Document:

gipr-ex103_61.htm

 

 

Exhibit 10.3

 

SUBLEASE 

 

		
	
 
	
 

	
LANDLORD:
	
CONTINENTAL 34 FUND LIMITED PARTNERSHIP, a Wisconsin limited partnership

	
 
	
 

	
TENANT:
	
KOHL’S DEPARTMENT STORES, INC., a Delaware corporation

	
 
	
 

	
PROPERTY:
	
Kohl’s department store located in a shopping center in Tucson, Arizona

	
 
	
 

	
DATE:
	
January 30, 2003

 

1

 

 

INDEX 

 

	
Article
	
 
	
 
	
Page  

	
I.
	
 
	
Premises and Term
	
3

	
 
	
 
	
 
	
 

	
II.
	
 
	
Options to Extend
	
4

	
 
	
 
	
 
	
 

	
III.
	
 
	
Lease Supplement
	
4

	
 
	
 
	
 
	
 

	
IV.
	
 
	
Construction
	
5

	
 
	
 
	
 
	
 

	
V.
	
 
	
Rent
	
11

	
 
	
 
	
 
	
 

	
VI.
	
 
	
Maintenance of Common Area and Operation of Shopping Center
	
12

	
 
	
 
	
 
	
 

	
VII.
	
 
	
Taxes
	
13

	
 
	
 
	
 
	
 

	
VIII.
	
 
	
Right of Entry
	
14

	
 
	
 
	
 
	
 

	
IX.
	
 
	
Utilities
	
15

	
 
	
 
	
 
	
 

	
X.
	
 
	
Insurance and Restoration
	
15

	
 
	
 
	
 
	
 

	
XI.
	
 
	
Repairs, Alterations, Improvements and Replacements
	
16

	
 
	
 
	
 
	
 

	
XII.
	
 
	
Trade Fixtures
	
17

	
 
	
 
	
 
	
 

	
XIII.
	
 
	
Subordination/Non-Disturbance
	
18

	
 
	
 
	
 
	
 

	
XIV.
	
 
	
Assignment and Subletting
	
18

	
 
	
 
	
 
	
 

	
XV.
	
 
	
Quiet Enjoyment, Representations and Title Insurance
	
18

	
 
	
 
	
 
	
 

	
XVI.
	
 
	
Surrender of Premises
	
20

	
 
	
 
	
 
	
 

	
XVII.
	
 
	
Condemnation
	
20

	
 
	
 
	
 
	
 

	
XVIII.
	
 
	
Defaults and Remedies
	
21

	
 
	
 
	
 
	
 

	
XIX.
	
 
	
Tenant’s Use of Premises
	
23

	
 
	
 
	
 
	
 

	
XX.
	
 
	
Leasehold Mortgages
	
23

	
 
	
 
	
 
	
 

	
XXI.
	
 
	
Mechanic’s Liens
	
25

	
 
	
 
	
 
	
 

	
XXII.
	
 
	
Indemnification
	
25

	
 
	
 
	
 
	
 

	
XXIII.
	
 
	
Memorandum of Lease
	
26

	
 
	
 
	
 
	
 

	
XXIV.
	
 
	
Estoppel Certificates
	
26

	
 
	
 
	
 
	
 

	
XXV.
	
 
	
Brokerage Commissions
	
26

	
 
	
 
	
 
	
 

	
XXVI.
	
 
	
Miscellaneous
	
26

Exhibits 

 

	
Exhibit A
	
Legal Description of the Land

	
Exhibit B
	
Site Plan

	
Exhibit C
	
Plans and Specifications for Landlord’s Work

	
Exhibit C-1
	
Building Pad Certification

	
Exhibit C-2
	
Criteria for Tenant’s Work

	
Exhibit C-3
	
Mechanic’s Lien Indemnity

	
Exhibit D
	
Home Depot REA

	
Exhibit D-1
	
Declaration of Use Restrictions

	
Exhibit E
	
Subordination, Non-Disturbance and Attornment Agreement

	
Exhibit E-1
	
Primary Ground Lessor Non-Disturbance Agreement

	
Exhibit E-2
	
Secondary Ground Lessor Non-Disturbance Agreement

	
Exhibit F
	
Estoppel Letter

	
Exhibit G
	
Memorandum of Lease

	
Exhibit H
	
Sign Criteria

	
Exhibit H-1
	
Building Signage

	
Exhibit H-2
	
Pylon Signage

	
Exhibit I
	
Prohibited Uses

	
Exhibit J
	
Guaranty

	
Exhibit K
	
Exterior Elevations

 

 

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SUBLEASE 

THIS SUBLEASE (“Lease”) is made and entered into as of the 30 day of January, 2003, by and between CONTINENTAL 34 FUND LIMITED PARTNERSHIP, a Wisconsin limited partnership having an office at 10850 W. Park Place, 6th Floor, Milwaukee, Wisconsin 53224 (hereinafter called “Landlord”) and KOHL’S DEPARTMENT STORES, INC., a Delaware corporation, having an office at N56 W17000 Ridgewood Drive, Menomonee Falls, Wisconsin 53051 (hereinafter called “Tenant”). 

W I T N E S S E T H : 

WHEREAS, Landlord has, or will have, a ground lessee interest in certain land located in the City of Tucson, Pima County, Arizona, which is legally described in EXHIBIT A attached hereto and is depicted on the site plan attached hereto as EXHIBIT B (the “Land”), pursuant to that certain Lease dated February 12, 2003 (the “Secondary Ground Lease”), by and between NSHE Bassett, LLC, as lessor (“Secondary Ground Lessor”), and Landlord, as lessee; and 

WHEREAS, Secondary Ground Lessor acquired its interest in the Land pursuant to that certain Land Lease dated January 30, 2003 (the “Primary Ground Lease”), by and between October 23rd Group, LLC, as lessor (“Primary Ground Lessor”), and Secondary Ground Lessor, as lessee; and 

WHEREAS, the Land is subject to that certain Reciprocal Ingress-Egress Easement Agreement dated April 19, 2002 by and between Primary Ground Lessor and Home Depot U.S.A., Inc. (“Home Depot”), as amended by First Amendment to Reciprocal Ingress-Egress Easement Agreement dated January     , 2003 (collectively, the “Home Depot REA”), a copy of which is attached hereto as EXHIBIT D and incorporated herein by this reference; and 

WHEREAS, in addition to the Land, the Home Depot REA encumbers certain adjacent land defined in the Home Depot REA as the Shopping Center (the “Shopping Center”), as well as the outlot depicted on EXHIBIT B (the “Outlot”); and 

WHEREAS, the Outlot is not a part of the Land; and 

WHEREAS, as an inducement to Tenant to enter into this Lease, the Outlot will be further encumbered by a Declaration of Use Restrictions in the form attached hereto as EXHIBIT D-1 and incorporated herein by this reference (the “Outlot Declaration”); and 

WHEREAS, Landlord desires to lease to Tenant and Tenant desires to lease and rent from Landlord, upon the terms and conditions hereinafter set forth, the Land and all improvements constructed or to be constructed thereon and all appurtenant rights thereto, upon the terms and conditions hereinafter set forth. 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows: 

ARTICLE I 

PREMISES AND TERM 

SECTION 1.1. Landlord hereby leases and demises unto Tenant and Tenant hereby leases and takes from Landlord, for the Term (as defined in Section 1.2 hereof), at the rental, and upon the covenants, terms and conditions hereinafter set forth, the Land and the building (the “Building”) designated as the “Kohl’s Building” on EXHIBIT B, which when constructed will contain approximately eighty-eight thousand four hundred eight (88,408) square feet of Floor Area (as hereinafter defined), and all accessory improvements servicing the Land and the Building (hereinafter collectively called the “Premises”) together with all easements, rights, privileges and amenities otherwise appurtenant to the Land. 

SECTION 1.2. 

(a)The term of this Lease (the “Term”) shall commence on the Commencement Date (as defined in Section 1.2(b) hereof) and shall expire on January 31, 2024, subject to Tenant’s extension options and termination option hereinafter contained. 

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(b)The term “Commencement Date”, as used herein, shall mean the date on which Landlord substantially completes the Pad Preparation Work (as defined in Section 4.1(e)) and delivers possession of the Premises to Tenant pursuant to Section 4.2. 

(c)Except as provided in Section 4.1(g) hereof, the term “Rent Commencement Date”, as used herein, shall mean the earlier to occur of (i) the Grand Opening Date (as defined in Section 1.2(d) hereof), or (ii) the following date: (A) October 10, 2003, if the Commencement Date occurs on or before January 31, 2003; (B) March 12, 2004, if the Commencement Date occurs after January 31, 2003 but on or before June 1, 2003; (C) April 16, 2004, if the Commencement Date occurs after June 1, 2003, but on or before July 1, 2003, (D) August 20, 2004, if the Commencement Date occurs after July 1, 2003, but on or before November 1, 2003, or (E) October 8, 2004, if the Commencement Date occurs after November 1, 2003, but on or before January 1, 2004. 

(d)As used in this Lease, the term “Grand Opening Date” shall mean the earlier to occur of (i) the advertised date of Tenant’s grand opening promotional event for the Premises, or (ii) the date which is ten (10) days after the date on which Tenant first opens the Premises for business with the general public. 

SECTION 1.3. Notwithstanding anything contained in this Lease to the contrary, the obligations of Tenant under this Lease shall be contingent upon Landlord and Tenant successfully negotiating and entering into a First Amendment to Reciprocal Ingress-Egress Easement Agreement with Home Depot, Primary Ground Lessor, Secondary Ground Lessor and HD Broadway LLC, an Arizona limited liability company, upon terms and conditions and in a form satisfactory to Tenant. If despite the use of best efforts, Landlord and Tenant have not obtained the First Amendment to Reciprocal Ingress-Egress Easement Agreement on or before January 24, 2003, then either party may terminate this Lease by delivering written notice of termination to the other party prior to the date on which the First Amendment to Reciprocal Ingress-Egress Easement Agreement is obtained. 

ARTICLE II 

OPTIONS TO EXTEND 

SECTION 2.1. Tenant shall have, and is hereby given, eight (8) separate options to extend the initial Term upon the terms, covenants, and provisions herein contained, for successive periods of five (5) years each. Each such option shall be exercisable by Tenant giving notice to Landlord of Tenant’s intention to exercise the same provided Tenant is not then in default under this Lease, not less than twelve (12) months prior to the expiration date of the initial Term, or the expiration date of the then current extended Term, as the case may be; provided that, if Tenant shall fail to give any such notice within the aforesaid time limit, Tenant’s right to exercise its option shall nevertheless continue until thirty (30) days after Landlord shall have given Tenant notice of Landlord’s election to terminate such option and Tenant may exercise such option at any time until the expiration of said thirty (30) day period or the end of the then existing Term, whichever occurs first. 

SECTION 2.2. It is the intention of the parties to avoid forfeiture of Tenant’s rights to extend the Term under any of the options set forth in Section 2.1 through inadvertent failure to give notice of exercise thereof within the time limits prescribed. Accordingly, if Tenant shall fail to give notice to Landlord of Tenant’s election to extend the Term for any of the extended Terms and if Landlord shall fail to give notice to Tenant of Landlord’s election to terminate Tenant’s right to extend this Lease under the option applicable thereto, then and so often as such event shall occur, the Term shall be automatically extended from year to year upon all of the terms and conditions then in effect (provided, however, annual fixed rent shall be at the rate that would have been in effect had Tenant exercised its option to extend the Term), subject to Tenant’s right under such option to extend the Term for the remainder of the extended Term covered thereby and to Landlord’s right to place the thirty (30) day limit on such option by a notice in the manner provided in Section 2.1. 

ARTICLE III 

LEASE SUPPLEMENT 

SECTION 3.1. Upon commencement of the Term, Landlord and Tenant shall execute a supplement to this Lease confirming the Commencement Date, the Rent Commencement Date, the termination date of the original Term, the Floor Area of the Building and such other matters as Landlord or Tenant may reasonably request. 

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ARTICLE IV 

CONSTRUCTION 

SECTION 4.1. 

(a)The term “Landlord’s Work” shall mean the construction of the following work: 

(i)Construction of all off-site and on-site improvements, land clearance, land balancing and grading as required for the use and operation of the Premises, as depicted on EXHIBIT B. 

(ii)Construction of interior roads and a paved surface parking area upon the Common Area in the location shown on EXHIBIT B, together with all access drives, curbs, walkways (other than the walkways adjacent to the Building), parking lot striping and related improvements. The minimum parking stall width shall be nine feet six inches (9’6”). Except as otherwise set forth in the plans and specifications for Landlord’s Work approved by Tenant pursuant to Section 4.1(b), the distance between rows of parking stalls shall be at least sixty-five feet (65’), measured from spine to spine. The Truck Lane depicted on EXHIBIT B shall be constructed with heavy duty paving in accordance with plans and specifications approved by Tenant. 

(iii)The construction of all off-site improvements shown on EXHIBIT B, including acceleration and deceleration lanes (if any) and adequate traffic flow controls and signalization (if any). 

(iv)All landscaping (except for landscaping within the perimeter sidewalks of the Building), exterior lighting, traffic control, signage and related Common Area facilities typically provided in first-class retail shopping center developments in the Tucson metropolitan area. 

(v)All necessary utility extensions to within five feet (5’) of Tenant’s building pad (at locations designated by Tenant), including, without limitation, all extensions for water, electric, natural gas and telephone service and all extensions for storm and sanitary sewers, storm and sanitary drains and retention or detention basins. Storm drainage is to be designed in accordance with good engineering practices to inhibit flooding in accordance with engineering practices for first-class retail shopping center developments in the Tucson metropolitan area. Pavement slope shall not exceed the maximum slope nor be less than the minimum slope set forth in the plans and specifications for Landlord’s Work approved by Tenant pursuant to Section 4.1(b). 

(vi)All entrances, exits, driveways, roadways, service drives, parking areas, curbing, sidewalks, and landscaping to be located in the Common Area (excluding the perimeter sidewalks of the Building and the landscaping within said perimeter sidewalks, which shall be part of Tenant’s Work (as hereinafter defined)). 

(vii)All traffic and parking lot striping and control signs, lighting and any fencing, screening or walls (except Premises truck dock screening walls) required by any governmental authority. Parking lot lighting shall be designed to a two footcandle minimum. To the extent permitted by the governing municipality, the layout for the parking lot lighting on the Land shall distribute a five footcandle minimum along the sidewalk in front of the Building and shall be designed according to photometric plans approved by Tenant. 

(viii)Compaction of Tenant’s building pad as recommended by the final soils report approved by Tenant. Compaction of fill will be performed in accordance with the recommendations set forth in the geotechnical report approved by Tenant. Depth of compacted soils shall be as recommended by final soils reports. 

(ix)Preparation of a staging area for Tenant in the location shown on EXHIBIT B and a temporary all weather access road from the public street to the staging area and from the staging area to and around the building pad on the Land (excluding any side of the Building upon which a building is being constructed adjacent to the Building). 

(x)Making temporary utilities available to the building pad on the Land until permanent utility service is available (Tenant shall pay for temporary utilities consumed by Tenant during the performance of Tenant’s Work). 

(b)Landlord’s Work shall be performed in a good and workmanlike manner, substantially in accordance with plans and specifications approved by Tenant. Landlord shall cause to be prepared and shall submit to Tenant detailed plans and specifications for Landlord’s Work and such plans and specifications will be prepared in compliance with all laws, ordinances, codes and regulations of all duly constituted authorities. Tenant shall have fifteen (15) days after receipt of Landlord’s plans and specifications to approve the same, which approval shall not be unreasonably withheld or delayed. If Tenant timely objects to a portion of Landlord’s plans and specifications, Landlord and Tenant shall 

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endeavor in good faith to revise the plans and specifications to satisfy Tenant’s concerns. Notwithstanding Tenant’s approval of the plans and specifications for Landlord’s Work, Landlord acknowledges and agrees that Tenant shall have no liability whatsoever for any defects, errors or omissions in such plans and specifications nor any liability for the failure of such plans and specifications to comply with any law, ordinance, or regulation. After the plans and specifications for Landlord’s Work are approved by Tenant, a list of the approved plans and specifications shall be attached to this Lease as EXHIBIT C. 

(c)The description of Landlord’s Work and the plans and specifications therefor, once approved by Tenant, shall not be modified without the written consent of Landlord and Tenant; provided, however, if Landlord desires to modify the plans and specifications for a portion of Landlord’s Work that is not situated within the Land, then (i) Tenant shall not unreasonably withhold its consent to the proposed modification and (ii) if the request for Tenant’s consent is properly addressed to Tenant and Tenant fails to respond to the request for consent within fifteen (15) days of Tenant’s receipt of same, Tenant shall be deemed to have consented to the proposed modification. Notwithstanding the foregoing, Tenant may authorize changes to Landlord’s Work during construction (“Change Order”) by providing Landlord with written instructions regarding the Change Order desired by Tenant. Landlord may condition consent to a Change Order requested by Tenant on the work described in the Change Order complying with all applicable laws, ordinances and regulations and on Tenant agreeing (A) to pay, within thirty (30) days after substantial completion of the work described in the Change Order and Landlord’s delivery to Tenant of a detailed invoice for such Change Order, any increase in cost incurred by Landlord as a result of such Change Order and (B) to extend the Delivery Date (as defined in Section 4.1(f) hereof) by the additional amount of time, if any, required to perform the work covered by the Change Order. 

(d)At such time as Landlord shall have commenced construction of Landlord’s Work, Landlord promptly shall give written notice of the same (“Landlord’s Notice of Commencement”) to Tenant. Once construction has commenced, Landlord shall diligently prosecute Landlord’s Work to completion. 

(e)Landlord shall use its best efforts to substantially complete the portion of Landlord’s Work described in subparagraphs (viii), (ix) and (x) of Section 4.1(a) (the “Pad Preparation Work”) on or before January 31, 2003 (the “Pad Delivery Date”). If Landlord does not substantially complete construction of the Pad Preparation Work by the Pad Delivery Date, subject to delays by reason of force majeure, as described in Section 26.11 hereof, but in any event on or before March 1, 2003, Tenant shall have the right to terminate this Lease by giving Landlord written notice of termination prior to the date on which Landlord substantially completes the Pad Preparation Work. 

(f)Landlord shall use its best efforts to complete the balance of Landlord’s Work on or before July 12, 2003, subject to delays by reason of events described in Section 26.11 hereof (the “Delivery Date”). If Landlord does not substantially complete construction of the balance of Landlord’s Work on or before the Delivery Date, subject to delays by reason of events described in Section 26.11 hereof, but in any event on or before August 11, 2003, then unless Tenant elects to extend the Rent Commencement Date pursuant to Section 4.1(g) hereof, Tenant shall, as liquidated damages for Landlord’s failure to complete Landlord’s Work on or before the Delivery Date, be entitled to three (3) days free rent for each 24-hour period beyond the Delivery Date until substantial completion of Landlord’s Work. In addition, if Landlord does not substantially complete construction of Landlord’s Work on or before the Delivery Date, subject to delays by reason of events described in Section 26.11, then Tenant shall provide Landlord with notice of same. If within ten (10) days after the date of Tenant’s notice, Landlord’s Mortgagee has not elected to assume control of Landlord’s Work and thereafter diligently prosecute Landlord’s Work to completion, Tenant shall have the right, but not the obligation, to assume control of Landlord’s Work and to proceed to complete Landlord’s Work with all reasonable dispatch. If Tenant elects to take over Landlord’s Work, Landlord shall reimburse Tenant for all costs incurred by Tenant in performing Landlord’s Work. Upon Tenant’s substantial completion of Landlord’s Work, Tenant shall provide Landlord with a detailed invoice of all costs incurred by Tenant to complete Landlord’s Work. Landlord shall reimburse Tenant for such costs within thirty (30) days after its receipt of said invoice from Tenant. If Landlord fails to reimburse Landlord as provided hereunder, Tenant may offset against the annual fixed rent provided hereunder, without any limitation as specified in Section 18.4, the sums due from Landlord plus interest thereon (compounded monthly) at the Prime Rate (as hereinafter defined) plus four percent (4%) per annum. If Tenant assumes control of Landlord’s Work, the liquidated damages provided in this Section 4.1(f) shall not extend for more than three (3) weeks after the date on which Tenant assumes control of Landlord’s Work (i.e., a maximum of sixty-three (63) days free rent for delays occurring from and after the date Tenant assumes control of Landlord’s Work). 

(g)If Landlord’s Work is substantially completed between (i) the day after the earlier to occur of the Delivery Date or August 11, 2003, and (ii) December 13, 2003, inclusive, Tenant may, by written notice to Landlord, elect to extend the Rent Commencement Date until the earlier to occur of the Grand Opening Date or March 12, 2004. If Landlord substantially completes Landlord’s Work between December 14, 2003 and January 17, 2004, inclusive, Tenant may, by written notice to Landlord, elect to extend the Rent Commencement Date until the earlier to occur of the Grand Opening Date or April 16, 2004. If Landlord substantially completes Landlord’s Work between January 18, 2004, and May 22, 2004, inclusive, Tenant may, by written notice to Landlord, elect to extend the Rent Commencement Date until the earlier to occur of the Grand Opening Date or August 20, 2004. If Landlord substantially completes Landlord’s Work between May 23, 2004, and July 10, 2004, inclusive, Tenant may, by written notice to Landlord, elect to extend the Rent Commencement Date until the earlier to occur of 

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the Grand Opening Date or October 8, 2004. The Rent Commencement Date shall not be made earlier under this Section 4.1(g). 

(h)The date of completion of the Pad Preparation Work shall be the later to occur of (i) the date on which Landlord has obtained all of the Governmental Approvals (as defined in Section 26.18 hereof) or (ii) the date established by a certificate from Landlord’s civil engineer in the form of EXHIBIT C-1 attached hereto and made a part hereof that the Pad Preparation Work has been substantially completed and that Tenant’s building pad has been compacted in accordance with the requirements of this Lease. 

(i)The date of substantial completion of Landlord’s Work shall be established and evidenced by a certificate of substantial completion executed by Landlord’s civil engineer confirming that Landlord’s Work has been substantially completed. Substantial completion shall be deemed to have been performed by Landlord when all of Landlord’s Work has been completed subject only to the completion of Landlord’s “punch list” items which do not interfere with Tenant’s use of the Building. Landlord shall complete all punchlist items within three (3) months after the date of substantial completion of Landlord’s Work, subject to delays by reason of events described in Section 26.11 and other events beyond Landlord’s control which may preclude Landlord from completing all punchlist items within said three (3) month period of time. 

SECTION 4.2. 

(a)Possession of the Premises shall be delivered by Landlord to Tenant upon substantial completion of the Pad Preparation Work. Prior to the Commencement Date, Tenant and its designees shall have the right to enter upon the Land to conduct inspections, studies and investigations of the Land; provided that such inspections, studies and investigations shall not unreasonably interfere with Landlord’s Work. 

(b)Upon the completion by Landlord of the Pad Preparation Work, Tenant shall construct the Building in accordance with all applicable building codes and ordinances, and the Design Plans prepared by Tenant’s architect and approved by Landlord pursuant to this Section 4.2. 

(c)The term “Design Plans” shall mean and include architectural drawings which identify (i) the exterior appearance, size and configuration of the Building, (ii) the roof, walls and structural components of the Building, (iii) the mechanical, electrical, plumbing and sprinkler systems for the Building, and (iv) the location of entrances and loading areas. 

(d)Prior to the Commencement Date, Tenant shall submit the Design Plans to Landlord. Landlord shall have twenty (20) days from receipt of the Design Plans to review, approve or reject the same. If Landlord does not respond within twenty (20) days of receipt of the Design Plans, Landlord shall be deemed to have approved the Design Plans. Landlord shall not object to the Design Plans unless and to the extent the same are (i) inconsistent with a prototype Kohl’s department store building or the design criteria attached hereto as EXHIBIT C-2, or (ii) not in compliance with applicable laws, ordinances and codes. If Landlord timely raises a valid objection to the Design Plans, Landlord and Tenant shall negotiate in good faith to resolve any disagreement. If despite such good faith negotiations, Tenant is unable to secure Landlord’s approval of the Design Plans or Tenant is unable to secure a building permit and such other governmental approvals as are necessary to construct the Building within one hundred twenty (120) days after the date of this Lease, Tenant shall have the right to terminate this Lease by written notice to Landlord. 

(e)Within thirty (30) days after the Commencement Date, Landlord shall pay to Tenant the sum of Seventy-Five Thousand Dollars ($75,000.00) to reimburse Tenant for architectural fees and other soft costs. In addition, Landlord shall pay all impact fees and assessments attributable to Tenant’s tenancy or to the construction of the Kohl’s Building or the development of the Premises. 

(f)After completion of Tenant’s Work, Tenant shall deliver to Landlord three (3) sets of drawings for the Building marked to reflect “as-built” conditions and three (3) sets of the operations and maintenance manuals for the Building, if any, and Landlord shall pay to Tenant any incremental out-of-pocket costs incurred by Tenant in obtaining same. 

SECTION 4.3. Tenant shall have the right to install within the Building all trade fixtures and equipment which Tenant, in its sole discretion, may deem necessary or desirable. Tenant shall select all personnel, labor, materials, equipment, services, utilities and other elements, enter into contracts therefor and determine and do any and all matters and things which 

7

 

Tenant, in its sole discretion, shall deem necessary or advisable in connection with the construction and fixturing of the Building and related improvements (collectively, “Tenant’s Work”). Tenant’s Work shall be in substantial compliance with all laws (including but not limited to the Americans with Disabilities Act), ordinances, codes and regulations of all duly constitutional authorities. With respect to Tenant’s Work, Tenant shall indemnify Landlord against any loss, liability or claim arising out of (i) any mechanic’s liens filed against the Premises, and (ii) the negligence or intentional misconduct of Tenant or its employees, agents or contractors. 

SECTION 4.4. Landlord hereby grants to Tenant, for use by Tenant and its servants, agents, employees and independent contractors, on or in connection with the Tenant’s Work, all necessary or appropriate rights of access, ingress and egress to and from the Land during the course of Tenant’s Work and the right to do all such other things as may be incidental to Tenant’s Work. During the course of Tenant’s Work, Landlord shall make available to those working on or in the Premises, for the parking of trucks and delivery vehicles for the storage of materials and for temporary structures and other matters incidental to construction, such portions of the Premises as may be required for the expeditious performance of Tenant’s Work. Tenant and Landlord shall cooperate reasonably with one another in all ways so that Tenant does not unreasonably interfere with the progress of Landlord’s Work, so that Landlord does not unreasonably interfere with the progress of the Tenant’s Work, and so that Landlord’s Work and Tenant’s Work may proceed as expeditiously as possible. In particular, Landlord shall make available to Tenant for use as a construction staging area the area designated on EXHIBIT B but Landlord shall have no obligation to maintain the staging area or the temporary construction access roads once delivered to Tenant. Tenant shall promptly repair any damage to the Land caused by Tenant’s Work. 

SECTION 4.5 Landlord shall furnish Tenant with sufficient design data in the form of drawings, specifications, schedules and such other documents as Tenant shall reasonably request, of the Land and development of the Premises, to permit Tenant to review Landlord’s Work and coordinate Landlord’s Work with Tenant’s Work. Documents and information to be furnished to Tenant shall consist of, but shall not necessarily be limited to, the following materials: 

(a)Boundary and topographical surveys. 

(b)Zoning and subdivision information, including all planning and zoning board approvals and such other approvals as may be required by any governmental authority required for procurement of the necessary building permits to commence development of the Premises. 

(c)Grading, drainage, and utility plans including plans for natural gas, electric and telephone service and water lines and storm and sanitary sewers, storm drains and retention and detention basins. 

(d) Paving, parking and striping plans. 

(e)Parking criteria and analysis which shall include the size and dimension of parking stalls, the maximum number of parking spaces to be located in the Common Area, ratios of the required minimum number of parking spaces per 1,000 square feet of Floor Area and the size of aisle widths and interior roadways upon the Premises. 

(f)Sign Criteria as required by all applicable governmental authorities for signs to be located on the Premises. 

(g)Soil test boring results and soil reports and evaluations. 

(h)Storm drainage design data and approval requirements for both on site and off site improvements. 

(i)Sewage drainage design data and approval requirements for both on site and off site improvements. 

(j)Site lighting (including photometric plans) and landscaping plans. 

(k)Traffic studies, traffic signal requirements. 

(l)Utility design data and approval requirements. 

SECTION 4.6. The term “Floor Area” as used in this Lease means, with respect to the Building, the actual number of square feet of floor space within the exterior walls of all floors, measured to the center lines of all common walls and the exterior sides of all exterior walls, including any basements used for retail sales, and including stairs, interior elevators, escalators, air conditioning and other interior equipment rooms; but excluding: (i) the following installations located outside of the exterior walls of the Building: loading docks and platforms, transformer vaults, utility or mechanical penthouses or utility enclosures; (ii) patio or outside selling areas which are not heated or air conditioned; (iii) any mezzanine space; and (iv) basement space not used for retail sales. Upon completion of the Tenant’s Work, Tenant’s architect shall certify to Landlord the exact Floor Area of the Premises. 

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SECTION 4.7. 

(a)Landlord shall unconditionally warrant and guarantee Landlord’s Work against defective workmanship and material for a period of one (1) year from the date of substantial completion of Landlord’s Work. Landlord hereby assigns and transfers to Tenant (such assignment to be nonexclusive and coextensive with the rights of Landlord) the benefit of any and all assignable warranties and guarantees received by or given to Landlord by any architect, contractor, subcontractor, material supplier, equipment supplier or any other individual or entity which provided goods or services to Landlord in connection with Landlord’s Work. Without limiting the generality of the foregoing, Landlord shall obtain (i) from the paving contractor a five (5) year warranty for the paving of drives, parking lot, sidewalks and other hard-surfaced portions of the Common Area against faulty installation (including failures of base, sub-base or sub-grade), frost-heaving and settling and (ii) from all other contractors a minimum of a one (1) year warranty. Landlord hereby agrees to cooperate with Tenant to the extent necessary to enable Tenant to enforce any such warranty or guarantee assigned to Tenant hereunder. 

(b)Tenant shall unconditionally warrant and guarantee Tenant’s Work against defective workmanship and material for a period of one (1) year from the date of substantial completion of Tenant’s Work. Tenant hereby assigns and transfers to Landlord (such assignment to be nonexclusive and coextensive with the rights of Tenant) the benefit of any and all assignable warranties and guarantees received by or given to Tenant by any architect, contractor, subcontractor, material supplier, equipment supplier or any other individual or entity which provided goods or services to Tenant in connection with Tenant’s Work. Without limiting the generality of the foregoing, Tenant shall obtain the warranties described in EXHIBIT C-2. Tenant hereby agrees to cooperate with Landlord to the extent necessary to enable Landlord to enforce any such warranty or guarantee assigned to Landlord hereunder. 

SECTION 4.8. 

(a)Landlord shall pay to Tenant the sum of Three Million Eight Hundred One Thousand Five Hundred Forty-Four and No/100 Dollars ($3,801,544.00) (the “Landlord Contribution”). The Landlord Contribution shall be payable in six (6) equal installments of Six Hundred Thirty-Three Thousand Five Hundred Ninety and 67/100 Dollars ($633,590.67) each in the manner hereinafter set forth. 

(b)Landlord shall pay the first installment of the Landlord Contribution to Tenant within thirty (30) days after the date on which Tenant has delivered the following to Landlord: 

(i)a sworn certificate of an authorized officer of Tenant certifying that construction of Tenant’s Work is one-sixth (1/6) complete; and 

(ii)an undertaking executed by Tenant and substantially in the form of EXHIBIT C-3 attached hereto with respect to mechanic’s liens or possible mechanic’s liens arising out of Tenant’s Work. 

Tenant shall permit the construction consultant engaged by Landlord’s mortgagee to inspect the progress of Tenant’s Work, and if the construction consultant has conclusive evidence that the sworn certificate furnished by Tenant is either fraudulent or is in gross error, Landlord shall not be obligated to pay the first installment of the Landlord Contribution until thirty (30) days after Tenant’s Work is one-sixth (1/6) complete. In addition, if the construction consultant engaged by Landlord’s mortgagee has conclusive evidence that the Building has not been constructed substantially in accordance with the Design Plans, Landlord may withhold from the first installment of the Landlord Contribution the sums reasonably required to correct such deficiencies, and the amount withheld shall be paid to Tenant along with the next installment due after the required corrections have been made. 

(c)Landlord shall pay the second installment of the Landlord Contribution to Tenant within thirty (30) days after the date on which Tenant has delivered the following to Landlord: 

(i)a sworn certificate of an authorized officer of Tenant certifying that construction of Tenant’s Work is one-third (1/3) complete; and 

(ii)an undertaking executed by Tenant and substantially in the form of EXHIBIT C-3 attached hereto with respect to mechanic’s liens or possible mechanic’s liens arising out of Tenant’s Work. 

Tenant shall permit the construction consultant engaged by Landlord’s mortgagee to inspect the progress of Tenant’s Work, and if the construction consultant has conclusive evidence that the sworn certificate furnished by Tenant is either fraudulent or is in gross error, Landlord shall not be obligated to pay the second installment of the Landlord Contribution until thirty (30) days after Tenant’s Work is one-third (1/3) complete. In addition, if the construction consultant engaged by Landlord’s mortgagee has conclusive evidence that the Building has not been constructed substantially in accordance with the Design Plans, Landlord may withhold from the second installment of the Landlord 

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Contribution the sums reasonably required to correct such deficiencies, and the amount withheld shall be paid to Tenant along with the next installment due after the required corrections have been made. 

(d)Landlord shall pay the third installment of the Landlord Contribution to Tenant within thirty (30) days after the date on which Tenant has delivered the following to Landlord: 

(i)a sworn certificate of an authorized officer of Tenant certifying that construction of Tenant’s Work is one-half (1/2) complete; and 

(ii)an undertaking executed by Tenant and substantially in the form of EXHIBIT C-3 attached hereto with respect to mechanic’s liens or possible mechanic’s liens arising out of Tenant’s Work. 

Tenant shall permit the construction consultant engaged by Landlord’s mortgagee to inspect the progress of Tenant’s Work, and if the construction consultant has conclusive evidence that the sworn certificate furnished by Tenant is either fraudulent or is in gross error, Landlord shall not be obligated to pay the third installment of the Landlord Contribution until thirty (30) days after Tenant’s Work is one-half (1/2) complete. In addition, if the construction consultant engaged by Landlord’s mortgagee has conclusive evidence that the Building has not been constructed substantially in accordance with the Design Plans, Landlord may withhold from the third installment of the Landlord Contribution the sums reasonably required to correct such deficiencies, and the amount withheld shall be paid to Tenant along with the next installment due after the required corrections have been made. 

(e)Landlord shall pay the fourth installment of the Landlord Contribution to Tenant within thirty (30) days after the date on which Tenant has delivered the following to Landlord: 

(i)a sworn certificate of an authorized officer of Tenant certifying that construction of Tenant’s Work is two-thirds (2/3) complete; and 

(ii)an undertaking executed by Tenant and substantially in the form of EXHIBIT C-3 attached hereto with respect to mechanic’s liens or possible mechanic’s liens arising out of Tenant’s Work. 

Tenant shall permit the construction consultant engaged by Landlord’s mortgagee to inspect the progress of Tenant’s Work, and if the construction consultant has conclusive evidence that the sworn certificate furnished by Tenant is either fraudulent or is in gross error, Landlord shall not be obligated to pay the fourth installment of the Landlord Contribution until thirty (30) days after Tenant’s Work is two-thirds (2/3) complete. In addition, if the construction consultant engaged by Landlord’s mortgagee has conclusive evidence that the Building has not been constructed substantially in accordance with the Design Plans, Landlord may withhold from the fourth installment of the Landlord Contribution the sums reasonably required to correct such deficiencies, and the amount withheld shall be paid to Tenant along with the next installment due after the required corrections have been made. 

(f)Landlord shall pay the fifth installment of the Landlord Contribution to Tenant within thirty (30) days after the date on which Tenant has delivered the following to Landlord: 

(i)a sworn certificate of an authorized officer of Tenant certifying that construction of Tenant’s Work is five-sixths (5/6) complete; and 

(ii)an undertaking executed by Tenant and substantially in the form of EXHIBIT C-3 attached hereto with respect to mechanic’s liens or possible mechanic’s liens arising out of Tenant’s Work. 

Tenant shall permit the construction consultant engaged by Landlord’s mortgagee to inspect the progress of Tenant’s Work, and if the construction consultant has conclusive evidence that the sworn certificate furnished by Tenant is either fraudulent or is in gross error, Landlord shall not be obligated to pay the fifth installment of the Landlord Contribution until thirty (30) days after Tenant’s Work is five-sixths (5/6) complete. In addition, if the construction consultant engaged by Landlord’s mortgagee has conclusive evidence that the Building has not been constructed substantially in accordance with the Design Plans, Landlord may withhold from the fifth installment of the Landlord Contribution the sums reasonably required to correct such deficiencies, and the amount withheld shall be paid to Tenant along with the next installment due after the required corrections have been made. 

(g)Landlord shall pay the balance of the Landlord Contribution to Tenant within thirty (30) days after the later to occur of the Grand Opening Date and the date on which Tenant has delivered the following to Landlord: 

(i)a copy of the certificate of occupancy issued for the occupancy of the Building, if certificates of occupancy are customarily issued by the City of Tucson; 

(ii)an undertaking executed by Tenant and substantially in the form of EXHIBIT C-3 attached hereto with respect to mechanic’s liens or possible mechanic’s liens arising out of Tenant’s Work; and 

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(iii)a certificate from Tenant’s architect or contractor certifying that Tenant’s Work has been substantially completed. 

(h)The installments of the Landlord Contribution may be sent to Tenant by overnight delivery service or by wire transfer of immediately available funds pursuant to instructions to be provided by Tenant. If Landlord shall fail to pay any installment of the Landlord Contribution to Tenant on or before the due date therefor, the past due installments of Landlord Contribution shall bear interest at a rate equal to the Prime Rate (as hereinafter defined) plus four percent (4%) per annum, compounded monthly. Funds received on account of the Landlord Contribution shall be applied first to interest accrued on the past due installments, then to past due installments and then to current installments. Tenant shall have the right to offset the amount of any past due sums under this Section 4.8 and the interest thereon as aforesaid against the entire annual fixed rent and other sums and charges due to Landlord under this Lease, without any limitation as specified in Section 18.4, until the past due installments and the interest thereon are paid in full. The sums offset shall be applied first to interest accrued on the past due installments, then to past due installments and then to current installments. 

(i)For purposes of this Lease, Tenant shall be deemed to be constructing the Building for Landlord as Landlord’s contractor and the payment of the Landlord Contribution to Tenant shall be the sole compensation due to Tenant for the construction of the Building. As a result, title to the Building shall vest in Landlord at the time the Building is constructed, subject to payment of the Landlord Contribution, and the Building shall be deemed to be property leased to Tenant as part of the Premises under the terms and conditions of this Lease. 

ARTICLE V 

RENT 

SECTION 5.1. 

(a)Commencing with the Rent Commencement Date and throughout the remainder of the initial Term, Tenant shall pay to Landlord an annual fixed rent at a rate of Eight Hundred Sixty-six Thousand Three Hundred Ninety-eight and No/100 Dollars ($866,398.00) per year. 

(b)If Tenant exercises its first option to extend the Term, then during the first extension term, Tenant shall pay to Landlord an annual fixed rent at a rate of Nine Hundred Thirty-one Thousand Three Hundred Seventy-eight and No/100 Dollars ($931,378.00) per year. 

(c)If Tenant exercises its second option to extend the Term, then during the second extension term, Tenant shall pay to Landlord an annual fixed rent at a rate of One Million One Thousand Two Hundred Thirty-two and No/100 Dollars ($1,001,232.00) per year. 

(d)If Tenant exercises its third option to extend the Term, then during the third extension term, Tenant shall pay to Landlord an annual fixed rent at a rate of One Million Seventy-six Thousand Three Hundred Twenty-four and No/100 Dollars ($1,076,324.00) per year. 

(e)If Tenant exercises its fourth option to extend the Term, then during the fourth extension term, Tenant shall pay to Landlord an annual fixed rent at a rate of One Million One Hundred Fifty-seven Thousand Forty-eight and No/100 Dollars ($1,157,048.00) per year. 

(f)If Tenant exercises its fifth option to extend the Term, then during the fifth extension term, Tenant shall pay to Landlord an annual fixed rent at a rate of One Million Two Hundred Forty-three Thousand Eight Hundred Twenty-seven and No/100 Dollars ($1,243,827.00) per year. 

(g)If Tenant exercises its sixth option to extend the Term, then during the sixth extension term, Tenant shall pay to Landlord an annual fixed rent at a rate of One Million Three Hundred Thirty-seven Thousand One Hundred Fourteen and No/100 Dollars ($1,337,114.00) per year. 

(h)If Tenant exercises its seventh option to extend the Term, then during the seventh extension term, Tenant shall pay to Landlord an annual fixed rent at a rate of One Million Four Hundred Thirty-seven Thousand Three Hundred Ninety-seven and No/100 Dollars ($1,437,397.00) per year. 

(i)If Tenant exercises its eighth option to extend the Term, then during the eighth extension term, Tenant shall pay to Landlord an annual fixed rent at a rate of One Million Five Hundred Forty-five Thousand Two Hundred Two and No/100 Dollars ($1,545,202.00) per year. 

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(j)The annual fixed rent payable under this Section 5.1 shall be payable to Landlord in equal, monthly installments in advance, on or before the first (1st) day of each month, at the address for Landlord set forth in Section 26.9 hereof or at such other address as Landlord shall from time to time designate by notice to Tenant. 

(k) If the Rent Commencement Date is other than the first day of a calendar month, Tenant shall pay on or before the first day of the calendar month immediately following the month in which the Rent Commencement Date occurs a pro rata portion of the monthly installment of annual fixed rent for such partial month (prorated on a per diem basis). 

ARTICLE VI 

MAINTENANCE OF COMMON AREA AND OPERATION OF SHOPPING CENTER 

SECTION 6.1. The term “Common Area” as used in this Lease shall have the same meaning as set forth in the Home Depot REA. 

SECTION 6.2. Landlord hereby grants to Tenant, during the Term, for the benefit of Tenant, Tenant’s licensees and concessionaires, and their respective officers, agents and employees, and their respective customers, invitees, business guests and visitors, the non-exclusive right to use in accordance with the terms of the Home Depot REA, for their intended purposes, all of the Common Area as such areas may be constituted from time to time. The rights hereby granted with respect to the Common Area shall constitute easements appurtenant to the Premises and a servitude upon the Land. The benefit and the burden of such easements shall run with and bind the Land. 

SECTION 6.3. 

(a)From and after the later to occur of the Delivery Date or the date of substantial completion of Landlord’s Work and continuing throughout the remainder of the Term, Tenant shall, at no cost or expense to Landlord, police and maintain the Common Area of the Land or cause the Common Area of the Land to be policed and maintained at all times in accordance with the standard set forth in the Home Depot REA (and to keep the Common Area of the Land in operation except as may be required to maintain in the required condition, order and repair). Tenant shall have no obligation to maintain any other land outside of the Land. Nothing in this Section 6.3(a) shall limit the obligations of Landlord under Section 11.1 hereof. 

(b)The Outlot Declaration will require the Occupant (as defined in the Outlot Declaration) of the Outlot to make payments to Landlord to compensate Landlord for the cost of maintaining portions of the Common Area located on the Land that benefit the Outlot (the “Outlot Contribution”), but will also provide that, so long as the Premises is being operated as a Kohl’s department store, the Occupant of the Outlot shall pay the Outlot Contribution directly to Tenant. Landlord shall pay to Tenant the amount of any such payments received by Landlord during the Term immediately after Landlord receives payment therefor from the Occupant of the Outlot; if Landlord or an affiliate of Landlord is an Occupant of the Outlot, Landlord shall pay to Tenant the required sum within thirty (30) days after the date such sum is payable to Landlord under the Outlot Declaration. 

(c)In the event that Landlord shall fail to pay any amount due Tenant under this Section 6.3, Tenant shall have the right to offset the unpaid amount against the annual fixed rent due hereunder without any limitation as set forth in Section 18.4 hereof. 

SECTION 6.4. Landlord shall not, without the prior written consent of Tenant, which consent may be withheld in Tenant’s sole discretion, do the following: 

(i)make any change to the Building except as otherwise provided in this Lease; 

(ii)close, restrict or otherwise alter the entrances to the Premises except to the extent that Landlord is required to do so to comply with the requirements of a governmental agency having jurisdiction over the Premises or access to the Premises (i.e., no alternative means of compliance is available to Landlord); 

(iii)change the size, configuration and/or location of the parking areas and access drives of the Premises except to the extent that Landlord is required to do so to comply with the requirements of a governmental agency having jurisdiction over the Premises or access to the Premises. 

SECTION 6.5. Tenant acknowledges that this Lease and all rights of Tenant hereunder and with respect to the Premises and the Common Area are subject and subordinate to the terms, conditions and provisions of the Home Depot REA and any further amendment, modification or extension hereafter made subject to the limitation set forth in the succeeding 

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sentence. Throughout the Term, Landlord shall not agree to any modification, alteration, amendment or voluntary termination of the Home Depot REA or the Outlot Declaration, nor shall Landlord grant any approval under the Home Depot REA or the Outlot Declaration, without the prior written consent of Tenant, which consent shall not be unreasonably withheld or delayed. 

SECTION 6.6. 

(a)Subject to municipal approval and compliance with the terms and conditions of the Home Depot REA, Tenant shall have the right to install one or more signs on the exterior walls of the Building in accordance with the specifications set forth in EXHIBIT H attached hereto. Notwithstanding any contrary provision in EXHIBIT H, Landlord hereby approves and consents to Tenant’s exterior signage described on EXHIBIT H-1. 

(b)Pursuant to the terms of the Home Depot REA, Home Depot is erecting electrically illuminated pylon signs at the locations set forth on EXHIBIT B, in accordance with the drawings attached hereto as EXHIBIT H-2 (collectively, the “Pylon Signs”), and Tenant shall have the right to install Tenant’s sign panels thereon in accordance with the terms of the Home Depot REA. 

Landlord shall not agree to any alteration or modification of the Pylon Signs or construct any additional pylon signs or monument signs within the Premises. Tenant shall be responsible for the fabrication, installation, maintenance, repair and replacement of Tenant’s sign panels as set forth in the Home Depot REA. Notwithstanding anything to the contrary contained in EXHIBIT H-2, but subject to applicable laws, ordinances and codes and the Home Depot REA, Tenant shall have the unqualified right to use its prototype sign panel and colors as the same may exist from time to time. 

ARTICLE VII 

TAXES 

SECTION 7.1. Throughout the Term (except the portion of the Term occurring prior to the Rent Commencement Date), Tenant shall pay, or cause to be paid, all that portion of real estate taxes which shall be assessed and levied during the Term and any renewal thereof (except for the portion of the Term occurring prior to the Rent Commencement Date) against the Land and the improvements thereon properly allocated (“Tenant’s Allocable Share”) to Tenant. Landlord shall use commercially reasonable efforts to cause the Land to be separately assessed for real estate tax purposes (including, without limitation, the subdivision of the Land into a separately subdivided lot). For all tax years during the Term for which the Land is separately assessed for real estate tax purposes, Tenant shall pay directly to the taxing authority, on or before the due date therefor, one hundred percent (100%) of the real estate taxes levied and assessed upon the Premises and Tenant shall have no further liability to Landlord for the payment of real estate taxes assessed and levied upon any other portion of the Land or the improvements thereon for such years. If the Land is not separately assessed, Tenant’s Allocable Share of real estate taxes assessed against the Land or the improvements thereon shall be determined from notes and records maintained by the tax assessor for the municipality charged with the responsibility for real estate tax assessment of the Premises as to the value of Land. If no notes or records are maintained by the tax assessor as to Land or if such notes or records are inconclusive as to the value of the Land, Tenant’s Allocable Share of real estate taxes assessed against the Land and the improvements thereon shall be equal to the sum of (a) the real estate taxes assessed against the land in the Premises multiplied by a fraction, the numerator of which is the square footage of the land in the Land and the denominator of which is the total square footage of the land in the larger tax parcel in which the Premises are situated; and (b) the real estate taxes assessed against the improvements in the larger tax parcel multiplied by a fraction, the numerator of which is the Floor Area of the Building and the denominator of which is the Floor Area of all buildings in the larger tax parcel. 

SECTION 7.2. If the Land is not separately assessed, Tenant shall pay Tenant’s Allocable Share of such real estate taxes to Landlord within thirty (30) days after receipt by Tenant of Landlord’s itemized statement showing the real estate taxes due and the calculation of Tenant’s Allocable Share thereof, but in no event shall Tenant be required to make any such payment more than ten (10) days prior to the date such tax is required to be paid without penalty to the taxing authority; and provided, further, that if such real estate taxes may be paid on an installment basis, Tenant shall not be required to pay more than Tenant’s Allocable Share of the installment then due. All such payments shall be held by Landlord in trust solely for the purpose of paying real estate taxes on the Land and improvements constituting the Premises and for no other purpose. The term “real estate taxes” as used in this Section shall not include any capital stock, franchise, estate, inheritance, devolution, succession, transfer, gift or income tax or tax of a similar nature which is or may become payable by Landlord or which may be imposed against Landlord or against the rents payable hereunder or upon the income or profits of Landlord by reason of any law now in force or hereafter enacted. The term “real estate taxes” shall, however, include special assessments which are not attributable to Landlord’s Work or otherwise attributable to work commenced prior to the Rent Commencement Date and, if payable in installments, shall be charged against Tenant’s Allocable Share of taxes only to the extent such installments 

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are payable during the Term commencing with the Rent Commencement Date. Notwithstanding the foregoing, the term “real estate taxes”, as used in this Lease shall include (i) any taxes based upon rents received by Landlord under this Lease (“Rent Tax”) hereafter enacted if such taxes are enacted specifically in substitution for or specifically in addition to real estate taxes (provided, however, that if the amount or rate of such Rent Tax levied against the income of Landlord as a substitute for such real estate taxes shall be increased by reason of any other income, receipts or property owned by Landlord, then and in that event, Tenant shall not be obligated to pay such increased amount, but only such Rent Tax as Landlord would be obligated to pay in case Landlord derived no income from any source other than the Premises and owned no property other than the Premises), and (ii) any sales tax privilege tax on the rent payable by Landlord to Secondary Ground Lessor under the Secondary Ground Lease, but only to the extent the payment of such tax is an obligation of (i) Landlord pursuant to the terms of the Secondary Ground Lease, and (ii) Secondary Ground Lessor pursuant to the terms of the Primary Ground Lease. For any partial tax year falling within the Term, real estate taxes shall be prorated based on the number of days in such tax period falling within the Term (excluding portions of the Term occurring prior to the Rent Commencement Date). 

SECTION 7.3. Throughout the Term, Landlord shall, except as otherwise provided herein, pay, or cause to be paid, all real estate taxes, assessments and other taxes, duties and charges in the same category imposed by any governmental or public authority which shall be assessed or levied against the Premises or any part thereof or any buildings or other improvements thereon or any appurtenances thereto or fixtures (other than Tenant’s trade fixtures) therein or any tax, charge or duty which may be imposed, levied or be or become a charge in lieu of any such present tax, charge or duty (herein collectively called “taxes”). All such taxes shall be paid before they become delinquent and Landlord agrees to exhibit to Tenant receipted bills or other evidence of payment of such taxes from time to time at Tenant’s request. 

SECTION 7.4. Tenant may contest in good faith by appropriate proceedings, or in any other manner permitted by law, at Tenant’s expense, in Landlord’s name, any taxes assessed or levied against the Land (or against the Land and the improvements thereon if the Land is not separately assessed) and Landlord agrees to cooperate with Tenant and to execute any documents reasonably required for such purpose. If the Land is not separately assessed, Tenant shall deliver written notice to Landlord advising Landlord that Tenant intends to contest such taxes and request Landlord’s participation in the cost of the contest. Landlord shall be deemed to have elected to participate in the cost of the contest unless within fifteen (15) days after Landlord’s receipt of Tenant’s notice, Landlord delivers written notice to Tenant declining to participate in the cost of the contest. Such contest may include appeals from any judgments, decrees or orders until a final determination shall be made by a court or governmental department or authority having final jurisdiction in the matter. Notwithstanding such contest, Tenant shall pay such taxes not later than sixty (60) days before the Land, or any portion thereof, may become subject to a sale by governmental authority by reason of the nonpayment thereof, and in time to avoid acceleration of the due date of any mortgage by reason of such nonpayment. Upon the final determination of any such contest by a court or governmental department or authority having final jurisdiction in the matter, Tenant shall pay the same, together with such fines, interest, penalties, costs and charges as may, in accordance with such determination, be payable in connection therewith. Any tax refund received in connection with such contest shall belong to Tenant less reasonable costs, expenses and out of pocket attorneys’ fees, if any, paid by Landlord or by Landlord’s mortgagees and less any sums for taxes paid by Landlord or Landlord’s mortgagee pursuant hereto. All costs, fees and expenses (including reasonable attorneys’ fees) actually incurred and paid by Tenant in connection with such contest, shall be borne by Tenant. Notwithstanding the foregoing, if the Land is not a separately assessed parcel, then (a) if Landlord elects or is deemed to have elected to participate in the cost of the contest, then (i) Tenant shall be responsible for only Tenant’s Allocable Share of the costs and expenses referred to in this Section 7.4 and Landlord shall be responsible for the remainder of such costs and expenses, and (ii) Tenant shall be entitled to only Tenant’s Allocable Share of the refund received and Landlord shall be entitled to the remainder of such refund and (b) if Landlord declines to participate in the cost of the contest, then (i) Tenant shall be responsible for all costs and expenses referred to in this Section 7.4 and Landlord shall have no responsibility for such costs and expenses; and (ii) Tenant shall be entitled to the entire refund or reduction with respect to the larger tax parcel and Landlord shall not be entitled to any portion thereof. 

SECTION 7.5. Written evidence of the payment of real estate taxes and assessments shall be furnished by Tenant to Landlord and Landlord’s mortgage lender upon written request therefor. 

ARTICLE VIII 

RIGHT OF ENTRY 

SECTION 8.1. Landlord, Primary Ground Lessor and Landlord’s mortgage lender reserve the right to enter the Premises during normal business hours upon at least forty-eight (48) hours prior written notice to Tenant to inspect the same. Landlord further reserves the right, upon at least forty-eight (48) hours prior written notice to Tenant (except in the case of 

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emergencies, in which event Landlord shall only be obligated to give such notice as is practical under the circumstances), to enter the Premises for the purpose of maintaining, repairing or replacing those portions of the Premises for which Landlord is responsible hereunder and for the purpose of performing any obligations of Tenant hereunder, if any, which Tenant has failed to perform; provided that such entry to the full extent practicable shall be limited to such times as Tenant is not open for business with the public and provided, further, that access to the Premises shall not be denied Tenant nor shall the business of Tenant be interfered with unreasonably. If any maintenance, repairs or replacements to the foundation or structural components of the improvements comprising the Premises shall be so extensive that, in Tenant’s reasonable discretion, it is not commercially practicable for Tenant to conduct business upon all or any portion of the Premises, then unless the maintenance, repairs or replacements are required as a result of Tenant’s negligence, there shall be a just abatement of rent for the period during which Tenant’s business is so interrupted. 

ARTICLE IX 

UTILITIES 

SECTION 9.1. Commencing on the Commencement Date and continuing through the expiration of the Term or earlier termination of this Lease, Tenant agrees to pay directly to the respective utility company all charges for water, natural gas, electricity and other utility services furnished to or consumed by Tenant in the Premises. Landlord shall, as part of Landlord’s Work, cause separate meters to be installed for the furnishing of all utilities to the Building. Tenant’s obligations under this Article IX shall survive the expiration or sooner termination of this Lease. 

ARTICLE X 

INSURANCE AND RESTORATION 

SECTION 10.1. Tenant, at all times during the Term, shall cause the Building to be insured against loss or damage by fire, lightning, and such other risks as are from time to time included in “all risks” endorsements in the State of Arizona, in an amount and form so that the proceeds thereof are sufficient to provide for actual replacement in full of the Building (said amount may exclude foundation and excavation costs and costs of underground flues, pipes and drains), as part of one or more policies of insurance. Landlord and Landlord’s mortgagees shall be named as additional loss payees on the insurance obtained by Tenant under this Section 10.1. 

SECTION 10.2. Commencing with the date Tenant or Landlord executes this Lease, whichever is later, Tenant agrees, at no expense to Landlord, to maintain or cause to be maintained commercial general public liability insurance against claims for contractual liability as well as personal injury or death and property damage occurring upon, in or about the Premises and the Common Area, such insurance in each case to afford protection to the limit of not less than $5,000,000 for combined single limit for personal injuries, including bodily injury or death (which limit may be included in an excess lines policy), and property damage to any number of persons arising out of any one occurrence. 

SECTION 10.3. All insurance provided for in this Article X shall be effected under valid and enforceable policies issued by insurers of recognized responsibility with a minimum A. M. Best Company, Inc. (or any successor rating organization) general policyholder’s Rating of A-/X or better, which shall contain a deductible of no more than $100,000.00 per occurrence and shall be primary and noncontributing. Each party shall provide self-insurance for any deductible carried by such party. Any insurance required to be maintained by Tenant may be self-insured in whole or in part if Tenant shall then have and thereafter maintain a net worth of at least $100,000,000. Any insurance required to be maintained by Landlord or Tenant hereunder may be taken out under a blanket insurance policy or policies covering other premises, property or insureds in addition to the Premises and the parties hereto, provided such policy or policies otherwise comply with this Article X and provide for a minimum limit available to the Premises equal to the insurance amounts required hereunder. If Tenant shall elect to self-insure, Landlord shall have all the benefits provided in this Article X that it would have if Tenant carried the required insurance with no deductible. The original of the initial policies or renewal policies, if any, shall be delivered to the named insured and certificates thereof shall be delivered to the each additional insured and its mortgagee. In the case of self-insurance, a certificate stating Tenant has elected to self-insure, and if the information is not publicly available, an affidavit of net worth signed by an officer of Tenant, as the case may be, shall be delivered to Landlord and Landlord’s mortgagee. Any liability insurance required to be maintained by a party hereunder shall name the other party and the other party’s mortgagees as additional insureds as their respective interests may appear. Any policy required by this Article shall provide that such policy shall not be cancelled or materially changed without at least thirty (30) days prior written notice to the other party and the other party’s mortgagee. If either party fails to maintain insurance in accordance with the provisions of this Article and 

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fails to correct such default after reasonable notice from the other party, the non-defaulting party may purchase such insurance for the defaulting party and the defaulting party shall pay the cost thereof and the interest thereon. Notwithstanding anything to the contrary contained in this Lease, Tenant may self insure only if Tenant (or any guarantor of Tenant’s obligations hereunder) has a Moody’s Investors Service rating of “Baa2” or better (or comparable National Statistical Rating Organization rating). 

SECTION 10.4. In the event of damage to or destruction of the whole or any substantial part of the improvements comprising the Premises by fire or any other casualty during the Term, such that it would be commercially unreasonable or unfeasible for Tenant, in Tenant’s reasonable discretion, to conduct its business upon the Premises, a just proportion of Tenant’s rent due under this Lease reflecting the adverse effect on Tenant shall be suspended and abated until the damaged portion of the Premises is rebuilt and refixtured. Except as otherwise provided in Section 10.5 hereof, in the event of damage to or destruction of the whole or any substantial part of the improvements comprising the Premises by fire or any other casualty during the Term, Tenant shall repair and restore such improvements to the same condition as existed immediately prior to the date of such casualty. All proceeds of insurance Tenant receives from insurers pursuant to this Article X shall be made available to Tenant for purposes of repair and restoration of the Premises pursuant to this Section 10.4; provided, however, if Tenant fails to perform the repairs and restoration as required by this Section 10.4 and Landlord elects to perform same pursuant to Section 18.2(c) hereof, the unused proceeds of insurance Tenant receives from insurers pursuant to this Article X shall be made available to Landlord for purposes of repair and restoration. All such repairs and restoration shall be performed in a commercially reasonable time and in a manner and quality consistent with the terms and conditions of this Lease. 

SECTION 10.5. Notwithstanding anything contained herein to the contrary, if more than thirty-three percent (33%) of the Floor Area of the Building is damaged or destroyed by fire or other casualty and the time to restore the damage or destruction (as reasonably estimated by an independent architect or engineer acceptable to Tenant and Landlord) is greater than two hundred seventy (270) days (subject to matters referred to in Section 26.11), then Tenant shall have the right to terminate this Lease by giving Landlord written notice of such termination within forty-five (45) days after the date of such casualty, specifying a termination date of at least thirty (30) days and not more than ninety (90) days after the date of Tenant’s notice of termination. If Tenant terminates this Lease pursuant to this Section 10.5, Tenant shall make all insurance proceeds relating to the casualty to the Premises available to Landlord within fifteen (15) days after receipt of same from the insurer. If Tenant does not give notice of termination within such forty-five (45) day period, Tenant shall be deemed to have waived such right of termination and Tenant shall repair and restore the Premises in accordance with the terms hereof. 

ARTICLE XI 

REPAIRS, ALTERATIONS, IMPROVEMENTS AND REPLACEMENTS 

SECTION 11.1. Upon the expiration of the one (1) year warranty period described in Section 4.7(b) hereof, and continuing throughout the remainder of the Term, Landlord, at Landlord’s sole expense, shall keep the foundation, roof joists, roof decking, roof membrane and all structural components of the Building in good condition and shall be responsible for any and all maintenance, repairs and/or replacements thereof; provided, however, Landlord shall not be responsible for latent defects in the design or construction of the Building or for repairs resulting from the negligence of the architect who designed the Building or the contractor who constructed the Building. All repairs and replacements made pursuant to this Section shall be at least equal in quality and workmanship to the original work. Any and all repairs and/or replacements required due to casualty or condemnation shall be governed by the provisions of Article X and XVII hereof. Landlord shall be responsible for all replacements (but not regular maintenance or seal coating) to all hard-surfaced Common Area on the Land; provided, however, Tenant shall, at its sole cost and expense, repair all damage caused to the Building or Common Area on the Land by Tenant’s construction activities or Tenant’s alterations to or expansion of the Premises. 

SECTION 11.2. Except as set forth in Section 11.1, hereof, and subject to the provisions of Section 10.5 and Sections 17.3 and 17.4, hereof, Tenant shall, at its sole expense, keep the Building in good condition and repair and shall be responsible for any and all maintenance and repairs thereto, ordinary wear and tear excepted. Without limiting the generality of the foregoing, Tenant shall be responsible for exterior painting, for minor roof repairs (i.e., those roof repairs which cost less than Fifteen Thousand Dollars ($15,000.00) to complete), for all repairs required as a result of the negligence of Tenant or Tenant’s agents, employees or contractors, for the maintenance and repair of the heating, ventilating and air-conditioning 

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system for the Building and for the sprinkler, plumbing and electrical systems serving the Building. All repairs and replacements made pursuant to this Section shall be at least equal in quality and workmanship to the original work. 

SECTION 11.3. At its own expense, Tenant may, at any time and from time to time during the Term, make any alterations, changes and improvements to the Building, provided that Tenant shall make no structural or exterior changes in the Building or any roof membrane penetrations or any changes to the exterior of the Building without the consent of Landlord; provided, however, Landlord’s consent shall not be required if (i) the structural integrity of the Building and roof is not materially adversely affected; (ii) there is no materially adverse impact upon the warranties for the roof of the Building and the warranties for other components of the Building for which Landlord is responsible to maintain and repair); (iii) the alterations are of equal or greater quality to the materials and workmanship used in the existing Building; (iv) all alterations are made in compliance with governmental rules and regulations; and (v) there is no reduction in the fair market value of the Building. 

SECTION 11.4. Landlord shall cooperate with Tenant in securing any building or other permits or authority necessary from time to time for any repair, alteration, change or improvement required or permitted to be performed by Tenant in, on, to or of the Premises. Subject to Tenant’s obligations under Section 16.1 hereof and the rights of any insurance company providing the insurance required hereunder, all salvage work done at any time by Tenant pursuant to the provisions of this Article XI shall belong to Tenant who shall not be accountable therefor to Landlord. Any repair, alteration, change or improvement shall be executed in a good and workmanlike manner in accordance with all applicable regulations and requirements of any state or local government. 

SECTION 11.5. Any provision of this Lease to the contrary notwithstanding, during the course of any replacement, restoration, alteration, expansion, improvement or repair of or to the Premises, Tenant, its independent contractors and suppliers, and their respective servants, agents and employees, may use the parking areas adjacent to or in the vicinity of the Premises for the parking of contractors’ and materialmen’s trucks and delivery vehicles, storage of materials, temporary structures and other matters incidental to construction. 

SECTION 11.6. Subject to compliance with the Home Depot REA, Tenant shall have the right at any time upon ninety (90) days prior written notice to Landlord to construct at Tenant’s sole cost and expense, an expansion to the Premises and the Building on that portion of the Land shown on EXHIBIT B as “Expansion Area”, consisting of approximately twenty thousand (20,000) square feet of Floor Area (the “Expansion Area”). Prior to undertaking any construction activities in the Expansion Area, Tenant shall provide Landlord with Tenant’s plans and specifications for the expansion of the Building (the “Expansion Plans”). Landlord shall have thirty (30) days to approve the Expansion Plans, which approval shall not be withheld if (i) the Expansion Plans are in accordance with all applicable governmental rules and regulations; (ii) the Expansion Plans are architecturally harmonious with the then existing Building; and (iii) the Expansion Plans do not damage the structural integrity of the Building or the roof of the Building. Tenant shall undertake such work in accordance with good engineering practices using first-class workmanship and materials. Landlord shall, at no cost to Landlord, cooperate with Tenant in obtaining building permits for the Expansion Plans. Upon substantial completion of the expansion to the Premises and the Building, the expansion shall become a part of the Premises and the Building. 

ARTICLE XII 

TRADE FIXTURES 

SECTION 12.1. Tenant may at any time during the Term install upon the Premises any and all trade fixtures and operating equipment which Tenant may deem necessary or advisable in connection with the conduct of its business. Any and all of such fixtures and equipment may at any time and from time to time during the Term be removed by Tenant from the Premises and Tenant agrees to repair, at its expense, any damage caused to the Premises by reason of such removal. Any personal property not removed from the Premises at the time Tenant surrenders possession of the Premises to Landlord shall be deemed abandoned by Tenant and shall become the property of Landlord. 

SECTION 12.2. Tenant may plan, design, construct, supervise and maintain upon the roof and/or the exterior of the Premises any air-conditioning and electrical equipment, alarm bells and equipment, antennas, satellite dishes and similar facilities (collectively, “Facility”) which may protect or service the Premises, provided that the same do not impair the structural integrity of the Premises nor penetrate the roof membrane, are reasonably screened from public view and comply with all applicable governmental codes, ordinances, rules, regulations and laws. Any Facility which shall be so installed or erected shall, unless and until Tenant shall remove the same, be maintained by Tenant at Tenant’s own cost and expense and 

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shall be removed by Tenant and any damage to the Premises repaired, at Tenant’s expense, upon the expiration or earlier termination of the Term. 

ARTICLE XIII 

SUBORDINATION/NON-DISTURBANCE 

SECTION 13.1. Landlord reserves the right to subject and subordinate this Lease at all times to the lien of any first mortgage hereafter placed upon Landlord’s interest in the Premises; provided, however: (a) no default by Landlord under any such mortgage shall affect Tenant’s rights under this Lease, so long as Tenant pays all monetary obligations and performs all material nonmonetary obligations imposed upon Tenant hereunder; and (b) this Lease shall not become subordinate to such mortgage until the mortgagee shall execute a Subordination, Non-Disturbance and Attornment Agreement substantially in the form as set forth in EXHIBIT E attached hereto. At or prior to the date of Landlord’s Notice of Commencement, Landlord shall cause to be delivered to Tenant a separate Subordination, Non-Disturbance and Attornment Agreement substantially in the form as that attached hereto as EXHIBIT E for each mortgage or deed of trust shown on the title insurance commitment delivered to Tenant in accordance with Section 15.6 hereof, duly executed by the holder of each such mortgage or deed of trust. Upon the request of Landlord, Tenant shall, within thirty (30) days of the date of such written request, execute and deliver to Landlord without charge, the Subordination, Non-Disturbance and Attornment Agreement attached hereto as EXHIBIT E. 

SECTION 13.2. Within thirty (30) days after the date of this Lease, Landlord shall cause Primary Ground Lessor and Secondary Ground Lessor to execute and deliver to Tenant a Ground Lessor Non-Disturbance Agreement substantially in the form as that attached hereto as EXHIBIT E-1 and EXHIBIT E-2, respectively. 

ARTICLE XIV 

ASSIGNMENT AND SUBLETTING 

SECTION 14.1. Tenant may assign this Lease or sublet the whole or any part of the Premises, but if it does so, it shall remain liable and responsible for all obligations of Tenant under this Lease. 

ARTICLE XV 

QUIET ENJOYMENT, REPRESENTATIONS AND TITLE INSURANCE 

SECTION 15.1. Landlord covenants, warrants and represents to Tenant that it has full right and power to execute and perform this Lease and to grant the estate demised herein, and Landlord further covenants that Tenant shall peaceably and quietly have, hold and enjoy the Premises and all rights, easements, appurtenances and privileges belonging or in any way appertaining thereto, during the full Term, free and clear of all liens and encumbrances except the Permitted Encumbrances (as defined in Section 15.6 hereto). 

SECTION 15.2. Within thirty (30) days after the date of this Lease, Landlord shall deliver to Tenant an environmental assessment report for the Premises (“Environmental Report”), analyzing the existence or likelihood of existence of any Hazardous Materials (as hereinafter defined) and compliance by the Premises with all applicable environmental laws, rules, regulations and orders of any applicable governmental authority having jurisdiction over the Premises (“Environmental Regulations”). As used in this Lease, “Hazardous Material(s)” shall mean any hazardous, toxic or radioactive substance, material, matter or waste which is or becomes regulated by any federal, state or local law, ordinance, order, rule, regulation, code or any other governmental restriction or requirement, and shall include asbestos, petroleum products and the terms “Hazardous Substance” and “Hazardous Waste” as defined in the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”) as amended, 42 U.S.C. §9601 et seq., the Resource Conservation and Recovery Act (“RCRA”), as amended, 42 U.S.C. §6901 et seq., and all Arizona environmental protection statutes. If the Environmental Report indicates that there does exist upon the Premises any Hazardous Materials or other life or environmental threatening conditions, or that the Premises are not in compliance with any applicable Environmental Regulations, which in Tenant’s reasonable opinion may materially impair Tenant’s ability to conduct its business upon the Premises, Tenant shall have the right to terminate this Lease by giving Landlord written notice of termination within thirty (30) days after the date of receipt of the Environmental Report. Landlord represents and covenants to Tenant that to the best of Landlord’s knowledge, 

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Landlord does not know of the existence of any Hazardous Materials (except as may be disclosed in the Environmental Report) within the Premises and that Landlord’s Work does not and shall not contain any Hazardous Materials (except as used in accordance with Environmental Regulations) and/or asbestos and that all requirements with respect to Environmental Regulations have been and will be complied with and satisfied in connection with Landlord’s Work. Landlord shall indemnify and save Tenant harmless from all claims, liens, losses, damages and expenses, including, without limitation, reasonable attorneys’ fees and expenses, arising out of Landlord’s breach of this environmental representation and covenant. This indemnity shall not apply to any first mortgage lender of Landlord which becomes Landlord under the Lease through a foreclosure action or deed in lieu of foreclosure. The obligations of Landlord hereunder shall survive the termination of this Lease. 

SECTION 15.3. If after the Commencement Date it is determined that there are Hazardous Materials on, upon or within the Premises or any other environmental conditions not caused by Tenant in violation of any Environmental Regulations or which result in action by either local, state or federal environmental agencies, then if in Tenant’s reasonable opinion such violation and/or action materially impairs Tenant’s ability to conduct business upon the Premises and Tenant ceases to operate from the Premises as a direct result thereof, all rent and charges payable by Tenant hereunder shall abate during such period as Tenant’s ability to so operate is materially impaired. If Landlord fails to diligently undertake remediation, or if Landlord fails, after exercising diligent efforts, to remediate the condition within six (6) months after Landlord becomes aware of the condition, Tenant shall have the right to terminate all of its rights and obligations hereunder by giving written notice to Landlord at any time after the expiration of such six (6) month period and so long as such condition continues. 

SECTION 15.4. Except for Excluded Materials (hereinafter defined), Tenant shall not, without the prior written consent of Landlord, cause or permit knowingly or unknowingly, any Hazardous Material (hereinafter defined) to be brought or remain upon, kept, used, discharged, leaked, or emitted in or about, or treated at the Premises. “Excluded Materials” shall mean Hazardous Materials (1) whose storage, disposal or presence on, in or under the Premises does not constitute a violation of applicable laws or regulations; (2) which may be present in: (i) paints, glues, fuels, photocopy equipment, supplies, photographic chemicals and supplies, building materials, maintenance supplies, cleaning agents and solvents; (ii) inventory held for sale at retail; (iii) oil, gasoline or other fluid deposits released from passenger cars or maintenance vehicles parked at the Premises; or (iv) fertilizer, herbicides, insecticides, and pesticides applied by Tenant within the Premises; (3) in quantities commonly stored, found or maintained for similar uses by tenants in retail shopping centers; and (4) which are not used for manufacturing purposes. Should Landlord consent in writing to Tenant bringing, using, storing or treating any Hazardous Material(s) in or upon the Premises or if Tenant is allowed to bring, use, store or treat Hazardous Materials in or upon the Premises pursuant to this Section, Tenant shall strictly obey and adhere to any and all federal, state or local laws, ordinances, orders, rules, regulations, codes or any other governmental restrictions or requirements (including but not limited to those federal and state statutes referred to in this section) which in any way regulate, govern or impact Tenant’s possession, use, storage, treatment or disposal of said Hazardous Material(s). In addition, Tenant represents and warrants to Landlord that (1) Tenant shall apply for and remain in compliance with any and all federal, state or local permits in regard to Hazardous Materials; (2) Tenant shall report to any and all applicable governmental authorities any release of reportable quantities of any Hazardous Material(s) as required by any and all federal, state or local laws, ordinances, orders, rules, regulations, codes or any other governmental restrictions or requirements; (3) Tenant, within fifteen (15) days of receipt, shall send to Landlord and Landlord’s mortgagee a copy of any notice, order, inspection report, or other document issued by any governmental authority relevant to Tenant’s compliance status with environmental or health and safety laws; and, (4) Tenant shall remove from the Premises all Hazardous Materials (other than the Excluded Materials) brought upon the Premises by Tenant at the termination of this Lease. Tenant shall forever defend, completely indemnify and hold harmless Landlord, its mortgagees, affiliates and their respective directors, shareholders, officers, and agents (the “Landlord Indemnitees”) from and against, and shall reimburse Landlord and the Landlord Indemnitees for, any and all liabilities, losses, costs, damages, demands, fines, expenses, suits, judgments, injunctive relief, claims, injuries to person, property or natural resources, actions or causes of action arising in connection with the release of any Hazardous Materials by Tenant, its employees, agents, contractors, licensees, subtenants and concessionaires, whether foreseeable or unforeseeable, known or unknown, material or immaterial, regardless of when such release shall have occurred or when the presence of any Hazardous Materials shall have been discovered. The foregoing indemnity includes, without limitation: (A) all costs of removal, remediation of any kind and disposal of Hazardous Materials; (B) all costs of determining whether the Premises are in compliance, and of causing the Premises to be in compliance, with all applicable federal, state or local laws, rules, ordinances or regulations governing Hazardous Materials; (C) all costs associated with claims for damages to persons, property or natural resources arising from a release of Hazardous Materials by Tenant; and (D) Landlord’s or the Landlord Indemnitees’ attorneys’ and consultants’ fees arising from a release of Hazardous Materials by Tenant. The obligations of Tenant hereunder shall survive the termination of this Lease. The rights of Landlord hereunder shall be in addition to any other rights and remedies of Landlord at law, in equity or by statute. 

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SECTION 15.5. Without limitation of any other covenant, representation or warranty contained in this Lease, Landlord represents and warrants as an inducement to Tenant to enter into this Lease, that no leases or other agreements affecting the Land conflict with this Lease or prohibit or restrict (i) the construction of the Building and Common Area; or (ii) the use or occupancy of the Building as a department store or for other retail purposes, or the use of the Common Area as contemplated in this Lease (“Intended Use”). Notwithstanding the foregoing, Landlord makes no representation or warranty regarding the effect of the Home Depot REA on this Lease, Tenant hereby acknowledging that Tenant has made an independent evaluation of the same. 

SECTION 15.6. Within forty five (45) days after the effective date of the Primary Ground Lease, Landlord shall deliver to Tenant, at Landlord’s sole cost, a leasehold owner’s title insurance policy, insuring Tenant’s leasehold interest under this Lease, for $1,500,000.00 of coverage, to be free and clear of all liens and encumbrances except (i) those encumbrances which do not impair the Intended Use (in Tenant’s reasonable opinion) including utility easements necessary for Landlord to develop the Land for the Intended Use; (ii) the Primary Ground Lease; (iii) Secondary Ground Lease; (iv) the Home Depot REA; and (iv) taxes for the year of closing and subsequent years (collectively, “Permitted Encumbrances”), written by a title insurance company licensed by the State of Arizona. If the title policy has any exceptions other than the Permitted Encumbrances which are unacceptable to Tenant (“Title Defects”), Tenant shall notify Landlord of same within thirty (30) days of receipt of the title policy. Landlord shall take such actions as necessary to have the Title Defects removed from the title policy, or otherwise remedy the Title Defects to the satisfaction of Tenant, at Landlord’s sole cost and expense. If Landlord is unable to remedy the Title Defects prior to the Commencement Date, Tenant may, at its option, either (A) terminate this Lease; or (B) accept the Premises subject to the incurred Title Defects. 

SECTION 15.7. Within thirty (30) days after the effective date of the Primary Ground Lease, Landlord shall deliver to Tenant, at Landlord’s sole cost, a survey of the Land prepared by a surveyor licensed by the State of Arizona and certified to Tenant and the title insurer providing the leasehold owner’s policy, which survey is to be prepared in accordance with (i) the accuracy requirements of an Urban Survey as defined in the Minimum Standard Detail Requirements for ALTA Land Title Surveys of the American Land Title Association; and (ii) any reasonable requirements of the title insurer necessary to remove the survey exception from the title policy issued pursuant to Section 15.6. 

ARTICLE XVI 

SURRENDER OF PREMISES 

SECTION 16.1. At the expiration or earlier termination of the Term and subject to Tenant’s rights under Section 12.1 of this Lease, Tenant covenants that it will peaceably and quietly leave and surrender the Premises together with all alterations, changes and improvements then a part of the Premises (including, but not limited to, any expansion to the Building made pursuant to Section 11.6 hereof) in good order and condition; reasonable wear and tear, loss or damage by fire or casualty and condemnation excepted. 

SECTION 16.2. In the event Tenant remains in possession of the Premises after the expiration of the Term, and without the execution and delivery of a new lease, Tenant, at the option of Landlord, which Landlord may withhold in its sole discretion, shall be deemed to be occupying the Premises as a tenant from month-to-month, at a minimum monthly rental equal to one and one-half times the monthly installment of annual fixed rent payable during the last month of the then current Term, subject to all the other conditions, provisions and obligations of this Lease insofar as the same are applicable to a month-to-month tenancy. 

ARTICLE XVII 

CONDEMNATION 

SECTION 17.1. If all of the Premises shall be sold to or taken by any governmental authority under its power of condemnation or threat thereof, this Lease shall terminate on the date of the vesting of title to the condemned property or on the date of the taking of possession of such property by the condemning authority, whichever shall first occur (“Taking”). 

SECTION 17.2. Upon a Taking of: (a) more than ten percent (10%) of the Floor Area of the Building or (b) if, as a result of any Taking, access between the Land and Broadway or Pantano Road, as shown on EXHIBIT B, is rendered unusable or materially impaired, Tenant shall have the right to terminate this Lease effective as of the date of such Taking by serving notice to that effect upon Landlord no later than forty-five (45) days after the Taking. 

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SECTION 17.3. Upon a Taking of a portion of the parking areas located upon the Land which shall result in a reduction of ten percent (10%) or more of the then existing total number of parking spaces upon the Premises, and Landlord fails to replace them in a manner acceptable to Tenant, in Tenant’s sole discretion, so that there are at least five (5.0) parking spaces within the Premises for each 1,000 square feet of Floor Area within the Premises, Tenant shall have the right to terminate this Lease effective as of the date of such Taking by serving notice to that effect upon Landlord no later than forty-five (45) days after the Taking. 

SECTION 17.4. Upon Taking of less than all of the Premises, if Tenant does not exercise its right to terminate this Lease under Sections 17.2 and/or 17.3 hereof, this Lease shall remain in effect for the balance of the Premises not so taken, rent shall be abated pro rata based on the Floor Area of the Building taken and Landlord shall, in a commercially reasonable prompt and diligent manner, restore the remainder of the Premises as near as possible to the condition it was in immediately prior to such Taking. 

SECTION 17.5. Both Landlord and Tenant shall have the right to participate in any condemnation proceedings. Each shall notify the other promptly of any contemplated or threatened condemnation proceeding of which it shall become aware and shall keep the other informed of developments with respect thereto. 

ARTICLE XVIII 

DEFAULTS AND REMEDIES 

SECTION 18.1. If any one or more of the following events occur, then Tenant shall be deemed to be in default under this Lease: 

(a)If Tenant fails to pay any rent or other charges required to be paid by Tenant when the same shall become due and payable hereunder, and such failure continues for fifteen (15) days after written notice is sent by Landlord to Tenant informing Tenant of such failure; 

(b)If Tenant fails to perform or observe any term or condition of this Lease (other than as set forth in subparagraph (a) above), and such failure continues for thirty (30) days after written notice is sent by Landlord to Tenant informing Tenant of such failure; provided, however, that if the failure set forth in Landlord’s notice is such that it requires more than thirty (30) days to correct, Tenant shall not be deemed to be in default hereunder if Tenant (i) promptly and diligently commences curing the failure within thirty (30) days after written notice is sent by Landlord to Tenant informing Tenant of such failure; and (ii) diligently prosecutes the cure to completion; and/or 

(c)If any execution, levy, attachment or other legal process of law shall occur upon Tenant’s goods, fixtures, or interest in the Premises and the same is not vacated or dismissed within ninety (90) days after the date of such filing or attachment. 

SECTION 18.2. In the event that Tenant is in default under this Lease, as provided in the preceding Section 18.1, then Landlord may pursue any or all of the following remedies in addition to all other rights and remedies provided at law or in equity: 

(a)Landlord may terminate this Lease and forthwith repossess the Premises and remove all persons or property therefrom, and be entitled to recover forthwith as damages a sum of money equal to the total of (i) the reasonable cost of recovering the Premises; (ii) the accrued and unpaid rentals owed at the time of termination, plus interest thereon from due date at the lesser of three percent (3%) plus the Prime Rate (as defined in Section 18.2(c) hereof) or the maximum rate permitted by law; (iii) the discounted net present value of the balance of the annual fixed rent for the remainder of the Term (discounted at a rate equal to one hundred fifty (150) basis points over the ten (10) year treasury bill rate in effect at the time of Tenant’s default) minus the then Fair Market rental value of the Premises for the remainder of the Term; and (iv) any other sum of money and damages owed by Tenant to Landlord; or 

(b)Landlord may terminate Tenant’s right of possession and may repossess the Premises without demand or notice of any kind to Tenant and without terminating this Lease, in which event Landlord may relet the same for the account of Tenant for such rent and upon such terms as shall be satisfactory to Landlord. For the purpose of such reletting Landlord is authorized to make repairs, changes, alterations or additions to the Premises to make same relettable; and (i) if Landlord shall be unable to relet the Premises; or (ii) if the same are relet and sufficient sum shall not be realized from such reletting (after paying (A) the unpaid rentals due hereunder earned but unpaid at the time of reletting plus interest thereon at the lesser of three percent (3%) plus the Prime Rate or at the maximum rate permitted by applicable law; (B) the costs of recovering possession; (C) all of the costs and expenses of reletting, including 

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decorations, repairs, changes, alterations and additions by Landlord; and (D) the expense of the collection of the rent accruing therefrom) to satisfy the rent and all other charges provided for in this Lease to be paid by Tenant, then Tenant shall pay to Landlord as damages a sum equal to the amount of the rent and other expenses payable by Tenant for such period or periods, or if the Premises have been relet, Tenant shall satisfy and pay any such deficiency upon demand therefor from time to time and Tenant agrees that Landlord may file suit to recover any sums falling due under the terms of this Article from time to time on one or more occasions without Landlord being obligated to wait until expiration of the Term. Such reletting shall not be construed as an election on the part of Landlord to terminate this Lease unless a written notice of such intention be given to Tenant by Landlord. Notwithstanding any such reletting without termination, Landlord may at any time thereafter elect to terminate this Lease for such previous breach. Failure of Landlord to declare any default immediately upon occurrence thereof, or delay in taking any action in connection therewith, shall not waive such default, but Landlord shall have the right to declare any such default at any time thereafter. Landlord shall use reasonable efforts to mitigate Landlord’s damages resulting from Tenant’s default hereunder. 

(c)In addition to the foregoing rights of Landlord, if Tenant shall be in default hereunder, Landlord shall have the option, but not the obligation, to cure the act or failure constituting such default for the account of and at the expense of Tenant. Landlord shall provide Tenant with ten (10) days written notice prior to curing any default, provided, however, that no such notice shall be required for emergency repairs. If Landlord has already terminated this Lease pursuant to this Article, Landlord’s cure or attempt to cure of any act or failure constituting a default by Tenant (which act or failure occasioned the termination of this Lease) shall not result in a waiver of such termination by Landlord. Tenant hereby agrees to pay Landlord interest, at a rate equal to three percent (3%) plus the “Prime Rate,” but not in excess of the maximum legal rate, for all sums paid by Landlord pursuant to the terms of this subsection (c). As used herein, “Prime Rate” shall mean the base rate on corporate loans at large U.S. money center commercial banks as published from time to time by The Wall Street Journal, adjusted with each change in such published rate. 

(d)The obligation of Tenant to pay damages to Landlord and the obligation of Landlord to pay damages to Tenant shall survive the termination of this Lease. 

SECTION 18.3. Any mention in this Lease of any particular remedy shall not preclude Landlord from exercising any other remedy, in law or in equity. The rights and remedies of Landlord set forth herein shall be in addition to any other right and remedy now or hereafter provided by law, and all such rights and remedies shall be cumulative. No action or inaction by Landlord shall constitute a waiver of a default by Tenant or termination of this Lease, and no waiver of a default by Tenant or termination of this Lease shall be effective unless it is in writing and signed by Landlord. 

SECTION 18.4. 

(a)If Landlord fails to perform or observe any of the obligations on Landlord’s part to be performed or observed pursuant to this Lease, and such failure continues for thirty (30) days after written notice thereof is sent by Tenant to Landlord and its mortgagee (provided Tenant has received written notice of the name and address of Landlord’s mortgagee and a request that notices be so served on such mortgagee) informing Landlord of such failure, then Landlord shall be deemed to be in default under this Lease; provided, however, that if the failure set forth in Tenant’s notice is such that it requires more than thirty (30) days to correct, Landlord shall not be deemed to be in default hereunder if Landlord (i) promptly and diligently commences to cure the failure within thirty (30) days after written notice is sent by Tenant to Landlord informing Landlord of such failure; and (ii) diligently prosecutes the cure to completion following the expiration of the original thirty (30) day period set forth herein. Upon such default by Landlord, Tenant may, in addition to any remedies available to it at law or in equity, perform the same for and on behalf of Landlord, the cost of which performance, upon the proper payment thereof, together with all interest and penalties necessarily paid in connection therewith and any and all other damages incurred by Tenant as a result of any such default, shall be paid to Tenant by Landlord upon demand, with interest thereon at the lesser of (i) three percent (3%) plus the “Prime Rate” or (ii) the maximum rate then permitted by law, from the date of each expenditure and/or incurrance or, at the continuing option of Tenant, the same may (in whole or in part), with interest as aforesaid, be deducted from annual fixed rent (not to exceed twenty-five percent (25%) of the monthly installment of annual fixed rent for the remaining Term) which may be due or become due thereafter and, if the remaining Term is not sufficient to enable Tenant to recover such amount over such remaining Term, then Tenant shall have the right to extend the Term upon the same terms and conditions until such amount is recovered in full by Tenant. If the default involves the failure of Landlord to pay monies due to Tenant under this Lease, interest shall accrue on such past due sums from and after the expiration of the thirty (30) day cure period set forth above at the interest rate set forth above, and such sums may be deducted from fixed rent, percentage rent and other charges to the extent permitted above. 

22

 

(b)Notwithstanding the foregoing provisions of this Section and regardless of whether an event of Landlord’s default shall have occurred, such curative action by Tenant may be taken without any notice if Tenant, in its good faith opinion, reasonably believes the condition complained of constitutes an emergency. 

(c)In order to effectuate the curing of any failure referred to in paragraphs (a) and (b) of this Section 18.4, Landlord shall take any and all action (including, without limitation, the execution of appropriate documents) necessary in order to assign, to the extent permitted by law, to Tenant the right to take action to effectuate such curing for and on behalf of Landlord. 

(d)If a court finally determines that Tenant has improperly exercised its self-help and/or offset rights under subparagraphs (a) and/or (b) of this Section 18.4, Tenant shall have thirty (30) days after receipt of notice of such final judgment to pay to Landlord any sums found by such court to be due from Tenant to Landlord, together with interest on such sums at an annual rate equal to the “Prime Rate” plus three percent (3%), before Landlord shall have the right to declare a termination of this Lease. 

ARTICLE XIX 

TENANT’S USE OF PREMISES 

SECTION 19.1. Tenant may use the Premises as a Kohl’s department store or any other use permitted under applicable zoning ordinances and the Home Depot REA; provided, however, Tenant shall not use the Premises for any use described on EXHIBIT I attached hereto without Landlord’s prior written consent. The foregoing language or any other language in this Lease shall not be construed to obligate Tenant to operate a store within the Premises. 

ARTICLE XX 

LEASEHOLD MORTGAGES 

SECTION 20.1. Notwithstanding anything contained in this Lease to the contrary, Tenant is hereby given the right, without Landlord’s prior consent, to mortgage its interest in this Lease, Tenant’s interest in the Building and improvements on the Premises, or any part thereof or property therein, and any sublease, under one or more leasehold mortgage(s) and to assign this Lease and any sublease as collateral security for such mortgages, upon the condition that all rights acquired under such mortgages shall be subject to each and all of the covenants, conditions and restrictions set forth in this Lease, and to all rights and interests of Landlord herein, none of which covenants, conditions or restrictions is or shall be waived by Landlord by reason of the right given to so mortgage such interest in this Lease, except as may be expressly provided in this Article XX. 

SECTION 20.2. If Tenant shall mortgage this leasehold pursuant to the provisions hereof, and if the holder(s) of any such mortgage(s) shall send to Landlord a true copy thereof, together with written notice specifying the name and address of the mortgagee(s) and the pertinent recording data with respect to such mortgage(s), Landlord agrees that so long as any such leasehold mortgage(s) shall remain unsatisfied, the following provisions shall apply: 

(a)There shall be no cancellation, surrender or modification of this Lease by joint action of Landlord and Tenant without the prior consent in writing of the leasehold mortgagee(s); 

(b)Landlord shall, upon serving Tenant with any notice of default, simultaneously serve a copy of such notice upon the leasehold mortgagee(s). The leasehold mortgagee(s) shall thereupon have the same period, after service of such notice upon it, as is allowed to Tenant, to remedy or cause to be remedied the defaults complained of, and Landlord shall accept such performance by or at the instigation of the leasehold mortgagee(s) in response to any such notice of default as if the same had been performed by Tenant; 

(c)Anything herein contained notwithstanding, while such leasehold mortgage(s) remains unsatisfied, or until written notice of satisfaction is given by the holder(s) thereof to Landlord, if any default shall occur, which, pursuant to any provision of this Lease, entitles Landlord to terminate this Lease, and if before the expiration of fifteen (15) days from the date of service of notice of termination upon such leasehold mortgagee(s), such leasehold mortgagee(s) shall have notified Landlord of its desire to nullify such notice and shall have paid to Landlord all rent and other payments herein provided for and then in default, and shall have complied or commenced the work of complying with all of the other requirements of this Lease except as provided in paragraph (g) of this Section 20.2, if any are then in default, and shall prosecute the same to completion with reasonable diligence, then in such event Landlord shall not be entitled to terminate this Lease and any notice of termination theretofore given shall be void and of no effect. 

23

 

(d)If Landlord shall elect to terminate this Lease by reason of default of Tenant, the leasehold mortgagee(s) shall not only have the right to nullify any notice of termination by curing such default as aforesaid, but shall also have the right to postpone and extend the date for the termination of this Lease as specified by Landlord in its notice of termination for a period of not more than six (6) months, provided that such leasehold mortgagee(s) shall cure or cause to be cured any then-existing monetary defaults and meanwhile pay the rent and all other charges and comply with and perform all of the other terms, conditions and provisions of this Lease on Tenant’s part to be complied with and performed, and provided further that the leasehold mortgagee(s) shall forthwith take steps to acquire or sell Tenant’s interest in this Lease by foreclosure of the leasehold mortgage(s) or otherwise and shall prosecute the same to completion with due diligence. If at the end of said six (6) month period the leasehold mortgagee(s) shall be actively engaged in steps to acquire or sell Tenant’s interest herein, the time for such mortgagee(s) to comply with the provisions of this Section 20.2 shall be extended for such period as shall be reasonably necessary to complete such steps with reasonable diligence and continuity; provided that during such period the leasehold mortgagee(s) shall continue to pay the rent and other charges and perform all other terms, conditions and provisions of this Lease on Tenant’s part to be complied with and performed; provided, further, that the total period extended to the leasehold mortgagee(s) under this subsection (d) shall not exceed twelve (12) months. 

(e)Landlord agrees that the name of the leasehold mortgagee(s) may be added as a loss payee to any and all insurance policies required to be carried by Tenant hereunder on condition that the insurance proceeds are to be applied in the manner specified in this Lease and that the leasehold mortgage(s) or collateral documents shall so provide. 

(f)Landlord agrees that in the event of termination of this Lease by reason of the bankruptcy or insolvency of Tenant, Landlord will enter into a new lease of the Premises with the leasehold mortgagee(s) or its nominee(s) or its assignee(s) for the remainder of the Term effective as of the date of such termination, at the rent and upon the terms, provisions, covenants and agreements as contained herein and subject only to the same conditions of title as this Lease is subject to on the date of execution hereof together with any exceptions to title created by or at the behest of Tenant, and to the rights, if any, of the parties then in possession of any part of the Premises, provided Landlord and Landlord’s mortgagee approves of the financial credit standing of the new tenant, which approval shall be in its sole discretion and provided, further: 

(i)said leasehold mortgagee(s) or its nominee(s) or assignee(s) shall make written request upon Landlord for such new lease within thirty (30) days after the date of such termination and such written request shall be accompanied by payment to Landlord of all sums due to Landlord under this Lease; 

(ii)said leasehold mortgagee(s) or its nominee(s) or assignee(s) shall pay to Landlord at the time of the execution and delivery of such new lease, any and all sums which would at the time of the execution and delivery thereof be due pursuant to this Lease but for such termination, and in addition thereto, any expenses, including reasonable attorney’s fees, which Landlord shall have incurred by reason of such default; 

(iii)said mortgagee(s) or its nominee(s) or assignee(s) shall perform and observe all covenants herein contained on Tenant’s part to be performed and shall further remedy any other condition which Tenant under the terminated Lease was obligated to perform under the terms of this Lease; and upon execution and delivery of such new lease and any subleases which may have theretofore been assigned and transferred by Tenant to Landlord, as security under this Lease, shall thereupon be deemed to be held by Landlord as security for the performance of all of the obligations of the tenant under the new lease; 

(iv)Landlord shall not warrant possession of the Premises to the tenant under the new lease; 

(v)such new lease shall be expressly made subject to the rights, if any, of Tenant under the terminated lease; 

(vi)the tenant under such new lease shall have the right, title and interest in and to the buildings and improvements on the Premises as Tenant had under the terminated lease; and 

(vii)said leasehold mortgagee(s) or its nominee(s) or assignee(s) shall bear the cost of recording such new lease or short form thereof if it or Landlord desires recordation thereof. 

(g)Nothing herein contained shall require the leasehold mortgagee(s) or its nominee(s) or assignee(s) to cure any default of Tenant under this Lease unless such leasehold mortgagee shall choose to do so under subparagraph (b) above or shall choose to nullify any notice of termination from Landlord pursuant to subparagraphs (c) or (d), or if such leasehold mortgagee(s) elects that Landlord enter into a new lease for the Premises pursuant to the provisions of subparagraph (f) above. 

24

 

(h)The proceeds from any insurance policies relating to the Premises or arising from a condemnation of the Premises are to be held by Landlord’s mortgagee, or if none, by any leasehold mortgagee(s) and in either event distributed pursuant to the provisions of this Lease; and 

(i)Landlord shall, upon request, execute, acknowledge and deliver to each leasehold mortgagee, an agreement prepared at the sole cost and expense of Tenant, in form satisfactory to such leasehold mortgagee(s), between Landlord, Tenant and leasehold mortgagee(s), agreeing to all of the provisions of this Article XX. The term “mortgage,” whenever used in this Section 20.2, shall include whatever security instruments are used in the locale of the Premises, such as, without limitation, mortgages, deeds of trust, security deeds and conditional deeds, as well as financing statements, security agreements and other documentation required pursuant to the Uniform Commercial Code, and shall also include any instruments required in connection with a sale-leaseback (or an assignment of lease and sublease) transaction. 

ARTICLE XXI 

MECHANIC’S LIENS 

SECTION 21.1. Tenant shall not permit any mechanic’s, construction, laborer’s or materialman’s lien to be filed at any time against the Premises or any part thereof by reason of work performed by or on behalf of Tenant or any agent or contractor or anyone holding the Premises through or under Tenant. If any such lien shall be filed, Tenant, upon notice thereof, shall promptly notify Landlord and shall promptly cause the same to be discharged of record by payment, deposit, bond, order of a court of competent jurisdiction or otherwise, and Tenant shall give Landlord prompt notice of such discharge. If Tenant shall fail to cause such lien to be so discharged within sixty (60) days after the date of the filing, then in addition to any other right or remedy which Landlord may have, Landlord may, but shall not be obligated to, discharge the same either by paying the amount claimed to be due or by procuring the discharge of such lien by deposit or by bonding proceedings, and in any such event Landlord shall be entitled, if Landlord so elects, to compel the prosecution of any action for the foreclosure of such lien by the lienor and to pay the amount of the judgment in favor of the lienor with interest, costs and allowances. Any amount so paid by Landlord and all costs and expenses (including reasonable counsel fees) incurred by Landlord in connection therewith, together with interest thereon at the lesser of (i) three percent (3%) plus the Prime Rate; or (ii) the maximum rate permitted by law from the date of Landlord’s making of the payment or incurring of the cost or expense, shall be promptly paid to Landlord by Tenant upon demand. 

ARTICLE XXII 

INDEMNIFICATION 

SECTION 22.1. Tenant shall defend, indemnify and save Landlord, Primary Ground Lessor and Secondary Ground Lessor harmless from all injury, loss, claim or damage (including attorneys’ fees and disbursements incurred by Landlord in conducting an investigation and preparing for and conducting a defense) to any person or property arising from, related to, or in any way connected with any injury, loss, claims or damage occurring within the Land, except to the extent that such injury, loss, claim or damage is attributable to the negligence or intentional misconduct of Landlord, Primary Ground Lessor, Secondary Ground Lessor or their respective agents, servants or employees. 

SECTION 22.2. Landlord and Tenant each hereby waives any and all rights of recovery, claim, action or cause-of action, against the other, its agents (including partners, both general and limited), officers, directors, shareholders or employees, for any loss or damage that may occur to the Premises, or any improvements thereto, or any property of such party therein, by reason of fire, the elements, or any other cause which is insured against under the terms of “all-risk” insurance policies, regardless of cause or origin, including negligence of the other party hereto, its agents, officers or employees, and covenants that no insurer shall hold any right of subrogation against such other party. Notwithstanding the foregoing, it is expressly understood and agreed that this Section 22.2 shall not preclude Landlord from seeking recourse against Tenant for (i) a failure by Tenant to maintain the insurance required to be maintained by Tenant under this Lease; or (ii) a failure by Tenant to make available to Landlord proceeds of insurance or self-insurance, as required under Article X of this Lease. 

25

 

ARTICLE XXIII 

MEMORANDUM OF LEASE 

SECTION 23.1. If requested by either party hereto, the other party agrees to execute and deliver a memorandum of lease substantially in the form attached hereto as EXHIBIT G in order to give notice of this Lease; provided, however, that the relations between Landlord and Tenant with respect to the Premises shall be governed solely by the provisions of this Lease and not by any such memorandum of lease. The cost of recording such memorandum of lease shall be paid by the party requesting the memorandum of lease. 

ARTICLE XXIV 

ESTOPPEL CERTIFICATES 

SECTION 24.1. Upon request of Landlord or Tenant, the other party, within twenty (20) days of the date of such written request, agrees to execute and deliver to the party requesting, without charge, a written statement substantially in the form attached hereto as EXHIBIT F. 

ARTICLE XXV 

BROKERAGE COMMISSIONS 

SECTION 25.1. Landlord represents and warrants that Landlord has not dealt with any broker or finder with regard to this Lease or the transaction contemplated hereby other than Phoenix Commercial Advisors (“Broker”), and Landlord agrees to indemnify, defend and hold Tenant harmless from and against any claim for brokerage commission or finder’s fees asserted by any person, firm or corporation claiming to have been engaged by Landlord. Tenant represents and warrants to Landlord that Tenant has not dealt with any broker or finder with regard to this Lease or the transaction contemplated hereby other than Broker, and Tenant agrees to indemnify, defend and hold Landlord harmless for and against any claim for brokerage commission or finder’s fees asserted by any person, firm or corporation other than Broker claiming to have been engaged by Tenant. 

ARTICLE XXVI 

MISCELLANEOUS 

SECTION 26.1. It is the intention of the parties to create the relationship of Landlord and Tenant and no other relationship whatsoever and nothing herein shall be construed to constitute the parties hereto partners or joint venturers, or to render either party hereto liable for any of the debts or obligations of the other party. 

SECTION 26.2. There are no oral agreements or understandings between the parties hereto affecting this Lease and this Lease supersedes and cancels any and all previous negotiations, arrangements, agreements and understandings between Landlord and Tenant and none thereof shall be used to interpret or construe this Lease. This Lease cannot be changed or terminated orally but only by an agreement in writing signed by the party against whom enforcement of any waiver, change, modification or discharge is sought. 

SECTION 26.3. The failure of either party hereto to insist upon strict performance of any of the terms, provisions, conditions or covenants herein shall not be deemed a waiver of any subsequent or continuing breach of the terms, provisions, conditions or covenants herein contained. The receipt by either party from the other of any payment, or the acceptance of performance of anything required by this Lease to be performed, with knowledge of the breach of a term, provision, condition or covenant of this Lease, shall not be deemed a waiver of such breach. 

SECTION 26.4. Each provision hereof shall be deemed both a covenant and a condition and shall run with the Land. 

SECTION 26.5. This Lease and all of the covenants and provisions thereof shall inure to the benefit of and be binding upon the respective legal representatives, successors and assigns of the parties hereto. 

26

 

SECTION 26.6. The expressions “Term”, “the Term” and “the Term of this Lease” are used interchangeably herein and wherever used in this Lease shall be deemed to refer not only to the initial Term but to any and all extensions thereof as well. 

SECTION 26.7. As used in this Lease, the word “mortgage” shall be deemed to include a deed of trust and the word “mortgagee” shall be deemed to include the trustee or beneficiary of a deed of trust. 

SECTION 26.8. This Lease may be executed in several counterparts, each of which shall be deemed an original, and such counterparts shall constitute but one and the same instrument. 

SECTION 26.9. Any notice, demand, consent, approval, statement or request given, served, made or obtained or required to be given, served, made or obtained hereunder shall be in writing and shall be sent by mailing the same by registered or certified mail, return receipt requested, postage prepaid, or by Federal Express or similar overnight delivery service addressed, if to Landlord, as follows: Continental 34 Fund Limited Partnership, Attention: Legal Department, 10850 W. Park Place, 6th Floor, Milwaukee, Wisconsin 53224, and if to Tenant, as follows: Kohl’s Department Stores, Inc., N56 W17000 Ridgewood Drive, Menomonee Falls, Wisconsin 53051, Attention: Chairman, with a copy, similarly sent, to Kohl’s Department Stores, Inc., N56 W17000 Ridgewood Drive, Menomonee Falls, Wisconsin 53051, Attention: Law Department; or to such other address or addresses or person or persons as either party may hereafter designate by like notice. Any such notice, demand, consent, approval, statement or request shall be deemed to have been given, served, made or obtained when deposited in a United States general or branch post office enclosed in the manner hereinabove provided or with Federal Express or other overnight courier. 

SECTION 26.10. The term “Landlord” as used in this Lease means only the ground lessee at the time in question of the Premises, and in the event of any transfer or conveyance of title to the Premises, the seller’s respective successors or assigns shall be deemed to be “Landlord” hereunder and the transferor shall be released from its obligations to Tenant under this Lease provided such obligations are expressly assumed by the transferee. The term “Tenant” as used in this Lease means only the owner or owners at the time in question of the Tenant’s interest in this Lease, and in the event of any transfer or permitted assignment of such interest, the assignee or transferee shall be deemed to be “Tenant” hereunder, but Kohl’s Department Stores, Inc. shall not be thereby released from any of its obligations hereunder. 

SECTION 26.11. If Landlord or Tenant is delayed or prevented from performing any of their respective obligations during the Term because of strikes, lockouts, labor troubles, inability to procure materials, failure of power, governmental restrictions, casualty, or reasons of a like nature not the fault of the party delayed in the performance of such obligation, then the time herein provided for the performance of any such obligation shall be extended by the additional amount time required to perform such obligation as a result of such delays and the defaulting party shall not be liable for losses or damages caused by such delays. In addition, if Landlord or Tenant is delayed or prevented from performing any of their respective obligations during the Term because of the failure of the other party to perform its obligations under this Lease, the time herein provided for the performance of such obligation shall likewise be extended by the additional amount of time required to perform such obligation as a result of such delay. Notwithstanding the foregoing, this Section shall not apply to the payment of any sums of money required to be paid by Tenant hereunder or any obligation of Landlord or Tenant that can be satisfied by the payment of money. 

SECTION 26.12. The undersigned officers of Tenant hereby warrant and certify to Landlord that Tenant is duly authorized to conduct business in the state in which the Premises is located. The undersigned officers of Tenant hereby further warrant and certify to Landlord that they, as such officers, are authorized and empowered to bind the Tenant to the terms of this Lease by their signatures hereto. 

SECTION 26.13. The undersigned individuals signing on behalf of Landlord hereby warrant and certify to Tenant that Landlord is duly authorized to conduct business in the state in which the Premises is located. The undersigned individuals signing on behalf of Landlord hereby further warrant and certify to Tenant that they, as such officers, partners, managers, members or authorized agents, are authorized and empowered to bind Landlord to the terms of this Lease by their signatures hereto. 

SECTION 26.14. The laws of the State of Arizona shall govern the validity, performance and enforcement of this Lease. The invalidity or unenforceability of any provision of this Lease shall not affect or impair any other provision. 

SECTION 26.15. Upon any dispute between Landlord and Tenant under this Lease, the prevailing party shall be entitled to recover from the non-prevailing party reasonable attorneys’ fees and costs incurred in contesting such dispute. 

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SECTION 26.16. The rule of construction to the effect that an instrument shall be construed against its draftsman shall not apply to this Lease and shall not negate or invalidate any provision of this Lease. 

SECTION 26.17. Concurrently with Tenant’s execution of this Lease, Tenant shall provide Landlord with a Lease Guaranty executed by Kohl’s Corporation in the form attached hereto as EXHIBIT J. 

SECTION 26.18. Landlord covenants, warrants and represents to Tenant that Landlord has obtained prior to the date of this Lease, at its sole cost and expense, all site plan approvals, permits, and other governmental approvals necessary to allow Landlord to construct Landlord’s Work as provided for herein (collectively, “Governmental Approvals”). 

SECTION 26.19. Landlord shall notify Tenant at least two (2) weeks in advance (or such shorter time of which Landlord receives notice) of any governmental hearings or meetings at which the subject of the design, colors or materials for Tenant’s Building or the exterior elevations of Tenant’s Building is to be or likely to be discussed. Without Tenant’s prior written consent, Landlord shall not consent to or acquiesce in the establishment of conditions to the development of the Building which would require a deviation in the design, colors or materials for the Building from those shown on the exterior elevations attached hereto as EXHIBIT K and made a part hereof. 

SECTION 26.20. The provisions of this Lease to the contrary notwithstanding, Landlord and Tenant acknowledge that, as of the date hereof, Landlord has a contract to enter into a ground lease for the Land. Accordingly, this Lease is contingent upon Landlord acquiring a ground lessee’s interest the Land. Landlord shall exercise reasonable diligent efforts to acquire a ground lessee’s interest in the Land. Landlord shall notify Tenant in writing when it has acquired a ground lessee’s interest in the Land. If Landlord does not notify Tenant that Landlord has acquired a ground lessee’s interest in the Land by January 17, 2003, either party may terminate this Lease by providing the other party with written notice thereof by January 31, 2003. If Landlord terminates this Lease pursuant to this Section 26.20, then neither Landlord nor any affiliate of Landlord shall acquire fee simple title to the Land without first offering to lease the Premises to Tenant on terms that are reasonably acceptable to Tenant. 

[remainder of page intentionally left blank] 

28

 

IN WITNESS WHEREOF, the parties hereto have caused this Lease to be signed as of the day and year first above written. 

 

			
	
LANDLORD:

	
 

	
CONTINENTAL 34 FUND LIMITED

PARTNERSHIP, a Wisconsin limited partnership

	
 
	
 

	
By:
	
Continental 34 Holding Company, Inc.,

a Delaware corporation, its general partner

	
 
	
 
	
 

	
 
	
By:
	
/s/ Daniel J. Minahan

	
 
	
 
	
Daniel J. Minahan

President

	
 

	
Date Executed: 2/7/03

	
 

	
TENANT:

 

		
	
KOHL’S DEPARTMENT STORES, INC., 

a Delaware corporation

	
 
	
 

	
By:
	
/s/ R. Lawrence Montgomery

	
 
	
R. Lawrence Montgomery

	
 
	
Chief Executive Officer

 

				
	
Attest:
	
/s/ Richard D. Schepp
	
	
 
	
Richard D. Schepp

Secretary
	
	
 
	
	
Date Executed: 1-30-03
	
	
 
	
 
	
 

 

29

 

 

EXHIBIT A 

LEGAL DESCRIPTION OF LAND 

30

 

EXHIBIT B 

SITE PLAN 

(Copy Attached) 

31

 

 

| LOCATION: SE Tucson Pantano NWC Pantano Road & Broadway Boulevard g Tucson, AZ oped by: i Department Stores, Inc. fl 7000 Ridgewood Drive WT KSOS1 

32

 

EXHIBIT C 

PLANS AND SPECIFICATIONS FOR LANDLORD’S WORK 

(to be attached after approval by Tenant) 

33

 

EXHIBIT C-1 

BUILDING PAD CERTIFICATE 

Part 1 of 2 

 

	
 

	
Project Name:                                                                                                                                                                                                                      

	
 

	
Developer:                                                                                                                                                                                                                           

	
 

	
Contractor:                                                                                                                                                                                                                           

Geotechnical: 

The undersigned hereby certifies to Kohl’s that: 

	
1.
	
All earthwork preparation for the Kohl’s building pad was completed in substantial compliance with the geotechnical investigation report(s), as amended, prepared by                          dated                  and with the Kohl’s approved site construction plans and specifications prepared by                          dated                     . 

	
2.
	
Preparation of the pad was monitored and tested at intervals appropriate to the site conditions by me or under my direct supervision. A detailed compilation of field reports and test data interpretations is attached. 

 

	
Company:                                                                      

	
 

	
By:                                                                                 

	
 

	
Date:                                                                              

	
 

	
Registration No.:                                                           

	
            (not valid unless sealed)

 

34

 

 

BUILDING PAD CERTIFICATION 

Part 2 of 2 

 

	
 

	
Project Name:                                                                                                                                                                                                                      

	
 

	
Developer:                                                                                                                                                                                                                           

	
 

	
Contractor:                                                                                                                                                                                                                           

Survey: 

 

	
 

	
Finished Floor Elevation:                                                                                                                                                                                                   

	
 

	
Pad Elevation:                                                                                                                                                                                                                      

The undersigned hereby certifies to Kohl’s that: 

	
1.
	
Spot elevations have been taken on a grid of 50’ centers across the Kohl’s building pad. All spot elevations are within 0.1’ of the specified pad elevation. A copy of the survey is attached. 

	
2.
	
The building corners have been staked with 10’ offsets. The size and location of the building pad are in substantial compliance with the Kohl’s approved site construction plans and specifications prepared by                              dated                         . 

	
3.
	
All survey work was performed by me or under by direct supervision. 

 

	
 

	
Company:                                                                      

	
 

	
By:                                                                                 

	
 

	
Date:                                                                              

	
 

	
Registration No.:                                                           

	
            (not valid unless sealed)

 

		
	
ACCEPTANCE OF CERTIFICATION:

	
 
	
 

	
By:
	
 

	
 
	
 

	
Date:
	
 

	
 
	
 

	
Title:
	
 

 

35

 

 

EXHIBIT C-2 

CRITERIA FOR TENANT’S WORK 

Tenant’s Work shall consist of construction of the Building’s shell and interior to conform to the Design Plans submitted by Tenant as approved by Landlord. Tenant’s Work includes, but is not limited to: 

	
 
	
a.
	
Complete Building’s shell in accordance with plans and specifications approved by Tenant. 

	
 
	
b.
	
Footings - Cast in place, reinforced concrete strip footings and column pads, or as recommended by final soils report. 

	
 
	
c.
	
Foundation Walls - Reinforced concrete with a 2” rigid polystyrene insulation, minimum of 2 pound density. 

	
 
	
d.
	
Exterior Walls - To be a combination of brick and concrete block or may be a combination of other building materials as deemed appropriate by Tenant and the local municipality. 

	
 
	
e.
	
Interior Concrete - 4” concrete slab with strength of 2,500 PSI with vapor barrier under 4” sand cushion (0.006 in. thick polyethylene sheet) with 6”x6” wire mesh reinforcement. 

	
 
	
f.
	
Rough Carpentry - Roof and door bucks, blocking, and miscellaneous framing lumber, treated where required. 

	
 
	
g.
	
Roofing - Single-ply bondable ballasted EPDM membrane roofing with a guaranteed useful life of a minimum of fifteen (15) years and an insulation rating of at least R-14. 

	
 
	
h.
	
Exterior Doors - Exterior personnel doors are insulated hollow metal doors and frames. 

	
 
	
i.
	
Fire Proofing - All structural steel will be fire - proofed if required by local codes. 

	
 
	
j.
	
Painting - Painting/finishing of all exterior surfaces including but not limited to doors and miscellaneous metal. All paint colors and masonry/brick materials shall be selected by Tenant. 

	
 
	
k.
	
Interior Plumbing - Insulated water service and non-insulated sanitary sewer complete at a pre-designated location. Interior insulated roof drain system connected to storm sewer system. 

	
 
	
l.
	
Automatic Fire Protection - System shall be U.L. approved and conform to the property insurance specifications established by the property insurance carrier selected by Tenant. 

	
 
	
m.
	
Electrical - One (1) exterior pad mounted transformer with capacity to serve Tenant’s electrical requirements of 1200 amp @ 277/480 volts located in the Building at a pre-designated location selected by Tenant. 

	
 
	
n.
	
Telephone - Size of conduit into the Building to be sufficient in size to accommodate a 100 pair telephone service. 

	
 
	
o.
	
Entrance and Storefronts - storefront entries and vestibules with non-insulated doors and thermal break aluminum frames, plus insulated glass. 

	
 
	
p.
	
Steel stud gypsum wall board - Finish sanded, including the recessed Garcy studs, 1301A series or equal. 

	
 
	
q.
	
HVAC - System to be designed with full distribution of supply air from roof top units (RTUs). Sales area RTUs and all other RTUs servicing areas in the Premises other than the main storage area, if any, shall provide heat using natural gas or electricity and provide electric cooling and be the York model DEG240N24046KL or equivalent. 

	
 
	
r.
	
Fire Alarm Detection - automatic fire protection system required by the state and/or local governmental authorities. 

	
 
	
s.
	
Warranties/guaranties - The following warranties/guaranties shall be provided to Landlord from Tenant or the applicable contractors: 

	
 
	
•
	
A one-year warranty/guaranty against any defects in work and materials. 

	
 
	
•
	
A five-year warranty/guaranty for all major components of the HVAC units or systems servicing the Building against defects in equipment or installation. Major components shall include condensing coil, cooling coil, blower, compressor and heat exchanger. 

	
 
	
•
	
A ten-year material warranty/guaranty for the compressors and the heat exchangers of the HVAC systems servicing the Building against defects in equipment or installation. 

	
 
	
•
	
A fifteen-year roof warranty/guaranty for the roof structure and membrane against leaks, and failure of material or seams or the installation thereof. 

All warranties/guaranties periods shall commence upon substantial completion of Tenant’s Work. 

36

 

 

EXHIBIT C-3 

PERSONAL UNDERTAKING 

WHEREAS,                                          (the “Company”) is about to issue its title insurance policy or policies or issue commitments for such policy or policies, identified as                      (the “Title Insurance Policy”), in respect to the land described in the Title Insurance Policy; and 

WHEREAS, the Company has raised as a title exception on the Title Insurance Policy the following defects, liens, encumbrances, adverse claims and other matters (the “Exceptions to Title”): 

Any lien, or right to a lien, for services, labor or material heretofore or hereafter furnished, imposed by law and not shown by the public records which may arise from contracts heretofore let by the undersigned for the construction of the Kohl’s store upon the land and by anyone claiming by, through or under said contracts. 

AND WHEREAS, the Company has been requested to issue the Title Insurance Policy, and may hereafter, in the ordinary course of its business, issue title insurance policy or policies or commitments therefor in the form or forms now or then commonly used by the Company, or issue hold harmless or indemnity letters to induce other title insurance companies to issue title insurance policies or commitments therefor in respect to the land or to some part or parts thereof, or interest therein (“Future Policies or Commitments”), either omitting all mention of the aforesaid Exceptions to Title, or insuring against loss or damage by reason thereof; 

NOW THEREFORE, in consideration of the issuance of the Title Insurance Policy and the payment of $1.00 to the undersigned by the Company, the sufficiency and receipt of which are hereby acknowledged, the undersigned hereby covenants and agrees with the Company as follows: 

1. The undersigned shall forever fully protect, defend, and save the Company harmless from and against all the Exceptions to Title, in and from any and all loss, costs, damages, attorneys’ fees, and expenses of every kind and nature which it may suffer, expend or incur under, or by reason, or in consequence of the Title Insurance Policy on account, or in consequence, or growing out of the Exceptions to Title or on account of the assertion or enforcement or attempted assertion or enforcement thereof or of any rights existing or hereafter arising, or which may be claimed to exist under, or by reason, or in consequence, or growing out of the Exceptions to Title or any of them. 

2. The undersigned shall provide for the defense, at its own expense, on behalf and for the protection of the Company and the parties insured or who may become insured, against loss or damage under the Title Insurance Policy (but without prejudice to the right of the Company to defend if it so elects) in all litigation consisting of actions or proceedings based on any Exceptions to Title which may be asserted or attempted to be asserted, established or enforced in, to, upon, against or in respect to the land or any part thereof, or interest therein. 

3. The undersigned shall pay, discharge, satisfy, and remove from the title to the land, and clear from the public record each Exception to Title within twenty-one (21) days after a final judgment is entered in respect of such Exception to Title if an appeal bond staying the enforcement of such judgment is not filed. 

4. Notwithstanding the foregoing, the Company shall not exercise any of its rights under Paragraph 1, Paragraph 2 and Paragraph 3 above until (A)(i) the undersigned has failed to diligently contest any such Exception to Title and defend the Company and the parties insured by the Company against such Exception to Title, and (ii) the Company has given thirty (30) days notice to the undersigned of the undersigned’s failure to diligently contest any such Exception to Title and defend the Company and the parties insured by the Company against such Exception to Title; or (B) a final judgment is entered in respect of any such Exception to Title and an appeal bond staying the enforcement of such judgment is not filed. 

5. The undersigned acknowledges that each and every provision herein shall extend to and be in force concerning Future Policies or Commitments. 

6. This undertaking shall be binding upon the undersigned and its successors and assigns. 

IN WITNESS WHEREOF, the undersigned has caused this undertaking to be executed as of the              day of                         , 20      . 

 

		
	
KOHL’S DEPARTMENT STORES, INC.,

a Delaware corporation

	
 
	
 

	
By:
	
 

	
Name:
	
 

	
Title:
	
 

 

37

 

 

EXHIBIT D 

HOME DEPOT REA 

(Copy Attached) 

38

 

EXHIBIT D-1 

DECLARATION OF USE RESTRICTIONS 

THIS DECLARATION OF USE RESTRICTIONS (this “Declaration”) is made and entered into as of the              day of January, 2003, by OCTOBER 23RD GROUP L.L.C., an Arizona limited liability company (“October Group”), NSHE BASSETT, LLC, an Arizona limited liability company (“NSHE”), and                         , a                          (“XYZ Corp”). 

PRELIMINARY STATEMENTS 

A.October Group is the owner of that certain real property located in Tucson, Pima County, Arizona, legally described on Exhibit “A” attached hereto and made a part hereof and as depicted on the site plan (the “Site Plan”) attached hereto as Exhibit “C” and made a part hereof (the “Kohl’s Property”). 

B.XYZ Corp is the owner of that certain real property contiguous to the Kohl’s Property, legally described in Exhibit “B” attached hereto and made a part hereof and as depicted on the Site Plan (the “Outlot” and, together with the Kohl’s Property, the “Adjoining Parcel”). 

C.October Group, as “Landlord”, and NSHE, as “Tenant”, previously entered into a certain Land Lease dated as of January     , 2003 (the “NSHE Lease”), for the ground lease of the Kohl’s Property. 

D.Pursuant to that certain Lease dated January     , 2003 (the “Continental Lease”), by and between NSHE, as landlord, and Continental 34 Fund Limited Partnership, a Wisconsin limited partnership (“Continental”), as tenant, NSHE has leased the Kohl’s Property to Continental. 

E.Pursuant to that certain Sublease dated January     , 2003 (the “Sublease”), by and between Continental, as landlord, and Kohl’s Department Stores, Inc., a Delaware corporation (“Kohl’s”), as tenant, Continental has leased the Kohl’s Property to Kohl’s. 

F.October Group and Home Depot U.S.A., Inc., a Delaware corporation (“Home Depot”), entered into that certain Reciprocal Ingress-Egress Easement Agreement dated as of April 19, 2002, and recorded on July 9, 2002, in the office of the Pima County, Arizona, Recorder at Docket 11837, Page 1966 (as amended from time to time, the “Home Depot REA’’), by the terms of which October Group and Home Depot set forth certain reciprocal easement rights with respect to the Properties (as defined in the Home Depot REA), including the Adjoining Parcel, and agreed to certain maintenance obligations with respect to the “Common Areas” (as defined in the Home Depot REA), and agreed to certain use restrictions and prohibitions encumbering the Adjoining Parcel. 

G.As an inducement to Continental to enter into the Continental Lease and to Kohl’s to subsequently enter into the Sublease, October Group, NSHE and XYZ Corp desire to impose certain restrictions on the use and operation of the Outlot. 

NOW, THEREFORE, in consideration of the foregoing, and the covenants and declarations hereinafter set forth, it is agreed as follows: 

ARTICLE 1 

DEFINITIONS 

1.1. Building. “Building” shall mean any enclosed structure placed, constructed or located within the Outlot. 

1.2. Common Area. “Common Area” shall have the same meaning as set forth in the Home Depot REA, that is, the paved areas of the Adjoining Parcel. 

1.3. Laws. “Laws” shall mean and include all laws, rules, regulations, orders, ordinances, statutes and other requirements of all federal, state, county and municipal authorities having jurisdiction over the Outlot. 

1.4. Occupant. “Occupant” shall mean any Person from time to time entitled to the use and occupancy of any portion of the Outlot under an ownership right or any lease, sublease, license, concession or other similar agreement. 

1.5. Person. “Person” shall mean any individual, partnership, firm, association, corporation, limited liability company, trust or any other form of business or government entity. 

39

 

ARTICLE 2 

IMPROVEMENT AND MAINTENANCE OF THE OUTLOT 

2.1. Improvement Restrictions. The Outlot shall be subject to the following restrictions: 

(A)No more than one (1) Building shall be built on the Outlot, and such Building shall not exceed thirty (30) feet in height above finished floor elevation (inclusive of parapets and mechanical equipment); and 

(B)All rooftop equipment shall be screened in a reasonable manner. 

2.2. Maintenance Standards. The Outlot shall be maintained in a safe and attractive condition and in a good state of repair, as more fully set forth in the Home Depot REA. The unimproved portions of the Outlot shall be mowed and kept litter-free. The Outlot shall be operated, maintained and repaired in compliance with all applicable Laws. 

ARTICLE 3 

THE OUTLOT CONTRIBUTION 

3.1 Outlot Contribution. As used in this Declaration, the term “Outlot Contribution” shall mean the sum of One Thousand Nine Hundred Seven and No/100 Dollars ($1,907.00) per year for the Outlot. The Outlot Contribution shall be increased by ten percent (10%) on January 1, 2009, and shall be increased by ten percent (10%) every five (5) years thereafter. Pursuant to the terms of the Continental Lease, Continental will perform, or cause to be performed, maintenance to certain of the access drives in the Common Area of the Kohl’s Property that will be of benefit to the Occupant of the Outlot, as depicted by cross-hatching on the Site Plan (the “Shared Access Drives”). In order to compensate Continental for the cost of such maintenance of the Shared Access Drives, the Occupant of the Outlot shall pay the Outlot Contribution to Continental (except as set forth below), in arrears, on or before February 1 of each calendar year for the previous year. The Outlot Contribution shall not accrue until the date on which construction commences on the Building, and the Outlot Contribution for the year in which such construction commences shall be prorated based on the day that such construction commences. The obligations with respect to this Section shall survive the termination of any Occupant’s interest in the Outlot. In the event that any portion of the amount billed is not paid within fourteen (14) days after a bill becomes due a late fee of five percent (5%) of the amount due may be charged by Continental and shall be immediately due with the payment of the delinquent bill. Notwithstanding the foregoing, for so long as the Kohl’s Property is being operated as a Kohl’s department store, the Occupant of the Outlot shall pay the Outlot Contribution directly to Kohl’s at P.O. Box 359, Milwaukee, Wisconsin 53201, Attention: Property Accountant. 

ARTICLE 4 

PERMITTED USES OF THE OUTLOT 

4.1. Permitted Uses. The Outlot shall only be used for those purposes allowed in the Home Depot REA; provided, however, that the Outlot (or any portion thereof) shall not be used for residential purposes. 

4.2. Prohibited Uses. Without limiting the generality of the foregoing, the following uses shall not be permitted on the Outlot without the prior written consent of Continental and Kohl’s (which consent may be granted or withheld in their sole and absolute discretion): 

(A)Any uses prohibited by the Home Depot REA, including, but not necessarily limited to, residential; theater; auditorium; sports or other entertainment viewing facility (whether live, film, audio/visual or video); motor vehicle or boat dealership; discotheque; dance hall or night club; bowling alley; skating rink; billiard parlor; health spa or exercise facility; more than 9,000 aggregate square feet of medical, dental, chiropractic, business or other type of office of any kind (unless incidental to a permitted use); phone bank or call center; motor vehicle or boat storage facility; training or educational facility; adult pornographic establishments; traveling carnivals, fairs, shows, kiosks, and sales by transient merchants using vehicles or booths; a bar greater than (i) 2,000 square feet of Floor Area within 200 feet of the building on the Kohl’s Property, or (ii) 5,000 square feet of Floor Area within 500 feet of the building on the Kohl’s Property; or a home improvement center. 

(B)Any retail operation in which more than twenty percent (20%) of the Occupants’ sales (based on dollar value) is derived from the sale of clothing commonly referred to as closeouts, manufacturer’s overruns, other retailer’s returned or excess inventory, manufacturer’s seconds, or imperfect merchandise. 

40

 

4.3. Use of Outdoor Area. No merchandise, equipment or services, including, but not limited to, vending machines, promotional devices and similar items, shall be displayed, offered for sale or lease, or stored on the sidewalks in front of or alongside the Building or within the remainder of the Outlot without the prior written approval of Continental and Kohl’s, which approval may be granted or withheld in their sole and absolute discretion. Notwithstanding the foregoing, it shall be permissible to place a temporary or permanent ATM or other banking machine outside of the Building. 

ARTICLE 5 

MISCELLANEOUS 

5.1. Covenants Run with the Land. The terms of this Declaration shall constitute covenants running with the land and shall inure to the benefit of October Group, NSHE, Continental and Kohl’s and their successors and assigns and be binding upon XYZ Corp as owner of the Outlot and its successors and assigns. This Declaration is not intended to supersede, modify, amend or otherwise change the provisions of any prior instrument affecting the land burdened hereby. 

5.2. Remedies. October Group, NSHE, Continental and Kohl’s shall have the right to prosecute any proceedings at law or in equity against the other, or any other Person, violating or attempting to violate any of the provisions contained in this Declaration, and to recover damages for any such violation. Such proceeding shall include the right to restrain by injunction any violation or threatened violation by another of any of the terms, covenants or conditions of this Declaration, or to obtain a decree to compel performance of any such terms, covenants or conditions, it being agreed that the remedy at law for a breach of any such term, covenant or condition (except those, if any, requiring the payment of any liquidated sum) is not adequate. All of the remedies permitted or available to October Group, NSHE, Continental and Kohl’s under this Declaration or at law or in equity shall be cumulative and not alternative, and the invocation of any such right or remedy shall not constitute a waiver or election of remedies with respect to any other permitted or available right or remedy. 

5.3. Costs of Enforcement. If October Group, NSHE, Continental or Kohl’s brings an action at law or in equity to enforce or interpret this Declaration, the prevailing party in such action shall be entitled to recover reasonable attorneys’ fees and court costs and expert witness fees for all stages of litigation, including, but not limited to, appellate proceedings, in addition to any other remedy granted. 

5.4. No Waiver. The failure of October Group, NSHE, Continental or Kohl’s to insist upon strict performance of any of the terms, covenants or conditions hereof shall not be deemed a waiver of any rights or remedies hereunder, at law or in equity and shall not be deemed a waiver of any subsequent breach or default in any of such terms, covenants or conditions. No waiver of any default under this Declaration shall be effective or binding unless made in writing and no such waiver shall be implied from any omission to take action in respect to such default. No express written waiver of any default shall affect any other default or cover any other period of time other than any default and/or period of time specified in such express waiver. One or more written waivers of any default under any provision of this Declaration shall not be deemed to be a waiver of any subsequent default in the performance of the same provision or any other term or provision contained in this Declaration. 

5.5. Severability. Invalidation of any of the provisions contained in this Declaration, or of the application thereof to any person by judgment or court order, shall in no way affect any of the other provisions hereof or the application thereof to any other person and the same shall remain in full force and effect. 

5.6. Amendments. This Agreement may be amended by, and only by, a written agreement signed by October Group, NSHE, XYZ Corp, Home Depot, Continental and Kohl’s and shall be effective only when recorded in the Pima County, Recorder’s office. No consent to the amendment of this Declaration shall ever be required of any party other than October Group, NSHE, Home Depot, XYZ Corp, Continental and Kohl’s. 

5.7. Captions. The captions preceding the text of each article and section are included only for convenience of reference. Capitalized terms are also selected only for convenience of reference and do not necessarily have any connection to the meaning that might otherwise be attached to such term in a context outside this Declaration. 

5.8. Governing Law. This Declaration shall be construed and applied in accordance with the laws of the State of Arizona. 

41

 

IN WITNESS WHEREOF, October Group, NSHE and XYZ Corp have caused this Declaration to be executed as of the day and year first above written. 

 

			
	
OCTOBER 23RD GROUP L.L.C., an Arizona limited liability company

	
 
	
 

	
By:
	
Mar Enterprises, L.L.C., an Arizona limited liability company, its Managing Member

	
 
	
 
	
 

	
 
	
By:
	
 

	
 
	
 
	
Steven A Mar, Authorized Signatory

 

		
	
 
	
 

	
NSHE BASSETT, LLC, an Arizona limited liability company

 

		
	
 
	
 

	
By:
	
 

	
Name:
	
 

	
Title:
	
 

 

	
XYZ CORP, a                                                      

 

	
By:
	
 

	
Name:
	
 

	
Title:
	
 

 

42

 

 

 

		
	
 
	
 

	
STATE OF ARIZONA
	
)

	
 
	
) ss.

	
COUNTY OF PIMA
	
)

The foregoing instrument was acknowledged before me this      day of January, 2003, by Steven A. Mar, as authorized signatory of Mar Enterprises, L.L.C., an Arizona limited liability company, as Managing Member of October 23rd Group L.L.C., an Arizona limited liability company. 

 

	
 

	
Notary Public

My commission expires: 

 

		
	
 
	
 

	
STATE OF                                            )

	
                                                               ) ss.

	
COUNTY OF                                        )

The foregoing instrument was acknowledged before me this      day of January, 2003, by                                               , as                                               of NSHE Bassett, LLC, an Arizona limited liability company. 

 

	
 

	
Notary Public

My commission expires: 

 

		
	
 
	
 

	
STATE OF                                           )

	
                                                              ) ss.

	
COUNTY OF                                      )

The foregoing instrument was acknowledged before me this      day of January, 2003, by                                               , as                  of XYX Corp, a                             . 

 

	
 

	
Notary Public

My commission expires: 

 

43

 

 

EXHIBIT A 

TO 

DECLARATION OF USE RESTRICTIONS 

LEGAL DESCRIPTION OF THE KOHL’S PROPERTY 

44

 

EXHIBIT B 

TO 

DECLARATION OF USE RESTRICTIONS 

LEGAL DESCRIPTION OF THE OUTLOT 

45

 

EXHIBIT C 

TO 

DECLARATION OF USE RESTRICTIONS 

SITE PLAN 

46

 

EXHIBIT E 

SUBORDINATION, NON-DISTURBANCE AND 

ATTORNMENT AGREEMENT 

THIS AGREEMENT made as of this          day of                                 , 20    , by and between                                                                   (“Lender”) and KOHL’S DEPARTMENT STORES, INC., a Delaware corporation (“Tenant”). 

R E C I T A L S: 

A.Tenant has entered into a sublease (“Lease”) dated January         , 2003 for premises (“Premises”) located within a shopping center located in Tucson, Pima County, Arizona, all as more particularly described in the Lease. 

B.Lender is the beneficiary of a Deed of Trust and Security Agreement (“Security Instrument”), between                                               (“Landlord”) and Lender, dated                     , 20      and recorded with the Pima County, Arizona Recorder as Document No.                          encumbering certain property more particularly described in Exhibit A annexed hereto (“Property”) and a specific Assignment of Leases and Rents dated                         , 20      and recorded with the Pima County, Arizona Recorder as Document No.                  (“Assignment”) assigning the Lease. Both the Security Instrument and the Assignment secure a loan or loans from Lender to Landlord. 

C.Each party hereto has requested the other party to enter into this Agreement. 

A G R E E M E N  T S: 

NOW, THEREFORE, in consideration of the above Recitals and the agreements of the parties set forth below, and for One Dollar ($1.00) and other good and valuable consideration, the parties hereto agree as follows: 

1.The Lease and each and every term and condition thereof, and any extensions, renewals, replacements or modifications thereof, and all of the right, title and interest of Tenant in and to the Premises are and shall be subject and subordinate to the Security Instrument and to all of the terms and conditions contained therein, all advances made or to be made thereunder, and to any renewals, modifications, supplements, replacements, consolidations, increases and extensions thereof. 

2.Lender agrees that in the event of foreclosure of the Security Instrument, or other enforcement of the terms and conditions of the Security Instrument or the exercise by Lender of its rights under the Assignment, or in the event Lender comes into possession or acquires title to the Premises as a result of foreclosure or the threat thereof, or as a result of any other means, such action shall not result in either a termination of the Lease or a diminution or impairment of any of the rights granted to Tenant in the Lease or in an increase in any of Tenant’s obligations under the Lease, including but not limited to provisions in the Lease dealing with condemnation, fire and other casualties, so long as Tenant is not in default (beyond the expiration of applicable notice and cure periods) in the payment of any monetary obligation or in default (beyond the expiration of applicable notice and cure periods) under any material non-monetary term or condition of the Lease and continues to observe and perform all of Tenant’s obligations under the Lease. 

3.Tenant agrees with Lender that if the interest of Landlord in the Premises shall be transferred to Lender by reason of foreclosure or other proceedings, or by any other manner, or in the event of a foreclosure sale of the Premises to any other person, firm, or corporation, then in any of said events, Tenant shall be bound to Lender or such purchaser, grantee or other successor to Landlord’s interest (“Successor Landlord”) under all of the terms, covenants and conditions of the Lease for the balance of the term remaining and any extensions or renewals thereof which may be effected in accordance with any option therefor in the Lease, with the same force and effect as if the Successor Landlord were the landlord under the Lease. Tenant does hereby agree to attorn to the Successor Landlord. 

4.At such time that Successor Landlord succeeds to the interest of Landlord under the Lease, Successor Landlord shall be bound to Tenant under all of the terms, covenants and conditions of the Lease for the balance of the term remaining and any extensions or renewals thereof which may be effected in accordance with any option therefor in the Lease; provided, however, Tenant agrees that a Successor Landlord shall not be: 

	
 
	
(a)
	
personally liable for any act or omission of any prior landlord under the Lease; 

	
 
	
(b)
	
bound by any base rent or additional rent which Tenant may have paid for more than the current or next succeeding month to any prior landlord; or 

47

 

	
 
	
(c)
	
obligated to perform any work in the Premises or any part thereof, other than such work which is required to be performed by Landlord under the Lease from and after the date on which Successor Landlord succeeds to the interest of Landlord under the Lease. 

5.Tenant will notify Lender of any default of Landlord under the Lease which Tenant believes would entitle it to cancel the Lease or abate the base rent or additional rent payable thereunder, and agrees that no notice of cancellation thereof nor any such rent abatement shall be effective against Lender unless Lender has received the notice aforesaid and has failed to cure the default within the longer of thirty (30) days after such notice or such period of time following such notice as Landlord has to cure the default which gives rise to such alleged right of cancellation or abatement (“Lender Cure Period”). All such notices shall be in writing and shall be deemed to have been given when delivered personally or when deposited in the United States mail, certified or registered, postage prepaid, addressed as follows: 

6.Tenant hereby acknowledges receipt of notice of the Assignment and agrees to be bound by the terms thereof and agrees that it will, upon Lender’s demand therefor, thereafter pay directly to Lender all amounts thereafter payable by Tenant to the Landlord under the Lease. 

7.This Agreement shall bind and inure to the benefit of the parties hereto, their successors and assigns. As used herein, the term “Tenant” shall include the Tenant, its successors and assigns as permitted under the Lease; the words “foreclosure” and “foreclosure sale” as used herein shall be deemed to include the acquisition of Landlord’s estate in the Premises by voluntary deed (or assignment) in lieu of foreclosure, and the word “Lender” shall include the Lender specifically named herein and any of its successors and assigns, including any Successor Landlord. 

48

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the month, day and year first above written. 

 

	
LENDER:

 

		
	
 

	
By:
	
 

	
  Name:
	
 

	
  Title:
	
 

 

		
	
Attest:
	
 

	
  Name:
	
 

	
  Title:
	
 

 

	
TENANT:

	
 

	
KOHL’S DEPARTMENT STORES, INC.,

a Delaware corporation

 

		
	
By:
	
 

	
  Name:
	
 

	
  Title:
	
 

 

		
	
 
	
 

	
STATE OF                                            )

	
                                                              ) SS

	
COUNTY OF                                      )

Personally came before me this      day of                             , 20    , the above-named                              and                                         , to me known to be the                                  and                                         , respectively of                                     , a                                                  , to me known to be the persons who executed the foregoing instrument and acknowledged the same. 

 

	
 
	
 

	
Notary Public

	
 
	
 

	
My Commission Expires:
	
 

 

 

49

 

 

 

		
	
 
	
 

	
STATE OF WISCONSIN
	
)

	
 
	
) SS

	
COUNTY OF WAUKESHA
	
)

Personally came before me this      day of                     , 20    , the above-named                                 , to me known to be the                              of Kohl’s Department Stores, Inc., a Delaware corporation, to me known to be the person who executed the foregoing instrument and acknowledged the same. 

 

	
 
	
 

	
Notary Public

	
 
	
 

	
My Commission Expires:
	
 

This instrument was drafted by 

and after recording should be returned to: 

Alan J. Salle 

Kohl’s Department Stores, Inc. 

N56 W17000 Ridgewood Drive 

Menomonee Falls, Wisconsin 53051 

 

50

 

 

EXHIBIT E-1 

PRIMARY GROUND LESSOR NON-DISTURBANCE AGREEMENT 

THIS AGREEMENT is made and entered into as of the          day of January, 2003, by and between OCTOBER 23RD GROUP, LLC, an Arizona limited liability company (“Ground Lessor”), and KOHL’S DEPARTMENT STORES, INC., a Delaware corporation (“Tenant”). 

R E C I T A L S: 

A. Ground Lessor is the fee owner of certain property located in the City of Tucson, County of Pima, State of Arizona and legally described in EXHIBIT A attached hereto and made a part hereof (the “Property”). 

B. Pursuant to a certain Land Lease dated                     , 2002 (the “Primary Ground Lease”), notice of which is recorded in the Pima County Registry of Deeds at Book                 , page                 , Ground Lessor leased the Property to NSHE Bassett, LLC, an Arizona limited liability company (“Secondary Ground Lessor”). 

C. Pursuant to a certain Lease dated                     , 2002 (the “Secondary Ground Lease”), notice of which is recorded in the Pima County Registry of Deeds at Book                 , page                 , Secondary Ground Lessor leased the Property to Continental 34 Fund Limited Partnership, a Wisconsin limited partnership (“Landlord”). 

D. Landlord leased the Property to Tenant pursuant to a certain Sublease dated January                 , 2003 (the “Lease”). 

E. As a condition precedent to the performance of Tenant’s obligations under the Lease, Tenant has required Ground Lessor to enter into this Agreement and Ground Lessor has agreed to enter into this Agreement. 

A G R E E M E N T S: 

NOW, THEREFORE, in consideration of the above Recitals and the agreements of the parties set forth below, and for One Dollar ($1.00) and other good and valuable consideration, the parties hereto agree as follows: 

1. Ground Lessor agrees that if the Primary Ground Lease and the Secondary Ground Lease are terminated by reason of any default on the part of Secondary Ground Lessor or Landlord or for any other reason, then (a) the Lease and the rights of Tenant under the Lease shall not be disturbed by Ground Lessor but shall continue in full force and effect for so long as Tenant continues to observe and perform all of Tenant’s obligations under the Lease, and (b) Ground Lessor shall recognize Tenant’s rights under the Lease and be bound by all of Landlord’s obligations under the Lease, including but not limited to provisions in the Lease dealing with condemnation, fire and other casualties for the balance of the unexpired term of the Lease (including any optional extension period properly exercised), except in accordance with the provisions thereof. 

2. If the interest of Secondary Ground Lessor and Landlord in the Property shall be terminated or shall be transferred to Ground Lessor, Tenant shall be bound to Ground Lessor under all of the terms, covenants and conditions of the Lease for the balance of the term remaining and any extensions or renewals thereof which may be effected in accordance with any option therefor in the Lease, with the same force and effect as if Ground Lessor were the landlord under the Lease. Tenant does hereby agree to attorn to Ground Lessor and execute such documents confirming the same as Ground Lessor shall reasonably request. 

3. Notwithstanding anything to the contrary herein, Ground Lessor shall not be liable for any default of any prior landlord, nor shall Tenant assert against Ground Lessor any claims, defenses or offsets Tenant may have had against any prior landlord except to the extent such offset is expressly provided for under the Lease. Tenant agrees that any liability which accrues to Ground Lessor, and its successors and assigns, for the performance of the obligations of the Landlord under the Lease shall be limited to the assets comprising the Property, the income therefrom and the net proceeds of the sales thereof and Tenant shall not have the right to enforce any such liability against any other assets of Ground Lessor. Ground Lessor shall not be bound by any payment of rent, additional rent or other sums made by Tenant for more than one month in advance of the due date therefor. 

4. Tenant shall give Ground Lessor a copy of any notice of default it shall give to Landlord and Tenant shall not terminate the Lease on account thereof or exercise its other rights under the Lease until the same period of time afforded in the Lease for Landlord to cure such default shall have lapsed which period may run concurrently with that of Landlord, during which period Ground Lessor shall have the right, but not the obligation, to cure such default; provided, however, that if Tenant, from time to time, has agreed with a then current mortgage holder that such mortgage holder shall be afforded a 

51

 

longer period of time in which to cure such default, Ground Lessor shall be afforded the same period of time to cure as such mortgage holder before Tenant may terminate the Lease or exercise other rights on account thereof. 

5. Tenant shall, upon notice from Ground Lessor of termination of the Ground Lease, thereafter pay directly to Ground Lessor all amounts payable by Tenant to Landlord under the Lease. Landlord hereby irrevocably and unconditionally directs Tenant to comply with such demand. 

6. Notices shall be deemed given at the time of delivery to the addressee; but if delivery shall fail because of refusal or acceptance or absence of a period to accept delivery during normal business hours, the notice shall be deemed given at the time of attempted delivery as attested by the United States Postal Service or any national or regional so-called overnight courier which attempted delivery. The address of Tenant is N56 W17000 Ridgewood Drive, Menomonee Falls, Wisconsin 53051, Attention: Chairman with a copy similarly sent to Tenant at N56 W17000 Ridgewood Drive, Menomonee Falls, Wisconsin 53051, Attention: General Counsel. The address of Ground Lessor is                                                                                  . Either party may change its address by notice to the other. 

7. This Agreement shall bind and inure to the benefit of the parties hereto, their successors and assigns. As used herein, the term “Tenant” shall include the Tenant, its successors and assigns as permitted under the Lease, and the word “Ground Lessor” shall include the Ground Lessor specifically named herein and any of its successors and assigns, including any Successor Landlord. 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the month, day and year first above written. 

 

		
	
 
	
 

	
GROUND LESSOR:

	
 

	
OCTOBER 23RD GROUP, LLC, an Arizona limited liability company

	
 
	
 

	
By:
	
 

	
    Name:
	
 

	
    Title:
	
 

 

			
	
 
	
 
	
 

	
 

	
TENANT:

	
 

	
KOHL’S DEPARTMENT STORES, INC., 

a Delaware corporation

	
 
	
 

	
By:
	
 

	
 
	
R. Lawrence Montgomery

	
 
	
Chief Executive Officer

	
 
	
 

	
Attest:
	
 

	
 
	
Richard D. Schepp

	
 
	
Secretary

 

			
	
 
	
 
	
 

	
STATE OF                             
	
)
	
 

	
 
	
)
	
SS

	
COUNTY OF                         
	
)
	
 

On this              day of January, 2003, before me, a Notary Public within and for said County, personally appeared                                         , to me personally known, who, being by me duly sworn, did say that he is                                          of October 23rd Group, LLC, an Arizona limited liability company, and acknowledged the execution by him in such capacity of said instrument to be his free act and deed. 

 

	
 
	
 

	
Notary Public

	
My Commission Expires:
	
 

 

			
	
 
	
 
	
 

	
STATE OF WISCONSIN
	
)
	
 

52

 

			
	
 
	
)
	
SS

	
COUNTY OF WAUKESHA
	
)
	
 

Personally came before me this              day of January, 2003, the above-named R. Lawrence Montgomery and Richard D. Schepp, to me known to be the Chief Executive Officer and Secretary, respectively, of Kohl’s Department Stores, Inc., to me known to be the person who executed the foregoing instrument and acknowledged the same. 

 

	
 
	
 

	
Notary Public

	
My Commission Expires:
	
 

 

CONSENT OF LANDLORD 

Continental 34 Fund Limited Partnership, a Wisconsin limited partnership (“Landlord”), hereby consents to the foregoing agreement and, in particular, to the provisions of Section 5 thereof. 

WITNESS the execution hereof under seal as of this                  day of January, 2003. 

 

			
	
CONTINENTAL 34 FUND LIMITED PARTNERSHIP, a Wisconsin limited partnership

	
 
	
 

	
By:
	
Continental 34 Holding Company, Inc., a Delaware corporation, its general partner

	
 
	
 
	
 

	
 
	
By:
	
 

	
 
	
 
	
Daniel J. Minahan

	
 
	
 
	
President

 

			
	
 
	
 
	
 

	
STATE OF WISCONSIN
	
)
	
 

	
 
	
)
	
    SS

	
COUNTY OF MILWAUKEE
	
)
	
 

Personally came before me this              day of January, 2003, the above-named Daniel J. Minahan, to me known to be the President of Continental 34 Holding Company, Inc., the general partner of Continental 34 Fund Limited Partnership, to me known to be the person who executed the foregoing instrument and acknowledged the same. 

 

	
 
	
 

	
Notary Public

	
My Commission Expires:
	
 

 

EXHIBIT E-2 

SECONDARY GROUND LESSOR NON-DISTURBANCE AGREEMENT 

THIS AGREEMENT is made and entered into as of the          day of January, 2003, by and between NSHE BASSETT, LLC, an Arizona limited liability company (“Ground Lessor”), and KOHL’S DEPARTMENT STORES, INC., a Delaware corporation (“Tenant”). 

R E C I T A L S: 

A. October 23rd Group, LLC, an Arizona limited liability company (October 23rd Group”), is the fee owner of certain property located in the City of Tucson, County of Pima, State of Arizona and legally described in EXHIBIT A attached hereto and made a part hereof (the “Property”). 

53

 

B. Pursuant to a certain Land Lease dated                 , 2002, notice of which is recorded in the Pima County Registry of Deeds at Book                     , page                 , October 23rd Group leased the Property to Ground Lessor. 

C. Pursuant to a certain Lease dated                     , 2002 (the “Ground Lease”), notice of which is recorded in the Pima County Registry of Deeds at Book                 , page                 , Ground Lessor leased the Property to Continental 34 Fund Limited Partnership, a Wisconsin limited partnership (“Landlord”). 

D. Landlord leased the Property to Tenant pursuant to a certain Sublease dated January                 , 2003 (the “Lease”). 

E. As a condition precedent to the performance of Tenant’s obligations under the Lease, Tenant has required Ground Lessor to enter into this Agreement and Ground Lessor has agreed to enter into this Agreement. 

A G R E E M E N T S: 

NOW, THEREFORE, in consideration of the above Recitals and the agreements of the parties set forth below, and for One Dollar ($1.00) and other good and valuable consideration, the parties hereto agree as follows: 

1. Ground Lessor agrees that if the Ground Lease is terminated by reason of any default on the part of Landlord or if the Ground Lease is terminated for any other reason, then (a) the Lease and the rights of Tenant under the Lease shall not be disturbed by Ground Lessor but shall continue in full force and effect for so long as Tenant continues to observe and perform all of Tenant’s obligations under the Lease, and (b) Ground Lessor shall recognize Tenant’s rights under the Lease and be bound by all of Landlord’s obligations under the Lease, including but not limited to provisions in the Lease dealing with condemnation, fire and other casualties for the balance of the unexpired term of the Lease (including any optional extension period properly exercised), except in accordance with the provisions thereof. 

2. If the interest of Landlord in the Property shall be terminated or shall be transferred to Ground Lessor, Tenant shall be bound to Ground Lessor under all of the terms, covenants and conditions of the Lease for the balance of the term remaining and any extensions or renewals thereof which may be effected in accordance with any option therefor in the Lease, with the same force and effect as if Ground Lessor were the landlord under the Lease. Tenant does hereby agree to attorn to Ground Lessor and execute such documents confirming the same as Ground Lessor shall reasonably request. 

3. Notwithstanding anything to the contrary herein, Ground Lessor shall not be liable for any default of any prior landlord, nor shall Tenant assert against Ground Lessor any claims, defenses or offsets Tenant may have had against any prior landlord except to the extent such offset is expressly provided for under the Lease. Tenant agrees that any liability which accrues to Ground Lessor, and its successors and assigns, for the performance of the obligations of the Landlord under the Lease shall be limited to the assets comprising the Property, the income therefrom and the net proceeds of the sales thereof and Tenant shall not have the right to enforce any such liability against any other assets of Ground Lessor. Ground Lessor shall not be bound by any payment of rent, additional rent or other sums made by Tenant for more than one month in advance of the due date therefor. 

4. Tenant shall give Ground Lessor a copy of any notice of default it shall give to Landlord and Tenant shall not terminate the Lease on account thereof or exercise its other rights under the Lease until the same period of time afforded in the Lease for Landlord to cure such default shall have lapsed which period may run concurrently with that of Landlord, during which period Ground Lessor shall have the right, but not the obligation, to cure such default; provided, however, that if Tenant, from time to time, has agreed with a then current mortgage holder that such mortgage holder shall be afforded a longer period of time in which to cure such default, Ground Lessor shall be afforded the same period of time to cure as such mortgage holder before Tenant may terminate the Lease or exercise other rights on account thereof. 

5. Tenant shall, upon notice from Ground Lessor of termination of the Ground Lease, thereafter pay directly to Ground Lessor all amounts payable by Tenant to Landlord under the Lease. Landlord hereby irrevocably and unconditionally directs Tenant to comply with such demand. 

6. Notices shall be deemed given at the time of delivery to the addressee; but if delivery shall fail because of refusal or acceptance or absence of a period to accept delivery during normal business hours, the notice shall be deemed given at the time of attempted delivery as attested by the United States Postal Service or any national or regional so-called overnight courier which attempted delivery. The address of Tenant is N56 W17000 Ridgewood Drive, Menomonee Falls, Wisconsin 53051, Attention: Chairman with a copy similarly sent to Tenant at N56 W17000 Ridgewood Drive, Menomonee Falls, Wisconsin 53051, Attention: General Counsel. The address of Ground Lessor is                                                                          . Either party may change its address by notice to the other. 

7. This Agreement shall bind and inure to the benefit of the parties hereto, their successors and assigns. As used herein, the term “Tenant” shall include the Tenant, its successors and assigns as permitted under the Lease, and the word “Ground 

54

 

Lessor” shall include the Ground Lessor specifically named herein and any of its successors and assigns, including any Successor Landlord. 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the month, day and year first above written. 

 

		
	
 
	
 

	
GROUND LESSOR:

	
 

	
NSHE BASSETT, LLC, an

Arizona limited liability company

	
 
	
 

	
By:
	
 

	
    Name:
	
 

	
    Title:
	
 

 

		
	
TENANT:

	
 

	
KOHL’S DEPARTMENT STORES, INC.,

a Delaware corporation

	
 
	
 

	
By:
	
 

	
 
	
R. Lawrence Montgomery

	
 
	
Chief Executive Officer

	
 
	
 

	
Attest:
	
 

	
 
	
Richard D. Schepp

	
 
	
Secretary

 

			
	
 
	
 
	
 

	
STATE OF                                 
	
)
	
 

	
 
	
)
	
SS

	
COUNTY OF                             
	
)
	
 

On this              day of January, 2003, before me, a Notary Public within and for said County, personally appeared                                              , to me personally known, who, being by me duly sworn, did say that he is                                                       of NSHE Bassett, LLC, an Arizona limited liability company, and acknowledged the execution by him in such capacity of said instrument to be his free act and deed. 

 

	
Notary Public

	
My Commission Expires:
	
 

 

			
	
 
	
 
	
 

	
STATE OF WISCONSIN
	
)
	
 

	
 
	
)
	
SS

	
COUNTY OF WAUKESHA
	
)
	
 

Personally came before me this              day of January, 2003, the above-named R. Lawrence Montgomery and Richard D. Schepp, to me known to be the Chief Executive Officer and Secretary, respectively, of Kohl’s Department Stores, Inc., to me known to be the person who executed the foregoing instrument and acknowledged the same. 

 

	
Notary Public

	
My Commission Expires:
	
 

 

CONSENT OF LANDLORD 

Continental 34 Fund Limited Partnership, a Wisconsin limited partnership (“Landlord”), hereby consents to the foregoing agreement and, in particular, to the provisions of Section 5 thereof. 

WITNESS the execution hereof under seal as of this                  day of January, 2003. 

55

 

 

			
	
 
	
 
	
 

	
CONTINENTAL 34 FUND LIMITED PARTNERSHIP, a Wisconsin limited partnership

	
 
	
 

	
By:
	
Continental 34 Holding Company, Inc., a Delaware corporation, its general partner

	
 
	
 
	
 

	
 
	
By:
	
 

	
 
	
 
	
Daniel J. Minahan

	
 
	
 
	
President

 

			
	
 
	
 
	
 

	
STATE OF WISCONSIN
	
)
	
 

	
 
	
)
	
SS

	
COUNTY OF MILWAUKEE
	
)
	
 

Personally came before me this          day of January, 2003, the above-named Daniel J. Minahan, to me known to be the President of Continental 34 Holding Company, Inc., the general partner of Continental 34 Fund Limited Partnership, to me known to be the person who executed the foregoing instrument and acknowledged the same. 

 

	
Notary Public

	
My Commission Expires:
	
 

 

EXHIBIT F 

TENANT’S ESTOPPEL CERTIFICATE 

	
RE:
	
Sublease dated January         , 2003, between Continental 34 Fund Limited Partnership (“Landlord”), and Kohl’s Department Stores, Inc., (“Tenant”), for premises located in Tucson, Arizona (collectively, the “Lease”). 

To Landlord, Lender, and whomever else it may concern: 

The undersigned Tenant under the Lease certifies that as of this date, the status of the Lease is as follows: 

	
1.
	
The Lease, together with the documents listed below, constitutes the entire and only agreements between Landlord and Tenant with respect to the demised premises identified therein (“Premises”). 

	
2.
	
The Lease is in full force and effect and, to Tenant’s knowledge, Tenant does not have nor is entitled to any credit, offset or claim against the obligation to pay rent or other charges, either by reason of prepayment thereof, Landlord’s acts or omissions, or for any other reason. 

	
3.
	
a.)The commencement date of the Lease was                          and the expiration date of the initial Term of the Lease is                         . 

	
 
	
b.)
	
There are no options remaining unexercised on the part of the Tenant to renew the Lease except:                  (        ) options of five (5) years each. 

	
 
	
c.)
	
Monthly minimum rents, currently and future, are payable as set forth in Schedule “A” at the end hereof. 

	
4.
	
Tenant is open for business in the Premises (if applicable). 

	
5.
	
That except as set forth in the Lease, Tenant has no right to cancel or terminate the Lease, no option or right to purchase the premises or the shopping center property or any part thereof, and no right of first refusal whatsoever, except as set forth in the Lease. 

	
6.
	
The security deposit being held by Landlord on the date hereof in accordance with the Lease is $0.00. 

	
7.
	
All guaranteed minimum rent, common area maintenance charges, real estate taxes, and other sums payable by Tenant under the Lease have been paid in accordance with the provisions of the Lease. 

	
8.
	
Tenant has not been granted and is not entitled to any free rental or any concession in or abatement of rent, except as stated in the Lease. 

56

 

	
9.
	
All of Landlord’s Work to be performed by Landlord has been heretofore completed to the full satisfaction of Tenant, except                                                                                                        . 

	
10.
	
To Tenant’s knowledge, no default exists under the Lease on the part of Landlord. 

	
11.
	
No installment of rent has been paid more than one (1) month in advance of the due date thereof. 

	
12.
	
A true and complete copy of the Lease and all exhibits and amendments thereto, if any, are attached hereto and made a part hereof. 

This estoppel certificate shall bar Tenant from asserting any claim that is based upon facts contrary to those asserted herein to the extent the claim is asserted against a bona fide purchaser or encumbrancer for value who has acted in reasonable reliance upon this estoppel certificate without knowledge of facts to the contrary of those contained herein. Notwithstanding anything to the contrary contained herein, the undersigned shall in no event subject to damages arising out of the negligent or inadvertent failure of the undersigned to disclose correct or relevant information in this estoppel certificate. 

Dated:                              

 

		
	
TENANT:

	
 

	
KOHL’S DEPARTMENT STORES, INC., 

a Delaware corporation

	
 
	
 

	
By:
	
 

	
    Name:
	
 

	
    Title:
	
 

 

LANDLORD ESTOPPEL CERTIFICATE 

[letterhead of Landlord] 

	
 
	
Re:
	
Sublease dated January         , 2003, by and between Continental 34 Fund Limited Partnership (“Landlord”) and Kohl’s Department Stores, Inc. (“Tenant”) for premises located in Tucson, Arizona (the “Lease”) 

Dear Sir or Madam: 

Pursuant to Section 24.1 of the Lease, the undersigned, as Landlord under the Lease, hereby certifies the following: 

	
1.
	
The Lease is in full force and effect on the date hereof, and except as set forth in Exhibit A attached hereto, (a) the Lease has not been amended, modified or supplemented and (b) the Lease is the entire agreement between Tenant and the undersigned with respect to the Premises. 

	
2.
	
Except as set forth in Exhibit B attached hereto, (a) Landlord has not given Tenant notice of any default under the Lease which has not since been cured and (b) to Landlord’s actual knowledge, there is no event or occurrence, which with the giving of notice or passage of time, or both, would constitute a default by Tenant under the Lease. 

	
3.
	
Except as set forth in Exhibit B, Landlord knows of no existing defenses, offsets, counterclaims or credits against the enforcement of the Lease by Tenant. 

	
4.
	
The current address to which notices sent under the Lease are to be sent to Landlord is                                                                                                                                                                          . 

	
5.
	
Tenant has annual fixed rent and other charges under the Lease through                 , 20      . 

	
6.
	
The annual fixed rent due under the Lease is as follows: 

Period                                             Annual Fixed Rent 

	
7.
	
The Commencement Date under the Lease is                                                                                       , 20      , the expiration date of the initial Term of the Lease is                                                                                                           , 20      , and Tenant has eight (8) options to extend the term of the Lease for successive periods of five (5) years each. 

 

57

 

 

	
8.
	
Landlord has not mortgaged or assigned its interest in the Lease except for mortgages or assignments which are of record. 

This estoppel certificate shall bar Landlord from asserting any claim that is based upon facts contrary to those asserted herein to the extent the claim is asserted against a bona fide purchaser or encumbrancer for value who has acted in reasonable reliance upon this estoppel certificate without knowledge of facts to the contrary of those contained herein. Notwithstanding anything to the contrary contained herein, the undersigned shall in no event subject to damages arising out of the negligent or inadvertent failure of the undersigned to disclose correct or relevant information in this estoppel certificate. 

Capitalized terms which are not otherwise defined herein shall have the meanings given to such terms in the Lease. 

This certificate is executed and delivered as the      day of                 , 20    . 

 

		
	
 
	
 

	
CONTINENTAL 34 FUND LIMITED PARTNERSHIP, a Wisconsin limited partnership

	
 
	
 

	
By:
	
Continental 34 Holding Company, Inc., a Delaware corporation, its general partner

	
 
	
 

	
 
	
By:                                                                          

	
 
	
Daniel J. Minahan

	
 
	
President

 

EXHIBIT G 

MEMORANDUM OF LEASE 

THIS MEMORANDUM OF LEASE, entered into as of the          day of January, 2003, by and between CONTINENTAL 34 FUND LIMITED PARTNERSHIP, a Wisconsin limited partnership (“Landlord”) and KOHL’S DEPARTMENT STORES, INC., a Delaware corporation (“Tenant”). 

W I T N E S S E T H : 

WHEREAS, Landlord has a ground lessee interest certain land (the “Land”) located in Pima County, Arizona, and legally described in EXHIBIT A attached hereto and depicted on EXHIBIT B attached hereto; 

WHEREAS, Landlord and Tenant entered into a Sublease of even date herewith (the “Lease”), whereby Landlord demised and leased to Tenant the Land for the term set forth below (and at a rental and upon such other terms and conditions as are stated in the Lease); and 

WHEREAS, under the Lease, Tenant has agreed to construct the building identified on EXHIBIT B as the Kohl’s Building” (the “Building”); and 

WHEREAS, Landlord and Tenant wish to place notice of the Lease on record. 

NOW, THEREFORE, Landlord and Tenant hereby execute this Memorandum of Lease for the purpose of evidencing Tenant’s interest in the Land and the Building (collectively, the “Premises”), TO HAVE AND TO HOLD the Premises unto Tenant upon the terms, covenants and conditions contained in the Lease, for a term expiring on January 31, 2024, subject to eight (8) separate options to extend the term for successive periods of five (5) years each. 

This Memorandum of Lease is made and executed and is to be recorded in the office of the Pima County, Arizona Recorder for the purpose of giving notice of the Lease and the rights of the parties thereunder. 

This Memorandum of Lease is subject in each and every respect to the rental and other terms, covenants and conditions contained in the Lease, which is incorporated herein by this reference, and is executed by Landlord and Tenant with the 

58

 

understanding and agreement that nothing contained herein shall in any manner alter, modify or vary the rental or other terms, covenants or conditions of the Lease. 

1. Section 6.4 of the Lease provides for the following: 

Landlord shall not, without the prior written consent of Tenant, which consent may be withheld in Tenant’s sole discretion, do the following: 

(i) make any change to the Building except as otherwise provided in this Lease; 

(ii) close, restrict or otherwise alter the entrances to the Premises except to the extent that Landlord is required to do so to comply with the requirements of a governmental agency having jurisdiction over the Premises or access to the Premises (i.e., no alternative means of compliance is available to Landlord); or 

(iii) change the size, configuration and/or location of the parking areas and access drives of the Premises except to the extent that Landlord is required to do so to comply with the requirements of a governmental agency having jurisdiction over the Premises or access to the Premises. 

Capitalized terms not otherwise defined herein shall have the meanings given to such terms in the Lease. 

IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum of Lease as of the day, month and year first above written. 

 

			
	
LANDLORD:

	
 

	
CONTINENTAL 34 FUND LIMITED PARTNERSHIP, a Wisconsin limited partnership

	
 
	
 

	
By:
	
Continental 34 Holding Company, Inc.,

a Delaware corporation, its general partner

	
 
	
 
	
 

	
 
	
By:
	
 

	
 
	
 
	
Daniel J. Minahan

	
 
	
 
	
President

	
 

	
TENANT:

	
 

	
KOHL’S DEPARTMENT STORES, INC.,

a Delaware corporation

	
 
	
 

	
By:
	
 

	
 
	
R. Lawrence Montgomery

	
 
	
Chief Executive Officer

	
 
	
 

	
Attest:
	
 

	
 
	
Richard D. Schepp

	
 
	
Secretary

 

		
	
 
	
 

	
STATE OF WISCONSIN
	
)

	
 
	
)  SS

	
COUNTY OF WAUKESHA
	
)

Personally came before me this          day of January, 2003, the above-named Daniel J. Minahan to me known to be the President of Continental 34 Holding Company, Inc., a Delaware corporation, the general partner of Continental 34 Fund Limited Partnership, to me known to be the person who executed the foregoing instrument and acknowledged the same. 

 

	
 

	
Notary Public,

	
My Commission Expires:                         

59

 

 

 

 

		
	
 
	
 

	
STATE OF WISCONSIN
	
)

	
 
	
) SS

	
COUNTY OF WAUKESHA
	
)

Personally came before me this          day of January, 2003, the above-named R. Lawrence Montgomery and Richard D. Schepp, to me known to be the Chief Executive Officer and Secretary, respectively, of Kohl’s Department Stores, Inc., to me known to be the person who executed the foregoing instrument and acknowledged the same. 

 

	
 

	
Notary Public,

	
 

	
My Commission Expires:                     

 

			
	
 
	
 
	
 

	
This instrument was drafted by and should be returned to:

 

Alan J. Salle

Kohl’s Department Stores, Inc.

N56 W17000 Ridgewood Drive

Menomonee Falls, Wisconsin 53051
	
                     NOTE:
	
DOCUMENT IS TO BE PUT IN A RECORDABLE FORM PRIOR TO EXECUTION AND RECORDING

 

EXHIBIT H 

SIGN CRITERIA 

1. Any occupant of the Premises occupying less than ten thousand (10,000) square feet of Floor Area may have only one (1) identification sign placed on the exterior of the building it occupies; provided, however, that if any such occupant is located at the corner of a building, then such occupant may have an identification sign on each side of such corner. Any occupant occupying at least ten thousand (10,000) square feet of Floor Area may have more than one identification sign placed on the exterior of the building it occupies. 

2. No occupant identification sign attached to the exterior of a building shall be: 

a. placed on canopy roofs extending above the building roof, placed on penthouse walls, or placed so as to project above the parapet, canopy or top of the wall upon which it is mounted; 

b. placed at any angle to the building; provided, however, the foregoing shall not apply to any sign located under a sidewalk canopy if such sign is at least eight (8) feet above the sidewalk; 

c. painted on the surface of any building; 

d. flashing, moving or audible signs; 

e. signs employing exposed raceways, exposed neon tubes (except for interior window signs), exposed ballast boxes, or exposed transformers; or 

f. paper or cardboard signs, temporary signs (exclusive of contractor signs), stickers or decals; provided, however, the foregoing shall not prohibit the placement at the entrance of each occupant’s space a small sticker or decal, indicating hours of business, emergency telephone numbers, acceptance of credit cards, and other similar bits of information. 

No occupant of less than ten thousand (10,000) square feet of Floor Area shall have an exterior sign which identifies leased departments and/or concessionaires operating under the occupant’s business or trade name, nor shall such sign identify specific brands or products for sale or services offered within a business establishment, unless such identification is used as part of the occupant’s trade name. 

3. Notwithstanding anything contained herein to the contrary, Landlord and Tenant shall be permitted to place within the Common Area directional signs or informational signs such as “Handicapped Parking”, the temporary display of “grand opening”, “now hiring” or “coming soon” signs, the temporary display of leasing information and the temporary erection of one sign identifying each contractor working on a construction job. 

 

60

 

 

EXHIBIT H-1 

Building Signage 

(Copy Attached) 

61

 

 

 

62

 

 

EXHIBIT H-2 

Pylon Signage 

(Copy Attached) 

63

 

 

 

64

 

 

 

 

65

 

 

EXHIBIT I 

PROHIBITED USES 

	
 
	
(a)
	
Uses prohibited by the Home Depot REA. 

 

EXHIBIT J 

GUARANTY OF LEASE 

For value received and in consideration for, and as an inducement to Landlord to enter into that certain Sublease dated as of January         , 2003, entered into by and between Continental 34 Fund Limited Partnership, a Wisconsin limited partnership, as landlord, and Kohl’s Department Stores, Inc., as tenant (the “Lease”), the undersigned, Kohl’s Corporation, a Wisconsin corporation, hereby guarantees the payment and performance of all obligations of Kohl’s Department Stores, Inc. now or hereafter arising under the Lease. 

All obligations and liabilities to the undersigned pursuant to this Guaranty shall be binding upon the successors and assigns of the undersigned. This Guaranty may be relied upon and enforced by Landlord, its successors and assigns. 

Dated this          day of January, 2003. 

 

		
	
KOHL’S CORPORATION, a Wisconsin corporation

	
 
	
 

	
By:
	
 

	
 
	
R. Lawrence Montgomery

	
 
	
Chief Executive Officer

	
 
	
 

	
Attest:
	
 

	
 
	
Richard D. Schepp

	
 
	
Secretary

 

66

 

 

EXHIBIT K 

EXTERIOR ELEVATIONS 

(Copy Attached) 

FIRST AMENDMENT TO SUBLEASE 

THIS FIRST AMENDMENT TO SUBLEASE (this “First Amendment”) is made and entered into as of the 10th day of June, 2003, by and between NSHE BASSETT, LLC, an Arizona limited liability company having an office at 10850 West Park Place, 6th Floor, Milwaukee, Wisconsin 53224 (“Landlord”), and KOHL’S DEPARTMENT STORES, INC., a Delaware corporation having an office at N56 W17000 Ridgewood Drive, Menomonee Falls, Wisconsin 53051 (“Tenant”). 

W I T N E S S E T H : 

WHEREAS, Continental 34 Fund Limited Partnership, a Wisconsin limited partnership (“Continental 34 Fund”), and Tenant entered into that certain Sublease dated as of January 30, 2003 (the “Lease”), whereby Continental 34 Fund leased to Tenant certain Premises (as defined in the Lease) located in the City of Tucson, County of Pima, State of Arizona; 

WHEREAS, pursuant to that certain Assignment dated as of June 5, 2003, Continental 34 Fund assigned all of its rights and obligations under the Lease to Landlord; and 

WHEREAS, Landlord and Tenant desire to amend the Lease as more particularly set forth herein. 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows: 

1. Defined Terms. Each capitalized term not otherwise defined herein shall have the meaning given to such term in the Lease. 

2. Amendments. The Lease is hereby amended as follows: 

A. First Amendment to Reciprocal Ingress-Egress Easement Agreement. Section 1.3 of the Lease is hereby deleted in its entirety. 

B. Governmental Approvals Contingency. Tenant acknowledges and agrees that Tenant’s termination right in Section 4.2(d) of the Lease expired on May 30, 2003. 

C. Pad Preparation Work. Tenant acknowledges and agrees that Tenant’s termination right in Section 4.2(e) of the Lease has expired as Landlord completed the Pad Preparation Work within the timeframe required by the Lease. 

D. Plans and Specifications for Landlord’s Work. EXHIBIT C of the Lease is hereby deleted and replaced in its entirety with EXHIBIT C attached hereto and made a part hereof. 

E. Secondary Ground Lessor Non-Disturbance Agreement. EXHIBIT E-2 of the Lease is hereby deleted in its entirety. In addition, Section 13.2 of the Lease is hereby deleted and replaced in its entirety with the following: 

“SECTION 13.2. Landlord has caused Primary Ground Lessor to execute and deliver to Tenant a Ground Lessor Non-Disturbance Agreement substantially in the form as that attached hereto as EXHIBIT E-1.” 

3. Counterparts. This First Amendment may be executed in multiple counterparts, each of which shall constitute an original, and all of which, when taken together, shall constitute one and the same agreement. 

4. Governing Provision. In the event of a conflict between the provisions of this First Amendment and the Lease, the provisions of this First Amendment shall govern, control and prevail. 

5. Survival of Remaining Terms. Except as expressly modified in this First Amendment, the terms and provisions of the Lease are hereby ratified and affirmed and shall continue in full force and effect. 

[remainder of page intentionally left blank] 

 

67

 

 

IN WITNESS WHEREOF, Landlord and Tenant have caused this First Amendment to be executed as of the date first set forth above. 

 

				
	
LANDLORD:

	
 

	
NSHE BASSETT, LLC, an Arizona limited liability company

	
 
	
 

	
By:
	
Continental 34 Fund Limited Partnership, a Wisconsin limited partnership, its sole member

	
 
	
 
	
 

	
 
	
By:
	
Continental 34 Holding Company, Inc., a Delaware corporation, its general partner

	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
/s/ Daniel J. Minahan

	
 
	
 
	
 
	
Daniel J. Minahan

President

	
 

	
TENANT:

	
 

	
KOHL’S DEPARTMENT STORES, INC., 

a Delaware corporation

	
 
	
 

	
By:
	
/s/ R. Lawrence Montgomery

	
 
	
R. Lawrence Montgomery

	
 
	
Chairman and Chief Executive Officer

	
 
	

	
 
	
 

	
Attest:
	
/s/ Richard D. Schepp

	
 
	
Richard D. Schepp

	
 
	
Secretary

	
 
	

 

68

 

 

EXHIBIT C 

PLANS AND SPECIFICATIONS FOR LANDLORD’S WORK 

[see attached] 

 

	
DRAWING ISSUE RECORD

 

Entranco Project Name: Kohl’s Development

Entranco Project Number: 2-40-02182
	
Updated: 06/04/2003

 

	
Sheet No.
	
 
	
Sheet Title
	
 
	
Date Revised
(Lower Right Margin)
	
 
	
Date
Sealed
	
 
	
Date
Issued
	
 
	
Revision

	
 
	
CIVIL CD’S
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
	
C1
	
 
	
Cover Sheet
	
 
	
12/24/2002
	
 
	
01/08/2003
	
 
	
01/10/2003
	
 
	
 

	
C2
	
 
	
Notes & Legend
	
 
	
12/24/2002
	
 
	
01/08/2003
	
 
	
01/10/2003
	
 
	
 

	
C3
	
 
	
(Reserved)
	
 
	
—
	
 
	
—
	
 
	
—
	
 
	
 

	
C4
	
 
	
(Reserved)
	
 
	
—
	
 
	
—
	
 
	
—
	
 
	
 

	
C5
	
 
	
Site Plan
	
 
	
02/19/2003
	
 
	
02/25/2003
	
 
	
02/25/2003
	
 
	
1

	
C6
	
 
	
Utility Plan
	
 
	
01/08/2003
	
 
	
01/08/2003
	
 
	
01/10/2003
	
 
	
 

	
C7 (E-1)
	
 
	
Electrical Site Plan
	
 
	
—
	
 
	
05/20/2003
	
 
	
05/21/2003
	
 
	
1

	
C8 (E-2)
	
 
	
Panel Schedule, Fixture Schedule, Notes & Pole Base
	
 
	
—
	
 
	
12/16/2002
	
 
	
01/10/2003
	
 
	
 

	
C9
	
 
	
Water Distribution Plan
	
 
	
02/07/2003
	
 
	
02/07/2003
	
 
	
02/25/2003
	
 
	
1

	
C10
	
 
	
(Reserved)
	
 
	
—
	
 
	
—
	
 
	
—
	
 
	
 

	
C11
	
 
	
(Reserved)
	
 
	
—
	
 
	
—
	
 
	
—
	
 
	
 

	
C12
	
 
	
Grading Plan - Cover Sheet
	
 
	
12/23/2002
	
 
	
12/23/2002
	
 
	
01/10/2003
	
 
	
 

	
C13
	
 
	
Grading Plan
	
 
	
02/19/2003
	
 
	
02/25/2003
	
 
	
02/25/2003
	
 
	
1

	
C14
	
 
	
Grading Details
	
 
	
12/23/2002
	
 
	
12/23/2002
	
 
	
01/10/2003
	
 
	
 

	
C15
	
 
	
(Reserved)
	
 
	
—
	
 
	
—
	
 
	
—
	
 
	
 

	
C16
	
 
	
Horizontal Control Plan
	
 
	
02/19/2003
	
 
	
02/25/2003
	
 
	
02/25/2003
	
 
	
1

	
C17
	
 
	
Storm Water Pollution Prevention Plan
	
 
	
12/23/2002
	
 
	
12/23/2002
	
 
	
01/10/2003
	
 
	
 

	
C18
	
 
	
(Reserved)
	
 
	
—
	
 
	
—
	
 
	
—
	
 
	
 

	
C19
	
 
	
Details
	
 
	
12/23/2002
	
 
	
12/23/2002
	
 
	
01/10/2003
	
 
	
 

	
C20
	
 
	
Details
	
 
	
12/23/2002
	
 
	
12/23/2002
	
 
	
01/10/2003
	
 
	
 

	
C21
	
 
	
Details
	
 
	
12/23/2002
	
 
	
12/23/2002
	
 
	
01/10/2003
	
 
	
 

	
 
	
LANDSCAPE
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
	
L1
	
 
	
General Information
	
 
	
10/14/2002
	
 
	
11/02/2002
	
 
	
01/15/2003
	
 
	
 

	
L2
	
 
	
Landscape Plan
	
 
	
10/14/2002
	
 
	
11/02/2002
	
 
	
01/15/2003
	
 
	
 

	
L3
	
 
	
Irrigation Plan
	
 
	
10/14/2002
	
 
	
11/02/2002
	
 
	
01/15/2003
	
 
	
 

	
L4
	
 
	
Landscape Schedule & Details
	
 
	
10/14/2002
	
 
	
11/02/2002
	
 
	
01/15/2003
	
 
	
 

	
L5
	
 
	
Irrigation Schedule & Details
	
 
	
10/14/2002
	
 
	
11/02/2002
	
 
	
01/15/2003
	
 
	
 

	
 
	
OTHER
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
 
	
	
E-3
	
 
	
Site Photometrics Plan
	
 
	
05/08/2003

(Lower Left Margin)
	
 
	
—
	
 
	
05/12/2003
	
 
	
 

 

SE Tucson, AZ #688 

Second Amendment to Sublease 

69

 

SECOND AMENDMENT TO SUBLEASE 

THIS SECOND AMENDMENT TO SUBLEASE (this “Second Amendment”) is made as of the 6 day of February, 2020 (the “Effective Date”) by and between NSHE BASSETT, LLC, an Arizona limited liability company (“Landlord”) and KOHL’S DEPARTMENT STORES, INC., a Delaware corporation (“Tenant”). 

Preliminary Statements 

A. Landlord is the owner of a ground leasehold interest in the Premises (as hereinafter defined) located in the City of Tucson, Pima County, Arizona. 

B. Landlord, as successor-in-interest by assignment to the original named sublandlord, Continental 34 Fund Limited Partnership (“Original Landlord”), and Tenant, as the original named subtenant and successor-in-interest by assignment to Kohl’s Pennsylvania, Inc., a Pennsylvania corporation (“KP”), are parties to that certain Sublease dated as of January 30, 2003 (the “Original Lease”), as amended by: (i) those certain Letter Agreements between Landlord and Tenant dated January 30, 2003, and between Landlord and KP dated December 9, 2003 (collectively, the “Letter Agreements”); and (ii) that certain First Amendment to Sublease dated as of June 10, 2003 (the “First Amendment” which, together with the Original Lease, Original MOL and the Letter Agreements is sometimes collectively referred to herein as the “Existing Lease”) for certain premises located at 199 N. Pantano Road, Tucson, AZ as more particularly described and depicted in the Existing Lease (the “Premises”). Capitalized terms used in this Second Amendment that are defined in the Existing Lease shall have the same meanings herein as are ascribed to such terms in the Existing Lease unless otherwise defined herein or the context dictates otherwise. For purposes of the Existing Lease and this Second Amendment, references to “the Lease” or “this Lease” or words of similar import shall mean and refer to the Existing Lease, as amended by this Second Amendment, unless the context clearly dictates otherwise. 

C. The initial Term of the Existing Lease is fixed to expire on January 31, 2024. Landlord and Tenant now desire to amend the Existing Lease to, among other things, (i) extend the initial Term, (ii) adjust the number of extension options available to Tenant, and (iii) adjust the amount of annual fixed rent payable from and after the Effective Date all as more particularly described below. 

NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated into this Second Amendment by this reference as if fully set forth hereinbelow, the mutual covenants and agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Landlord and Tenant hereby agree to amend the Existing Lease as follows: 

1. Extension of Term. As of the Effective Date, Landlord and Tenant hereby agree to extend the initial Term of the Lease (from the current expiration date of January 31, 2024) through and including January 31, 2030, upon and subject to all of the terms and conditions contained in the Lease. 

2. Extension Options. Notwithstanding anything to the contrary in the Lease, Landlord and Tenant hereby acknowledge and agree that following the expiration of the Term of the Lease as extended in Section 1 above, Tenant has seven (7) remaining options to extend the term pursuant to Section 2.1 of the Original Lease (collectively, the “Extension Options,” and each an “Extension Option”) for additional periods of five (5) years each (each, an “Extension Term”) upon and subject to all of the terms of the Lease. During any applicable Extension Term, all references in the Lease to the “Term” shall mean and refer to the Term, as extended by any applicable Extension Term herein. Each Extension Term may be exercised in accordance with and subject to the terms of Section 2.1 of the Original Lease, except that annual fixed rent payable during each 5-year Extension Term shall be as set forth in the annual fixed rent table set forth below in Section 3 hereof. 

3. Annual Fixed Rent. As of the Effective Date, Landlord and Tenant hereby agree that (i) Section 5.1(a) of the Original Lease is hereby deleted in its entirety, and (ii) the sole amount of fixed annual rent payable by Tenant to Landlord 

70

 

under the Lease during the remainder of the initial Term (or any subsequent Extension Term) shall be as set forth in the annual fixed rent table below: 

 

	
 
	
 
	
 
	
 
	
 

	
Period 
	
 
	
Annual Fixed Rent  
	
 
	
Monthly Installment  

	
Effective Date - 1/31/2024
	
 
	
$823,962.56
	
 
	
$68,663.55

	
2/1/2024 - 1/31/2030
(end of initial Term)
	
 
	
$864,630.24
	
 
	
$72,052.52

	
First Extension Term*
2/1/2030 - 1/31/2035
	
 
	
$872,586.96
	
 
	
$72,715.58

	
Second Extension Term*
2/1/2035 - 1/31/2040
	
 
	
$916,790.96
	
 
	
$76,399.25

	
Third Extension Term*
2/1/2040 - 1/31/2045
	
 
	
$960,994.96
	
 
	
$80,082.91

	
Fourth Extension Term*
2/1/2045 - 1/31/2050
	
 
	
$1,036,816.00
	
 
	
$86,401.33

	
Fifth Extension Term*
2/1/2050 - 1/31/2055
	
 
	
$1,049,402.96
	
 
	
$87,450.25

	
Sixth Extension Term*
2/1/2055 - 1/31/2060
	
 
	
$1,093,606.96
	
 
	
$91,133.91

	
Seventh Extension Term*
2/1/2060 - 1/31/2065
	
 
	
$1,137,810.96
	
 
	
$94,817.58

	
*
	
Each Extension Term shall only be applicable to the extent that Tenant exercises each applicable Extension Option, subject to the terms of Section 2.1 of the Original Lease, as amended in Section 2 of this Second Amendment. 

Landlord acknowledges that if Tenant has paid monthly fixed rent at the prior rate set forth in Section 5.1 of the Original Lease (i.e., $866,398 annually and $72,199.83 monthly) (the “Prior Rate”) for any period from and after the Effective Date, then Tenant shall be entitled to offset such overpayment (in fixed rent paid at the Prior Rate for any period from and after Effective Date) against fixed rent next coming due hereunder by an amount equal to $117.88 per day toward the end that Tenant shall only pay fixed rent from the Effective Date in the amount set forth in the table above. 

4. Tenant Lease Rights. 

(a) Upon Tenant’s written request, at no additional cost to Landlord, Landlord shall cooperate with Tenant’s pursuit of signage for any subtenant within the Premises (each a “Subtenant”) in the areas limited to (i) all the exterior walls of the Building, and/or (ii) use of any available panel position on the Shopping Center signs, or pursuit of independent and new monument or pylon signs, and/or (iii) splitting the existing signage available to Tenant. Without limiting or modifying Tenant’s rights under the Existing Lease, if necessary, Landlord shall, at no additional cost to Landlord, exercise commercially reasonable efforts to amend (or obtain any required consent or waiver under) any reciprocal easement agreement, declaration or other agreement in effect in the Shopping Center as of the Effective Date that is superior to the Lease and to which Tenant and the Premises are subject to or bound by, if any (the “Existing Restrictions”), to permit any sign modification or construction proposed by Tenant pursuant to this Section 4(a), as described hereinabove, and/or to cooperate with Tenant in securing any additional permits or authority necessary from time to time for any such work. 

(b) Upon Tenant’s written request, Landlord shall execute and deliver to a Subtenant under an Approved Sublease (as hereinafter defined) an agreement in form and substance reasonably satisfactory to Landlord and such Subtenant to the effect that, upon any termination of the Lease by Landlord, such Approved Sublease and the rights of the Subtenant thereunder shall not be disturbed by Landlord but shall continue in full force and effect and Landlord shall assume the obligations of the landlord under the Approved Sublease (a “Non-Disturbance Agreement”). As used herein, an “Approved Sublease” is a sublease where: (i) the Subtenant (A) pays more in fixed rent on a per square foot basis than Tenant pays under the Lease, (B) has a market capitalization that exceeds Two Hundred Million Dollars ($200,000,000.00), and (C) operates a business that has thirty (30) or more stores operating under the same or similar trade name; and (ii) the Approved Sublease is on terms and conditions which are no more onerous to the sublandlord thereunder than those pertaining to Landlord under the Lease or if the terms and conditions of the Approved Sublease are more onerous, then the Subtenant shall be required to reimburse Landlord for any additional costs related to Landlord’s performance of any added obligation, and (iii) the Approved Sublease is for no less than 20,000 square feet of the Kohl’s Building. 

5. Prohibited Uses Applicable to the Premises. Anything in the Existing Lease to the contrary notwithstanding, including anything to the contrary in Section 19.1 thereof or on Exhibit I of the Existing Lease which is applicable to Tenant 

71

 

or the Premises, Landlord agrees that, as between Landlord and Tenant, any use restriction in the Lease that would restrict or prevent Tenant or any assignee or Subtenant from operating any Additional Permitted Uses (as hereinafter defined) will no longer be applicable to Tenant or the Premises. Landlord further agrees to cooperate with Tenant and use commercially reasonable efforts to obtain a waiver of any of the use restrictions under any lease or Existing Restrictions that would prevent Tenant, or any assignee or Subtenant, from operating any of the Additional Permitted Uses in the Premises. As used herein, the term “Additional Permitted Uses” shall mean any of the following uses within the Premises: a health club, health spa, fitness center, gymnasium, workout facility or martial arts training studio. 

6. Roof Replacement. In further consideration of Tenant’s agreements in this Second Amendment, Landlord has agreed to the following provisions with respect to the replacement of the roof of the Building without otherwise limiting or modifying Landlord’s obligations under the Lease with respect to the roof: 

(i) Within sixty (60) days after the Effective Date, Landlord shall obtain (at its sole expense) and deliver to Tenant a roof replacement proposal from a reputable and qualified roofing contractor reasonably acceptable to Tenant. A qualified roofing contractor is one that has at least ten (10) years of experience installing, repairing and replacing roofs of commercial buildings comparable to the Building. Landlord acknowledges that specifications for the Roof Work (as hereinafter defined) in the roof replacement proposal shall provide for a new roof which shall be a mechanically fastened (white) TPO single-ply roof system with exterior metal flashing, subject to Landlord’s reasonable discretion (taking into account the type and location of Tenant’s Building), and Tenant’s prior written approval, not to be unreasonably withheld. The roof replacement proposal approved pursuant to this Section 6 is referred to herein as the “Approved Roof Proposal”. 

(ii) Landlord agrees to perform and complete the replacement of the roof as provided in the Approved Roof Proposal toward the end that the roof of the Building shall be placed in a water-tight condition free of all leaks (collectively, the “Roof Work”): (A) as promptly as reasonably practicable, but in no event shall the Roof Work be completed later than twelve (12) months after the Effective Date; (B) at Landlord’s sole cost and expense without reimbursement of any kind from Tenant; (C) in a good and workmanlike manner using new and high quality materials; and (D) in accordance with (1) all applicable permits, approvals and laws, (2) sound construction and engineering practices, (3) the Approved Roof Proposal, and (4) the terms of the Lease. 

(iii) In addition, Landlord agrees that it shall exercise its best efforts (and cause its employees, agents and contractors performing any Roof Work to exercise their respective best efforts) not to disrupt or interfere with (A) Tenant’s business operations, (B) any systems, utilities or equipment serving the Premises, or (C) Tenant’s customers’, vendors’ or suppliers’ access, parking, loading, unloading or deliveries to or from the Premises; provided, however, the exercise of best efforts as provided in this clause (iii) shall in no event limit, modify, waive, release, terminate or adversely affect Landlord’s liability to Tenant for any such disruption or interference caused by Landlord or its employees, agents or contractors. 

(iv) Landlord acknowledges that any claims, damages, liabilities or expenses paid, suffered or incurred by Tenant resulting from the performance of the Roof Work by or on behalf of Landlord shall be covered by Landlord’s indemnification obligations to Tenant under the Existing Lease. 

7. Right of First Refusal. Article XXVI of the Lease is hereby amended to add the following new Section 26.21: 

“SECTION 26.21. Subject to the terms and conditions set forth in this Section 26.21, Landlord hereby grants to Tenant a right of first refusal to purchase the Landlord’s interest in the Premises (the “Refusal Right”). The Refusal Right shall be in full force and effect during the entire Term of this Lease. Upon the expiration of the Term of this Lease or upon the earlier termination of this Lease, the Refusal Right shall expire. The terms of such Refusal Right are as follows: 

(a) If Landlord enters into good faith negotiations with a proposed purchaser during the Term of this Lease, then Landlord shall notify Tenant in writing (“Landlord’s Refusal Right Notice”) of the purchase price and other basic terms and conditions which have been negotiated and upon which Landlord is prepared to sell the Landlord’s interest in the Premises to such prospective purchaser (the “Offered Sale Terms”). 

(b) Tenant’s right to purchase the Landlord’s interest in the Premises shall be exercisable by written notice (the “Exercise Notice”) from Tenant to Landlord of Tenant’s election to exercise the Refusal Right given not later than ten (10) business days after Tenant receives Landlord’s Refusal Right Notice. If Tenant fails to deliver the Exercise Notice within said 10-business day period, the Refusal Right shall terminate and be of no further force or effect and Landlord may thereafter sell Landlord’s interest in the Premises upon terms which are no less favorable to Landlord than the Offered Sale Terms without notice to Tenant and free of any right in Tenant to purchase the Landlord’s interest in the Premises. Landlord may not sell Landlord’s interest in 

72

 

the Premises upon terms which are less favorable to Landlord than the Offered Sale Terms without providing Tenant the first right of refusal to purchase the Premises in accordance with this Section 26.21. 

(c) If Tenant does not exercise the Refusal Right and Landlord fails to close the sale of the Landlord’s interest in the Premises to a third party in accordance with the Offered Sale Terms within twelve (12) months after Tenant receives Landlord’s Refusal Right Notice, then notwithstanding anything to the contrary contained in this Lease, Landlord may not sell Landlord’s interest in the Premises without providing Tenant the first right of refusal to purchase the Landlord’s interest in the Premises in accordance with this Section 26.21. 

(d) If Tenant exercises the Refusal Right, Landlord and Tenant shall enter into a written agreement for the purchase and sale of the Landlord’s interest in the Premises (the “Contract”) for a purchase price equal to the purchase price set forth in the Offered Sale Terms. Unless otherwise set forth in the Offered Sale Terms or unless otherwise agreed by Landlord and Tenant, the Contract shall provide for the following: 

(i) An escrow closing at the office of the title insurance company issuing the title insurance policy specified below on a date no later than sixty (60) days after the effective date of the Exercise Notice; 

(ii) The delivery by Tenant to Landlord of the purchase price by wire transfer of immediately available funds in accordance with the escrow instructions customarily used by the title insurance company issuing the title insurance policy specified below; 

(iii) The delivery by Landlord to Tenant of good title to the Premises by a limited warranty deed as to any fee interest in the Premises or an Assignment as to any leasehold interest, subject only to those exceptions and encumbrances which are customary (excluding delinquent real estate taxes or any mortgage or other lien voluntarily created by Landlord, which shall be paid at closing by Landlord) or which do not interfere with the use of the Premises for all uses permitted under this Lease and do not adversely affect the fair market value of the Premises; 

(iv) The delivery by Landlord to Tenant of an ALTA owner’s or leasehold title insurance policy issued by the title insurer issuing the policy described in Section 15.6 hereof or by another title insurer acceptable to both Landlord and Tenant, subject only to those exceptions stated above; 

(v) The execution and delivery by Landlord and Tenant of a reciprocal easement agreement for the Shopping Center to place of record the easements and restrictive covenants set forth in this Lease, unless such rights are already of record; 

(vi) The delivery by the appropriate party of all documentation necessary or customarily provided to complete the sale or assignment; and 

(vii) The payment of all prorations, transfer taxes, title insurance charges, escrow fees, recording fees and other expenses, fees and charges by the party from whom such payment is due in accordance with statutory requirements or in accordance with the custom at the time of the closing for sales of properties similar to the Premises in the metropolitan area in which the Premises are located. 

(e) The Refusal Right shall apply only to transactions in which the Landlord’s interest in the Premises are being sold separately from the balance of the Shopping Center. If the Premises are being sold with other property in the Shopping Center as part of a portfolio sale, the Refusal Right shall not be applicable with respect to such sale, but the Landlord’s interest in the Premises shall be sold subject to the rights granted to Tenant in this Section 26.21.” 

8. Brokerage. Landlord and Tenant each hereby represent and warrant to the other that it has not dealt with any broker in connection with this Second Amendment, other than CL-SJCO, LLC (“Broker”). Tenant shall pay, at no cost or expense to Landlord, any commission or compensation of any kind due to Broker in connection with the negotiation and execution of this Second Amendment pursuant to a separate agreement between Tenant and Broker. Landlord and Tenant each represent and warrant to one another that, except for Broker, neither of them has employed or dealt with any broker, agent or finder in connection with the Second Amendment and the transactions contemplated hereunder. Landlord shall indemnify and hold Tenant harmless, and Tenant shall indemnify and hold Landlord harmless, from and against any claim or claims for brokerage or other commissions arising from or out of any breach of the foregoing representation and warranty by the respective indemnifying party. 

73

 

9. Notices. Section 26.9 of the Original Lease is hereby amended to provide the current notice addresses for Landlord and Tenant as follows: 

 

		
	
 
	
 

	
If to Landlord:
	
NSHE Bassett, LLC

c/o Continental Properties Company, Inc.

W134 N8675 Executive Parkway

Menomonee Falls, WI 53051

Attention: Property Development

	
 
	
 

	
with a copy to:
	
Continental Properties Company, Inc.

W134 N8675 Executive Parkway

Menomonee Falls, WI 53051

Attention: Legal

	
 
	
 

	
If to Tenant:
	
Kohl’s Department Stores, Inc.

(Re: SE Tucson, AZ / Store #688)

W165 N5830 Ridgewood Drive

Menomonee Falls, WI 53051

Attention: Property Development

	
with a copy to:
	
Kohl’s Department Stores, Inc.

(Re: SE Tucson, AZ / Store #688)

W56 W17000 Ridgewood Drive (South Dock)

Menomonee Falls, WI 53051

Attention: Real Estate Law Department

10. Miscellaneous. 

(a) Consents. Landlord represents and warrants to Tenant that Landlord has obtained all consents which are required for the execution of this Second Amendment. Landlord to provide evidence satisfactory to Tenant of any existing lender’s consent which: (A) if Tenant has an existing SNDA with such lender will provide that the “Lease” as defined in the SNDA will mean and refer to the Existing Lease, as amended herein; or (B) if there is no currently existing SNDA in effect, then lender’s consent will agree to recognize the Existing Lease, as amended herein, regardless of any exercise of remedies by lender under any existing mortgage/loan documents, subject to the terms of the Lease. 

(b) Due Execution. Landlord and Tenant each represents and warrants to the other that it is authorized to enter into this Second Amendment and that the parties executing this Second Amendment have the power and authority to bind Landlord or Tenant, as the case may be. 

(c) Successors and Assigns. The terms and conditions of this Second Amendment shall be binding upon and shall inure to the benefit of Landlord and Tenant and their respective successors and assigns. 

(d) Entire Agreement. This Second Amendment (including any and all exhibits, addenda and/or riders attached to this Second Amendment, each of which is hereby made a part of this Second Amendment with full force and effect as is set forth herein) contains the entire agreement of the parties in regard to this Second Amendment and, together with the Existing Lease, the Lease. 

(e) Amendment. Except as amended by this Second Amendment, all of the terms, covenants, conditions, agreements and provisions set forth in the Existing Lease shall be and they hereby are reaffirmed, ratified, confirmed and approved in their entirety and shall remain in full force and effect. 

(f) Conflict. In the event of any conflict or inconsistency between the terms and conditions of this Second Amendment and the terms and conditions of the Existing Lease, the terms and conditions of this Second Amendment shall in all instances govern and control. 

(g) Counterparts. This Second Amendment may be executed in several counterparts, each of which will be deemed an original but all of which will constitute one and the same document. Signatures transmitted by facsimile or other electronic means, including, without limitation, e-mail, .pdf or .tif formats, shall be treated as original signatures. 

[remainder of page left intentionally blank; signature page to follow] 

 

74

 

 

IN WITNESS WHEREOF, Landlord and Tenant have executed this Second Amendment to Sublease as of the date first written above. 

 

		
	
 
	
 

	
LANDLORD:

	
 

	
NSHE BASSETT, LLC,

	
an Arizona limited liability company

	
 

	
By: Continental 34 Fund Limited Partnership, a Wisconsin limited partnership, its Sole Member and Manager

	
 

	
By: Continental 34 Holding Company, Inc., a Wisconsin corporation, its General Partner

	
 
	
 

	
By:
	
/s/ Daniel J. Minahan 

	
Name: Daniel J. Minahan

	
Title: President

COUNTY OF WAUKESHA) 

                                                     ) ss. 

STATE OF WISCONSIN) 

I, the undersigned, a notary public in and for the jurisdiction aforesaid, do hereby certify that Daniel J. Minahan, the President of Continental 34 Holding Company, Inc., General Partner of Continental 34 Fund Limited Partnership, sole Manager and Member of NSHE Bassett, LLC, an Arizona limited liability company, whose name is signed to the foregoing Second Amendment to Sublease, has acknowledged the same before me on this 6 day of February, 2020. 

 

	
 

	
/s/ ERIN A. RIVERS 

	
Notary Public

 

	
 
	
 

	
My commission expires: 7/14/2023
	
 

[Tenant signature page to follow on the next page] 

 

75

 

 

 

			
	
 
	
 
	
 

	
 
	
TENANT:

	
 
	
 

	

	
KOHL’S DEPARTMENT STORES, INC.,

	
a Delaware corporation

 

	
By:
	
/s/ Michelle Gass 

	
Name: Michelle Gass

	
        
	
Title: Chief Executive Officer

	
 
	
 

	
 
	
ATTEST:

	
 
	
 
	
 

	
 
	
By:
	
/s/ Jason J. Kelroy 

	
 
	
Name: Jason J. Kelroy

	
 
	
Title: General Counsel and Secretary

 

			
	
 
	
 
	
 

	
COUNTY OF WAUKESHA
	
)
	
 

	
 
	
) ss.
	
 

	
STATE OF WISCONSIN
	
)
	
 

I, the undersigned, a notary public in and for the jurisdiction aforesaid, do hereby certify that Michelle Gass, Chief Executive Officer of Kohl’s Department Stores, Inc., a Delaware corporation, whose name is signed to the foregoing Second Amendment to Lease, has acknowledged the same before me on this 3 day of February, 2020. 

 

	
 

	
/s/ Crystal L. Rose 

	
Notary Public

 

			
	
 
	
 
	
 

	
My commission expires: 4/8/2020

 
	
 

	
 
	
 
	
 

	
COUNTY OF WAUKESHA
	
)
	
 

	
 
	
) ss.
	
 

	
STATE OF WISCONSIN
	
)
	
 

I, the undersigned, a notary public in and for the jurisdiction aforesaid, do hereby certify that Jason J. Kelroy, General Counsel and Secretary of Kohl’s Department Stores, Inc., a Delaware corporation, whose name is signed to the foregoing Second Amendment to Lease, has acknowledged the same before me on this 3 day of February, 2020. 

 

	
 

	
/s/ Crystal L. Rose 

	
Notary Public

 

	
 
	
 

76

 

	
My commission expires: 4/8/2020
	
 

 

77gipr-ex104_62.htm

Exhibit_10.4

 

LAND LEASE 

This Land Lease (this “Lease”) is made and entered into as of the 30th day of January, 2003, by and between October 23rd Group L.L.C., an Arizona limited liability company (hereinafter referred to as “Landlord”), and NSHE Bassett, LLC, an Arizona limited liability company (hereinafter referred to as “Tenant”). 

1.Demise, Term. Landlord, for and in consideration of the rent, covenants and agreements herein contained to be paid, kept and performed by Tenant, does hereby lease to Tenant upon and subject to all of the terms and conditions herein contained the land (the “Premises”) legally described on Exhibit A, which is attached hereto and made a part hereof for all purposes. The Premises consists of Lots 4 and 6 and a portion of Lot 5 of Broadway Pantano Center, a subdivision of Pima County, Arizona, according to the Plat of record in Book 56 of Maps and Plats at Page 84, records of Pima County, Arizona (“Broadway Pantano Center”). Landlord is leasing the Premises in its present condition, except as specifically set forth herein. 

The term of this Lease (the “Term”) shall begin at 11:59 p.m. on the first (1st) business day following mutual execution and delivery of this Lease (the “Commencement Date”) and expire at 11:59 p.m. on January 31, 2029, unless earlier terminated in accordance with the terms hereof. 

Landlord hereby grants to Tenant the option (individually, an “Option”) to extend the Term for up to eleven (11) consecutive periods of five (5) years each (individually, an “Option Term”) on the same terms and conditions as set forth in this Lease. Each Option shall be exercised, if at all, by giving written notice to Landlord at least six (6) months prior to the expiration of the Term then in effect. Upon each such exercise, this Lease shall be extended without the execution of any further lease or other instrument. The failure to exercise a preceding Option shall terminate all succeeding Options. 

2. Rent. Rent (“Rent”) shall be paid as set forth below. Rent shall be due and payable commencing March 1, 2003, and shall be paid in equal monthly installments during the Term and shall be due on the first day of each calendar month during the Term. Tenant shall pay Rent to Landlord as follows: 

 

	
 
	
 
	
 
	
 

	
 
	
 
	
Years

 
	
Per Annum

 

	
Initial Term:
	
 
	
03/01/03 – 01/31/09
	
$206,845.00

	
 
	
 
	
02/01/09 – 01/31/14
	
$217,187.25

	
 
	
 
	
02/01/14 – 01/31/19
	
$227,529.50

	
 
	
 
	
02/01/19 – 01/31/24
	
$232,700.63

	
 
	
 
	
02/01/24 – 01/31/29
	
$245,111.33

	
Option Terms:
	
1
	
02/01/29 – 01/31/34
	
$258,995.80

	
 
	
2
	
02/01/34 – 01/31/39
	
$279,715.46

	
 
	
3
	
02/01/39 – 01/31/44
	
$302,092.70

	
 
	
4
	
02/01/44 – 01/31/49
	
$326,260.12

	
 
	
5
	
02/01/49 – 01/31/54
	
$352,230.93

	
 
	
6
	
02/01/54 – 01/31/59
	
$380,549.80

	
 
	
7
	
02/01/59 – 01/31/64
	
$410,993.78

	
 
	
8
	
02/01/64 – 01/31/69
	
$443,873.29

	
 
	
9
	
02/01/69 – 01/31/74
	
$479,383.15

	
 
	
10
	
02/01/74 – 01/31/79
	
$517,773.80

	
 
	
11
	
02/01/79 – 01/31/84
	
$559,152.51

 

Tenant shall be responsible for paying all applicable rental or sales privilege tax on Rent, which shall be due with each installment. 

In the event that any amount due Landlord under this Lease is not received by Landlord within ten (10) days after its due date for any reason whatsoever, then in addition to the past due amount, Tenant shall pay to Landlord a late charge in an amount equal to three percent (3%) of the amount then due in order to compensate Landlord for its administrative expenses relating to the collection of past due amounts, plus interest on the past due amount from and after the due date at the rate of fifteen percent (15%) per annum. Any such late charge or interest payment shall be payable immediately upon demand. 

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3. Use; Construction. 

(a) Use of the Premises. Tenant may use the Premises for any lawful use or purpose, provided, however, that Tenant shall comply with the terms and conditions of the REUA and the Declaration (both as hereinafter defined). 

(b) Construction. 

(i) Tenant shall, at its sole cost and expense, construct or cause to be constructed the improvements described below (collectively, the “Improvements”) upon the Premises. It is Tenant’s intention that the Improvements, once completed, shall substantially consist of a 88,408 square foot one-story building (the “Building”) with parking as required by the REUA and all applicable ordinances. The Improvements may include at some point during the term of this Lease an additional approximately 20,000 square feet which may be constructed by Tenant at Tenant’s sole cost and expense. Tenant’s costs shall include, without limitation, the costs of relocating any utilities, lighting improvements and roads and the design and engineering costs and surveying costs associated with same necessary for the development of the Premises. In the event that the City of Tucson requires the installation of a traffic signal and median (the “Traffic Light Improvements”) on Pantano Road at the entrance to Broadway Pantano Center, then Tenant shall be responsible for paying its pro-rata share of all of the costs associated with the Traffic Light Improvements based on the final square footage of the Premises compared to the total square footage of Lots 4, 5 and 6 of Broadway Pantano Center. Once all prerequisite approvals have been obtained, Tenant shall promptly submit any and all applications (the “Applications”) necessary for the approval of Tenant’s development plan for the Premises and for the issuance of building permits for the construction of the Building and the Improvements. Landlord shall cooperate with Tenant, at no cost to Landlord, in obtaining any required zoning, planning, use or other governmental or regulatory approvals, variances, licenses or permits as Tenant may require for the use of the Premises. 

The design and construction of the Improvements shall be in accordance with applicable laws and ordinances of all governmental authorities having jurisdiction over the Premises, the zoning conditions affecting the Premises and the REUA as the same may be modified from time to time. Prior to Tenant’s submittal of the Applications to the City for review and approval, Tenant shall submit the Applications to Landlord for Landlord’s confirmation of such conformance. If Landlord believes that the design and construction of the Improvements are not so in conformance, Landlord shall give written notice to Tenant within five (5) days following receipt of the Applications. Landlord’s failure to either approve or reasonably disapprove the Applications within such five (5)-day period shall constitute Landlord’s approval thereof. If Landlord reasonably disapproves the Applications, then Landlord shall notify Tenant in writing of any reasonably required changes, and Tenant shall either (i) promptly incorporate any such changes into the Applications and redeliver it, as revised, to Landlord for approval or reasonable disapproval, or (ii) notify Landlord that it elects not to make the requested changes, at which time Tenant and Landlord agree to meet and confer in good faith to resolve differences relating to the Applications. 

(ii) Tenant shall not cause or maintain or permit any nuisance or commit or suffer the commission of any waste within, on or about the Premises. 

(c) Alterations and Repairs. All interior, structural and non-structural repairs, alterations and additions to the Premises shall fully comply with all applicable building and use codes. Tenant shall promptly pay when due the entire cost of all work done to the Premises and shall keep the Premises free of liens for labor or materials. Should mechanics’, materialmen’s or other liens be filed against the Premises by reason of the acts Tenant, Tenant shall cause the lien to be canceled and discharged of record by bond or otherwise within thirty (30) days of receiving actual notice of such lien. 

4. Title; Quiet Enjoyment. Landlord represents and warrants that Landlord is seized in fee simple, and has good and marketable title to, the Premises, and that the Premises is free of all easements, covenants, restrictions, liens, tenancies, mortgages and encumbrances except as set forth in the leasehold title policy to be obtained by Tenant including, without limitation, matters arising from the subdivision of the Premises as a part of Broadway Pantano Center, that certain Reciprocal Ingress-Egress Easement Agreement dated as of April 19, 2002, by and between October 23rd Group, L.L.C., and Home Depot U.S.A., Inc. (“Home Depot”), and recorded on July 9, 2002, in the office of the Pima County, Arizona, Recorder at Docket 11837, Page 1966 (the “REUA”), and that certain Declaration of Covenants, Conditions, Restrictions and Easements Concerning Reciprocal Ingress-Egress Easement Obligations in form set forth in Exhibit B, which is attached hereto and made a part hereof (the “Declaration”) (all collectively, the “Permitted Exceptions”). Landlord represents and warrants that Landlord has the full right and authority to enter into this Lease without the joinder or approval of any other persons or parties including any mortgagee. Landlord covenants and warrants that Tenant shall have, hold and enjoy, during the Term, peaceful, quiet, undisturbed and undisputed possession of the Premises without hindrance or molestation by or from anyone, except as otherwise provided in the Permitted Exceptions. Landlord shall not during the Term encumber or impair the title to the Premises including, without limitation, any subsequent amendment or modification to the REUA, without Tenant’s prior 

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written consent, which consent may be withheld by Tenant in Tenant’s sole discretion; however, Landlord may at any time mortgage Landlord’s fee interest in the Premises provided any mortgage is and remains in all respects subject and subordinate to this Lease and the rights of Tenant hereunder and, upon written request of Tenant, executes a document in form and substance satisfactory to Tenant, and to Tenant’s lender, assignees or sublessees evidencing such subordination. Any mortgagees currently holding a mortgage or deed of trust on the Premises shall execute such document in favor of Tenant within thirty (30) days after the date hereof. Should any mortgagee of Landlord succeed to Landlord’s interest through foreclosure or deed in lieu thereof, Tenant shall attorn to such succeeding party as its landlord under this Lease promptly upon any such succession, provided such succeeding party assumes all of Landlord’s duties and obligations under this Lease, including without limitation the covenant of quiet enjoyment. Such succeeding party shall not be liable for any of Landlord’s obligations and duties hereunder prior to its assumption of Landlord’s duties and obligations hereunder. Landlord agrees that it will execute and deliver an amendment to the REUA in the form set forth in Exhibit C, which is attached hereto and made a part hereof, provided Tenant acknowledges that the effectuation of such amendment is subject to the approval of Home Depot and to the approval of Landlord’s lender MONY Life Insurance Company. Tenant hereby agrees to reasonably cooperate with Landlord in connection with the access points on Centrepark Drive to the north of the Premises and hereby consents to Landlord’s agreeing to closing all of such access points. Tenant hereby also agrees to cooperated with Landlord and the City of Tucson with respect to any reconfiguration of the trailhead north and west of the Premises so long as same does not cause any material changes in Tenant’s development plans. 

5. Maintenance; Utilities. Landlord shall not be required to furnish any services or make any repairs or alterations of any kind with respect to the Premises, unless the necessity therefor is caused by or attributable to the negligence or willful misconduct of Landlord or Landlord’s agents, employees, representatives or contractors. Tenant shall pay for all utility service to the Premises. Tenant shall, at Tenant’s own cost and expense, throughout the term of this Lease, keep and maintain the Premises and the Improvements in good condition and repair and shall use all reasonable precautions to prevent waste, damage or injury thereto. Tenant shall be responsible for maintaining and repairing the drainage channel located on the southerly boundary of Lots 4 and 6 of Broadway Pantano Center. Tenant shall have the right to enter into agreements with utility companies creating easements in favor of such companies as are required in order to service the Premises, and any other easements that may be required for Tenant’s use of the Premises, and, in such case, Landlord covenants and agrees to execute any and all documents, agreements and instruments, and to take all other actions, in order to effectuate the same, all at Tenant’s cost and expense. Tenant shall at all times abide by all laws, ordinances and regulations governing the condition and use of the Premises, including without limitation the Americans With Disabilities Act, as laws, ordinances and regulations are enforced from time to time. 

 

6. Payments of Taxes and Assessments. Tenant shall, during the Term, at Tenant’s own cost and expense, pay all real estate, personal property, special assessments, and other similar ad valorum taxes, on the Premises, including any such taxes assessed on any and all of the Improvements and any other improvements now or hereafter constructed upon the Premises, that are due and payable during the Term. Tenant shall have the right to pay special assessments on any installment plan available by the taxing authority and shall be responsible for payment of only those installments that are due and payable during the Term. Tenant may contest, in good faith and by appropriate proceedings, at Tenant’s own cost and expense any tax, tax assessment, statute, rule, regulation, order, ordinance, lien or encumbrance relating to the Premises, including the Improvements thereon, in Tenant’s own name or in the name of Landlord, provided that Tenant provides any required security for the payment of any amount owed or complies with any other duty imposed by the taxing authority. Tenant shall, in all events, indemnify and hold harmless Landlord from and against any adverse consequences of the contest. Notwithstanding anything to the contrary herein, Landlord acknowledges and agrees that Landlord shall be responsible for any and all assessments levied against the Premises as of the date hereof or resulting from any work undertaken in conjunction with the development contemplated by REUA (except work by Tenant on its Premises), including, without limitation, the pending assessment in the amount of $6,407.49. Landlord shall take the reasonable steps requested by Tenant to make the Premises a separate tax parcel following issuance of a certificate of occupancy. 

7. Insurance. During the Term, Tenant, at Tenant’s sole cost and expense, but for the mutual benefit of Tenant and Landlord as an additional insured, shall maintain for the Premises commercial general liability insurance with a combined single limit of at least $3,000,000.00 with an annual deductible not to exceed $10,000.00. Tenant shall also maintain for all Improvements constructed on the Premises by Tenant, property insurance against loss or damage covered by the industry standard fire and extended coverage or special form insurance policy in an amount not less than 100% of value with a replacement cost endorsement. Such general liability and property insurance policies shall be issued by insurers authorized to issue insurance policies in the State of Arizona with a financial rating of VIII or better and a policyholder’s rating of A- or better in the latest edition of Best’s Rating Guide on Property and Casualty Insurance Companies, and shall provide that Landlord shall be given a minimum of ten (10) days’ written notice by any such insurance company prior to the cancellation, 

3

 

termination or alteration of the terms or limits of such coverage. On or prior to the Commencement Date, Tenant shall deliver to Landlord a certificate evidencing the general liability insurance required of Tenant hereunder, naming Landlord (and any mortgagee of Landlord) as an additional insured. Throughout the Term, Tenant shall provide Landlord with evidence of renewal of such insurance coverage prior to the scheduled expiration of the current policy. Notwithstanding anything to the contrary herein, Landlord acknowledges and agrees that Tenant’s Lease with Kohl’s Department Stores, Inc. (“Kohl’s Lease”) allows Kohl’s to self insure and that so long as Kohl’s or any permitted assignee or subtenant is in full compliance with the self insurance provisions of the Kohl’s Lease, Landlord shall be deemed to be in full compliance with this Section 7. 

8. Damage and Destruction of Improvements. In the event that the Improvements constructed by Tenant on the Premises or any part thereof are destroyed or damaged during the Term, Tenant shall either repair, demolish (and completely clear the site of materials and debris) or rebuild the Improvements. Insurance proceeds shall be the exclusive property of Tenant, provided that if this Lease terminates as a result of Tenant’s default, Landlord shall be entitled to all such insurance proceeds. No damage or destruction of any Improvements on the Premises shall affect the Term of this Lease or relieve Tenant from any obligation created or imposed by this Lease, including, but without limitation, Tenant’s obligation to make payment of the rent and all other charges on the part of Tenant to be paid, all other covenants and agreements on the part of Tenant to be performed. 

9. Condemnation. In the event that the whole of the Premises shall be taken or condemned for any public use or purpose during the Term of this Lease or any extension thereof, or sold in lieu of condemnation, this Lease shall terminate as of the date of such taking. Landlord shall give Tenant notice of all condemnation proceedings or prospective condemnation proceedings including any notices of intent to condemn immediately upon Landlord’s acquiring knowledge of same. Tenant shall be entitled to receive an award for the taking of Tenant’s leasehold interest plus an award for the loss of Improvements, loss of business, relocation expense and any other damage which may be proved by Tenant and Landlord hereby assigns to Tenant the right to same including the right to receive payment directly from the condemning authority. Landlord shall receive the portion of the award attributed to loss of fee ownership. Tenant shall be responsible for discharging any Mortgage (as hereinafter defined), whether or not the proceeds paid hereunder are adequate to discharge same. 

In the event that a part of the Premises shall be taken or condemned, or sold in lieu thereof, Tenant may elect to terminate this Lease, and in the event that Tenant makes such election, then all of the terms and conditions contained in the preceding paragraph with respect to Tenant’s right to receive an award for damages arising out of such taking shall apply. In the event that Tenant elects not to terminate this Lease, this Lease shall continue in effect with respect to the portion of the Premises not so taken or sold, with a proportionate reduction in Rent for the balance of the Term. In such event, Tenant shall be entitled to receive an award for the taking of Tenant’s leasehold interest with respect to that portion of the Premises so taken plus an award for the loss of Improvements, loss of business and any other damage that may be proved by Tenant, and Landlord hereby assigns to Tenant the right to same including the right to receive payment directly from the condemning authority. Landlord shall receive the portion of the award attributed to loss of fee ownership. Tenant shall have the right, but not the obligation, to apply condemnation proceeds towards the repair and restoration of the Improvements or what may remain thereof, provided however, that Tenant shall not be required to expend more than Tenant’s share of the award on such restoration or repairs. 

In the event of any termination of this Lease as the result of the provisions of this Section 9, the parties, effective as of such termination, shall be released, each to the other, from all liability and obligations thereafter arising under this Lease, and this Lease shall become null and void and of no further force or effect, except for any then-pending obligation to indemnify the other party set forth herein. 

10. Mortgages. 

(a) Notwithstanding anything contained in this Lease to the contrary, Tenant is hereby given the right, without Landlord’s prior consent, to obtain a loan or loans (and to extend, renew, refinance or replace any such loan or loans and/or to negotiate and obtain a new loan or loans) secured by a mortgage on Tenant’s interest in the Premises, the building and improvements on the Premises, or any part thereof or property therein, and any sublease, under one or more mortgage(s) (“Mortgage”) and to assign this Lease and any sublease as collateral security for such mortgages, upon the condition that all rights acquired under such mortgages shall be subject to each and all of the covenants, conditions and restrictions set forth in this Lease, and to all rights and interests of Landlord herein, none of which covenants, conditions or restrictions is or shall be waived by Landlord by reason of the right given to so mortgage such interest in this Lease, except as may be expressly provided in this Section 10. 

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(b) If Tenant shall mortgage this leasehold pursuant to the provisions hereof, and if the holder(s) of any such mortgage(s) shall send to Landlord a true copy thereof, together with written notice specifying the name and address of the mortgagee(s) and the pertinent recording data with respect to such mortgage(s), Landlord agrees that so long as any such leasehold mortgage(s) shall remain unsatisfied, the following provisions shall apply: 

(i) There shall be no cancellation, surrender or modification of this Lease by joint action of Landlord and Tenant without the prior consent in writing of the leasehold mortgagee(s); 

(ii) Landlord shall, upon serving Tenant with any notice of default, simultaneously serve a copy of such notice upon the Mortgagee. The Mortgagee shall thereupon have the same period, after service of such notice upon it, as is allowed to Tenant, to remedy or cause to be remedied the defaults complained of, and Landlord shall accept such performance by or at the instigation of the Mortgagee in response to any such notice of default as if the same had been performed by Tenant; 

(iii) Anything herein contained notwithstanding, while such Mortgage remains unsatisfied, or until written notice of satisfaction is given by the holder(s) thereof to Landlord, if any default shall occur, which, pursuant to any provision of this Lease, entitles Landlord to terminate this Lease, and if before the expiration of fifteen (15) business days from the date of service of notice of termination upon such leasehold mortgagee(s), such Mortgagee shall have notified Landlord of its desire to nullify such notice and shall have paid to Landlord all rent and other payments herein provided for and then in default, and shall have complied or commenced the work of complying with all of the other requirements of this Lease except as provided in subparagraph (vii) of this Section 10(b), if any are then in default, and shall prosecute the same to completion with reasonable diligence, then in such event Landlord shall not be entitled to terminate this Lease and any notice of termination theretofore given shall be void and of no effect. 

(iv) If Landlord shall elect to terminate this Lease by reason of default of Tenant, the Mortgagee shall not only have the right to nullify any notice of termination by curing such default as aforesaid, but shall also have the right to postpone and extend the date for the termination of this Lease as specified by Landlord in its notice of termination for a period of not more than six (6) months, provided that such leasehold mortgagee(s) shall cure or cause to be cured any then-existing monetary defaults and meanwhile pay the rent and all other charges and comply with and perform all of the other terms, conditions and provisions of this Lease on Tenant’s part to be complied with and performed, and provided further that the Mortgagee shall forthwith take steps to acquire or sell Tenant’s interest in this Lease by foreclosure of the Mortgage or otherwise and shall prosecute the same to completion with due diligence. If at the end of said six (6) month period the Mortgagee shall be actively engaged in steps to acquire or sell Tenant’s interest herein, the time for such Mortgagee to comply with the provisions of this Section 10(b) shall be extended for such period as shall be reasonably necessary to complete such steps with reasonable diligence and continuity; provided that during such period the Mortgagee shall continue to pay the rent and other charges and perform all other terms, conditions and provisions of this Lease on Tenant’s part to be complied with and performed; provided, further, that the total period extended to the Mortgagee under this subparagraph (iv) shall not exceed twelve (12) months. 

(v) Landlord agrees that the name of the Mortgagee may be added as a loss payee to any and all insurance policies required to be carried by Tenant hereunder on condition that the insurance proceeds are to be applied in the manner specified in this Lease and that the Mortgage or collateral documents shall so provide. 

(vi) Landlord agrees that in the event of termination of this Lease by reason of the bankruptcy or insolvency of Tenant, Landlord will enter into a new lease of the Premises with the Mortgagee or its nominee(s) or its assignee(s) for the remainder of the Term effective as of the date of such termination, at the rent and upon the terms, provisions, covenants and agreements as contained herein and subject only to the same conditions of title as this Lease is subject to on the date of execution hereof together with any exceptions to title created by or at the behest of Tenant, and to the rights, if any, of the parties then in possession of any part of the Premises, provided Landlord and Landlord’s Mortgagee approves of the financial credit standing of the new tenant, which approval shall be in its sole discretion and provided, further: 

 

(A) said Mortgagee or its nominee(s) or assignee(s) shall make written request upon Landlord for such new lease within thirty (30) days after the date of such termination and such written request shall be accompanied by payment to Landlord of all sums due to Landlord under this Lease; 

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(B) said Mortgagee or its nominee(s) or assignee(s) shall pay to Landlord at the time of the execution and delivery of such new lease, any and all sums which would at the time of the execution and delivery thereof be due pursuant to this Lease but for such termination, and in addition thereto, any expenses, including reasonable attorney’s fees, which Landlord shall have incurred by reason of such default; 

(C) said Mortgagee or its nominee(s) or assignee(s) shall perform and observe all covenants herein contained on Tenant’s part to be performed and shall further remedy any other condition which Tenant under the terminated Lease was obligated to perform under the terms of this Lease; and upon execution and delivery of such new lease and any subleases which may have theretofore been assigned and transferred by Tenant to Landlord, as security under this Lease, shall thereupon be deemed to be held by Landlord as security for the performance of all of the obligations of the tenant under the new lease; 

(D) Landlord shall not warrant possession of the Premises to the tenant under the new lease; 

(E) such new lease shall be expressly made subject to the rights, if any, of Tenant under the terminated lease; 

(F) the tenant under such new lease shall have the right, title and interest in and to the buildings and improvements on the Premises as Tenant had under the terminated lease; and 

(G) said Mortgagee or its nominee(s) or assignee(s) shall bear the cost of recording such new lease or short form thereof if it or Landlord desires recordation thereof. 

(vii) Nothing herein contained shall require the Mortgagee or its nominee(s) or assignee(s) to cure any default of Tenant under this Lease unless such Mortgagee shall choose to do so under subparagraph (ii) above or shall choose to nullify any notice of termination from Landlord pursuant to subparagraphs (iii) or (iv), or if such Mortgagee elects that Landlord enter into a new lease for the Premises pursuant to the provisions of subparagraph (v) above. 

(viii) The proceeds from any insurance policies relating to the Premises or arising from a condemnation of the Premises are to be distributed pursuant to the provisions of this Lease; and 

 

(c) Landlord shall, upon request, execute, acknowledge and deliver to each Mortgagee, an agreement prepared at the sole cost and expense of Tenant, in form satisfactory to such Mortgagee, between Landlord, Tenant and Mortgagee, agreeing to all of the provisions of this Section 10. The term “mortgage,” whenever used in this Section 10 shall include whatever security instruments are used in the locale of the Premises, such as, without limitation, mortgages, deeds of trust, security deeds and conditional deeds, as well as financing statements, security agreements and other documentation required pursuant to the Uniform Commercial Code, and shall also include any instruments required in connection with a sale-leaseback (or an assignment of lease and sublease) transaction. 

11. Surrender. On the last day of the Term, Tenant shall surrender to Landlord the Premises free and clear of all liens, claims and encumbrances. Tenant shall surrender the Improvements in their reasonable condition with wear and tear excepted. 

12. Defaults; Remedies. 

(a) Any one or more of the following events shall be a default by Tenant and constitute a breach of this Lease: (i) failure by Tenant to observe and perform any covenant, condition, agreement or obligation contained herein on its part to be performed, which continues for a period of thirty (30) days after receipt by Tenant of written notice from Landlord specifying the nature of such default in reasonable detail, provided, however, if any such default cannot be remedied within such thirty (30)-day period, then Tenant shall not be in default if Tenant proceeds to cure the default after receipt of such written notice and diligently and continuously pursues same through completion; or (ii) the failure to pay Rent or any other monetary obligation to Landlord when due continues for a period of more than ten (10) days after receipt by Tenant of written notice of such monetary default provided, however, that no such written notice shall be required for the second such failure to pay Rent or any other monetary obligation when due for a period of more than ten (10) days after its due date during any calendar year. 

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Upon the occurrence of an Event of Default and provided that all required notices have been given, Landlord may, without further notice to Tenant, terminate Tenant’s tenancy and proceed as required by the laws of the State of Arizona without accepting a surrender of the Premises or affecting Tenant’s liability for Rent and other charges due or future Rent and other charges becoming due hereunder. Upon any event of Default, Landlord shall be entitled to recover from Tenant, in addition to Rent and other charges equivalent to Rent, all other damages sustained by Landlord on account of the breach of this Lease, including, but not limited to, the costs, expenses and attorney fees incurred by Landlord in enforcing the terms and provisions hereof and in reentering and recovering possession of the Premises and for the cost of repairs, brokerage and attorney fees connected with the reletting of the Premises. 

(b) Any right or remedy conferred on Landlord under this Lease shall not be deemed exclusive of any other rights or remedies that Landlord may have, and all of Landlord’s rights and remedies shall be cumulative. All of Landlord’s rights and remedies may be exercised and enforced concurrently and whenever and as often as the occasion therefor arises. 

 

(c) The failure of Landlord to insist upon strict performance of any of the terms, covenants, and conditions herein shall not be deemed a waiver of any of Landlord’s other rights or remedies and shall not be deemed a waiver of any subsequent breach or default in any of the terms, covenants, and conditions herein contained. No surrender of the Premises shall be effected by Landlord’s acceptance of the keys thereto or acceptance of Rent therefor or by any other means whatsoever unless the same is evidenced by Landlord’s written acceptance of same as a surrender. 

(d) In the event that it becomes necessary to enforce the covenants and provisions of this Lease through legal process, the prevailing party shall be entitled to recover as an element of damages the reasonable costs, attorney fees, and expenses incurred in such litigation, including the costs of appeal. 

(e) Remedies Upon Landlord’s Default. In the event that Landlord shall at any time be in default in the observance or performance of any of the covenants and agreements required to be performed and observed by Landlord hereunder and any such default shall continue for a period of thirty (30) days after written notice to Landlord (or if such default is incapable of being cured in a reasonable manner within thirty (30) days, if Landlord has not commenced to cure the same within such thirty (30)-day period or does not thereafter diligently prosecute the same to completion), Tenant shall be entitled, at its election, to exercise, concurrently or successively, any one or more of the following rights, in addition to all remedies otherwise provided in this Lease and otherwise available at law or in equity: 

(i) To bring suit for the collection of any amounts for which Landlord may be in default, or for the performance of any other covenant or agreement devolving upon Landlord, without terminating this Lease; or 

(ii) To terminate this Lease upon thirty (30) days’ written notice to Landlord. In the event that Tenant elects to terminate this Lease as aforesaid, all rights and obligations of Tenant, and of any successors or assigns, shall cease and terminate, except that Tenant shall have and retain full right to sue for and collect all amounts for the payment of which Landlord shall then be in default. 

All remedies of Tenant herein created or remedies otherwise existing at law or in equity are cumulative and the exercise of one or more right or remedies shall not be taken to exclude or waive the right to the exercise of any other. All such rights and remedies may be exercised and enforced concurrently and whenever and as often as Tenant shall deem necessary. 

 

13. Miscellaneous. 

(a) Environmental Covenants. Tenant shall not use the Premises for the production, sale or storage of any toxic or hazardous chemicals, wastes, materials or substances, or any pollutants or contaminants, as those terms are defined in any applicable federal, state, local or other governmental law, statute, ordinance, code, rule or regulation (“Hazardous Substances”), and shall not use any Hazardous Substance in the Premises; and shall not permit any Hazardous Substance to be disposed of from, in and on the Premises, unless such Hazardous Substances are of the type normally used in the ordinary course of Tenant’s or Tenant’s subtenant’s business or cleaning and maintaining building improvements, and are stored, used and disposed of in accordance with all such laws, statutes, ordinances, codes, rules and regulations applicable to the Premises (“Environmental Regulations”). Throughout the term of this Lease and after its termination, Tenant shall defend, indemnify and hold harmless Landlord from and against any and all claims, demand, penalties, causes of action, fines, liabilities, settlements, damages, costs or expenses of whatever kind or nature, known or unknown, foreseen or unforeseen, contingent 

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or otherwise (including, without limitation, counsel and consultant fees, expert witness fees and expenses, investigation and laboratory fees and expenses, court costs and litigation expenses) arising out of, or in any way related to: 

(i) a breach by Tenant of any of the covenants set forth in this Section; 

(ii) the presence, disposal, spillage, discharge, emission, leakage, or release of any Hazardous Substance that occurs during the Term that is at, in, on, under, about, from or affecting the Premises, resulting from any such Hazardous Substance; 

(iii) any personal injury or property damage that occurs during the Term arising out of or related to any such Hazardous Substance; 

(iv) any lawsuit brought or any order or directive of or by any governmental authority that occurs during the Term relating to such Hazardous Substance; or 

(v) any violation of any Environmental Regulation that occurs during the Term. 

(b) Consents and Approvals. Whenever in this Lease the consent or approval of Tenant or Landlord shall be required, it is expressly agreed between the parties that such consent or approval will not be unreasonably withheld, conditioned or delayed. 

(c) Construction Liens. If any lien or claim of lien of any mechanic, laborer or supplier or any other lien or claim for lien arising out of work performed, or alleged to have been performed by, or at the direction of, or on behalf of Tenant, except any Mortgagee or construction loan (which shall only encumber the leasehold interest of Tenant), is filed, Tenant shall upon the commencement of any foreclosure action by any such lien claimant have such lien or claim for lien released of record or shall post a bond or other security to indemnify Landlord against all costs and liabilities resulting from such lien or claim for lien and the foreclosure or attempted foreclosure thereof. 

(d) Recording of Memorandum. Upon execution hereof, the parties hereto shall enter into a Memorandum of Lease in recordable form, which Memorandum shall be recorded by Tenant in the Pima County, Arizona, Recorder’s office, provided, however, that no economic terms shall be described in the Memorandum. 

(e) Hold Over. Tenant shall pay Landlord to 150% of the monthly Rent applicable in the last year of the Term for each month, with no proration, during which Tenant retains possession of the Premises, or any part thereof, after the expiration or termination of the Term, or the termination of Tenant’s right of possession of the Premises. 

(f) Pantano Road Signage. Tenant shall be entitled to utilize all of the thirty percent (30%) of the area not allocated to Home Depot of the sign to be constructed along Pantano Road. 

14. Assignment and Subletting. Tenant may assign this Lease or any interest therein or may sublease the Premises without the consent of Landlord; however, no such assignment or sublease shall release Tenant from any obligation or liability hereunder whether or not such assignee shall assume the obligations of Tenant under this Lease. Specifically and without limitation, Tenant may assign its rights under this Lease to Continental 34 Fund Limited Partnership, a Wisconsin limited partnership, and Landlord is hereby deemed to have consented to such assignment. Notwithstanding the foregoing, this Lease may be assigned to a Mortgagee as security, or by virtue of a foreclosure or assignment deed in lieu of foreclosure, and, in such event, such Mortgagee shall only be liable under this Lease until the effective date of such assignment of this Lease to a third party and shall be released from any liability pursuant to this Lease accruing after the effective date of such assignment but only if such Mortgagee’s assignee expressly assumes in writing all of the obligations of Tenant under this Lease. Landlord shall execute, acknowledge and deliver documents to that effect upon reasonable request from such Mortgagee. Landlord agrees to enter into a Non-Disturbance and Attornment Agreement with Kohl’s Department Stores, Inc. (“Kohl’s”), in the form set forth as Exhibit “D” hereto, in connection with the contemplated sublease of the Premises by Kohl’s from Tenant (the Kohl’s Sublease”). In the event that the Kohl’s Sublease terminates, Landlord agrees to execute a Non-disturbance and Attornment Agreement in the form set forth as Exhibit “D” hereto with a sublessee under a new sublease so long as the proposed new sublessee has a net worth at least equal to the financial net worth of Kohl’s, there is a guaranty from any parent company comparable to the guaranty given under the Kohl’s Sublease, and the terms and conditions of the new sublease are substantially similar to those under the Kohl’s Sublease. 

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15. Sale or Conveyance of Premises. In the event of the sale of the Premises by Landlord, such sale shall be subject to all of the terms of this Lease. 

16. Relationship of Parties. Nothing herein shall be construed so as to constitute a joint venture or partnership between Landlord and Tenant. 

17. Applicable Law. This Lease shall be construed under the laws of the State of Arizona. 

 

18. Interpretation. In interpreting this Lease in its entirety, the printed provisions of this Lease and any additions written or typed thereon shall be given equal weight, and there shall be no inference, by operation of law or otherwise, that any provision of this Lease shall be construed against either party hereto. 

19. Headings, Captions and References. The section captions contained in this Lease are for convenience only and do not in any way limit or amplify any term or provision hereof. The use of the terms “hereof,” “hereunder” and “herein” shall refer to this Lease as a whole, inclusive of the Exhibits, except when otherwise noted. The use of the masculine or neuter genders herein shall include the masculine, feminine and neuter genders and the singular form shall include the plural when the context so requires. 

20. Partial Invalidity. If any provision of this Lease or the application thereof to any person or circumstance shall to any extent be held invalid, then the remainder of this Lease or the application of such provision to persons or circumstances other than those as to which it is held invalid shall not be affected thereby, and each provision of this Lease shall be valid and enforced to the fullest extent permitted by law. 

21. Counterparts. This Lease may be executed in several counterparts, each of which may be deemed an original, and all of such counterparts together shall constitute one and the same instrument. 

22. Entire Agreement. This Lease shall merge all undertakings between the parties hereto with respect to the Premises and, upon execution by both parties, shall constitute the entire lease agreement, unless otherwise hereafter modified by both parties in writing. Tenant hereby acknowledges that neither Landlord nor Landlord’s employees, agents or contractors have made any representations or promises to Tenant with regard to the Premises or this Lease that have not been expressly stated in this Lease and, therefore, Tenant hereby waives any and all claims against, or liability of, Landlord and Landlord’s employees, agents, and contractors based thereon. 

23. Successors and Assigns. All covenants, promises, conditions, representations, and agreements herein contained shall be binding upon, apply and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors, and permitted assigns. 

24. Notice. Any notice that shall be given hereunder shall be mailed or sent by national courier service and shall be deemed to have been mailed, rendered, given or served on the date mailed or sent and shall be deemed to have been received on the expiration of two (2) business days after mailing or one (1) business day after being sent by national courier service (i.e., Federal Express, Airborne, etc.). 

 

Any notice to Landlord shall be addressed to: 

October 23rd Group L.L.C. 

Attention: Steven A. Mar 

6040 N. Tocito Place 

Tucson, AZ 85718 

Any notice to Tenant shall be addressed to: 

Continental Properties Company, Inc. 

Attn: Legal Department 

10850 W. Park Place, 6th Floor 

Milwaukee, Wisconsin 53224 

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Each party shall have the right to change such party’s notice address by notice to the other party given as provided in this Section; provided, however, that until actual receipt of a change of address notice, any notice to the previously designated address shall be deemed properly given. 

25. Indemnity. Tenant agrees to defend, indemnify and save Landlord harmless from all injury, loss, claims or damage (including attorneys’ fees and disbursements incurred by Landlord in conducting an investigation and preparing for and conducting a defense) to any person or property arising from, related to, or in any way connected with the use or occupancy of the Premises or the conduct or operation of Tenant’s business, unless such injury, loss, claims or damage are attributable to the negligence or intentional act of Landlord or its agents, servants or employees. 

26. Estoppel. Upon request of Landlord or Tenant, the other party, within twenty (20) days of the date of such written request, agrees to execute and deliver to the party requesting, without charge, a written statement: (a) ratifying this Lease; (b) certifying that this Lease is in full force and effect, if such is the case, and has not been modified, assigned, supplemented or amended, except as shall be stated; (c) certifying that all conditions and agreements under this Lease to be satisfied and performed have been satisfied and performed, except as shall be stated; (d) reciting the amount of advance rental, if any, paid by Tenant and the date to which rental has been paid; and (e) confirming such other provisions as are reasonably requested by such party. 

27. Confidentiality. Landlord and Tenant agree that the terms and conditions of this Lease shall be maintained strictly confidential, and, except for filings with any court, neither party shall disclose, either orally or in writing, any of the contents of this Lease to any person, other than executive officers and management level employees of Tenant, and partners, members and management level employees of Landlord, as well as the parties’ respective lenders, attorneys’, accountants, consultants and engineers (the “Permitted Parties”). Landlord and Tenant shall each direct the Permitted Parties not to disclose the terms and conditions of this Agreement to any persons other than Permitted Parties. 

28. Execution of Documents. Landlord and Tenant shall each cooperate with the other and execute such documents as the other party may reasonably require or request in order to carry out the intents and purposes of this Lease. 

 

29. Brokerage Commissions. Landlord shall be responsible for paying a real estate commission to Bourne Partners by separate agreement. Landlord and Tenant each warrants and represents to the other that there are no other brokers’ or finders’ fees or any real estate commissions due to any broker, agent or other party in connection with the negotiation or execution of this Lease, or on behalf of either of them. Each party shall indemnify the other with respect to compensation, commissions, fees or other sums claimed to be due or owing with respect to the representations made by Landlord or Tenant, as applicable. 

30. Personal Guaranty. Performance of Tenant’s obligations under this Lease is personally guarantied by Continental Properties Company, Inc., a Wisconsin corporation (the “Guarantor”), pursuant to a Limited Guaranty in the form set forth in Exhibit “E” hereto. In the event that Landlord pledges its fee interest to a secured lender, Tenant agrees to cause Guarantor to provide reasonable information regarding its ability to guaranty this Lease so long as the Limited Guaranty is in force, provided, however, that Tenant shall not have an obligation to provide financial statements. So long as this Lease is not in default, Tenant may substitute a guarantor of this Lease in the place and stead of Guarantor, provided that such substitute guarantor shall demonstrate a net worth at least equal to the net worth of Guarantor. 

31. Right of First Offer. 

(a) If at any time after the Commencement Date Landlord desires to offer the Premises or any portion thereof for sale (the “Proposed Sale Parcel”), then prior to offering to sell the Proposed Sale Parcel to any other person or entity Landlord shall offer Tenant the right to purchase the Proposed Sale Parcel by sending to Tenant a written notice of the specific terms of an offer to sell including price (the “Offering Amount”), payment terms, conditions of title, costs of escrow and all other material terms, and a proposed purchase agreement and joint escrow instructions reflecting such terms, executed by Landlord (the “Proposed Agreement”). 

(b) Tenant shall have thirty (30) days after its receipt of the Proposed Agreement to exercise its right to purchase the Proposed Sale Parcel by executing the Proposed Agreement and transmitting it to Landlord, or by submitting a counteroffer. If Tenant counteroffers, Landlord and Tenant shall negotiate diligently and in good faith in order to attempt to reach an agreement within ten (10) days after Landlord receives Tenant’s counteroffer. If Tenant does not elect to accept such offer in writing within said thirty (30)-day period, or if Landlord and Tenant do not reach written agreement on Tenant’s 

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counteroffer within such ten (10)-day period, then for a period of one hundred eighty (180) days thereafter (the “Third Party Sale Period”) Landlord may offer to sell the Proposed Sale Parcel to a third party on the same terms as were set forth in the Proposed Agreement. If Landlord fails to enter into an agreement in writing on such terms and conditions with any third party during the Third Party Sale Period, and if Landlord again desires to offer the Proposed Sale Parcel for sale, Landlord shall again follow the foregoing procedure for granting Tenant the right of first offer. In the event that Tenant determines not to exercise its right to purchase the Proposed Sale Parcel, then upon written request of Landlord Tenant shall deliver a written statement setting forth such determination. 

(c) As a condition precedent to accepting a third party offer during the Third Party Sale Period for an amount less than ninety-five percent (95%) of the Offering Amount, or accepting any offer which is on terms substantially more favorable to the purchaser than in the Proposed Agreement, Landlord shall give Tenant notice of such terms together with the applicable purchase agreement and joint escrow instructions, and Tenant shall have an additional thirty (30) days after the receipt of such notice and joint escrow instructions to exercise this right of first offer. If Tenant accepts such revised proposal, the Landlord and Tenant shall execute the revised purchase agreement and joint escrow instructions reflecting the more favorable terms within ten (10) days, or as soon thereafter as is reasonably possible. If Tenant fails to accept such offer within the thirty (30)-day period or does not execute such joint escrow instructions within the ten (10)-day period, Landlord shall be free to sell the Proposed Sale Parcel during the Third Party Sale Period on terms no more favorable than were most recently offered to Tenant. At no time may Landlord sell the Proposed Sale Parcel on terms which are more favorable than were first offered to Tenant in the manner specified herein. Tenant may enforce its rights under this Section 31 by obtaining a court order for specific performance, or damages, or both, and shall be entitled to an award of its costs of suit, including attorneys’ fees, in addition to any other relief which the court awards. 

(d) This right of first offer shall remain in full force and effect throughout the Term of this Lease, including the Option Terms, and shall apply to any and all successor Landlords. 

32. Limited Liability of Original Tenant NSHE Bassett, LLC. Landlord shall not have recourse for the enforcement of any obligation, promise or agreement of original Tenant NSHE Bassett, LLC (“NSHE”) contained in this Lease or for any claim based hereon or otherwise in respect hereof against any director, member, officer, agent, attorney or employee, as such, in his individual capacity, past, present, or future, of NSHE or of any successor entity of NSHE (other than assignees under this Lease), whether by virtue of any constitutional provisions, statue or rule of law, or by the enforcement of any assessment or penalty or otherwise. No personal liability whatsoever shall attach to, or be incurred by, any director, member, officer, agent, attorney, or employee, as such, past, present or future, of NSHE of any successor entity (other than assignees under this Lease), under or by reason of any of the obligations, promises or agreements entered into between Landlord and Tenant, whether contained in this Lease or to be implied herefrom as being supplemental hereto, and all personal liability of that character against every such director, member, officer, agent, attorney and employee is, by the execution of this Lease and as a condition of, and as part of the consideration for, the execution of this Lease, expressly waived and released. The immunity of directors, members, officers, agents, attorneys and employees of NSHE under the provisions contained in this paragraph shall survive the completion of the project, the sale thereof, and the expiration of the Term of, or earlier termination of, this Lease. This limitation of liability shall not apply to any assignees of Tenant’s rights under this Lease by is only given to NSHE because it is an accommodator to a deferred tax exchange. 

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IN WITNESS WHEREOF, the parties hereto have executed or have caused this Lease to be duly executed as of the day and year first above written. 

 

			
	
 
	
 
	
 

	
LANDLORD:

	
 

	
OCTOBER 23RD GROUP L.L.C., an Arizona limited liability company

	
 
	
 

	
By:
	
Mar Enterprises, L.L.C., an Arizona limited liability company, its Managing Member

	
 
	
 
	
 

	
 
	
By:
	
/s/ Steven A. Mar

 

	
 
	
 
	
Steven A. Mar, Authorized Signatory

	
 

	
TENANT:

	
 

	
NSHE BASSETT, LLC, an Arizona limited liability company

	
 
	
 

	
By:
	
National Safe Harbor Exchanges, a

	
 
	
California corporation, its Sole Member

	
 
	
 
	
 

	
 
	
By:
	
/s/ Dana R. Sobrado

 

	
 
	
 
	
Dana R. Sobrado, Assistant Vice President

 

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LIST OF EXHIBITS 

Exhibit A – Legal Description of the Premises 

Exhibit B – Declaration Re: Home Depot Obligations 

Exhibit C – Amendment to REUA 

Exhibit D – Kohl’s Non-Disturbance and Attornment Agreement 

Exhibit E – Limited Guaranty 

 

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Exhibit_10.4

 

 

EXHIBIT A 

(Legal Description) 

 

Lots 4 and 6 of Broadway Pantano Center, according to the plat of record in the office of the County Recorder of Pima County, Arizona, in Book 56 of Maps, Page 84, lying within the Southeast Quarter of the Southeast Quarter of Section 8, Township 14 South, Range 15 East, of the Gila and Salt River Meridian, Pima County, Arizona. 

EXCEPT that portion of Lot 4 described as follows: 

COMMENCING at the Northeast corner of said Lot 4, said point also being the TRUE POINT OF BEGINNING; 

Thence South 00o 11’ 12” West, along the easterly line of said Lot 4, a distance of 56.00 feet, to a point on a line lying 56.00 feet Southerly and parallel with the North line of said Lot 4; 

Thence North 89o 46’ 08” West, parallel with said North line of Lot 4, a distance of 34.94 feet; 

Thence South 87o 56’ 25” West, a distance of 100.08 feet to a point on a line lying 60.00 feet Southerly and parallel with said North line of Lot 4; 

Thence North 89o 46’ 08” West, parallel with said North line of Lot 4, a distance of 442.36 feet, to a point on the westerly line of Lot 4; 

Thence North 00o 11’ 12” East, along the westerly line of Lot 4, a distance of 60.00 feet to the Northwest corner of Lot 4; 

Thence South 89o 46’ 08” East, along the North line of said Lot 4, a record distance of 577.35 feet to the TRUE POINT OF BEGINNING. 

TOGETHER WITH that portion of Lot 5 of Broadway Pantano Center, according to the plat of record in the office of the County Recorder of Pima County, Arizona, in Book 56 of Maps, Page 84, lying within the Southeast Quarter of the Southeast Quarter of Section 8, Township 14 South, Range 15 East, of the Gila and Salt River Meridian, Pima County, Arizona, more particularly described as follows: 

 

	
 
	

	

SHEET 1 OF 3   

 

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COMMENCING at the Northwest corner of said Lot 5; 

Thence South 00o 11’ 12” West, along the westerly line of said Lot 5, a distance of 56.00 feet, to the TRUE POINT OF BEGINNING; 

Thence continuing South 00o 11’ 12” West, along the westerly line of said Lot 5, a distance of 54.79 feet; 

Thence South 34o 48’ 48” East, along the westerly line of said Lot 5, a distance of 152.21 feet; 

Thence leaving the westerly line of Lot 5, North 00o 11’ 12” East, a distance of 179.41 feet to a point on a line lying 56.00 feet Southerly and parallel with the North line of said Lot 5; 

Thence North 89o 46’ 08” West, parallel with the said North line of Lot 5, a distance of 87.31 feet, to the TRUE POINT OF BEGINNING. 

Said parcel contains 427363 square feet or 9.811 acres. 

 

			
	
 
	
 
	

	

	
 

	
 
	
 

 

SHEET 2 OF 3   

 

15

 

 

 

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Exhibit_10.4

 

EXHIBIT “B” 

When recorded, return to: 

Joe F. Tarver, P.C. 

4710 N. Caida Place 

Tucson, AZ 85718 

DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS AND EASEMENTS 

CONCERNING RECIPROCAL INGRESS-EGRESS EASEMENT OBLIGATIONS 

THIS DECLARATION OF COVENANTS, CONDITIONS, RESTRICTIONS AND EASEMENTS CONCERNING RECIPROCAL INGRESS-EGRESS EASEMENT OBLIGATIONS (this “Declaration”) is made and entered into as of the 17th day of February, 2003, by OCTOBER 23RD GROUP L.L.C., an Arizona limited liability company (“October Group”), and PIMA FEDERAL CREDIT UNION, a corporation (“Pima Federal”). 

PRELIMINARY STATEMENTS 

A. October Group is the owner of that certain real property legally described in Exhibit “A” attached hereto (the “Shopping Center Property” or the “Shopping Center”). 

B. October Group, as “Landlord”, and Home Depot U.S.A., Inc., a Delaware corporation, as “Tenant”, previously entered into a certain Ground Lease dated March 12, 2001, as amended by that certain Development Agreement and First Amendment of Lease dated as of April 19, 2002, and that certain Second Amendment of Lease dated as of November 21, 2002 (collectively, the “Home Depot Lease”). The Home Depot Lease is evidenced by a certain Amended and Restated Memorandum of Lease dated as of November 21, 2002, and recorded on November 27, 2002, in the office of the Pima County, Arizona, Recorder at Docket 11935, Page 13209. Home Depot U.S.A. Inc. and its successors and assigns as Tenant under the Home Depot Lease, and any extension or renewal thereof, are referred to herein collectively as “Home Depot.” 

C. Pursuant to the Home Depot Lease, Home Depot leases from October Group that portion of the Shopping Center Property legally described in Exhibit “B” hereto (the “Home Depot Premises”). October Group owns the fee interest (the “Underlying Fee”) in the Home Depot Premises. The record holder of fee title to the Underlying Fee, its heirs, personal representatives, successors and assigns (whether by sale, transfer, foreclosure, deed in lieu of foreclosure, or otherwise) is referred to herein as the “Underlying Fee Owner”. 

 

D. October Group was originally also the owner of that certain real property legally described in Exhibit “C” attached hereto (the “Adjoining Parcel”). October Group has now conveyed that portion of the Adjoining Parcel legally described in Exhibit “D” attached hereto to Pima Federal (the “Pima Federal Parcel”). The record holder of fee title to any portion of the Adjoining Parcel, its heirs, personal representatives, successors and assigns (whether by sale, transfer, foreclosure, deed in lieu of foreclosure, or otherwise) is referred to herein as an “Adjoining Parcel Owner” or “Adjoining Parcel Owners”. 

E. In addition to the Home Depot Lease, October Group and Home Depot entered into that certain Reciprocal Ingress-Egress Easement Agreement dated as of April 19, 2002, and recorded on July 9, 2002, in the office of the Pima County, Arizona, Recorder at Docket 11837, Page 1966, as amended by that certain First Amendment to Reciprocal Ingress-Egress Easement dated as of February    , 2003, and recorded on February     , 2003, in the office of the Pima County, Arizona, Recorder at Docket             , Page      (collectively, the “Home Depot REA”), by the terms of which October Group and Home Depot set forth certain reciprocal easement rights with respect to the Shopping Center Property and the Adjoining Parcel and agreed to certain maintenance obligations with respect to the “Common Areas” (as defined in the Home Depot REA), and agreed to certain use restrictions and prohibitions encumbering the Adjoining Parcel. 

Notwithstanding October Group’s ownership of the Underlying Fee and October Group’s and Pima Federal’s ownership of the Adjoining Parcel, such common ownership shall not cause a merger of any of the easements, rights and benefits granted hereunder for the benefit of the Home Depot Premises and the Underlying Fee over the Adjoining Parcel nor cause the merger of any of the obligations or burdens placed hereunder upon the Adjoining Parcel for the benefit of the Home Depot Premises and the Underlying Fee. 

F. October Group and Pima Federal desire to make this Declaration in order to set forth certain easements, covenants, conditions and restrictions that encumber the Adjoining Parcel for the benefit of the October Group, the Underlying Fee Owner and Home Depot (collectively, the “Benefitted Owners”) and for the benefit of the Home Depot Premises and the Underlying Fee, and to obligate each Adjoining Parcel Owners to be liable for the full and faithful performance of all of the 

1

 

covenants, conditions, restrictions and easements set forth in this Declaration and to provide that this Declaration may be enforced by any or all of the Benefitted Owners (including without limitation October Group at such time as it no longer owns any portion of the Shopping Center or the Adjoining Parcel). 

 

DECLARATIONS 

1. Imposition of Covenants. In order to accomplish the purposes and intentions recited above, October Group and Pima Federal hereby submit the Adjoining Parcel, together with all improvements, appurtenances and facilities relating to or located on the Adjoining Parcel now and in the future, to this Declaration, and hereby impose upon the Adjoining Parcel the covenants, conditions, restrictions and easements and other provisions of this Declaration for the benefit of the Underlying Fee, the Home Depot Premises and the Benefitted Owners, and October Group and Pima Federal hereby declare that the Adjoining Parcel shall be held, sold, conveyed, encumbered, leased, rented, occupied and improved subject to the provisions of this Declaration. 

2. Covenants Running With the Land. Each and every of the provisions of this Declaration shall be a burden upon the Adjoining Parcel and shall be appurtenant to and for the benefit of the Home Depot Premises and the Underlying Fee. All provisions of this Declaration shall be deemed to be covenants running with the land or equitable servitudes, as the case may be. 

3. Faithful Performance. Each Adjoining Parcel Owner and its Permittees (as defined in Section 8(e) below) shall be obligated at all times to fully and faithfully perform in a timely manner all of the covenants, both affirmative and negative, and all of the terms and provisions set forth in this Declaration, together with all of the terms and provisions set forth in the Home Depot REA as they relate to the Adjoining Parcel as if all such covenants and terms and provisions were fully set forth in this Declaration, and all references herein to the Declaration shall be deemed to include the Adjoining Parcel Owners’ obligations under the Home Depot REA. 

4. Indemnification. Each Adjoining Parcel Owner shall defend, indemnify and hold the Benefitted Owners harmless for, from and against any and all damages, liabilities, losses, actions, claims, costs and expenses (including reasonable attorneys’ fees and court costs and reasonable attorneys’ fees and court costs on appeal) incurred as a result of its failure, or the failure of any of the tenants, subtenants, licensees, concessionaires occupants or users of its portion of the Adjoining Parcel, to comply with the provisions of this Declaration. 

 

5. Enforcement and Remedies. By accepting a deed for any portion of the Adjoining Parcel, each Adjoining Parcel Owner (i) shall be deemed to acknowledge and agree that the foregoing covenants, conditions and restrictions are a material inducement to the sale of the Adjoining Parcel to such Adjoining Parcel Owner; and (ii) agrees that the Benefitted Owners shall have the right to enforce the provisions of this Declaration by any and all appropriate injunctive or other equitable relief, in addition to any and all remedies at law, (iii) agrees that the violation of any of the covenants, conditions and restrictions in this Declaration may result in damages that are difficult or impossible to determine in amount, and therefore equitable remedies to enjoin the violation are appropriate, including temporary injunction, permanent injunction and specific performance against the breach of any of the provisions hereof, and (iv) agrees that any defaulting Adjoining Parcel Owner shall reimburse each Benefitted Owner for all expenses incurred by such Benefitted Owner in enforcing this Declaration, including without limitation reasonable attorneys’ fees. Enforcement of the covenants, conditions, restrictions and easements and other provisions contained in this Declaration may be by any proceeding at law or in equity against any person or persons or entity or entities violating or attempting to violate any such provision, to enjoin or restrain such violation or attempted violation or to recover damages, or both, and the Benefitted Owners shall have the right to institute, maintain and prosecute any such proceedings and to recover its costs and reasonable attorneys’ fees incurred pursuant thereto. 

6. Creation of Lien. Each Adjoining Parcel Owner, by acceptance of a deed to any portion of the Adjoining Parcel, whether or not it shall be so expressed in such deed, shall be deemed to covenant and agree to pay to the Benefitted Owners all amounts recoverable against such defaulting Adjoining Parcel Owner under this Declaration, and such amounts shall be a charge upon that portion of the Adjoining Parcel owned by of the defaulting Adjoining Parcel Owner and shall be a continuing lien upon such portion of the Adjoining Parcel. The lien so created hereby may be enforced by foreclosure of the defaulting Adjoining Parcel Owner’s portion of the Adjoining Parcel in like manner as a mortgage or deed of trust on real property. In any such foreclosure, the defaulting Adjoining Parcel Owner shall be required to pay the costs and expenses of such proceedings, including without limitation reasonable attorneys’ fees. 

Prior to undertaking enforcement of the lien provided for in this Section 6, the Benefited Owner or Benefited Owners, as applicable, shall file a notice in the official records of the Pima County Recorder, signed and verified, which shall contain at least: (i) an itemized statement of all amounts due and payable pursuant hereto; (ii) a description sufficient for identification of the portion of the Adjoining Parcel that is the subject of the lien; (iii) the name of the Adjoining Parcel Owner or reputed Adjoining Parcel Owner of the portion of the Adjoining Parcel that is the subject of the lien; and (iv) the 

2

 

name and address of the Benefitted Owner or Benefitted Owners, as applicable. The lien, when such notice has been recorded, shall be prior and superior to all right, title, interest, lien or claim that may be or has been acquired or attached to such portion of the Adjoining Parcel after the time of filing of this Declaration. 

 

7. Right to Remedy Defaults and Access Easement. In the event that any Adjoining Parcel Owner or its Permittees violate the provisions of this Declaration, any or all of the Benefitted Owners shall be entitled, but not obligated, to undertake any and all remedial action to cure such violations, including without limitation performing maintenance and repair on the Adjoining Parcel, and all costs, expenses and fees incurred for such remedial action, plus a management fee equal to fifteen percent (15%) of such costs, expenses and fees to defray administrative expenses, shall be the obligation of the defaulting Adjoining Parcel Owner and shall be added to and become part of the lien on the defaulting Adjoining Parcel Owner’s portion of the Adjoining Parcel and shall be enforceable and collected as provided in Section 6 hereof. 

The Adjoining Parcel is hereby made subject to an easement in favor of the Benefitted Owners (including their agents, employees and contractors) for the purpose of entry to take any and all remedial action necessary or desirable to cure violations of this Declaration. 

8. Miscellaneous. 

(a) This Declaration shall be construed in accordance with the laws of the State of Arizona. 

(b) This Declaration shall be effective as of the date of recording hereof in the Office of the Pima County, Arizona, Recorder and shall continue in full force and effect in perpetuity. This Declaration may be modified by a written agreement among the Underlying Fee Owner and the Adjoining Parcel Owners, and during the term of the Home Depot Lease and any extension or renewal thereof consented to by Home Depot, and recorded in the Office of the Pima County Recorder. This Declaration may be terminated by written notice recorded in the office of the Pima County, Arizona, Recorder executed by the Underlying Fee Owner, any mortgagee upon the Underlying Fee and Home Depot, and, upon expiration or termination of the Home Depot Lease, by the Underlying Fee Owner and any mortgagee upon the Underlying Fee acting alone. 

(c) Failure by the Benefitted Owners to enforce any covenant, condition, restriction or easement or other provision contained in this Declaration shall in no way or event be deemed to be a waiver of the right to do so thereafter. 

 

(d) The provisions of this Declaration shall be deemed to be independent and severable, and the invalidity of any one or more of the provisions of it by judgment or court order or decree shall in no way affect the validity or enforceability of any of the other provisions, which provisions shall remain in full force and effect to the fullest extent provided by law. 

(e) As used in the Declaration, the term “Permittees” shall mean the tenants, employees, agents, guests, invitees, licensees, or contractors of the Adjoining Parcel Owners and their respective subtenants, employees, agents, guests, invitees, licensees, or contractors. 

(f) This Declaration shall inure to the benefit of the Underlying Fee, Home Depot Premises and the Benefitted Owners and be binding upon the Adjoining Parcel Owners of the Adjoining Parcel and the respective portions thereof, their heirs, personal representatives, successors and assigns, and each Adjoining Parcel Owner shall be liable for the performance of all covenants, obligations and undertakings herein set forth with respect to the portion of the Adjoining Parcel owned by it that accrue during the period of such ownership. Each term, covenant, condition, restriction and agreement contained herein respecting the Adjoining Parcel shall be a burden on the Adjoining Parcel, shall be appurtenant to and for the benefit of the Underlying Fee and Home Depot Premises, and shall run with the land. 

(g) The provisions of this Declaration are not intended to create, nor shall they in any way be interpreted or construed to create, a joint venture, partnership or any other similar relationship between the parties. Each party shall be considered a separate party, and no party shall have the right to act as agent for another, unless expressly authorized to do so herein or by separate written instrument signed by the party to be charged. 

(h) The captions and headings in this Declaration are for reference only and shall not be deemed to define or limit the scope or intent of any of the terms, covenants, conditions, restrictions or agreements contained herein. 

(i) Whenever the context requires in construing the provisions of this Declaration, the use of one gender shall include both genders, the use of the singular shall include the plural, and the use of the plural shall include the singular. The word “including” shall be construed inclusively, and not in limitation, whether or not the words “without limitation” or “but not limited to” (or words of similar import) are used with respect thereto. Unless otherwise provided, references to Sections refer to the Sections of this Declaration. 

 

(j) If any party hereto or bound hereby is composed of more than one person, then the obligations of such party shall be joint and several. 

3

 

(k) Time is of the essence with respect to the performance of each obligation of this Declaration. Whenever performance is required by any Person hereunder, such Person shall use all due diligence to perform and take all necessary measures in good faith to perform. 

(l) Except as specifically provided below, there shall be absolutely no corporate or personal liability of persons who constitute Home Depot, or persons who constitute the Underlying Fee Owner or persons who constitute the mortgagee or beneficiary of any mortgage or deed of trust that encumbers the Underlying Fee, including, but not limited to, officers, directors, employees or agents thereof, with respect to any of the terms, covenants, conditions and provisions of this Declaration. In the event of any dispute or litigation arising from or connected with this Declaration, the Adjoining Parcel Owner who seeks recovery from Home Depot, the Underlying Fee Owner or such mortgagee or beneficiary shall look solely to the interest of Home Depot in the Home Depot Lease, and solely to the interest of the Underlying Fee Owner or such mortgagee or beneficiary in the Underlying Fee, as applicable, for the satisfaction of each and every remedy of the non-defaulting Adjoining Parcel Owner; provided, however, that the foregoing shall not in any way impair, limit or prejudice the right of any Adjoining Parcel Owner to pursue equitable relief in connection with any term, covenant or condition of this Declaration, including a proceeding for a temporary restraining order, preliminary injunction, permanent injunction or specific performance. 

(m) If any party initiates or defends any legal action or proceeding to enforce or interpret any of the terms of this Declaration, the prevailing party in any such action or proceeding shall be entitled to recover from the losing party its reasonable costs and attorneys’ fees (including costs and attorneys’ fees on any appeal). 

(n) The following exhibits are attached to this Declaration and by this reference incorporated in this Declaration: 

Exhibit “A” – Legal Description of Shopping Center Property 

Exhibit “B” – Legal Description of Home Depot Premises and Underlying Fee 

Exhibit “C” – Legal Description of Adjoining Parcel 

Exhibit “D” – Legal Description of Pima Federal Parcel 

In witness whereof, this Declaration has been executed by October Group and consented to by Home Depot as of the date first set forth above. 

 

 

			
	
 
	
 
	
 

	
OCTOBER 23RD GROUP L.L.C., an Arizona

limited liability company

	
 
	
 

	
By:
	
Mar Enterprises, L.L.C., an Arizona

limited liability company, its managing member

	
 
	
 
	
 

	
 
	
By:
	
 

	
 
	
 
	
Steven A Mar, Authorized Signatory

	
 

	
PIMA FEDERAL CREDIT UNION, a corporation

	
 
	
 

	
By:
	
 

	
 
	
Title:
	
 

 

			
	
 
	
 
	
 

	
STATE OF ARIZONA
	
)
	
 

	
 
	
)
	
ss.

	
COUNTY OF PIMA
	
)
	
 

The foregoing instrument was acknowledged before me this          day of February, 2003, by Steven A. Mar, as authorized signatory of Mar Enterprises, L.L.C., an Arizona limited liability company, as managing member of October 23rd Group L.L.C., an Arizona limited liability company, on behalf of such company. 

 

	
 

Notary Public

 

			
	
 
	
 
	
 

4

 

			
	
My commission expires:

 
	
 
	
 

	
STATE OF ARIZONA
	
)
	
 

	
 
	
)
	
ss.

	
COUNTY OF PIMA
	
)
	
 

 

	
 
	
 
	
 

	
The foregoing instrument was acknowledged before me this          day of February, 2003, by                         , as                          of Pima Federal Credit Union, a corporation, on behalf of such corporation.

 

	
 

	
 

Notary Public

My commission expires: 

 

CONSENT BY HOME DEPOT U.S.A., INC. 

The undersigned acknowledges and agrees on behalf of Home Depot U.S.A., Inc. that the foregoing Declaration has been read, approved and consented to by Home Depot U.S.A., Inc., and that the undersigned is authorized to and does by signing below evidence Home Depot U.S.A. Inc.’s consent to the Declaration and all of the terms and conditions set forth therein. 

HOME DEPOT USA, INC., a Delaware corporation 

 

	
By:
	
 

	
Title:
	
Senior Corporate Counsel

 

		
	
 
	
 

	
STATE OF                         )
	
 

	
                                             )
	
ss.

	
COUNTY OF                     )
	
 

 

		
	
 
	
 

	
The foregoing instrument was acknowledged before me this          day of January, 2003, by                             , as                              of HOME DEPOT U.S.A., INC., a Delaware corporation, for and on behalf of such company.

 

	
 

	
 

Notary Public

My commission expires: 

 

5

 

 

EXHIBIT “A” 

LEGAL DESCRIPTION OF SHOPPING CENTER PROPERTY 

Lots 1, 2 and 3, inclusive, of Broadway Pantano Center, a subdivision of Pima County, Arizona, according to the plat of record at Book 56 of Maps and Plats at Page 84, records of Pima County, Arizona. 

 

EXHIBIT “B” 

LEGAL DESCRIPTION OF HOME DEPOT PREMISES 

AND UNDERLYING FEE 

Lot 1 of Broadway Pantano Center, a subdivision of Pima County, Arizona, according to the plat of record at Book 56 of Maps and Plats at Page 84, records of Pima County, Arizona. 

 

EXHIBIT “C” 

LEGAL DESCRIPTION OF ADJOINING PARCEL 

Lots 4, 5 and 6, inclusive, of Broadway Pantano Center, a subdivision of Pima County, Arizona, according to the plat of record at Book 56 of Maps and Plats at Page 84, records of Pima County, Arizona. 

 

EXHIBIT “D” 

LEGAL DESCRIPTION OF PIMA FEDERAL PARCEL 

LOT 5 – PARCEL C 

 

All of Lot 5 of Broadway Pantano Center, according to the plat of record in the office of the County Recorder of Pima County, Arizona, in Book 56 of Maps, Page 84, lying within the Southeast Quarter of the Southeast Quarter of Section 8, Township 14 South, Range 15 East, of the Gila and Salt River Meridian, Pima County, Arizona. 

EXCEPT the North 56.00 feet of Lot 5. 

FURTHER EXCEPT that portion of Lot 5 described as follows: 

COMMENCING at the Northwest corner of said Lot 5; 

Thence South 00° 11’ 12” West, along the westerly line of said Lot 5, a distance of 56.00 feet, to the TRUE POINT OF BEGINNING; 

Thence continuing South 00° 11’ 12” West, along the westerly line of said Lot 5, a distance of 54.79 feet; 

Thence South 34° 48’ 48” East, along the westerly line of said Lot 5, a distance of 152.21 feet; 

Thence leaving the westerly line of Lot 5, North 00o 11’ 12” East, a distance of 179.41 feet to a point on a line lying 56.00 feet Southerly and parallel with the North line of said Lot 5; 

Thence North 89° 46’ 08” West, parallel with the said North line of Lot 5, a distance of 87.31 feet, to the TRUE POINT OF BEGINNING. 

Said parcel contains 52108 square feet or 1.196 acres. 

6

 

 

   

 

	
 
	
 

	
  
	
SHEET 3 0F 4  

 

7

 

 

 

 

 

8

 

 

When recorded, return to: 

Nagle Law Group, P.C. 

4530 East Shea Boulevard                                                                 Exhibit C 

Suite 140 

Phoenix, Arizona 85028 

FIRST AMENDMENT TO 

RECIPROCAL INGRESS-EGRESS AGREEMENT 

THIS FIRST AMENDMENT TO RECIPROCAL INGRESS-EGRESS AGREEMENT (this “First Amendment”) is made and entered into as of the      day of February, 2003, by and among OCTOBER 23RD GROUP L.L.C., an Arizona limited liability company (“October Group”), HD BROADWAY LLC, an Arizona limited liability company (“HDB”), HOME DEPOT U.S.A., INC., a Delaware corporation (“Home Depot”), and PIMA FEDERAL CREDIT UNION, a corporation (“PFCU”). 

RECITALS 

A. October Group and Home Depot are parties to that certain Reciprocal Ingress-Egress Agreement dated as of April 19, 2002 (the “Agreement”), encumbering certain real property located in Pima County, Arizona, as more particularly described on Exhibit “A” attached hereto and made a part hereof (the “Shopping Center”) and on Exhibit “B” attached hereto and made a part hereof (the “Adjoining Parcel”), which Agreement was recorded with the Pima County Recorder in Docket 11837, at Page 1966. 

B. October Group is the owner of that portion of the Shopping Center more particularly described on Exhibit “C” attached hereto and made a part hereof (the “Pad Property”), as well as that portion of the Adjoining Parcel more particularly described on Exhibit “D” attached hereto and made a part hereof (the “Kohl’s Parcel”). With respect to the Kohl’s Parcel, the owner thereof is hereafter referred to as the “Adjoining Parcel Owner”. The occupant of the Kohl’s Parcel is hereinafter referred to as the “Kohl’s Parcel Occupant”. If there is no occupant of the Kohl’s Parcel then the Adjoining Parcel Owner shall be deemed to be the Kohl’s Parcel Occupant for purposes of this First Amendment. 

C. HDB is the owner of that portion of the Shopping Center more particularly described on Exhibit “E” attached hereto and made a part hereof (the “Premises”). 

D. Pursuant to that certain Lease dated March 12, 2001, entered into by and between HDB, as successor in interest to October Group, as landlord, and Home Depot, as tenant (the “Lease”), Home Depot has a leasehold interest in the Premises. The Shopping Center is sometimes referred to as the “Original Parcels”. With respect to the Original Parcels, October Group, HDB and Home Depot are collectively referred to as the “Parcel Owners”. 

E. PFCU is the owner of that portion of the Adjoining Parcel more particularly described on Exhibit “F” attached hereto and made a part hereof (the “PFCU Parcel”). 

 

F. The Premises, the Pad Property, the Kohl’s Parcel and the PFCU Parcel are sometimes collectively referred to as the “Properties”. Home Depot, October Group, HDB, PFCU, the Kohl’s Parcel Occupant and the Adjoining Parcel Owner are sometimes referred to individually as a “Party” and collectively as the “Parties”. 

G. The Parties desire to amend the Agreement and the rights of ingress, egress, access and parking for vehicular and pedestrian traffic upon, across and over the paved portion of the Properties and the Common Areas in order to incorporate the development of the Kohl’s Parcel. 

H. Unless otherwise defined in this First Amendment, all defined terms in the Agreement shall have the same meaning herein. 

9

 

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 

AGREEMENTS 

1. Section 1 of the Agreement is hereby deleted and replaced in its entirety with the following: 

“There is hereby granted, declared and reserved, for the mutual and reciprocal benefit of the Parcel Owners, PFCU and the Adjoining Parcel Owner, and their respective successors, assigns and lessees and sublessees (including, without limitation, the Kohl’s Parcel Occupant), a non-exclusive perpetual easement upon, over and across the Common Areas now or hereafter existing on the Properties for the purposes set forth in Section 2 below and for no other purposes whatsoever.” 

2. Section 4 of the Agreement is hereby deleted in its entirety and replaced with the following: 

“4. Shopping Center Signs. 

(a) Grant of Easement. Each Party hereby grants and conveys to the other Party, for their use and for the use of designated occupants of the Properties, a non-exclusive perpetual easement under, through and across the Common Area of the Properties for the installation, operation, maintenance, repair and replacement of the Shopping Center Signs (as defined in subparagraph (b) below) and all Utility Lines (as defined in Section 6 below) located on the Properties. Home Depot and the Kohl’s Parcel Occupant, and their respective successors, assigns, lessees and sublessees, shall have the right and privilege to place sign panels on the Shopping Center Signs within the panel space allocated to such Party in subparagraph (b) below and Exhibit “G” of this Agreement. The foregoing easement, together with the rights included therewith, shall be for the benefit of and appurtenant to the lands of each of the Parties entitled to place sign panels on the Shopping Center Signs and shall be binding on and burden the lands upon which the Shopping Center Signs are constructed. 

 

(b) Permitted Signage. With respect to this Agreement, the freestanding signs shall be used to identify Home Depot, as occupant of the Premises, and the Kohl’s Parcel Occupant (collectively, the “Shopping Center Signs”). With respect to the Shopping Center Sign located along East Broadway Boulevard, Home Depot shall be entitled to the top seventy percent (70%) of the panel space thereon and the Kohl’s Parcel Occupant shall be entitled to the remaining thirty percent (30%). With respect to the Shopping Center Sign located along Pantano Road, the Kohl’s Parcel Occupant shall be entitled to the top thirty percent (30%) of the panel space thereon and Home Depot shall be entitled to the remaining seventy percent (70%). Each outlot may have a monument sign to identify one (1) occupant of the outlot, but only if such monument sign does not preclude the installation of the Shopping Center Signs. 

(c) Construction; Maintenance. Home Depot shall construct and install the Shopping Center Signs in conformance with the design and dimensions, and the allocation of the panel areas, more particularly set forth in Exhibit “G” of this Agreement. Within thirty (30) days of receipt of an invoice from Home Depot, the Kohl’s Parcel Occupant shall reimburse Home Depot for all the costs related to and incurred by Home Depot for the design, construction and installation of the Shopping Center Signs. Home Depot shall be responsible for the ongoing maintenance, repair and replacement of the Shopping Center Signs. The Kohl’s Parcel Occupant shall reimburse Home Depot for thirty percent (30%) of such maintenance, repair and replacement costs within thirty (30) days of receipt of an invoice from Home Depot. If Home Depot fails to perform its maintenance and repair obligations under this Section 4(c), then, upon ten (10) days’ prior written notice to Home Depot (except that no notice shall be required in an emergency), the Kohl’s Parcel Occupant shall have the right, but not the obligation, to cure such default for the account of and at the expense of Home Depot. If the Kohl’s Parcel Occupant exercises its self-help right, then, within ten (10) days after receipt of an invoice from the Kohl’s Parcel Occupant, Home Depot shall reimburse the Kohl’s Parcel Occupant all costs reasonably incurred in curing such default plus a ten percent (10%) maintenance fee. Home Depot and the Kohl’s Parcel Occupant shall each install and illuminate its sign panels on the Shopping Center Signs at its own cost and expense. 

(d) Modifications. The Shopping Center Signs shall not be modified without the prior written consent of the Parties entitled to display sign panels thereon, except that Home Depot and the Kohl’s Parcel Occupant shall have the unqualified right to use in the panel or space allocated to them on the Shopping Center Signs their identification signage.” 

 

3. The last paragraph of Section 6 is hereby deleted and replaced in its entirety with the following: 

“The Adjoining Parcel Owner shall be responsible for the ongoing maintenance and repair of the Truck Lane (as defined below). Such maintenance and repair shall include repaving (at least once every ten (10) years), seal coating (at least once every two (2) years), repairs, sweeping and striping (as reasonably necessary). The Adjoining Parcel Owner shall be 

10

 

responsible for all costs and expenses incurred in the maintenance and repair of the Truck Lane. In no event shall Home Depot be obligated to reimburse, contribute or pay for the maintenance and repair of the Truck Lane. If the Adjoining Parcel Owner fails to perform its maintenance and repair obligations under this Section 6, then, upon ten (10) days’ prior written notice to the Adjoining Parcel Owner and the Kohl’s Parcel Occupant (except that no notice shall be required in an emergency), Home Depot shall have the right, but not the obligation, to cure such default for the account of and at the expense of the Adjoining Parcel Owner and the Kohl’s Parcel Occupant. If Home Depot exercises its self-help right, then, within ten (10) days after receipt of an invoice from Home Depot, the Adjoining Parcel Owner or the Kohl’s Parcel Occupant shall reimburse Home Depot all costs reasonably incurred in curing such default plus a ten percent (10%) maintenance fee. 

Home Depot, at its sole cost and expense, shall be responsible for the initial construction of the Truck Lane and the Truck Lane Lighting (as defined below). The Truck Lane shall be lit and conform to the lighting (with respect to the location and number of lights) as depicted on the Site Plan (the “Truck Lane Lighting”). Once constructed, the Kohl’s Parcel Occupant shall be responsible for the maintenance, repair, insurance and replacement of the Truck Lane Lighting, including light standards, wires, conduits, lamps, ballasts and lenses, time clocks and circuit breakers (and all service/facilities and hardware thereto) along the Truck Lane. Within thirty (30) days of receipt of an invoice from the Kohl’s Parcel Occupant, Home Depot shall reimburse the Kohl’s Parcel Occupant for (i) fifty percent (50%) of the cost for maintenance, repair, insurance and replacement of the Truck Lane Lighting, including light standards, wires, conduits, lamps, ballasts and lenses, time clocks and circuit breakers (and all service/facilities and hardware thereto); and (ii) fifty-two percent (52%) of the utility costs with respect to the light poles along the Truck Lane. The Kohl’s Parcel Occupant shall keep the Truck Lane Lighting illuminated from dusk until the then current delivery and lighting restrictions pursuant to local governmental regulations. The parties acknowledge that as of the date of this First Amendment local governmental regulations limit the hours which the Truck Lane may be lit to a minimum required for security and low pressure sodium application between the hours of 10 p.m. and 7 a.m. Pursuant to the foregoing the Truck Lane Lighting shall be lit to the minimum required for security purposes and with low pressure sodium application until at least 11:00 p.m. Notwithstanding the allocation of costs set forth above, in the event the local governmental regulations are amended so as to permit delivery and full lighting beyond 10:00 p.m., the allocation of utility costs shall conform to the following schedules: 

 

 

	
 
	
 
	
 

	
UTILITY COSTS

 

	
Additional Lighting Hour (or fraction thereof) beyond 11:00 p.m.

 
	
Kohl’s
Share 

 
	
Home Depot’s
Share 

 

	
1
	
38.40%
	
61.60%

	
2
	
32.00%
	
68.00%

	
3
	
27.43%
	
72.57%

	
4
	
24.00%
	
76.00%

	
5
	
21.33%
	
78.67%

	
6
	
19.20%
	
80.80%

	
7
	
17.45%
	
82.55%

	
8
	
16.00%
	
84.00%

	
9
	
14.77%
	
85.23%

If the Kohl’s Parcel Occupant fails to perform its maintenance and repair obligations for the Truck Lane Lighting, then, upon ten (10) days’ prior written notice to the Kohl’s Parcel Occupant (except that no notice shall be required in an emergency), Home Depot shall have the right, but not the obligation, to cure such default for the account of and at the expense of the Kohl’s Parcel Occupant. If Home Depot exercises its self-help right, then, within ten (10) days after receipt of an invoice from Home Depot, the Kohl’s Parcel Occupant shall reimburse Home Depot all costs reasonably incurred in curing such default plus a ten percent (10%) maintenance fee. 

4. The following shall be added at the end of Section 7 of the Agreement: 

“The Parties hereby approve the site plan configuration attached hereto as Exhibit “H” (the “Site Plan”). Notwithstanding Section 3 of the Agreement, the Truck Lane configuration as shown on Exhibit “H” (the “Truck Lane”) shall not be modified, altered or moved without the express written consent of Home Depot, such consent to be in Home Depot’s sole and absolute discretion.” 

5. The introduction to Section 9 is hereby deleted and replaced in its entirety with the following: 

“Each Lot of the Adjoining Parcel, individually, shall at all times contain sufficient ground level parking spaces in order to comply with the following minimum requirements:” 

11

 

6. Section 13 of the Agreement is hereby deleted and replaced in its entirety with the following: 

“The grant of easement and other provisions contained in this Agreement shall be a burden on each Parcel, shall be appurtenant to and for the benefit of the other Properties and each Occupant and part thereof and shall run with the land. The provisions herein may be enforced by the owners of the Original Parcels, the Adjoining Parcel Owner, October Group, HDB, Home Depot, PFCU and the Kohl’s Parcel Occupant.” 

 

7. A new Section 21 is hereby created reading as follows: 

“The building to be constructed on the Premises is to be built as category V-NR as that category is defined pursuant to the applicable building code. The Kohl’s Parcel Occupant covenants and agrees that the building on the Kohl’s Parcel will be constructed, remodeled or expanded so as not to cause the building on the Premises to be other than a category V-NR under the applicable building code. Home Depot, in turn, covenants and agrees that the building on the Premises will be constructed, remodeled or expanded so as not to cause the building on the Kohl’s Parcel to be other than a category II-NR or V-NR under the applicable building code.” 

8. In the event of a conflict between the provisions of this First Amendment and the Agreement, the provisions of this First Amendment shall govern, control and prevail. 

9. Except as expressly modified in this First Amendment, the terms and provisions of the Agreement are hereby ratified and affirmed and shall continue in full force and effect. 

10. This First Amendment may be executed in one or more counterparts, each of which may be executed by one or more of the signatory parties hereto. Signature pages may be detached from the counterparts and attached to a single copy of this First Amendment to form one legally effective document. 

SIGNATURES FOLLOW 

 

IN WITNESS WHEREOF, this First Amendment has been made effective as of the date first set forth above. 

 

		
	
 
	
 

	
PIMA FEDERAL CREDIT UNION,

	
a corporation

	
 
	
 

	
By:
	
 

	
Name:
	
 

	
Its:
	
 

 

				
	
 
	
 
	
 

	
OCTOBER 23RD GROUP L.L.C.,

	
an Arizona limited liability company

	
 
	
 

	
By:
	
Mar Enterprises, L.L.C.,

	
 
	
an Arizona limited liability company,

	
 
	
its managing member

	
 
	
 
	
 

	
 
	
By:
	
 

	
 
	
 
	
Steven A Mar, Authorized Signatory

	
 

	
HD BROADWAY LLC,

	
an Arizona limited liability company

	
 
	
 

	
By:
	
October 23rd Group L.L.C.,

	
 
	
an Arizona limited liability company, its sole member

	
 
	
 
	
 

	
 
	
By:
	
Mar Enterprises LLC, an Arizona

	
 
	
 
	
limited liability company, its

	
 
	
 
	
managing member

	
 
	
 
	
 
	
 

	
 
	
 
	
By:
	
 

	
 
	
 
	
 
	
Steven A. Mar, Authorized Signatory

12

 

 

 

			
	
 
	
 
	
 

	
 

	
HOME DEPOT U.S.A., INC.,

	
a Delaware corporation

	
 
	
 

	
By:
	
 

	
 
	
Daniel R. Hatch, its Senior Corporate Counsel

 

 

		
	
 
	
 

	
ACKNOWLEDGED AND CONSENTED TO:

	
 

	
MONY LIFE INSURANCE COMPANY, a

	
New York corporation

	
 
	
 

	
By:
	
 

	
Name:
	
 

	
Its:
	
 

 

			
	
 
	
 
	
 

	
NSHE BASSETT, LLC, an Arizona limited liability company

	
By: National Safe Harbor Exchanges, a

	
California corporation, its Sole Member

	
 
	
 

	
By:
	
 

	
 
	
Dana R. Sobrado, Assistant Vice President

	
 

	
CONTINENTAL 34 FUND LIMITED PARTNERSHIP,

	
a Wisconsin limited partnership

	
 
	
 

	
By:
	
Continental 34 Holding Company, Inc.,

	
 
	
a Delaware corporation, its general partner

	
 
	
 
	
 

	
 
	
By:
	
 

	
 
	
 
	
Daniel J. Minahan, President

	
 

	
KOHL’S DEPARTMENT STORES, INC.,

	
a Delaware corporation

	
 
	
 

	
By:
	
 

	
 
	
R. Lawrence Montgomery,

	
 
	
Chief Executive Officer

	
 
	
 

	
Attest:
	
 

	
 
	
Richard D. Schepp,

	
 
	
Secretary

	
 

	
[ACKNOWLEDGMENTS ON NEXT PAGE]

 

 

		
	
 
	
 

	
STATE OF ARIZONA
	
)

	
 
	
) SS

	
COUNTY OF PIMA
	
)

13

 

 

The foregoing instrument was acknowledged before me this        day of                     , 2003, by                         , as                          of Pima Federal Credit Union, a corporation, on behalf of such corporation. 

 

	
 

	
Notary Public, State of Arizona

	
My Commission expires:

 

		
	
 
	
 

	
STATE OF ARIZONA
	
)

	
 
	
) ss.

	
COUNTY OF PIMA
	
)

The foregoing instrument was acknowledged before me this        day of                     , 2003, by Steven A. Mar, as authorized signatory of Mar Enterprises, L.L.C., an Arizona limited liability company, as managing member of October 23rd Group L.L.C., an Arizona limited liability company, on behalf of such limited liability company. 

 

	
 

	
Notary Public

	
My commission expires:

 

 

			
	
 
	
 
	
 

	
STATE OF ARIZONA
	
)
	
 

	
 
	
) SS
	
 

	
COUNTY OF PIMA
	
)
	
 

The foregoing instrument was acknowledged before me this      day of                     , 2003, by Steven A. Mar, as authorized signatory of Mar Enterprises, L.L.C., an Arizona limited liability company, as managing member of October 23rd Group L.L.C., an Arizona limited liability company, in its capacity as sole member of HD Broadway LLC, an Arizona limited liability company, on behalf of such limited liability company. 

 

	
 

	
Notary Public

	
My commission expires:

 

			
	
 
	
 
	
 

	
STATE OF CALIFORNIA
	
)
	
 

	
 
	
) SS
	
 

	
County of Orange
	
)
	
 

On                     , 2003, before me, a notary public in and for said state, personally appeared Daniel R. Hatch, personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person acted, executed the instrument. 

 

	
 

	
WITNESS my hand and official seal.

	
 

	
 

	
Signature

 

 

		
	
 
	
 

	
STATE OF                         
	
)

	
 
	
) ss.

	
COUNTY OF                         
	
)

The foregoing instrument was acknowledged before me this        day of                     , 2003, by                             , as                              of MONY Life Insurance Company, a New York corporation, on behalf of such corporation. 

 

	
 

	
Notary Public

	
My commission expires:

 

		
	
 
	
 

14

 

		
	
STATE OF ARIZONA
	
)

	
 
	
) ss.

	
COUNTY OF MARICOPA
	
)

The foregoing instrument was acknowledged before me this        day of                         , 2003, by Dana R. Sobrado, as executive vice president of National Safe Harbor Exchanges, a California corporation, sole member NSHE BASSETT, LLC, an Arizona limited liability company, on behalf of such limited liability company. 

 

	
 

	
Notary Public

	
My commission expires:

 

 

			
	
 
	
 
	
 

	
STATE OF                         
	
)
	
 

	
 
	
) ss.
	
 

	
COUNTY OF                     
	
)
	
 

The foregoing instrument was acknowledged before me this      day of                     , 2003, by Daniel J. Minahan, as President of Continental 34 Holding Company, Inc., a Delaware corporation, as general partner of Continental 34 Fund Limited Partnership, a Wisconsin limited partnership, on behalf of such limited partnership. 

 

	
 

	
Notary Public

	
My commission expires:

 

			
	
 
	
 
	
 

	
STATE OF                         
	
)
	
 

	
 
	
) ss.
	
 

	
COUNTY OF                     
	
)
	
 

The foregoing instrument was acknowledged before me this      day of                     , 2003, by R. Lawrence Montgomery and Richard D. Schepp, as Chief Executive Officer and Secretary, respectively, of Kohl’s Department Stores, Inc., a Delaware corporation, on behalf of such corporation. 

 

	
 

	
Notary Public

	
My commission expires:

 

EXHIBIT “A” 

Description of Shopping Center 

Lots 1, 2 and 3, inclusive, of Broadway Pantano Center, a subdivision of Pima County, Arizona, according to the plat of record at Book 56 of Maps and Plats at Page 84, records of Pima County, Arizona. 

 

EXHIBIT “B” 

Adjoining Property Description 

Lots 4, 5 and 6, inclusive, of Broadway Pantano Center, a subdivision of Pima County, Arizona, according to the plat of record at Book 56 of Maps and Plats at Page 84, records of Pima County, Arizona. 

 

EXHIBIT “C” 

Pad Property Description 

Lots 2 and 3 of Broadway Pantano Center, a subdivision of Pima County, Arizona, according to the plat of record at Book 56 of Maps and Plats at Page 84, records of Pima County, Arizona. 

 

15

 

 

EXHIBIT “D” 

Kohl’s Parcel Description 

 

Lots 4 and 6 of Broadway Pantano Center, according to the plat of record in the office of the County Recorder of Pima County, Arizona, in Book 56 of Maps, Page 84, lying within the Southeast Quarter of the Southeast Quarter of Section 8, Township 14 South, Range 15 East, of the Gila and Salt River Meridian, Pima County, Arizona. 

EXCEPT that portion of Lot 4 described as follows: 

COMMENCING at the Northeast corner of said Lot 4, said point also being the TRUE POINT OF BEGINNING; 

Thence South 00o 11’ 12” West, along the easterly line of said Lot 4, a distance of 56.00 feet, to a point on a line lying 56.00 feet Southerly and parallel with the North line of said Lot 4; 

Thence North 89o 46’ 08” West, parallel with said North line of Lot 4, a distance of 34.94 feet; 

Thence South 87° 56’ 25” West, a distance of 100.08 feet to a point on a line lying 60.00 feet Southerly and parallel with said North line of Lot 4; 

Thence North 89o 46’ 08” West, parallel with said North line of Lot 4, a distance of 442.36 feet, to a point on the westerly line of Lot 4; 

Thence North 00o 11’ 12” East, along the westerly line of Lot 4, a distance of 60.00 feet to the Northwest corner of Lot 4; 

Thence South 89° 46’ 08” East, along the North line of said Lot 4, a record distance of 577.35 feet to the TRUE POINT OF BEGINNING. 

TOGETHER WITH that portion of Lot 5 of Broadway Pantano Center, according to the plat of record in the office of the County Recorder of Pima County, Arizona, in Book 56 of Maps, Page 84, lying within the Southeast Quarter of the Southeast Quarter of Section 8, Township 14 South, Range 15 East, of the Gila and Salt River Meridian, Pima County, Arizona, more particularly described as follows: 

 

	
 
	
 

	
  
	

SHEET 1 OF 3   

 

EXHIBIT “D” 

Kohl’s Parcel Description 

 

COMMENCING at the Northwest corner of said Lot 5; 

Thence South 00o 11’ 12” West, along the westerly line of said Lot 5, a distance of 56.00 feet, to the TRUE POINT OF BEGINNING; 

Thence continuing South 00o 11’ 12” West, along the westerly line of said Lot 5, a distance of 54.79 feet; 

Thence South 34o 48’ 48” East, along the westerly line of said Lot 5, a distance of 152.21 feet; 

Thence leaving the westerly line of Lot 5, North 00o 11’ 12” East, a distance of 179.41 feet to a point on a line lying 56.00 feet Southerly and parallel with the North line of said Lot 5; 

16

 

Thence North 89o 46’ 08” West, parallel with the said North line of Lot 5, a distance of 87.31 feet, to the TRUE POINT OF BEGINNING. 

Said parcel contains 427363 square feet or 9.811 acres. 

 

   

 

  

SHEET 2 OF 3   

 

17

 

 

 

18

 

 

 

 

EXHIBIT “E” 

Premises Description 

Lot 1 of Broadway Pantano Center, a subdivision of Pima County, Arizona, according to the plat of record at Book 56 of Maps and Plats at Page 84, records of Pima County, Arizona. 

 

EXHIBIT “F” 

PFCU Parcel Description 

LOT 5 – PARCEL C 

 

All of Lot 5 of Broadway Pantano Center, according to the plat of record in the office of the County Recorder of Pima County, Arizona, in Book 56 of Maps, Page 84, lying within the Southeast Quarter of the Southeast Quarter of Section 8, Township 14 South, Range 15 East, of the Gila and Salt River Meridian, Pima County, Arizona. 

EXCEPT the North 56.00 feet of Lot 5. 

FURTHER EXCEPT that portion of Lot 5 described as follows: 

COMMENCING at the Northwest corner of said Lot 5; 

Thence South 00o 11’ 12” West, along the westerly line of said Lot 5, a distance of 56.00 feet, to the TRUE POINT OF BEGINNING; 

Thence continuing South 00o 11’ 12” West, along the westerly line of said Lot 5, a distance of 54.79 feet; 

Thence South 34o 48’ 48” East, along the westerly line of said Lot 5, a distance of 152.21 feet; 

Thence leaving the westerly line of Lot 5, North 00o 11’ 12” East, a distance of 179.41 feet to a point on a line lying 56.00 feet Southerly and parallel with the North line of said Lot 5; 

Thence North 89o 46’ 08” West, parallel with the said North line of Lot 5, a distance of 87.31 feet, to the TRUE POINT OF BEGINNING. 

Said parcel contains 52108 square feet or 1.196 acres. 

 

  

 

  

SHEET 3 OF 4   

 

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EXHIBIT “G” 

Shopping Center Signs Description 

 

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EXHIBIT “D” 

PRIMARY GROUND LESSOR NON-DISTURBANCE AND ATTORNMENT AGREEMENT 

THIS GROUND LESSOR NON-DISTURBANCE AND ATTORNMENT AGREEMENT (this “Agreement”) is made and entered into as of the                  day of                     , 2003, by and between OCTOBER 23RD GROUP L.L.C., an Arizona limited liability company (“Ground Lessor”), and KOHL’S DEPARTMENT STORES, INC., a Delaware corporation (“Tenant”). 

PRELIMINARY STATEMENTS 

A. Ground Lessor is the fee owner of certain property located in Tucson, Pima County, Arizona, and legally described in Exhibit “A” attached hereto and made a part hereof (the “Premises”). 

B. Pursuant to a certain Land Lease dated as of January 24, 2003 (the “Ground Lease”), notice of which is recorded in the Pima County, Arizona, Recorder’s Office at Docket                 , Page             , Ground Lessor leased the Premises to NHSE Bassett, LLC, a Wisconsin limited liability company (“Secondary Ground Lessor”). 

C. Pursuant to a certain Lease dated as of                         , 2003 (the “Secondary Ground Lease”), notice of which is recorded in the Pima County, Arizona, Recorder’s Office at Docket                 , Page                 , Secondary Ground Lessor leased the Premises to Continental 34 Fund Limited Partnership, a Wisconsin limited partnership (“Landlord”). 

D. Landlord subleased the Premises to Tenant pursuant to a certain Sublease dated as of                             , 2003 (the “Lease”). 

E. As a condition precedent to the performance of Tenant’s obligations under the Lease and the performance of Ground Lessor’s obligations under the Ground Lease, Tenant and Ground Lessor have required the other to enter into this Agreement, and they have agreed to do so. 

 

AGREEMENTS 

NOW, THEREFORE, for valuable consideration, the receipt and adequacy are hereby acknowledged, the parties hereto agree as follows: 

1. So long as Tenant is not in default (beyond any period given Tenant by the terms of the Lease to cure such default) in the performance of the terms, covenants, conditions and provisions contained in the Lease and so long as Tenant observes the provisions of this Agreement, Ground Lessor agrees that if the Ground Lease is terminated by reason of any default on the part of Secondary Ground Lessor or if the Ground Lease is terminated for any other reason, then (a) the Lease and the rights of Tenant under the Lease shall not be disturbed by Ground Lessor but shall continue in full force and effect for so long as Tenant continues to observe and perform all of Tenant’s obligations under the Lease, and (b) Ground Lessor shall recognize Tenant’s rights under the Lease and be bound by all of Landlord’s obligations under the Lease, including but not limited to provisions in the Lease dealing with condemnation, fire and other casualties, for the balance of the unexpired term of the Lease (including any optional extension period properly exercised), except in accordance with the provisions thereof. 

Notwithstanding the foregoing, Ground Lessor shall not be: 

(a) Liable for any damages or other relief attributable to any act or omission or indemnity obligation of Landlord or any other prior landlord; 

(b) Obligated to cure any defaults of Landlord or any other prior landlord under the Lease that has occurred prior to the time that Ground Lessor succeeded to the interest of Landlord under the Lease; 

(c) Liable for any damage or other relief attributable to any breach of any representation or warranty contained in the Lease by Landlord or any prior landlord under the Lease; 

(d) Subject to any offsets or defenses that Tenant might have against Landlord or any prior landlord; 

(e) Bound by any prepayment of rent or additional rent that Tenant might have paid for more than the current month to Landlord or any prior landlord; 

 

(f) Bound by any amendment or modification of the Lease or by any waiver or forbearance on the part of Landlord or any prior landlord made or given without the written consent of Ground Lessor; 

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(g) Bound to make any payment to Tenant or to perform any design or construction requirements called for in the Lease; 

(h) Liable for any warranties or guaranties relating to the construction of improvements on the Premises, including any warranties or guaranties for defective workmanship and materials; or 

(i) Liable or responsible for or with respect to the retention, application or return to Tenant of any security deposit paid to Landlord or any prior landlord, unless and until Ground Lessor has actually received for its own account as landlord the full amount of such security deposit. 

2. If the interest of Landlord in the Premises shall be terminated or shall be transferred to Ground Lessor, Tenant shall be bound to Ground Lessor under all of the terms, covenants and conditions of the Lease for the balance of the term remaining and any extensions or renewals thereof that may be effected in accordance with any option therefor in the Lease, with the same force and effect as if Ground Lessor were the landlord under the Lease. Specifically and without limitation, the personal guaranty set forth in the Lease by Kohl’s Corporation, a Wisconsin corporation, shall inure to the benefit of Ground Lessor. Tenant does hereby agree to attorn to Ground Lessor and to execute such documents and instruments confirming the same as Ground Lessor shall reasonably request. 

3. Notwithstanding anything to the contrary herein, Ground Lessor shall not be liable for any default of any prior landlord, nor shall Tenant assert against Ground Lessor any claims, defenses or offsets that Tenant may have had against any prior landlord. Tenant agrees that any liability that accrues to Ground Lessor, and its successors and assigns, for the performance of the obligations of Landlord under the Lease shall be limited to the assets comprising the Premises, the income therefrom and the net proceeds of the sales thereof, and Tenant shall not have the right to enforce any such liability against any other assets of Ground Lessor. Ground Lessor shall not be bound by any payment of rent, additional rent or other sums made by Tenant for more than one month in advance of the due date therefor. 

 

4. Tenant shall give Ground Lessor a copy of any notice of default that it shall give to Landlord, and Tenant shall not terminate the Lease on account thereof or exercise its other rights under the Lease until the same period of time afforded in the Lease for Landlord to cure such default shall have lapsed but in no event less than sixty (60) days, which period may run concurrently with that of Landlord, during which period Ground Lessor shall have the right, but not the obligation, to cure such default; provided, however, that if Tenant, from time to time, has agreed with a then current mortgage holder that such mortgage holder shall be afforded a longer period of time in which to cure such default, Ground Lessor shall be afforded the same period of time to cure as such mortgage holder before Tenant may terminate the Lease or exercise other rights on account thereof. 

5. Tenant shall, upon notice from Ground Lessor of termination of the Ground Lease, thereafter pay directly to Ground Lessor all amounts payable by Tenant to Landlord under the Lease, pro-rated to the date of termination. Landlord hereby irrevocably and unconditionally directs Tenant to comply with such demand. 

6. Notices shall be deemed given at the time of delivery to the addressee; but if delivery shall fail because of refusal or acceptance or absence of a period to accept delivery during normal business hours, the notice shall be deemed given at the time of attempted delivery as attested by the United States Postal Service or any national or regional so-called overnight courier which attempted delivery. The address of Tenant is N56 W17000 Ridgewood Drive, Menomonee Falls, Wisconsin 53051, Attention: Chairman, with a copy similarly sent to Tenant at N56 W17000 Ridgewood Drive, Menomonee Falls, Wisconsin 53051, Attention: General Counsel. The address of Ground Lessor is 6040 N. Tocito Place, Tucson, Arizona 85718, Attention: Steven A. Mar. Either party may change its address by written notice to the other. 

7. This Agreement shall bind and inure to the benefit of the parties hereto, their successors and assigns. As used herein, the term “Tenant” shall include Tenant, its successors and assigns as permitted under the Lease, the term “Landlord” shall include Landlord, its successors and assigns as permitted under the Lease, and the word “Ground Lessor” shall include Ground Lessor specifically named herein and any of its successors and assigns, including any successor landlord. 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the month, day and year first above written. 

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GROUND LESSOR:

	
 

	
OCTOBER 23RD GROUP L.L.C., 

	
an Arizona limited liability company

	
 

	
By:
	
Mar Enterprises, L.L.C., an

	
 
	
Arizona limited liability company,

	
 
	
its managing member

	
 
	
 
	
 

	
 
	
By:
	
 

	
 
	
 
	
Steven A Mar, Authorized Signatory

	
 

	
TENANT:

	
 

	
KOHL’S DEPARTMENT STORES, INC.,

	
a Delaware corporation

	
 
	
 

	
By:
	
 

	
 
	
R. Lawrence Montgomery,

	
 
	
Chief Executive Officer

 

 

		
	
 
	
 

	
STATE OF ARIZONA
	
)

	
 
	
) ss.

	
COUNTY OF PIMA
	
)

The foregoing instrument was acknowledged before me this          day of                     , 2003, by Steven A. Mar, as authorized signatory of Mar Enterprises, L.L.C., an Arizona limited liability company, as managing member of October 23rd Group L.L.C., an Arizona limited liability company. 

 

	
 

	
 

Notary Public

My commission expires: 

 

		
	
 
	
 

	
STATE OF WISCONSIN
	
)

	
 
	
) SS

	
COUNTY OF WAUKESHA
	
)

The foregoing instrument was acknowledged before me this          day of                     , 2003, by R. Lawrence Montgomery, as Chief Executive Officer of Kohl’s Department Stores, Inc., a Delaware corporation. 

 

	
 

	
 

Notary Public

My commission expires: 

 

CONSENT OF LANDLORD 

Continental 34 Fund Limited Partnership, a Wisconsin limited partnership (“Landlord”), hereby consents to the foregoing Agreement and, in particular, to the provisions of Section 5 thereof. Dated the ___ day of                     , 2003. 

 

			
	
 
	
 
	
 

	
CONTINENTAL 34 FUND LIMITED

	
PARTNERSHIP, a Wisconsin limited partnership

	
 
	
 

	
By:
	
Continental Properties Company, Inc.,

a Wisconsin corporation, its general partner

	
 
	
 
	
 

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By:
	
 

	
 
	
 
	
Daniel J. Minahan, President

 

		
	
 
	
 

	
STATE OF WISCONSIN
	
)

	
 
	
)  ss.

	
COUNTY OF MILWAUKEE
	
)

The foregoing instrument was acknowledged before me this          day of                     , 2003, by Daniel J. Minahan, as President of Continental Properties Company, Inc., a Wisconsin corporation, as Managing Member of CONTINENTAL 121 FUND LLC, a Wisconsin limited liability company. 

 

	
 

	
Notary Public

My commission expires: 

 

EXHIBIT A 

(Legal Description) 

 

Lots 4 and 6 of Broadway Pantano Center, according to the plat of record in the office of the County Recorder of Pima County, Arizona, in Book 56 of Maps, Page 84, lying within the Southeast Quarter of the Southeast Quarter of Section 8, Township 14 South, Range 15 East, of the Gila and Salt River Meridian, Pima County, Arizona. 

EXCEPT that portion of Lot 4 described as follows: 

COMMENCING at the Northeast corner of said Lot 4, said point also being the TRUE POINT OF BEGINNING; 

Thence South 00o 11’ 12” West, along the easterly line of said Lot 4, a distance of 56.00 feet, to a point on a line lying 56.00 feet Southerly and parallel with the North line of said Lot 4; 

Thence North 89o 46’ 08” West, parallel with said North line of Lot 4, a distance of 34.94 feet; 

Thence South 87o 56’ 25” West, a distance of 100.08 feet to a point on a line lying 60.00 feet Southerly and parallel with said North line of Lot 4; 

Thence North 89o 46’ 08” West, parallel with said North line of Lot 4, a distance of 442.36 feet, to a point on the westerly line of Lot 4; 

Thence North 00o 11’ 12” East, along the westerly line of Lot 4, a distance of 60.00 feet to the Northwest corner of Lot 4; 

Thence South 89o 46’ 08” East, along the North line of said Lot 4, a record distance of 577.35 feet to the TRUE POINT OF BEGINNING. 

TOGETHER WITH that portion of Lot 5 of Broadway Pantano Center, according to the plat of record in the office of the County Recorder of Pima County, Arizona, in Book 56 of Maps, Page 84, lying within the Southeast Quarter of the Southeast Quarter of Section 8, Township 14 South, Range 15 East, of the Gila and Salt River Meridian, Pima County, Arizona, more particularly described as follows: 

 

	
 
	
 
	
 

	
  
	
    
	
   

	
 
	
 
	
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COMMENCING at the Northwest corner of said Lot 5; 

Thence South 00o 11’ 12” West, along the westerly line of said Lot 5, a distance of 56.00 feet, to the TRUE POINT OF BEGINNING; 

Thence continuing South 00o 11’ 12” West, along the westerly line of said Lot 5, a distance of 54.79 feet; 

Thence South 34o 48’ 48” East, along the westerly line of said Lot 5, a distance of 152.21 feet; 

Thence leaving the westerly line of Lot 5, North 00o 11’ 12” East, a distance of 179.41 feet to a point on a line lying 56.00 feet Southerly and parallel with the North line of said Lot 5; 

Thence North 89o 46’ 08” West, parallel with the said North line of Lot 5, a distance of 87.31 feet, to the TRUE POINT OF BEGINNING. 

Said parcel contains 427363 square feet or 9.811 acres. 

 

   

 

	
 
	
 

	
  
	
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EXHIBIT “E” 

LIMITED GUARANTY 

This Limited Guaranty (this “Guaranty”) is made as of the 17th day of February, 2003, by CONTINENTAL PROPERTIES COMPANY, INC., a Wisconsin corporation (“Guarantor”), to and for the benefit of OCTOBER 23rd GROUP L.L.C., an Arizona limited liability company (“October 23rd Group”). 

Preliminary Statements 

A. October 23rd Group, as Landlord, and NSHE Bassett, LLC, an Arizona limited liability company, as Tenant (“Obligor”), have entered into a certain Land Lease dated as of January 24, 2003 (the “Lease”), by the terms of which Obligor has leased certain property legally described as Lots 4 and 6 and a portion of Lot 5 of Broadway Pantano Center, a subdivision of Pima County, Arizona (the “Property”). 

B. Guarantor acknowledges that it will benefit from Obligor’s performance of the Lease by virtue of its affiliation with Obligor. 

C. Guarantor desires to induce October 23rd Group to perform under the Lease and acknowledges that its execution of this Guaranty is a condition precedent to October 23rd Group’s performance under the Lease. 

Agreements 

In light of the foregoing, and in consideration of the covenants hereinafter expressed, Guarantor agrees: 

1. Guarantors unconditionally guaranties to October 23rd Group the full, complete and timely performance of the Lease and all extensions, renewals, modifications and amendments thereof and the payment of any and all amounts payable of whatever nature with respect to the Lease. 

2. Guarantor hereby waives each and every condition precedent to the enforcement of this Guaranty, whether required by law or otherwise. October 23rd Group shall not be required to pursue Obligor or any other person or entity that is or may be liable for performance of the Lease, whether by actions, judgment or execution, nor shall October 23rd Group be required to proceed against or preserve any security. October 23rd Group may proceed against Guarantor alone. It shall be no defense to the enforcement of this Guaranty that Obligor, any security or any other person has the liability for or ability to satisfy the Lease. 

 

3. This Guaranty shall be fully assignable by October 23rd Group and its successors and assignees. Any such assignment shall not terminate the liability of Guarantor to October 23rd Group or its successors or assignees, and Guarantor shall continue to guaranty payment of the Lease and the other amounts payable hereunder to October 23rd Group and each and every such successor or assignee. The term “assignee” shall include assignees of October 23rd Group and each and every subsequent assignee. 

4. In the event that October 23rd Group retains counsel for the enforcement of this Guaranty, Guarantor agrees to pay to October 23rd Group, in addition to the amounts payable hereunder, attorneys’ fees and costs for the enforcement of this Guaranty. 

5. This Guaranty is a continuing guaranty, and no revocation or termination hereof shall affect in any manner the rights arising hereunder with respect to liabilities that shall have been created, contracted, assumed or incurred prior to receipt by October 23rd Group of written notice of such revocation or termination. 

6. The obligations hereunder are independent of the Lease of Obligor. 

7. Guarantor shall have no right of subrogation and does waive any right to enforce any remedy that October 23rd Group now has or may hereafter have against Obligor, and it waives any benefit of and any right to participate in any security now or hereafter held by October 23rd Group. Guarantor waives all presentments, demands for performance, notices of performance, protests, notices of protest, notices of dishonor, homestead exemption and notices of acceptance of this Guaranty. 

8. Time shall be of the essence in the performance of all terms and conditions of this Guaranty. 

9. This Guaranty shall inure to the benefit of and be binding upon the successors and assigns of the parties. 

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10. This Guaranty shall be construed pursuant to the laws of the State of Arizona. 

11. Upon payment of the Lease and the other amounts payable hereunder in full, this Guaranty shall be released. 

 

13. Obligor contemplates subleasing the Property to Kohl’s Department Stores, Inc. (“Kohl’s”). If Obligor or its successors or assigns construct a building upon the Property as contemplated in paragraph 3(b) of the Lease, then notwithstanding any provision of this Guaranty to the contrary, provided that the Lease is then in full force and effect and Obligor (or its successor or assigns) is not in default thereunder and there are no mechanics liens against the Property, this Guaranty shall terminate one (1) year after Kohl’s opens for business, and Guarantor shall have no more liability under this Guaranty. October 23rd Group agrees to provide Guarantor with written acknowledgment that Guarantor is no longer liable under this Guaranty upon the fulfillment of the above conditions and that Guarantor is then fully released from the obligations contained herein. 

 

			
	
 
	
 
	
 

	
GUARANTOR:

	
 

	
CONTINENTAL PROPERTIES COMPANY, INC., a Wisconsin corporation

	
 
	
 

	
By:
	
 

	
 
	
Daniel J. Minahan, President

	
 

	
OCTOBER 23RD GROUP:

	
 

	
OCTOBER 23RD GROUP L.L.C., an

	
Arizona limited liability company

	
 
	
 

	
By:
	
Mar Enterprises, L.L.C., an Arizona limited Liability company, its Managing Member

	
 
	
 
	
 

	
 
	
By:
	
 

	
 
	
 
	
Steven A. Mar, Authorized Signatory

 

LIMITED GUARANTY 

This Limited Guaranty (this “Guaranty”) is made as of the 30th day of January, 2003, by CONTINENTAL PROPERTIES COMPANY, INC., a Wisconsin corporation (“Guarantor”), to and for the benefit of OCTOBER 23rd GROUP L.L.C., an Arizona limited liability company (“October 23rd Group”). 

Preliminary Statements 

A. October 23rd Group, as Landlord, and NSHE Bassett, LLC, an Arizona limited liability company, as Tenant (“Obligor”), have entered into a certain Land Lease dated as of January 30, 2003 (the “Lease”), by the terms of which Obligor has leased certain property legally described as Lots 4 and 6 and a portion of Lot 5 of Broadway Pantano Center, a subdivision of Pima County, Arizona (the “Property”). 

B. Guarantor acknowledges that it will benefit from Obligor’s performance of the Lease by virtue of its affiliation with Obligor. 

C. Guarantor desires to induce October 23rd Group to perform under the Lease and acknowledges that its execution of this Guaranty is a condition precedent to October 23rd Group’s performance under the Lease. 

Agreements 

In light of the foregoing, and in consideration of the covenants hereinafter expressed, Guarantor agrees: 

1. Guarantors unconditionally guaranties to October 23rd Group the full, complete and timely performance of the Lease and all extensions, renewals, modifications and amendments thereof and the payment of any and all amounts payable of whatever nature with respect to the Lease. 

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2. Guarantor hereby waives each and every condition precedent to the enforcement of this Guaranty, whether required by law or otherwise. October 23rd Group shall not be required to pursue Obligor or any other person or entity that is or may be liable for performance of the Lease, whether by actions, judgment or execution, nor shall October 23rd Group be required to proceed against or preserve any security. October 23rd Group may proceed against Guarantor alone. It shall be no defense to the enforcement of this Guaranty that Obligor, any security or any other person has the liability for or ability to satisfy the Lease. 

 

3. This Guaranty shall be fully assignable by October 23rd Group and its successors and assignees. Any such assignment shall not terminate the liability of Guarantor to October 23rd Group or its successors or assignees, and Guarantor shall continue to guaranty payment of the Lease and the other amounts payable hereunder to October 23rd Group and each and every such successor or assignee. The term “assignee” shall include assignees of October 23rd Group and each and every subsequent assignee. 

4. In the event that October 23rd Group retains counsel for the enforcement of this Guaranty, Guarantor agrees to pay to October 23rd Group, in addition to the amounts payable hereunder, attorneys’ fees and costs for the enforcement of this Guaranty. 

5. This Guaranty is a continuing guaranty, and no revocation or termination hereof shall affect in any manner the rights arising hereunder with respect to liabilities that shall have been created, contracted, assumed or incurred prior to receipt by October 23rd Group of written notice of such revocation or termination. 

6. The obligations hereunder are independent of the Lease of Obligor. 

7. Guarantor shall have no right of subrogation and does waive any right to enforce any remedy that October 23rd Group now has or may hereafter have against Obligor, and it waives any benefit of and any right to participate in any security now or hereafter held by October 23rd Group. Guarantor waives all presentments, demands for performance, notices of performance, protests, notices of protest, notices of dishonor, homestead exemption and notices of acceptance of this Guaranty. 

8. Time shall be of the essence in the performance of all terms and conditions of this Guaranty. 

9. This Guaranty shall inure to the benefit of and be binding upon the successors and assigns of the parties. 

10. This Guaranty shall be construed pursuant to the laws of the State of Arizona. 

11. Upon payment of the Lease and the other amounts payable hereunder in full, this Guaranty shall be released. 

 

13. Obligor contemplates subleasing the Property to Kohl’s Department Stores, Inc. (“Kohl’s”). If Obligor or its successors or assigns construct a building upon the Property as contemplated in paragraph 3(b) of the Lease, then notwithstanding any provision of this Guaranty to the contrary, provided that the Lease is then in full force and effect and Obligor (or its successor or assigns) is not in default thereunder and there are no mechanics liens against the Property, this Guaranty shall terminate one (1) year after Kohl’s opens for business, and Guarantor shall have no more liability under this Guaranty. October 23rd Group agrees to provide Guarantor with written acknowledgment that Guarantor is no longer liable under this Guaranty upon the fulfillment of the above conditions and that Guarantor is then fully released from the obligations contained herein. 

 

			
	
 
	
 
	
 

	
GUARANTOR:

	
 

	
CONTINENTAL PROPERTIES COMPANY,

INC., a Wisconsin corporation

	
 
	
 

	
By:
	
/s/ Daniel J. Minahan

	
 
	
Daniel J. Minahan, President

	
 

	
OCTOBER 23RD GROUP:

	
 

	
OCTOBER 23RD GROUP L.L.C., an

33

 

			
	
Arizona limited liability company

	
 
	
 

	
By:
	
Mar Enterprises, L.L.C., an Arizona limited Liability company, its Managing Member

	
 
	
 
	
 

	
 
	
By:
	
/s/ Steven A. Mar

	
 
	
 
	
Steven A. Mar, Authorized Signatory

 

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