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APPCO
41
LAND AND BUILDING LEASE AGREEMENT
LANDLORD:
YA Landholdings, LLC
a
Delaware limited liability company
TENANT :
Appalachian Oil Company, Inc.,
a
Tennessee corporation
LAND AND BUILDING LEASE AGREEMENT
TABLE OF CONTENTS
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DEFINITIONS
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1
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1.1
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Lease
Year
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1
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1.2
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Hazardous
Material
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1
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1.3
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Wastes
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2
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1.4
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Environmental
Laws
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2
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1.5
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Storage
Tank System
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1.6
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Release
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2.
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CONDITION
OF THE PREMISES
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3.
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TERM
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3
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3.1
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Primary
Term
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3.2
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First
Option to Extend
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3.3
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Second
Option to Extend
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3.4
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Third
Option to Extend
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3.5
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Fourth
Option to Extend
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4
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3.6
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Surrender
of Premises; Holding Over
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4.
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BASE
MONTHLY RENT
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4.1
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Triple
Net Lease
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4.2
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BaseMonthlyRent
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4.3
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Adjustment
Date
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5.
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USE
OF THE PREMISES; COMPLIANCE
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5.1
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Use
of the Premises
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5.2
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Compliance
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6
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6.
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PROPERTY
TAXES, OTHER CHARGES, ASSESSMENTS AND UTILITIES
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6
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6.1
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Tenant’s
Required Payments
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6.2
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Payments
Not Required by Tenant
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7
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6.3
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Assessments
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8
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6.4
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Utility
Payments
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6.5
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Tenant’s
Right to Contest Utility Charges, Contest Taxes and Seek
Reduction of Assessed Valuation of the Premises
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6.6
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Landlord
Not Required to Join in Proceedings or Contest Brought
by Tenant
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6.7
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Partial
Lease Years and Adjustment of Taxes
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9
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7.
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FURNITURE,
FIXTURES AND EQUIPMENT
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7.1
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Furniture,
Fixtures, and Equipment
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9
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7.2
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Landlord’s
Waiver
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7.3
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Removal
of Tenant’s Personal Property at Expiration of
Lease
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7.4
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Right
to Affix Signs
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8.
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MAINTENANCE
AND REPAIRS OF THE PREMISES
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8.1
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Obligation
to Maintain the Premises
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8.2
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Obligation
to Keep the Premises Clear
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9.
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ALTERATIONS
AND IMPROVEMENTS
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11
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9.1
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Right
to Make Alterations
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11
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9.2
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Tenant
Shall Not Render Premises Liable For Any Lien
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11
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10.
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INDEMNITY
AND INSURANCE
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12
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10.1
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Indemnification
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10.2
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Insurance
Company Requirement
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10.3
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Insurance
Certificate Requirements
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10.4
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Minimum
Acceptable Insurance Coverage Requirements
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13
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10.5
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Additional
Insureds
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15
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10.6
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Mortgage
Endorsement
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10.7
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Renewals,
Lapses or Deficiencies
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10.8
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Waiver
of Subrogation
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16
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11.
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PARTIAL
AND TOTAL DESTRUCTION OF THE PREMISES
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16
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11.1
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Damage
or Destruction of Premises
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16
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11.2
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Damage
or Destruction During the Last Twenty-four (24) Months of the
Term
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16
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12.
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CONDEMNATION
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17
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12.1
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Condemnation
Damages
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12.2
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Termination
of Lease Due to Condemnation
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13.
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ASSIGNMENT
AND SUBLETTING
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18
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13.1
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Tenant’s
Right of Assignment and Subletting
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18
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13.2
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Assignment
Without Landlord’s Consent
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18
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13.3
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Assignment
with Landlord’s Consent
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19
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13.4
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Subletting
Without Landlord’s Consent
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19
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13.5
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Landlord’s
Option to Preserve Subtenancies
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19
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13.6
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Rent
from Subletting
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19
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13.7
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Continuing
Obligation of Tenant
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20
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13.8
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Landlord’s
Right of Assignment
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20
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14.
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DEFAULT
AND TERMINATION
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20
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14.1
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Event
of Default
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20
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14.2
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Landlord’s
Remedies
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21
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14.3
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Right
of Landlord to Re-Enter
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24
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14.4
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Surrender
of Premises
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24
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14.5
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Interest
Charges
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24
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14.6
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Default
by Landlord
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25
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15.
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RIGHT
OF INSPECTION
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25
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16.
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WAIVER
OF BREACH
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25
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17.
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NOTICES
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25
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17.1
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Notice
Requirements
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25
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17.2
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Payments
Under Lease
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26
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18.
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RELATIONSHIP
OF THE PARTIES
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27
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19.
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SUBORDINATION,
ATTORNMENT AND ESTOPPEL
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27
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19.1
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Subordination
and Non-Disturbance
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27
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19.2
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Attornment
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27
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19.3
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Tenant
Estoppel Certificate
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19.4
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Landlord
Estoppel Certificate
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19.5
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Leasehold
Mortgage
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28
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20.
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ATTORNEYS’
FEES
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30
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20.1
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Recovery
of Attorneys’ Fees and Costs of Suit
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30
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20.2
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Party
to Litigation
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21.
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AUTHORITY
TO MAKE LEASE; COVENANT OF QUIET ENJOYMENT
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21.1
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Full
Power and Authority to Enter Lease
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21.2
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Quiet
Enjoyment
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22.
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HAZARDOUS
MATERIAL
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22.1
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Compliance
Generally
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22.2
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Tenant’s
Responsibility for Hazardous Materials
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31
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22.3
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Tenant’s
Environmental Indemnification
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22.4
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Tenant’s
Notification Obligations
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32
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22.5
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Survival
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23.
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GENERAL
PROVISIONS
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23.1
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Recitals
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23.2
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Gender;
Number
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23.3
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Captions
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23.4
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Exhibits
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33
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23.5
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Entire
Agreement
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23.6
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Drafting
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23.7
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Modification
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23.8
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Joint
and Several Liability
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23.9
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Enforceability
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23.10
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Severability
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23.11
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Successors
and Assigns
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34
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23.12
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Independent
Covenants
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23.13
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Limitation
on Landlord’s Liability
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23.14
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Waiver
of Trial by Jury
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23.15
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Characterization
of Lease
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23.16
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Counterparts
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35
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23.17
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Force
Majeure
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35
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23.18
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Confidentiality
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35
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EXHIBIT
“A” -LEASED PREMISES
Exhibit
“B” —
Memorandum
of Lease
Exhibit
“C” —
Certificate
of Liability Insurance and Evidence of Property
Insurance
Exhibit
“D” —
Form
of Subordination, Non-Disturbance and Attornment
Agreement
Exhibit
“E” - Not Applicable
LAND AND BUILDING LEASE AGREEMENT
This
Land and Building Lease Agreement (this
“Lease”), dated
for reference purposes
only as of ,
is
made by and between
YA Landholdings, LLC, a Delaware limited liability
company
(“Landlord”), and
Appalachian Oil Company, Inc. ,
a Tennessee corporation
(“Tenant”), with
reference to the recitals set forth below.
RECITALS
A.
Landlord is the owner of a certain real property identified as
the
“Leased Premises ,”
attached hereto and incorporated herein as
Exhibit “A” ,
together with all improvements located thereon,
but
not Tenant’s Personal Property (as defined in Section 7.1),
and which real property shall include all of Landlord’s
right, title and interest in and to all roadways, sidewalks,
walkways, parkways, driveways, common areas, landscaped areas and
similar areas and facilities and appurtenances thereunto belonging
(all of the foregoing real properties, improvements and
appurtenances being hereinafter collectively referred to as the
“
Premises ”).
B.
Landlord desires to lease the Premises to Tenant, and Tenant
desires to lease the Premises from Landlord, pursuant to the
provisions of this Lease.
1. DEFINITIONS
The
following terms, when used in this Lease, shall have the
meaning set forth in this Section.
The
term
“Lease Year” shall
mean the first twelve (12) full calendar months after the
Commencement Date (as defined in Section 3.1) and each subsequent
twelve (12) month period thereafter during the term and any
extensions. If the Commencement Date is other than the first day of
the month, then the first Lease Year also will include the partial
month in which the Commencement Date occurs.
The
term
“Hazardous Material” means
any and all hazardous, toxic or radioactive substances or
materials, including but not limited to asbestos or
asbestos-containing materials, petroleum and petroleum products
(including without limitation, gasoline and diesel), pollutants,
pollution, contaminants or contamination as those terms are
defined, designated or otherwise regulated under any applicable
Environmental Law and includes Wastes (as such terms are herein
defined).
The
term
“Wastes” means
any and all chemical, petroleum, or biological wastes, emissions or
discharges, whether hazardous or non-hazardous, liquid, solid or
gaseous, and whether
from any production, operation, maintenance, manufacturing,
processing, storage, use or other activity, where such wastes,
contaminants, emissions or discharges are regulated under
Environmental Laws.
The
term
“Environmental Laws” means
all federal, state and local statutes, regulations, ordinances,
rules, policies, directives, orders, demands or requirements of any
government agency, in each case solely to the extent having the
force of law, and all common law, to the extent regulating,
relating to, affecting or imposing liability or other obligations
concerning Hazardous Materials or protecting public health or
safety or the environment, including with respect to the
occupational health or environmental conditions on or about the
Premises, as now exist or may at any later time be adopted or
amended, including laws and regulations to the extent relating to
Storage Tank Systems, gasoline service stations, Hazardous
Materials, Release reporting requirements, noise abatement
requirements and provisions thereof protecting natural resources,
species and habitat.
The
term
“Storage Tank System” means
a complex of one or more underground or above ground storage tanks
and their associated underground, above-ground, and/or connected
piping and related fuel dispensing, pumping, mechanical, control
and monitoring or detection devices, facilities or
equipment.
The
term
“Release” means
any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping, or disposing
into the environment of any Hazardous Material.
2. CONDITION OF THE PREMISES
Landlord
leases to Tenant and Tenant leases from Landlord the Premises
in an
“AS IS, WHERE IS, WITH ALL FAULTS”
condition with
no representations or warranties whatsoever and on the terms and
conditions set forth in this Lease. Tenant acknowledges that it has
occupied the Premises for a substantial period of time prior to the
Commencement Date and that Tenant is familiar with the condition of
the Premises, and Tenant further acknowledges and agrees that other
than as set forth in this Lease: (i) no representations have been
or are made, or responsibility assumed by Landlord with respect to
the Premises or its operations, or the condition or repair of the
Premises, or as to any fact, circumstance, thing or condition which
may affect or relate to the Premises, except as specifically set
forth in this Lease; (ii) the Premises are leased in an
“
AS IS, WHERE IS, WITH ALL FAULTS”
condition as of the Commencement Date; and (iii) Landlord shall
have no obligation to alter, restore, improve, repair or develop
the Premises, and further shall have no obligation to remove
therefrom any parties or items of personal property, or other trade
fixtures or equipment which may be upon the Premises.
3. TERM
The
effective date (the
“Commencement Date”) of
this Lease shall be the date upon which escrow is deemed closed
pursuant to that certain Purchase Agreement of even date herewith
by and between Tenant, as “Seller,” and Landlord, as
“Buyer”
(“Purchase Agreement”). The
expiration date (the
“Expiration Date”) of
the
primary
term
(the “Primary Term”) of
this Lease shall be the last day of the month which is twenty (20)
Lease Years following the Commencement Date, unless terminated
earlier as provided herein or extended as set forth in Sections
3.2, 3.3, 3.4, and 3.5. References to the term of the Lease shall
include extensions, if any; and references in this Lease to the
Expiration Date shall refer to the expiration of any Extension
Periods which may be exercised by Tenant pursuant to this Lease.
Except as otherwise expressly stated, the terms and conditions of
this Lease shall remain in effect during any extension, renewal or
holdover of the Primary Term. Concurrently with the recording of
the deed transferring ownership of the Premises to Landlord, a
Memorandum of Lease substantially in the form of
Exhibit “B ”
attached hereto and incorporated herein, may be recorded by and at
the expense of Tenant with respect to the Premises.
| 3.2 |
First
Option to Extend
|
One
hundred eighty (180) days prior to the expiration of the
Primary Term, provided there are no uncured monetary Events of
Default (as defined in Section 14) existing under the Lease,
Tenant may extend the term of this Lease for an additional
sixty (60) months by notifying Landlord of such intention in
writing
(“First Extension Period”).
The
maximum
term of the Lease with one extension is twenty five (25) Lease
Years.
| 3.3 |
Second
Option to Extend
|
One
hundred eighty (180) days prior to the expiration of the First
Extension Period, provided there are no uncured monetary
Events of Default existing under the Lease, Tenant may extend
the term of this Lease for an additional sixty (60) months by
notifying Landlord of such intention in writing
(“Second Extension Period”).
The
maximum term of the Lease with two extensions is thirty (30) Lease
Years.
| 3.4 |
Third
Option to Extend
|
One
hundred eighty (180) days prior to the expiration of the
Second Extension Period, provided there are no uncured
monetary Events of Default existing under the Lease, Tenant
may extend the term of this Lease for an additional sixty (60)
months by notifying Landlord of such intention in
writing
(“Third Extension Period”).
The maximum term of the Lease with three extensions is thirty five
(35) Lease Years.
| 3.5 |
Fourth
Option to Extend
|
One
hundred eighty (180) days prior to the expiration of the Third
Extension Period, provided there are no uncured monetary
Events of Default existing under the Lease, Tenant may extend
the term of this Lease for an additional sixty (60) months by
notifying Landlord of such intention in writing
(“Fourth Extension Period”).
The
maximum term of the Lease
with
four extensions is forty (40) Lease Years.
| 3.6 |
Surrender
of Premises; Holding Over
|
On
the last day or sooner termination of the term of this Lease,
Tenant shall quit and surrender the Premises, together with
all alterations, vacant and free of all tenancies and any
leasehold rights therein and in good condition and repair,
normal wear and tear and damage from casualty excepted, broom
clean and free of violations of applicable laws caused or
permitted by Tenant, its subtenants, licensees,
concessionaires, contractors, agents or employees and shall
surrender all keys for the Premises to Landlord at the place
then fixed for the payment of rent and shall inform Landlord
of all combinations of locks, safes, and vaults, if any, in
the Premises. If Tenant does not do so as set forth above,
then after expiration of this Lease, it will be a
month-to-month tenant upon the applicable conditions of this
Lease at 200% of the then applicable Base Monthly Rent. If the
Premises are not surrendered as and when aforesaid, Tenant
shall indemnify Landlord from and against loss or liability
resulting from the delay by Tenant in so surrendering the
Premises, including without limitation, any claims made by any
succeeding occupant or purchaser founded on such delay.
Tenant’s obligations under this Section shall survive
the expiration or earlier termination of this
Lease.
4. BASE MONTHLY RENT
This
is a triple net lease. It is the intention of Landlord and
Tenant that the Base Monthly Rent (as defined below) and other
sums and charges provided herein shall be absolutely net to
Landlord. The Base Monthly Rent shall be payable in advance in
consecutive monthly installments on the first day of each
month during the Term. Except as otherwise specifically set
forth in this Lease, Tenant shall pay, as additional rent, all
costs, charges, obligations, assessments, and expenses of
every kind and nature against or relating to the Premises or
the use, occupancy, area, possession, leasing, operation,
management, maintenance, or repair thereof, that may arise or
become due during the term hereof, or that may pertain to this
transaction, whether or not now customary or within the
contemplation of the parties hereto, and which, except for the
execution and delivery of this Lease, would have been payable
by Landlord, but in no event shall Tenant be obligated to pay
any (i) of Landlord’s income, profits, gross receipts,
excise, estate or similar taxes, (ii) expenses of debt service
relating to any mortgage, deed of trust or other financing
entered into by Landlord or which shall encumber
Landlord’s interest in the Premises, or (iii) expenses,
costs or charges caused by the gross negligence or willful
misconduct of Landlord, its agents or employees.
Tenant
shall
pay
to Landlord as base monthly rent
(“Base Monthly Rent”) the
sum
of Five Thousand Four Hundred Sixteen and 67/Dollars ($5,416.67)
per month .
Effective
on each Adjustment Date (as hereinafter defined) Base Monthly Rent
shall be increased by TEN PERCENT (10%) of the Base Monthly Rent
payable during the immediately preceding period.
If
the Commencement Date is a date other than the first day of
the month, Base Monthly Rent shall be payable by Tenant to
Landlord in advance commencing upon the Commencement Date
pro-rated based on the ratio that the number of days from the
Commencement Date through the last day in the month containing
the Commencement Date bears to the actual number of days in
such month. Thereafter, Base Monthly Rent shall be payable on
the first day of each calendar month thereafter, without prior
notice, invoice, demand, deduction or offset whatsoever,
except as otherwise provided in this Lease. Landlord shall
have the right to accept all rent and other payments, whether
full or partial, and to negotiate checks and payments thereof
without any waiver of rights, irrespective of any conditions
to the contrary sought to be imposed by Tenant. All rent shall
be paid to Landlord at the address to which notices to
Landlord are given. The Base Monthly Rent for any partial
month shall be prorated based upon the actual number of days
in the period subject to proration.
“Adjustment Date” shall
mean
, as
the case may require, the Fifth (5
th )
,
Tenth
(10
th )
and Fifteenth (15
th )
anniversaries of the Commencement Date (provided, however, if the
Commencement Date is other than the first day of the month, then
“Adjustment Date” shall mean, as the case may require,
the first day of the first month occurring after the Fifth
(5
th ),
Tenth
(10
th )
and Fifteenth (15
th )
anniversaries of the Commencement Date), and the first day of the
First Extension Period, Second Extension Period, Third Extension
Period, Fourth Extension Period.
5. USE
OF THE PREMISES; COMPLIANCE
Tenant
shall use the Premises for a convenience food store and retail
motor fuel sales (“
Initial Use ”),
or for such other uses as Tenant
may
determine in Tenant’s reasonable business judgment and as
Landlord shall approve in Landlord’s reasonable judgment,
provided that such uses: (i) are lawful; (ii) are in compliance
with applicable environmental, zoning and land use laws and
requirements; and (iii) do not violate matters of record or
restrictions affecting the Premises. Notwithstanding the foregoing,
in no event may the Premises be used as a factory, processing or
rendering plant, massage parlor, peep show store, head shop store,
topless or strip club, adult book or video store (which shall mean
a store which primarily sells or offers for sale sexually explicit
printed materials, audio or video tapes, or sexual devices), or
flea market.
Tenant,
at Tenant’s sole expense, promptly shall comply with all
applicable statutes, ordinances, rules, regulations, orders,
covenants and restrictions of record, and requirements of
governmental agencies that are in effect during the term or
any part of the term hereof, regulating the use by Tenant of
the Premises.
6. PROPERTY TAXES, OTHER CHARGES, ASSESSMENTS AND
UTILITIES
| 6.1 |
Tenant’s
Required Payments
|
| |
6.1.1
|
Tenant
shall pay before delinquency and as additional rent, all Property
Taxes and Other Charges (as such terms are defined herein) that
accrue prior to, during, or are otherwise properly allocable to the
term of this Lease. Property Taxes and Other Charges together are
referred to herein as
“Taxes.”
|
| |
(i)
|
“Property Taxes” shall
mean all taxes, assessments, excises, levies, fees, and charges
(and any tax, assessment, excise, levy, fee, or charge levied
wholly or partly in lieu thereof or as a substitute therefor or as
an addition thereto) of every kind and description, general or
special, ordinary or extraordinary, foreseen or unforeseen, secured
or unsecured, whether or not now customary or within the
contemplation of Landlord and Tenant, that are levied, assessed,
charged, confirmed, or imposed on or against the Premises or any
part thereof It is the intention of Landlord and Tenant that all
new and increased taxes, assessments, levies, fees and charges be
included within the definition of Property Taxes for the purpose of
this Lease.
|
| |
(ii)
|
“Other Charges” shall
mean all taxes, assessments, excises, levies, fees, and charges
(including, without limitation, common area
maintenance charges, charges relating to the cost of
providing facilities
or services, and charges relating to documents or instruments of
record affecting or encumbering the Premises), whether or not now
customary or within the contemplation of Landlord and Tenant, that
are levied, assessed, charged, confirmed, or imposed upon, or
measured by, or reasonably attributable to (a) the Premises; (b)
the cost or value of any leasehold improvements made in or to the
Premises by or for Tenant, regardless of whether title to such
improvements is vested in Tenant or Landlord; (c) Base Monthly Rent
and all additional rent payable under the Lease, including, if
applicable, Property Taxes, Other Charges, insurance, maintenance,
and other costs incurred by Tenant by which Landlord may benefit,
including, without limitation, any gross income tax or excise tax
levied by any public or government authority with respect to the
receipt of any such rents and costs; and (d) this transaction or
any document to which Tenant is a party creating or transferring an
interest or an estate in the Premises.
|
| |
6.1.2
|
During
the term of this Lease, Tenant shall also pay before delinquency,
but not as additional rent, all taxes, assessments, excises,
levies, fees and charges, whether or not now customary or within
the contemplation of Landlord and Tenant, that are levied,
assessed, charged, confirmed, or imposed upon, or measured by, or
reasonably attributable to (a) any personal property of Tenant used
in connection with the Premises; (b) the cost or value of
Tenant’s furniture, fixtures, equipment, or personal property
located in the Premises; (c) the possession, leasing, operation,
management, maintenance, alteration, repair, use, or occupancy by
Tenant of the Premises; and (d) any fees, charges, fines,
penalties, costs, assessments, taxes, demands, orders, directives,
or other requirements imposed by any governmental agency asserting
jurisdiction, or under any Environmental Laws which arise from or
relate to Tenant’s use of, or Tenant’s activities at,
the Premises, including, but not limited to, Storage Tank System
registration fees, any other applicable fees, and any consultant or
attorneys’ fees related to or arising under any Environmental
Laws.
|
| |
6.1.3
|
In
addition to the foregoing, during the term of this Lease, Tenant
acknowledges and agrees it is obligated to and shall perform all
obligations of the owner of the Premises under, and pay all
expenses which the owner of the Premises may be required to pay in
accordance with, any declarations or reciprocal easement agreements
or any other documents or instruments of record now affecting the
Premises (herein referred to collectively as the
“REA’s ”).
Tenant shall promptly comply with all of the terms and
conditions
of the REA’s, including without limitation, all insurance
requirements, regardless of whether any such requirements exceed
the requirements otherwise set forth in Section 10
below.
|
Landlord
shall cooperate with tenant as shall be required for Tenant to
comply with the foregoing terms and conditions, including
executing any documents and instruments as owner, which shall
be required in connection therewith.
| 6.2 |
Payments
Not Required by Tenant
|
Anything
herein to the contrary notwithstanding, Tenant shall not be
required to pay any state or federal income or franchise,
gross receipts, estate, profits or excise taxes of Landlord,
or any state or federal estate, succession, inheritance, or
transfer taxes of Landlord or any tax or other charge imposed
with respect to the sale, exchange, financing or other
disposition by Landlord, in whole or in part, of the Premises
or Landlord’s interest in this Lease, or any sales or
rent taxes or similar charges assessed with respect to the
Base Monthly Rent or any additional rent due pursuant to this
Lease. All of the foregoing taxes shall not be deemed to be
included in Taxes and are the sole and exclusive
responsibility of the Landlord, and Landlord shall file all
required returns and make all necessary filings in connection
therewith.
If
any assessment for a capital improvement made by a public or
governmental authority shall be levied or assessed against the
Premises, and the assessment is payable either in a lump sum
or on an installment basis, then Tenant shall have the right
to elect the basis of payment; provided however, throughout
the entire term of this Lease, Tenant shall pay all
assessments that accrue prior to, during, or are otherwise
allocable to the term of this Lease.
Tenant
shall pay when due all charges for water, gas, electricity,
and all other utilities furnished to or used upon the Premises
during the term of this Lease, including all charges for
installation, termination, and relocations of such service.
Landlord, at its option, following any default by Tenant in
making such payments, may require Tenant to furnish Landlord
with evidence of payment of such charges.
| 6.5 |
Tenant’s
Right to Contest Utility Charges, Contest Taxes and Seek Reduction
of Assessed Valuation of the Premises
|
Tenant,
at Tenant’s sole cost and expense, shall have the right,
at any time, to seek a reduction in the assessed valuation of
the Premises or to contest any Taxes or utility charges that
are to be paid by Tenant; provided however, Tenant shall (i)
give Landlord contemporaneous written notice of any contest;
(ii) indemnify and hold Landlord Indemnified Parties (defined
below) harmless from all liability on account of such contest
with respect to Property Taxes; (iii) take such action as is
necessary to remove the effect of any lien which attached to
any of the Premises or the improvements thereon due to such
contest, or in lieu thereof, at Landlord’s election, and
if required by applicable law, furnish Landlord with adequate
security for the amount of the Taxes due plus interest and
penalties; and (iv) in the event of a final determination
adverse to Tenant, prior to enforcement, foreclosure or sale,
pay the amount involved together with all penalties, fines,
interest, costs, and expenses which may have accrued. If
Tenant seeks a reduction or contests any Taxes or utility
charges, the failure on Tenant’s part to pay the Taxes
or utility charges shall not constitute a default as long as
Tenant complies with the provisions of this Section. Tenant,
on final determination of the proceeding or contest, shall
within applicable grace periods pay or discharge any decision
or judgment rendered, together with all costs, charges,
interest, and penalties incidental to the decision or
judgment.
| 6.6 |
Landlord
Not Required to Join in Proceedings or Contest Brought by
Tenant
|
Landlord
shall not be required to join in any proceeding or contest
brought by Tenant unless the provisions of the law require
that the proceeding or contest be brought by or in the name of
Landlord or the owner of the Premises. In that case, Landlord
shall join in the proceeding or contest or permit it to be
brought in Landlord’s name as long as Landlord is not
required to bear any cost.
| 6.7 |
Partial
Lease Years and Adjustment of Taxes
|
Property
Taxes (and Other Charges, as may be applicable) payable by
Tenant in accordance with the terms of this Lease shall be
appropriately adjusted for any partial Lease Year at the end
of the Term. Upon the Expiration Date, Taxes which have
accrued prior to the Expiration Date and are payable after the
Expiration Date, shall be prorated and apportioned as of the
Expiration Date based upon the actual number of days in the
period subject to proration such that Tenant shall bear all
expenses with respect to the Premises up through and including
the Expiration Date. Any amount payable by Tenant shall be
remitted to Landlord within ten (10) business days following
the later of (i) the date the amount payable by Tenant
hereunder is determined and (ii) the Expiration Date. Any
excess prepaid Taxes shall be refunded to Tenant by Landlord
within ten (10) business days of the Expiration Date. Taxes
which cannot be ascertained with certainty as of the
Expiration Date shall be prorated on the basis of the
parties’ reasonable estimates of such amount(s) and
shall be the subject of a final proration as soon thereafter
as the precise amounts can be ascertained. The provisions of
this paragraph shall survive the expiration or termination of
this Lease.
7. FURNITURE, FIXTURES AND EQUIPMENT
| 7.1 |
Furniture,
Fixtures, and Equipment
|
During
the term Tenant may, at Tenant’s expense, place or
install such furniture, trade fixtures, equipment, machinery,
furnishings, face plates of signage and other articles of
movable personal property (collectively, “
Tenant’s Personal Property ”)
on the Premises as may be needed for the conduct of Tenant’s
business. It is expressly understood that the term Tenant’s
Personal Property as used herein shall in no event extend to
leasehold improvements, fixtures or similar “vanilla
shell” items such as light fixtures, HVAC equipment, or other
fixtures and equipment permanently affixed to the Premises. Tenant
is authorized to access Tenant’s Personal Property for
maintenance, repair and replacement purposes during the term of
this Lease.
Tenant
may finance Tenant’s Personal Property at any time and
from time to time during the term of this Lease. Upon request
of Tenant, Landlord shall execute and deliver to any lender a
Landlord’s Waiver in such form as shall be requested by
Tenant and reasonably acceptable to Landlord. Tenant may
remove and replace Tenant’s Personal Property
periodically during the term of this Lease.
| 7.3 |
Removal
of Tenant’s Personal Property at Expiration of
Lease
|
At
any time up to and including the expiration or earlier
termination of the Lease, all or any part of Tenant’s
Personal Property may be removed at the option of Tenant. At
the expiration or earlier termination of the Lease, Landlord
may require Tenant to remove Tenant’s Personal Property
within five (5) business days following receipt of written
notice from Landlord. Tenant immediately shall make such
repairs and restoration of the Premises as may be necessary to
repair any damage to the Premises from the removal of
Tenant’s Personal Property. Any of Tenant’s
Personal Property not so removed shall be deemed abandoned,
and Landlord may cause such property to be removed from the
Premises and disposed of, but the reasonable cost of any such
removal shall be borne by Tenant. The provisions of this
paragraph shall survive the expiration or termination of this
Lease.
Tenant
shall have the right to decorate the Premises and affix signs
customarily used in its business upon the windows, doors,
interior and exterior walls of the Premises, and such
free-standing signs as may seem appropriate to Tenant and are
in compliance with applicable laws and are not expressly
prohibited by any covenants, conditions and restrictions
encumbering the Premises. Upon the expiration or earlier
termination of the Lease, Tenant shall remove such signs
within a reasonable time following the expiration or earlier
termination of the Lease. Tenant promptly shall make such
repairs and restoration of the Premises as are necessary to
repair any damage to the Premises from the removal of the
signs.
8. MAINTENANCE AND REPAIRS OF THE PREMISES
| 8.1 |
Obligation
to Maintain the Premises
|
During
the term of this Lease, Tenant shall, at its own expense, keep
and maintain the entirety of the Premises in good order and
repair, ordinary wear and tear excepted, including, but not
limited to, the interior, exterior, foundations, floors,
walls, roof and structure of the building; the sidewalks,
curbs, trash enclosures, landscaping with sprinkler system (if
installed), light standards, and parking areas which are a
part of the Premises. Tenant shall make such repairs and
replacements as may be necessary, regardless of whether the
benefit of such repair or replacement extends beyond the term
of this Lease. The Premises shall be returned to Landlord at
the termination or expiration of this Lease in as good
condition as received, ordinary wear and tear and casualty
excepted. In the event of destruction of the Premises or any
portion thereof by fire or casualty, the condition of the
Premises upon termination of this Lease shall be
governed
by
Section 11. Landlord shall have no obligation whatsoever to
alter, remodel, improve, repair, renovate, retrofit or
maintain the Premises or any portion thereof.
| 8.2 |
Obligation
to Keep the Premises Clear
|
Tenant
shall keep the Premises, including sidewalks adjacent to the
Premises and loading area allocated for the use of Tenant,
clean and free from rubbish and debris at all times. Tenant
shall store all trash and garbage within the Premises and
arrange for regular pickup and cartage of such trash and
garbage at Tenant’s expense.
9. ALTERATIONS AND IMPROVEMENTS
| 9.1 |
Right
to Make Alterations
|
At
all times during the term of this Lease, Tenant shall have the
right to make alterations, additions and improvements
(collectively,
“Alterations”) to
the interior or exterior of the Premises and parking areas adjacent
to the Premises as more particularly set forth herein. Tenant shall
have the right to make Alterations including, without limitation,
the addition of food service items, in its reasonable business
judgment at any time to the extent such Alterations are
non-structural in nature; provided, however Tenant shall give
Landlord at least ten (10) days’ prior written notice, for
information purposes only, of the commencement of any such
non-structural Alterations that will cost in excess of Four Hundred
Thousand Dollars ($400,000). Notwithstanding the foregoing,
Alterations that are structural in nature and which will cost in
excess of Fifty Thousand Dollars ($50,000) shall not be made by
Tenant without the prior written consent of Landlord, which consent
shall not be unreasonably withheld or delayed, and which shall be
deemed given if not denied within ten (10) business days after
notice to Landlord. Any Alterations made or installed by Tenant
shall remain upon the Premises and, at the expiration or earlier
termination of this Lease, shall be surrendered with the Premises
to Landlord. All Alterations shall be accomplished by Tenant in a
good, expeditious, quality workmanlike manner, in conformity with
applicable laws, regulations, ordinances, orders and covenants,
conditions and restrictions encumbering the Premises. Landlord may,
if required by applicable
law, enter upon the Premises for the purpose of posting appropriate
notices, including, but not limited to, notices of
non-responsibility, provided that Landlord shall give reasonable
notice to Tenant and shall not unreasonably interfere with the
progress of such work. Landlord agrees to cooperate with Tenant in
filing for any required permits and authorizations from the
applicable governmental authorities.
| 9.2 |
Tenant
Shall Not Render Premises Liable For Any Lien
|
Tenant
shall have no right, authority, or power to bind Landlord, or
any interest of Landlord in the Premises, nor to render the
Premises liable for any lien or right of lien for the payment
of any claim for labor, material, or for any charge or expense
incurred to maintain, to repair, or to make Alterations to the
Premises. Tenant shall in no way be considered the agent of
Landlord in the construction, erection, modification, repair,
or alteration of the Premises. Notwithstanding the above,
Tenant shall have the right to contest the legality or
validity of any lien or claim filed against a Premises. No
contest shall be carried on or maintained by Tenant after the
time limits in the sale notice of the Premises for any such
lien or claim unless Tenant (i) shall have duly paid the
amount involved under protest; (ii) shall have procured and
recorded a lien release bond or other security reasonably
acceptable to Landlord in an amount reasonably necessary to
prevent a foreclosure of the Premises as a result of such lien
or claim during the pendency of such contest; or (iii) shall
have procured a stay of all proceedings to enforce collection.
Upon a final adverse determination of any contest, Tenant
shall pay and discharge the amount of the lien or claim
determined to be due, together with any penalties, fines,
interest, cost, and expense which may have accrued, and shall
provide proof of payment to Landlord.
10. INDEMNITY AND INSURANCE
Tenant
shall indemnify, defend, and protect Landlord, its agents,
employees, officers, affiliates, investors, partners and
lenders (the “
Landlord Indemnified Parties ”)
and hold Landlord Indemnified Parties harmless, from any and all
loss, cost, damage, expense and/or liability (including, without
limitation, court costs and reasonable attorneys’ fees)
incurred in connection with or arising at any time and from any
cause whatsoever in or about the Premises which results from or
relates to any claim brought by any person other than Landlord
Indemnified Parties, other than any such loss, cost, damage,
expense and/or liability caused by reason of the gross negligence
or willful misconduct of Landlord Indemnified Parties including,
without limiting the generality of the foregoing: (i) any default
by Tenant in the observance or performance of any of the terms,
covenants, or conditions of this Lease on Tenant’s part to be
observed or performed; (ii) any condition of or on the Premises
arising prior to the expiration of the term of the Lease or any
occurrence or happening on the Premises arising prior to the
expiration of the term of the Lease from any cause whatsoever,
unless such condition, occurrence or happening shall have been
caused by the gross negligence or willful misconduct of Landlord
Indemnified Parties; or (iii) any acts, omissions, or negligence of
Tenant or any person claiming by, through, or under Tenant, or of
the contractors, agents, servants, employees, visitors, or
licensees of Tenant in, on, or about the Premises, prior to the
expiration of the Lease term (including, without limitation, any
holdovers in connection therewith), including, without limitation,
any acts, omissions, or negligence in the making or performance of
any alterations, provided that this Section shall not apply to any
environmental or occupational health matter whatsoever in that
Article 22 deals with any indemnification or other arrangement
between the parties with respect thereto. The provisions of this
Section shall survive the expiration or sooner termination of this
Lease.
| 10.2 |
Insurance
Company Requirement
|
Insurance
required by this Lease shall be issued by companies holding a
general policyholder’s rating of A-VIII or better as set
forth in the most current issue of
Best’s Insurance Guide and
authorized to do business in the states in which the Premises are
located. If this publication is discontinued, then another
insurance rating guide or service generally recognized as
authoritative shall be substituted by Landlord.
| 10.3 |
Insurance
Certificate Requirements
|
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10.3.1
|
Within
ten (10) business days following Landlord’s request
therefore, Tenant shall deliver to Landlord (i) evidence of the
existence and amounts of the insurance with additional insured
endorsements and loss payable clauses as required herein, and (ii)
a Certificate of Liability Insurance in connection with
Tenant’s liability policy(ies), and an Evidence of Property
Insurance in connection with Tenant’s property policy(ies).
No policy shall be cancelable or subject to reduction of coverage
or other material modification except after ten (10) days’
prior written notice to Landlord. Neither the issuance of any
insurance policy required hereunder, nor the minimum limits
specified herein with respect to any insurance coverage, shall be
deemed to limit or restrict in any way the liability of Tenant
arising under or out of this Lease.
|
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10.3.2
|
The
insurance required to be maintained herein may be carried under
blanket or umbrella policies.
|
| 10.4 |
Minimum
Acceptable Insurance Coverage Requirements
|
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10.4.1
|
Tenant
shall, at Tenant’s expense, obtain and keep in full force
during the term of this Lease a policy of combined single limit
bodily injury and property damage insurance written on an
occurrence basis insuring Tenant (with Landlord as an additional
insured) against any liability arising out of ownership, use,
occupancy, or maintenance of the Premises. The insurance shall be
in an amount not less than One Million Dollars ($1,000,000) per
occurrence; provided however, following receipt of written notice
from Landlord the limits of such insurance shall be increased from
time to time during the term of the Lease to such amount as may be
deemed commercially reasonable by Landlord but which shall not be
in excess of the limits generally applicable to other similar
businesses. The policy shall provide blanket contractual liability
coverage. However, the limits of the insurance shall not limit the
liability of Tenant. In addition, Tenant shall, at Tenant’s
expense, obtain and keep in full force during the term of this
Lease an umbrella liability policy in an amount not less than Six
Million Dollars ($6,000,000) in excess of primary insurance. The
insurance to be maintained by Tenant pursuant to this Section
10.4.1 shall be primary and not contributory to any other insurance
maintained by Landlord.
|
| |
10.4.2
|
Tenant
shall, at Tenant’s expense, obtain and keep in force during
the term of this Lease a “Special Form” (as such term
is used in the insurance industry) policy of property insurance
covering loss or damage to the Premises. The insurance shall be in
an amount not less than the full guaranteed replacement cost of the
building(s) (less slab, foundation, supports and other customarily
excluded improvements). The policy shall contain only standard
printed exclusions and include an ordinance or law coverage
endorsement covering increased costs resulting from changes in laws
or codes, and demolition and removal of the damaged structure. In
addition, the policy shall include an endorsement naming Landlord
as “Loss Payee” thereunder; provided, however,
notwithstanding the foregoing, payments up to and including Two
Hundred Fifty Thousand Dollars ($250,000) shall be made directly to
Tenant, and payments in excess of such amount shall be made jointly
to Landlord and Tenant. In no event shall any deductible payable in
connection with such policy exceed the higher of (i) Five Hundred
Thousand Dollars ($500,000), as such amount shall be increased by a
percentage equal to the percentage increase in the Base Monthly
Rent pursuant to this Lease from time to time, or (ii) Twenty Five
percent (25%) percent of the aggregate limit of liability under
such policy.
|
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10.4.3
|
If
the Premises are located in Flood Zone A or V as defined by the
Federal Emergency Management Agency (FEMA), Tenant shall, at
Tenant’s expense, obtain and keep in force during the term of
this Lease a policy of insurance covering loss or damage due to
flood with respect to the Premises. Tenant may obtain such
insurance through any available governmental programs providing for
such coverage. Notwithstanding the foregoing, Tenant shall have the
right to self-insure with respect to such insurance to the extent
such self-insurance is not prohibited under the laws of the state
where the Premises are located.
|
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10.4.4
|
If
the Premises are located within the State of California, or in any
county which is classified as being in an earthquake territory 1
through 11 by Insurance Services Office
(“ISO”) or
an earthquake zone of 1 through 3 by ISO, Tenant shall, at
Tenant’s expense, obtain and keep in force during the term of
this Lease a policy of insurance covering loss or damage due to
earthquake with respect to the Premises. Tenant may obtain such
insurance through any available governmental programs providing for
such coverage. Notwithstanding the foregoing, Tenant shall have the
right to self-insure with respect to such insurance to the extent
such self-insurance is not prohibited under the laws of the state
where the Premises are located.
|
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10.4.5
|
Tenant
shall also obtain and keep in force during the term of this Lease a
worker’s compensation policy, insuring against and satisfying
Tenant’s obligations and liabilities under the worker’s
compensation laws of the state in which the Premises is located,
including Employer’s Liability insurance, in an amount of not
less than Five Hundred Thousand Dollars ($500,000). Notwithstanding
the foregoing, Tenant shall have the right to self-insure with
respect to worker’s compensation to the extent such
self-insurance is not prohibited under the laws of the state where
the Premises are located.
|
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10.4.6
|
Should
any financial assurance requirements pursuant to Environmental Laws
be imposed on Tenant’s use of, or activities at, the
Premises, Tenant promptly and timely shall comply with those
requirements as they take effect. Tenant shall maintain pollution
liability insurance in favor of Landlord which names Landlord as an
additional insured as set out in Section 10.5 herein, and any third
parties which might be affected, in an amount of at least One
Million Dollars ($1,000,000) per occurrence providing coverage for
the investigation and/or remediation of any Hazardous Materials
released at, on, under or from the Premises, property damage
(including, without limitation, natural resource damages) and
compensation for personal injuries
(“Environmental Insurance”).
Within
ten (10) business days following Landlord’s request therefor,
Tenant shall provide a certificate of insurance evidencing such
required coverage prior to the Commencement Date, and such
certificate shall provide that the policy may not be cancelled or
amended in any material respect without thirty (30) days’
prior written notice to Landlord. Tenant may obtain all or any
portion of such insurance through any available governmental
programs or funds providing such coverage.
|
| |
10.4.7
|
If
attached, Landlord acknowledges that the insurance described in the
certificate of liability insurance and evidence of property
insurance attached hereto as
Exhibit “C ”
substantially satisfies the requirements of this
Section.
|
Tenant
shall name Landlord and Landlord’s successor(s) and
assignee(s), and any other affiliate or lender of Landlord as
Landlord may designate from time to time, as additional
insureds and loss payees on all insurance.
| 10.6 |
Mortgage
Endorsement
|
If
requested
by
Landlord, the policies of insurance required to be maintained
hereunder shall bear a standard first mortgage endorsement in favor
of any holder or holders of a first mortgage lien or security
interest in the Premises with loss payable to such holder or
holders as their interests may appear.
| 10.7 |
Renewals,
Lapses or Deficiencies
|
Tenant
sh
|
