acknowledge and agree that both
parties intend that this Lease shall be and constitute what is generally
referred to as a "triple net" or "absolute net" lease, such that, after the
Delivery Date, Tenant shall be obligated hereunder to pay all costs and expenses
incurred with respect to, and associated with, the Premises and the business
operated thereon and therein, including, without limitation, all taxes and
assessments, utility charges, insurance costs, maintenance costs and repair,
replacement and restoration expenses (all as more particularly herein provided)
together with any and all other assessments, charges, costs and expenses of any
kind or nature whatsoever related to, or associated with, the Premises and the
business operated thereon and therein; provided, however, that Landlord shall
nonetheless be obligated to pay any debt service on any mortgage encumbering
Landlord's fee simple interest in the Premises, and Landlord's personal income
taxes with respect to the rents received by Landlord under this Lease. Except as
expressly hereinabove provided or as otherwise provided in this Lease, this is a
"net" Lease and Landlord shall bear no cost or expense of any type or nature
with respect to, or associated with, the Premises.
22.2 Estoppel Certificates. Tenant shall from time to time, within
fifteen (15) days after request by Landlord and without charge, give a Tenant
Estoppel Certificate in the form attached hereto as Exhibit "F" and containing
such other matters as may be reasonably requested by Landlord to any person,
firm or corporation specified by Landlord. Landlord shall from time to time,
within fifteen (15) days after request by Tenant and without charge, give an
estoppel certificate to Tenant confirming that this Lease is in full force and
effect, the date(s) to which Rent has been paid, that this Lease has not been
amended or modified, except as specified in such estoppel certificate, and that,
to Landlord's knowledge, Tenant is not in default under this Lease, except as
specified in such estoppel certificate.
22.3 Brokerage. Landlord and Tenant hereby represent and warrant to
each other that they have not engaged, employed or utilized the services of any
business or real estate brokers, salesmen, agents or finders in the initiation,
negotiation or consummation of the business and real estate transaction
reflected in this Lease. On the basis of such representation and warranty, each
party shall and hereby agrees to indemnify and save and hold the other party
harmless from and against the payment of any commissions or fees to or claims
for commissions or fees by any real estate or business broker, salesman, agent
or finder resulting from or arising out of any actions taken or agreements made
by them with respect to the business and real estate transaction reflected in
this Lease.
22.4 No Partnership or Joint Venture. Landlord shall not, by virtue of
this Lease, in any way or for any purpose, be deemed to be a partner of Tenant
in the conduct of Tenant's business upon, within or from the Premises or
otherwise, or a joint venturer or a member of a joint enterprise with Tenant.
22.5 Entire Agreement. This Lease contains the entire agreement between
the parties and, except as otherwise provided herein, can only be changed,
modified, amended or terminated by an instrument in writing executed by the
parties. It is mutually acknowledged and agreed by Landlord and Tenant that
there are no verbal agreements, representations, warranties or other
understandings affecting the same; and that Tenant hereby waives, as a material
part of the consideration hereof, all claims against Landlord for rescission,
damages or any other form of relief by reason of any alleged covenant, warranty,
representation, agreement or understanding not contained in this Lease. This
Lease shall not be changed, amended or modified except by a written instrument
executed by Landlord and Tenant.
22.6 Waiver. No release, discharge or waiver of any provision hereof
shall be enforceable against or binding upon Landlord or Tenant unless in
writing and executed by Landlord or Tenant, as the case may be. Neither the
failure of Landlord or Tenant to insist upon a strict performance of any of the
terms, provisions, covenants, agreements and conditions hereof, nor the
acceptance of any Rent by Landlord with knowledge of a breach of this Lease by
Tenant in the performance of its obligations hereunder, shall be deemed a waiver
of any rights (except the right to declare a default as to the failure to pay
rent timely if Landlord accepts the payment of such rent after the date it was
otherwise due) or remedies that Landlord or Tenant may have or a waiver of any
subsequent breach or default in any of such terms, provisions, covenants,
agreements and conditions. Notwithstanding the foregoing, in the event of a
default by Tenant under any non-monetary provision of this Lease, such default
shall be deemed waived by Landlord unless within ninety (90) days from the later
of the time of such default or when Landlord learns of such default, Landlord
shall so notify Tenant of the default.
22.7 Time. Time is of the essence in every particular of this Lease,
including, without limitation, obligations for the payment of money.
22.8 Costs and Attorneys' Fees. If either party shall bring an action
to recover any sum due hereunder, or for any breach hereunder, and shall obtain
a judgment or decree in its favor, the court may award to such prevailing party
its reasonable costs and reasonable attorneys' fees, specifically including
reasonable attorneys' fees incurred in connection with any appeals (whether or
not taxable as such by law). Landlord shall also be entitled to recover its
reasonable attorneys' fees and costs incurred in any bankruptcy action filed by
or against Tenant, including, without limitation, those incurred in seeking
relief from the automatic stay, in dealing with the assumption or rejection of
this Lease, in any adversary proceeding, and in the preparation and filing of
any proof of claim.
22.9 Captions and Headings. The captions and headings in this Lease
have been inserted herein only as a matter of convenience and for reference and
in no way define, limit or describe the scope or intent of, or otherwise affect,
the provisions of this Lease.
22.10 Severability. If any provision of this Lease shall be deemed to
be invalid, it shall be considered deleted therefrom and shall not invalidate
the remaining provisions of this Lease.
22.11 Successors and Assigns. The agreements, terms, provisions,
covenants and conditions contained in this Lease shall be binding upon and inure
to the benefit of Landlord and Tenant and, to the extent permitted herein, their
respective successors and assigns.
22.12 Applicable Law. This Lease shall be governed by, and
construed in accordance with, the laws of the State of Texas.
22.13 Recordation of Memorandum of Lease. Landlord and Tenant agree to
execute a short form memorandum of this Lease, in the form attached hereto as
Exhibit "G" which may be recorded or filed in the appropriate land records of
Collin County, Texas, at the request of either party and the party so recording
the short form memorandum shall pay the recording costs associated therewith. In
the event of a discrepancy between the provisions of this Lease and such short
form memorandum thereof, the provisions of this Lease shall prevail.
22.14 Waiver of Jury Trial. TENANT AND LANDLORD HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT EITHER OF THEM OR THEIR HEIRS,
PERSONAL REPRESENTATIVES, SUCCESSORS OR ASSIGNS MAY HAVE TO A TRIAL BY JURY IN
RESPECT TO ANY LITIGATION ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LEASE
OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF ANY PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT TO LANDLORD'S
ACCEPTING THIS LEASE.
22.15 Contingency Relating to Landlord's Acquisition of the Land.
Landlord's and Tenant's respective obligations under this Lease are subject to
and conditioned upon the acquisition by Landlord, or an entity owned or
controlled by or affiliated with Landlord, of title to the Land, together with
the acquisition by Landlord or such an entity of construction financing from a
lender and on terms and conditions acceptable to Landlord in Landlord's sole
reasonable discretion, on or before December 6, 1999 (the "Title Date"). In the
event Landlord or such a reasonable entity is unable to obtain title to the Land
and such financing as described above prior to the Title Date after using good
faith efforts to do so, Landlord and Tenant shall each have the right to
terminate this Lease by written notice to the other delivered at any time within
thirty (30) days after the Title Date; provided, however, Tenant shall have no
right to terminate this Lease in the event Landlord or such an entity as is
referenced above does acquire title to the Land after the Title Date, but prior
to delivery of written notice of termination of this Lease by Tenant.
22.16. Contingency Relating to Approval of CCRs. Landlord's and
Tenant's respective obligations under this Lease are subject to and conditioned
upon the approval of the CCRs by Landlord and Tenant, which approval shall not
be unreasonably withheld or delayed. In the event the CCRs are not approved in
writing by Landlord and Tenant on or before December 6, 1999, then Landlord and
Tenant shall each have the right to terminate this Lease upon ten (10) days
written notice to the other party, provided that Landlord and Tenant have not
previously given such written approval of the CCRs.
22.17 Contingency Relating to the Approval of Final Construction Plans.
Landlord's and Tenant's respective obligations under this Lease are subject to
and conditioned upon the approval by Landlord and Tenant of the Final
Construction Plans. In the event the Final Construction Plans are not approved
by Landlord and Tenant pursuant to Section 2.3(a) of this Lease on or before
December 6, 1999, then Landlord and Tenant shall each have the right to
terminate this Lease upon ten (10) days written notice to the other party,
provided that Landlord and Tenant have not previously given such written
approval of the Final Constructions Plans.
[Signature Pages to Follow]
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
duly executed on or as of the day and year first above written.
LANDLORD:
---------
LINCOLN RAS, LTD.,
a Texas limited partnership
By: Akard Ervay, Inc.,
a Texas corporation, general partner
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
Date of Execution:
----------------------------
TENANT:
-------
ROBB & STUCKY, LTD.,
a Florida limited partnership
By: Derby Road Investments, Inc.,
general partner
By:
---------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
Date of Execution:
----------------------------
EXHIBIT "A"
Legal Description
BEING a tract of land situated in the Henry Cook Survey, Abstract No. 183 in the
City of Plano, Collin County, Texas and being portions of a called 78.176-acre
tract of land (TRACT VII) conveyed to Electronic Data Systems Corporation (EDS),
formerly known as Quorum Development Corporation, as evidenced in a Special
Warranty Deed recorded in Volume 1257 at Page 760 of the Land Records of Collin
County, Texas (LRCCT) and being more particularly described by metes and bounds
as follows (bearings based on the EDS control monumentation):
BEGINNING at a 5/8-inch rod set for the North corner of a visibility clip at the
intersection of the East right of way line of the Dallas North Tollway (a
variable width right of way) with the South right of way line of Legacy Drive (a
variable width right of way) as recorded in Volume C at Page 774 of the Map
Records of Collin County Texas (MRCCT);
THENCE North 89 degrees 54 minutes 36 seconds East, along the South right of way
line of said Legacy Drive, a distance of 263.28 feet to a 5/8-inch "KHA" capped
iron rod set for corner;
THENCE South 86 degrees 17 minutes 44 seconds East, departing the South right of
way line of said Legacy Drive, a distance of 81.54 feet to a 5/8-inch "KHA"
capped iron rod set for corner;
THENCE South, a distance of 157.01 feet to a 5/8-inch "KHA" capped iron rod set
for corner;
THENCE South 45 degrees 05 minutes 27 seconds East, a distance of 187.56 feet to
a 5/8-inch "KRA" capped iron rod set for corner;
THENCE South, a distance of 85.11 feet to a 5/8-inch "KHA" capped iron rod set
for corner;
THENCE South, 44 degrees 48 minutes 56 seconds West, a distance of 186.44 feet
to a 5/8-inch "KHA" capped iron rod set for corner;
THENCE South, a distance of 180.19 feet to a 5/8-inch "KRA" capped iron rod set
for corner;
THENCE West, a distance of 348.77 feet to a 5/8-inch "KHA" capped iron rod set
for corner;
THENCE North 44 degrees 14 minutes 15 seconds West, a distance of 20.93 feet to
a 5/8-inch "KHA" capped iron rod set for corner on the East right of way line of
said Dallas North Tollway;
THENCE in a northerly direction, along the East right of way line of said Dallas
North Tollway, the following:
EXHIBIT "A"
Legal Description (Cont.)
North 01 degrees 31 minutes 30 seconds East, a distance of 105.96 feet
to a 5/8-inch "KHA" capped iron rod set for the point of curvature of a
non-tangent curve to the left;
Along the arc of said curve to the left, through a central angle of 01
degrees 40 minutes 53 seconds, having a radius of 2874.79 feet, a chord
bearing of North 00 degrees 39 minutes 51 seconds East, a chord
distance of 84.36 feet and an arc length of 84.36 feet to a 5/8-inch
"KHA" capped iron rod set for the end of said curve;
North 00 degrees 10 minutes 35 seconds West, a distance of 471.55 feet
to a 5/8-inch "KHA" capped iron rod set for the South corner of the
aforesaid visibility clip at the intersection of the East right of way
line of said Dallas North Tollway with the South right of way line of
said Legacy Drive;
THENCE North 44 degrees 52 minutes 02 seconds East, along the South right of way
line of said Legacy Drive, a distance of 21.20 feet to the POINT OF BEGINNING
and containing 6.367 acres of land.
Tract 2:
Being a non-exclusive easement for ingress and egress as created by Easement
granted by Electronic Data Systems Corporation dated June 17, 1999, filed June
23, 1999, recorded in Volume 4443, Page 28, Land Records of Collin County,
Texas, over and across the areas described therein and depicted on Exhibit B
thereto.
EXHIBIT "A-1"
Site Plan
EXHIBIT "B"
Preliminary Construction Plans
I. Civil Engineering Plans, Drawings and Specifications.
The following Preliminary Civil Construction Plans dated July 14, 1999, prepared
by Kimley-Horn and Associates, Inc.:
Cover Sheet
Preliminary Plat
Final Site Plan
Paving Plans
C-1 General Notes and Miscellaneous Details
C-2 Dimension Control and Paving Plan
C-3 Grading Plan and Erosion Control
Utilities Plans
C-4 Water and Sanitary Sewer Plan
C-5 Water and Sanitary Sewer Profiles
Storm Sewer Plans
C-6 Drainage Area Map
C-7 Storm Sewer Plan
C-8 Storm Sewer Profiles
LS01 Landscape Plan
EXHIBIT "B"
Preliminary Construction Plans (Cont.)
II. Architectural and Mechanical Plans, Drawings and Specifications.
The following plans, drawings and specifications, dated July 15, 1999, prepared
by Butler Design Group:
CS Cover Sheet E1.0 Electrical Site Plan
A1.1 Site Plan E2.0 Electrical Lighting Plan `A'
A1.2 Enlarged Site Plans E2.1 Electrical Lighting Plan `B'
A1.3 Site Details E2.2 Electrical Lighting Plan `C'
A2.1 Building Grid and Context Plan E2.3 Electrical Lighting Plan `D'
A2.2 Floor Plan - A E2.4 Electrical Lighting Plan - Mezzanine
A2.3 Floor Plan - B E3.0 Electrical Power Plan `A'
A2.4 Floor Plan - C E3.1 Electrical Power Plan `B'
A2.5 Floor Plan - D E3.2 Electrical Power Plan `C'
A2.6 Mezzanine Floor Plan E3.3 Electrical Power Plan `D'
A2.7 Roof Plan E3.4 Electrical Power Plan - Mezzanine
A3.1 Exterior Elevations E3.5 Electrical HVAC Plan
A3.2 Exterior Elevations - Towers E4.0 Electrical Single Line Diagram
A4.1 Building Sections E5.0 Electrical Fixture Schedule, Symbol List
A4.2 Wall Sections E5.1 Electrical Panel Schedules
A4.3 Wall Sections E5.2 Electrical Panel Schedules/Calculations
A4.4 Wall Sections
A4.5 Wall Sections ID 1.1 Partial Floor Plan `A' - Wall Types
A4.6 Wall Sections ID 1.1A Partial Floor Plan `A' - Dimensions
A5.1 Enlarges Stair Plans ID 1.2 Partial Floor Plan `B' - Wall Types
A5.2 Stair Sections ID 1.2A Partial Floor Plan `B' - Dimensions
A6.1 Roof Details ID 1.3 Partial Floor Plan `C' - Wall Types
A7.1 Door and Window Types ID 1.3A Partial Floor Plan `C' - Dimensions
A7.2 Door and Window Details ID 1.4 Partial Floor Plan `D' - Wal Types
ID 1.4A Partial Floor Plan `D' - Dimensions
S1.0 General Structural Notes - ID 1.5 Mezzanine Level
Interpretation of Drawings ID 1.6 Detail Floor Plans
S1.1 Typical Details ID 1.7 Detail Floor Plans
S2.1 Foundation Plan
S3.1 Roof Framing Plan ID 2.1 Partial Reflected Ceiling Plan `A'
S3.2 Floor Framing and Clerestory Framing Plan ID 2.2 Partial Reflected Ceiling Plan `B'
S4.1 Foundation Details ID 2.3 Partial Reflected Ceiling Plan `C'
S5.1 Framing Details ID 2.4 Partial Reflected Ceiling Plan `D'
S5.2 Framing Details ID 2.5 Mezzanine - Reflected Ceiling Plan
S5.3 Framing Details ID 2.6 Detail Reflected Ceiling Plans
S5.4 Framing Details ID 2.7 Detail Reflected Ceiling Plans
S5.5 Framing Details ID 2.8 Ceiling Details and Sections
MO Mechanical Symbols and Legend ID 3.1 Toilet Room Elevations
M1 Mechanical Partial Plan `A' ID 3.2 Miscellaneous Elevations
EXHIBIT "B"
Preliminary Construction Plans (Cont.)
M2 Mechanical Partial Plan `B' ID 3.3 Interior Elevations
M3 Mechanical Partial Plan `C' ID 3.4 Interior Elevations
M4 Mechanical Partial Plan `D' ID 3.5 Interior Elevations
M5 Mechanical Plan - Second Floor
M6 Mechanical Schedules and Details ID 5.1 Miscellaneous Details
M7 Sequence of Operations and Points List ID 6.3 Sections and Details
P1 Plumbing Floor Plan - First Floor
P2 Plumbing Floor Plan - Second Floor ID 7.1 Room Finish Schedule
P3 Plumbing Schematics
P4 Plumbing Schedules and Details ID 8.1 Door & Hardware Schedule
ID 8.2 Door Details
EXHIBIT "B-1"
Development Schedule
EXHIBIT "C"
Permitted Encumbrances
1. Mineral estate and interest described in Warranty Deed dated, October
25, 1979, granted by Laverne W. Baccus, Trustee for the benefit of
Earlene B. Croom to H. R. Perot, recorded in Volume 1203, Page 898,
Deed Records of Collin County, Texas.
2. Mineral estate and interest described in Warranty Deed dated, October
25, 1979, granted by Earl Baccus, Trustee of Laverne W. Baccus to H. R.
Perot, recorded in Volume 1204, Page 1, Deed Records of Collin County,
Texas.
3. Corrected Easement Agreement, dated June 18, 1985, granted by
Electronic Data Systems Corporation to Texas Power & Light Company,
recorded in Volume 4443, Page 28, Land Records of Collin County, Texas.
4. Limited or lack of access to road or highway abutting subject property
as set forth in Special Warranty Deed, dated June 30, 1986, granted by
E.D.S. Land Corporation to The City of Plano, Texas, recorded in Volume
2409, Page 402, Land Records of Collin County, Texas.
5. Limited or lack of access to road or highway abutting subject property
as set forth in Special Warranty Deed, dated June 30, 1986, granted by
E.D.S. Land Corporation to The City of Plano, Texas, recorded in Volume
2409, Page 438, Land Records of Collin County, Texas.
6. Corrected Declaration of Restrictive Covenants, dated October 4, 1988,
executed by Electronic Data Systems Corporation, recorded in Volume
3204, Page 669, Land Records of Collin County, Texas.
7. Easement, dated December 12, 1991, granted by Electronic Data Systems
Corporation to American Telephone & Telegraph Company, recorded under
Clerk's File No. 91-0070594, Land Records of Collin County, Texas, and
as shown on survey of Michael B. Marx, R.P.L.S. No. 5181, dated April
28. 1999, last revised July 20, 1999.
8. Easement, dated December 12, 1991, granted by Electronic Data Systems
Corporation to American Telephone & Telegraph Company, under Clerk's
File No. 91-0070595, Land Records Of Collin County, Texas, and as shown
on survey of Michael B. Marx, R.P.L.S. No. 5181, dated April 28, 1999,
last revised July 20, 1999.
EXHIBIT "C"
Permitted Encumbrances (Cont.)
9. Easement, dated July 15, 1997, granted by Electronic Data Systems
Corporation to The City of Plano, recorded in Volume 2683, Page 420,
Land Records of Collin County, Texas, and as shown on survey of Michael
B. Marx, R.P.L.S. No. 5181, dated April 28, 1999, last revised July 20,
1999;
10. Easement, dated July 15, 1997, granted by Electronic Data Systems
Corporation to The City of Plano, recorded in Volume 2683, Page 471,
Land Records of Collin County, Texas, and as shown on survey of Michael
B. Marx, R.P.L.S. #5181, dated April 28, 1999, last revised July 20,
1999.
11. Electric Service Provider Restriction, dated August 6, 1998, executed
by Electronic Data Systems for the benefit of Texas Utilities Electric
Company, recorded in Volume 4226, Page 2200, Land Records of Collin
County, Texas.
12. Terms, provisions and conditions of Sidewalk Agreement, dated June 28,
1998, by and between The City of Plano and Electronic Data Systems
Corporation, recorded in Volume 2892, Page 398, Land Records of Collin
County, Texas.
13. Master Declaration of Covenants, Conditions and Restrictions, dated
February 16, 1999, executed by Electronic Data Systems Corporation, in
Volume 4355, Page 619, Land Records of Collin County, Texas.
EXHIBIT "D"
Subordination, Non-Disturbance and Attornment Agreement
This instrument prepared by:
STATE OF TEXAS )
)
COUNTY OF COLLIN )
SUBORDINATION, ATTORNMENT, AND
NON-DISTURBANCE AGREEMENT
THIS AGREEMENT is made and entered into as of the ___ day of
______________, 1999, by and between ROBB & STUCKY, LTD., a Florida limited
partnership ("Tenant"), and ________________________________________, a
___________________________________ ("Lender").
R E C I T A L S:
Tenant is the present tenant under that certain Lease Agreement dated
as of July 29, 1999, (hereinafter the "Lease"), on the parcel of real property
more particularly described in Exhibit A attached hereto and made a part hereof
(the "Land"). The premises demised to Tenant under the Lease, as more
particularly described therein, are referred to herein as the "Premises".
Lincoln RAS Ltd., a Texas limited partnership, as the present landlord
under the Lease (the "Landlord"), has requested a loan from Lender, to be
secured by a first deed of trust covering the Land and an assignment of all
leases relating thereto, including the Lease. Said deed of trust and assignment
of leases, as the same may hereafter be amended, increased, renewed, extended,
spread, consolidated, severed, restated, or otherwise changed from time to time
(the consent of Tenant to which shall not be required), are referred to herein
as the "Security Instruments." As a condition to making such loan, Lender has
required that Tenant execute this instrument.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, and as an inducement to Lender to extend financing to the
Landlord, the parties hereto do mutually covenant and agree as follows:
1. Subordination. The Lease shall at all times be subject and subordinate
in all respects to the Security Instruments, the lien and security
interest imposed by the Security Instruments, and all advances made
under the Security Instruments.
2. Lender's Right to Cure. Notwithstanding anything to the contrary in the
Lease or this Agreement, Tenant shall give prompt written notice to
Lender of any default or breach by Landlord under the Lease that are of
such a nature as to give Tenant a right to terminate the Lease, to
reduce rent, or to credit or offset any amounts against future rents.
After Lender receives such notice, Lender shall have a period of thirty
(30) days beyond the time available to Landlord under the Lease in
which to cure the breach or default by Landlord. Lender shall have no
obligation to cure (and shall have no liability or obligation for not
curing) any breach or default by Landlord.
3. Payment of Rents to Lender. Upon Lender's written request and without
regard to contrary instructions from Landlord, Tenant agrees that it
will make the payments to be made by Tenant under the Lease directly to
Lender. Landlord acknowledges that any such payments made by Tenant to
Lender following such a request shall be deemed to satisfy Tenant's
obligations to Landlord under the Lease to the extent of such payments,
but not otherwise. Prior to the time that Successor Landlord succeeds
to the interest of Landlord in the Premises as described in Section 5
below, receipt of such payments by Lender shall not relieve Landlord of
its obligations under the Lease nor operate to make Lender responsible
for the performance thereof, and Tenant shall continue to look solely
to Landlord for performance of such obligations.
4. Attornment. If the interest of Landlord in the Premises shall be
acquired by Lender or any other transferee through foreclosure, deed
in lieu of foreclosure, or by any other method (Lender or such other
transferee being referred to herein as "Successor Landlord"), then
the Lease shall continue in full force and effect and shall not be
terminated or disturbed except in accordance with the terms thereof.
Tenant shall thereupon be bound to Successor Landlord, and Successor
Landlord shall be bound to Tenant, under all the terms, covenants,
and conditions of the Lease for the balance of the term thereof
remaining, and any extensions or renewals thereof, with the same
force and effect as if Successor Landlord was the original landlord
under the Lease. Tenant does hereby attorn to Successor Landlord as
its landlord, said attornment to be effective and self-operative
without the execution of any additional documents by the parties
hereto immediately upon Successor Landlord's succeeding to the
interest of Landlord under the Lease.
Protection of Successor Landlord. Notwithstanding anything to the contrary in
the Lease or the Security Instruments, Successor Landlord shall not be liable
for or bound by any of the following matters:
(a) except for any default or breach of which Lender has been
notified pursuant to Section 2 hereof but has failed to cure, any
default or breach in the Landlord's obligations under the Lease
occurring prior to the time Successor Landlord succeeds to the interest
of Landlord in the Premises;
(b) any payment of rent (including fixed rent, percentage
rent, or additional rent) that Tenant might have made to Landlord more
than thirty (30) days before the date such rent was first due and
payable under the Lease with respect to any period after the time
Successor Landlord succeeds to the interest of Landlord in the
Premises;
(c) any deposit or security which was delivered to Landlord
but which was not subsequently delivered to Successor Landlord;
(d) any modification or amendment to the Lease, or any waiver
of any terms of the Lease, made without Lender's prior written consent,
which consent shall not be unreasonably withheld, delayed or
conditioned;
(e) any consensual or negotiated surrender, cancellation, or
termination of the Lease, in whole or in part, agreed upon between
Landlord and Tenant; or
(f) any obligation of Landlord under the Lease to make, pay
for, or reimburse Tenant for any construction, alterations, demolition,
or other improvements or work at the Land, including the Premises
(other than day-to-day maintenance and repairs).
In no event shall the foregoing provisions of this Section 5 be deemed
to limit the valid exercise of Tenant's set-off rights under the Lease
with respect to breaches or defaults by Landlord occurring prior to the
time Successor Landlord succeeds to the interest of Landlord in the
Premises.
Exculpation of Successor Landlord. Notwithstanding anything to the contrary in
the Lease, upon any attornment pursuant to this Agreement the Lease shall be
deemed to have been automatically amended to provide that Successor Landlord's
obligations and liability under the Lease shall never extend beyond Successor
Landlord's (or its successors' or assigns') interest, if any, in the Land from
time to time, Successor Landlord's interest in the Lease, and the proceeds from
any sale or other disposition of the Land by Successor Landlord (collectively,
the "Successor Landlord's Interest"). Tenant shall look exclusively to Successor
Landlord's Interest for payment or discharge of any obligations of Successor
Landlord under the Lease as affected by this Agreement. Tenant shall not collect
or attempt to collect any such obligations out of any other assets of Successor
Landlord.
5. Confirmation of Facts. Tenant hereby represents and warrants to
Lender, knowing that Lender will rely hereon as an inducement to
extend credit to Landlord, that as of the date that Tenant executed
this Agreement (a) the Lease is in full force and effect, has not
been modified, altered, or amended except as described herein,
and constitutes the entire agreement between Landlord and Tenant
relating to the Premises; (b) Tenant has no interest in the Land
except pursuant to the Lease; (c) no breach or default by Landlord
exists and no event has occurred that, with the giving of notice, the
passage of time, or both, would constitute such a breach or default;
(d) there are no offsets or credits against rentals under the Lease;
(e) Tenant is not in default under the Lease and has not received any
uncured notice of any default by Tenant under the Lease; (f) all
rent due under the Lease is currently paid to the Landlord, has not
been prepaid, and Tenant will not hereafter prepay rentals by more
than thirty (30) days; (g) unless sooner terminated in accordance with
the terms of the Lease, the initial term of the Lease expires on the
date that is twenty (20) years after the Rent Commencement Date; (h)
there are no actions, either voluntary or involuntary, pending
against Tenant under the bankruptcy laws of the United States, or
under the bankruptcy laws of any state; and (i) Tenant has full
authority to enter into this Agreement, which has been duly authorized
by all necessary actions.
6. Notices. All notices, demands, or requests, and responses thereto,
required or permitted to be given pursuant to this Agreement shall be
in writing and shall be given or served by the United States mail,
postage prepaid and certified with return receipt requested, or by a
nationally recognized overnight courier service, addressed as follows:
If to Lender:
Attn:
------------------------------
If to Tenant:
Robb & Stucky, Ltd.
13170 S. Cleveland Avenue
Fort Myers, Florida 33907
Attn: Craig Nesvick
With a copy to:
Kane, Russell, Coleman & Logan
3700 Thanksgiving Tower, 1601 Elm
Dallas, Texas 75201-7207
Attn: David N. Condon, Esq.
or at such other single address in the United States as either party may by
notice in writing designate. Any notice shall be effective the next business day
after being sent by overnight courier service and five (5) business days after
being sent by certified mail (return receipt requested).
7. Successors and Assigns. This Agreement shall bind and benefit the
parties, their successors and assigns. If Lender assigns the Security
Documents, then upon delivery to Tenant of written notice thereof
accompanied by the assignee's written assumption of all obligations
under this Agreement, all liability of the assignor shall terminate.
8. Entire Agreement. This Agreement constitutes the entire agreement
between Lender and Tenant regarding the subordination of the Lease to
the Security Documents and the rights and obligations of Tenant and
Lender as to the subject matter of this Agreement.
9. Interaction with Lease and Security Documents. If this Agreement
conflicts with the Lease, then this Agreement shall govern as between
Tenant and Lender, including upon any attornment pursuant to this
Agreement. This Agreement supersedes, and constitutes full compliance
with, any provisions in the Lease that provide for subordination of the
Lease to, or for delivery of nondisturbance agreements by the holder
of, the Security Documents.
10. Amendments. This Agreement may be amended, discharged, or terminated,
or any of its provisions waived, only by a written instrument executed
by the party to be charged.
11. Execution. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, or have
caused this Agreement to be duly executed, as of the day and year first above
written.
TENANT:
ROBB & STUCKY, LTD.,
a Florida limited partnership
By: Derby Road Investments, Inc.,
a Florida corporation, general partner
By:
-----------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
Date of execution:
-------------------------------
LENDER:
a
-----------------------------------------
By:
-----------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
Date of execution:
--------------------------------
LANDLORD'S CONSENT
Landlord consents and agrees to the foregoing Agreement, which was
entered into at Landlord's request. The foregoing Agreement shall not alter,
waive, or diminish any of Landlord's obligations under the Security Documents or
the Lease. The foregoing Agreement discharges the obligations of Lender under
the Security Documents and related loan documents, if any, to enter into a
nondisturbance agreement with Tenant. Landlord is not a party to the foregoing
Agreement.
LANDLORD:
LINCOLN RAS LTD.,
a Texas limited partnership
By: Akard Ervay, Inc.,
a Texas corporation,
its General Partner
By:
--------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
Date of execution:
--------------------------------
EXHIBIT A
to
Subordination, Attornment and Nondisturbance Agreement
EXHIBIT "E"
Approved Budget
EXHIBIT "F"
TENANT ESTOPPEL CERTIFICATE
The undersigned ("Tenant") hereby certifies that:
1. Tenant is the tenant of certain real property and improvements thereon
(the "Premises") located in Collin County, Texas, under a Lease
Agreement (the "Lease") dated as of July 29, 1999, entered into between
Tenant, as tenant, and Lincoln RAS, Ltd., a Texas limited partnership,
as landlord ("Landlord"), as further described in that certain
Memorandum of Lease dated effective July 29, 1999 between Landlord and
Tenant and filed in the Real Property Records of Collin County, Texas.
2. A true, correct and complete copy of the Lease and all amendments
thereto, if any, are attached hereto as Exhibit "A". Except for such
amendments as may be attached as part of Exhibit "A", the Lease has not
been amended, modified, supplemented, encumbered, assigned, pledged or
terminated.
3. The Lease is presently in full force and effect and neither Landlord
nor Tenant is in default thereunder. To the knowledge of Tenant, there
exist no defaults under the Lease.
4. To the knowledge of Tenant, all improvements or repairs required under
the terms of the Lease to be made by Landlord through the date hereof
have been satisfactorily completed.
5. Tenant has accepted the Premises and is paying rent under the Lease.
6. The term of the Lease has commenced, the Rent Commencement Date is
________, 19__, and the term of the Lease will end on ________________,
_______ subject to Tenant's options to renew the Lease for two (2)
successive periods of five (5) years each.
7. The amount of security deposit paid under the terms of the Lease is
_________.
8. There are no concessions, bonuses, free rental periods, rebates or
other matters affecting the rental payable by Tenant under the Lease.
9. Tenant is obligated to pay rent to Landlord at the rate set forth in
the Lease. Tenant is current with respect to, and is paying the full
rent and other charges stipulated in the Lease with no offsets,
deductions, defenses or claims; and Tenant has not prepaid any rent or
other amounts to Landlord other than rent and other charges due and
payable in the calendar month of this certification.
10. The Premises is in compliance with any and all use restrictions
pursuant to the Lease.
11. This certificate is made for the benefit of Landlord, its successors
and assigns, [Name of Purchaser, if applicable] and [Name of Landlord's
lender], its successors and assigns, and is executed by a person duly
authorized and fully qualified to execute this instrument on behalf of
Tenant.
EXECUTED this _____ day of _______, _____.
TENANT:
ROBB & STUCKY, LTD.,
a Florida limited partnership
By: Derby Road Investments, Inc.,
A Florida corporation, general partner
By:
--------------------------------------------
Name:
--------------------------------------------
Title:
--------------------------------------------
STATE OF _____________ ss.
COUNTY OF ___________ ss.
On this ____ day of _______, 1999, before me personally appeared
___________________, to me known to be the ____________ of Derby Road
Investments, Inc., a Florida corporation, general partner of ROBB & STUCKY,
LTD., a Florida limited partnership, that executed the within and foregoing
instrument, and acknowledged the said instrument to be the free and voluntary
act and deed of said limited partnership, for the uses and purposes therein
mentioned, and on oath stated that he was authorized to execute said instrument.
In witness whereof, I have hereunto set my hand and affixed my official
seal the day and year first above written.
Notary Public in and for the State
of _______ residing at _______________
--------------------------------------
Expiration of Commission
FIRST AMENDMENT TO LEASE AGREEMENT
THIS FIRST AMENDMENT TO LEASE AGREEMENT (this "Amendment") is made and
entered into on this the 31st day of August, 1999, to be effective as of the
29th day of July, 1999, by and between LINCOLN RAS, LTD., a Texas limited
partnership ("Landlord"), and ROBB & STUCKY, LTD., a Florida limited partnership
("Tenant").
R E C I T A L S:
---------------
A. On or about July 29, 1999, Landlord and Tenant entered into that
certain Lease Agreement (the "Lease"), pursuant to the terms of which Landlord
leased to Tenant approximately 112,389 square feet of space situated in a
building (the "Building") to be constructed by Landlord in the City of Plano,
Collin County, Texas, as more particularly described in the Lease.
B. Landlord and Tenant now desire to amend the Lease.
NOW, THEREFORE, for and in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:
1. All terms which are defined in the Lease shall have the same meaning when
used in this Amendment, unless specifically provided herein to the contrary.
2. Exhibit "A" attached to the Lease is hereby deleted in its entirety and
Exhibit "A" attached hereto is substituted in lieu thereof.
3. Exhibit "C" attached to the Lease is hereby deleted in its entirety and
Exhibit "C" attached hereto is substituted in lieu thereof.
4. Section 3.1 of the Lease is hereby amended to delete the second sentence of
such Section and substitute the following in lieu thereof:
"To the limited extent permitted by the terms, provisions and
conditions of the CCRs, following the expiration of the third (3rd)
Lease Year (hereinafter defined), Tenant shall have the right to change
the Permitted Use to any other lawful retail use following not less
than thirty (30) days prior written notice to Landlord of such change
in use."
5. Section 3.2 of the Lease is hereby amended to delete the second sentence of
such Section and substituted the following in lieu thereof:
"Following the expiration of the third (3rd) Lease Year, Tenant shall
have the right to cease or reduce operations in the Premises following
prior written notice to Landlord of such cessation or reduction in
operations delivered no later than the date that is thirty (30) days
prior to the date of such cessation or reduction in operations."
6. Section 4.3 of the Lease is hereby amended to delete the last sentence of
such Section and substitute the following in lieu thereof:
"Throughout the Term of this Lease, in addition to the statements of
Gross Sales described above, Tenant shall deliver to Landlord (i)
audited annual financial statements of Tenant with audit report and
related notes, all prepared by a nationally recognized firm of
certified public accountants, delivered no later than four (4) months
after the end of each of Tenant's fiscal years, (ii) unaudited
quarterly financial statements of Tenant, certified to be true, correct
and complete by the chief financial officer of Tenant, delivered no
later than two (2) months after the end of each of Tenant's fiscal
quarters, and (iii) unaudited quarterly operating statements with
respect to Tenant's operations at the Premises (including all receipts
and expenses attributable to such operations), certified to be true,
correct and complete by the chief financial officer of Tenant,
delivered no later than two (2) months after the end of each of
Tenant's fiscal quarters."
7. In addition to the matters described in Paragraph 3 above, Tenant will
provide within five (5) days of Landlord's written request (which requests shall
be made no more often than twice per Lease Year) the then most current monthly
unaudited financial statements of Tenant and the then most current monthly
unaudited operating statements with respect to Tenant's operations at the
Premises. Further, after reasonable notice, throughout the term of the Lease,
Tenant shall make available to Landlord for reasonable meetings and telephonic
conferences, during Tenant's normal business hours and at Tenant's offices,
appropriate representatives of Tenant, including Tenant's chief financial
officer and comptroller, to discuss with Landlord such questions as Landlord may
in good faith reasonably submit to Tenant with respect to Tenant's operations
and financial condition.
8. Landlord and Tenant each hereby acknowledge and agree that the contingency
relating to the approval of the CCRs described in Section 22.16 of the Lease and
the contingency relating to the approval of the Final Construction Plans
described in Section 22.17 of the Lease have both been satisfied, such that
neither Landlord nor Tenant shall have any further right to terminate the Lease
pursuant to either Section 22.16 or Section 22.17.
9. For so long as the Lease remains in effect, Landlord shall not amend or
modify, or consent to the amendment or modification of, the CCRs without
Tenant's prior written consent, which consent shall not be unreasonably withheld
or delayed.
10. The parties hereto agree that the Lease may not be recorded and that such
parties shall use their good faith efforts to preserve the confidentiality of
the material economic terms of this transaction, such as rental rate, lease term
and renewal options. In addition, Landlord agrees to use its good faith efforts
to preserve the confidentiality of Tenant with respect to any reports concerning
Gross Sales, Tenant's financial condition and Tenant's business operations which
are not otherwise made public by tenant (whether through disclosure to credit
rating agencies, such as Dun & Bradstreet or otherwise) or available in the
public domain generally. This confidentiality agreement extends to any partners,
lawyers, accountants, employees, agents or any other persons acting at the
specific direction of the parties hereto. The parties hereto agree to use their
good faith efforts to avoid discussing with, or disclosing to, any third parties
(except those parties listed above, together with any prospective lenders,
lenders, developers, prospective purchasers, and purchasers of the parties
hereto) any of the material economic terms of this transaction. It is
specifically agreed by way of illustration, but not by limitation, that the
covenant of confidentiality set forth herein shall not be breached if such
information is disclosed in connection with or due to any governmental law or
ordinance or judicial proceedings, or if Landlord shall disclose such
information to Landlord's prospective partners, partners, developers, bankers,
prospective purchasers, accountants, agents, prospective lenders, lenders,
lawyers or other parties referred to above, provided notice of this
confidentiality provision is given to such parties. Any knowing or willful
breach of this confidentiality agreement shall constitute an automatic event of
default without notice or cure provided, for which either party may recover
actual (but not consequential or punitive) damages as their sole remedy and for
which neither party can terminate this Lease.
11. This Amendment may be executed in separate counterparts, each of which shall
constitute an original and all of which, when taken together, shall constitute
one and the same instrument.
12. The Lease, as amended hereby, is ratified and confirmed by all the parties
as being in full force and effect. To the extent of any conflict between the
terms and provisions of the Lease and this Amendment, the terms and provisions
of this Amendment shall govern and control. Tenant hereby acknowledges, confirms
and agrees that, as of the date of this Amendment, no known disputes exist
between Landlord and Tenant, Landlord is not in default under the terms of the
Lease and the Lease is in full force and effect. Tenant hereby acknowledges and
agrees that, as of the date of this Amendment, Tenant has no known claims
against Landlord and has no defenses or offsets to the full and timely
performance by Tenant of each of its duties and obligations under the Lease,
whether monetary or otherwise. This Amendment is binding on the parties and
their successors and assigns.
(Signatures on following page)
IN WITNESS WHEREOF, this Amendment is being made and entered into on
this 9th day of September, 1999, to be effective as of the 29th day of July,
1999.
LANDLORD:
LINCOLN RAS, LTD.,
a Texas limited partnership
By: Akard Ervay, Inc.,
a Texas corporation, general partner
By:
-----------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
TENANT:
ROBB & STUCKY, LTD.,
a Florida limited partnership
By: Derby Road Investments, Inc.,
general partner
By:
----------------------------------------
Name:
----------------------------------------
Title:
----------------------------------------
EXHIBIT "A"
Legal Description (Cont.)
EXHIBIT "A"
Legal Description
BEING a tract of land situated in the Henry Cook Survey, Abstract No. 183 in the
City of Plano, Collin County, Texas and being portions of a called 78.176-acre
tract of land (TRACT VII) conveyed to Electronic Data Systems Corporation (EDS),
formerly known as Quorum Development Corporation, as evidenced in a Special
Warranty Deed recorded in Volume 1257 at Page 760 of the Land Records of Collin
County, Texas (LRCCT) and being more particularly described by metes and bounds
as follows (bearings based on the EDS control monumentation):
BEGINNING at a 5/8-inch rod set for the North corner of a visibility clip at the
intersection of the East right of way line of the Dallas North Tollway (a
variable width right of way) with the South right of way line of Legacy Drive (a
variable width right of way) as recorded in Volume C at Page 774 of the Map
Records of Collin County, Texas (MRCCT);
THENCE North 89 degrees 54 minutes 36 seconds East, along the South right of way
line of said Legacy Drive, a distance of 263.28 feet to a 5/8-inch "KHA" capped
iron rod set for corner;
THENCE South 86 degrees 17 minutes 44 seconds East, departing the South right of
way line of said Legacy Drive, a distance of 81.54 feet to a 5/8-inch "KHA
capped iron rod set for corner;
THENCE South, a distance of 157.01 feet to a 5/8-inch "KHA" capped iron rod set
for corner;
THENCE South 45 degrees 05 minutes 27 seconds East, a distance of 187.56 feet to
a 5/8-inch "KHA" capped iron rod set for corner;
THENCE South, a distance of 85.11 feet to a 5/8-inch "KHA" capped iron rod set
for corner;
THENCE South, 44 degrees 48 minutes 56 seconds West, a distance of 186.44 feet
to a 5/8-inch "KHA" capped iron rod set for corner;
THENCE South, a distance of 180.19 feet to a 5/8-inch "KHA" capped iron rod set
for corner;
THENCE West, a distance of 348.77 feet to a 5/8-inch "KHA" capped iron rod set
for corner;
THENCE North 44 degrees 14 minutes 15 seconds West, a distance of 20.93 feet to
a 5/8-inch "KHA" capped iron rod set for corner on the East right of way line of
said Dallas North Tollway;
THENCE in a northerly direction, along the East right of way line of said Dallas
North Tollway, the following:
North 01 degrees 31 minutes 30 seconds East, a distance of 105.96 feet
to a 5/8-inch "KHA" capped iron rod set for the point of curvature of a
non-tangent curve to the left;
Along the arc of said curve to the left, through a central angle of 01
degrees 36 minutes 44 seconds, having a radius of 2874.79 feet, a chord
bearing of North 00 degrees 41 minutes 56 seconds East, a chord
distance of 80.89 feet and an arc length of 80.896 feet to a 5/8-inch
"KHA" capped iron rod set for the end of said curve;
THENCE North 04 degrees 01 minutes 07 seconds East, departing the right of way
of said North Dallas Tollway, a distance of 150.40 feet to a 5/8-inch "KHA"
capped iron rod set for corner;
THENCE North 00 degrees 10 minutes 35 seconds West, a distance of 325.00 feet to
a 5/8-inch "KHA" capped iron rod set for a corner;
THENCE North 44 degrees 52 minutes 02 seconds East, a distance of 21.20 feet to
the POINT OF BEGINNING and containing a calculated area of 272,800 square feet
or 6.263 acres of land.
Tract 2:
Being a non-exclusive easement for ingress and egress as created by Easement
granted by Electronic Data Systems Corporation dated June 17, 1999, filed June
23, 1999, cc#99-0078442, recorded in Volume 4443, Page 28, Land Records of
Collin County, Texas, over and across the areas described therein and depicted
on Exhibit B thereto.
Tract 3:
Being a non-exclusive easement for ingress and egress as created by Reciprocal
Driveway Easement, Temporary Construction Easement and Maintenance Agreement,
dated September __, 1999, filed September __, 1999, cc#99-___________, recorded
in the Land Records of Collin County, Texas, over and across that portion of the
Driveway Easement Area (as defined therein) situated on the EDS Tract (as
defined therein, and described and depicted on Exhibit C thereto).
EXHIBIT "C"
Permitted Encumbrances
1. Mineral estate and interest described in Warranty Deed dated, October 25,
1979, granted by Laverne W. Baccus, Trustee for the benefit of Earlene B. Croom
to H. R. Perot, recorded in Volume 1203, Page 893, Deed Records of Collin
County, Texas.
2. Mineral estate and interest described in instrument filed 10/29/1979,
recorded in Volume 1203, Page 893, Deed Records of Collin County, Texas.
3. Mineral estate and interest described in Warranty Deed dated, October 25,
1979, granted by Earl Baccus, Trustee of Laverne W. Baccus to H. R. Perot,
recorded in Volume 1204, Page 1, Deed Records of Collin County, Texas.
4. Limited or lack of access to road or highway abutting subject property as set
forth in Special Warranty Deed, dated June 30, 1986, granted by E.D.S. Land
Corporation to The City of Plano, Texas, recorded in Volume 2409, Page 402, Land
Records of Collin County, Texas.
5. Limited or lack of access to road or highway abutting subject property as set
forth in Special Warranty Deed, dated June 30, 1986, granted by E.D.S. Land
Corporation to The City of Plano, Texas, recorded in Volume 2409, Page 438, Land
Records of Collin County, Texas.
6. Corrected Declaration of Restrictive Covenants, dated October 4, 1988,
executed by Electronic Data Systems Corporation, recorded in Volume 3204, Page
669, Land Records of Collin County, Texas.
7. Easement, dated December 12, 1991, granted by Electronic Data Systems
Corporation to American Telephone & Telegraph Company, recorded under Clerk's
File No. 91-0070594, Land Records of Collin County, Texas, and as shown on
survey of Michael B. Marx, R.P.L.S. No. 5181, dated April 28. 1999, last revised
July 20, 1999.
8. Easement, dated December 12, 1991, granted by Electronic Data Systems
Corporation to American Telephone & Telegraph Company, under Clerk's File No.
91-0070595, Land Records Of Collin County, Texas, and as shown on survey of
Michael B. Marx, R.P.L.S. No. 5181, dated April 28, 1999, last revised July 20,
1999.
9. Easement, dated July 15, 1997, granted by Electronic Data Systems Corporation
to The City of Plano, recorded in Volume 2683, Page 420, Land Records of Collin
County, Texas, and as shown on survey of Michael B. Marx, R.P.L.S. No. 5181,
dated April 28, 1999, last revised July 20, 1999;
10. Easement, dated July 15, 1997, granted by Electronic Data Systems
Corporation to The City of Plano, recorded in Volume 2683, Page 471, Land
Records of Collin County, Texas, and as shown on survey of Michael B. Marx,
R.P.L.S. #5181, dated April 28, 1999, last revised July 20, 1999.
11. Electric Service Provider Restriction, dated August 6, 1998, executed by
Electronic Data Systems for the benefit of Texas Utilities Electric Company,
recorded in Volume 4226, Page 2200, Land Records of Collin County, Texas.
12. Terms, provisions and conditions of Sidewalk Agreement, dated June 28, 1998,
by and between The City of Plano and Electronic Data Systems Corporation,
recorded in Volume 2892, Page 398, Land Records of Collin County, Texas.
13. Master Declaration of Covenants, Conditions and Restrictions, dated February
16, 1999, executed by Electronic Data Systems Corporation, in Volume 4355, Page
619, Land Records of Collin County, Texas, as affected by Supplement to Master
Declaration of Covenants, Conditions and Restrictions dated ________________,
1999, executed by Electronic Data Systems Corporation and recorded or to be
recorded in the Land Records of Collin County, Texas.
14. Easement granted by Electronic Data Systems Corporation to Denton County
Electric Cooperative, Inc., filed 06/03/1998, recorded, recorded in Volume 4178,
Page 4336, Land Records of Collin County, Texas, and as shown on survey of
Michael E. Marx, R.P.L.S. #5181, dated 04/28/99, last revised 07/29/1999.
15. Repurchase Option and Right of First Negotiation reserved in Special
Warranty Deed dated September __, 1999, executed by Electronic Data Systems
Corporation to Lincoln RAS, Ltd., recorded or to be recorded in the Land Records
of Collin County, Texas.
SECOND AMENDMENT TO LEASE AGREEMENT
THIS SECOND AMENDMENT TO LEASE AGREEMENT (this "Amendment") is made and
entered into on this the 11th day of July, 2001, by and between LINCOLN RAS,
LTD., a Texas limited partnership ("Landlord"), and ROBB & STUCKY, LTD., a
Florida limited partnership ("Tenant").
R E C I T A L S:
---------------
A. On or about July 29, 1999, Landlord and Tenant entered into that
certain Lease Agreement (as amended, the "Lease"), pursuant to the terms of
which Landlord leased to Tenant approximately 112,389 square feet of space
situated in a building (the "Building") to be constructed by Landlord in the
City of Plano, Collin County, Texas, as more particularly described in the
Lease, which Lease was amended pursuant to the terms of that certain First
Amendment to Lease Agreement dated effective as of July 29, 1999, executed by
and between Landlord and Tenant.
B. Landlord has completed construction of the Building substantially in
accordance with the Final Construction Plans (as defined in the Lease) and
Tenant has commenced the operation of Tenant's business in the Premises as a
Robb & Stucky retail furniture store.
C. Landlord and Tenant now desire to further amend the Lease and
confirm certain factual matters relating to the Lease.
NOW, THEREFORE, for and in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:
13. All terms which are defined in the Lease shall have the same meaning when
used in this Amendment, unless specifically provided herein to the contrary.
14. For purposes of Section 2.2 of the Lease, Landlord and Tenant hereby confirm
that the Rent Commencement Date occurred on, and shall be deemed to be, June 24,
2000. Accordingly, the Term of the Lease shall expire at 11:59 p.m. on June 23,
2020, unless sooner terminated or extended in accordance with the terms and
provisions of the Lease.
Landlord and Tenant hereby confirm that the Delivery Date has occurred
and that all of the requirements of Section 2.3 of the Lease have been
satisfied. Without limiting the generality of the foregoing, Tenant
hereby confirms that it has unconditionally accepted delivery of the
Premises, subject only to Landlord's warranty contained in Section
2.3(g) of the Lease. Such warranty expired on May 1, 2001, with respect
to the work specified in divisions 14, 15 and 16 of the Final
Construction Plans (mechanical, electric and plumbing) and shall expire
on May 22, 2001 with respect to all other items subject to such
warranty.
15. Landlord and Tenant hereby further confirm that all costs and expenses
described in the Approved Budget have been properly allocated and paid by
Landlord and Tenant, as applicable, and that no further allocations in
connection with the Approved Budget are necessary. Accordingly, the Approved
Budget is no longer applicable to the Lease and shall be of no further force and
effect.
16. Section 2.3(h) of the Lease is hereby deleted in its entirety and shall be
without any force and effect as though such Section had never existed.
17. For purposes of Section 3.2 of the Lease, Landlord hereby acknowledges that
Tenant opened for business in the Premises on or about June 24, 2000, which date
occurred before the date which is ninety (90) days following the Rent
Commencement Date, as required by the terms of such Section 3.2.
18. Section 4.1 of the Lease is hereby deleted in its entirety and shall be
without any force and effect as though such Section had never existed and the
following is substituted in lieu thereof:
"4.1 Base Rent. Effective as of the Rent Commencement
Date, Tenant shall pay to Landlord base rent (as applicable
for each Lease Year, "Base Rent") for the Premises, together
with all applicable sales and use taxes thereon, if any, in
accordance with the following schedule:
Lease Years Annual Base Rent Monthly Base Rent
----------- ---------------- -----------------
1-7 $1,254,098 $104,508.16
8-14 $1,379,507 $114,958.91
15-20 $1,517,458 $126,454.83
21-25 (1st option period) $1,669,204 $139,100.33
26-30 (2nd option period) $1,636,124 $136,343.66
Base Rent shall be due and payable commencing on the
Rent Commencement Date. Base Rent for each successive Lease
Year during the Term shall be due and payable in equal monthly
installments, in advance, on the first day of each calendar
month commencing on the first day of the calendar month
immediately following the Rent Commencement Date, it being
agreed that Base Rent payable with respect to the period
between the Rent Commencement Date and the first day of the
following calendar month shall be due at the time that the
first payment of Base Rent is due.
For the purposes of this Lease, the term "Lease Year"
shall mean and be defined as each twelve (12) month period
commencing on the first day of the calendar month immediately
following the Rent Commencement Date; provided, however, that
the first Lease Year shall include the period from the Rent
Commencement Date to the first day of the next following
calendar month. Base Rent shall be prorated for an extended or
partial Lease Year (i.e., the first Lease Year and/or the
final Lease Year)."
19. Landlord and Tenant each hereby confirm that the contingency described in
Section 22.15 relating to Landlord's acquisition of the Land has been satisfied,
such that neither Landlord nor Tenant shall have any further right to terminate
the Lease pursuant to such Section 22.15.
20. This Amendment may be executed in separate counterparts, each of which shall
constitute an original and all of which, when taken together, shall constitute
one and the same instrument.
21. The Lease, as amended hereby, is ratified and confirmed by all the parties
as being in full force and effect. To the extent of any conflict between the
terms and provisions of the Lease and this Amendment, the terms and provisions
of this Amendment shall govern and control. Landlord and Tenant hereby
acknowledge, confirm and agree that, as of the date of this Amendment, to such
parties' respective knowledge, no known disputes exist between Landlord and
Tenant, neither Landlord nor Tenant is in default under the terms of the Lease
and the Lease is in full force and effect. Tenant hereby acknowledges and agrees
that, as of the date of this Amendment, Tenant has no known claims against
Landlord and has no defenses or offsets to the full and timely performance by
Tenant of each of its duties and obligations under the Lease, whether monetary
or otherwise. Landlord hereby acknowledges and agrees that, as of the date of
this Amendment, Landlord has no known claims against Tenant and has no defenses
or offsets to the full and timely performance by Landlord of each of its duties
and obligations under the Lease, whether monetary or otherwise. This Amendment
is binding on the parties and their successors and assigns.
(Signatures on following page)
IN WITNESS WHEREOF, this Amendment is being made and entered into on
this 11th day of July, 2001.
LANDLORD:
LINCOLN RAS, LTD.,
a Texas limited partnership
By: Akard Ervay, Inc.,
a Texas corporation, general partner
By:
---------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
TENANT:
ROBB & STUCKY, LTD.,
a Florida limited partnership
By: Derby Road Investments, Inc.,
general partner
By:
-----------------------------------------
Name:
-----------------------------------------
Title:
-----------------------------------------
THIRD AMENDMENT TO LEASE AGREEMENT
THIS THIRD AMENDMENT TO LEASE AGREEMENT (this "Amendment") is made and
entered into on this the 31st day of August, 2001, by and between LINCOLN RAS,
LTD., a Texas limited partnership ("Landlord"), and ROBB & STUCKY, LTD., a
Florida limited partnership ("Tenant").
R E C I T A L S:
---------------
A. On or about July 29, 1999, Landlord and Tenant entered into that
certain Lease Agreement (as amended, the "Lease"), pursuant to the terms of
which Landlord leased to Tenant approximately 112,389 square feet of space
situated in a building (the "Building") to be constructed by Landlord in the
City of Plano, Collin County, Texas, as more particularly described in the
Lease, which Lease was amended pursuant to the terms of that certain First
Amendment to Lease Agreement dated effective as of July 29, 1999, executed by
and between Landlord and Tenant, and that certain Second Amendment to Lease
Agreement dated as of July 11th, 2001, executed by and between Landlord and
Tenant.
B. Landlord and Tenant now desire to further amend the Lease and
confirm certain factual matters relating to the Lease.
NOW, THEREFORE, for and in consideration of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:
22. All terms which are defined in the Lease shall have the same meaning when
used in this Amendment, unless specifically provided herein to the contrary.
23. Section 4.1 of the Lease is hereby amended to provide that Base Rent for
Lease Years 26-30 (2nd option period) shall be equal to $1,836,124 per year
($153,010.33 per month).
24. This Amendment may be executed in separate counterparts, each of which shall
constitute an original and all of which, when taken together, shall constitute
one and the same instrument.
25. The Lease, as amended hereby, is ratified and confirmed by all the parties
as being in full force and effect. To the extent of any conflict between the
terms and provisions of the Lease and this Amendment, the terms and provisions
of this Amendment shall govern and control. Landlord and Tenant hereby
acknowledge, confirm and agree that, as of the date of this Amendment, to such
parties' respective knowledge, no known disputes exist between Landlord and
Tenant, neither Landlord nor Tenant is in default under the terms of the Lease
and the Lease is in full force and effect. Tenant hereby acknowledges and agrees
that, as of the date of this Amendment, Tenant has no known claims against
Landlord and has no defenses or offsets to the full and timely performance by
Tenant of each of its duties and obligations under the Lease, whether monetary
or otherwise. Landlord hereby acknowledges and agrees that, as of the date of
this Amendment, Landlord has no known claims against Tenant and has no defenses
or offsets to the full and timely performance by Landlord of each of its duties
and obligations under the Lease, whether monetary or otherwise. This Amendment
is binding on the parties and their successors and assigns.
IN WITNESS WHEREOF, this Amendment is being made and entered into on
this 31st day of August, 2001.
LANDLORD:
LINCOLN RAS, LTD.,
a Texas limited partnership
By: Akard Ervay, Inc.,
a Texas corporation, general partner
By:
-----------------------------------------------
Name:
-----------------------------------------------
Title:
-----------------------------------------------
TENANT:
ROBB & STUCKY, LTD.,
a Florida limited partnership
By: Derby Road Investments, Inc.,
general partner
By:
-----------------------------------------------
Name:
-----------------------------------------------
Title:
-----------------------------------------------