<PAGE>
EXHIBIT 10.9
LEASE AGREEMENT
MEYER WAREHOUSE, LLC, LANDLORD
AND
CITI TRENDS, INC., TENANT
INDEX
1. Leased Premises
2. Term of Lease and
Rent
3. Operating Expenses and
Taxes
4. Triple Net Lease
5. Option to Renew
6. General Agreement
Between Landlord and Tenant
7. Failure of Landlord to
Maintain Premises
8. Alterations and
Additions
9. Liens
10. Insurance
11. Waiver of Subrogation
12. Hold Harmless
13. Replacement of Building
14. Condemnation of Premises
15. Entry by Landlord
16. Assignment and
Subletting
17. Holding Over
18. Default
19. Quiet Enjoyment
20. As-is
21. Estoppel Certificate
22. Subordination
23. Notices
24. Authority of Parties
25. Leasing Commission or
Brokerage Fees
26. Late Charges
27. Interest on Past-Due
Obligations
28. Rules and Regulations
29. Security Measures
30. Tenant's Responsibility
Regarding Hazardous Substances
31. Easements and Covenants
32. Landlord's Liability
33. Fair Dealing; Consents;
Assignment
34. Purchase Option
35. General Provisions
Exhibit A Legal Description
Exhibit B Site Plan
Exhibit C Rules and Regulations
Exhibit D Easements and Covenants
Exhibit E Lien Waiver
<PAGE>
LEASE AGREEMENT
THIS LEASE
AGREEMENT ("Lease") is made and entered into this 30th day of
September 2004, by and between MEYER
WAREHOUSE LLC, a Georgia limited liability
company (the "Landlord"), and Citi Trends,
Inc., a Delaware corporation
("Tenant"). This Lease supersedes and
replaces all negotiations and other
agreements between the parties. Tenant has
submitted to Landlord a signed
financial statement demonstrating its net
worth and showing an ability to
perform.
1. LEASED
PREMISES. In consideration of the payment of the rent and the
performance of the agreements of Tenant
hereinafter set forth, Landlord does
hereby lease unto Tenant and Tenant does
hereby lease from Landlord the real
property and improvements, situate in the
County of Chatham, and State of
Georgia, described on Exhibit A (the
"Premises"), including a building
encompassing approximately Seventy-One
Thousand Eight Hundred Seventy-Five
(71,875) gross square feet (the
"Building"), as shown on the drawing attached as
Exhibit B. The Building is numbered as 104
Coleman Boulevard, Savannah, Georgia
31408.
Tenant is
accepting the Premises "as-is." Tenant will return the trash
compactor to Southern Paper Recovery (or
make arrangements to keep the compactor
and have it removed before the Premises are
restored).
2. TERM OF LEASE
AND RENT.
a. TERM. The initial term of this Lease shall be for two (2)
years,
commencing
on October 1, 2004 (the "Commencement Date") and terminating on
the last
day of September, 2006.
b. ANNUAL BASE RENT. The Annual Base Rent for each full year of
the
Term of
this Lease shall be payable in lawful money of the United
States
and shall
be the sum of Two Hundred Fifteen Thousand Dollars ($215,000)
payable in
advance in monthly installments of Seventeen Thousand Nine
Hundred
Sixteen and 67/100 Dollars ($17,916.67) per month. The Annual
Base
Rent is
not calculated on a per-square-foot basis and shall not be
adjusted
regardless of the actual square footage of the Building or the
Premises
except as may elsewhere be provided for in this Lease.
c. OPERATING EXPENSE RENT. This is a triple-net lease. Subject
to
the
provision below concerning expenses on parking lots, roof and
structure
in excess of $10,000, in addition to the payment of Annual Base
Rent,
Tenant shall pay any and all property and maintenance costs and
all
operating
expenses, taxes, and insurance attributable to the Premises
("Operating Expense Rent"), whether directly under Section 3 or
under
Section 4
or by reimbursing Landlord or some combination thereof.
d. PAYMENT OF RENT. Any and all Annual Base Rent and the amount
of
the
Operating Expense Rent, if any, paid directly to Landlord
(collectively "Rent") shall be
paid in advance on or before the first day
of each
calendar month during said term at the office of Landlord at
211
East York
Street, Savannah, Georgia 31401, or at such other place as
Landlord
may designate from time to time in writing. In the event rent
due
under this
Lease shall commence (or end) on any day other than the first
(or last)
day of a calendar month, the rental payments for the partial
month
shall be prorated to reflect the actual number of days the
Premises
were under
lease.
<PAGE>
3.
OPERATING EXPENSES AND TAXES.
a. The term "Operating Expenses and Taxes" means the sum of:
(1) All operating expenses of any kind or nature with respect
to the Premises and shall include, but not be limited to, the
following costs:
(a) building supplies;
(b) utility costs incurred in connection with all energy
sources for the Building, such as natural gas and electricity;
(c) water and sewer service;
(d) janitorial services required by the Lease;
(e) general maintenance of the Premises, including but
not limited to the interior, the exterior, the roof, and the
heating, electrical, and air conditioning systems of the
Building, but excluding repairs of the parking lot, roof and
structure beyond $10,000 per occurrence;
(f) landscaping and maintenance of the Premises;
(g) maintenance, repair, replacement, and striping of
all parking areas, subject to the limitation contained in (e);
(h) fire and extended coverage, public liability
insurance, "all risk" insurance, rental value insurance
covering a period of twelve (12) months, and all other
insurance required to be obtained by the Lease;
(i) labor costs incurred in the operation and
maintenance of the Premises, including wages and other
payments, costs to Landlord for workmen's compensation and
disability insurance, payroll taxes, and reasonable fringe
benefits;
(j) legal, accounting, inspection, and consultation fees
reasonably and necessarily incurred in connection with any
breach of this Lease if Landlord is the prevailing party;
(k) expenditures necessary to comply with ADA and any
other laws, rules, regulations, or orders of any governmental
authority having jurisdiction and expenditures solely of an
energy conservation, security, or handicapped access nature
required by any laws, rules, regulations, or orders of any
governmental authority having jurisdiction.
(2) All taxes
and assessments of any kind or nature against
the Premises, including but not limited to:
(a) any form of assessment, special assessment, license
fee, license tax, business license fee, business license tax,
commercial rental tax, levy, charge, penalty, or other tax
imposed by any authority having the direct
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power to tax, including any city, county, state, or federal
government, or any school, agricultural, lighting, water,
drainage, or other municipal, improvement, or special
district, against the Building, the Premises, or any legal or
equitable interest of Landlord therein but excluding
Landlord's income tax; and
(b) any assessment, tax, fee, levy or charge in
substitution, partially or totally, of or in addition to any
assessment, tax, fee, levy, or charge which may be imposed by
governmental agencies for such services as fire protection;
street, sidewalk, and road maintenance; refuse removal; and
for other governmental services.
(3) Operating Expenses and Taxes shall not include:
(a) depreciation and amortization of Landlord;
(b) interest and principal payments on mortgages and
other debt, financing and refinancing costs, if any, of
Landlord;
(c) any leasing or brokerage commission or compensation,
including any advertising or promotional expense (except in
the event of a breach);
(d) repair expenses of the parking lots, roof, or
structural that are in excess of $10,000 per occurrence. (For
parking
lot repairs, the only expenses for which Landlord
shall be liable are expenses in excess of $10,000 for each
occurrence to repair the parking lot to the condition it is
now; Landlord shall not be responsible for any upgrades.)
(e) payments to any affiliate of Landlord for goods or
services in excess of "market" costs;
(f) Landlord's federal, state, or local income tax; and
(g) Landlord's executive salaries and bonuses.
(4) "Operating Cost Year" means the twelve- (12) month period
beginning on the Commencement Date of this Lease and any
twelve-
(12) month period thereafter.
b. Any Operating Expense Rent payable by Tenant shall be payable
as
follows,
unless otherwise provided: During the term hereof, Tenant shall
pay to
Landlord monthly in advance and every month thereafter during
the
initial term
one-twelfth (1/12th) of the estimated amount of such
Operating
Expense Rent as determined by Landlord (and, if possible, based
on the
actual expenses for the preceding twelve- (12) month period).
Such
initial
budget may be adjusted at the end of each twelve- (12) month
period by
Landlord, based on actual and expected increases; and Tenant
shall pay
installments of Operating Expense Rent according to such
estimate
or any adjustment thereof. In the event such estimated
Operating
Expense
Rent exceeds the actual Operating Expense, Landlord shall
credit
Tenant for
any excess payment within thirty (30) days of the end of each
twelve-
(12) month period. In the event such estimated Operating
Expense
Rent is
less than the actual Operating Expense, Tenant shall pay the
difference
to Landlord promptly within thirty (30) days of demand
therefor.
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c. Landlord shall maintain books of account, which shall be
open
during
normal business hours to Tenant and its representatives for
audit
and
inspection for one (1) year after billing for Operating Expense
Rent
so that
Tenant can determine that such Operating Expense costs have, in
fact, been
paid or incurred and are within the definition of Operating
Expenses.
Tenant shall give Landlord at least thirty (30) days' notice of
such
inspection. Tenant shall pay the costs of such audit and any of
Landlord's out-of-pocket
expenses associated therewith.
d. Even though the Lease has expired and Tenant has vacated the
Premises,
when the final determination is made of Tenant's share of
actual
Operating
Expense for the previous twelve- (12) month period, Tenant
shall,
within thirty (30) days after receipt of written demand
therefore
together
with reasonably detailed support for the charges, pay any
increase
due over the estimated amount previously paid and, conversely,
any
overpayment made shall be rebated by Landlord to Tenant within
thirty
(30) days
after Landlord has determined the amount of Operating Expense
has
exceeded costs incurred. Failure of Landlord or Tenant to
submit
statements
as called for herein shall not be deemed to be a waiver of
Tenant's
and/or Landlord's requirement to pay sums as herein provided,
unless
Landlord fails to submit a final invoice within one (1) year
after
the Lease
terminates or Tenant fails to request a final invoice within
one
(1) year
after the Lease terminates.
e. Notwithstanding subsections (b), (c), and (d) above, Tenant
shall
arrange
for and perform all maintenance and repairs and other items
that
would
constitute operating expenses hereunder (except for payment of
real
estate
taxes and Landlord's insurance). Notwithstanding the foregoing,
Tenant
shall pay in advance to Landlord monthly one-twelfth (1/12) of
the
taxes.
f. Tenant shall pay upon execution hereof and yearly thereafter
to
Landlord
an amount equal to one (1) year's payment of the insurance
Landlord
may maintain under Section 10 below or elsewhere.
4. TRIPLE
NET LEASE.
It is the
purpose and intent of Landlord and Tenant that this Lease be a
triple net Lease.
a. Notwithstanding anything to the contrary anywhere hereunder,
including
in Sections 2, 3, 4, and 6, Tenant shall be responsible, at its
sole cost
and expense, for the entire and full maintenance, repair, and
upkeep of
the Premises and the Building and for the maintenance, repairs,
replacements, and matters, including but not limited to those
described in
said
sections and elsewhere; provided, however, Tenant shall not be
responsible for repairs to parking lot, roof, or structure more
than
$10,000
per occurrence. (For parking lot repairs, the only expenses for
which
Landlord shall be liable are expenses in excess of $10,000 for
each
occurrence
to repair the parking lot to the condition it is now. Landlord
shall not
be responsible for upgrades.) Tenant shall keep the Property,
Premises,
Building, grounds, and parking lot in good working order and
repair and
shall fix or replace all items which are broken. Tenant shall
comply
with all laws, rules, regulations, codes, and ordinances, at
its
expense.
Landlord and its agents shall be entitled to periodically enter
the
Premises for the reason of inspection and to observe whether
the
Tenant is
properly maintaining the Premises. Landlord shall be under no
duty to
inspect. If Landlord does inspect, such inspection shall not be
a
waiver of
any right of Landlord or duty of Tenant. If after inspection of
the
Premises by Landlord, Landlord makes a good-faith determination
that
the
maintenance is inadequate, Landlord shall notify Tenant in writing
of
such
determination. In the event Tenant fails to correct such
situation
within
thirty (30) days of receipt of such
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notice or
if the nature of the situation is such that it cannot
reasonably
be
corrected within a period of thirty (30) days and work thereon has
not
been
initiated and diligently pursued to completion, Landlord shall
have
the right
to declare a default; and Landlord shall also have the right to
elect to
perform and assume the maintenance and repair of the Premises
and
to perform the
obligations set forth in Sections 2,3,4, and 6 hereof, all
at
Tenant's expense. In either event, the provisions of Sections
2,3,4,
and 6.b.
relating to maintenance shall apply.
b. Under Sections 3.e. and 4.a. above, Tenant shall be
responsible
for and
shall provide all service, maintenance, repair, and replacement
to
the
Premises except those repairs or replacements excluded in Section
3a,
including
but not limited to that required under the definition of
Operating
Expenses, including (without limitation) mechanical systems,
lighting,
roof, utilities, roads, parking, landscaping, and grounds. Such
activities
shall be at least consistent with the standard of service for
similar
buildings. If Tenant does not comply, Landlord, at its option
thereafter, may provide all of such service, at Tenant's
expense.
c. In connection with any repair where Tenant asks for
reimbursement, Tenant will notify Landlord at least twenty (20)
days prior
to
initiating the repair and provide copies of the bids and
detailed
information on the repair at that time. Landlord shall only be
liable for
costs
where the notices were timely given and only for reasonable and
necessary
expenses above the $10,000 per occurrence for parking lot,
roof,
and
structure.
d. Tenant shall provide telephone service, comprehensive
general
liability
insurance, workman's compensation insurance (or its
equivalent),
and
security services and insurance on Tenant's property, all at
Tenant's
sole
cost.
e. At Landlord's option, Landlord (if it is providing services
at
Tenant's
expense) may delegate the responsibility of providing services
under this
Lease to one or more rental managers or, with Tenant's prior
consent,
to Tenant.
5. OPTION
TO RENEW. Tenant shall have the option to renew and extend this
Lease for one (1) additional term of one
(1) year, as long as Tenant is not in
default of the lease beyond any applicable
cure periods.
a. Tenant is given the option to extend the term on all the
provisions
contained in this Lease, including Annual Base Rent, for a one-
(1) year
period ("First Extended Term") by giving written notice of
exercise
of the option ("First Option Notice") to Landlord at least six
(6) months
but not more than one (1) year before the expiration of the
initial
term.
b. Tenant, if it exercises the option in a. above and is not in
default
beyond any applicable cure periods, is given the option to
extend
the terms
for a two- (2) year period (the "Second Extended Term") by
giving
written notice of exercise of the option (the "Second Option
Notice")
to Landlord at least six (6) months prior to the end of the
first
extended
term but not more than one (1) year prior to the end of the
first
extended
term. If Tenant exercises this option, the following shall be
applicable:
(1) The Annual Base Rent shall be the greater of (a) $236,500
per year, payable in advance monthly or (b) an amount determined
by
the Consumer Price Index. The index used shall be the Consumer
Price
Index for Savannah, Georgia, if available, or the area selected
by
Landlord near Savannah, Georgia. The amount shall be the Annual
Base
Rent multiplied by a fraction, the denominator (top) of which is
the
Consumer Price Index for the month which is six (6) months prior
to
the beginning of the second extended term and the numerator
(bottom)
of which is the
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<PAGE>
same Consumer Price Index for the month which is six (6) months
prior to the date of the initial term of this Lease.
(2) If Tenant exercises this second extended term, the figure
of $10,000 found in Sections 3.a.(1)(e), 3.a.(3)(d), 4.a., and
4.c.
shall be changed to $150,000.
c. Tenant shall have no other right to extend the term beyond
that
provided
above.
6. GENERAL
AGREEMENT BETWEEN LANDLORD AND TENANT:
a. For and in consideration of leasing of the Premises
aforesaid,
Tenant
does covenant and agree as follows:
(1) to pay the rent for the Premises hereinabove provided
promptly when due and payable;
(2) to pay directly to the provider all charges for telephone
services and utilities to the Premises promptly when due and
payable;
(3) except as specifically permitted herein, to order no
improvements or repairs and, at the expiration of this Lease,
to
surrender and deliver up the Premises in at least as good order
and
condition as when the same were entered upon, ordinary wear and
tear
excepted;
(4) to use the Premises for warehousing, distribution, office,
and related business purposes and for no other purposes unless
approved in advance by Landlord in writing, which approval will
not
be unreasonably withheld; to use the Premises for no purposes
prohibited by the ordinances of the city or county in which the
Premises are located or by the laws, rules, regulations, and
codes
of the United States or the State of Georgia, now in force or
hereafter enacted; and for no unlawful purpose whatsoever;
Tenant
agrees not to request approval for any manufacturing activity or
any
activities involving storage of Hazardous Substances;
(5) to neither permit nor suffer any disorderly conduct, odor,
noise, dust, or nuisance about the Premises having a tendency
to
unreasonably annoy or unreasonably disturb any persons
occupying
nearby properties;
(6) to commit no waste on the Premises;
(7) to not allow or permit heavy trucks on asphalt;
(8) to fully comply with all federal, state and local codes,
statutes, laws, and ordinances ("Law"). Tenant shall be
responsible
to make and pay for any and all repairs and alterations to the
components of the Premises (subject to the terms and provisions
of
this Lease) and to any appurtenances situated upon the Premises
that
may be required of the Landlord or Tenant as a result of any Law
in
effect at the time of execution of this Lease or which may be
enacted during the term of this Lease.
(9) to neither permit nor suffer the Premises, or the walls,
floors, doors, windows, roof, or ceiling thereof, to be
endangered
by overloading;
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(10) to permit Landlord to place a For Rent sign upon the
Premises at any time one hundred eighty (180) days before the
expiration of the term or any extended term of this Lease; and
(11) to surrender and deliver up the possession of the
Premises promptly at the expiration of this Lease or in case of
termination of this Lease on account of a breach of any one or
more
of the covenants or agreements hereof.
b. For and in consideration of this Lease, Tenant does covenant
and
agree to
pay all Operating Expenses and Taxes, including (without
limitation) assessments for water and sewer charges levied against
such
Premises
and all charges for heating, cooling, gas, power, light,
telephone,
and all other services and utilities applied to the Premises:
(1) to keep and maintain all exterior and interior
improvements upon the Premises (including lighting, landscaping,
and
blacktop or its equivalent) clean and neat in appearance and in
good
order and repair and to repair and maintain the same as the
need
arises;
(2) to furnish building standard heating and ventilating and
air conditioning for the office space as appropriate for the
season;
(3) to furnish janitorial service for the Building.
7. FAILURE
OF LANDLORD TO MAINTAIN PREMISES. If Landlord refuses or
neglects to pay an amount required under
Section 3.a. and under Section 4.c.
(which is only to pay for the reasonable
costs for parking lot, roof, and
structure repair costs above $10,000 per
occurrence and any other matters that
Landlord elects to do) and if Tenant has
paid all amounts due hereunder and
performed hereunder and complied with
Section 4.c., Tenant may deduct the amount
owed by Landlord from rent, with applicable
interest. This shall be Tenant's
sole remedy, notwithstanding any other
provision herein.
8.
ALTERATIONS AND ADDITIONS.
a. Tenant shall not make or allow to be made any alterations,
additions,
or improvements to or of the Premises or any part thereof
without
the prior written consent of Landlord, which shall not be
unreasonably withheld. Any alterations, additions, or improvements
to or
of the
Premises (but excepting furniture and equipment) and fixtures
shall
become a
part of the realty and belong to Landlord and shall be
surrendered with the Premises at the expiration of this Lease,
at
Landlord's
option. No consent shall be needed for any non-structural
alterations, additions, or improvements to the Premises which (i)
cannot
reasonably
be expected to decrease the value of the Premises and (ii) the
cost of
which does not exceed $40,000.
b. In the event Landlord consents to the making of any
alterations,
additions,
or improvements to the Premises by Tenant, the same may be made
by Tenant
at Tenant's sole cost and expense in accordance with all
applicable
codes, ordinances, and other governmental regulations or, by
mutual
agreement, by Landlord at Tenant's sole cost.
9. LIENS.
Tenant shall keep the Premises free of mechanics',
materialmen's, judgment, tax, and all other
liens and encumbrances, including
but not limited to those arising out of any
construction or other work done for,
or debts incurred by, Tenant. Not less than
twenty-one (21) days prior to the
commencement of any construction,
alteration, or addition to the Premises,
Tenant shall notify Landlord in writing of
its intention to commence the same
and provide written evidence of its
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ability to pay for the work; and Landlord
shall have the right to post and
maintain on the Premises such notices of
non-responsibility as may be allowed
under applicable law.
10.
INSURANCE.
a. Tenant agrees to provide comprehensive general liability
insurance
with combined single limits of not less than $2,000,000 per
occurrence, written with a company authorized to do business in the
State
of Georgia
and having a Best's Rating of at least A or its equivalent, and
shall name
Landlord, Landlord's mortgagees, or their assigns under said
insurance
policy as additional named insureds. The limit of said
insurance
shall not,
however, limit any liability of Tenant here under. Tenant shall
furnish to
Landlord a certificate of insurance indicating that said policy
is in full
force and effect, that the premium is fully paid, that Landlord
and
Landlord's mortgagees have been named as additional insureds, and
that
said
policy will not be canceled unless at least thirty (30) days'
prior
written
notice of the proposed cancellation has been given to Landlord
and
Landlord's mortgagees.
b. Landlord shall obtain and provide fire and extended coverage
and
property
damage insurance in an amount equal to the fair market value of
the
Premises, written with a company authorized to do business in
the
State of
Georgia and having a Best's Rating of at least A minus or its
equivalent, and may, at Landlord's option, name Tenant under
said
insurance
policy as an additional insured. Upon at least ten (10) days'
prior
written request, Landlord shall furnish Tenant a certificate of
insurance
indicating that said policy is in full force and effect, that
the
premium is fully paid, and that said policy will not be
canceled
unless at
least thirty (30) days' prior written notice of the proposed
cancellation has been given to Tenant. Said policy may contain
rental
interruption insurance, at Landlord's option. Tenant shall
reimburse
Landlord
for the full and complete cost of said policy or, at Landlord's
option, shall
pay the bill for said policy within ten (10) days of
presentment.
c. Tenant shall purchase workmen's compensation insurance (or
its
equivalent) in compliance with all state, federal, and other
governmental
laws,
rules, and regulations.
d. Tenant shall fully insure any and all personal properly and
trade
fixtures
owned by Tenant on the Premises.
e. All insurance of Tenant under this Lease shall be written with
an
insurance
company licensed to do business within the State of Georgia,
with
ratings of A and above, and not disapproved by Landlord (which
disapproval shall not be unreasonable), with such policies to
be
non-assessable and fully paid and with thirty (30) days' prior
notice to
Landlord
before cancellation.
f. Notwithstanding anything herein to the contrary, Tenant
shall
maintain
at least the amounts and coverages which are customarily
maintained, including umbrella coverage. If it is customary to have
more
insurance
or higher limits, Landlord may require Tenant to obtain such
additional
insurance.
g. Upon request, Tenant will provide evidence of insurance. If
Tenant
fails to secure any policy, Landlord, at its option, may secure
the
policy, at
Tenant's expense.
h. Tenant shall cause Landlord and Richard Meyer III to be
named
insureds
or additional insureds, as their interests may appear, under
any
policy
which Tenant obtains.
11.
WAIVER OF
SUBROGATION. Landlord and Tenant agree to request in any
policy providing fire and extended coverage
insurance and any other property
damage insurance as
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required hereunder a waiver of any right of
subrogation any such insurer of
either party may acquire or claim against
the other party by reason of the
payment of any loss under such insurance
with respect to damage to the Premises.
12. HOLD
HARMLESS. Tenant agrees to and shall indemnify and hold
harmless
(including reasonable attorney's fees)
Landlord against and from any and all
claims arising from any negligent act or
omission of Tenant and its officers,
agents, and employees or arising out of the
Premises or for a breach hereunder.
13.
REPLACEMENT OF BUILDING.
a. In the event of a casualty to the Premises, a portion thereof,
or
any
portion of the Building which causes the Building to become
untenantable or prevents Tenant from using the Premises and the
Building
for their
intended purpose on account of damage by fire, act of God, or
other
casualty, Landlord shall be given the option, in Landlord's
sole
discretion, to correct the deficiency or condition which shall
render the
Premises
untenantable or to terminate this Lease.
b. Tenant shall immediately notify Landlord of any damage to
the
building.
Within twenty (20) days after receipt of written notice from
Tenant
describing the damage to the Premises, Landlord shall notify
Tenant
in writing
as to whether or not it elects to repair the same. If in the
reasonable
opinion of Landlord it is not feasible to repair or rebuild the
same,
Landlord may terminate this Lease. In the event Landlord elects
to
repair
said Premises, Landlord shall have one hundred twenty (120)
days
from the
date of its notice to Tenant to effect such repairs; and
Landlord
shall
diligently pursue the repair or replacement of the Building and
the
Premises
and shall use commercially reasonable efforts to cause the
repair
or
restoration to be completed and to restore the Building and
Premises to
at least
the condition existing on the date immediately preceding the
date
the damage
occurred. Landlord will not be liable or responsible if the
repairs
take longer.
c. During the period from the date of Landlord's receipt of
notice
from
Tenant of damage to the Premises until the Premises are restored
to
their
prior condition and possession thereof given to Tenant, the
rent
shall
abate, but only to the extent loss of rents insurance is paid
to
Landlord.
Insurance against loss of rents shall be carried on the
Premises
at the
cost and expense of Tenant. In the event of a scheduled rent
loss
on said
policy, the appropriate proceeds as a result of the same shall
be
paid to
Landlord and shall be credited against rent due from Tenant on
a
monthly
basis for the time the Premises are not tenantable. In the
event
said
repairs have not been completed within the period above
specified,
Tenant, at
its option (if the damage was not the result of Tenant's
negligence
or the wilful act of Tenant and/or its agents, employees, and
subcontractors), which must be exercised in writing within ten (10)
days
from the
expiration of the time period specified and prior to completion
of
construction, may terminate this Lease. If either Landlord or
Tenant
terminates
this Lease as provided in this section, any monies due and
owing to
Landlord shall be paid by Tenant to the date of the casualty or
the date
Tenant vacates the Premises, whichever is later; and all future
obligations on the part of both parties hereto shall cease and
Landlord
shall
incur no further obligations to Tenant whatsoever from and
after
such
termination of this Lease.
d. Notwithstanding anything to the contrary contained in this
section, Landlord, at
its option, shall not have any obligation whatsoever
to repair,
reconstruct, or restore the Premises when the damage resulting
from any
casualty occurs during the last twelve (12) months of the term
of
this Lease
or any extension thereof.
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<PAGE>
e. The parties hereto waive the provisions of any statute which
relate to
termination of leases when leased property is destroyed and
agree that
such event shall be governed by the terms of this Lease.
f. Notwithstanding anything to the contrary contained in this
section,
Tenant, as long as Tenant is not in default, may, in the event
Landlord
elects to terminate the Lease pursuant to this section, at its
option,
within twenty (20) days of termination, elect to purchase the
Premises
in accordance with Section 34 of this Lease. In such event, all
proceeds
or payments from any Insurance required to be carried under the
terms of
this Lease shall be paid to Tenant at closing, other than
rental
interruption insurance.
14.
CONDEMNATION OF PREMISES.
a. If the entire Premises, at any time during the term of this
Lease
or any
extension thereof, shall be taken by the exercise of a power of
eminent
domain, this Lease shall then terminate as of the date of title
vesting in
such proceeding, all rentals shall be paid up to that date, and
Tenant
shall have no claim against Landlord or the condemning
authority
for the
value of the unexpired term of this Lease.
b. In the event of a taking of more than twenty-five (25%)
percent
of the
Building or the Premises which renders the Premises or Building
unfit for
the normal and proper conduct of the business of Tenant, Tenant
shall have
the right to cancel and terminate this Lease effective upon the
actual
taking. Tenant must exercise such option to terminate no later
than
thirty
(30) days after such partial taking. All rentals shall be paid
up
to that
date, and Tenant shall have no claim against Landlord or the
condemning
authority for the value of any unexpired term of this Lease. If
this Lease
shall not be canceled as above provided, it shall continue in
effect;
and the rental after such partial taking shall be that part of
the
rental
herein agreed to be paid which the value of the untaken part of
the
Premises,
immediately after the taking, bears to the value of the entire
Premises
immediately before the taking. If Tenant's continued use of the
Premises
requires alterations and repairs by reason of a partial taking,
Landlord
may elect to terminate this Lease within thirty (30) days after
the actual
taking or, subject to Tenant's right of termination above
provided,
may elect to continue this Lease, in which event Landlord shall
make all
necessary alterations and repairs at its expense which are
required
because of such partial taking. Until such alterations and
repairs
are completed, an equitable abatement of rent shall be made to
Tenant for
any portion of the Premises unfit for occupancy and use in the
conduct of
Tenant's business or inaccessible for the period during which
same is
unfit for such occupancy and use or inaccessible.
c. In the event of any condemnation or taking as aforesaid,
whether
whole or
partial, Tenant shall not be entitled to any part of the award
paid for
such condemnation, Tenant hereby expressly waiving any right or
claim to
any part thereof. Although all such damages awarded in the
event
of any
condemnation are to belong to Landlord, whether such damages
are
awarded as
compensation for diminution in value of the leasehold or to the
fee of the
Premises, Tenant shall have the right to claim and recover from
the
condemning authority, but not from Landlord, such compensation as
may
be
separately awarded or recoverable by Tenant in Tenant's own right
on
account of
any and all damage to Tenant's business by reason of the
condemnation and for or on account of any cost or loss to which
Tenant
might be
put in removing Tenant's merchandise, furniture, fixtures,
leasehold
improvements, and equipment.
d. Notwithstanding anything to the contrary contained in this
section,
Tenant may, in the event any full taking contemplated by this
section
occurs, at its option, elect to purchase the Premises in
accordance
with Section 34 of this Lease; and Tenant shall be
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<PAGE>
entitled
to the whole of any award paid for such condemnation or taking
up
to the
amount of the purchase price.
15. ENTRY
BY LANDLORD. Subject to Tenant's security and safety
requirements, Landlord reserves, and shall
have, the right to enter the Premises
to inspect or to exhibit the Premises to
prospective lenders, purchasers, or
tenants; to post notices of
non-responsibility; to post signs; to make repairs
to the Premises or the Building that
Landlord may reasonably deem necessary,
without abatement of rent, and may for that
purpose erect scaffolding and other
necessary structures where reasonably
required by the character of the work to
be performed, always providing that the
entrances to the Premises, including all
loading docks, shall not be unreasonably
blocked thereby and further providing
that the business of Tenant shall not be
unreasonably impeded or disrupted. In
the event of an emergency, Landlord shall
have the right to use any and all
reasonable means which Landlord may deem
proper to open doors or gates in order
to obtain entry
