Exhibit 10.2
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DOLLAR TREE STORES, INC, AT
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CASTLE SHOPS CHESAPEAKE, VA
Final
Lease for Castle Shops - Chesapeake, VA
TABLE OF
CONTENTS......................»...................»
LEASE
AGREEMENT..........................................................,...............™
A. BASIC LEASE
PROVISIONS
................................................................................................
1
1.
Premises.................................................................................................................................
1
2.
Trade
Name.............................................................................................................................
1
3. Permitted Use
....................................................................................................................
1
4.
Notices............................................................................................»^
5.
Effective Date of Lease
.......................................................................................................
2
6.
Delivery Date for Possession of Premises
(............................................................................
2
7.
Lease Term Commencement
Date...........................................................................................
2
8. Rent Commencement Date
.....................................................................................................
2
9.
Termination
Date......................................................................................................................
2
10.
Rental Terms and
Renewal.....................................................................................................
2
11. Additional Rent
.....................................................................................................................
2
12.
First Year Operating
Charges.................................................................................................
2
13. Annual Increases for Common Area Maintenance
Charge.....................................................
3
14.
Kickout
Clause.......................................................................................................................
3
15.
Exclusive...............................................................................................................................
3
16.
Co-Tenancy...........................................................................................................................
3
17. Tenant
Allowance..................................................................................................................
3
S.
PREM/SES...............................................^
1.
Description..............................................................................................................................
4
2.
Right to
Remeasure................................................................................................................
4
C. LEASE
TERM................................................................,.................^
1.
Lease Effective
Date...............................................................................................................
4
2. Commencement
Certificate.....................................................................................................
4
3.
Option to
Renew.....................................................................................................................
4
D.
CONSTRUCTION
........................................................................................................................
5
1.
Delivery...................................................................................................................................
5
2. Force
Majeure.........................................................................................................................
5
3.
HVAC......................................................................................................................................5
4.
Signage...................................................................................................................................
5
5. Tenant's
Work..,......................................................................,............6»
6. Code
Compliance....................................................................................................................
6
7.
Time is of the
Essence............................................................................................................
6
E.
BASE
RENT.................................................6
F.
TAXES...................................6
1.
Real Estate Taxes and
Assessments......................................................................................
6
2.
Procedure for
Payment...........................................................................................................
6
3.
Municipal, County, State, or Federal
Taxes.............................................................................
7
4.
Other
Taxes......,............................................7
G. COMMON
AREAS................................. 7
1.
Common Areas
....................................................................................................................
7
2.
Common Area Maintenance
Charge........................................................................................
7
Final
Lease for Castle Shops - Chesapeake, VA
3. Procedure for Payment
..................................................................................................
8
4. Audit Rights
.......................................................................
H. UTILITIES AND
RUBBISH DISPOSAL
.........................................................................................
8
1.
Utilities..........................................8
2.
Rubbish
Disposal.....................,....................8
3.
Trash Compactor
..........................................................,.....8
/. USE OF
PREMISES BY
TENANT..........................................................................9
1. Use of
Premises.....,........,.............................................,..............................9
2.
Trade
Name............................................................................................
w
9
3.
Operation of
Business...........................................................................................................
9
4.
Retail
Operations....................................................................................................................
9
J. TENANT'S
COVENANTS WITH RESPECT TO OCCUPANCY
.....................................................
70
1. Landlord
Access...................................................................................................................
10
2.
Tenant's Compliance with
Rules...........................................................................................
10
3.
Landlord's Right to Show
Premises......................................................................................
10
K.
REP>URS4WDALrERAr/OtfS...................__
1. Repairs by
Landlord..............................................................................................................
10
2.
Repairs by
Tenant.................................................................................................................
11
3.
Alterations or Improvements by
Tenant................................................................................
12
4.
Removal of
Improvements....................................................................................................
12
L. INDEMNITY A ND
INSURANCE
...................................................
............................................... 12
1. Indemnification by
Tenant.....................................................................................................
12
2. Indemnification by Landlord
..................................................................................................
12
3.
Tenant's General Liability
Insurance.....................................................................................
13
4. Landlord's
Insurance............................................................................................................13
5.
Self-insure.............................................................................................................................
13
6. Mutual Waiver
....................................................................................................................
13
M. DAMAGE
AND
DESTRUCTION.................................................................................................
14
1. Partial
Damage......................................................................................................................
14
2.
Total
Damage........................................................................................................................
14
3.
Repair....................................................................................................................................
14
4.
Abatement of
Rent................................................................................................................
14
N. ASSIGNING AND
SUBLETTING
...............................................................................................
14
1.
Tenant's
Rights........................................^^
2.
Tenant's
Stock.....................................................................................................................
15
3.
Consent of
Landlord............................................................................................................
15
O.
EMINENT
DOMAW.............................^
1.
Condemnation Award
...........................................................................................................
15
2.
Rights of Termination
...........................................................................................................
15
3.
Restoration..............,.................................^ 15
P. DEFAULT AND REMEDIES
.......................................................................................................
75
1.
Default by
Tenant..................................................................................................................
15
2.
Default by
Landlord...................................................................,........................,..........^ 17
Q.
NOTICES..........................17
1.
Proper Notice
................................................................................................,...„....„,......
17
2.
Change of Address
..............................................................................................................
17
Final
Lease for Castie Shops - Chesapeake, VA
R.
MORTGAGE
SUBORDINATION.......................................17
S. ESTOPPEL
CERTIFICATES.....................................17
T. COVENANT OF
QUIET
ENJOYMENT.........................................................................................
17
U.
LIABILITY OF
LANDLORD..................................................18
1.
Judgments...........................................................................................................................
18
2. Transfer of
Title.................................,........................................
18
V. ENVIRONMENTAL
MATTERS - NO HAZARDOUS
SUBSTANCES.............................................
18
1.
ActS.....................,..........................».....»18
2.
Asbestos........................................................................................19
3.
Tenant's
Operations............................................................................................................
19
4.
Indemnification of Landlord
..................................................................................................
19
5.
Tenant's Limitation of
Liability..............................................................................................
19
IV. MISCELLANEOUS
PKOWS/OWS......................................................^^
1.
Brokers
Commissions...........................................................................................................
19
2.
Surrender and Holding
Over.................................................................................................
19
3. Storage
Trailer......................................................................................................................
19
4. Mechanic's
Liens..................................................................................................................
19
5.
Mortgagee
Clause.................................................................................................................
19
6.
Landlord Title
Report............................................................................................................
20
7.
Recording.............................................................................................................................
20
8.
Severability
........................................................................................................................
20
9. Attorneys'
Fees.......................................................................»...............».............»..........»20
10.
Jury
Trial...........................................................................................................................
20
11.
Waiver
......................................................................................................................20
12.
Force
Majeure......................................................................................................................
20
13.
No Partnership
.................................................................................................................
20
14.
Section
Headings.................................................................................................................
20
15.
Lease Inures to the Benefit of
Assignees.............................................................................
20
16.
No Presumption Against
Drafter..........................................................................................
20
17.
Authority to Sign
Lease.......................................................................................................
21
18.
Cancellation of Existing
Lease............................................................................................
21
19. Entire
Agreement................................................................................................................21
Final
Lease for
Castle Shops - Chesapeake, VA
19th
day of A
ugust
2002,
between
DMK
THIS LEASE, made as of
this
ASSOCIATES,
a Virginia general partnership, whose address is Port Office
Box 869, Virginia Beach, VA 23451 (hereinafter referred to as
"Landlord") and DOLLAR TREE STORES, INC., a Virginia
corporation, whose address is 500 Volvo Parkway, Chesapeake,
Virginia 23320 (hereinafter referred to as
Tenant").
THAT
in consideration of the mutual covenants and agreements herein
contained, it is agreed by
and
between Landlord and Tenant as follows:
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A.
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BASIC
LEASE PROVISIONS
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the
following constitute the basic provisions of this
Lease;
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1.
Premises (as
defined in Section B)
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Shopping Center Address County Township
17,200
square feet 100 linear feet
Tenant's
Proportionate Share. 47.1%. Tenant's Proportionate Share shall
be equal to a fraction, the numerator of which shall be the
number of square feet of gross leasable area within the
Premises (17,200 square feet) ("Premises GLA") and the
denominator of which shall be the Shopping Center gross
leasable area (36,519 square feet) ("Shopping Center
GLA").
d. Space
Number Trade Name.
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3.
Permitted
Use. The retail sale of general merchandise including, but
not limited to, home decor and accessories, costume jewelry,
bathroom accessories, toys, stationery, auto accessories, apparel,
kitchen accessories, household and cleaning products, gift wrap,
greeting cards, party supplies, health and beauty supplies, novelty
candy and snacks, and other incidental food items as well as other
items typically sold in a majority of Dollar Tree stores. Tenant
agrees that no one category will become the primary product line of
the retail business so that no product line will exceed twenty-five
percent (25%) of the sales floor area. Landlord covenants that
Tenant will be permitted to occupy the Premises for the entire
Lease Term for the uses herein specified. Landlord warrants that as
of the date hereof there are no recorded or unrecorded restrictions
or other tenant exclusives which would prohibit Tenant's use of the
Premises as stated above. The exclusives and restrictions in place
in the Shopping Center, if any, are attached as Exhibit
G.
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Final
Lease for Castle Shops - Chesapeake, VA
Post
Office Box 869 Virginia Beach, VA 23451 Telephone:
757-428-8900 Facsimile: 757-428-8814
Tenant
DOLLAR TREE
STORES, INC.
Attn:
Lease Administration Department 500 Volvo Parkway Chesapeake,
VA 23320 Telephone: 757-321-5000 Facsimile:
757-321-5220
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5.
Effective
Date of Lease. Execution of the Lease Agreement and delivery
of the Leases to all parties.
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6.
Delivery Date
for Possession of Premises ("Delivery Date"). January
31,2003.
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7.
Lease
Term Commencement Date. The Lease term shall commence the
earlier of (a) ninety (90) days after the Delivery Date or (b) when
Tenant opens for business.
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8.
Rent
Commencement Date. Base Rent (as defined in Section E) shall
commence the earlier of (a) ninety (90) days after the Delivery
Date or (b) when Tenant opens for business.
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9.
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Termination Date. The Original Lease Term shall terminate on
the last day of the twenty-
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fourth
(24 m )
calendar month following the Lease Term Commencement Date set forth
in
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10.
Rental Terms and
Renewal.
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11.
Additional
Rent. Any amounts to be paid by Tenant to Landlord pursuant
to the provisions of this Lease, including Common Area Maintenance
Charges (as defined in Section G.2), Real Estate Taxes (as defined
in Section F.1), and Insurance (as defined in Section L.4.b),
whether such payments are to be periodic and recurring or not,
shall be deemed to be "Additional Rent" and otherwise subject to
all provisions of this Lease and of law as to the default in the
payment of Base Rent. Additional Rent shall commence on the Rent
Commencement Date.
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$0.72
per square foot $0.82 per square foot $0.04 per square
foot
12.
First Year
Operating Charges
Final Lease for Castle Shops - Chesapeake,
VA
Tenant
will pay its proportionate share of actual operating expenses
for the first year of the Original Lease Term in accordance
with this Section A.12, and Sections F.1 and G.2 of this
Lease; however, Landlord represents the first year's operating
charges will not exceed $1.13 per square foot.
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13.
Annual
Increases for Common Area Maintenance Charge. Annual
increases for the Common Area Maintenance Charge will not exceed
five percent (5%) of such charges on a non-cumulative basis for the
previous year during the entire Lease Term and any Renewal Term(s)
thereof.
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14.
Kickout
Clause. Intentionally
deleted. '
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15.
Exclusive.
Tenant shall have an "exclusive" for a single price point variety
retail store. Landlord will not permit any other occupant in the
Shopping Center to operate a retail variety store whose Principal
Business (hereinafter defined), is selling merchandise at a single
price point or retail operations with the word "Dollar" in their
trade name. For the purpose of this section, Principal Business
shall be defined as selling such single price point merchandise in
twenty-five percent (25%) or more of the sales floor area
(including one-half ("A) of the adjacent
aisle space).
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If
Landlord violates this exclusive, Tenant shall pay one-half (
1
/z) monthly Base Rent plus full Additional Rent beginning
thirty (30) days after the violation occurs and continuing
until the violation is cured. However, if the violation has
not been cured within six (6) months, Tenant shall have the
option to terminate the Lease. If Tenant does not elect to
terminate the Lease, Tenant will continue to pay one-half
(1/2) Base Rent plus full Additional Rent throughout the
remainder of the then current Lease Term, or until the
violation is cured.
If
Tenant does elect to terminate the Lease, Landlord shall
reimburse Tenant within thirty (30) days of Landlord's receipt
of written notice for the unamortized value (using a
straight-line amortization schedule over the Original Lease
Term) of the cost of the Tenant's Improvements and other costs
Incurred by Tenant. Upon such termination, Landlord and Tenant
shall be relieved of any further obligations to the other
hereunder.
16.
Co-Tenancv.
Intentionally deleted.
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17.
Free
Rent. Landlord has agreed that Tenant's Base Rent and
Additional Rent shall be
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abated
in the amount of Forty-Two Thousand Five Hundred Dollars ($42,500).
Said rant
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abatement
is being taken as reduced rent over the first twenty-four (24)
months of the
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Initial
lease term and is already reflected in the reduced rental terms for
Original Lease
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Term
Years 1-2 shown in Section A.10.
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Final
Lease for Castle Shops - Chesapeake, VA
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1.
Description.
Landlord hereby leases to Tenant the Premises ("Premises")
described as follows: The space within a one-story unit (without
basement, balcony, or mezzanine) as measured from the exterior face
of any exterior walls and to the centerline of common walls, and
crosshatched on the Site Plan attached hereto as Exhibit A.
Landlord agrees that there is, as of the date of the Lease,
tractor- trailer and/or dumpster-truck ingress to and egress from
the rear service door of the Premises or Tenant's dumpster, and
throughout the Lease term, as such may be extended, Landlord will
take no action which would deprive Tenant's tractor-trailers or
dumpster-trucks of such continued ingress and egress. Landlord
warrants that no change in the Site Plan shall occur without
Landlord first notifying Tenant. In the event the Shopping Center
is new construction, Landlord shall furnish the engineered plans to
be attached hereto as Exhibit A-2. The "Shopping Center" is more
fully described in the legal description attached hereto as Exhibit
B.
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2.
Right to
Remeasure. Prior to opening the store for business, Landlord
and Tenant reserve the right to remeasure the Premises to determine
the Premises GLA. In the event the remeasurement discloses that the
actual Premises GLA as set forth in the preceding paragraph is
incorrect, Landlord and Tenant shall execute an amendment to the
Lease (i) reflecting the actual Premises GLA; (ii) adjusting the
Base Rent based on the new square footage; (iii) adjusting Renewal
Rent; and (iv) adjusting Tenant's Proportionate Share of the
Shopping Center as defined in Section A.1.c, and all other charges
accruing under the Lease which are based on the actual Premises
GLA. In the event of an adjustment, Tenant will pay any excess Base
Rent or Additional Rent owed to Landlord within thirty (30) days
after receipt of a statement, or Tenant shall take a credit for any
overpayment against the next monthly Base Rent and Additional Rent
payments.
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1.
Lease
Effective Date. The Lease shall be effective upon the mutual
execution of the Lease and delivery of the Lease to all parties.
The Original Lease Term shall commence upon the Lease Term
Commencement Date and shall terminate on the last day of the
twenty-fourth (24 th
) calendar month following the Lease Term Commencement Date as set
forth in Section A.7 hereof. In no event shall the Expiration Date
occur during the months of October, November, or December, and as
such the Termination Date shall be extended to January 31 following
the date of termination of the Lease.
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Commencement Certificate. Upon the Rent Commencement Date
t
Tenant will prepare a written instrument stipulating the Lease Term
Commencement Date, \ the Rent Commencement Date, and the Lease
/Termination Date to be signed by all parties.
Option to Renew. Provided Tenant is not in default beyond
any applicable cure period under any of the terms and
provisions\herein contained at the time of renewal, Landlord hereby
grants to Tenant the option to\renew this Lease for the periods
.stipulated in Section A.10. The First Renewal Term and each
succeeding Renewal Term(s) (if any) shall be based upon all the
terms and conditions contained in this lease except for payment of
Base Rent that shall be increased pursuant to Section A.10
("Renewal Rent). Notice of election by Tenant to exercise each
option shall be given to Landlord in writing at least six (6)
months prior to the expiration of the then current term; provided,
however, that Tenant's right to exercise any option hereunder shall
not expire unless and until Landlord has given Tenant written
notice of Tenant's failure to timely exercise its option. After
receipt of such notice from Landlord, Tenant shall have fifteen
(15) days to notify Landlord if Tenant wishes to exercise such
option.
Final
Lease for Castle Shops - Chesapeake, VA
Delivery. The Delivery Date of the Premises from Landlord to
Tenant shall be on January 31, 2003, As Is. If Landlord is unable
to deliver the Premises within sixty (60) days after the Delivery
Date, Tenant, at its discretion, may either (a) cancel this Lease
with no further obligation hereunder, or (b) receive a credit
against Base Rent equal to Five Hundred Dollars ($500) per day for
each day commencing on the sixty-first (61 st
) day after the Delivery Date above specified and ending with the
date the Premises is delivered to Tenant.
Tenant will not be required to accept delivery of stores between
September 15 th
and October 31 st
.
Force Maieure. The period of time during which Landlord or
Tenant is prevented or delayed in the performance of, or the making
of any improvements or repairs or fulfilling any obligation
required under this Lease due to delays caused by fire,
catastrophe, strikes or tabor trouble, civil commotion, acts of
God, governmental prohibitions or regulations including
administrative delays in obtaining building permits, inability to
obtain materials or other causes beyond the responsible party's
control, shall be added to that party's time for performance
hereof, and Landlord or Tenant shall have no liability by reason
thereof. Tenant's obligation to pay rent is excluded from Force
Majeure except when caused by administrative delays in obtaining
building permits, subject to Tenant timely applying for such
permits.
HVAC. Landlord, upon delivery of the Premises, will warrant
that the HVAC system will be in good working order. System will be
maintained by Tenant, but replaced by Landlord, if age and
condition dictate.
Sign Package. Tenant's sign package is attached as Exhibit D
and made a part of this Lease, Tenant will place no sign on the
exterior of the Premises or on the interior surface of any windows
of the Premises (except for Tenant's standard window decal
treatment which in no event shall occupy more than fifteen percent
(15%) of said window) unless it meets the standards set forth in
Exhibit D attached hereto. Exterior signs are to be provided by
Tenant, individually lit, sixty (60) inch (or larger if allowed by
focal code) channel letters in Dollar Tree's registered trademark
logo and face color 5121-0 Green by Cyro, and are to be located on
the store front. Exterior signage as shown on Exhibit D is hereby
approved by Landlord, subject to local codes. Tenant will have the
right to place temporary signage announcing the opening of a new
store. Tenant agrees not to display any pennants, searchlights,
window signs, or similar temporary advertising media. Tenant may
display banners inside the Premises within two (2) feet from the
front of the store as long as they are professionally
prepared.
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b.
Pylon. Tenant
shall have the right to place signage on any existing or future
pylon signs at no additional cost other than manufacture and
installation of its panel.
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c.
Maintenance and
Removal. Tenant agrees to maintain its signs in good states
of repair and save Landlord harmless from any loss, cost, or damage
resulting from the signs' condition and shall repair any damage
which may have been caused by the erection, existence, maintenance,
or removal of such signs. Upon vacating the Premises, Tenant agrees
to remove all signs and repair all damages caused by such
removal.
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Final
Lease for Castle Shops - Chesapeake, VA
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5.
Tenant's
Work. Tenant's work, if any, is detailed in Exhibit C of
this Lease. Prior to the execution of this Lease, Landlord must
provide Tenant a copy of the Tenant Handbook, if one exists, to be
attached hereto as Exhibit F. Failure to provide Tenant a copy of
the Tenant Handbook will exempt Tenant from abiding by any
conditions contained therein.
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6.
Code
Compliance. Landlord warrants that, to the best of
Landlord's knowledge, as of the Delivery Date, the structure of the
Premises is in compliance with all applicable laws, codes, rules,
and regulations of governmental authorities ("Applicable Laws") and
free from patent and latent defects. In the event it is determined
that the structure is not in compliance with Applicable Laws (i) as
of the Delivery Date, and as a result, the municipality having
jurisdiction over the Premises refuses to issue Tenant a building
permit or certificate of occupancy, or (ii) after the Delivery
Date, if Tenant is notified that the Premises was not in compliance
with applicable laws on the Delivery Date, Tenant shall notify
Landlord, and Landlord shall act promptly to bring the structure
into compliance. The foregoing warranty shall not apply to any
conditions created or related to Tenant's Work, remodeling,
specific use or occupancy of the Premises, or assignment or
subletting of the Premises. In addition, in the event any
structural modifications to the Shopping Center or the Premises are
required by governmental or insurance regulations, Landlord shall
be responsible to perform any such modifications unless required by
Tenant's specific use of the Premises. Tenant shall be responsible
to perform any necessary nonstructural modifications to the
Premises as well as any modifications, regardless of where located,
if occasioned by Tenant's use of the Premises. Nothing contained
herein shall negate Landlord's or Tenant's right to challenge any
such requirements in administrative and/or judicial
proceedings.
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7.
Roof. Landlord
will be responsible to provide a structurally sound, leak-free
roof. Landlord is responsible for all costs associated with
correcting all deficiencies prior to the Delivery
Date.
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8.
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Time is of the Essence. TIME IS OF THE ESSENCE WITH
REGARD TO SECTION D
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Tenant
agrees to pay to Landlord, at the address noted above, or at
such place as Landlord may from time to time designate in
writing, Base Rent for the Premises during the Lease Term, as
set forth in Section A.10, in advance on the first day of each
calendar month. The amounts to be paid by Tenant for Base Rent
and Additional Rent shall be pro-rated on a per diem basis for
any partial month in the first Lease Year.
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1.
Real
Estate Taxes and Assessments. Tenant agrees to pay Tenant's
Proportionate Share of all real estate taxes and assessments,
together with any and all expenses incurred by Landlord in
negotiating, appealing, or contesting such taxes and assessments,
both general and special, levied and assessed against the land,
buildings, and all other improvements which may be added thereto,
or constructed within the Shopping Center. Tenant's Proportionate
Share of taxes will include all discounts and exclude all penalties
and interest. Tenant's Proportionate Share shall be as defined in
Section A.1.c. Tenant's Proportionate Share shall be at the time
such taxes were levied or assessed, but excluding the gross
leasable area of any buildings within the Shopping Center which are
separately assessed for tax purposes and billed to an entity other
than Landlord or paid directly by an entity other than
Landlord.
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2.
Procedure
for Payment. During the Lease Term, or any Renewal Term(s)
thereof, Tenant shall pay to Landlord, monthly in advance, an
amount equal to one-twelfth (1/12 th
)
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Final
Lease for Castle Shops - Chesapeake, VA
of
Tenant's Proportionate Share of real estate taxes and
assessments for the current tax year as reasonably estimated
by Landlord. If Tenant's Proportionate Share of real estate
taxes and assessments with respect to any tax year is less
than the total amount paid by Tenant for such period, the
excess shall be credited against the next rental payment. If
Tenant's Proportionate Share of real estate taxes and
assessments for any tax year exceeds the total amount paid by
Tenant for such period, Tenant shall, within thirty (30) days
of receipt of a copy of the actual tax bill from Landlord, pay
the difference between the actual amount paid by Tenant and
Tenant's Proportionate Share of real estate taxes and
assessments.
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3.
Municipal. County.
State, or Federal Taxes. Tenant shall pay, before
delinquent, all municipal, county, state, or federal taxes assessed
against Tenant's fixtures, furnishings, equipment, stock-in-trade,
or other personal property owned by Tenant in the
Premises.
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4.
Other
Taxes. Should any governmental taxing authority levy,
assess, or impose any tax, excise, or assessment (other than
income, inheritance, gift, or franchise tax) upon or against the
rentals payable by Tenant to Landlord, by way of substitution for
or in addition to any existing tax on land and buildings, Tenant
shall be responsible for and shall pay any such tax, excise, or
assessment, or shall reimburse Landlord for the amount thereof, as
the case may be.
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