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HomeMy WebLinkAbout6B(1)To: Redevelopment Commission From: Staff — Debrah Jennings, Property Manager Subject: Imagine That Lease Date: May 24, 2011 Attached is a draft lease for Imagine That, a new retailer in Downtown South Bend. Imagine That originally was one of the pop -up holiday retailers. The intent for the holiday pop -up shops was to generate permanent occupancy in the Redevelopment Retail vacant spaces. Imagine That has agreed to a one -year lease with Redevelopment Commission. The terms are as follows: • Twelve (12) month lease term beginning June 1, 2011 and ending May 31, 2012 • Base rent is the greater of 10% of gross sales or the minimum starting at $150.00 per month and increasing $50.00 each month until month five (5). • Months six (6) through twelve, Base Tent is the greater of 10% of gross sales or the minimum monthly rent of $453.46. This schedule also includes Common Area Maintenance (CAM) expenses. • Imagine That is responsible for payment of all utilities. • Lessee has the option to terminate lease at anytime with a thirty (30) day written notice. Staff recommends approval. HAWPDATA \correct memo.doc V LEASE By and Between THE SOUTH BEND REDEVELOPMENT COMMISSION and MARLENE HOLLENKAMP dba IMAGINE THAT! May , 2011 w � LEASE THIS LEASE ( "Lease ") is made by and between the City of South Bend, Indiana, Department of Redevelopment, acting by and through the South Bend Redevelopment Commission, (the "Landlord ") and Marlene Hollenkamp dba Imagine That!, (the "Tenant ") as of the date of last execution hereof by Landlord or Tenant (the "Effective Date "). WITNESSETH: ARTICLE I. BASIC LEASE PROVISIONS 1.1. Basic Lease Provisions. The following basic provisions of this Lease (the "Basic Lease Provisions ") constitute an integral part of this Lease and are set forth in this Section 1.1 for the convenience of the parties. Each reference in this Lease to a Basic Lease Provision shall be construed to incorporate all of the terms provided for under such provisions. (a) Leased Premises: 117 S. Michigan Street and as further defined in Section 2_1 hereof, consisting of approximately 1,106 square feet of "Floor Area." (b) Term: Initial Term of One (1) Lease Year, with One (1) option of One (1) Year to extend the Initial Term, all as provided for in Sections 3.1 and 3_2 hereof. (c) Tenant's Use: Retailer selling children's toys, games and related items. (d) Tenant's Trade Name: Imagine That! (or such other trade name taken by the Tenant) (e) Landlord's Address: 1200 County -City Building 227 West Jefferson Boulevard South Bend, Indiana 46601 With copy to: CBRE I Bradley 101 N. Michigan St., Ste 300 South Bend, IN 46601 (f) Tenant's Address: 707 N. Main St. Mishawaka, IN 46545 Attn: Marlene Hollenkamp Phone Number: 574- 254 -1600 Facsimile Number: 574- 256 -9471 (g) Lease Year: A "Lease Year" shall mean each period of twelve (12) consecutive full months, beginning on the Commencement Date as defined in Section 3.1 (such that if the Commencement Date is not the first day of a calendar month, then the first Lease Year shall begin on the first day of the first calendar month following the Commencement Date, and any partial month in which the Commencement Date occurs will be included within the first Lease Year). il s .11` :s (h) Security Deposit: Intentionally Omitted. A. ameaw equal to the fir-°* menth's Modified GFess Refit as seeaFhy deposit shall be due lease. (i) The Building: upen signing of Michigan Street Shops, commonly referred to as 117 — 131 S. Michigan St, South Bend, Indiana, as more particularly described in Exhibit A, and depicted in Exhibit B, each attached hereto and made a part hereof. Q) Effective Date: The date of last execution hereof by Landlord or Tenant. (k) Delivery Date: The date to which possession is delivered to the Tenant as determined in Section 4.1. (1) Commencement Date: The date on which the "Initial Term" commences as determined in Section 3.1. 1.2. Modified Gross Rent. Modified Gross Rent includes Base Rent plus estimated Additional Rent (currently $4.92 per square foot per year) and Percentage Rent, (collectively the "Rent "). Tenant shall pay the greater of a.) ten (10 %) percent of Gross Sales, or b.) a minimum of four hundred fifty three and 46/100 dollars ($453.46) per month to be phased in over the first several months of the Lease as follows: ARTICLE II. PREMISES. 2.1. Premises. Landlord is the owner of the Building. Landlord, in consideration of the Rent, as hereinafter defined, to be paid and the covenants to be performed by Tenant, hereby leases to Tenant, and Tenant hereby leases from Landlord, that certain premises located in the Building and depicted on Exhibit C (the "Premises "), subject to the terms and conditions of this Lease. Landlord reserves the right, with respect to the Building, to modify, increase or decrease: the number, location, dimension, size, and height of buildings and other improvements in the Building; and the identity and type of other tenants. Tenant's interest in the Premises is and shall be subject to all easements, restrictions, liens, encumbrances, rights -of -way, or other matters now or hereafter of record affecting the Premises or the Building. 2.2. Common Areas. Tenant shall have the right, in common with all other tenants in the Building, to use the areas in and around the Building designated by Landlord from time to time as common areas, including, without limitation, hallways, stairs, elevators, sidewalks, interior drives, parking areas and green areas (the "Common Areas "), subject to the Rules, as hereinafter defined. Landlord shall operate, maintain and insure the Common Areas for their intended purposes in such a manner as Landlord shall determine to be necessary or appropriate, including, without limitation, that Landlord at any time may close or change any part of the Common Areas as Landlord determines to be necessary or appropriate. Tenant understands that Landlord does not control the sidewalks located in the Michigan Street right of way. Tenant will file its request with the South Bend Board of Public Works for use of a portion of the sidewalk area for outdoor seating. Landlord will not oppose such request. r All 2.3. Quiet Enjoyment. Landlord warrants that it is the owner in fee simple of the Building, and that it has full right and authority to enter into this Lease, subject to all easements, restrictions, liens, encumbrances, rights - of -way and other matters of record. Landlord agrees that if Tenant observes all of the terms and conditions of, and performs all of its obligations under, this Lease, then, at all times during the Term, subject to the terms and conditions of this Lease, Tenant shall have the peaceable and quiet enjoyment of possession of the Premises, without any manner of hindrance from parties claiming under, by, or through Landlord. ARTICLE III. TERM. 3.1. Initial Term. The "Commencement Date" shall commence on the Effective Date, estimated to be June 1, 2011. The Initial Term shall end on that date which is One (1) Lease Year after the Commencement Date, unless earlier terminated in accordance with the provisions of this Lease (the "Termination Date "). Tenant hereby covenants that within five (5) days after the Gemmeneement Date, it shall emeetite the Gemmeneement Cef4ifieate a�taehed hefete as Exhibit E and made a paf4 hereof-, and deliver it te . 3.2. Extension Options. Provided that no Event of Default, as hereinafter defined, or any facts which with the giving of notice or passage of time, or both, would constitute an Event of Default, exists at the time of the exercise of any option to extend the Term hereof or exists at the end of the Initial Term, Tenant may renew this Lease and extend the Initial Term hereof for one (1) additional period of one (1) year ( "Extended Term "), on the same terms and provisions as provided in this Lease, except that the Rent due in such Extended Term shall be subject to negotiation and shall not be less than eight hundred sixty seven and 45/100 ($867.45) dollars per month, with delivery of written notice of the exercise of such option not later than one hundred and eighty (180) days before the expiration of the Initial Term of this Lease. If Tenant fails to exercise its option to extend the Term hereof in the time periods set forth in this Section 3.2, all such option to extend shall immediately terminate and have no further force or effect, without further notice from Landlord. Any reference in this Lease to the "Term" shall mean the Initial Term as it may be extended pursuant to this Section 3.2. 3.3. Holdinp, Over. If Tenant fails to surrender the Premises upon the expiration of the Term or earlier termination of the Lease (it being agreed that Tenant shall not be permitted to so hold over without Landlord's written consent), Tenant shall pay Landlord for each day of such holding over a sum equal to one hundred and twenty-five percent (125 %) of the Rent payable during the preceding Lease Year prorated for the number of days for such holding over, plus Tenant's Pro Rata Share of all other amounts which Tenant would have been required to pay hereunder had this Lease been in effect (the "Holdover Rent "). If Tenant holds over without Landlord's written consent for a period in excess of thirty (30) days without any action from Landlord to dispossess Tenant, Tenant shall be deemed to occupy the Premises on a tenancy from month -to -month at the Holdover Rent, and all other terms and provisions of this Lease shall be applicable to such period. At any time, either party may terminate such tenancy from month -to -month upon written notice delivered to the other party at least thirty (30) days in advance. Tenant hereby waives any and all notice to which Tenant may otherwise be entitled under the laws of the State of Indiana (the "State ") as a prerequisite to a suit against Tenant for unlawful detention or possession of the Premises. Tenant shall Indemnify, as hereinafter defined, Landlord from any Loss, as hereinafter defined, resulting from such hold over, including without limitation any liability incurred by Landlord to any succeeding tenant of the Premises. ARTICLE IV. CONSTRUCTION 4.1. Landlord's Work. Intentionally Omitted. bandl fd shall PeFf ..., the . OFk aosr.Fibe, in n ,h;h:+ n attaelied hereto and made a part heFeef (the "LandleFd's W-Ek") substantiaNy in aeoerdanee with the plans and , as sueh plans and speeifirations may be modified by Landlord as appFepFiate to eemplete Landlord's Work (the ,> "DeliveEy Date" Landlord's list" substantially oemplete in araeordanee with the Plans, subjeet to delineated "puneh list!' items tha4 do Mt ffffeflt Tenant ffem tising the Wefflises for- the puFpose ofi (a) eendueting its normal business epeFations; er (b) completing Tenant's Wer ",s; hereina;fi�_r defined. On the Delivery Date, Tenant shall have Ul ereetipaney ef the WeFflises, subjeet to all ef the terms and renditions of this Lease. Landler-d shall raer-rerst any "punrah items within sixty (60) days aftef the Delivef�, Dew-, 4.2. Tenant's Work. Intentionally Omitted. I­RAFT� " (a) be deemed . respensibility by bandlerd feF the aeour-ae)', suffleiefley shall not te be an assumptien--ef Tenant's Plans, or- pfepriety ef pursuant te applieable laws, Tenant copies of the oemplete to obtaining a Tenant shall and speeifleatiens (the « Tenant's , shall submit te Landler-d twe (2) „ Tenant's plans and equipment; shall: (i) and « , WOFIE"). Within days , Plans, Landler-d shall netif�, Tenant and appr-evals licenses failures thiFt�, (30) after- Tenant's appFeval. Tenant shall, within ten (10) days after (a) eopies Tenant of an), and ef the Plans te meet with Landlord's Tenant's to the extent neeessaFy to obtain LandleFd's reeeipt of any surah be netice, eause the Plans te be Fevis feF Landlord has appreved the eriginal or- Fevised approval Tenant's and te resubmitted handleFd's appFeval. When approved Tenant's Plans (the « „ and all peFfnits, and approvals; and (b) LandleFd has appFeved Tenant's Plans, whieh approval with shall not be unr-easenably Tenant's . Landlerd's review and approval of Tenant's Plans be deemed . respensibility by bandlerd feF the aeour-ae)', suffleiefley shall not te be an assumptien--ef Tenant's Plans, or- pfepriety ef pursuant te applieable laws, leasehold imprevements, to obtaining a Tenant shall Landlord feF prerequisite permit, submit stiell ehanges to appr-eval, and Tenant shall no Tenant's (i) install its Tenant's (b) Performance. Tenant shall, * Appr-eved Plans: leasehold imprevements, tFade fiMuFes consistent with the Tenant's (i) install its Tenant's WeFlE, Tenant and equipment; shall: (i) and (ii) complete all other- lieenses Work. Prior- feF peFfeFming Tenant's Wer-lq and (ii) deliveF ebtain to Landlord: all peFmits, and appr-evals licenses FeqUired Tenant to perform evidenee reasenably satisfaeteFy to Landlord that (a) eopies Tenant of sueh permits, has and appFevals; and (b) liability, and and dafnage insuFance Pfer.Wed W0FkeFS' Landler-d eempensation, builder-'s r-isk, genefal Tenant's pef!sonal pi!epeFoy WeFk! (a) in aeeer-danee the AppFeved as reasonably Plans may require. lieenses Tenant shalk (i) per-fefm in a and workmanlike Faanner- with in and all peFfnits, and approvals; and (b) geed applieable r-tiles, Fegulafiens, and eemplianee with all applieable > deof!ees , and/er- or-dinanees « ,, . and an), governmental eaentfaeteFs, stibeentraraters, labeFefs guidelines, and suppliers erder-s, and/or- (the (ii) efisure that all in full; observe and all of its obligatiens this perfeRning Lease wefk eF supplying matefials its are paid Rent) and (iii) peFfefm undeF (emeept ebligation to pay at all times aftef the (c) Re-. ARTICLE V. RENT. 5.1. Rent. Commencing on the Effective Date, Tenant shall pay to Landlord, in lawful United States currency without notice, demand, deduction, set -off, counterclaim or recoupment, and without relief from valuation or appraisement laws, the Rent, as set forth in Section 1.2, including Base Rent plus the Additional Rent charges plus Percentage Rent (as herein defined) (collectively, the "Rent "), together with any sales, use, or other taxes assessed thereon for the use and occupancy of the Premises. Rent shall be paid in monthly installments commencing as provided herein and thereafter during the entire Term or Extended Term on or before the fifteenth (15th) day of each calendar month, in advance. Tenant's obligations under this Section 5.1 shall survive the Termination Date. 5.2. Additional Rent. Intentionally Omitted. , Tenant shall pay Tenant's to LandleFd, as part of Rent, Addifienal Ren4 (the "Additi-nnal Re-11"), all etheF sums, esharges, and paWents requir- te be paid by Tenant to LaadleFd undeF this LeaSO, Whe4heF 6F Bet the same are designated as Additional Ren ineluding, but net lifnited to, sum ar ehar-ge is not paid at the tifne pFevided in this Lease, then it shall be eelleetible as Additienal Rent with the fleK4 fnenthly instalifnent ef Rent; pFevided that nething eentained heFeiR shall be deemed to suspend or delay the payment ef su ge-,er- to lifnit any Fight eF Femedy of Landlord with respeet te its nenpaytnent 5.3. Late Charge. Any amount of Rent that is overdue shall bear interest at the lesser o£ (a) the maximum rate payable by Tenant under State law; or (b) the rate of eighteen percent (18 %) per annum from the date E � i when such amount is due and payable under this Lease until the date paid. If any amount of Rent is paid more than five (5) days after its due date, then Landlord shall be entitled to a late payment fee of One Hundred Dollars ($100.00) in addition to the interest charge set forth in this Section 5.3. herein. 5.4. Common Expenses. Intentionally Omitted. Included in the Rent as further defined in Section 1.2 5.5. RealEstate Tax Expenses. Intentionally Omitted. Tenant shall pa�y to , andle_d as Additional l Rent, Tenant's Pro Rata ShaFe of (eelleetively, the "Tax Expenses"): (a) all Foal estate taxes and assessments ef an), nattife levied during the Term on, against, oF with respect to flie Building (the "Real Estate Taxes"); (b) any and all eests and expenses ineur-red by Landlord in eennell with an appeal efthe Real Estate Taxes5 and (c) all Real Estate TwEes levied dufing the Teffa en, against, eF with resperat te Tenant's leasehold interest in the Pfetnises, The ebligatiens of Tenant her-eundef with fespe fit ef Real Estate Taxes levied dufing the final year- ef the Te«m shall s a the Teffnin tier Date. 5.6. Insurance Expenses. Intentionally Omitted. Tenant shall pay to Landlord, as Additional Rent its Pro Rata Share of any and all 0.9415 iflOUFFed by LandWd in eeaneoien with the Gasuaky insufanee, as defined in Seration 8.1, and- thp, I iahility jnsUFanrae, as defined in Seetion 8.1, ineluding, but not limited to, all premiums and Irr IT= 5.5. RealEstate Tax Expenses. Intentionally Omitted. Tenant shall pa�y to , andle_d as Additional l Rent, Tenant's Pro Rata ShaFe of (eelleetively, the "Tax Expenses"): (a) all Foal estate taxes and assessments ef an), nattife levied during the Term on, against, oF with respect to flie Building (the "Real Estate Taxes"); (b) any and all eests and expenses ineur-red by Landlord in eennell with an appeal efthe Real Estate Taxes5 and (c) all Real Estate TwEes levied dufing the Teffa en, against, eF with resperat te Tenant's leasehold interest in the Pfetnises, The ebligatiens of Tenant her-eundef with fespe fit ef Real Estate Taxes levied dufing the final year- ef the Te«m shall s a the Teffnin tier Date. 5.6. Insurance Expenses. Intentionally Omitted. Tenant shall pay to Landlord, as Additional Rent its Pro Rata Share of any and all 0.9415 iflOUFFed by LandWd in eeaneoien with the Gasuaky insufanee, as defined in Seration 8.1, and- thp, I iahility jnsUFanrae, as defined in Seetion 8.1, ineluding, but not limited to, all premiums and Wh 101111" I MM-111§1 '11 IN If IN MTPUR Jill MW MM ITMIlTIM NO "No 5.5. RealEstate Tax Expenses. Intentionally Omitted. Tenant shall pa�y to , andle_d as Additional l Rent, Tenant's Pro Rata ShaFe of (eelleetively, the "Tax Expenses"): (a) all Foal estate taxes and assessments ef an), nattife levied during the Term on, against, oF with respect to flie Building (the "Real Estate Taxes"); (b) any and all eests and expenses ineur-red by Landlord in eennell with an appeal efthe Real Estate Taxes5 and (c) all Real Estate TwEes levied dufing the Teffa en, against, eF with resperat te Tenant's leasehold interest in the Pfetnises, The ebligatiens of Tenant her-eundef with fespe fit ef Real Estate Taxes levied dufing the final year- ef the Te«m shall s a the Teffnin tier Date. 5.6. Insurance Expenses. Intentionally Omitted. Tenant shall pay to Landlord, as Additional Rent its Pro Rata Share of any and all 0.9415 iflOUFFed by LandWd in eeaneoien with the Gasuaky insufanee, as defined in Seration 8.1, and- thp, I iahility jnsUFanrae, as defined in Seetion 8.1, ineluding, but not limited to, all premiums and 5.7. Percentage Rent. Beginning on the Effective Date, Tenant will be liable to Landlord for the Percentage Rent provided herein, in addition to the Rent, and Additional Rent without previous demand therefore and without any abatement, diminution, set off, or deduction. (a) Definition of Gross Sales. For purposes of calculating Percentage Rent, the term "Gross Sales" means the selling price of all merchandise sold in, at, on, or from any part of the Premises and the charges for and services of any sort sold or performed in, at, or from any portion of the Premises, including sales made by Tenant or any subtenant, licensee, assignee or concessionaire and including sales from orders accepted in, on or from the Premises for delivery from places other than the Premises, or orders filled from the Premises even though accepted from places other than the Premises, including orders via electronic, telephonic, video, computer or other technology -based systems now existing or developed in the future. Gross Sales includes all sales and charges, for cash or credit, regardless of collections in the case of the latter. The parties acknowledge that Tenant's successful operation of its business is of prime importance to both parties, and Tenant hereby agrees to use its best efforts to maximize Gross Sales in the Premises for the benefit of Landlord and Tenant. On or before the fifteenth (15th) day of each month during the Term, Tenant will furnish Landlord a statement signed by Tenant showing the amount of Gross Sales for the preceding month. Gross Sales shall be taken from the first day to last day of each calendar month including weekends and holidays, with Percentage Rent calculated there from and due along with such statement on or before the fifteenth (15th) day of each month in advance. Estimation. Intentionally Omitted. - - Expenses, insur-ance Expenses, aa&er- GAM Contributions (eelleetively, the "Genter " payable by Tenant for- any whole er- dur-ing paf4ial ealendar year the TeFfn, Additional Rent, equal menthly installments its We Rata Share Tenant ef of the estimated during suoh whole or- pat4ial ealendar year-. Center- Expenses - - laic- MIr - _ - WIN -- �M­Wftftl 5.8. Utilities. Tenant shall: (a) promptly pay all charges for sewer, water, gas, electricity, telephone, and other utility services used in, on, at, or from, the Premises (all of which utilities shall be separately metered to the Premises) (the "Utility Charges "); and (b) deliver to Landlord, upon demand, receipts or other satisfactory evidence of payment of the Utility Charges. ARTICLE VI. ALTERATIONS AND MAINTENANCE OF AND REPAIRS TO THE PREMISES 6.1. Landlord Repairs. Landlord shall, at its expense: (a) keep the foundations and roof of the Premises in good order, repair and condition; and (b) maintain the exterior walls of the Premises in a structurally sound condition, except to the extent that there is damage caused by any act or omission of Tenant or its employees, agents, contractors, invitees or licensees. Landlord shall be responsible for the installation and replacement of all heating, ventilating, and cooling equipment and systems serving the Premises (the "HVAC Systems") provided however that the Landlord may bill the Tenant as Additional Rent if the Landlord's consultant determines with reasonable certainty that the need to replace the HVAC Systems was as a result of the Tenant's misuse of it or the Tenant's failure to.notify the Landlord of its malfunctioning. The Landlord may enter into a maintenance contract with a reputable company (the "Maintenance Contract "), pursuant to which Maintenance Contract such company shall institute a regularly scheduled program of preventive maintenance and repair of the HVAC Systems to keep and maintain such items in good order, condition, and repair at all times, and any such expenses incurred by the Landlord as a result of such Maintenance Contract or any routine or otherwise insubstantial repairs shall be considered a Common Expense allocable to this Premises only, unless the HVAC Systems service more than on Tenant. Except as provided in this Section 6.1, Landlord shall not be obligated to make repairs, replacements or improvements of any kind to or for the Premises, or any trade fixtures or equipment contained therein, all of which such repairs, replacements or improvements shall be the responsibility of Tenant. 6.2. Tenant Repairs. Except for repairs to be performed by Landlord pursuant to Section 6. 1, Tenant shall: (a) keep the Premises clean, neat, and safe, and in good order, repair and condition, including, without limitation, that Tenant shall make all maintenance, repairs, alterations, additions, or replacements to the Premises as may be required by any Law, or by fire underwriters or underwriters' fire prevention engineers; (b) keep all glass in windows, doors, fixtures, skylights, and other locations clean and in good order, repair, and condition, and replace glass that may be damaged or broken with glass of the same quality; and (c) paint and decorate the Premises as necessary or appropriate to comply with the terms and conditions of this Section 6.2. The Tenant shall be responsible for notifying the Landlord of any damage to, malfunctioning of, or apparent repairs necessary to be made to the HVAC Systems or to the plumbing, electrical or other systems used by or for the Premises. 6.3. Tenant Alterations. (a) Alterations. Tenant, at its sole cost and expense, may install in the Premises such improvements and equipment as Tenant reasonably determines to be necessary or appropriate to conduct its business. Tenant, at its cost and expense, also may make non - structural alterations or improvements to the interior of the Premises if. (i) the cumulative cost of making such alterations or improvements is less than Three Thousand Dollars ($3,000.00); (ii) Tenant delivers to Landlord written notice describing the proposed alteration or improvement with particularity, and provides to Landlord copies of any plans and specifications for the alteration or improvement; and (iii) on the Termination Date, Tenant surrenders the part of the Premises altered or improved in as good a condition as on the date that Tenant accepts the Premises. Tenant shall not, without the prior written consent of Landlord, make any: (1) alterations, improvements, or additions of or to the exterior of the Premises; or (2) except as described above, structural or other alterations, improvements, or additions of or to any part of the Premises. All alterations, improvements, or additions to the Premises, exclusive of moveable equipment, shall become the sole property of Landlord on the Termination Date. (b) Permits. Before making any alterations, improvements, or additions, Tenant shall: (i) obtain all permits, licenses, and approvals necessary for the completion of the improvements, alterations, or additions; and (ii) deliver to Landlord: (A) copies of such permits, licenses, and approvals; and (B) evidence reasonably satisfactory to Landlord that Tenant has procured workers' compensation, builder's risk, general liability, . and personal and property damage insurance as Landlord reasonably may require. Tenant shall at Tenant's cost and expense: (1) complete the construction of any alterations, improvements or additions in a good and workmanlike manner, and in compliance with all Laws and all permits, licenses and approvals; and (2) assure that all contractors, subcontractors, laborers, and suppliers performing work or supplying materials are paid in full. (c) Liens. Tenant shall not suffer or cause the filing of any mechanic's or other lien against the Premises or the Building. Tenant shall further not enter into any contract or agreement that provides explicitly or implicitly that a lien may be attached against the Premises, the Building or any improvements If any mechanic's or other lien is filed against the Premises, the Building, or any part thereof for work claimed to have been done for, or materials claimed to have been furnished to, Tenant, other than for the performance of Landlord's Work, then Tenant shall: (i) cause such lien to be discharged of record within twenty (20) days after notice of the filing by bonding or as provided or required by law; or (ii) provide evidence satisfactory to Landlord that the lien is being contested by proceedings adequate to prevent foreclosure of the lien, together with indemnity satisfactory to 5 i Landlord (in an amount equal to at least one hundred fifty percent (150 %) of the claimed lien) to Landlord within thirty (30) days after notice of the filing thereof. All liens suffered or caused by Tenant shall attach to Tenant's interest only. Nothing in this Lease shall be deemed or construed to: (1) constitute consent to, or request of, any party for the performance of any work for, or the furnishing of any materials to, Tenant; or (2) give Tenant the right or authority to contract for, authorize, or permit the performance of, any work or the furnishing of any materials that would permit the attaching of a mechanic's lien to the Premises or the Building or Landlord's interest therein. 6.4. 5i M. Tenant shall not affix or maintain upon the exterior of the Premises or make visible from the exterior any sign, advertising placard, name, insignia, trademark, or descriptive material, without the prior written approval of Landlord, which approval shall not be withheld unreasonably. No such materials may be displayed or attached which are against any applicable law or regulation. ARTICLE VII. USE. 7.1. Use of the Premises. At all time during the Term, Tenant shall: (a) Use the Premises solely for Tenant's Use, as defined in Section 1.1(c), doing business under Tenant's Trade Name, as defined in Section 1.1(d), and for no other use or purpose; (b) Tenant will open the Premises for business on the Commencement Date and operate one hundred percent (100 %) of the Premises during the entire Term, without interruption, during at least the hours of 10:00 a.m. through 6:00 p.m., Monday through Saturday, or such other minimum hours upon which Landlord may agree from time to time with prior written consent, provided that such operation may be interrupted for such reasonable periods as may be necessary to repair, restore, or remodel the Premises, or for purposes of taking inventory, Tenant shall obtain the prior written consent of Landlord, which approval shall not be unreasonably withheld for such time periods. Tenant will keep its sign and the interior of the Premises lighted at least one (1) hour past such closing time. Tenant agrees that Tenant will open and close at the times set forth above. If Tenant either (i) opens for business more than thirty (30) minutes late; or (ii) closes for business more than thirty (30) minutes early on more than two (2) occasions in any Lease Year, Tenant will pay to Landlord as a further item of Additional Rent, the sum of Two Hundred Fifty Dollars ($250.00) per occurrence thereafter. (c) Remain fully fixtured, fully stocked, and fully staffed at all times. (d) Conduct the business located on the Premises at all times in a high grade and reputable manner so as to produce the maximum volume of sales and transactions and to help establish and maintain a high reputation for the Building. During the Term, Tenant will be considered to "Operate" or be "Operating" in the Premises so long as Tenant is open for business in compliance with this Section 7.1. 7.2. Covenant to Open. Tenant covenants that it will open and begin Operating in the Premises as of the Effective Date. 7.3. Compliance with Law. Tenant shall promptly comply with all federal, state and local Laws and ordinances and lawful orders and regulations affecting the Premises, and the health, cleanliness, safety, construction, occupancy and use of same, in effect from time to time. Tenant shall promptly and fully comply with all federal, state and local Laws and ordinances in effect from time to time prohibiting discrimination or segregation by reason of race, color, religion, disability, gender or national origin or otherwise. 7.4. Operation by Tenant. Tenant covenants and agrees that it: will not place or maintain any merchandise or vending machines outside the building on the Premises; will store garbage, trash, rubbish and other refuse in rat -proof and insect -proof containers with adequate screening to hide such garbage, trash, rubbish and refuse from view on the Premises and the Shopping Center, and will remove the same frequently and regularly, all at Tenant's cost; will not permit any sound system to be audible or objectionable advertising medium to be visible outside the Premises; will not commit or permit waste or a nuisance upon the Premises; will not permit or cause objectionable odors to emanate or be dispelled from the Premises; will not distribute advertising matter to, in or upon any portion of the Building; will not permit the loading or unloading or the parking or standing of delivery vehicles outside any area designated therefore, nor permit any use of vehicles which will interfere with the use of any portion of the Building; will not use the any portion of the Building for promotional activities, to include without limitation rides, carnival type shows, entertainment, outdoor shows, automobile or other product shows; will comply with all Laws, recommendations, ordinances, rules and regulations of governmental, public, private and other authorities and agencies, including those with authority over insurance rates, with respect to the use or occupancy of the Premises, and including, but not limited to, the Occupational Safety and Health Act ( "OSHA ") and the Americans With Disabilities Act ( "ADA "), as the same may be amended from time to time. Tenant covenants and agrees that it will not serve liquor or any other alcoholic beverages in or from the Premises unless Tenant first obtains the written consent of Landlord, which may be granted or withheld in Landlord's sole and absolute discretion. 7.5. Storaee. Tenant shall store in the building on the Premises only merchandise and products which Tenant intends to sell at, in, or from the Premises within a reasonable time after receipt thereof. 7.6. Sales and Use. Tenant shall not permit, allow, or cause to be conducted in the Premises: (a) a public or private auction; or (b) a sale that would indicate to the public that Tenant (i) is bankrupt, (ii) is going out of business, or (iii) has lost or is preparing to terminate its possession of the Premises. The Premises shall not be used except in a manner consistent with the general high standards of the neighborhood, and shall not be used in a disreputable or immoral manner or in violation of federal, state or local Laws or ordinances. Tenant shall not operate the Premises either in whole or in part as a clearance, outlet, off - price, or discount store, provided that nothing in this Section 7.6 is intended to affect Tenant's pricing policies. 7.7. Emissions and Hazardous Materials. (a) Emissions. Tenant shall not, without the prior written consent of Landlord: i. make, or permit to be made, any use of the Premises or any portion thereof which emits, or permits the emission of, an unreasonable amount of dust, sweepings, dirt, cinders, fumes or odors into the atmosphere, the ground or any body of water, whether natural or artificial (including without limitation rivers, streams, lakes, ponds, dams, canals, sanitary or storm sewers, or flood control channels), which is in violation of any Laws; ii. create, or permit to be created, any sound level which will interfere with the quiet enjoyment of any real property by any tenant or occupant of the Building, or which will create a nuisance or violate any Laws; iii. transmit, receive, or permit to be transmitted or received, any electromagnetic, microwave or other radiation which is harmful or hazardous to any person or property in, on or about the Premises or the Building, or which interferes with the operation of any electrical, electronic, telephonic or other equipment wherever located, whether on the Premises or the Building; iv. create, or permit to be created, any ground vibration that is discernible outside the Premises; or V. produce, or permit to be produced, any intense glare, light or heat except within an enclosed or screened area and then only in such manner that the glare, light or heat shall not be discernible outside the Premises. (b) Hazardous Materials. Tenant shall be permitted to use and store those Hazardous Materials, as defined below, that are used in the normal course of Tenant's Use at the Premises, so long as such Hazardous Materials are used, stored, handled and disposed of in compliance with applicable Law. Subject to the exception contained in the preceding sentence, Tenant shall not, without the prior written consent of Landlord, cause or permit, knowingly or unknowingly, any Hazardous Material to be brought or remain upon, kept, used, discharged, leaked, or emitted in or about, or treated at, the Premises or the Building. As used in this Lease, "Hazardous Material(s)' shall mean any hazardous, toxic, infectious or radioactive substance, material, matter or waste which is or becomes regulated by any federal, state or local Law, ordinance, order, rule, regulation, code or any other governmental restriction or requirement, and shall include, but not be limited to, asbestos, petroleum products, and the terms "Hazardous Substance" and "Hazardous Waste" as defined in the Comprehensive Environmental Response, Compensation and Liability Act, as amended, 42 U.S.C. Sec. 9601 et sec . ( "CERCLA "), and the Resource Conservation and Recovery Act, as amended, 42 U.S.C. Sec. 6901 et seq. ( "RCRA "), and the term "Hazardous Chemical" as defined in OSHA (hereinafter "Environmental Laws "). In addition to, and in no way limiting, Tenant's duties and obligations under this Lease, should Tenant breach any of its duties and obligations as set forth in this Section 7.7(b), or if the presence of any Hazardous Material(s) on the Premises results in contamination of the Premises, the Building, any land other than the Building, the atmosphere, or any water or waterway (including without limitation groundwater), or if contamination of the Premises or of the Building by any Hazardous Material(s) otherwise occurs for which Tenant is otherwise legally liable to Landlord for damages resulting therefrom, Tenant shall Indemnify, as hereinafter defined, Landlord from and against any Loss, as hereinafter defined, arising during or after the Term as a result of such contamination. The term "Loss," in this Section 7.7(b) includes, without limitation, costs and expenses incurred in connection with any investigation of site conditions or any cleanup, remediation, removal, fines, monitoring, or restoration work required or imposed by any federal, state or local governmental agency or political subdivision because'of the presence of Hazardous Material(s) on or about the Premises or the Building, or because of the presence of Hazardous Material(s) anywhere else which came or otherwise emanated from Tenant or the Premises. The indemnification contained in this Section 7.7(b) shall survive the Termination Date. 7.8, Inspections. Tenant shall permit Landlord and its employees, agents and contractors to enter the Premises at reasonable times (or at any time in the event of an emergency) for the purpose of: (a) inspecting the Premises; (b) making repairs, replacements, additions, or alterations to the Premises, or to the building in which the Premises is located; and (c) showing the Premises to prospective purchasers, lenders, and tenants. During the last one hundred and eighty (180) days of the Term, Landlord may put a "For Lease" sign in the storefront window of the Premises. 7.9. Sidewalks. Tenant acknowledges that the use of the sidewalks adjoining the Premises is controlled by the South Bend Board of Public Works (the "BPW "). The Landlord makes no representation concerning the availability of such use for dining or other purposes. Tenant understands that it must make application to the BPW for a permit to use the adjoining sidewalks. Landlord shall not oppose such application. ARTICLE VIII. INSURANCE AND INDEMNIFICATION 8.1. Tenant's Liability Insurance. Tenant, at its expense, shall maintain during the Term, commercial general liability insurance on the Premises covering Tenant as the named insured and identifying Landlord as an "additional insured" with terms satisfactory to Landlord and with companies qualified to do business in the State, for limits of not less than $700,000.00 for bodily injury, including death resulting therefrom, and personal injury for any one (1) occurrence, $1,000,000.00 property damage insurance, or a combined single limit in the amount of $6,000,000.00. At all times, Tenant shall maintain limits naming Landlord as an "additional insured" in an amount sufficient to cover any possible liability Landlord may have pursuant the amounts set forth at Indiana Code § 34-13- 3-4, as the same may be amended, superseded or recodified from time to time. 8.2. Hazardous Materials Coverage. Notwithstanding the above mentioned commercial general liability insurance policy limit for Tenant, if Tenant does or intends to bring, possess, use, store, treat or dispose any Hazardous Material in or upon the Premises or the Building, Tenant shall purchase additional public liability insurance and supply Landlord with certificates of insurance reflecting the additional insurance, with coverage of no less than $5,000,000.00 and purchase environmental impairment liability insurance with coverage of not less than $5,000,000.00 with a deductible of not greater than $50,000.00 to insure that anything contaminated with or by the Hazardous Material be removed from the Premises and /or the Building, and that the Premises and /or the Building be restored to a clean, neat, attractive, healthy, sanitary and non - contaminated condition. 8.3. Dram Shop Coverage. In addition to the insurance required under this Article VIII, for any such period of time as Tenant shall serve liquor or other alcoholic beverages in or from the Premises, Tenant agrees to MIT, maintain minimum limits of coverage of at least $2,000,000 covering "liquor law" liability (sometimes also known as "dram shop" insurance) which shall insure Tenant, as the named insured, and Landlord, as the additional insured, and all those claiming by, through or under Landlord, against any and all claims, demands or actions for personal or bodily injury to, or death of, one person or multiple persons in one or more accidents, and for damage to property, as well as for damages due to loss of means of support, loss of consortium, and the like so that at all times Landlord will be fully protected against claims that may arise by reason of or in connection with the sale and dispensing of liquor and alcoholic beverages in and from the Premises. 8.4. Tenant's Additional Insurance. Tenant shall comply with the provisions of the applicable workers' compensation laws, and shall insure its liability thereunder. Tenant, at its expense, shall maintain plate glass insurance covering all exterior plate glass in the Premises or shall be obligated to promptly replace any damaged exterior glass, to the satisfaction of the Landlord within five (5) days of the occurrence of such damage. In the event that the Tenant neither obtains insurance providing for the immediate repair of the damaged glass nor repairs said damage to the satisfaction of the Landlord within five (5) days of the occurrence of such damage, the Landlord may have the damaged glass repaired at the Tenant's expense. 8.5. Policies. All policies of insurance required by this Article to be maintained by Tenant shall: (a) be in a form, and maintained with an insurer, reasonably satisfactory to Landlord; and (b) provide that such policies shall not be subject to cancellation, termination, or change without written notice to Landlord at least thirty (30) days in advance. Tenant shall deposit with Landlord the policy or policies of insurance required to be maintained by Tenant pursuant to this Article VIII, or proper certificates of such insurance, duly executed by the insurance company or the general agency writing such policies and effective not later than the Commencement Date. Tenant shall deposit appropriate renewal or replacement policies or certificates with Landlord not less than ten (10) days prior to the expiration of any such policy or policies. Tenant shall also furnish Landlord with certificates evidencing such coverages from time to time upon Landlord's request. If Tenant shall fail to timely procure or renew any of the insurance required under this Article VIII, Landlord may obtain replacement coverage and the cost of same shall be deemed Additional Rent payable by Tenant with the next installment of Rent thereafter becoming due and payable. 8.6. Indemnity. (a) Definition of "Loss." The term "Loss," as used throughout this Lease, shall mean any and all claims, demands, damages, expenses, fees, costs, fines, penalties, suits, proceedings, actions, causes of action, and losses of any and every kind and nature (including, without limitation, sums paid in settlement of claims and for attorney's fees and court costs). (b) Definition of "Indemnify." The term "Indemnify," as used throughout this Lease, shall mean that Tenant shall indemnify Landlord, save it harmless and, at Landlord's option and with attorneys approved in writing by Landlord, defend Landlord, and its contractors, agents, employees, members, managers, officers, and mortgagees, if any, from any Loss arising out of the condition specified in the particular indemnity provision. (c) General Indemnity. Except for loss, injury or damage caused solely by the willful misconduct of Landlord, its employees, contractors, or agents, Tenant covenants to Indemnify Landlord for any Loss in connection with or arising from any use or condition of the Premises or occasioned wholly or in part by any act or omission of Tenant, its agents, contractors, employees, licensees, invitees or visitors, occurring on or about the Premises and in the case of Tenant, its agents, contractors or employees occurring on or about the Building. Except for loss, injury or damage caused by the negligent acts or willful misconduct of Tenant, its employees, contractors, invitees, licensees, visitors or agents, Landlord covenants to Indemnify Tenant, and save it harmless, from and against any and all claims, actions, damages, injuries, accidents, liability and expense, including reasonable attorneys' fees, in connection with or arising from, or occasioned wholly or in part by, any act or omission of Landlord, its agents, contractors or employees occurring on or about the Building, excluding the Premises. (d) Covenant to Hold Harmless. Landlord shall be defended and held harmless by Tenant from any liability or claims for damages to any person or any property in or upon the Premises unless caused by the willful act of Landlord, including but not limited to the person and property of Tenant and its officers, agents, employees, and shall pay all expenses incurred by Landlord in defending any such claim or action, including without limitation ( Xa attorney fees of Landlord and any judgment or court costs. All property kept, stored or maintained in the Premises shall be so kept, stored or maintained solely at the risk of Tenant The Landlord shall not be liable for damage caused by hidden defects or failure to keep said Premises in repair, and shall not be liable for any damage done or occasioned by or from plumbing, gas, water, steam, or other pipes, or sewerage, or the bursting or leaking of plumbing or of any plumbing or heating fixtures or waste or soil pipe existing in connection with the Building or Premises, nor for damage occasioned by water, nor for any damages arising from negligence of co- tenants or other occupants of the Building, or the agents, employees or servants of any of them, or of any owners or occupants of adjacent or contiguous property. The Landlord shall not be liable for any injury to the Tenant, its employees and agents or any other person, occurring on said Premises, irrespective of whether said injury is caused by a defect in said Premises or by reasons of said Premises becoming out of repair or arising from any other cause whatsoever, and the Landlord shall not be liable for damage to Tenant's property or to the property of any other person which may be located in or upon said Premises and the Tenant agrees to indemnify and save harmless the Landlord from any and all claims arising out of injuries to persons or property occurring on said Premises. 8.7. Release of Subrogation. Each party hereto does hereby release and discharge the other party from any liability, which the released party would have had (but for this section) to the releasing party, arising out of or in connection with any accident or occurrence or casualty: (a.) which is or would be covered by a fire and extended - coverage policy with vandalism and malicious mischief endorsement or by a sprinkler leakage or water damage policy, regardless of whether or not such coverage is being carried by the releasing party, and (b.) to the extent of recovery under any other casualty, which accident, occurrence or casualty may have resulted in whole or in part from any act or neglect of the released party, its officers, agents or employees; and insofar as Tenant is the releasing party, it will also release the other tenants in the Building from any such liability as if the other tenants were each a released party under this section. Notwithstanding anything contained in this Lease to the contrary, Landlord shall not be liable for any damage to person or party arising from the negligent act or omission or willful misconduct of any other tenant or occupant of the Building, and Tenant hereby expressly waives any claim for such damages. 8.8. The Tenant will not allow said Premises to be used for any purpose that will increase the rate of insurance thereon, nor to be occupied in whole or in part by any other person. ARTICLE IX. CASUALTY AND CONDEMNATION. 9.1. Casual . (a) Insubstantial Damaee. If the Premises is damaged by fire or any other casualty (the "Casual Damaee "), and the estimated cost to repair such Casualty Damage is less than fifty percent (50 %) of the estimated cost to replace the Premises, then Landlord shall repair such Casualty Damage so long as sufficient insurance proceeds recovered as a result of such Casualty Damage remain after: (i) Landlord's mortgagee has withheld any amount of the proceeds to which it is entitled, if any; and (ii) deduction for any expenses incurred in collecting the insurance proceeds. Notwithstanding anything to the contrary set forth herein, in no event shall Landlord be required to repair or replace: (1) the improvements to the Premises made by Tenant; or (2) any trade fixtures, equipment, or inventory of Tenant (or any other person or entity) located on, in, or about the Premises. (b) Substantial Damage. If (i) there is Casualty Damage to the Premises, and the cost to repair such Casualty Damage is equal to or greater than fifty percent (50 %) of the estimated cost to replace the Premises; (ii) there is Casualty Damage to the building of which the Premises is apart, and the cost to repair such Casualty Damage is equal to or greater than twenty-five percent (25 %) of the cost to replace such building; or (c) there is Casualty Damage to the buildings (taken in the aggregate) in the Building, and ,the cost to repair such Casualty Damage is equal to or greater than twenty-five percent (25 %) of the cost to replace such buildings; then Landlord may elect either to: (1) repair or rebuild the Premises, the building of which the Premises is a part, or the aggregate attorney fees of Landlord and any judgment or court costs. All property kept, stored or maintained in the Premises shall be so kept, stored or maintained solely at the risk of Tenant The Landlord shall not be liable for damage caused by hidden defects or failure to keep said Premises in repair, and shall not be liable for any damage done or occasioned by or from plumbing, gas, water, steam, or other pipes, or sewerage, or the bursting or leaking of plumbing or of any plumbing or heating fixtures or waste or soil pipe existing in connection with the Building or Premises, nor for damage occasioned by water, nor for any damages arising from negligence of co- tenants or other occupants of the Building, or the agents, employees or servants of any of them, or of any owners or occupants of adjacent or contiguous property. The Landlord shall not be liable for any injury to the Tenant, its employees and agents or any other person, occurring on said Premises, irrespective of whether said injury is caused by a defect in said Premises or by reasons of said Premises becoming out of repair or arising from any other cause whatsoever, and the Landlord shall not be liable for damage to Tenant's property or to the property of any other person which may be located in or upon said Premises and the Tenant agrees to indemnify and save harmless the Landlord from any and all claims arising out of injuries to persons or property occurring on said Premises. 8.7. Release of Subrogation. Each party hereto does hereby release and discharge the other party from any liability, which the released party would have had (but for this section) to the releasing party, arising out of or in connection with any accident or occurrence or casualty: (a.) which is or would be covered by a fire and extended - coverage policy with vandalism and malicious mischief endorsement or by a sprinkler leakage or water damage policy, regardless of whether or not such coverage is being carried by the releasing party, and (b.) to the extent of recovery under any other casualty, which accident, occurrence or casualty may have resulted in whole or in part from any act or neglect of the released party, its officers, agents or employees; and insofar as Tenant is the releasing party, it will also release the other tenants in the Building from any such liability as if the other tenants were each a released party under this section. Notwithstanding anything contained in this Lease to the contrary, Landlord shall not be liable for any damage to person or party arising from the negligent act or omission or willful misconduct of any other tenant or occupant of the Building, and Tenant hereby expressly waives any claim for such damages. 8.8. The Tenant will not allow said Premises to be used for any purpose that will increase the rate of insurance thereon, nor to be occupied in whole or in part by any other person. ARTICLE IX. CASUALTY AND CONDEMNATION. 9.1. Casual . (a) Insubstantial Damaee. If the Premises is damaged by fire or any other casualty (the "Casual Damaee "), and the estimated cost to repair such Casualty Damage is less than fifty percent (50 %) of the estimated cost to replace the Premises, then Landlord shall repair such Casualty Damage so long as sufficient insurance proceeds recovered as a result of such Casualty Damage remain after: (i) Landlord's mortgagee has withheld any amount of the proceeds to which it is entitled, if any; and (ii) deduction for any expenses incurred in collecting the insurance proceeds. Notwithstanding anything to the contrary set forth herein, in no event shall Landlord be required to repair or replace: (1) the improvements to the Premises made by Tenant; or (2) any trade fixtures, equipment, or inventory of Tenant (or any other person or entity) located on, in, or about the Premises. (b) Substantial Damage. If (i) there is Casualty Damage to the Premises, and the cost to repair such Casualty Damage is equal to or greater than fifty percent (50 %) of the estimated cost to replace the Premises; (ii) there is Casualty Damage to the building of which the Premises is apart, and the cost to repair such Casualty Damage is equal to or greater than twenty-five percent (25 %) of the cost to replace such building; or (c) there is Casualty Damage to the buildings (taken in the aggregate) in the Building, and ,the cost to repair such Casualty Damage is equal to or greater than twenty-five percent (25 %) of the cost to replace such buildings; then Landlord may elect either to: (1) repair or rebuild the Premises, the building of which the Premises is a part, or the aggregate buildings in the Building, as applicable; or (2) terminate this Lease upon delivery of written notice to Tenant within ninety (90) days after the occurrence of the Casualty Damage. (c) Partial Abatement of Rent. Base Rent shall be abated proportionately (based upon the proportion that the unusable space in the Premises due to the Casualty Damage bears to the total space in the Premises) for each day that the Premises or any part thereof is unusable by reason of any Casualty Damage. (d) Repair of Tenant Improvements. If Landlord is required or elects to repair the Premises, then Tenant shall repair or replace: (i) the alterations, improvements, and additions to the Premises made by Tenant; and /or (ii) any equipment of Tenant located on, in, or about the Premises. (e) Notice. Tenant shall give Landlord prompt written notice of any Casualty Damage in or to the Premises or the Common Areas of which Tenant has knowledge. 9.2. Condemnation. If. (a) all or a substantial part of the Premises is taken or condemned for public or quasi- public use under any statute or by the right of eminent domain; or (b) all or a substantial part of the Premises is conveyed to a public or quasi- public body under threat of condemnation (collectively, the "Condemnation "); and the Condemnation renders the Premises unsuitable for use for Tenant's Use, then, at the option of either Landlord or Tenant exercised within ninety (90) days after the Condemnation occurs: (i) this Lease shall terminate as of the date possession of all or such part of the Premises is taken by, or conveyed to, the condemning authority; (ii) all Rent shall be apportioned as of the date that possession of all or such part of the Premises is taken by, or conveyed to, the condemning authority; and (iii) all obligations hereunder, except those due or mature, shall cease and terminate. If there is a Condemnation with respect to: (A) more than twenty-five percent (25 %) of the square footage of the building of which the Premises is a part; or (B) more than twenty-five percent (25 %) of the aggregate square footage of the Building; then Landlord, at its option, exercised within ninety (90) days after the Condemnation occurs, may elect to terminate this Lease as of the date possession of such square footage is taken by, or conveyed to, the condemning authority, and: (i) all Modified Gross Rent shall be apportioned as of the date that possession of such square footage is taken by, or conveyed to, the condemning authority; and (ii) all obligations hereunder, except those due or mature, shall cease and terminate. All compensation awarded or paid for the Condemnation (the "Condemnation Proceeds ") shall belong to and be the sole property of Landlord;.provided that Landlord shall not be entitled to the amount of any Condemnation Proceeds awarded or paid solely to Tenant for loss of business or costs and expenses of relocation and removing improvements and equipment. If neither Landlord nor Tenant elects to terminate this Lease pursuant to this Section 9.2, then Landlord shall be responsible for the performance of all work necessary to make the Premises usable by Tenant; provided that Landlord shall not be obligated to incur costs for such work in excess of the Condemnation Proceeds awarded or paid to Landlord and remaining after: (y) Landlord's mortgagee has withheld any amount of the proceeds to which it is entitled, if any; and (z) deduction for any expenses incurred in collecting the Condemnation Proceeds. If neither Landlord nor Tenant elects to terminate this Lease pursuant to this Section 9.2, or if any Condemnation is temporary in nature, then Base Rent shall be abated proportionately (based upon the proportion that the that area Premises taken by, or conveyed to, the condemning authority bears to the total space in the Premises) for each day that the Premises or any part thereof is unusable by reason of the Condemnation. ARTICLE X. SURRENDER. 10.1. Surrender of Leased Premises. Except as herein otherwise expressly provided in this Article X, Tenant shall surrender and deliver up the Premises, together with all property affixed to the Premises, to Landlord at the expiration or other termination of this Lease or of Tenant's right to possession hereunder, without fraud or delay, in good order, condition and repair except for reasonable wear and tear after the last necessary repair, replacement, or restoration is made by Tenant, free and clear of all liens and encumbrances, and without any payment or allowance whatsoever by Landlord on account of any improvements made by Tenant. 10.2. Removal of Certain Property. All furniture and business equipment furnished by or at the expense of Tenant shall be removed by or on behalf of Tenant at or prior to the expiration or other termination of this Lease or of Tenant's right of possession hereunder, but only if, and to the extent, that the removal thereof will not cause r physical injury or damage to the Premises or necessitate changes or repairs to the same. Tenant repair and restore any injury or damage to the Premises arising from such removal so as to return the Premises the condition described in Section 10.1 above, or alternatively, Tenant shall pay or cause to be paid to Landlord one hundred ten percent (110 %) of the cost of repairing or restoring injury or damage with such costs to be considered Additional Rent and shall be deemed due and payable as of the date on which surrender by Tenant is required under this Lease. 10.3. Property Not Removed. Any personal property of Tenant which shall remain in or upon the Premises after Tenant has surrendered possession of the Premises shalt be deemed to have been abandoned by Tenant, and at the option of Landlord, such property: (a) shall be retained by Landlord as its property; (b) shall be disposed of by Landlord in such manner as Landlord shall determine, without accountability to any person; or (c) shall be removed by Tenant within three (3) business days at Tenant's expense upon written request from Landlord or such Tenant fails to remove such property within such timeframe Landlord may remove such property at Tenant's expenses, charging Tenant one hundred ten percent (110 %) of the costs incurred by Landlord to remove said items, which funds shall be due immediately upon notification of Tenant of such charges. Landlord shall not be responsible for any loss or damage occurring to any property owned by Tenant remaining in the Premises after Tenant surrenders possession thereof. 10.4. Survival of Terms. The terms of this Article X and other terms of this Lease referred to herein shall survive any termination of this Lease. ARTICLE XI. DEFAULT. 11.1. Events of Default. Each and all of the following events shall be deemed an "Event of Default" by Tenant under this Lease: (a) Nonpayment. Tenant's failure to pay Base Rent, Additional Rent, or other sums or charges that Tenant is obligated to pay by any provision of this Lease when due. (b) use of Insurance. Any failure to maintain the insurance coverages required to be maintained by Tenant under this Lease. (c) All Other Lease Violations. Tenant's failure to perform or observe any other covenant, condition, or agreement of this Lease, which failure is not cured within thirty (30) days after the giving of notice thereof by Landlord specifying the items in default unless such default is of such nature that it cannot be cured within such thirty (30) day period, in which case no Event of Default shall occur so long as the Tenant shall commence the curing of the default within such thirty (30) day period and shall thereafter diligently prosecute the curing of same; provided, however, if the Tenant shall default in the performance of any such covenant or agreement of this Lease more than one time in any twelve (12) month period notwithstanding that such default shall have been cured by Tenant, the second and further defaults in said twelve (12) month period may be deemed by Landlord, in its sole discretion, an Event of Default without the ability for cure. (d) Falsification of Information. If Tenant, any guarantor of Tenant's obligations under this Lease, or any agent of Tenant falsifies any report in any material respect or misrepresents other information in any material respect required to be furnished to Landlord pursuant to this Lease. (e) Merger or Consolidation. If Tenant is merged or consolidated with any other entity, or there is a transfer of a controlling interest in Tenant, other than as permitted in Section 13.1(b) of this Lease. (f) Tenant's or Guarantor's Death, Dissolution or Liquidation. The death of Tenant or any guarantor of Tenant's obligations under this Lease; or the commencement of steps or proceedings toward the dissolution, winding up, or other termination of the existence of Tenant or of any guarantor of Tenant's obligations, or toward the liquidation of either of their respective assets. q (g) Bankruptcy. The commencement of a case under any chapter of the United States Bankruptcy Code by or against Tenant or any guarantor of Tenant's obligations hereunder, or the filing of a voluntary or involuntary petition proposing the adjudication of Tenant or any such guarantor as bankrupt or insolvent, or the reorganization of Tenant or any such guarantor, or an arrangement by Tenant or any such guarantor with its creditors, unless the petition is fled or case commenced by a party other than Tenant or any such guarantor and is withdrawn or dismissed within thirty (30) days after the date of its filing. (h) Assignment or Attachment. The making of an assignment by Tenant or any guarantor of Tenant's obligations hereunder for the benefit of its creditors, or if in any other manner Tenant's interest in this Lease passes to another by operation of law, including, without limitation, by attachment, execution, or similar legal process, which is not discharged or vacated within thirty (30) days, except as permitted under this Lease. (i) Appointment of Receiver or Trustee. The appointment of a receiver or trustee for the business or property of Tenant or any guarantor of Tenant's obligations hereunder, unless such appointment shall be vacated within ten (10) days after its entry. 0) Inability to Pay. The admission in writing by Tenant or any guarantor of Tenant's obligations under this Lease of its inability to pay its debts when due. (k) Breach by Guarantor. The breach by any guarantor of any of that guarantor's obligations under its guaranty. (1) As Otherwise Provided. The occurrence of any other event described as a default elsewhere in the Lease or any amendment thereto, regardless of whether such event is defined as an "Event of Default." 11.2. Remedies. Upon the occurrence of an Event of Default, Landlord, without notice to Tenant in any instance (except where expressly provided for below or by applicable law) may do any one or more of the following: (a) Satisfy Tenant Obligations. Landlord may perform, on behalf of and at the expense of Tenant, any obligation of Tenant under this Lease which Tenant has failed to perform and of which Landlord has given Tenant notice (entering upon the Premises for such purpose, if necessary), the cost of which performance by Landlord, plus interest thereon at the lesser of (i) the highest rate permitted by law, or (ii) eighteen percent (18 %) per annum from the date of such expenditure, and reasonable cost and expense incurred by Landlord, shall be deemed Additional Rent and shall be payable by Tenant to Landlord with the first Rent installment thereafter becoming due and payable. The performance by Landlord of any Tenant obligation under this Section 11.2(a) shall not be construed either as a waiver of the Event of Default or of any other right or remedy of Landlord with respect to such Event of Default or as a waiver of any term or condition of this Lease. Notwithstanding the provisions of this Section 11.2(a) and regardless of whether an Event of Default shall have occurred, Landlord may exercise the remedy described in this Section 11.2(a) without any notice to Tenant if Landlord, in its good faith judgment, believes that it or the Premises would be materially injured by failure to take rapid action or if the unperformed obligation of Tenant constitutes an emergency. (b) Termination of Lease. Landlord may terminate this Lease, by written notice to Tenant, without any right by Tenant to reinstate its right by payment of Rent due or other performance of the terms and conditions hereof. Upon such termination, Tenant shall immediately surrender possession of the Premises to Landlord, and Landlord shall, in addition to all other rights and remedies that Landlord may have, immediately become entitled to receive from Tenant: (i) an amount equal to the aggregate of all Base Rent and Additional Rent which then remains due to Landlord but unpaid by Tenant; (ii) reasonable costs and expenses incurred by Landlord in connection with a re -entry or taking of possession of the Premises; (iii) reasonable costs and expenses incurred by Landlord in connection with making alterations and repairs for the purpose of reletting the Premises; (iv) reasonable attorneys' fees; (v) the unamortized value of the Construction Allowance, if any. (c) Termination of Possessory Rights. Landlord may terminate Tenant's rights to possession of the Premises without terminating this Lease or Tenant's obligations hereunder and Tenant shall continue to be obligated 4 .. to pay all Base Rent and Additional Rent which then remains due to Landlord but unpaid by Tenant and Tenant shall continue to be obligated for future Base Rent and Additional Rent as the same comes due under this Lease. (d) Acceleration of Rent. Landlord may, whether it terminates the Lease or Tenant's possessory rights to the Premises, accelerate and declare immediately due all of the Base Rent and Additional Rent (as reasonably estimated by Landlord) that otherwise would have been due from the date of the Event of Default through the stated expiration date of the Initial Term or any Extended Term, the option for which has been exercised. (e) Rent Minus Fair Market Value. Landlord may declare immediately due and payable from Tenant, in addition to any damages or other amounts becoming due from Tenant under any other provision of this Lease, an amount equal to the difference between the Base Rent and Additional Rent reserved in this Lease from the date of the Event of Default through the stated expiration date of the Initial Term or any Extended Term, the option for which has been exercised, and the then -fair market value of the Premises for the same period. (f) Other Remedies. Pursue any legal or equitable remedy allowed by applicable laws of the State. 11.3. Failure to Surrender. If Tenant fails to surrender the Premises upon expiration of the Term or earlier termination of the Lease pursuant to Section 11.2(1?), or termination of Tenant's possession rights, the provisions of Section 3.3 shall apply, and Landlord may, without further notice and with or without process of law, enter upon and re -enter the Premises and possess and repossess itself thereof, by force, summary proceedings, ejectment or otherwise, and may dispossess Tenant and remove Tenant and all other persons and property from the Premises and may have, hold and enjoy the Premises and the right to receive all rental and other income of and from the same. 11.4. Reimbursement of Landlord's Costs in Exercising Remedies. Landlord may recover from Tenant, and Tenant shall pay to Landlord upon demand, such reasonable and actual costs and expenses as Landlord may incur in recovering possession of the Premises, placing the same in good order and condition and repairing and altering the same for reletting, and all other reasonable and actual costs and expenses, commissions and charges incurred by Landlord in reletting and otherwise exercising any remedy provided herein or as a result of any Event of Default by Tenant hereunder (including, without limitation, reasonable attorneys' fees). 11.5. Remedies Are Cumulative. No right or remedy herein conferred upon or reserved to Landlord is intended to be exclusive of any other right or remedy herein or by law provided, but each shall be cumulative and in addition to every other right or remedy given herein or now or hereafter existing at law or in equity or by statute. 11.6. Counterclaim. If Landlord commences any proceedings for non payment of Rent, Tenant will not interpose any counterclaim of any nature or description in such proceedings. This shall not, however, be construed as a waiver of Tenant's right to assert such claims in a separate action brought by Tenant. The covenants to pay Rent and other amounts due hereunder are independent covenants and Tenant shall have no right to hold back, offset or fail to pay any such amounts for any reason whatsoever, except as may be specifically provided for herein to the contrary, it being understood and acknowledged by Tenant that Tenant's only recourse is to seek an independent action against Landlord. 11.7. Bankruptcy. (a) Assumption of Lease. In the event that Tenant shall become a Debtor under Chapter 7 of the United States Bankruptcy Code (the "Code ") or a petition for reorganization or adjustment of debts is filed concerning Tenant under Chapters 11 or 13 of the Code, or a proceeding is filed under Chapter 7 and is transferred to Chapters 11 or 13, the Trustee or Tenant, as Debtor and as Debtor In- Possession, may not elect to assume this Lease unless, at the time of such assumption, the Trustee or Tenant has: Cured or provided Landlord "Adequate Assurance," as defined below, that: i A. Within ten (10) days from the date of such assumption the Trustee or Tenant will cure all monetary defaults under this Lease and compensate Landlord for any actual pecuniary loss resulting from any existing default including, without limitation, Landlord's reasonable costs, expenses, accrued interest as set forth in Section 11.2 of the Lease, and attorneys' fees incurred as a result of the default and /or to enforce the terms hereof; B. Within thirty (30) days from the date of such assumption the Trustee or Tenant will cure all non - monetary defaults under this Lease; and C. The assumption will be subject in all respects to all of the provisions of this Lease. ii. For purposes of this Section 113, Landlord and Tenant hereby acknowledge that, in the context of a bankruptcy proceeding of Tenant that this Lease is a lease of real property within a Building and, at a minimum "Adequate Assurance" shall mean: A. The Trustee or Tenant has and will continue to have sufficient unencumbered assets after the payment of all secured and priority obligations and administrative expenses to assure Landlord that the Trustee or Tenant will have sufficient funds to fulfill the obligations of Tenant under this Lease, and to keep the Leased Premises stocked with merchandise and properly staffed with sufficient employees to conduct a fully Operational, actively promoted business in the Leased Premises; B. The bankruptcy court shall have entered an order segregating sufficient cash payable to Landlord, and /or the Trustee or Tenant shall have granted a valid and perfected first lien and security interest and /or mortgage in property of Trustee or Tenant acceptable as to value and kind to Landlord, to secure to Landlord the obligation of the Trustee or Tenant to cure the monetary and /or non - monetary defaults under this Lease within the time periods set forth above; and C. The Trustee or Tenant at the very least shall deposit a sum equal to one (1) month's Rent to be held by Landlord (without any allowance for interest thereon) to secure Tenant's future performance under the Lease. (b) Assignment of Lease. If the Trustee or Tenant has assumed the Lease pursuant to the provisions of this Section 11.7 for the purpose of assigning Tenant's interest hereunder to any other person or entity, such interest may be assigned only after the Trustee, Tenant or the proposed assignee have complied with all of the terms, covenants and conditions of Section 13.1 herein, including, without limitation, those with respect to Additional Rent and the use of the Premises only as permitted in Article VII herein; Landlord and Tenant hereby acknowledging that such terms, covenants and conditions are commercially reasonable in the context of a bankruptcy proceeding of Tenant. Any person or entity to which this Lease is assigned pursuant to the provisions of the Code shall be deemed without further act or deed to have assumed all of the obligations arising under this Lease on and after the date of such assignment. Any such assignee shall upon request execute and deliver to Landlord an instrument confirming such assignment and assumption in form acceptable to Landlord. (c) Adequate Protection. Upon the filing of a petition by or against Tenant under the Code, Tenant, as Debtor and as Debtor in Possession, and any Trustee who may be appointed hereby agree to adequately protect Landlord as follows: i. To immediately perform each and every obligation of Tenant under this Lease until such time as this Lease is either rejected or assumed by order of the bankruptcy court; ii. To pay all monetary obligations required under this Lease, including, without limitation, the payment of Base Rent and such Additional Rent charges payable hereunder which is considered reasonable compensation for the use and occupancy of the Premises; t iii. Provide Landlord a minimum thirty (30) days' prior written notice, unless a shorter period is agreed to in writing by Landlord, of any proceeding relating to any assumption of this Lease or any intent to abandon the Premises, which abandonment shall be deemed a rejection of this Lease; and iv. To perform to and for the benefit of Landlord as otherwise required under the Code. The failure of Tenant to comply with the above shall result in an automatic rejection of this Lease and the automatic stay under Section 362 of the Code shall automatically be terminated as to Landlord and the Premises. (d) Accumulative Rights. The rights, remedies and liabilities of Landlord and Tenant set forth in this Section 11.7 shall be in addition to those which may now or hereafter be accorded, or imposed upon, Landlord and Tenant by the Code. (e) Changes in Code. If the Code is changed or amended such that any references in this Section 11.7 to particular provisions or terms of art lose the meaning that they have as of the Effective Date, such provisions or terms of art of this Lease shall be deemed to be amended to reflect such changes in the Code. ARTICLE XIL ESTOPPEL CERTIFICATES, ATTORNMENT, AND SUBORDINATION 12.1. Estoppel Certificates. Tenant and Landlord agree to execute and deliver, within ten (10) days after request therefor by the other party, a statement, in writing, certifying to Landlord and /or any party designated by Landlord, or Tenant and /or any party designated by Tenant, as the case may be, that: (a) this Lease is in full force and effect; (b) the Commencement Date; (c) that Rent is paid currently without any off -set or defense thereto, (d) the amount of Rent, if any, paid in advance; (e) that there are no known uncured defaults by Landlord or Tenant, or stating those known and claimed, provided that, in fact, such facts are accurate and ascertainable, and (f) any other information reasonably requested. 12.2. Attornment. In the event any proceedings are brought for the foreclosure of, or in the event of conveyance by deed -in -lieu of foreclosure of, or in the event of exercise of the power of sale under any mortgage made by Landlord covering the Premises, Tenant hereby attorns to the successor -in- interest of Landlord and covenants and agrees to execute an instrument in writing reasonably satisfactory to same whereby Tenant attorns to such successor -in- interest and recognizes such successor -in- interest as Landlord hereunder. 12.3. Subordination. (a) Landlord shall have the right at any time and from time -to -time to create security interests in the form of a mortgage, deed of trust or other similar lien or encumbrance (a "Mortgage") upon or affecting Landlord's fee estate in the Premises, or any part thereof, and the rights of Tenant under this Lease shall be subject and subordinate to any such Mortgage; provided, however, that in the event of any foreclosure or sale under any such Mortgage or the delivery by Landlord of any deed -in -lieu of foreclosure to the holder of any such Mortgage, then the holder of any such Mortgage agrees not to disturb Tenant's possession so long as Tenant is not in default under the terms of this Lease beyond any notice and /or cure periods provided for under this Lease and attorns to such holder or the foreclosure purchaser as Landlord under this Lease. Said subordination shall be self - operative and no further instrument of subordination shall be necessary unless required by any such Mortgage holder, in which event Tenant agrees to, within ten (10) days after request by Landlord or the Mortgage holder, execute any agreement reasonably required by such Mortgage holder to memorialize said subordination and to memorialize the terms of any related agreements between Tenant and such Mortgage holder. Any holder of any of any such Mortgage is herein referred to as "Landlord's Mort a ee(s)." Notwithstanding the foregoing, a Landlord's Mortgagee may at any time subordinate its Mortgage to this Lease without Tenant's consent by notice in writing to Tenant, and thereupon this Lease shall be deemed prior to such Mortgage without regard to their respective dates of execution and delivery and, in that event, such Landlord's Mortgagee shall have the same rights with respect to this Lease as though it had been executed prior to the execution and delivery of any such Mortgage and had been assigned to such Landlord's Mortgagee. (b) This Lease shall be subject to and subordinate to all easements, restrictions, liens, encumbrances, rights -of -way, or other matters affecting the Premises of record. ARTICLE XIII. ASSIGNMENT AND SUBLETTING 13.1. Assignment and Sublettine. (a) Tenant shall not sublet, mortgage, encumber or in any manner transfer, in whole or in part, this Lease, the Premises or any estate or interest in said Premises or Lease. Except as expressly permitted herein, Tenant shall not assign this Lease or any estate or interest therein or allow the occupancy thereof by any person or entity other than Tenant, without Landlord's prior written consent, which may be granted or withheld in Landlord's sole and absolute discretion. Consent by Landlord to one or more assignments of this Lease shall not operate to exhaust Landlord's rights under this Article XIII. In the event that Tenant, with or without the previous consent of Landlord, does assign or in any manner transfer this Lease or any estate or interest therein or sublet the Premises or any part thereof, or allow the occupancy thereof by any person or entity other than Tenant, Tenant shall not be released from any of its obligations under this Lease unless a release is given, in writing, by Landlord. (b) If this Lease is assigned or the Premises or any part thereof occupied by any entity other than Tenant, Landlord may collect rent from the assignee or occupant and apply the same to the Rent herein reserved, but no such assignment, occupancy or collection of Rent shall be deemed a waiver of any restrictive covenant contained in this Section 13.1 or the acceptance of the assignee or occupant as tenant, or a release of Tenant from the performance by Tenant of any covenants on the part of Tenant herein contained. Any sublease of the Premises shall be void. Landlord shall have the right, at any time, to immediately remove an occupant or than Tenant from the Premises along with any possession of said occupant, which shall be deemed to have been abandoned if not claimed by occupant within three (3) business days of their removal, and the Landlord's acceptance of rent from the occupant shall in no way waive any rights the Landlord may have against the occupant. The Tenant shall indemnify the Landlord for any actions, claims or demands made by the occupant or its assigns against the Landlord. . Any assignment: (x) as to which Landlord has consented or is deemed to have consented; or (y) which is required by reason of a final nonappealable order of a court of competent jurisdiction; or (z) which is made by reason of and in accordance with the provisions of any law or statute, including, without limitation, the laws governing bankruptcy, insolvency or receivership, shall be subject to all terms and conditions of this Lease, and shall not be effective or deemed valid unless, at the time of such assignment: i. Each assignee shall assume the obligations of this Lease by executing, acknowledging and delivering to Landlord, before the effective date of such assignment, a written assumption agreement in form and substance reasonably satisfactory to Landlord; ii. Landlord shall receive affidavits, made by both Tenant and its assignee through an officer or principal of each such entity, stating the full consideration to be received by Tenant as assignor as a result of said assignment, including, if any, payments for Tenant's improvements, proposed rent (which includes, without limitation, all monthly charges allocated to common area maintenance, insurance, real property taxes, and utility charges) and any other payments; iii. Each assignee shall have submitted to Landlord a current financial statement, audited by a certified public accountant, showing a net worth and working capital in amounts determined by Landlord to be sufficient to assure the future performance by such assignee of Tenant's obligations hereunder; iv. Each assignee shall have submitted to Landlord, in writing, evidence satisfactory to Landlord of substantial experience in operating a business similar to that offered by Tenant and permitted under Section 1.1(c) of this Lease or a business otherwise requested by the Landlord and in operating said business in a space or volume comparable to that contemplated under this Lease; V. The business reputation of each assignee shall meet or exceed generally acceptable commercial standards; vi. The use of the Premises by each assignee shall not violate, or create any potential violation of, applicable Laws, codes or ordinances, nor violate any other agreements affecting the Premises, Landlord or other occupants in the Building; and vii. Tenant shall pay Landlord the sum of One Thousand Five Hundred Dollars ($1,500.00) as reimbursement to Landlord for administrative and legal expenses incurred by Landlord in connection with any such assignment. (c) In the event that Tenant desires to assign this Lease, Tenant shall give notice to Landlord setting forth the terms of the proposed assignment. Tenant shall advise Landlord of the name of the proposed assignee, shall furnish Landlord with the information required by Landlord with respect to the proposed assignee, and Landlord shall advise Tenant, within sixty (60) business days after receipt of such notice and all required information from Tenant, that Landlord either consents or refuses to consent to an assignment to the proposed assignee. 13.2. Assignment by Landlord. Landlord, at any time and from time to time, may assign its interest in this Lease, and, if (a) Landlord assigns its interest in this Lease; and (b) the assignee assumes all of the obligations of Landlord under the terms and conditions of this Lease; then Landlord and its successors and assigns (other than the assignee of this Lease) shall be released from any and all liability hereunder. ARTICLE XIV. MISCELLANEOUS 14.1. Security Deposit. Intentionally Omitted. GeHtefllpffaneously with the execautien of this Lease, Tenant shall deposit the Seeer-ity Deposit, as defined in Seetinn,! �1(j)) with Landlord. Lafidlor& (a) shall held the funds. The geeuFity Depesi )a thereef-, may be applied by Landler-d to eur-e any default by Tenant undef this Lease, without pfejudiee to afty othef remedy ef remedies that Landlefd may have en aeeeunt ef sueh application. Upen an), stieh applioatien by Landlefd, Tenant shall pay te Landlffd en demand the afneow applied b) Landlord to euFe suoh defiault so that the Seeurity Depesit is fes4efed to its original ametint. if Landlord eonveys the Premises duFing the Ter-mi (A) Landlord may tum the Seeur-ity Deposit eveF to Landlord's gFafitee of! sueeesser; and (B) Tenant shall release Landlerd ffem any and all liability with Fespeet te the Seeur-ky Deposit. if Tenant faithful!y peFfeFms its obligations under- the ter-Ffls and eenditions ef this Lease, then Landlek! shall return to Tenant the ameunt ef the Serawity Deposit net applied by LandleFd te eur-e defaults by Tenant, witheut interest, within thi (30) days after the latter- ofi (y) the TeFfnifla4ien Date; oF (z) the date thm Tenant has suffendered possession te LandleFd in aeeerdanee with the ter-fns and oenditiens of this Lease. 14.2. Guaranjy. Intentionally Omitted. This Lease shall not berseme effeetive until the execautien personal guar-ant�, ef this Lease ift the form at4aeahed heivto as Exhibit E (the "9±jggW'). Upon exeetitien of this Lease and the QuaFanty, the executed- Geun—n—in-13, shall be aftaGhed to thi&bease ams Ex-hibit Jr. 11. 14.3. Notices. Any notice, demand, request or other instrument (any "Notice ") which may be or is required to be given under this Lease shall be in writing and shall be deemed given and received: (a) on the date of delivery when delivered in person (with receipt for delivery); (b) three (3) business days after deposit with the U.S. Postal Service, when sent by United States certified or registered mail, return receipt requested, postage prepaid; or (c) on the next business day following deposit of any such Notice with a national overnight delivery carrier (with receipt evidencing such delivery) such as, but not limited to, Federal Express or UPS. Any Notice to be delivered in person or by mail shall be addressed: (a) if to Landlord, at the address set forth in Section 1.1(fl hereof, or at such other address as Landlord may designate by written notice; and (b) if to Tenant, at the address set forth in Section 1.1(g) hereof, or at such other address as Tenant may designate by written notice. 14.4. Waiver. One or more waivers of any covenant or condition by Landlord shall not be construed as a waiver of a subsequent breach of the same covenant or condition, and the consent or approval by Landlord to or of any act by Tenant requiring Landlord's consent or approval shall not be deemed to render unnecessary Landlord's consent or approval to or of any subsequent similar act by Tenant, except as otherwise provided herein. 14.5. Entire Aareement. This Lease and the exhibits attached hereto set forth all the covenants, promises, agreements, conditions and understandings between Landlord and Tenant concerning the Premises, and there are no covenants, promises, agreements, conditions or understandings, either oral or written, between Landlord and Tenant other than as are herein set forth. No alteration, amendment, change or addition to this Lease shall be binding upon Landlord or Tenant unless reduced to writing and signed by each party. 14.6. Remedies Cumulative. The rights and remedies of Landlord and Tenant hereunder shall be cumulative, and no one of them shall be deemed or construed as exclusive of any other right or remedy hereunder, at law, or in equity. The exercise of anyone such right or remedy by Landlord or Tenant shall not impair its standing to exercise any other such right or remedy. 14.7. Accord and Satisfaction. No payment by Tenant or receipt by Landlord of a lesser amount than the Rent due hereunder shall be deemed to be other than on account of the Rent first due hereunder. No endorsement or statement on any check or letter accompanying any check or payment of Rent shall be deemed to be an accord and satisfaction, and Landlord may accept any such check or payment without prejudice to the right of Landlord to recover the balance of such Rent or to pursue any other right or remedy. 14.8. Relationship, Nothing contained herein shall be deemed or construed to create between the parties any relationship other than that of landlord and tenant. 14.9. Information. Tenant shall provide to Landlord, upon request, accurate financial statements of Tenant and /or any guarantors of this Lease (which, in the event Tenant or a guarantor is an entity, shall be certified by the highest - ranking financial officer of Tenant or guarantor). 14.10. Construction. The laws of the State in which the Premises is located shall govern the validity, performance, and enforcement of this Lease. The invalidity or unenforceability of any term or condition of this Lease shall not affect the other terms and conditions, and this Lease shall be construed in all respects as if such invalid or unenforceable term or condition had not been contained herein. The captions of this Lease are for convenience only and do not in any way limit or alter the terms and conditions of this Lease. Whenever in this Lease a singular word is used, it also shall include the plural wherever required by the context and vice versa. All references in this Lease to periods of days shall be construed to refer to calendar, not business, days, unless business days are specified. This Lease shall be recorded, but a failure to record shall not affect the effectiveness of this Lease. All Exhibits referenced in this Lease are attached hereto and incorporated herein by reference. 14.11. Force Majeure. Notwithstanding anything to the contrary set forth herein, if Landlord or Tenant is delayed in, or prevented from observing or performing any of its obligations hereunder (other than the payment of any amount of money due hereunder) as the result of: (a) an act or omission of the other party; or (b) any other cause that is not within the control of the delayed or prevented party (including, without limitation, inclement weather, the unavailability of materials, equipment, services or labor, and utility or energy shortages or acts or omissions of public utility providers); then: (A) such observation or performance shall be excused for the period of the delay; and (B) any deadlines for observation or performance shall be extended for the same period. 14.12. Counterparts. This Lease may be executed in separate counterparts, each of which when so executed shall be an original, but all of which together shall constitute but one and the same instrument. 14.13. Successors and Assigns. Except as otherwise expressly provided herein, this Lease, and all of the terms and conditions hereof, shall inure to the benefit of, and be binding upon, the respective heirs, executors, administrators, successors, and assigns of Landlord and Tenant. All indemnities set forth herein shall survive the Termination Date, 14.14. Authori1y. Each person executing this Lease represents and warrants that: (a) he or she has been authorized to execute and deliver this Lease by the entity for which he or she is signing; and (b) this Lease is the valid and binding agreement of such entity, enforceable in accordance with its terms. 14.15. Exculpation. If there is a breach or default by Landlord under this Lease, Tenant shall look solely to the equity interest of Landlord in the Premises and any rentals derived therefrom; provided that in no event shall any judgment be sought or obtained against any individual person or entity comprising Landlord. 14.16. Equal Opportunity Obligation. Tenant agrees not to discriminate against any employee or applicant for employment, to be employed by Tenant with respect to his or her hire, tenure, terms, conditions or privileges of employment or any matter directly or indirectly related to employment, because of his or her race, color, religion, sex, handicap, national origin, or ancestry. Breach of this covenant may be regarded as a material breach of the Lease. Tenant further agrees execute and deliver an affidavit attesting to the terms of this provision in the form set forth at Exhibit E. 14.17, Anti - Collusion Requirement. By executing this Lease, Tenant certifies that it has not, nor has any member, employer, representative or agent of its firm, directly or indirectly, entered into or offered to enter into any combination, collusion, or agreement to receive or pay, that it has not received nor paid any sum of money or other consideration for the negotiation and execution of this Lease other than that which is set out herein. Tenant further agrees to execute and deliver an affidavit attesting to the terms of this provision in the form set forth at Exhibit E. 14.18, Early Termination. Tenant and Landlord shall each have the independent right to terminate this Lease ( "Termination Right ") with thirty (30) days prior written notice to the other party ( "Termination Notice "). IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the date set forth above. ATTEST: Signature Printed ame and Title "LANDLORD" CITY OF SOUTH BEND, INDIANA, DEPARTMENT OF REDEVELOPMENT by and through the South Bend Redevelopment Commission Signature Printed ame and Title "TENANT" MARLENE HOLLENKAMP d/b /a IMAGINE THAT! By: Name: Title: (Signature Page of Lease) { IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the date set forth above. ATTEST: Signature Printed ame and Title "LANDLORD" CITY OF SOUTH BEND, INDIANA, DEPARTMENT OF REDEVELOPMENT by and through the South Bend Redevelopment Commission Signature Printed ame and Title "TENANT" MARLENE HOLLENKAMP d/b /a IMAGINE THAT! By: Name: Title: (Signature Page of Lease) STATE OF INDIANA ) `� SS: ST. JOSEPH COUNTY ) Before me, the undersigned, a Notary Public for and in said County and State this day of 2011, personally appeared , known to be to be the of the South Bend Redevelopment Commission and acknowledged execution of the foregoing Lease on behalf of said Commission. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal. , Notary Public Resident of St. Joseph County, Indiana My commission expires: STATE OF INDIANA ) SS: ST. JOSEPH COUNTY ) Before me, the undersigned, a Notary Public for and in said County and State this day of 2011, personally appeared , known to be the of , and acknowledged execution of the foregoing Lease on behalf of said Tenant. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal. My commission expires: , Notary Public Resident of St. Joseph County, Indiana (Notary Page of Lease) INDEX TO EXHIBITS Exhibit A Legal Description of Building Exhibit B Site Plan of Building Exhibit C Description of Premises Exhibit D Landlord's Work Exhibit E Non - Debarment, Non - Collusion and Non - Discrimination Affidavit EXHIBIT A Legal Description of Building The ground level of the Leighton Center Parking Garage, which is the retail shops commonly referred to as the Michigan Street Shops, South Bend, Indiana, which shops are more particularly described as follows: A parcel of land located in the Original Plat of the Town of South Bend, Leighton Plaza Replat, and a part of the Northwest Quarter of Section 12, Township 37 North, Range 2 East, Portage Township, City of South Bend, St. Joseph County, and described as follows: Beginning at the intersection of the North right of way line of Jefferson Blvd and the West right of way line of Michigan Street; thence North along said West right of way line of Michigan Street a distance of 220 feet, more or less; thence West parallel with said North line of Jefferson Blvd, a distance of 53 feet, more or less; thence South parallel with said West line of Michigan Street to the North line of said Jefferson Blvd; thence East along said North line of Jefferson Blvd to the place of beginning. Containing 0.268 acres, more or less, subject to all legal easements and rights of way. Said description is the land occupied by the existing store fronts in the Leighton Plaza Building fronting on Michigan Street in downtown South Bend. EXHIBIT B Site Plan of Building and Description of Premises EXHIBIT C Description of Premises The Properly consists of Retail Area No. 7, commonly referred to as 117 S. Michigan Street, South Bend, Indiana, which is comprised of 1,106 square feet located on the ground level of the Leighton Center Parking Garage, which is a part of the retail shops commonly referred to as the Michigan Street Shops, South Bend, Indiana, which shops are more particularly described at Exhibit A of the Lease to which this Exhibit C is attached. EXHIBIT D Landlord's Work The Landlord shall deliver the premises in "as -is" condition (the "Landlord's Work "). EXHIBIT E NON - DEBARMENT, NON - COLLUSION AND NON - DISCRIMINATION AFFIDAVIT STATE OF INDIANA ) ) SS: COUNTY OF ST. JOSEPH ) The undersigned, being duly sworn on oath, hereby certifies, on behalf of ( "Tenant "), as follows: 1. That the undersigned is duly authorized and is competent to certify to the statements contained herein on behalf of Tenant. 2. That neither it nor its principals are presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency. 3. That Tenant has not, nor has any other member, representative, or agent of the firm, company, corporation or partnership represented by the firm, entered into any combination, collusion or agreement with any person relative to the price to be offered by any person nor to prevent any person from making an offer nor to induce anyone to refrain from making an offer and that this offer is made without reference to any other offer. 4. That Tenant hereby agrees to abide by the following nondiscrimination commitment, which shall be made a part of any contract that Tenant may henceforth enter into with the City of South Bend, Indiana or any of its agencies, boards or commissions: Tenant agrees not to discriminate against any employee or applicant for employment in the performance of this contract with privileges of employment, or any matter directly or indirectly related to employment, because of race, religion, color, sex, handicap, national origin or ancestry. Breach of this provision may be regarded as a material breach of the contract. ILN Name: Title: Subscribed and sworn to before me this day of , 2011. , Notary Public Resident of St. Joseph County, Indiana My commission expires: • r a n d u m SOUTd BLS` O� gd111�1W 4 to Community & Economic Development`�v a 1865 1200 County -City Building, 227 West Jefferson, South Bend, Indiana 46601 -1830 Phone 574/235 -9371 Fax 574/235 -9021 To: Redevelopment Commission From: Tamara Nicholl- Smith, Director, Downtown Business Recruitment Subject: Lease Proposal for Imagine That! (Holiday Pop -Up Program Participant) Date: May 9, 2011 Staff in the Community and Economic Development Department has reviewed the lease situation for 117 S. Michigan Street and is recommending the following: Background: • 117 S. Michigan is a 1,106 SFT storefront that has not been rented since the yoga place moved out. • The asking price for storefronts in the Michigan Street Shops building is $11.00 per square foot, plus CAM of $4.92/SF for a total PSF price of $16 plus utilities, however the most recent lease for 131 S. Michigan was signed at a reduced rate of $4.49 SF for rent plus $4.92 in CAM for a total of $9.41/SF. • The building currently has 3 unrented spaces 123, 121, and 117 S. Michigan. • Regardless of whether or not 117 S. Michigan is occupied, the city has a fixed cost equal to the CAM $4.92 PSF x 1,106 = $5,441.52 per year or $453.46 per month). The current proposal below promises to, at the very least, cover the fixed expenses of the building and works towards doing more than this by the end of the lease term. Assumptions: • The building owner will need to pay the fixed costs regardless of whether or not the space is occupied • The goal of the building owner, is not only to make money on the building, but also to help enliven the downtown by bringing the types of businesses that are in line with the retail plan for downtown • The downtown is better off with Imagine That! in the space than without them in the space • Even at paying utilities and 10 %, Imagine That! will need to reach a certain sales threshold to make this venture a profitable one for their business. In this way, the interests of the property owner and the business owner are tied together. The Proposal: 1. The terms of this proposed lease are 12 months. 2. The proposed start date is June 1, 2011 What We Do Today Makes A Difference! 3. Imagine That! will pay all the utilities on the space 4. Imagine That! will pay 10% of their gross sales, or a minimum of $453.46 per month to be phased in over the first few months of their lease as follows: Month (s) The greater of 10% of gross sales, or a minimum of: 1 $150 2 $200 3 $250 4 $300 5 $400 6 -12 $453.46 This 10% of total sales will be considered rent and CAM. There will be no cap, thus while the property owner takes a risk on the low end, the business owner takes a risk on the high end. 5. Imagine That! agrees that based on a 6 day week, they will work to achieve the following sales goals: o $200 per day or $4,800 per month by the end of the 1St six months of the lease term (This will cover the fixed cost of the CAM of 453.46 as the payments would reach $480) o $300 per day of $7,200 per month by the end of the 2nd six months of the lease term. (This will cover the fixed cost of the CAM of 453.46 as the payments would reach $720) 6. Imagine That! has the option to terminate the lease at any point with a written letter and 30- day notice. 7. The landowner would have the option to terminate the lease with a written letter and 30 -day notice if: • Imagine That! falls short of their sales goals for an extended period of time, or • the broker is able to first fill at least one of the two larger available spaces (121 or 123 S. Michigan) and then is able to produce a tenant for 117 S. Michigan who has signed a 2 -year lease at a rate higher than the Imagine That! agreement and put a deposit down. 8. At the end of the 12 month term, Imagine That! will have the option to continue their lease term at terms no less than the terms for the lease for 131 S. Michigan Street' for a period of one year. Staff seeks approval from the Redevelopment Commission to work through the details of a 12- month lease based upon the above proposal. 1 The space at 131 S. Michigan is approximately 1,530 square feet, which at $9.41 including CAM brings their monthly rent to $1,200 per month or $14,400 annually (includes rent and CAM). If these same terms were applied to 117 S. Michigan this would bring in a minimum of $867.29 per month or $10,407.46 annually (includes rent and CAM). The purpose of this clause is not to set the lease rate, but to set a bottom floor, below which we would not negotiate going forward. What We Do Today Makes A Difference!