LEASE
THIS LEASE ("Lease") is entered into this 3rd day of March, 3333, by and between Landlord
("Landlord") and tenant ("Tenant").
WITNESSETH:
WHEREAS, the Landlord is the owner of certain real property located in the City of city, County
of county, State of Tennessee (the "Property"); and
WHEREAS, the Landlord seeks to lease space in the Property to the Tenant, and the Tenant
seeks to lease space in the Property from the Landlord.
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein
contained, the parties hereto do hereby covenant and agree as follows:
I. DEFINITIONS
COMMENT
The Lease should contain definitions of all significant terms, including but not limited to
the following:
(1) Shopping Center (including any modifications or expansions thereto)
(2) Mall Building
(3) Premises (or Leased Premises)
(4) Term
(5) Commencement Date
(6) Termination Date
(7) Permitted Use (this should be as restrictive as possible, to assure compliance and
conformity with any exclusive use provisions of any other lease or other document in the shopping center; for a discussion of these matters, see § 14.06[5] supra)
(8) Base Rent
(9) Percentage Rent
(10) Common Areas
(11) Parking Areas
(12) Common Area Maintenance Charges
(13) Proportionate Share
(14) Exclusive Use
(15) Radius Restriction
(16) Anchor Tenant
(17) Store Floor Area
(18) Mall Building Floor Area
(19) Additional Rent
(20) Event of Default
(21) CPI Adjustment
(22) Mortgage
(23) Mortgagee
(24) Rent
(25) Taxes
(26) Store Hours
(27) Gross Sales (for the purpose of calculating Percentage Rent as described in
Section 6.3 below); a definition is included below
"Gross Sales" means the prices of all goods, wares and merchandise sold, and the actual charges
for all services performed by Tenant or by any subtenant, in, at, from, or arising out of the use of
the Premises. Gross Sales shall include, without limitation, sales and services (a) where the
orders therefor originate in, at, from, or arising out of the use of the Premises, whether delivery
or performance is made from the Premises or from some other place, (b) made or performed by
mail, telephone, or facsimile orders. Gross Sales shall not include (i) returns to shippers or
manufacturers, (ii) cash or credit refunds to customers on transactions otherwise included in
Gross Sales, or (iii) amounts collected and paid by Tenant to any government for any sales or
excise tax.
II. DESCRIPTION OF SHOPPING CENTER
Section 2.1. Description of Shopping Center.
COMMENT
In a shopping center, the use of common areas, parking areas and the rest of the shopping
center is more important than the use of such areas in other commercial real estate
projects. The tenants depend on the use of these areas to assure the success of their
businesses. In addition, the tenant's location in the shopping center, and its relative
location to the common areas and parking areas, and to the location of other tenants,
particularly anchor tenants, may significantly affect the success of its store. For these
reasons, the Lease should contain exhibits, including a legal description of the Shopping
Center property, and a map of the Shopping Center, showing the Mall Building, and the
location of the Common Areas, the Parking Area, the Tenant's Premises, and the locations
of spaces leased to Anchor Tenants and other tenants.
Section 2.2. Landlord's Right to Make Changes.
Landlord reserves the right at any time to make changes in its plan for the
Shopping Center or the Shopping Center Land including modifications to the building areas,
walkways, parking areas, driveways or other Common Areas, construction of new buildings or
improvements or modifications to existing buildings or improvements in the Shopping Center
Area, and changes in the Shopping Center Land, including additions thereto, and conveyance of
portions thereof to others; provided, however, that such changes shall not reduce the parking
ratio of the shopping center below 3,333 spaces per 1000 square feet of rentable area in the
shopping center, or reduce the size of the common area below 33,333 square feet per 1000 square
feet of rentable area.
COMMENT
The Landlord needs to have flexibility, and the right to make certain changes to the
shopping center, as long as they do not seriously diminish the tenants' use of the common
area, parking area or other areas in the shopping center. Such changes will generally
require the consent of anchor tenants and other parties pursuant to the Shopping Center
Operating Agreement.
III. LEASED PREMISES
Section 3.1. Demise of Leased Premises.
Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the Premises
identified in Exhibit ______ attached hereto. The Tenant has inspected the Premises and shall be
deemed to have accepted the Premises in their condition existing on the date the Landlord
delivers possession thereof to the Tenant.
Section 3.2. Covenant of Quiet Possession.
Landlord hereby warrants that it owns the fee title to and has the right to lease the
Premises hereby demised. Provided Tenant is not in default of this Lease Agreement, Tenant
shall have peaceful and quiet use and possession of the Premises without interference on the part
of Landlord, and Landlord shall warrant and defend Tenant in such peaceful and quiet use and
possession against the claims of all persons claiming by, through, or under Landlord.
IV. TERM OF LEASE
Section 4.1. Lease Term.
The Term of this Lease shall commence on the earlier to occur of (a) _________ or (b)
the opening by Tenant of its business in the Premises, and shall be for three hundred thirty-three
years. This Lease shall terminate on the Termination Date or at the end of any extension or
renewal thereof, without the necessity of any notice from either Landlord or Tenant to effectuate
such termination.
COMMENT
Many shopping center leases provide that the lease term will not commence until certain
conditions are satisfied, such as construction by landlord of certain "tenant
improvements," or the leasing of a minimum percentage of the shopping center. This lease
form does not include such conditions.
V. USE OF PREMISES
Section 5.1. Use of Premises by Tenant.
Tenant shall occupy the Premises on the Commencement Date and thereafter will
continuously use the Premises for the Permitted Use and for no other purpose whatsoever.
Tenant shall conduct and operate its business to assure the transaction of a maximum volume of
business in and at the Premises. Tenant covenants and agrees to remain open for business at least
during the Store Hours and such additional hours as shall be determined by Landlord.
Tenant will at its expense: (a) maintain the Premises in a clean, orderly and sanitary
condition; (b) comply with all laws, ordinances, rules and regulations of governmental authorities
and all recommendations of Landlord's fire insurance rating organization now or hereafter in
effect; (c) comply with and observe all rules and regulations established by Landlord from time
to time which apply generally to all retail tenants in the Shopping Center; and (d) conduct its
business in all respects in a manner consistent with the operation of a first class Shopping
Center.
COMMENT
The tenant's use of the premises raises several issues: (1) compatibility with the character
of the shopping center; (2) operation of the space to cause the maximum amount of sales,
for purposes of the Percentage Rent (a form of continuous operation covenant); (3)
operation of the space during specified store hours (generally, at least during those hours
that anchor tenants are open); and (4) avoiding conflict with any exclusive use clauses of
other tenants. While this lease form does not contain an exclusive use clause, giving the
tenant any exclusive rights, it does contain a radius restriction, restricting the tenant from
operating a competing store near the shopping center. See Section 15.2 of this lease form
below.
VI. RENT
Section 6.1. Rent.
Tenant covenants and agrees to pay to Landlord, as Rent for the Premises, (a) Base Rent; (b) Percentage Rent; and (c) Additional Rent, which shall include all additional sums, charges or amounts of whatever nature to be paid by Tenant to Landlord in accordance with the provisions
of this Lease. Tenant shall pay all Rent when due and payable, without any setoff or deduction,
and without any notice or demand therefor. Any Rent which is not paid within five (5) days
after the same is due shall bear interest at the Default Rate from the first day due until paid.
COMMENT
The Percentage Rent and Additional Rent clauses of a shopping center lease need to be
carefully drafted on the basis of the tenant's use of the premises and the size of the
premises. Section 6.2. Base Rent.
Base Rent shall be payable in equal monthly installments in advance on the first
day of each full calendar month during the Term, the first such payment to include also any
prorated Base Rent for the period from the Commencement Date to the first day of the first full
Lease Year.
Section 6.3. Percentage Rent.
Percentage Rent shall be payable in monthly installments during the Term, and
shall be calculated by multiplying (a) the Gross Sales for the month by (b) 33 percent, and
subtracting therefrom the Base Rent for the month. The first monthly payment of Percentage
Rent shall include Gross Sales for the period from the Commencement Date to the first day of the
first full Lease Year. Tenant shall deliver to Landlord: (i) within fifteen (15) days after the close
of each calendar month of the Term, a written report showing the Gross Sales made in the
preceding calendar month and (ii) within ninety (90) days after the close of each Lease Year, a
statement of Gross Sales for the preceding Year which shall conform to and be in accordance
with generally accepted accounting principles. As soon as practicable after the end of each Lease
Year, the Percentage Rent paid or payable for such Year shall be adjusted between Landlord and
Tenant, and each party hereby agrees to pay to the other, on demand, the amount of any excess or
deficiency in Percentage Rent paid by Tenant to Landlord during the preceding Year.
COMMENT
The Percentage Rent clause enables the landlord to share in the profitability of the
tenant's store. In calculating percentage rent, the parties need to consider three factors: (1)
the basic measure used to calculate income, such as sales or other receipts; (2) the
percentage of such income to be included in percentage rent; and (3) the setting of Base
Rent, which is generally used as a floor for Percentage Rent (that is, the tenant will be
required to pay Percentage Rent only to the extent it exceeds the Base Rent for the
applicable period). It is important for the tenant to maintain records to enable the
landlord to confirm the tenant's income for Percentage Rent purposes.
The Percentage Rent clause may also lead to an implication of a continuous
operation covenant, on the rationale that otherwise, the tenant could thwart the purpose of
the clause. This lease has an express covenant to operate the store during specified store
hours, and to operate the store to cause the maximum volume of sales, and the payment of
the maximum Percentage Rent to the landlord.
Section 6.4. Tenant's Records.
Tenant will maintain for at least five (5) years, and during the Term shall keep at
the Premises, a general ledger, required receipts and disbursement journals and such sales records
and other supporting documentation together with original or duplicate books and records which
shall disclose in detail all information required to permit Landlord to verify Tenant's Gross Sales and which shall conform to and be in accordance with generally accepted accounting principles. At any time or from time to time after twenty-four (24) hours advance notice to Tenant, Landlord
or any Mortgagee shall have the right during business hours to make any examination or audit of
such books and records.
Section 6.5. Payment of Taxes as Additional Rent.
Tenant shall pay in each Year during the Term, as Additional Rent, a
proportionate share of all real estate taxes and assessments payable with respect to or allocable to
the Shopping Center ("Taxes"). Tenant's proportionate share of Taxes for any Year shall be
computed on the basis of the ratio of the Store Floor Area to the Mall Building Floor Area. For
the Year in which the Term commences or terminates, Tenant's payment shall be subject to a pro
rata adjustment. Tenant's proportionate share of Taxes shall be paid by Tenant as Additional
Rent in equal monthly installments in such amounts as are estimated and billed for each Year by
Landlord during the Term, each such installment being due on the first day of each calendar
month. Within ninety (90) days after Landlord's receipt of tax bills for each Year, Landlord will
notify Tenant of the amount of Taxes for the Year in question and the amount of Tenant's
proportionate share thereof. Any overpayment or deficiency in Tenant's payment of its
proportionate share of Taxes for each Year shall be adjusted between Landlord and Tenant, and
Landlord and Tenant hereby agree that Tenant shall pay Landlord or Landlord shall credit to
Tenant's account, within thirty (30) days, such amount necessary to effect such adjustment.
Section 6.6. Payment of Insurance Costs as Additional Rent.
In each Lease Year, Tenant shall pay Landlord, as Additional Rent, Tenant's
Proportionate Share of Landlord's cost of maintaining all insurance with respect to the Mall
Building including, without limitation, all-risks property and casualty insurance and rent
insurance. Tenant's Proportionate Share of such costs for any Rental Year shall be computed on
the basis of the ratio of the Store Floor Area to the Mall Building Floor Area. Such amounts
shall be paid by Tenant in monthly installments in such amounts as are estimated and billed by
Landlord during each year, each installment being due on the first day of each calendar month.
Within ninety (90) days after the end of each such year, Landlord shall deliver to Tenant a
statement of its insurance costs for such year. Any overpayment or deficiency in Tenant's
payment of its proportionate share of such insurance costs shall be adjusted between Landlord
and Tenant, and Tenant shall pay Landlord or Landlord shall credit to Tenant's account within
thirty (30) days of receipt of such statement, such amounts as may be necessary to effect such
adjustment.
Section 6.7. Payment of Mall HVAC Expenses as Additional Rent.
In each Lease Year, Tenant shall pay Landlord annually (in twelve (12) equal
monthly installments together with the Base Rent), as Additional Rent, an amount representing
Tenant's Proportionate Share of the Landlord's Cost of providing Heat, Ventilation and
Air-Conditioning (HVAC) to the Mall.
COMMENT
In a property with common facilities and common costs, such as a shopping center, a
tenant will be obligated to pay its share of the costs of maintaining these facilities and
areas, providing utilities, and paying taxes and other legally required costs.
The tenant's proportionate share of such common costs is typically based
upon the size of the tenant's leased space in relation to the size of the whole shopping center, although other measures may be used if the tenant has a use which is likely to place a greater burden on the common areas or require a larger provision of utilities. The
landlord will need to maintain records with respect to these costs to justify the costs to be
paid by the tenant.
VII. MAINTENANCE AND REPAIRS
COMMENT
The landlord will generally be responsible for maintenance and repairs of structural
portions of the shopping center. The landlord and its lender desire to avoid any excessive
or unusual obligations in this regard. The tenant will be required to maintain and repair
the interior of its leased space, and to use the premises so as to minimize the need for any
repairs.
Section 7.1. Landlord's Maintenance and Repairs.
Landlord, at its expense, will make any necessary structural repairs to exterior
walls, structural columns and structural floor which collectively enclose the Premises; provided,
however, if the necessity for such repairs is caused by the negligence or willful acts of Tenant,
its agents, officers, employees, or customers, Landlord may (but shall not be obligated to) make
such repairs, and Tenant agrees to pay to Landlord promptly upon Landlord's demand, as
Additional Rent, the cost of such repairs, with interest thereon at the Default Rate until paid. In
the event Landlord elects not to make such repairs caused by Tenant's negligence, Landlord may
require Tenant to make such repairs at Tenant's sole cost and expense.
Section 7.2. Tenant's Maintenance and Repairs.
All repairs to the Premises or any installations, equipment or facilities therein,
shall be made by Tenant at its expense. Without limiting the generality of the foregoing, Tenant
will keep the interior of the Premises, together with all electrical, plumbing and mechanical
installations and equipment therein, in good order and repair and will make all replacements
required thereto at its expense. Tenant covenants to surrender the Premises at the expiration of
the Term or at such other time as it may vacate the Premises in as good condition as when
received, except ordinary wear and tear. Tenant will not overload the electrical wiring serving
the Premises or within the Premises, and will install at its expense, any additional electrical
wiring which may be required in connection with Tenant's use of the Premises. Any damage or
injury sustained by any person because of any such equipment or installations whose
maintenance and repair shall be the responsibility of Tenant, shall be paid for by Tenant, and
Tenant shall indemnify and hold Landlord harmless from and against all costs, claims, actions,
damages and liability in connection therewith.
Section 7.3. Repair of Damage Caused by Tenant.
Tenant will repair promptly at its expense any damage to the Premises caused by
or arising from its use, installation or removal of property in or from the Premises. If Tenant
shall fail to make such repairs, Landlord may do so and Tenant agrees to pay to Landlord
promptly upon Landlord's demand, as Additional Rent, the cost of such repairs, with interest
thereon at the Default Rate until paid. If Tenant's use of the Premises or any installation or
removal of property in or from the Premises causes any damage to any other areas in the
Shopping Center, Tenant shall, upon demand, reimburse Landlord for the cost of the repair of
such damage, and such reimbursement shall constitute Additional Rent.
VIII. COMMON AREAS
COMMENT
The common areas are essential to tenants in a shopping center, much more so than in other commercial real estate projects. The tenant's rights to use the parking areas and
other common areas (and the use thereof by the tenant's customers) may determine the
success or failure of a tenant's business. The common areas need to be described in detail,
both in a legal description and in a map or site plan of the shopping center, so that the
tenant knows where it may exercise its rights. These areas may be modified by the
landlord, as long as such modifications do not materially reduce the tenant's rights therein
or reduce the parking ratio. The landlord will be responsible for the maintenance and
operation of the common areas, with the tenant reimbursing landlord for its proportionate
share of such cost.
Section 8.1. Landlord's Management of Common Areas.
Landlord will operate and maintain the Common Areas in a manner consistent
with the character of the Shopping Center. In connection therewith, Landlord may establish
reasonable rules and regulations with respect to the Common Areas, enter into third-party
agreements with respect to the use and maintenance of the Common Areas, collect parking
charges with appropriate provisions for ticket validation by merchants, and do and perform such
other acts as Landlord may deem appropriate or necessary to the use and enjoyment thereof by
the tenants.
Section 8.2. Use of Common Areas.
Landlord grants to Tenant and its agents, employees and customers a
non-exclusive license to use the Common Areas and the Parking Areas in common with others
during the Term. Tenant and its employees shall park their cars only in such areas designated for
that purpose by Landlord. Tenant shall furnish Landlord with automobile license plate numbers
for cars used by Tenant or its employees and any changes in such information.
Section 8.3. Common Area Maintenance Charges.
"Common Area Maintenance Charges" shall include all costs and expenses
incurred by Landlord in operating and maintaining the Common Areas. These shall include, but
not be limited to, the cost of insurance, including, without limitation, liability insurance for
personal injury, death and property damage, insurance against fire, extended coverage, theft or
other casualties, workmen's compensation insurance covering personnel, fidelity bonds for
personnel; removal of snow, ice, trash and debris; regulation of traffic; installing and renting of
signs; fire protection; maintenance, repair and replacement of utility systems serving the
Common Areas, including, but not limited to, water and sanitary sewer lines and other utility
lines, pipes and conduits; repair or replacement of paving, curbs, walkways, landscaping,
drainage, pipes, ducts, conduits and similar items; planting, replanting and replacing flowers,
shrubbery and planters; and maintenance of sprinkler systems serving the Shopping Center Area.
Section 8.4. Tenant's Proportionate Share of Common Area Charges.
In each Year Tenant will pay Landlord, as Additional Rental, its Proportionate
Share of Landlord's Common Area Maintenance Charges, which Proportionate Share shall be
determined on the basis of the ratio of the Store Floor Area to the Mall Building Floor Area.
Such Proportionate Share shall be paid by Tenant in monthly installments in amounts determined
by Landlord at the beginning of each year, each installment being due on the first day of each
calendar month. Within ninety (90) days after the end of each year, Landlord shall deliver to
Tenant a statement of the total Common Area Maintenance Charges for such year, and each party
hereby agrees that Tenant shall pay Landlord or Landlord shall credit Tenant's account, within thirty (30) days of receipt of such statement, the amount of any excess or deficiency paid by Tenant to Landlord during such year.
IX. INDEMNITY
Section 9.1. Tenant's Indemnification of Landlord.
Tenant shall indemnify, hold harmless and defend Landlord from and against any and all
claims, actions, damages, liability and expense, including, but not limited to, attorney's and other
professional fees, in connection with loss of life, personal injury and/or damage to, property
arising from or out of the occupancy or use by Tenant of the Premises or any part thereof or any
other part of the Shopping Center, occasioned wholly or in part by any act or omission of Tenant,
its agents, employees or customers.
X. INSURANCE
Section 10.1. Tenant's Insurance.
Tenant will obtain and maintain, at its expense, all-risk property and casualty insurance,
in the amount of the replacement cost of the property, covering all of Tenant's personal property
in the Premises and all leasehold improvements installed in the Premises by or on behalf of
Tenant. Tenant shall also maintain public liability insurance with respect to the Premises, with
limits, for each occurrence, of not less than Two Million Dollars ($2,000,000) with respect to
personal injury and death, and Five Hundred Thousand Dollars ($500,000) with respect to
property damage. Tenant shall also maintain, if and to the extent required by law, workmen's
compensation or similar insurance in form and amounts required by law. The company or
companies writing any insurance which Tenant is required to carry and maintain as well as the
form of such insurance shall at all times be subject to Landlord's approval. All policies
evidencing such insurance shall name Landlord as additional insured and shall also contain a
provision by which the insurer agrees that such policy shall not be cancelled except after thirty
(30) days' written notice to Landlord. In addition, each such policy shall provide that neither
Landlord nor Tenant shall be liable to the other party or to any insurance company (by way of
subrogation or otherwise) insuring the other party for any loss or damage to any building,
structure or other property or liability for personal injury, or losses under workmen's
compensation laws and benefits, even though such loss or damage might have been occasioned
by the negligence of such party, its agents or employees. Tenant shall deliver to Landlord on the
Commencement Date, a copy of each such policy, or a certificate thereof.
XI. DAMAGE AND DESTRUCTION
Section 11.1. Occurrence of Casualty.
(a) Reconstruction of Premises. If the Premises shall be damaged by fire, the elements,
accident or other casualty ("Casualty"), Landlord shall promptly cause such damage to be
repaired. All such repairs shall be made at the expense of Landlord.
(b) Partial Abatement of Rent. If, as the result of any Casualty, the Premises shall
be rendered wholly or partially untenantable, then all Rental shall be abated proportionately as to
the portion of the Premises rendered untenantable during the period of such untenantability. This
abatement shall be the extent of Landlord's liability, and Landlord shall not be liable for
interruption to Tenant's business.
(c) Damage to Personal Property. Landlord shall not be liable for any damage to
or destruction of Tenant's personal property (including, without limitation, inventory, trade
fixtures, floor coverings, furniture and other property removable by Tenant under the provisions of this Lease) or to any leasehold improvements installed in the Premises. Tenant shall be responsible for and shall promptly repair or replace any such damaged or destroyed property.
Section 11.2. Occurrence of Major Casualty.
If the Premises are rendered untenantable, or damaged or destroyed during the last
year of the Term, or if the Mall Building is damaged to the extent of fifty percent (50%) or more
of the Mall Building Floor Area, Landlord may elect to terminate this Lease by giving to Tenant
thirty (30) days' notice thereof, and upon such termination, the rights and obligations of the
parties under this lease shall cease.
COMMENT
In the event of a major casualty, the landlord should not be obligated to restore the
property. Instead, it should have the option to restore, or to terminate the leases.
However, the Shopping Center Operating Agreement may give the landlord the obligation
to restore, and the terms of any mortgage or other loan document may do the same. The
landlord must make sure that the provisions of all of these documents are consistent, and
do not impose any inconsistent obligations on the landlord.
Section 11.3. Insurance Proceeds.
All insurance proceeds payable with respect to the Premises shall belong to and
shall be payable to Landlord. If Landlord does not elect to terminate this Lease as provided
above, Landlord shall, subject to the prior rights of any Mortgagee, disburse and apply any
insurance proceeds received by Landlord to the restoration and rebuilding of the Mall Building.
XII. CONDEMNATION
COMMENT
In the event of a partial taking of the shopping center or the leased space, there should be
a restoration of the property by the landlord, using the condemnation award for this
purpose. The remainder of the award will go the landlord. If the condemnation causes the
leased space to become unsuitable for its intended purpose, either party should have the
right to terminate the lease. The significance of the parking areas in a retail shopping
center means that if there is a taking of a major part of the parking areas (which should be
defined as a taking which reduces the parking ratio below a specified minimum), the
landlord has the obligation to provide replacement parking areas for the tenant, or the
tenant may terminate the lease.
Section 12.1. Appropriation of Property.
If there shall be an appropriation or taking of the whole or any part of the
Premises, by condemnation or otherwise, this Lease shall terminate as to the part so taken on the
date Tenant is required to yield possession thereof to the condemning authority (the "Taking
Date"). Landlord shall make such repairs and alterations as may be necessary in order to restore
the part not taken to useful condition and all Rent shall be reduced in the same proportion as the
portion of the floor area of the Premises so taken bears to the Store Floor Area. If the taking
renders the remainder of the Premises unsuitable for the Permitted Use, either party may
terminate this Lease as of the Taking Date. If twenty-five percent (25%) or more of the Mall
Building Floor Area, or if ten percent (10%) or more of the parking spaces are taken, landlord
may replace such parking spaces (or such number of spaces necessary to reduce the amount
effectively taken to less than 10%) with other parking spaces on the portion of the Shopping
Center Land not taken. If landlord does not replace such parking spaces, then Tenant may elect
to terminate this Lease as of the Taking Date. In the event of any termination provided hereunder, this Lease and the rights and obligations of the parties hereunder shall cease as of the date of such termination. All compensation awarded for any taking of the Premises or the
Shopping Center Land or any interest in either shall belong to and be the property of Landlord,
Tenant hereby assigning to Landlord all rights with respect thereto; provided, however, nothing
contained herein shall prevent Tenant from applying for reimbursement from the condemning
authority (if permitted by law) for any amounts which it deems appropriate, but only if there shall
be no reduction in the amount of the award or other compensation otherwise recoverable from
the condemning authority by Landlord.
XIII. ASSIGNMENT AND SUBLETTING
Section 13.1. Assignment and Subletting Prohibited.
Any assignment of this Lease, in whole or in part, or any sublet of all or any part of the
Premises, is prohibited without the prior written consent of Landlord, which consent may not be
unreasonably withheld. This prohibition includes, without limitation, any subletting or
assignment by operation of law, merger, consolidation, reorganization, transfer or other change
of Tenant's corporate or proprietary structure, or any change in control of a partnership or
corporation.
COMMENT
In a shopping center, the use of the leased space by a tenant, and the identity of the
tenant, are very important issues. The tenants and uses are designed and chosen by the
landlord to create a certain character in the shopping center as a whole, and each use must
be compatible with the rest of the center, and must result in the proper mix of uses and
tenants, and the proper location of the various tenants and uses. These concerns make it
necessary for the landlord to prohibit assignments and subletting which will result in
changes in the tenants and uses.
XIV. DEFAULT AND REMEDIES
Section 14.1. Default by Tenant.
The occurrence of any of the following events shall result in a default by Tenant
hereunder:
(a) The failure to pay any Rent or other sum of money within five (5) days after the due
date thereof.
(b) The failure to perform or observe any covenant or agreement of this Lease (other than
a default involving the payment of money), which default is not cured within ten (10) days after
the giving of notice thereof by Landlord (or if such default cannot be cured within such ten (10)
day period, then within such time period as is necessary to effectuate such cure, provided that
Tenant has commenced the curing of the default within such ten (10) day period and thereafter
diligently proceeds to complete the cure of such default.
(c) The filing of a voluntary or involuntary petition proposing the adjudication of Tenant
as bankrupt or insolvent; the reorganization of Tenant with its creditors, unless the petition is
filed or case commenced by a party other than Tenant and is withdrawn or dismissed within
thirty (30) days after the date of its filing; the making by Tenant of an assignment for the benefit
of its creditors; the admission in writing by Tenant of its inability to pay its debts when due; the
appointment of a receiver or trustee for the business or property of Tenant, unless such
appointment shall be vacated within ten (10) days of its entry; or if Tenant is adjudicated as
bankrupt or insolvent under any federal or state bankruptcy or insolvency law and such
adjudication or order is not vacated within ten (10) days.
Section 14.2. Remedies of Landlord.
(a) Performance of Tenant's Obligations. Landlord may perform, at the expense of
Tenant, any obligation of Tenant under this Lease which Tenant has failed to perform and of
which Landlord shall have given Tenant notice; provided, that Landlord may exercise this
remedy without any notice to Tenant in case of an emergency, or if the delay resulting from the
giving of notice may diminish the Landlord's ability to effectuate an adequate cure. The cost of
Landlord's performance of such obligations, together with interest thereon at the Default Rate,
shall be deemed Additional Rental and shall be payable by Tenant to Landlord upon demand.
(b) Termination of Lease. Landlord may elect to terminate this Lease by giving
notice thereof to Tenant, and reenter the Premises, without the necessity of legal proceedings,
and remove Tenant and all other persons from the Premises. In addition, Landlord may remove
all personal property from the Premises, and store such property at the Tenant's cost. If Landlord
terminates this Lease, Landlord may relet the Premises or any part thereof, on such terms and
conditions as Landlord, in its absolute discretion, may determine; provided, however, that
Landlord shall not be liable for, nor shall Tenant's obligations hereunder be diminished by reason
of, any failure by Landlord to relet the Premises or any failure by Landlord to collect any rent due
upon such reletting. If this Lease is terminated by Landlord following a default by Tenant,
Tenant shall remain liable for any Rent or other amounts due, and for any damages which may be
due or sustained by Landlord and all reasonable costs, fees and expenses including, but not
limited to, attorney's fees, costs and expenses incurred by Landlord in enforcing its remedies
hereunder, or in renting the Premises to others from time to time, and any additional damages
which Landlord may be able to prove and entitled to recover under applicable law.
(c) Other Remedies. Landlord may exercise any other legal or equitable right or
remedy which it may have. Any costs and expenses incurred by Landlord (including, without
limitation, attorneys' fees) in enforcing any of its rights or remedies under this Lease shall be
deemed to be Additional Rental and shall be repaid to Landlord by Tenant upon demand.
XV. SUBORDINATION AND ATTORNMENT
COMMENT
In the event that it acquires the property through a foreclosure or other enforcement of its
loan documents, a lender seeks the right and ability to enforce the leases in the property, or
to terminate them, if it so desires. In order to give the mortgagee the option, this lease
provides that leases will automatically be subordinate to any mortgage (which gives the
mortgagee the right to terminate), but that the mortgagee may, in turn, subordinate its
mortgage to the leases (which gives the mortgagee the right to keep the leases in effect). If
the lender chooses to keep the leases in effect, it will want the tenants to recognize the
mortgagee as landlord under the leases (or to "attorn to" the mortgagee). Finally, many
tenants will require that, in return for subordinating to the mortgage and attorning to the
mortgagee, any mortgagee must agree not to disturb the tenant's possession under the
lease. This lease does not contain such a clause. In addition to the language contained in
the lease on these matters, many mortgagees will require that each tenant (or certain
specified tenants) execute a separate subordination, non-disturbance and attornment
agreement with the mortgagee. Such an agreement will clear up any discrepancies between
leases, remedy any language of the leases that the mortgagee is not happy with, and also
govern other issues, such as the distribution of insurance and condemnation proceeds.
Section 15.1 Subordination of Lease to Mortgages.
Except as provided below, Tenant's rights under this Lease are and shall remain subject and subordinate to the operation and effect of any mortgage, deed of trust or other
security instrument constituting a mortgage lien upon the Premises, whether the same shall be in
existence at the date hereof or created hereafter ("Mortgage"). Tenant's subordination is
self-operative and no further instrument of subordination shall be required to effectuate it;
however, Tenant agrees to execute such other documents as may be required by any beneficiary
of a Mortgage ("Mortgagee") to effectuate or acknowledge such subordination. If a Mortgagee
shall so elect by notice to Tenant or by the recording of a unilateral declaration of subordination,
this Lease and Tenant's rights hereunder shall be superior and prior to the Mortgage, with the
same force and effect as if this Lease had been executed, delivered and recorded prior to the
execution, delivery and recording of such Mortgage.
Section 15.2. Attornment to Successors in Interest.
If any person shall succeed to all or part of Landlord's interest in the Premises,
whether by purchase, foreclosure, deed-in-lieu of foreclosure, or otherwise, and if so requested
or required by such successor in interest, Tenant shall attorn to such successor in interest and
shall execute such agreement in confirmation of such attornment as such successor in interest
shall reasonably request.
XVI. MISCELLANEOUS
Section 16.1 Notices.
In the event of any requirement under this Lease that any notice, request, demand,
approval or consent be given, such notice, request, demand, approval or consent shall be in
writing and shall be deemed to have been given on the third day following the day on which the
same shall have been mailed by United States registered or certified mail or Express Mail, return
receipt requested, with all postal charges prepaid, addressed as follows: (i) if to Tenant, at the
address indicated below, with a copy to the Premises; and if to Landlord, at the address indicated
below, with a copy to Landlord's management office in the Shopping Center. Either party may,
at any time, change its address for purpose of notice by sending a notice to the other party stating
the change and setting forth the new address. If any Mortgagee shall notify Tenant that it is the
holder of a Mortgage affecting the Premises, no notice, request or demand thereafter sent by
Tenant to Landlord shall be effective unless and until a copy of the same shall also be sent to
such Mortgagee in the manner prescribed above.
Section 16.2. Radius Restriction.
Tenant agrees that Tenant and its officers, directors, stockholders, affiliates or
partners shall not, directly or indirectly, operate, manage or have any interest in any other store or
business which is similar to or in competition with the Permitted Use within the Radius
Restriction.
Section 16.3. Estoppel Certificates.
Tenant shall be required, upon request by Landlord, to execute, acknowledge and
deliver to Landlord and to such Mortgagee or other party as may be designated by Landlord, a
certificate with respect to the matters required by Landlord or such other party relating to this
Lease or the status of performance of obligations of the parties hereunder. Landlord shall be
required, upon request by Tenant, to execute, acknowledge and deliver to Tenant and to such
other party as may be designated by Tenant, a certificate with respect to the matters required by
Tenant or such other party relating to this Lease or the status of performance of obligations of the parties hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
day and year first above written.
Landlord
By: ___________________
Landloard agent
Tenant
By: ___________________
tenant agent
|
|
Dr. MICHAEL A. S. GUTH |
|
|
Dr. MICHAEL A. S. GUTH |