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EXHIBIT 10.65

L E A S E

 
LANDLORD:
KIMSCHOTT FACTORIA MALL L.L.C.

C/O KIMCO REALTY CORPORATION
3333 NEW HYDE PARK ROAD
SUITE 100
NEW HYDE PARK, NEW YORK 11042

DSW INC.
4150 EAST FIFTH AVENUE
COLUMBUS, OHIO 43219

 
PREMISES:
Approximately 21,223 square feet at

Factoria Mall Shopping Center, Bellevue, Washington

 
 

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TABLE OF CONTENTS

      Page        
SECTION 1.
 
PREMISES
1
       
SECTION 2.
 
TERM
1
       
SECTION 3.
 
COMMENCEMENT DATE
1
       
SECTION 4.
 
RENEWAL OPTIONS
3
       
SECTION 5.
 
MINIMUM RENT
3
       
SECTION 6.
 
PERCENTAGE RENT
4
       
SECTION 7.
 
TITLE ENCUMBRANCES
5
       
SECTION 8.
 
RIGHT TO REMODEL
5
       
SECTION 9.
 
UTILITIES
6
       
SECTION 10.
 
GLASS
6
       
SECTION 11.
 
PERSONAL PROPERTY
6
       
SECTION 12.
 
RIGHT TO MORTGAGE
6
       
SECTION 13.
 
SUBLEASE OR ASSIGNMENT
7
       
SECTION 14.
 
COMMON AREAS
8
       
SECTION 15.
 
OPERATION OF COMMON AREAS
8
       
SECTION 16.
 
COMMON AREA MAINTENANCE, TENANT'S SHARE
9
       
SECTION 17.
 
EMINENT DOMAIN
12
       
SECTION 18.
 
TENANT'S TAXES
12
       
SECTION 19.
 
RISK OF GOODS
13
       
SECTION 20.
 
USE AND OCCUPANCY
13
       
SECTION 21.
 
NUISANCES
15
       
SECTION 22.
 
WASTE AND REFUSE REMOVAL
15
       
SECTION 23.
 
DESTRUCTION OF PREMISES
15
       
SECTION 24.
 
LANDLORD REPAIRS
16
       
SECTION 25.
 
TENANT'S REPAIRS
16
       
SECTION 26.
 
COVENANT OF TITLE AND PEACEFUL POSSESSION
17
       
SECTION 27.
 
TENANT'S AND LANDLORD'S INSURANCE; INDEMNITY
18
       
SECTION 28.
 
REAL ESTATE TAXES
20
       
SECTION 29.
 
TENANT'S INSURANCE CONTRIBUTION
21
       
SECTION 30.
 
FIXTURES
21
       
SECTION 31.
 
SURRENDER
22
       
SECTION 32.
 
HOLDING OVER
22

 
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SECTION 33.
 
NOTICE
22
       
SECTION 34.
 
DEFAULT
22
       
SECTION 35.
 
WAIVER OF SUBROGATION
25
       
SECTION 36.
 
LIABILITY OF LANDLORD; EXCULPATION
25
       
SECTION 37.
 
RIGHTS CUMULATIVE
25
       
SECTION 38.
 
MITIGATION OF DAMAGES
25
       
SECTION 39.
 
SIGNS
26
       
SECTION 40.
 
ENTIRE AGREEMENT
26
       
SECTION 41.
 
LANDLORD'S LIEN – DELETED BY INTENTION
26
       
SECTION 42.
 
BINDING UPON SUCCESSORS
26
       
SECTION 43.
 
HAZARDOUS SUBSTANCES
26
       
SECTION 44.
 
TRANSFER OF INTEREST
27
       
SECTION 45.
 
ACCESS TO PREMISES
27
       
SECTION 46.
 
HEADINGS
28
       
SECTION 47.
 
NON-WAIVER
28
       
SECTION 48.
 
SHORT FORM LEASE
28
       
SECTION 49.
 
ESTOPPEL CERTIFICATE
28
       
SECTION 50.
 
TENANT'S REIMBURSEMENT
28
       
SECTION 51.
 
TENANT’S TERMINATION RIGHT:
28
       
SECTION 52.
 
NO BROKER
29
       
SECTION 53.
 
UNAVOIDABLE DELAYS
29
       
SECTION 54.
 
TIMELY EXECUTION OF LEASE
29
       
SECTION 55.
 
ACCORD AND SATISFACTION
29
       
SECTION 56.
 
WAIVER OF JURY TRIAL
30
       
SECTION 57.
 
LEASEHOLD FINANCING
30

LIST OF EXHIBITS:

EXHIBIT "A-1"
 
SITE PLAN
EXHIBIT "A-2"
 
LEGAL DESCRIPTION
EXHIBIT "B"
 
LANDLORD'S WORK
EXHIBIT "C"
 
TENANT'S WORK
EXHIBIT "D"
 
EXISTING USE EXCLUSIVES AND PROHIBITED USES
EXHIBIT "E"
 
EXCEPTIONS TO TENANT EXCLUSIVE
EXHIBIT "F"
 
INTENTIONALLY DELETED
EXHIBIT "G-1"
 
TENANT SIGNAGE
EXHIBIT "G-2"
 
TENANT IMPROVEMENTS

 
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L E A S E

THIS AGREEMENT OF LEASE, made this 27th day of November, 2006, by and between
KIMSCHOTT FACTORIA MALL L.L.C., a Delaware limited liability company
(hereinafter referred to as "Landlord"), with offices at c/o Kimco Realty
Corporation, 3333 New Hyde Park Road, Suite 100, New Hyde Park, New York 11042
and DSW INC., an Ohio corporation (hereinafter referred to as "Tenant") with
offices at 4150 East Fifth Avenue, Columbus, Ohio 43219.

W I T N E S S E T H:

SECTION 1.
PREMISES

(a)           Landlord, in consideration of the rents to be paid and covenants
and agreements to be performed by Tenant, does hereby lease unto Tenant the
premises (hereinafter referred to as the "premises" or "demised premises") in
the shopping center commonly known as Factoria Mall Shopping Center, City of
Bellevue, County of King and State of Washington containing approximately
529,108 square feet of leasable space (subject to change based upon
redevelopment of the Center as described in Section 15(b) hereof, but in no
event less than 500,000 square feet of leasable space) on approximately 41 acres
(hereinafter referred to as the "Shopping Center" or “Center”).  The location,
size, and area of the demised premises and of the Shopping Center shall be
substantially as shown on Exhibit "A-1" attached hereto and made a part hereof
subject to changes based upon the redevelopment of the Shopping Center as
described in Section 15(b) hereof.  A legal description of the Shopping Center
is shown on Exhibit "A-2" attached hereto and made a part hereof.  Landlord
shall not (i) change the configuration of the Shopping Center behind the demised
premises (east side of the Shopping Center) so as to materially adversely affect
access to the “No Build Area” from the east side of the Shopping Center; or (ii)
make any changes or modifications to the parking on the east side of the
Shopping Center that result in a parking ratio of less than 3.5 spaces per 1,000
square feet of leasable space for the Shopping Center.  Notwithstanding the
foregoing, the moving and replacement of the access points to the Shopping
Center from the public rights of way on the east side of the Shopping Center
shall not be deemed material and adverse provided that comparable access points
are provided.  In addition to the foregoing, Landlord agrees that no
modification to the Shopping Center shall (i) alter or make any changes,
including any reduction or rearrangement of parking spaces, to that portion of
the Shopping Center indicated on the site plan as the "Protected Area", (ii)
materially or adversely interfere with truck access to the loading doors of the
demised premises, (iii) materially or adversely interfere with customer access
to the demised premises, or (iv) result in the construction of any buildings to
that portion of the Shopping Center indicated on the site plan as "No Build
Area" except as specifically permitted during the Renovation Period as set forth
in Section 15 hereof.

(b)           The demised premises shall have a ground floor area of
approximately 21,223 square feet with approximate dimensions of 140' x 150'.

SECTION 2.
TERM

The term of this Lease shall be for a period of fifteen (15) years, beginning on
the commencement date (as hereinafter defined), except that if the commencement
date shall be a day other than the first day of a month, then the period of time
between the commencement date and the first day of the month next following
shall be added to the term of the Lease.

SECTION 3.
COMMENCEMENT DATE

 
 
 

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(a)           As herein used, the phrase "commencement date" shall mean the
earlier of: (i) the day Tenant opens for business in the demised premises, or
(ii) one hundred twenty (120) days after Landlord has delivered to Tenant
possession of the demised premises as same are to be substantially completed by
Landlord and ready for occupancy, as in (b) below.  Landlord agrees to deliver
the demised premises to Tenant with Landlord's Work (as set forth on Exhibit
"B", attached hereto and made a part hereof) completed between July 1, 2006 and
October 15, 2006 (the "Delivery Period").  Landlord shall give Tenant notice
(the "Estimated Delivery Notice") no later than July 1, 2006 of the status of
Landlord's construction and the estimated date that Landlord shall deliver the
Premises to Tenant with Landlord's Work substantially completed (the "Estimated
Delivery Date").  Landlord may, but is under no obligation, to revise the
Estimated Delivery Date any time prior to thirty (30) days prior to the
Estimated Delivery Date (the "Final Delivery Notice Date"), by which time
Landlord shall have given Tenant a final notice (the "Final Delivery Notice") of
a firm delivery date (the "Final Delivery Date") upon which the Landlord's Work
shall be substantially completed and the demised premises delivered to
Tenant.  Upon the sending of the Final Delivery Notice, Landlord shall have no
further right to modify the Final Delivery Date.  However, if Landlord has not
delivered a Final Delivery Notice by the Final Delivery Notice Date, then the
Estimated Delivery Notice shall be the Final Delivery Notice and the Estimated
Delivery Date shall be the Final Delivery Date.  The Final Delivery Date shall
not be earlier than (i) thirty (30) days after the date Tenant receives the
Final Delivery Notice, or (ii) the first day of the Delivery Period.  If
Landlord does not deliver the demised premises to Tenant as required herein by
October 15, 2006, Tenant may defer delivery until January 2, 2007.  If Landlord
does not deliver the demised premises to Tenant thereafter on or before July 1,
2007, Tenant may terminate this Lease.  Notwithstanding the foregoing, if
Landlord’s failure to deliver the demised premises to Tenant on or before July
1, 2007 is due to an event of force majeure which occurs on or after May 1,
2007, Tenant may not exercise its right to terminate the Lease pursuant to this
Section 3(a) for an additional ninety (90) day period.  In the event that the
demised premises and Landlord's Work are not substantially completed and
delivered to Tenant on or before the Final Delivery Date, the minimum rent due
hereunder shall be adjusted so that, after the Rent Commencement Date, the
Tenant shall receive a credit against minimum rent thereafter due Landlord equal
to one (1) day of minimum rent for each day after the Final Delivery Date until
delivery of the demised premises is made to Tenant consistent with the terms of
this Lease, including substantial completion of the Landlord's Work (“Late
Delivery Credit”).  In the event Landlord does not provide to Tenant a Final
Delivery Notice as required herein and the demised premises and Landlord’s Work
is not substantially completed and delivered to Tenant on or before the Final
Delivery Date, the Late Delivery Credit shall not exceed One Hundred Fifty
Thousand Dollars and 0/00 ($150,000.00).  Tenant shall not be obligated to
accept possession of the demised premises prior to the later of (a) substantial
completion of Landlord's Work, (b) the first day of the Delivery Period and (c)
the Final Delivery Date.  Time is of the essence regarding all dates set forth
in this Section 3(a).  Landlord shall obtain a certificate of occupancy or
completion, permit or the local equivalent that is required for Landlord’s Work
at the demised premises so that Tenant may obtain a building permit for Tenant’s
Work and commence performance of the same.

(b)           Possession of the demised premises shall not be deemed to have
been given to Tenant unless the demised premises are ready for the installation
of Tenant's fixtures and finishing work by Tenant, and are free of any violation
of laws, ordinances, regulations and building restrictions relating to the
possession or use of or construction upon the demised premises, and until
Landlord has substantially completed Landlord's Work.  Tenant shall supply
Landlord with Tenant's prototypical plans and specifications, and Landlord shall
prepare plans and specifications for the Premises at Landlord's expense, for
Tenant's approval.  All such Landlord's Work shall be done at Landlord's expense
and in compliance with all applicable federal, state and local laws, rules,
regulations and code requirements.  Landlord shall obtain a certificate of
occupancy or completion, permit or the local equivalent that is required for
Landlord’s Work at the demised premises as part of Landlord's Work.

(c)           Prior to the date on which possession is delivered to Tenant as
aforesaid, Tenant shall have the right to enter the demised premises at its own
risk rent-free for the purpose of preparing for its occupancy, installing
fixtures and equipment, and receiving merchandise and other property, provided
that it does not unreasonably interfere with Landlord's construction
activities.  All work other than that to be performed by Landlord is to be done
by Tenant within ninety (90) days after the date possession of the demised
premises has been delivered to Tenant, at Tenant's expense in accordance with
the provisions of this Lease and as set forth in the schedule entitled
Description of Tenant's Work and attached hereto as Exhibit "C" and made a part
hereof.  All Tenant's Work shall be performed lien free by Tenant, in a good and
workmanlike manner (employing materials of good quality) in compliance with all
governmental requirements.  In the event a mechanic's lien is filed against the
demised premises or the Shopping Center on account of Tenant's Work, Tenant
shall discharge or bond off same within ten (10) days from the filing
thereof.  If Tenant fails to discharge said lien, Landlord may bond off or pay
same without inquiring into the validity or merits of such lien, and all sums so
advanced shall be paid on demand by Tenant as additional rent.

 
 

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(d)           From the date upon which the demised premises are delivered to
Tenant for its work until the commencement date of the lease term, Tenant shall
observe and perform all of its obligations under this Lease (except Tenant's
obligation to operate and pay minimum rent, percentage rent and "Tenant's
Proportionate Share" (defined in Section 16(c) below) of "Maintenance Costs"
(defined and provided for in Section 16(b) hereof) "real estate taxes" (defined
and provided for in Section 28(b) hereof) and insurance (provided for in Section
28 hereof).  In the event Tenant fails to open for business within one hundred
twenty (120) days after the date possession of the demised premises has been
delivered to Tenant, Landlord, in addition to any and all other available
remedies, may require Tenant to pay to Landlord, in addition to all other rent
and charges herein, as liquidated damages and not as a penalty, an amount equal
to one-three hundred sixty five thousandths (1/365) of the annual minimum rent
for each day such failure to open continues.

SECTION 4.
RENEWAL OPTIONS

(a)           Provided Tenant has fully complied with all of the terms,
provisions, and conditions on its part to be performed under this Lease and is
not in default under this Lease, Tenant may, by giving written notice to the
Landlord at least two hundred seventy (270) days on or before the expiration of
the initial term of this Lease, extend such term for a period of five (5) years
upon the same covenants and agreements as are herein set forth, except that the
minimum rent during the first renewal term shall be increased to Fifty-seven
Thousand Seven Hundred Seventy-nine and 62/100 Dollars ($57,779.62) each month.

(b)           Provided Tenant has fully complied with all of the terms,
provisions and conditions on its part to be performed under this Lease, is not
in default under this Lease and has exercised its first option to renew
hereunder, Tenant may, by giving written notice to the Landlord at least seventy
(270) days on or before the expiration of the first extended term of this Lease,
extend such term for an additional period of five (5) years upon the same
covenants and agreements as the first extended term except that the minimum rent
(as increased pursuant to Section 4(a) above) during this second renewal term
shall be further increased to Sixty-three Thousand Five Hundred Sixty-two and
89/100 Dollars ($63,562.89) each month.

(c)           Provided Tenant has fully complied with all of the terms,
provisions and conditions on its part to be performed under this Lease, is not
in default under this Lease and has exercised its second option to renew
hereunder, Tenant may, by giving written notice to the Landlord at least seventy
(270) days on or before the expiration of the second extended term of this
Lease, extend such term for an additional period of five (5) years upon the same
covenants and agreements as the second extended term except that the minimum
rent (as increased pursuant to Section 4(b) above) during this third renewal
term shall be further increased to Sixty-nine Thousand Nine Hundred Twenty-nine
and 79/100 Dollars ($69,929.79) each month.  The initial term and any renewal
term(s) are hereinafter collectively referred to as the "term".

SECTION 5.
MINIMUM RENT

(a)           Tenant agrees to pay to Landlord, as minimum rent for the demised
premises, equal consecutive monthly installments of Forty-three Thousand Four
Hundred Eighteen and 72/100 Dollars ($43,418.72), commencing on the commencement
date, and continuing on the first day of each calendar month during years one
(1) through five (5) of the initial term of this Lease, monthly installments of
Forty-seven Thousand Seven Hundred Fifty-one and 75/100 Dollars ($47,751.75)
each calendar month during years six (6) through ten (10), and monthly
installments of Fifty-two Thousand Five Hundred Twenty-six and 93/100 Dollars
($52,526.93) each calendar month during years eleven (11) through fifteen (15)
of the initial term of this Lease.  All such rental shall be payable to Landlord
in advance, without prior written notice or demand and without any right of
deduction, abatement, counterclaim or offset whatsoever (unless specifically
permitted in this Lease).  In no event shall Tenant have the right to offset
more than twenty-five percent (25%) of minimum rent in any calendar month, and
Tenant shall have no right to offset against any additional rent other than any
percentage rent payable hereunder.  As used in this Lease, the terms  "minimum
rent" and "minimum rental" mean the minimum rental set forth in this Section
5(a) as adjusted pursuant to Section 4 hereof.  As used in this Lease, the terms
"rent and "rental" mean minimum rental, percentage rental, additional rental and
all other sums due and owing from Tenant to Landlord under this Lease.

 
 

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(b)           If the Lease term shall commence on a day other than the first day
of a calendar month or shall end on a day other than the last day of a calendar
month, the minimum rental for such first or last fractional month shall be such
proportion of the monthly minimum rental as the number of days in such
fractional month bears to the total number of days in such calendar month.

(c)           Until further notice to Tenant, all rental payable under this
Lease shall be payable to Landlord and mailed to Landlord at c/o Kimco Realty
Corporation, 3333 New Hyde Park Road, Suite 100, New Hyde Park, New York 11042.

(d)           In the event any sums required under this Lease to be paid are not
received when due, then all such amounts shall bear interest from the due date
thereof until the date paid at the rate of interest equal to two percent (2%)
over the prime rate in effect from time to time as established by National City
Bank, Columbus, Ohio (the "Interest Rate"), and shall be due and payable by
Tenant without notice or demand, Tenant shall pay the foregoing interest thereon
in addition to all default remedies of Landlord pursuant to Section 34 below.

(e)           Notwithstanding anything herein contained to the contrary, Tenant
shall initially pay to Landlord as additional rental, simultaneously with the
payment of minimum rental called for under Section 5(a) above, Five Dollars and
03/100 ($5.03) per square foot, payable in equal monthly installments of Eight
Thousand Eight Hundred Ninety-five and 97/100 Dollars ($8,895.97), as the
estimated monthly amount of Tenant's Proportionate Share of Maintenance Costs
(provided for in Section 16 hereof), real estate taxes (provided for in Section
28 hereof) and insurance (provided for in Section 29 hereof).  Tenant's
Proportionate Share of Maintenance Costs shall not exceed Two Dollars and 25/100
cents ($2.25) per square foot in the first lease year.

SECTION 6.
PERCENTAGE RENT

(a)           Beginning with the first lease year, Tenant shall pay to the
Landlord, in addition to minimum rent, upon the conditions and at the times
hereinafter set forth, percentage rent equal to two percent (2%) of Tenant's
gross sales (as hereinafter defined) in excess of the number obtained by
dividing (a) minimum rent for the applicable lease year by (b) the number
.04.  The annual percentage rent shall be paid by Tenant to the Landlord within
ninety (90) days after the end of each lease year.  Each such payment shall be
accompanied by a statement signed by an authorized representative of Tenant
setting forth Tenant's gross sales for such lease year.  For purposes of
permitting verification by the Landlord of the gross sales reported by Tenant,
the Landlord shall have the right, not more than one (1) time per lease year,
upon not less than five (5) business days notice to Tenant, to audit during
normal business hours in Tenant's corporate office, Tenant's books and records
relating to Tenant's gross sales for a period of two (2) years after the end of
each lease year.  Landlord agrees that no contingency fee auditor shall be
employed by Landlord for the purpose of conducting any such audit.  If such an
audit reveals that Tenant has understated its gross sales by more than three
percent (3%) for any lease year, Tenant, in addition to paying the additional
percentage rent due, shall pay the reasonable cost of the audit within thirty
(30) days of Tenant's receipt of Landlord's demand for the same and copies of
all bills or invoices on which such cost is based.

(b)           For purposes hereof, a lease year shall consist of a consecutive
twelve (12) calendar month period commencing on the commencement of the term of
this Lease; provided, however, that if this Lease commences on a day other than
the first day of a calendar month, then the first lease year shall consist of
such fractional month plus the next succeeding twelve (12) full calendar months,
and the last lease year shall consist of the period commencing from the end of
the preceding lease year and ending with the end of the term of the Lease,
whether by expiration of term or otherwise.  In the event percentage rental
shall commence to accrue on a day other than the first day of a lease year, the
percentage rental for such lease year shall be adjusted on a pro rata basis,
based upon the actual number of days in such lease year.

 
 

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(c)           Each lease year shall constitute a separate accounting period, and
the computation of percentage rental due for any one period shall be based on
the gross sales for such lease year.

(d)           The term "gross sales" as used in this Lease is hereby defined to
mean the gross dollar aggregate of all sales or rental or manufacture or
production of merchandise and all services, income and other receipts whatsoever
of all business conducted in, at or from any part of the demised premises,
whether for cash, credit, check, charge account, gift or merchandise certificate
purchased or for other disposition of value regardless of collection.  Should
any departments, divisions or parts of Lessee's business be conducted by any
subleases, concessionaires, licensees, assignees or others, then there shall be
included in Lessee's gross sales, all "gross sales" of such department, division
or part, whether the receipts be obtained at the demised premises or elsewhere
in the same manner as if such business had been conducted by Lessee.  Gross
sales shall exclude the following: (i) any amount representing sales, use,
excise or similar taxes; (ii) the amount of refunds, exchanges or returns by
customers or allowances to customers.

(e)           The percentage rental, if any, shall be paid within ninety (90)
days after the end of each lease year, accompanied by a statement in writing
signed by Tenant setting forth its gross sales from the sale of all items for
such lease year.  Tenant shall keep at its principal executive offices, where
now or hereafter located, true and accurate accounts of all receipts from the
demised premises.  Landlord, its agents and accountants, shall have access to
such records at any and all times during regular business hours for the purpose
of examining or auditing the same.  Tenant shall also furnish to Landlord any
and all supporting data in its possession relating to gross sales and any
deductions therefrom as Landlord may reasonably require.  Landlord agrees to
keep any information obtained therefrom confidential, except as may be required
for Landlord's tax returns, or in the event of litigation or arbitration where
such matters are material.

(f)            Tenant shall at all times maintain accurate records which shall
be available for Landlord's inspection at any reasonable time.

(g)           If Landlord, for any reason, questions or disputes any statement
of percentage rental prepared by Tenant, then Landlord, at its own expense, may
employ such accountants as Landlord may select to audit and determine the amount
of gross sales for the period or periods covered by such statements.  If the
report of the accountants employed by Landlord shall show any additional
percentage rental payable by Tenant, then Tenant shall pay to Landlord such
additional percentage rental plus interest at one (1) point over the prime rate,
commencing on the date such percentage rentals should have been paid, within
thirty (30) days after such report has been forwarded to Tenant, unless Tenant
shall, within said thirty (30) day period, notify Landlord that Tenant questions
or disputes the correctness of such report.  In the event that Tenant questions
or disputes the correctness of such report, the accountants employed by Tenant
and the accountants employed by Landlord shall endeavor to reconcile the
question(s) or dispute(s) within thirty (30) days after the notice from Tenant
questioning or disputing the report of Landlord's accountants.  In the event
that it is finally determined by the parties that Tenant has understated
percentage rent for any Lease year by three percent (3%) or more, Tenant shall
pay the cost of the audit.  Furthermore, if Tenant's gross sales cannot be
verified due to the insufficiency or inadequacy of Tenant's records, then Tenant
shall pay the cost of the audit.  The cost of any audit resulting from failure
to report percentage rent after written notification of default shall be at the
sole cost of Tenant.

SECTION 7.
TITLE ENCUMBRANCES

Tenant’s rights under this Lease are subject and subordinate to those title
matters set forth in Landlord’s owner’s title insurance policy issued by Chicago
Title Insurance Company, being Policy No. 1141013, dated December 9, 2004.  All
of the foregoing are collectively referred to herein as the “Underlying
Documents” and Tenant agrees that it shall abide by the terms and conditions of
the Underlying Documents.

SECTION 8.
RIGHT TO REMODEL

(a)           Tenant may, at Tenant's expense, make repairs and alterations to
the interior non-structural portions of the demised premises and remodel the
interior of the demised premises, excepting structural and exterior changes, in
such manner and to such extent as may from time to time be deemed necessary by
Tenant for adapting to the demised premises to the requirements and uses of
Tenant and for the installation of its fixtures, appliances and equipment.  Any
structural or exterior alteration may only be made by Tenant with the prior
written approval of Landlord, which approval may be granted or withheld in
Landlord's sole discretion.  All plans for any structural alterations shall be
submitted to Landlord for endorsement of its approval prior to commencement of
work.  Upon Landlord's request, Tenant shall be obligated, if it remodels and/or
alters the demised premises, to restore the demised premises upon vacating the
same. Tenant will indemnify and save harmless the Landlord from and against all
mechanics liens or claims by reason of repairs, alterations or improvements
which may be made by Tenant to the demised premises.  Inasmuch as any such
alterations, additions or other work in or to the demised premises may
constitute or create a hazard, inconvenience or annoyance to the public and
other tenants in the Shopping Center, Tenant shall, if so directed in writing by
Landlord, erect barricades, temporarily close the demised premises, or affected
portion thereof, to the public or take whatever measures are necessary to
protect the building containing the demised premises, the public and the other
tenants of the Shopping Center for the duration of such alterations, additions
or other work.  If Landlord determines, in its sole judgment, that Tenant has
failed to take any of such necessary protective measures, and Tenant fails to
cure same within ten (10) days after notice thereof, Landlord may do so and
Tenant shall reimburse Landlord for the cost thereof within ten (10) days after
Landlord bills Tenant therefor.

 
 

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(b)           All such work, including Tenant's Work pursuant to Exhibit "C"
shall be performed lien free by Tenant.  In the event a mechanic's lien is filed
against the premises or the Shopping Center, Tenant shall discharge or bond off
same within ten (10) days from the filing thereof.  If Tenant fails to discharge
said lien, Landlord may bond off or pay same without inquiring into the validity
or merits of such lien, and all sums so advanced shall be paid on demand by
Tenant as additional rent.

SECTION 9.
UTILITIES

(a)           The Tenant agrees to be responsible and pay for all public utility
services rendered or furnished to the demised premises during the term hereof,
including, but not limited to, heat, water, gas, electric, steam, telephone
service and sewer services, together with all taxes, levies or other charges on
such utility services when the same become due and payable.  Landlord will
separately meter utilities prior to delivery.  Landlord shall provide, or cause
to be provided, all such utility services to the premises during the term of
this Lease.  Tenant shall be responsible for all utility services and costs
inside the premises.  Landlord shall not be liable for the quality or quantity
of or interference involving such utilities unless due directly to Landlord's
negligence.

(b)           During the term hereof, whether the demised premises are occupied
or unoccupied, Tenant agrees to maintain heat sufficient to heat the demised
premises so as to avert any damage to the demised premises on account of cold
weather.

SECTION 10.
GLASS

The Tenant shall maintain the glass part of the demised premises, promptly
replacing any breakage and fully saving the Landlord harmless from any loss,
cost or damage resulting from such breakage or the replacement thereof.

SECTION 11.
PERSONAL PROPERTY

The Tenant further agrees that all personal property of every kind or
description that may at any time be in or on the demised premises shall be at
the Tenant's sole risk, or at the risk of those claiming under the Tenant, and
that the Landlord shall not be liable for any damage to said property or loss
suffered by the business or occupation of the Tenant caused in any manner
whatsoever.

SECTION 12.
RIGHT TO MORTGAGE

(a)           Landlord reserves the right to subject and subordinate this Lease
at all times to the lien of any deed of trust, mortgage or mortgages now or
hereafter placed upon Landlord's interest in the demised premises; provided,
however, that no default by Landlord, under any deed of trust, mortgage or
mortgages, shall affect Tenant's rights under this Lease, so long as Tenant
performs the obligations imposed upon it hereunder and is not in default
hereunder, and Tenant attorns to the holder of such deed of trust or mortgage,
its assignee or the purchaser at any foreclosure sale.  Any such subordination
shall be contingent upon Tenant receiving a commercially reasonable
non-disturbance agreement.  It is a condition, however, to the subordination and
lien provisions herein provided, that Landlord shall procure from any such
mortgagee an agreement in writing, which shall be delivered to Tenant or
contained in the aforesaid subordination agreement, providing in substance that
so long as Tenant shall faithfully discharge the obligations on its part to be
kept and performed under the terms of this Lease and is not in default under the
terms hereof, its tenancy will not be disturbed nor this Lease affected by any
default under such mortgage.  Landlord represents and warrants that, as of the
commencement date, there shall be no mortgages, ground leases or other
encumbrances that could dispossess Tenant's leasehold interest hereunder
(collectively, "Mortgages") on Landlord's fee title to the Center other than
that certain Deed of Trust and Security Agreement and Fixture Filing and
Assignment of Leases and Rents which were filed in King County, Washington, on
June 15, 2005, between Massachusetts Mutual Life Insurance Company, as
mortgagee, and Landlord, as mortgagor.  Landlord agrees that Tenant's
obligations hereunder shall be contingent upon Tenant entering into a
commercially reasonable subordination, non-disturbance and attornment agreement
("SNDA") with such Mortgage holder on or before the commencement date.  Further,
in the event the conditions set forth herein are not satisfied, Tenant shall
have the right to terminate this Lease upon delivery of notice of such election
to Landlord any time after the commencement date but prior to Landlord's
satisfaction of the conditions set forth herein.  In any event, Tenant shall
have no obligations hereunder, specifically including the obligation to pay
rent, until the conditions set forth herein are satisfied.

 
 

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(b)           Wherever notice is required to be given to Landlord pursuant to
the terms of this Lease, Tenant will likewise give such notice to any mortgagee
of Landlord's interest in the demised premises upon notice of such mortgagee's
name and address from Landlord.  Furthermore, such mortgagee shall have the same
rights to cure any default on the part of Landlord that Landlord would have had.

SECTION 13.
SUBLEASE OR ASSIGNMENT

(a)           Tenant may assign Tenant's interest in this Lease or sublet all or
any portion of the demised premises to a nationally recognized retailer (defined
as a retailer with at least fifty (50) retail stores in the United States) or
regionally recognized retailer (defined as a retailer with at least five (5)
retail stores in the State of Washington) customarily found in similar shopping
centers without Landlord's consent.  Any other assignment or subletting not
specifically provided for in this Section 13 shall be subject to Landlord’s
prior written consent, which consent shall not be unreasonably
withheld.  Landlord’s review of the proposed assignee or subtenant shall be
limited to business reputation, business experience, a retail use compatible
with then existing tenant mix of the Shopping Center, and financial ability to
perform its obligations under this Lease or the proposed sublease, as the case
may be.  In any such event, Tenant shall remain fully and primarily liable
hereunder.  Tenant's right to assign or sublet shall be subject to those
exclusives and prohibited uses set forth on Exhibit "D" attached hereto and made
a part hereof, which are the exclusives and prohibited uses in effect for the
Shopping Center as of the date hereof, for so long as and to the extent said
exclusives and prohibited uses are still in full force and effect, as well as
exclusives and prohibited uses hereafter granted for tenants leasing more than
15,000 square feet of space elsewhere within the Shopping Center, for so long as
and to the extent said exclusives are still in full force and effect.

In the event Tenant desires to assign the Lease and such assignment requires
Landlord’s prior written consent, then Landlord shall within fifteen (15)
business days of receipt of Tenant’s written notice to Landlord requesting such
consent, either consent to such assignment, or elect to terminate the Lease
effective sixty (60) days after notice of such election to terminate.  In the
event Landlord terminates the Lease pursuant to this Section 13(a), (i) then
effective upon such termination date, neither party shall have any further
rights or liabilities hereunder arising after such termination date, and (ii)
Tenant shall have the right to nullify such termination by withdrawing its
assignment request within ten (10) days after receiving Landlord’s termination
notice and continuing as the direct tenant/occupant hereunder.

 
 

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(b)           Tenant may, without the consent of Landlord, (i) grant licenses
and/or concessions within the demised premises or (ii) assign or sublet all or
any portion of the demised premises to (a) any parent, affiliate or subsidiary
corporation of Tenant; (b) a transferee or successor by merger, consolidation or
acquisition of Tenant or its parent or subsidiary; or (c) a transferee with a
good business reputation who is acquiring all or substantially all of the stores
of the Tenant in the State of Washington or the assets of the Tenant, its parent
or subsidiary.  Any such assignee or sublessee shall be bound by the terms of
this Lease.  Tenant shall deliver to Landlord in the ordinary course of its
business an instrument whereby the assignee or entity succeeding to Tenant’s
interest hereunder agrees to be bound by the terms of this Lease.

In the event of any assignment of this Lease or subletting of the demised
premises, in whole or in part, Tenant shall remain fully and primarily liable
hereunder.

(c)           Landlord may assign Landlord's interest in this Lease without the
consent of Tenant (a) to any entity to which Landlord transfers its fee interest
in the demised premises provided such entity (i) agrees in writing to be bound
by all the terms of this Lease and (ii) such assignment is pursuant to a bona
fide arm's length transaction not designed to reduce Landlord's liability or to
otherwise exempt Landlord from any provision of this Lease or (b) subject to
Section 12, as security for any indebtedness undertaken by Landlord.

SECTION 14.
COMMON AREAS

Common areas means all areas and facilities in the Shopping Center provided and
so designated by Landlord and made available by Landlord in the exercise of good
business judgment for the common use and benefit of tenants of the Shopping
Center and their customers, employees and invitees.  Common areas shall include
(to the extent the same are constructed), but not be limited to, the parking
areas, sidewalks, landscaped areas, corridors, stairways, boundary walls and
fences, incinerators, truckways, service roads, and service areas not reserved
for the exclusive use of Tenant or other tenants.

SECTION 15.
OPERATION OF COMMON AREAS

(a)           Landlord shall, throughout the term hereof, operate and maintain
the common areas including the parking areas for the use and benefit of the
tenants of the Shopping Center and their customers and invitees.  Landlord shall
at all times have exclusive control of the common areas and may at any time and
from time to time: (i) promulgate, modify and amend reasonable rules and
regulations for the use of the common areas, which rules and regulations shall
be binding upon the Tenant upon delivery of a copy thereof to the Tenant; (ii)
temporarily close any part of the common areas, including but not limited to
closing the streets, sidewalks, road or other facilities to the extent necessary
to prevent a dedication thereof or the accrual of rights of any person or of the
public therein; (iii) exclude and restrain anyone from the use or occupancy of
the common areas or any part thereof except bona fide customers and suppliers of
the tenants of the Shopping Center who use said areas in accordance with the
rules and regulations established by Landlord; and (iv) engage others to operate
and maintain all or any part of the common areas, on such terms and conditions
as Landlord shall, in its sole judgment, deem reasonable and proper; and (v)
make such changes in the common areas as in its opinion are in the best interest
of the Shopping Center, including but not limited to changing the location of
walkways, service areas, driveways, entrances, existing automobile parking
spaces and other facilities, changing the direction and flow of traffic and
establishing prohibited areas; provided, however, Landlord shall not (i) change
the configuration of the Shopping Center behind the demised premises (east side
of the Shopping Center) so as to materially adversely affect access to the “No
Build Area” from the east side of the Shopping Center; or (ii) make any changes
or modifications to the parking on the east side of the Shopping Center that
result in a parking ratio of less than 3.5 spaces per 1,000 square feet of
leasable space for the Shopping Center.  Notwithstanding the foregoing, the
moving and replacement of the access points to the Shopping Center from the
public rights of way on the east side of the Shopping Center shall not be deemed
material and adverse provided that comparable access points are provided.  In
addition to the foregoing, Landlord shall be permitted to make changes to the
Shopping Center to the extent necessary during the Renovation Period as set
forth in Section 15(b) hereof.

 
 

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(b)           Tenant acknowledges that Landlord will be renovating the Shopping
Center, including the Common Areas, which renovation shall commence during the
first five (5) years of the term hereof and once commenced, shall not exceed a
period of three and one half (3.5) years (“Renovation Period”).  Tenant
acknowledges that during the Renovation Period the parking field and accessways
to the demised premises will be renovated and therefore there will be temporary
interferences with same.  Notwithstanding the foregoing, during the Renovation
Period, the parking for, access to or visibility or use of the demised premises
shall not be interfered with by Landlord for a period of more than two hundred
seventy (270) consecutive days (the “Tenant Obstruction Period”) and Landlord
shall renovate the Common Areas adjacent to and in front of the demised premises
in three phases during such Tenant Obstruction Period so that parking for and
access to the demised premises will always be available per at least one of the
three phases illustrated on the site plan attached hereto as Exhibit "A-1" and
so that any renovation to any one of the three phases shall not last for more
than ninety (90) consecutive days.  In the event during the Tenant Obstruction
Period, Tenant’s gross sales from the demised premises are less than the
comparative monthly sales from the prior year, Tenant shall be entitled to pay
Landlord, in lieu of minimum rent otherwise payable hereunder, eight percent
(8%) of Tenant’s gross sales from the demised premises, as calculated by Tenant
using generally accepted accounting principles consistently applied.  Within
thirty (30) days after the end of each month during the Tenant Obstruction
Period in which Tenant exercises the foregoing right to abate minimum rent,
Tenant shall deliver to Landlord a statement signed by an authorized
representative of the Tenant setting forth the gross sales of Tenant during such
month compared to the gross sales from the same month from the prior year and
Tenant shall pay the foregoing abatement rent in lieu of the next immediately
monthly payment of minimum rent due hereunder.

(c)           As part of its renovation of the Shopping Center during the
Renovation Period, and subject to all governmental approvals, Landlord shall
construct a means of access from Factoria Blvd to the west side of the demised
premises which may or may not be as depicted on the site plan.  Upon the
expiration of the Renovation Period, Landlord agrees that no modification to the
Shopping Center shall (i) alter or make any changes, including any reduction or
rearrangement of parking spaces, to that portion of the Shopping Center
indicated on the site plan as the "Protected Area", (ii) materially or adversely
interfere with truck access to the loading doors of the demised premises, (iii)
materially or adversely interfere with customer access to the demised premises,
or (iv) result in the construction of any buildings to that portion of the
Shopping Center indicated on the site plan as "No Build Area".

(d)           Tenant shall keep all common areas free of obstructions created or
permitted by Tenant.  Tenant shall permit the use of the common areas only for
normal parking and ingress and egress by its customers and suppliers to and from
the demised premises.  If in Landlord's opinion unauthorized persons are using
any of the common areas by reason of Tenant's occupancy of the demised premises,
Landlord shall have the right at any time to remove any such unauthorized
persons from said areas or to restrain unauthorized persons from said
areas.  Landlord, Tenant, and others constructing improvements or making repairs
or alterations in the Shopping Center shall have the right to make reasonable
use of portions of the common areas.

SECTION 16.
COMMON AREA MAINTENANCE, TENANT'S SHARE

(a)           Tenant shall initially pay to Landlord as additional rental,
simultaneously with the payment of minimum rental called for under Section 5(a),
the estimated monthly amount of Tenant's Proportionate Share of the "Maintenance
Costs" (as defined in Section 16(c) below)  for the operation and maintenance of
the common areas as set forth in Section 5(e), Two Dollars and 25/100 cents
($2.25) per square foot, payable in equal monthly installments of Three Thousand
Nine Hundred Seventy-nine and 31/100 Dollars ($3,979.31) as the estimated
monthly amount of Tenant's Proportionate Share of the "Maintenance Costs" (as
defined in Section 16(c) below) for the operation and maintenance of the common
areas.

(b)           The Maintenance Costs for the common areas shall be computed on an
accrual basis, under generally accepted accounting principles, and shall include
all costs of operating, maintaining, repairing and replacing the common areas,
including by way of example but not limitation: (i) cost of labor (including
worker's compensation insurance, employee benefits and payroll taxes); (ii)
materials, and supplies used or consumed in the maintenance or operation of the
common area; (iii) the cost of operating and repairing of the lighting; (iv)
cleaning, painting, removing of rubbish or debris, snow and ice, private
security services, and inspecting the common areas; (v) the cost of repairing
and/or replacing paving, curbs, walkways, markings, directional or other signs;
landscaping, and drainage and lighting facilities; (vi) rental paid for
maintenance of machinery and equipment; (vii) cost of commercial general
liability insurance and property insurance for property in the common areas
which are not part of the building and/or demised premises; and (viii) a
reasonable allowance to Landlord for Landlord's supervision, which allowance
shall not in an accounting year exceed fifteen percent (15%) of the total of all
Maintenance Costs for such accounting year (all of the foregoing are
collectively referred to herein as "Maintenance Costs").

 
 

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Notwithstanding the foregoing, the following shall be excluded, deducted or
credited from Maintenance Costs when computing Tenant's Proportionate Share of
same:

 
(i)
Net recoveries received by the Landlord from tenants as a result of any act,
omission, default or negligence or as the result of breaches by tenants of the
provisions of their leases and/or other amounts received by Landlord from third
parties, which recoveries and/or amounts reimburse Landlord for or reduce
Maintenance Costs.

 
(ii)
Gross revenues from charges, if any, made for the use of the parking facilities
and other Common Areas or facilities of the Center (including, without
limitation, the sale or rental of advertising space).

 
(iii)
The cost of the land underlying and the construction of the Center, whether
initially or in connection with any replacement or expansion thereof.

 
(iv)
The depreciation or amortization of the Center or any part thereof or any
equipment or other property used in connection therewith.

 
(v)
The initial cost of the installation of the parking areas or facilities or the
amortization or depreciation of such initial cost.

 
(vi)
The cost of providing or performing improvements, work or repairs to or within
(a) any portion of the premises of any other tenants or occupants in the Center,
(b) any other building which is not part of the Common Areas or (c) any portion
of the Center the use of which is not available to the public.

 
(vii)
Any reserves for future expenditures or liabilities which would be incurred
subsequent to the then current accounting year.

 
(viii)
Any bad debt loss, rent loss or reserves for bad debt or rent loss.

 
(ix)
Legal fees, audit fees, leasing commissions, advertising expenses and other
costs incurred in connection with (a) the original development or original
leasing of the Center, (b) the future re-leasing of the Center, (c) any
advertising or promotion of the Center or any part thereof, and (d) disputes
with other tenants or third parties.

 
(x)
Costs of repairing or restoring any portion of the Center damaged or destroyed
by any casualty or peril.

 
(xi)
Costs in connection with the cleanup or removal of hazardous materials;
provided, however, that Maintenance Costs may include the costs to remove
Hazardous Substances from the surface of the parking lot, such as paint cans and
minor motor oil spills, but excluding contamination otherwise addressed in
Section 43 below and further provided that Tenant’s Proportionate Share of such
costs shall not exceed Five Hundred Dollars ($500.00) in any one Lease Year.

 
(xii)
Net recoveries from insurance policies taken out by the Landlord to the extent
that the proceeds reimburse Landlord for expenses which have previously been
included or which would otherwise be included in Maintenance Costs.

 
(xiii)
Contributions to Maintenance Costs by tenants or occupants whose space is
excluded from the denominator of the Tenant's Proportionate Share.

 
 

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(xiv)
Any management costs or fees of any kind that are paid for management or
supervising functions performed by the Landlord or by some other entity, whether
or not the cost or fee is paid to a third party or paid to the Landlord in
excess of the fifteen percent (15%) of Tenant's Proportionate Share of
Maintenance Costs permitted in Section 16(b).

 
(xv)
Costs of a capital nature, including all capital improvements, alterations,
repairs and/or replacements (for purposes of this Lease, "costs of a capital
nature" shall mean the cost of any item or service the useful life of which
exceeds 36 months).

 
(xvi)
Costs relating to the negligence of Landlord or its contractors, agents or
employees or the payment of any claims or damages relating to the same.

 
(xvii)
Any insurance costs, except to the extent required to be paid by Tenant pursuant
to Section 27.

(c)           Landlord shall maintain accurate and detailed records of all
Maintenance Costs for the common areas in accordance with generally accepted
accounting principles.  For purposes of this Lease, "Tenant's Proportionate
Share" shall be the product of the applicable cost or expense multiplied by a
fraction, the numerator of which shall be the gross leasable area (expressed in
square feet) of the demised premises and the denominator of which shall be the
gross leasable area (expressed in square feet) of all leasable space in the
Shopping Center.  Tenant’s Proportionate Share of that portion of the Shopping
Center is presently twenty-four one/hundredths percent (.24%), which amount is
subject to change from time to time during the term of this Lease.

(d)           The actual amount of Tenant's Proportionate Share of all
Maintenance Costs shall be computed by Landlord within one hundred eighty (180)
days after the end of each accounting year (which Landlord may change from time
to time).  At this time Landlord shall furnish to Tenant a statement showing in
reasonable detail the actual Maintenance Costs incurred during such accounting
year and Tenant's Proportionate Share thereof (prorated for any partial Lease
year, with appropriate adjustments to reflect any change in the floor area of
the premises or the gross leasable area of a building occurring during such
accounting year).  Any excess payments from Tenant shall be applied to the next
installments of the Maintenance Costs hereunder, or refunded by Landlord.  Any
underpayments by Tenant shall be paid to Landlord within thirty (30) days after
receipt of such reconciliation statement.   Tenant's estimated monthly
Maintenance Cost hereunder may be adjusted by written notice from
Landlord.  Notwithstanding anything contained in this Section 16 to the
contrary, Landlord and Tenant agree that the actual amount of Tenant's
Proportionate Share of Maintenance Costs, excluding costs for snow and ice
removal, common area utilities and common area security shall not increase by
more than five percent (5%) in any lease year over the previous lease year, and
that Tenant's Proportionate Share of Maintenance Costs for the first lease year
shall not exceed Two Dollars and 25/100 cents ($2.25) per square foot.

(e)           If Tenant, for any reason in the exercise of good business
judgment, questions or disputes any statement of Maintenance Costs prepared by
Landlord, then Tenant, at its own expense, may employ such accountants as Tenant
may select to review Landlord's books and records solely with respect to
Maintenance Costs during the prior two Lease years and to determine the amount
of Maintenance Costs for the period or periods covered by such statements.  If
the report of the accountants employed by Tenant shall show any overcharge paid
by Tenant, then Tenant shall receive a credit from Landlord for such difference.
Any underpayment shall be paid by Tenant.  Tenant agrees that no contingency fee
auditors shall be employed by Tenant for the purpose of conducting any such
audit.  In the event that Landlord questions or disputes the correctness of such
report, the accountants employed by Tenant and the accountants employed by
Landlord shall endeavor to reconcile the question(s) or dispute(s) within thirty
(30) days after the notice from Tenant questioning or disputing the report of
Landlord's accountants.  In the event that it is finally determined by the
parties that Landlord has overstated Maintenance Costs for any Lease year by
three percent (3%) or more, Landlord shall pay the reasonable cost of the
audit.  Furthermore, if Landlord’s Maintenance Costs cannot be verified due to
the insufficiency or inadequacy of Landlord's records, then Landlord shall pay
the cost of the audit.

 
 

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SECTION 17.
EMINENT DOMAIN

(a)           In the event the entire premises or any part thereof shall be
taken or condemned either permanently or temporarily for any public or
quasi-public use or purpose by any competent authority in appropriation
proceedings or by any right of eminent domain, the entire compensation or award
therefore, including leasehold, reversion and fee, shall belong to the Landlord
and Tenant hereby assigns to Landlord all of Tenant's right, title and interest
in and to such award.

(b)           In the event that only a portion of the demised premises, not
exceeding twenty percent (20%) of same, shall be so taken or condemned, and the
portion of the demised premises not taken can be repaired within ninety (90)
days from the date of which possession is taken for the public use so as to be
commercially fit for the operation of Tenant's business, the Landlord at its own
expense shall so repair the portion of the demised premises not taken and  there
shall be an equitable abatement of rent for the remainder of the term and/or
extended terms.  The entire award paid on account thereof shall be paid to the
Landlord.  If the portion of the demised premises not taken cannot be repaired
within ninety (90) days from the date of which possession is taken so as to be
commercially fit for the operation of Tenant's business, then this Lease shall
terminate and become null and void from the time possession of the portion taken
is required for public use, and from that date on the parties hereto shall be
released from all further obligations hereunder except as herein stated and
Tenant shall have no claim for any compensation on account of its leasehold
interest.  No other taking, appropriation or condemnation shall cause this Lease
to be terminated.  Any such appropriation or condemnation proceedings shall not
operate as or be deemed an eviction of Tenant or a breach of Landlord's covenant
of quiet enjoyment and Tenant shall have no claim for any compensation on
account of its leasehold interest.

(c)           In the event that more than 20% of the demised premises shall at
any time be taken by public or quasi-public use or condemned under eminent
domain, then at the option of the Landlord or Tenant upon the giving of thirty
(30) days written notice (after such taking or condemnation), this Lease shall
terminate and expire as of the date of such taking and any prepaid rental shall
be prorated as of the effective date of such termination.

SECTION 18.
TENANT'S TAXES

Tenant further covenants and agrees to pay promptly when due all taxes assessed
against Tenant's fixtures, furnishings, equipment and stock-in trade placed in
or on the demised premises during the term of this Lease.

SECTION 19.
RISK OF GOODS

All personal property, goods, machinery, and merchandise in said demised
premises shall be at Tenant's risk if damaged by water, fire, explosion, wind or
accident of any kind, and Landlord shall have no responsibility therefore or
liability for any of the foregoing and Tenant hereby releases Landlord from such
liability.

SECTION 20.
USE AND OCCUPANCY

(a)           Tenant agrees to initially open and operate a DSW for the retail
sales of shoes and other footwear in the demised premises, fully staffed and
stocked and equivalent to other DSW stores operated by Tenant in the State of
Washington (the “Permitted Use”), or for any other lawful retail use upon
obtaining the prior written consent of Landlord, which consent shall not be
unreasonably withheld.  Any use other than a retail shoe store shall be
consistent with the then existing character of the Shopping Center, and shall
not violate those exclusives and prohibited uses set forth on Exhibit "D"
attached hereto and made a part hereof, which are the exclusives and prohibited
uses in effect for the Shopping Center as of the date hereof, for so long as and
to the extent said exclusives and prohibited uses are still in full force and
effect, as well as exclusives and prohibited uses hereafter granted for tenants
leasing more than 15,000 square feet of space elsewhere within the Shopping
Center, for so long as and to the extent said exclusives are still in full force
and effect.  In connection with the use exclusives and prohibited uses set forth
on Exhibit "D", Landlord (i) acknowledges that Tenant is not leasing space in
Buildings H, F or L as identified and described in the use exclusive for Old
Navy, (ii) has not signed a lease with TJX as of the date hereof and agrees that
upon executing any such lease will provide that DSW is carved-out as an
exception to any use exclusive granted to such tenant, and (iii) Landlord shall
indemnify, defend and hold harmless Tenant, Tenant’s officers, directors,
employees and agents against any and all damages, claims and liabilities arising
from any claim by Nordstrom Rack that Tenant is operating in violation of the
use exclusive granted to such tenant.

 
 

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(b)           For so long as Tenant is continuously and regularly operating its
business in the demised premises, Landlord will not lease any space within the
Shopping Center or permit any space within the Shopping Center (to the extent
Landlord has control) to be used by any person, persons, partnership or entity
who devotes ten percent (10%) or more of its selling area to the sale of
footwear (the “Exclusive Use”).  The foregoing limitation shall not apply to (i)
shoe departments found in department stores, junior department stores, general
merchandise and discount department stores such as Target, Marshalls, TJX and
Kohls provided that such tenants are operating their shoe department consistent
with their national prototypical shoe department; and (ii) the existing tenants
or their successors or assigns at the Shopping Center which presently have the
right to sell shoes and other footwear, as set forth on Exhibit "E", so long as
such tenants are operating their prototypical shoe department consistent with
their national prototypical shoe department.  Notwithstanding the foregoing, in
the event an existing tenant at the Shopping Center which presently has the
right to engage in the Exclusive Use assigns or sublets its portion of the
Shopping Center, and the assignment or sublet is subject to Landlord’s consent,
Landlord will condition its consent on such assignment or sublet being subject
to the Exclusive Use to the extent Landlord has the right to do so.  Any portion
of the Shopping Center which is sold by Landlord during the term shall contain a
deed restriction incorporating the foregoing Exclusive Use.

(c)           Tenant shall at all times conduct its operations on the demised
premises in a lawful manner and shall, at Tenant's expense, comply with all
laws, rules, orders, ordinances, directions, regulations, and requirements of
all governmental authorities, now in force or which may hereafter be in force,
which shall impose any duty upon Landlord or Tenant with respect to the business
of Tenant and the use, occupancy or alteration of the demised premises.  Tenant
shall comply with all requirements of the Americans with Disabilities Act, and
shall be solely responsible for all alterations within the demised premises in
connection therewith.  Tenant covenants and agrees that the demised premises
shall not be abandoned or left vacant and that only minor portions of the
demised premises shall be used for office or storage space in connection with
Tenant's business conducted in the demised premises.

Without being in default of this Lease, Tenant shall have the right to cease
operating (go dark) at any time and for whatever reason after the first (1st)
lease year.  Notwithstanding the foregoing, Tenant’s right to vacate (go dark),
shall not release or excuse the Tenant from any obligations or liabilities,
including the payment of minimum rent and additional rent and other charges,
under this Lease without the express written consent of Landlord.  In the event
Tenant fails to (i) open and operate within ninety (90) days after delivery of
the demised premises or (ii) operate for one hundred twenty (120) or more
consecutive days, Landlord shall have the right, effective upon thirty (30) days
prior written notice to Tenant, to terminate the Lease as Landlord’s sole
remedy, provided that if Tenant recommences operating fully stocked in
substantially all of the premises within such thirty (30) days, Landlord’s
termination shall be null and void.  In the event Tenant fails to open and
operate as provided above or shall cease operating as provided above, Landlord’s
sole remedy on account thereof shall be limited to the right to elect to
recapture the premises and terminate the Lease, whereupon there shall be no
further liability of the parties hereunder.  Such termination shall be effective
upon written notice to Tenant any time prior to Tenant reopening for business in
the demised premises.  Provided, however, in the event Landlord has not so
elected to recapture, Tenant shall have right to notify Landlord of Tenant’s
intention to reopen for business in the demised premises within sixty (60) days,
followed by Tenant’s actually reopening for business fully stocked in
substantially all of the demised premises within such sixty (60) day period,
which notice and actual reopening shall toll Landlord’s right to recapture.

(d)           Landlord agrees that during the term of this Lease no space in the
Shopping Center (excluding areas of the Shopping Center not owned by Landlord)
will be used for a flea market, theater showing either film, television or the
like or live entertainment, bar (except as permitted below), game/amusement room
(except as permitted below), bowling alley, indoor playground (except as
permitted below), or adult bookstore (defined for the purposes hereof as a store
devoting ten percent (10%) or more of its floor space to offering books and/or
video materials for sale or for rent which are directed to or restricted to
adult customers due to sexually explicit subject matter or for any other reason
making it inappropriate for general use).  Landlord agrees that during the term
of this Lease the spaces identified on the site plan as “Restaurant-Not
Permitted” shall not be used as a restaurant, bar, or any establishment selling
food products including but not limited to a coffee shop, candy store, bagel
store, ice cream store or any fast food/sandwich shop establishment.  Landlord
agrees that during the term of this Lease the spaces identified on the site plan
as “Health Club-Not Permitted” shall not be used as a health club, gym, yoga or
fitness studio, karate studio, or weight loss clinic.  In addition to the
foregoing, Landlord and Tenant agree that space outside of the “Restaurant-Not
Permitted” area may be used as a bar, game/amusement room or indoor playground
provided that such uses are incidental to a restaurant use.  The aforementioned
restrictions shall not apply to the rights of tenant’s under existing leases at
the Shopping Center as the same may be renewed, extended, modified or amended
(except that no such renewal, extension, modification or amendment shall grant a
tenant the right to engage in any of the aforementioned prohibited uses where
such tenant did not previously have that right).

 
 

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(e)           Tenant agrees that the demised premises may not be used for the
operation of a bingo parlor, bar, tavern, restaurant, cocktail lounge, adult
book or adult video store (defined for the purposes hereof as a store devoting
ten percent (10%) or more of its floor space to offering books and/or video
materials for sale or for rent which are directed to or restricted to adult
customers due to sexually explicit subject matter or for any other reason making
it inappropriate for general use), adult theater or "strip-tease" establishment,
automotive maintenance or automotive repair facility, warehouse, car wash, pawn
shop, check cashing service, establishment selling second hand goods, flea
market, entertainment or recreational facility (as defined below), training or
educational facility (as defined below); the renting, leasing, selling or
displaying of any boat, motor vehicle or trailer; industrial or manufacturing
purposes; a carnival, circus or amusement park; a gas station, facility for the
sale of paraphernalia for use with illicit drugs, funeral home, blood bank or
mortuary, gambling establishment, banquet hall, auditorium or other place of
public assembly, second-hand or surplus store, gun range; the sale of fireworks;
a veterinary hospital or animal raising facility; the storage of goods not
intended to be sold from the Center; a video rental store, karate center,
central laundry or dry cleaning plant, supermarket or any facility which is
illegal or dangerous, constitutes a nuisance, emits offensive odors, fumes, dust
or vapors or loud noise or sounds or is inconsistent with community oriented
shopping centers.  For the purposes of this Section 20(e), the phrase
"entertainment or recreational facility" shall include, without limitation, a
movie or live theater or cinema, bowling alley, skating rink, gym, health spa or
studio, dance hall or night club, billiard or pool hall, massage parlor, health
club, game parlor or video arcade (which shall be defined as any store
containing more than five (5) electronic games) or any other facility operated
solely for entertainment purposes (such as a "laser tag" or "virtual reality"
theme operation).  For the purposes of this Section 20(e), the phrase "training
or educational facility" shall include, without limitation, a beauty school,
nail salon, barber college, reading room, place of instruction or any other
operation catering primarily to students or trainees as opposed to customers.

SECTION 21.
NUISANCES

Tenant shall not perform any acts or carry on any practice which may injure the
demised premises or be a nuisance or menace to other tenants in the Shopping
Center.

SECTION 22.
WASTE AND REFUSE REMOVAL

Tenant covenants that it will use, maintain and occupy said demised premises in
a careful, safe, lawful and proper manner and will not commit waste
therein.  Landlord or its agent shall have access at all reasonable times to the
demised premises for purposes of inspecting and examining the condition and
maintenance of the demised premises.  Tenant agrees to remove all refuse from
the demised premises in a timely, clean and sanitary manner.  Tenant shall
provide a refuse collection container at the rear of the demised premises to
accommodate Tenant's refuse and Tenant shall routinely clean up around trash
containers.  Tenant shall contract with a licensed and insured refuse collection
contractor to timely remove refuse therefrom and the location of the container
shall be approved by Landlord.

 
 

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SECTION 23.
DESTRUCTION OF PREMISES

(a)           Landlord shall at all times during the term of this Lease carry
property insurance on the building containing the demised premises, including
the “Structural Portions” (defined in Section 24(a) below) and common utility
lines up to the point they serve individual tenant’s premises.  Landlord shall
be under no obligation to maintain insurance on any improvements installed by or
for the benefit of Tenant's use of the premises or otherwise owned by
Tenant.  Landlord may elect to self-insure its obligations hereunder and/or use
whatever deductibles as Landlord deems appropriate, in its sole discretion.

(b)           If the demised premises shall be damaged, destroyed, or rendered
untenantable, in whole or in part, by or as the result or consequence of fire or
other casualty during the term hereof, Landlord shall repair and restore the
same to a good tenantable condition with reasonable dispatch.  During such
period of repair, the rent herein provided for in this Lease shall abate (i)
entirely in case all of the demised premises are untenantable; and (ii)
proportionately if only a portion of the demised premises is untenantable and
Tenant is able to economically conduct its business from the undamaged portion
of the demised premises.  The abatement shall be based upon a fraction, the
numerator of which shall be the square footage of the damaged and unusable area
of the demised premises and the denominator shall be the total square footage of
the demised premises.  Said abatement shall cease at such time as the demised
premises shall be restored to a tenantable condition.

(c)           In the event the demised premises, because of such damage or
destruction, are not repaired and restored to a tenantable condition with
reasonable dispatch within one hundred fifty (150) days from the date of receipt
of insurance proceeds for such damage or destruction, Tenant or Landlord may, at
their option, terminate this Lease within sixty (60) days following such one
hundred fifty (150) day period but prior to the repair and restoration of same
by giving prior written notice to the other party and thereupon Landlord and
Tenant shall be released from all future liability and obligations under this
Lease.

(d)           If one-third (1/3) or more of the ground floor area of the demised
premises are damaged or destroyed during the last two (2) years of the original
or any extended term of this Lease, Landlord shall have the right to terminate
this Lease by written notice to Tenant within sixty (60) days following such
damage or destruction, unless Tenant shall, within thirty (30) days following
receipt of such notice, offer to extend the term of this Lease for an additional
period of five (5) years from the date such damage or destruction is repaired
and restored.  If Tenant makes said offer to extend, Landlord and Tenant shall
determine the terms and conditions of said extension within thirty (30) days
thereafter or Tenant's offer shall not be deemed to prevent Landlord from
canceling this Lease.  If such terms and conditions have been mutually agreed to
by the parties, then Landlord shall accept Tenant's offer and shall repair and
restore the demised premises with reasonable dispatch thereafter.

(e)           If Landlord is required or elects to repair and restore the
demised premises as herein provided, Tenant shall repair or replace its stock in
trade, trade fixtures, furniture, furnishings and equipment and other
improvements including floor coverings, and if Tenant has closed, Tenant shall
promptly reopen for business.  Anything contained in this Section 23 to the
contrary notwithstanding, Landlord's restoration and repair obligations under
Section 23 shall in no event include restoration or repair of Tenant's Work or
improvements.

SECTION 24.
LANDLORD REPAIRS

(a)           Landlord shall keep in good order, condition, and repair the
following: (i) structural portions of the demised premises; (ii) downspouts;
(iii) gutters; (iv) utility lines leading up to the point of entry into the
demised premises; (v) the roof of the Building of which the demised premises
forms a part; and (vi) the plumbing and sewage system serving the demised
premises but located outside of the demised premises, except (as to all items)
for damage caused by any negligent act or omission of Tenant or its customers,
employees, agents, invitees, licensees or contractors, which shall be repaired
or replaced as necessary, at the sole cost and expense of Tenant. "Structural
Portions" shall mean only the following: (vii) foundations; (viii) exterior
walls except for interior faces); (ix) concrete slabs; (x) the beams and columns
bearing the main load of the roof; and (xi) the floors (but not floor
coverings).

 
 

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(b)           Notwithstanding the provisions of Section 24(a) above, Landlord
shall not be obligated to repair the following: (i) the exterior or interior of
any doors, windows, plate glass, or showcases surrounding the demised premises
or the store front; (ii) HVAC unit(s), equipment and systems (including all
components thereof) in the demised premises; or (iii) damage to Tenant's
improvements or personal property caused by any casualty, burglary, break-in,
vandalism, acts of terrorism, war or act of G-d.  Landlord shall, in any event,
have ten (10) days after notice from Tenant stating the need for repairs to
complete same, or commence and proceed with due diligence to complete
same.  Landlord shall be obligated to replace all HVAC components as and when
necessary during the first ten (10) years of the term hereof so long as Tenant
has fulfilled its obligations under Section 25(b)(ii) above, and provided such
replacements did not arise from (x) repairs, installations, alterations, or
improvements made by or for Tenant or anyone claiming under Tenant, or (y) the
fault or misuse of Tenant or anyone claiming under Tenant.  Provided that the
HVAC system serving the demised premises is for the exclusive use of Tenant,
Tenant shall have the obligation to replace all HVAC components as and when
necessary after the first ten (10) years of the term hereof; however in the
event the HVAC system serving the demised premises is not for the exclusive use
of Tenant, Landlord shall have the obligation to replace the HVAC system serving
the demised premises after the first ten (10) years of the term hereof.  Prior
to delivery of possession of the demised premises, Landlord shall install, at
its expense, a new HVAC unit(s), equipment and systems (including all components
thereof) in the demised premises.  Except as specifically set forth in this
Lease, Tenant expressly hereby waives the provisions of any law permitting
repairs by a tenant at Landlord's expense.

(c)           The provisions of this Section 24 shall not apply in the case of
damage or destruction by fire or other casualty or a taking under the power of
eminent domain in which events the obligations of Landlord shall be controlled
by Section 23 and Section 17 respectively.

(d)           Landlord shall assign to Tenant all warranties covering all
matters required by the terms hereof to be repaired and maintained by Tenant.

SECTION 25.
TENANT'S REPAIRS

(a)           Tenant shall keep and maintain, at Tenant's expense, all and every
other part of the demised premises in good order, condition and repair,
including, by way of example but not limitation: (i) all leasehold improvements;
(ii) all HVAC unit(s), equipment and systems (including all components thereof)
serving the demised premises; (iii) interior utility systems exclusively serving
the demised premises; (iv) plumbing and sewage facilities; (v) all interior
lighting; (vi) electric signs; (vii) all interior walls; (viii) floor coverings;
(ix) ceilings; (x) appliances and equipment; (xi) all doors, exterior entrances,
windows and window moldings; (xii) plate glass; (xiii) signs and showcases
surrounding and within the demised premises; (xiv) the store front; (xv)
sprinkler systems including supervisory alarm service in accordance with
National Fire Protection Association standards and current local and state fire
protection standards to ensure property operation, and as required by Section
27(b) below.

(b)           Sprinkler systems, if any, located in Tenant's area shall be
maintained in accordance with National Fire Protection Association standards to
ensure proper operation.  Sprinkler control valves (interior and exterior)
located in Tenant's area shall be monitored by supervisory alarm service.  In
the event local or state codes do not require alarm systems, Tenant shall
provide alarm service on all sprinkler systems to detect water flow and
tampering with exterior and interior main control valves of the sprinkler system
servicing Tenant's premises.  Moreover, it shall be Tenant's responsibility to
contact the Landlord’s property manager in the event the sprinkler system in the
demised premises is ever shut off for any reason, and advise same of any damage
occasioned or caused by the actions of Tenant, its agents, invitees, or
employees, and/or as a result of Tenant's repair obligations hereunder.  In the
event fifty percent (50%) or more of the total number of sprinkler heads require
replacement at any one time as part of ordinary maintenance, but excluding
repairs or replacements that arise from (x) repairs, installations alterations,
or improvements made by or for Tenant or anyone claiming under Tenant, or (y)
the fault or misuse of Tenant or anyone claiming under Tenant, such cost shall
be fifty percent (50%) borne by Landlord and fifty percent (50%) borne by
Tenant.  Tenant, at Tenant’s sole cost and expense, shall replace all sprinkler
heads due to repairs, installations, alterations, or improvements made by or for
Tenant or anyone claiming under Tenant, the fault or misuse of Tenant or anyone
claiming under Tenant, painting or environmental exposure from Tenant's
operations.  All other costs of maintaining the sprinkler system in the demised
premises shall be paid by Tenant.

 
 

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(c)           If Landlord deems any repair which Tenant is required to make
hereunder to be necessary, Landlord may demand that Tenant make such repair
immediately.  If Tenant refuses or neglects to make such repair and to complete
the same with reasonable dispatch, Landlord may make such repair and Tenant
shall, on demand, immediately pay to Landlord the cost of said repair, together
with annual interest at the Interest Rate.  Landlord shall not be liable to
Tenant for any loss or damage that may accrue to Tenant's stock or business by
reason of such work or its results.

(d)           Neither Tenant nor any of its contractors are permitted access to
or permitted to perform alterations of any kind to the roof of the building.

(e)           Tenant shall pay promptly when due the entire cost of work in the
demised premises undertaken by Tenant under this Lease (including, but not
limited to, Tenant's Work and/or alterations permitted under Section 8 of this
Lease) so that the demised premises and the Shopping Center shall at all times
be free of liens for labor and materials arising from such work; to procure all
necessary permits before undertaking any such work; to do all of such work in a
good and workmanlike manner, employing materials of good quality; to perform
such work only with contractors previously reasonably approved of in writing by
Landlord; to comply with all governmental requirements; and save Landlord and
its agents, officers, employees, contractors and invitees harmless and
indemnified from all liability, injury, loss, cost, damage and/or expense
(including reasonable attorneys' fees and expenses) in respect of any injury to,
or death of, any person, and/or damage to, or loss or destruction of, any
property occasioned by or growing out of any such work.

SECTION 26.
COVENANT OF TITLE AND PEACEFUL POSSESSION

Subject to the provisions of Section 12 hereof, Landlord shall, on or before the
date on which Tenant is permitted to install its merchandise and fixtures in the
demised premises, have good and marketable title to the demised premises in fee
simple and the right to make this Lease for the term aforesaid.  At such time,
Landlord shall put Tenant into complete and exclusive possession of the demised
premises, and if Tenant shall pay the rental and perform all the covenants and
provisions of this Lease to be performed by the Tenant, Tenant shall, during the
term hereby demised, freely, peaceably, and quietly enjoy and occupy the full
possession of the demised premises and the common facilities of the Shopping
Center, subject, however, to the terms and conditions of this Lease including
the Landlord’s right to modify, change or alter the Shopping Center during the
Renovation Period as set forth in Section 15(b) hereof.

SECTION 27.
TENANT'S AND LANDLORD'S INSURANCE; INDEMNITY

(a)           Tenant's Property Insurance.  Tenant agrees to procure and
maintain during the demised term a property insurance policy written on the
causes of loss-special form (also referred to as the special extended coverage
form), or the most broad property insurance form then available, insuring
against loss of, or damage to, Tenant's property, in, on or about the demised
premises.  Such property insurance shall include coverage (whether by additional
policies, endorsements or otherwise): (i) against earthquake and flood; (ii) for
plate glass; (iii) in an amount equal to the full insurable replacement cost,
without deduction for depreciation; (iv) with an agreed valuation provision in
lieu of, or in an amount sufficient to satisfy, any co-insurance clause; (v)
against inflation (also known as inflation guard); (vi) for any costs due to
ordinances or laws; and (vii) as Landlord may from time to time reasonably
require Tenant to procure and maintain.  Landlord shall not be liable for any
damage to Tenant's property in, on or about the demised premises caused by fire
or other insurable hazards regardless of the nature or cause of such fire or
other casualty, and regardless of whether any negligence of Landlord or
Landlord's employees or agents contributed thereto.  Tenant expressly releases
Landlord of and from all liability for any such damage and Tenant agrees that
its property insurance policies required hereunder shall include a waiver of
subrogation recognizing this release from liability.

 
 

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(b)           Boiler and Machinery Insurance.  Tenant agrees to maintain a
comprehensive boiler and machinery policy on a full repair and replacement cost
basis, and further in accordance with the requirements of Section
27(a)(iii)-(vi) above, with an admitted, reputable insurance carrier covering
property damage as a result of a loss from boiler(s), pressure vessel(s), HVAC
equipment, or other electrical or mechanical apparatus within or servicing the
demised premises, furniture, fixtures, equipment and inventory together with
property of others in the care, custody and control of Tenant.  The deductible
for property damage under such policy shall not exceed Five Thousand Dollars
($5,000.00) per occurrence.

(c)           Additional Tenant Insurance.  Tenant's insurance required under
Section (27(a) and (b) above shall also include business income coverage against
any interruption (including utility interruption) in Tenant's business (whether
direct, indirect, contingent or interdependent), including, but not limited to,
coverage for Tenant's leasehold interests and obligations to continue paying all
rental amounts hereunder, lost revenues and income, and extra expense.  Such
coverage should be for a period of at least twelve (12) months, with an extended
period of indemnity of at least thirty (30) days.  The deductible for such
coverage may not exceed twenty-four (24) hours.

(d)           Tenant's Commercial General Liability Insurance.  Tenant agrees to
procure and maintain during the demised term commercial general liability
insurance by a responsible insurance company or companies, with policy limits of
not less than $1,000,000.00 per occurrence and $2,000,000.00 annual aggregate,
and $500,000.00 limits for fire and legal liability, insuring against liability
for losses, claims, demands or actions for bodily injury (including death) and
property damage arising from Tenant's conduct and operation of its business in
and Tenant's use, maintenance and occupancy of, the demised premises and any
areas adjacent thereto, or the acts or omissions of Tenant's employees and
agents.  Such commercial general liability policy may be written on a blanket
basis to include the demised premises in conjunction with other premises owned
or operated by Tenant but shall be written such that the required policy limits
herein specifically apply on a per location basis to the demised
premises.  Tenant's commercial general liability insurance policy shall further
provide: (i) coverage for defense costs (in excess of policy limits); (ii)
contractual liability coverage; (iii) cross-liability coverage; and, (iv) that
Landlord, its shareholders, officers, directors, employees, and agents, are
named as additional insureds such that (Y) Tenant's policy shall be the primary
source of insurance for such additional insured and (Z) any liability policy
carried by such additional insureds shall be in excess of, and will not
contribute with or to, Tenant's commercial general liability insurance required
to be maintained hereunder.  At the time this Lease is executed and thirty (30)
days prior to the expiration of such insurance policy, Tenant shall furnish to
Landlord certificates of insurance evidencing the continuous existence during
the term of this Lease of Tenant's commercial general liability insurance
coverage, which certificates shall include attachment of additional insured
endorsement, name any and all non-standard exclusions or limitations, and
provide not less than thirty (30) days notice of cancellation or termination to
Landlord (and any other additional insured, if applicable).  All insurance
companies must be licensed to do business in the state where the premises are
located.  Tenant shall further procure and maintain other liability insurance
(including, but not limited to, liquor and pollution insurance) as Landlord may
from time to time reasonably require.

(e)           Worker's Compensation.  Tenant agrees to provide and keep in force
at all times worker's compensation insurance complying with the law of the state
in which the premises are located.  Tenant agrees to defend, indemnify and hold
harmless Landlord from all actions or claims of Tenant's employees or employee's
family members.  Tenant agrees to provide a certificate as evidence of proof of
worker's compensation coverage.

If Tenant hires contractors to do any improvements on the demised premises, each
contractor must provide proof of worker's compensation coverage on its employees
and agents to Landlord.

(f)            Contingent Liability and Builder's Risk Insurance.  With respect
to any alterations or improvements by Tenant, Tenant shall maintain contingent
liability and builder's risk coverage naming Landlord as an additional insured,
in compliance with the additional insured requirements set forth in Section
27(d).

 
 

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(g)           Landlord's Property Insurance.  Commencing as of the Commencement
Date, and thereafter throughout the term of this Lease, Landlord shall, at
Landlord's sole cost and expense, provide and maintain or cause to be provided
and maintained a property insurance policy insuring all buildings (and building
additions) and other improvements in the Center and in the demised premises,
and  Tenant's store building (including any permanent improvements to the
demised premises paid for by the Tenant Reimbursement but excluding those items
insured by Tenant as required under this Section 27) for all the hazards and
perils normally covered by the Causes of Loss-Special Form. Said property
insurance policy shall include endorsements for coverage against: (i) earthquake
and flood (including, but not limited to, mud slide, flood hazard or fault
area(s), as designated on any map prepared or issued for such purpose by any
governmental authority); and (ii) increased costs of construction and demolition
due to law and ordinance. The foregoing property coverage shall be provided in
amounts sufficient to provide one hundred percent (100%) of the full replacement
cost of all buildings (and building additions) and other improvements in the
Center and in the demised premises and Tenant's store building (including any
permanent improvements to the demised premises paid for by Tenant Reimbursement
but excluding those items insured by Tenant as required under this Section
27).  If for any reason the Causes of Loss-Special Form is not customarily used
in the insurance industry, then the property insurance policy then in effect
shall at least provide coverage for the following perils: fire, lightning,
windstorm and hail, explosion, smoke, aircraft and vehicles, riot and civil
commotion, vandalism and malicious mischief, sprinkler leakage, sinkhole and
collapse, volcanic action, earthquake or earth movement, and flood, and
increased costs of construction and demolition due to law, ordinance and
inflation.  Neither Tenant nor any of its affiliates or subtenants shall be
liable to Landlord for any loss or damage (including loss of income), regardless
of cause, resulting from fire, flood, act of G-d or other casualty.

(h)           Landlord's Commercial General Liability Insurance.  Commencing as
of the Commencement Date, and thereafter throughout the term of this Lease,
Landlord shall, at Landlord's sole cost and expense, provide and maintain or
cause to be provided and maintained a commercial general liability policy,
naming Landlord as an insured (and naming Tenant as an additional insured, said
additional insured's coverage under Landlord's commercial general liability
policy to be primary), protecting Landlord, the business operated by Landlord,
and any additional insureds (including Tenant) against claims for bodily injury
(including death) and property damage occurring upon, in or about the Center
(other than the demised premises and those areas insured by other tenants at the
Center), including Common Areas. Such insurance shall afford protection to the
limits of not less than One Million Dollars ($1,000,000.00) per occurrence, Two
Million Dollars ($2,000,000.00) annual aggregate, and Five Hundred Thousand
Dollars ($500,000.00) with respect to property damage for fire legal liability.
All liability policies shall be written on an occurrence form unless such form
is no longer customarily used in the insurance industry.  Landlord may use
commercially reasonable deductibles Landlord customarily carries in the conduct
of its business; however, the amount of such deductibles which may be charged to
Tenant pursuant to Section 12.09 below may not exceed $0.20 per square foot of
gross leasable area of the demised premises in any lease year.

(i)            Landlord's Umbrella.  Commencing as of the Commencement Date, and
thereafter throughout the term of this Lease, Landlord shall, at Landlord's sole
cost and expense, provide and maintain or cause to be provided and maintained an
umbrella liability insurance policy with a Ten Million Dollar ($10,000,000.00)
minimum annual aggregate, which umbrella policy (or policies) shall list
Landlord's commercial general liability policy required under this Section 27
and any other liability policy or policies carried by, or for the benefit of,
Landlord as underlying policies.  Said umbrella liability policy shall also name
Tenant as an additional insured (said additional insured's coverage under
Landlord's umbrella liability policy to be primary).  All liability policies
shall be written on an occurrence form unless such form is no longer customarily
used in the insurance industry.

(j)            Tenant Indemnity.  Tenant shall indemnify Landlord,  Landlord's
agents, employees, officers or directors, against all damages, claims and
liabilities arising from any alleged products liability or from any accident or
injury whatsoever caused to any person, firm or corporation during the demised
term in the demised premises, unless such claim arises from a breach or default
in the performance by Landlord of any covenant or agreement on its part to be
performed under this Lease or, to the extent not required to be insured
hereunder, the negligence of Landlord.  The indemnification herein provided
shall include all reasonable costs, counsel fees, expenses and liabilities
incurred in connection with any such claim or any action or proceeding brought
thereon.

 
 

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(k)           Landlord Indemnity.  Landlord shall indemnify Tenant, Tenant’s
officers, directors, employees and agents against all damages, claims and
liabilities arising from any accident or injury whatsoever caused to any person,
firm or corporation during the demised term in the common areas of the Shopping
Center, unless such claim arises from a breach or default in the performance by
Tenant of any covenant or agreement on Tenant’s part to perform under this Lease
or, to the extent not required to be insured hereunder, the negligence of
Tenant.  The indemnification herein provided shall include all reasonable costs,
counsel fees, expenses and liabilities incurred in connection with any such
claim or any action or proceeding brought thereon.

SECTION 28.
REAL ESTATE TAXES

(a)           Tenant shall pay Tenant's Proportionate Share (as defined in
Section 16(c) above) of any "real estate taxes" (defined in Section 28(b) below)
imposed upon the retail portions of the Shopping Center that become due and
payable during each lease year included within the period commencing with the
commencement  date and ending with the expiration of the term of this
Lease.  Tenant shall initially pay to landlord as additional rental,
simultaneously with the payment of minimum rental called for under Section 5(a),
the estimated monthly amount of Tenant's Proportionate Share of real estate
taxes as set forth in Section 5(e) of Two and 50/100 Dollars ($2.50) per square
foot, payable in equal monthly installments of Four Thousand Four Hundred
Twenty-one and 46/100 Dollars ($4,421.46) as the estimated amount of Tenant's
Proportionate Share of real estate taxes.  Within one hundred twenty (120) days
after the end of each accounting year (which Landlord may change from time to
time), Landlord shall provide Tenant with an annual reconciliation of real
estate taxes and a statement of the actual amount of Tenant's Proportionate
Share thereof. Any excess payments from Tenant shall be applied to the next
installments of real estate taxes hereunder, or refunded by Landlord.  Any
underpayments by Tenant shall be paid to Landlord within thirty (30) days after
receipt of such reconciliation statement. Tenant's estimated monthly installment
of real estate taxes payable hereunder may be adjusted by written notice from
Landlord.

(b)           For the purpose of this Lease, the term "real estate taxes" shall
include any special and general assessments, water and sewer rents and other
governmental impositions imposed upon or against the Shopping Center of every
kind and nature whatsoever, extraordinary as well as ordinary, foreseen and
unforeseen and each and every installment thereof, which shall or may during the
lease term be levied, assessed or imposed upon or against such Shopping Center
and of all expenses, including reasonable attorneys' fees, administrative
hearing and court costs incurred in contesting or negotiating the amount,
assessment or rate of any such real estate taxes, minus any refund received by
Landlord.

(c)           Notwithstanding any provision of this Lease to the contrary,
Tenant shall not be obligated to pay for any assessment for special improvements
heretofore installed or in the process of installation in connection with the
initial development of the Shopping Center, and Landlord hereby agrees to pay
for the same.

(d)           The real estate taxes for any lease year shall be the real estate
taxes that become due and payable during such lease year.  If any lease year
shall be greater than or less than twelve (12) months, or if the real estate tax
year shall be changed, an appropriate adjustment shall be made.  If there shall
be more than one taxing authority, the real estate taxes for any period shall be
the sum of the real estate taxes for said period attributable to each taxing
authority.  If, upon the assessment day for real estate taxes for any tax year
fully or partly included within the term of this Lease, a portion of such
assessment shall be attributable to buildings in the process of construction, a
fair and reasonable adjustment shall be made to carry out the intent of this
Section 28.

(e)           Upon request, Landlord shall submit to Tenant true copies of the
real estate tax bill for each tax year or portion of a tax year included within
the term of this Lease and shall bill Tenant for the amount to be paid by Tenant
hereunder.  Said bill shall be accompanied by a computation of the amount
payable by Tenant and such amount shall be paid by Tenant within thirty (30)
days after receipt of said bill.

 
 

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(f)            Should the State of Washington or any political subdivision
thereof or any governmental authority having jurisdiction thereof, impose a tax
and/or assessment (other than an income or franchise tax) upon or against the
rentals payable hereunder, in lieu of or in addition to assessments levied or
assessed against the demised premises, or Shopping Center, then such tax and/or
assessment shall be deemed to constitute a tax on real estate for the purpose of
this Section 28.

SECTION 29.
TENANT'S INSURANCE CONTRIBUTION

Tenant shall pay as additional rent, Tenant's Proportionate Share (as defined in
Section 16(c) above) of the premiums for the insurance maintained by Landlord on
all buildings and improvements, as well as liability insurance, for the Shopping
Center, including the common areas, as set forth above in Section 16(b), for
each lease year during the term of this Lease.  The premiums for the first and
last lease years shall be prorated.  Tenant shall pay Tenant's Proportionate
Share of such premiums annually upon demand for such payment by
Landlord.  Tenant's Proportionate Share thereof shall be paid by Tenant within
thirty (30) days after Landlord's demand therefore.  Tenant shall initially pay
to Landlord as additional rental, simultaneously with the payment of minimum
rental called for under Section 5(a), the estimated monthly amount of Tenant's
Proportionate Share of such insurance premiums as set forth in Section 5(e), of
Twenty-eight Cents ($0.28) per square foot, payable in equal monthly
installments of Four Hundred Ninety-five and 20/100 Dollars ($495.20) as the
estimated amount of Tenant's Proportionate Share of such insurance
premiums.  Within one hundred twenty (120) days after the end of each accounting
year (which Landlord may change from time to time), Landlord shall provide
Tenant with a reconciliation of the premiums for the insurance maintained by
Landlord hereunder and a statement of the actual amount of Tenant's
Proportionate Share thereof. Any excess payments from Tenant shall be applied to
the next installments of insurance premiums payable by Tenant hereunder, or
refunded by Landlord.  Any underpayments by Tenant shall be paid to Landlord
within thirty (30) days after receipt of such reconciliation statement. Tenant's
monthly installment of insurance premiums payable hereunder may be adjusted by
written notice from Landlord.

SECTION 30.
FIXTURES

Provided that Tenant shall repair any damage caused by removal of its property
and provided that the Tenant is not in default under this Lease, Tenant shall
have the right to remove from the demised premises all of its signs, shelving,
electrical, and other fixtures and equipment, window reflectors and backgrounds
and any and all other trade fixtures which it has installed in and upon the
demised premises.

SECTION 31.
SURRENDER

The Tenant covenants and agrees to deliver up and surrender to the Landlord the
physical possession of the demised premises upon the expiration of this Lease or
its termination as herein provided in as good condition and repair as the same
shall be at the commencement of the initial term, loss by fire and/or ordinary
wear and tear excepted, and to deliver all of the keys to Landlord or Landlord's
agents.

SECTION 32.
HOLDING OVER

There shall be no privilege of renewal hereunder (except as specifically set
forth in this Lease) and any holding over after the expiration by the Tenant
shall be from day to day on the same terms and conditions (with the exception of
rental which shall be prorated on a daily basis at twice the daily rental rate
of the most recent expired term) at Landlord's option; and no acceptance of rent
by or act or statement whatsoever on the part of the Landlord or his duly
authorized agent in the absence of a written contract signed by Landlord shall
be construed as an extension of the term or as a consent for any further
occupancy.

 
 

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SECTION 33.
NOTICE

Whenever under this Lease provisions are made for notice of any kind to
Landlord, it shall be deemed sufficient notice and sufficient service thereof if
such notice to Landlord is in writing, addressed to Landlord at c/o Kimco Realty
Corporation, 3333 New Hyde Park Road, Suite 100, New Hyde Park, N.Y. 11042, or
at such address as Landlord may notify Tenant in writing, and deposited in the
United States mail by certified mail, return receipt requested, with postage
prepaid or Federal Express, Express Mail or such other expedited mail service as
normally results in overnight delivery, with a copy of same sent in like manner
to President, Real Estate, 1800 Moler Road, Columbus, Ohio 43207.  Notice to
Tenant shall be sent in like manner to Tenant at 4150 East Fifth Avenue,
Columbus, Ohio 43219, with copies of same sent to (i) General Counsel, 4150 East
Fifth Avenue, Columbus, Ohio 43219 and (ii) Randall S. Arndt, Esq.,
Schottenstein Zox & Dunn, 250 West Street, Columbus, Ohio 43215.  All notices
shall be effective upon receipt or refusal of receipt.  Either party may change
the place for service of notice by notice to the other party.

SECTION 34.
DEFAULT

(a)            Elements of Default:  The occurrence of any one or more of the
following events shall constitute a default of this Lease by Tenant:

1.             Tenant fails to pay any monthly installment of rent within ten
(10) days after the same shall be due and payable, except for the first two (2)
times in any consecutive twelve (12) month period, in which event Tenant shall
have five (5) days after receipt of written notice of such failure to pay before
such failure shall constitute a default;

2.            Tenant fails to perform or observe any term, condition, covenant
or obligation required to be performed or observed by it under this Lease for a
period of twenty (20) days after notice thereof from Landlord; provided,
however, that if the term, condition, covenant or obligation to be performed by
Tenant is of such nature that the same cannot reasonably be cured within twenty
(20) days and if Tenant commences such performance or cure within said twenty
(20) day period and thereafter diligently undertakes to complete the same, then
such failure shall not be a default hereunder if it is cured within a reasonable
time following Landlord's notice, but in no event later than forty-five (45)
days after Landlord's notice.

3.             If Tenant refuses to take possession of the demised premises as
required pursuant to this Lease or abandons the demised premises for a period of
thirty (30) days or substantially ceases to operate its business or to carry on
its normal activities in the demised premises as required pursuant to this
Lease.

4.             A trustee or receiver is appointed to take possession of
substantially all of Tenant's assets in, on or about the demised premises or of
Tenant's interest in this Lease (and Tenant or any guarantor of Tenant's
obligations under this Lease does not regain possession within sixty (60) days
after such appointment); Tenant makes an assignment for the benefit of
creditors; or substantially all of Tenant's assets in, on or about the demised
premises or Tenant's interest in this Lease are attached or levied upon under
execution (and Tenant does not discharge the same within sixty (60) days
thereafter).

5.             A petition in bankruptcy, insolvency, or for reorganization or
arrangement is filed by or against Tenant or any guarantor of Tenant's
obligations under this Lease pursuant to any Federal or state statute, and, with
respect to any such petition filed against it, Tenant or such guarantor fails to
secure a stay or discharge thereof within sixty (60) days after the filing of
the same.

(b)           Landlord's Remedies:  Upon the occurrence of any event of default,
Landlord shall have the following rights and remedies, any one or more of which
may be exercised without further notice to or demand upon Tenant:

1.             Landlord may re-enter the demised premises and cure any default
of Tenant, in which event Tenant shall reimburse Landlord for any cost and
expenses which Landlord may incur to cure such default; and Landlord shall not
be liable to Tenant for any loss or damage which Tenant may sustain by reason of
Landlord's action.

 
 

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2.             Landlord may terminate this Lease or Tenant's right to possession
under this Lease as of the date of such default, without terminating Tenant's
obligation to pay rent due hereunder, in which event (A): neither Tenant nor any
person claiming under or through Tenant shall thereafter be entitled to
possession of the demised premises, and Tenant shall immediately thereafter
surrender the demised premises to Landlord; (B) Landlord may re-enter the
demised premises and dispose Tenant or any other occupants of the demised
premises by force, summary proceedings, ejectment or otherwise, and may remove
their effects, without prejudice to any other remedy which Landlord may have for
possession or arrearages in rent; and (C) notwithstanding a termination of this
Lease, Landlord may re-let all or any part of the demised premises for a term
different from that which would otherwise have constituted the balance of the
term of this Lease and for rent and on terms and conditions different from those
contained herein, whereupon Tenant shall immediately be obligated to pay to
Landlord as liquidated damages the difference between the rent provided for
herein and that provided for in any lease covering a subsequent re-letting of
the demised premises, for the period which would otherwise have constituted the
balance of the term of this Lease, together with all of Landlord's costs and
expenses for preparing the demised premises for re-letting, including all
repairs, tenant finish improvements, broker's and attorney's fees, and all loss
or damage which Landlord may sustain by reason of such termination, re-entry and
re-letting, it being expressly understood and agreed that the liabilities and
remedies specified herein shall survive the termination of this
Lease.  Notwithstanding a termination of this Lease by Landlord, Tenant shall
remain liable for payment of all rentals and other charges and costs imposed on
Tenant herein, in the amounts, at the times and upon the conditions as herein
provided.  Landlord shall credit against such liability of the Tenant all
amounts received by Landlord from such re-letting after first reimbursing itself
for all reasonable costs incurred in curing Tenant's defaults and re-entering,
preparing and refinishing the demised premises for re-letting, and re-letting
the demised premises.

3.             Upon termination of this Lease pursuant to Section 34(b)2,
Landlord may recover possession of the demised premises under and by virtue of
the provisions of the laws of the State of Washington, or by such other
proceedings, including reentry and possession, as may be applicable.

4.             If the Tenant shall not remove all of Tenant's property from said
demised premises as provided in this Lease, Landlord, at its option, may remove
any or all of said property in any manner that Landlord shall choose and store
same without liability for loss thereof, and Tenant will pay the Landlord, on
demand, any and all reasonable expenses incurred in such removal and storage of
said property for any length of time during which the same shall be in
possession of Landlord or in storage, or Landlord may, upon thirty (30) days
prior notice to Tenant,  sell any or all of said property in such manner and for
such price as the Landlord may reasonably deem best and apply the proceeds of
such sale upon any amounts due under this Lease from the Tenant to the Landlord,
including the reasonable expenses of removal and sale.

5.             Any damage or loss of rent sustained by Landlord may be recovered
by Landlord, at Landlord's option, at the time of the reletting, or in separate
actions, from time to time, as said damage shall have been made more easily
ascertainable by successive relettings, or at Landlord's option in a single
proceeding deferred until the expiration of the term of this Lease (in which
event Tenant hereby agrees that the cause of action shall not be deemed to have
accrued until the date of expiration of said term) or in a single proceeding
prior to either the time of reletting or the expiration of the term of this
Lease.

6.             In the event of a breach by Tenant of any of the covenants or
provisions hereof, Landlord shall have the right of injunction and the right to
invoke any remedy allowed at law or in equity as if reentry, summary
proceedings, and other remedies were not provided for herein.  Mention in this
Lease of any particular remedy shall not preclude Landlord from any other
remedy, in law or in equity.  Tenant hereby expressly waives any and all rights
of redemption granted by or under any present or future laws in the event of
Tenant being evicted or dispossessed for any cause, or in the event of Landlord
obtaining possession of the demised premises by reason of the violation by
Tenant of any of the covenants and conditions of this Lease or other use.

7.             Tenant hereby expressly waives any and all rights of redemption
granted by or under any present or future laws, in the event of eviction or
dispossession of Tenant by Landlord under any provision of this Lease.  No
receipt of monies by Landlord from or for the account of Tenant or from anyone
in possession or occupancy of the demised premises after the termination of this
Lease or after the giving of any notice shall reinstate, continue or extend the
term of this Lease or affect any notice given to the Tenant prior to the receipt
of such money, it being agreed that after the service of notice or the
commencement of a suit, or after final judgment for possession of said demised
premises, the Landlord may receive and collect any rent or other amounts due
Landlord and such payment shall not waive or affect said notice, said suit or
said judgment.

 
 

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(c)           Additional Remedies and Waivers:  The rights and remedies of
Landlord set forth herein shall be in addition to any other right and remedy now
or hereinafter provided by law and/or equity and all such rights and remedies
shall be cumulative and shall not be deemed inconsistent with each other, and
any two or more or all of said rights and remedies may be exercised at the same
time or at different times and from time to time without waiver thereof of any
right or remedy provided or reserved to Landlord.  No action or inaction by
Landlord shall constitute a waiver of a default and no waiver of default shall
be effective unless it is in writing, signed by the Landlord.

(d)           Default by Landlord.  Any failure by Landlord to observe or
perform any provision, covenant or condition of this Lease to be observed or
performed by Landlord, if such failure continues for thirty (30) days after
written notice thereof from Tenant to Landlord, shall constitute a default by
Landlord under this Lease, provided, however, that if the nature of such default
is such that the same cannot reasonably be cured within a thirty (30) day
period, Landlord shall not be deemed to be in default if it shall commence such
cure within such thirty (30) day period and thereafter rectify and cure such
default with due diligence.

(e)           Interest on Past Due Obligations:  All monetary amounts required
to be paid by Tenant or Landlord hereunder which are not paid on or before the
due date thereof shall, from and after such due date, bear interest at the
Interest Rate, and shall be due and payable by such party without notice or
demand.

(f)            Tenant’s Remedies.  In the event of default by the Landlord with
respect to the demised premises, Tenant shall have the option to cure said
default.  Landlord shall reimburse Tenant for the reasonable costs incurred by
Tenant in curing such default within thirty (30) days after invoice thereof by
Tenant, together with reasonable evidence supporting such invoiced amount.
Tenant shall also have any and all rights available under the laws of the state
in which the demised premises are situated; provided, however, that any right of
offset available to Tenant shall be subject to the provisions of Section 36
below.

SECTION 35.
WAIVER OF SUBROGATION

Landlord and Tenant, and all parties claiming under each of them, mutually
release and discharge each other from all claims and liabilities arising from or
caused by any casualty or hazard covered or required hereunder to be covered in
whole or in part by insurance coverage required to be maintained by the terms of
this Lease on the demised premises or in connection with the Shopping Center or
activities conducted with the demised premises, and waive any right of
subrogation which might otherwise exist in or accrue to any person on account
thereof.  All policies of insurance required to be maintained by the parties
hereunder shall contain waiver of subrogation provisions so long as the same are
available.

SECTION 36.
LIABILITY OF LANDLORD; EXCULPATION

(a)           Except with respect to any damages resulting from the gross
negligence of Landlord, its agents, or employees, Landlord shall not be liable
to Tenant, its agents, employees, or customers for any damages, losses,
compensation, accidents, or claims whatsoever.  The foregoing notwithstanding,
it is expressly understood and agreed that nothing in this Lease contained shall
be construed as creating any liability whatsoever against Landlord personally,
and in particular without limiting the generality of the foregoing, there shall
be no personal liability to pay any indebtedness accruing hereunder or to
perform any covenant, either express or implied, herein contained, or to keep,
preserve or sequester any property of Landlord and that all personal liability
of Landlord to the extent permitted by law, of every sort, if any, is hereby
expressly waived by Tenant, and by every person now or hereafter claiming any
right or security hereunder; and that so far as the parties hereto are
concerned, the owner of any indebtedness or liability accruing hereunder shall
look solely to the demised premises and the Shopping Center for the payment
thereof.

 
 

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(b)           If the Tenant obtains a money judgment against Landlord, any of
its officers, directors, shareholders, partners, members or their successors or
assigns under any provisions of or with respect to this Lease or on account of
any matter, condition or circumstance arising out of the relationship of the
parties under this Lease, Tenant's occupancy of the building or Landlord's
ownership of the Shopping Center, Tenant shall be entitled to have execution
upon any such final, unappealable judgment only upon Landlord's fee simple or
leasehold estate in the Shopping Center (whichever is applicable) and not out of
any other assets of Landlord, or any of its officers, directors, shareholders,
members or partners, or their successor or assigns; and Landlord shall be
entitled to have any such judgment so qualified as to constitute a lien only on
said fee simple or leasehold estate.

Notwithstanding the above, Tenant shall have the right to offset any final,
unappealable judgment against twenty five percent (25%) of all minimum rent and
all percentage rental (but no other additional rent components) if not paid to
Tenant by Landlord within thirty (30) days thereafter.

(c)           It is expressly agreed that nothing in this Lease shall be
construed as creating any personal liability of any kind against the assets of
any of the officers, directors, members, partners or shareholders of Tenant, or
their successors and assigns.

SECTION 37.
RIGHTS CUMULATIVE

Unless expressly provided to the contrary in this Lease, each and every one of
the rights, remedies and benefits provided by this Lease shall be cumulative and
shall not be exclusive of any other of such rights, remedies and benefits or of
any other rights, remedies and benefits allowed by law.

SECTION 38.
MITIGATION OF DAMAGES

Notwithstanding any of the terms and provisions herein contained to the
contrary, Landlord and Tenant shall each have the duty and obligation to
mitigate, in every reasonable manner, any and all damages that may or shall be
caused or suffered by virtue of defaults under or violation of any of the terms
and provisions of this Lease agreement committed by the other.

SECTION 39.
SIGNS

No signs shall be placed on the demised premises by Tenant except as shall
comply with all applicable governmental codes, restrictions of record in
accordance with Section 7 above, sign criteria established by Landlord for the
Shopping Center, and with the prior written consent of Landlord (not to be
unreasonably withheld) after sign drawings have been submitted to Landlord by
Tenant.  Subject to the foregoing, Tenant shall have the right to install its
prototypical signage and awnings on the front of the demised premises as
described on Exhibit "G-1" attached hereto and made a part hereof.  Tenant
acknowledges that it shall not be entitled to pylon signage at the Shopping
Center on the commencement date of this Lease.  Landlord agrees however, to use
commercially reasonable efforts to provide Tenant pylon sign representation at
the Shopping Center and agrees that no tenant of the Shopping Center leasing the
same or less square feet of leasable space as Tenant shall have representation
on the existing pylon sign for the Shopping Center or any new pylon sign(s)
erected for the Shopping Center unless Tenant shall also have representation on
such sign(s) excluding any existing rights of tenants under existing leases as
of the date hereof which would have a right to be on such pylon
sign(s).  Notwithstanding the foregoing, in the event three (3) pylon and/or
monument signs are erected for the Shopping Center with Tenant identification
thereon, Landlord is not obligated to identify Tenant on any additional pylon
and/or monument signs at the Shopping Center.

 
 

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SECTION 40
.ENTIRE AGREEMENT

This Lease shall constitute the entire agreement of the parties hereto; all
prior agreements between the parties, whether written or oral, are merged herein
and shall be of no force and effect.  This Lease cannot be changed, modified, or
discharged orally but only by an agreement in writing signed by the party
against whom enforcement of the change, modification or discharge is sought.

SECTION 41.
LANDLORD'S LIEN – DELETED BY INTENTION

SECTION 42.
BINDING UPON SUCCESSORS

The covenants, conditions, and agreements made and entered into by the parties
hereto shall be binding upon and inure to the benefit of their respective heirs,
representatives, successor and assigns.

SECTION 43.
HAZARDOUS SUBSTANCES

(a)           During the term of this Lease, Tenant shall not suffer, allow,
permit or cause the generation, accumulation, storage, possession, release or
threat of release of any hazardous substance or toxic material, as those terms
are used in the Comprehensive Environmental Response Compensation and Liability
Act of 1980, as amended, and any regulations promulgated thereunder, or any
other present or future federal, state or local laws, ordinances, rules, and
regulations.  Tenant shall indemnify and hold Landlord harmless from any and all
liabilities, penalties, demands, actions, costs and expenses (including without
limitation reasonable attorney fees), remediation and response costs incurred or
suffered by Landlord directly or indirectly arising due to the breach of
Tenant's obligations set forth in this Section.  Such indemnification shall
survive expiration or earlier termination of this Lease.  At the expiration or
sooner termination hereof, Tenant shall return the demised premises to Landlord
in substantially the same condition as existed on the date of commencement
hereof free of any hazardous substances in, on or from the demised premises.

(b)           Landlord hereby represents and warrants that, except as set forth
in that certain Phase I Environmental Site Assessment dated December 20, 2004
prepared by ADR Environmental Group, Inc., and that certain Subsurface
Investigation Results Report dated January 7, 2005 prepared by ADR Environmental
Group, Inc.: (i) it has not used, generated, discharged, released or stored any
hazardous substances on, in or under the Shopping Center and has received no
notice and has no knowledge of the presence in, on or under the Shopping Center
of any such hazardous substances; (ii) to Landlord’s knowledge there have never
been any underground storage tanks at the Shopping Center, whether owned by the
Landlord or its predecessors in interest; (iii) to Landlord’s knowledge there
have never been accumulated tires, spent batteries, mining spoil, debris or
other solid waste (except for rubbish and containers for normal scheduled
disposal in compliance with all applicable laws) in, on or under the Shopping
Center; (iv) to Landlord's knowledge it has not spilled, discharged or leaked
petroleum products other than de minimis quantities in connection with the
operation of motor vehicles on the Shopping Center; (v) to Landlord's knowledge
there has been no graining, filling or modification of wetlands (as defined by
federal, state or local law, regulation or ordinance) at the Shopping Center;
and (vi) to Landlord's knowledge there is no asbestos or asbestos-containing
material in the demised premises.  The representations and warranties set forth
in this subparagraph shall apply to any contiguous or adjacent property owed by
the Landlord.  Landlord hereby indemnifies Tenant for any and all loss, cost,
damage or expense to Tenant resulting from any misrepresentation or breach of
the foregoing representations and warranties.

(c)           If any such hazardous substances are discovered at the Shopping
Center (unless introduced by the Tenant, its agents or employees) or if any
asbestos or asbestos containing material is discovered in the demised premises
(unless introduced by the Tenant, its agents or employees), and removal,
encapsulation or other remediation is required by applicable laws, the Landlord
immediately and with all due diligence and at no expense to the Tenant shall
take all measures necessary to comply with all applicable laws and to remove
such hazardous substances or asbestos from the Shopping Center and/or
encapsulate or remediate such hazardous substances or asbestos, which removal
and/or encapsulation or remediation shall be in compliance with all
environmental laws and regulations, and the Landlord shall repair and restore
the Shopping Center at its expense.  From the date such encapsulation,
remediation and restoration is complete, the rent due hereunder shall be reduced
by the same percentage as the percentage of the demised premises which, in the
Tenant’s reasonable judgment, cannot be safely, economically or practically used
for the operation of the Tenant’s business.  Anything herein to the contrary
notwithstanding, if in the Tenant’s reasonable judgment, such removal,
encapsulation, remediation and restoration cannot be completed within one
hundred eighty (180) days or the same is not actually completed by Landlord
within such one hundred eighty (180) day period following the date such
hazardous substances or asbestos are discovered and such condition materially
adversely affects Tenant's ability to conduct normal business operations in the
premises, then the Tenant may terminate this Lease by written notice to the
Landlord within thirty (30) days after such 180 day period, which notice shall
be effective on Landlord’s receipt thereof.  Landlord shall comply with OSHA 29
CFR 1910.1001 (j) to notify tenants, including Tenant, of asbestos related
activities in the demised premises and the Shopping Center including, but not
limited to, selection of the certified/licensed asbestos abatement contractor,
scope of the abatement work, and final clearance testing procedures and results.

 
 

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SECTION 44.
TRANSFER OF INTEREST

If Landlord should sell or otherwise transfer its interest in the demised
premises, upon an undertaking by the purchaser or transferee to be responsible
for all the covenants and undertakings of Landlord accruing subsequent to the
date of such sale or transfer, Tenant agrees that Landlord shall thereafter have
no liability to Tenant under this Lease or any modifications or amendments
thereof, or extensions thereof, except for such liabilities which might have
accrued prior to the date of such sale or transfer of its interest by Landlord.
 

SECTION 45.
ACCESS TO PREMISES

Landlord and its representatives shall have free access to the demised premises
at all reasonable times for the purpose of:  (a) examining the same or to make
any alterations or repairs to the demised premises that Landlord may deem
necessary for its safety or preservation; (b) exhibiting the demised premises
for sale or mortgage financing; (c) during the last three (3) months of the term
of this Lease, for the purpose of exhibiting the demised premises and putting up
the usual notice "for rent" which notice shall not be removed, obliterated or
hidden by Tenant, provided, however, that any such action by Landlord shall
cause as little inconvenience as reasonably practicable and such action shall
not be deemed an eviction or disturbance of Tenant nor shall Tenant be allowed
any abatement of rent, or damages for an injury or inconvenience occasioned
thereby.

SECTION 46.
HEADINGS

The headings are inserted only as a matter of convenience and for reference and
in no way define, limit or describe the scope or intent of this Lease.

SECTION 47.
NON-WAIVER

No payment by Tenant or receipt by Landlord or its agents of a lesser amount
than the rent in this Lease stipulated shall be deemed to be other than on
account of the stipulated rent nor shall an endorsement or statement on any
check or any letter accompanying any check or payment of rent be deemed an
accord and satisfaction and Landlord or its agents may accept such check or
payment without prejudice to Landlord's right to recover the balance of such
rent or pursue any other remedy in this Lease provided.

SECTION 48.
SHORT FORM LEASE

This Lease shall not be recorded, but a short form lease, which describes the
property herein demised, gives the term of this Lease and refers to this Lease,
shall be executed by the parties hereto, upon demand of either party and such
short form lease may be recorded by Landlord or Tenant at any time either deems
it appropriate to do so.  The cost and recording of such short form lease shall
belong to the requesting party.

 
 

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SECTION 49.
ESTOPPEL CERTIFICATE

Each party agrees that at any time and from time to time on ten (10) days prior
written request by the other, it will execute, acknowledge and deliver to the
requesting party a statement in writing stating that this Lease is unmodified
and in full force and effect (or, if there have been modifications, stating the
modifications, and that the Lease as so modified is in full force and effect,
and the dates to which the rent and other charges hereunder have been paid, and
such other information as may reasonably re requested, it being intended that
any such statements delivered pursuant to this Section may be relied upon by any
current or prospective purchaser of or any prospective holder of a mortgage or a
deed of trust upon or any interest in the fee or any leasehold or by the
mortgagee, beneficiary or grantee of any security or interest, or any assignee
of any thereof or under any mortgage, deed of trust or conveyance for security
purposes now or hereafter done or made with respect to the fee of or any
leasehold interest in  the demised premises
 

SECTION 50.
TENANT'S REIMBURSEMENT

(a)           Landlord shall pay Tenant Three Hundred Thousand Dollars
($300,000.00) (the "Tenant Reimbursement"), as payment for all costs incurred on
behalf of Tenant for the purchase, erection, and installation of Tenant
Improvements on or within the demised premises.  "Tenant Improvements" shall
consist of the work described in the attached Exhibit "G-2".  The Tenant
Reimbursement shall be paid by Landlord to Tenant within ten (10) days of the
later of (i) Tenant opening for business in the demised premises and (ii) Tenant
providing to Landlord a lien waiver from Tenant's general contractor.  In the
event Landlord does not timely pay the Tenant Reimbursement to Tenant, (a)
Landlord shall pay to Tenant interest on such unpaid amounts at the Interest
Rate and (b) Tenant shall have the right to deduct any and all such amounts owed
Tenant against payments of Rent thereafter due Landlord until such time as
Tenant has been credited the full amount of the Tenant Reimbursement plus
applicable interest.

(b)           Notwithstanding anything to the contrary contained in this Lease,
the Tenant Improvements shall, at all times during the term of this Lease and
upon the expiration or earlier termination of this Lease, be the property of
Landlord.  Tenant shall not acquire any interest, equitable or otherwise, in any
Tenant Improvement.

SECTION 51.
TENANT’S TERMINATION RIGHT:

In the event (x) that Tenant's gross sales (as defined in Section 6 of this
Lease) shall be less than Eight Million Five Hundred Thousand Dollars
($8,500,000.00) in either of the eighth (8th) or ninth (9th) lease years of the
initial term hereof, and (y) Tenant was open and operating for business for the
Permitted Use during the Shopping Center’s standard business days and hours
during the eighth (8th) and ninth (9th) lease years (unless Tenant was not open
and operating on account of casualty or condemnation), Tenant shall have the
right, at Tenant's sole election, provided that Tenant is not then in default of
the terms of this Lease beyond any applicable notice and cure periods, on or
before the date (the “Last Termination Notice Date”) which is thirty (30) days
after the end of the ninth (9th) lease year, to send to Landlord a notice
terminating this Lease as of the last day of the tenth (10th) lease year (the
"Tenant's Termination Date").  In the event that Tenant shall so terminate this
Lease in accordance with the provisions of this Section 51, then the term of
this Lease shall terminate and expire on Tenant’s Termination Date with the same
force and effect as though said date was the scheduled expiration date of the
term under this Lease.  Notwithstanding the giving of such termination notice
and Tenant’s exercise of its termination right under this Section 51, Tenant
shall perform and observe all of Tenant’s obligations under this Lease through
and including the Tenant’s Termination Date and Tenant shall pay to Landlord, on
or before the Tenant's Termination Date, the sum of One Hundred Thousand Dollars
($100,000.00).  In the event Tenant exercises the termination right provided for
in this Section 51, Landlord shall have the right, upon ten (10) days prior
written notice, at Tenant's corporate headquarters, to examine Tenant's books
and records relating to gross sales at the demised premises, provided such right
shall expire sixty (60) days after Tenant notifies Landlord of Tenant's exercise
of Tenant's election to terminate the Lease pursuant to the provisions of this
Section 51.

 
 

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SECTION 52.
NO BROKER

Landlord and Tenant each represent to the other that they have not entered into
any agreement or incurred any obligation in connection with this transaction
which might result in the obligation to pay a brokerage commission to any
broker.  Each party shall indemnify and hold the other party harmless from and
against any claim or demand by any broker or other person for bringing about
this Lease who claims to have dealt with such indemnifying party, including all
expenses incurred in defending any such claim or demand (including reasonable
attorney's fees).

SECTION 53.
UNAVOIDABLE DELAYS

In the event either party hereto (the "Delayed Party") shall be delayed or
hindered in or prevented from the performance of any act required under this
Lease by reason of strikes, lockouts, labor troubles, inability to procure
materials, failure of power, the unforeseen application of restrictive
governmental laws or regulations, riots, insurrection, war, acts of terrorism or
other reason of a like nature not the fault of the Delayed Party in performing
work or doing acts required under the terms of this Lease, then performance of
such act shall be excused for the period of the delay, and the period for the
performance of any such act shall be extended for a period equivalent to the
period of such delay, provided that the Delayed Party notified the other party
within fifteen (15) days of the Delayed Party being informed of the occurrence
of the event causing such delay.  The provisions of this Section 53 shall not
operate to excuse either party from the payment of any rental or other monetary
sums due under the terms of this Lease.

SECTION 54.
TIMELY EXECUTION OF LEASE

Landlord and Tenant agree that this Lease, and the parties' obligations
hereunder, shall automatically be null and void and this Lease shall terminate
automatically without further action of the parties if both parties do not
execute this Lease and both parties have not received an original thereof within
sixty (60) days after the date of execution hereof by the first party to execute
this Lease.

SECTION 55.
ACCORD AND SATISFACTION

No payment by Tenant or receipt by Landlord of a lesser amount than the entire
rent and all other additional rents and charges hereunder shall be deemed to be
other than payment on account of the earliest stipulated rent and other
additional rents and charges hereunder, nor shall any endorsement or statement
on any check or any letter accompanying any check or payment for rent or other
additional rent and charges be deemed an accord and satisfaction, and Landlord
may accept such check or payment without prejudice to Landlord's right to
recover the balance of such rent and other additional rents and charges
or  pursue any other right or remedy available to the Landlord.

SECTION 56.
WAIVER OF JURY TRIAL

The Landlord, Tenant any Guarantor(s) do hereby knowingly, voluntarily and
intentionally waive the right to a trial by jury of any and all issues either
now or hereinafter provided by law in any action or proceeding between the
parties hereto, or their successors, arising directly or indirectly out of or in
any way connected with this Lease or any of its provisions, the Tenant's use or
occupancy of said premises and/or any claim for personal injury or property
damage including, without limitation, any action to rescind or cancel this
Lease, and any claim or defense asserting that this Lease was fraudulently
induced or is otherwise void or voidable.  It is intended that said waiver shall
apply to any and all defenses, rights and/or counterclaims in any action or
proceeding at law or in equity.  This waiver is a material inducement for
Landlord and Tenant to enter into this Lease.

SECTION 57.
LEASEHOLD FINANCING

(a)           Tenant's Financing Rights.  Landlord acknowledges and agrees that
Tenant may from time to time during the term, without the consent of Landlord,
mortgage or otherwise finance and encumber, whether by leasehold deed of trust
or mortgage, collateral assignment of this Lease, lease/sublease-back, and/or
assignment/leaseback, any and/or all of its leasehold estate hereunder, and
property and rights in and to the demised premises granted to it under this
Lease, as security for the payment of an indebtedness (any and all of which are
herein referred to as a "Leasehold Mortgage" and the holder thereof is herein
referred to as "Leasehold Mortgagee").  Any such Leasehold Mortgage shall be a
lien only upon Tenant's leasehold estate hereunder and Tenant's interests in
this Lease. Leasehold Mortgagee or its assigns may enforce such Leasehold
Mortgage and acquire title to the leasehold estate and Tenant's interest in the
demised premises in any lawful way, and in connection therewith Leasehold
Mortgagee may take possession of and rent the demised premises.

 
 

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(b)           Cooperation with Leasehold Mortgagee. Tenant shall notify Landlord
(and any Fee Mortgagee, as hereinafter defined in Section 57(c) below), in the
manner hereinafter provided for the giving of notice, of the execution of such
Leasehold Mortgage and the name and place for service of notice upon Leasehold
Mortgagee.  Upon such notification of Landlord that Tenant has entered into a
Leasehold Mortgage, Landlord hereby agrees for the benefit of such Leasehold
Mortgagee, and upon written request by Tenant, to execute and deliver to Tenant
and Leasehold Mortgagee a commercially reasonable “Landlord’s Agreement” whereby
Landlord agrees to recognize the interest of Leasehold Mortgagee thereunder.  In
addition, Landlord does hereby waive any statutory lien of Landlord in Tenant’s
present and after-acquired assets, including among other things, Tenant’s
inventory and equipment.  To evidence such waiver for the benefit of a lender of
Tenant, Landlord agrees to execute and deliver to Tenant and such lender a
commercially reasonable “Landlord’s Waiver” whereby Landlord agrees to waive any
lien on Tenant’s assets including its inventory and equipment.

[SIGNATURES ON THE FOLLOWING PAGE]

 
 

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IN WITNESS WHEREOF, the parties hereto have executed this Lease the day and year
first above written.
 
Signed and Acknowledged in the presence of:      
  LANDLORD:              
KIMSCHOTT FACTORIA MALL L.L.C.,
     
a Delaware limited liability company
               
By:
Kimco Factoria 1188, Inc.,
       
a Delaware corporation,
     
Its:
Member
                         
By:
/s/Michael J. Flynn
/s/ Betty Ann Lopinto
 
Name:
Michael J. Flynn
Print Name:
Betty Ann Lopinto
 
Title:
President
/s/ Christine Boecklin
     
Print Name:
Christine Boecklin
     

 

     
TENANT:
     
DSW INC.,
     
an Ohio corporation
                           
/s/Jeffrey P. Meena
 
By:
/s/William Jordan
Print Name:
Jeffrey P. Meena
 
Name:
William Jordan
/s/Melinda Holmes
 
Its:
VP & General Counsel
Print Name:
Melinda Holmes
     

 

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