UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended June 30, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission File Number: 0-7775
WESTLAND DEVELOPMENT CO., INC.
(Exact name of registrant as specified in its charter)
New Mexico 85-0165021
(State or other jurisdiction of (I.R.S. Employer
incorporation or other organization Identification No.)
401 Coors Boulevard, N.W., Albuquerque, New Mexico, 87121
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 505-831-9600
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
No Par Value Common Stock
(Title of Class)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No____.
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year: $3,007,533
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days: $6,785,366.
The number of shares outstanding of each of the Registrant's classes of
common stock, as of September 18, 1995, was:
No Par Value Common: 716,608 shares.
Class A $1.00 Par Value: none.
Class B $1.00 Par Value: 76,100 shares.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated by reference herein:
Part II - Items 5, 6, 7, - Registrant's Annual Report for the fiscal year
ended June 30, 1995.
Part III- Items 9, 10, 11, and 12 - Registrant's Definitive Proxy Statement
for the Annual Meeting of Shareholders to be held on November 15, 1995.
PART I
ITEM 1: DESCRIPTION OF BUSINESS
General Development of Business.
Westland Development Co., Inc., a New Mexico for-profit corporation
("Registrant"), is the successor to a community land grant corporation named
Town of Atrisco, Inc., which itself was a successor to a Spanish community land
grant named the Atrisco Land Grant. Information concerning the historical
background of these predecessor organizations and the conversion in 1967 from a
community land grant corporation into a business corporation can be found in the
Registrant's Form 10 and its Form 10-K for the fiscal year ended June 30, 1974.
The Registrant's executive offices are located in its own building at 401
Coors Boulevard, N.W., Albuquerque, New Mexico, 87121, telephone (505) 831-9600,
on land which was originally part of the Atrisco Land Grant.
The Registrant is the owner of approximately 59,000 acres of land located
on the west side of Albuquerque, New Mexico. More than 99% of its property is
held for long term investment and is not currently marketed nor planned for
development in the foreseeable future, most of which is devoted to the grazing
of cattle. The Registrant derives revenues through commercial and land leases,
partnerships formed for various development projects, lot development and sales
and land sales.
As of September 15, 1995, approximately 280 acres of the Registrant's land
located on the west side of the City of Albuquerque, New Mexico have been
segregated for development.
The Registrant believes that over the next few years it will decrease its
reliance on raw land sales and increase its sales of fully developed residential
lots ready for construction, enter into joint ventures, land developments,
ground leases, limited partnerships and, if warranted by available capital, may
begin the construction of industrial and commercial structures for lease or
sale. The Registrant's long term business philosophy is to enhance the value of
the Registrant's land through careful planning and development, while retaining
ownership of a major portion of the land in perpetuity and simultaneously
increasing the value of the Registrant's stock and to provide dividends for its
shareholders, when consistent with the Registrant's need for a sufficient cash
flow to meet current operating expenses.
Narrative Description of Business.
In addition to the approximately 59,000 acres of land devoted to grazing
discussed above, the Registrant previously developed six sector plans for the
development of certain of its properties. Each such plan encompassed
approximately 600 to 1,000 acres and are identified by the Registrant as Atrisco
Urban Center and El Rancho Atrisco, Phases I through V. Portions of Phases I and
IV have been developed and sold and development of Phase V sector plan was
abandoned due the introduction of the Petroglyph National Monument. A revised
sector plan for the area between Unser and Paseo del Volcan was initiated in
January of 1994.
1. Land and Grazing Leases.
Approximately 56,000 acres of the Registrant's land is not planned for
development and is currently leased to others under grazing lease(s) or various
other leases. As of June 30, 1995 the Company has leases, all of which were with
unaffiliated persons, providing rental income of approximately $152,000.
2. Development Properties.
In the last 15 years, the Company has planned and developed four areas
which initially covered approximately 1,600 acres, of which, as of June 30,
1995, the Registrant owns approximately 300 acres. A summary of the development
areas is as follows:
a. Atrisco Urban Center
1) Atrisco Urban Center Development and Sales. The Registrant still owns
approximately 72 acres within this Center. It intends to continue to work with
end users to develop projects. A senior citizen's center, four manufacturing
facilities, a warehouse facility, an office building, a police substation, a
400-unit apartment complex, gas station and car wash are among the projects
currently located in the Center. See items number 3 and 4 below for a discussion
of current construction projects.
2) Atrisco Urban Center Rental Properties. The Registrant owns a two-story
office building in the Atrisco Urban Center. The entire first floor
(approximately 5,057 square feet of rentable space) is leased to Sunwest Bank of
Albuquerque, N.A. for use as a branch bank for a term ending in October 1999.
The Registrant occupies the second floor of this building.
3) Cedar Ridge Estates Subdivision. The Registrant owns a 37 acre tract
located within the Atrisco Urban Center zoned for a single family residential
subdivision called Cedar Ridge Estates. The Registrant has completed development
of the first phase consisting of approximately 11 acres and 57 lots. A Builder
executed an option agreement for the purchase of those developed lots for
moderate residential subdivisions and as of September 15, 1995, had purchased 13
lots. Houses are selling in the range of $100,000 to $120,000.
4) Assisted Living Development Corporation. The Registrant has entered into
a partnership arrangement with Assisted Living Development Corp. of Portland,
Oregon for the development and ownership of a housing facility for persons in
need of some care but ambulatory. The 40 unit complex is under construction on
the Company's property located next to a City of Albuquerque Senior Citizen
Center. The facility is expected to be completed in the winter of 1995.
b. Sector Plan.
1) The Registrant has made application for a sector development plan
covering approximately 6,400 acres to be annexed to the City of Albuquerque. The
sector plan is located north of Interstate 40 and south of the area designated
for the Petroglyph National Monument for the establishment of a sector plan.
c. ERA Phase II; Volcano Business Park.
Volcano Business Park consists of approximately 22 acres zoned for
industrial park uses of which 11 acres have been platted and developed into 9
lots. The Registrant has entered into a partnership arrangement through which it
will supervise construction, manage and own 50% of an 172 unit storage facility
on approximately 1.7 acres of this property.
d. ERA Phase III Commercial, Industrial and Residential Developments.
In 1985, the Registrant completed the planning of Heritage Park and
Heritage Plaza in El Rancho Atrisco Phase III. Those plans included construction
of a total of 200,000 square feet of office space, approximately 100,000 square
feet of retail space, 130 acres for industrial usage (Ladera Industrial Park),
and 31 acres of high density housing. During fiscal 1995, the Registrant sold a
6.3 acre tract and also joined a limited liability corporation for the
development of an 8.5 acre tract, both of which will be developed for affordable
multi-family apartment units. Additionally, the Registrant has entered into a
purchase agreement with Diamond Shamrock for the development of a a convenience
store-gas station at the corner of Unser and Ladera Drive. Prospects for the
sale or development of the office and commercial property may be improving
because of the growing demand for such property and the construction of single
family homes west of Unser. The Registrant also has entered into a sale
agreement for an approximately 16 acre tract with a home builder based in Las
Vegas, Nevada.
c. Other Properties.
1). Travel Plaza. In March 1990, the Registrant submitted a zone change
request to Bernalillo County for 100 acres for a travel center and related
commercial uses. In June 1990, the County Commission approved the request for
zone change. Anticipated users may include restaurants, motel-hotel facilities,
fueling stations, and other travel/tourist related facilities. During 1995, the
Registrant sold two acres for approximately $90,000.
2). Sivage Thomas. During fiscal year 1992, the Company signed an Option
Agreement with Sivage Thomas Homes, Inc. of Albuquerque, New Mexico to acquire
up to 48 acres of land lying west of Unser Boulevard and South of Ladera
Boulevard for the construction of approximately 240 homes. As of June 30, 1994
all acreage had been sold.
In 1994, the Company agreed to develop approximately 15 acres of land (57
lots) for Sivage Thomas adjacent to the above subdivision. Development of the
residential lots is complete and sales effort related to the lots is underway.
As of September 15, 1995, 47 lots had been sold. The Registrant is now planning
the next phase of development with construction anticipated to begin during the
late winter of 1995.
3). Recreation Complex. During fiscal 1994, the Registrant entered into a
lease/option arrangement with PG Corporation, a New Mexico corporation, for 100
acres of Registrant's land located north of I-40 on Paseo del Volcan. A portion
of the property was subsequently developed as a recreation and softball complex.
The Registrant exchanged $100,000 in rental and option payments for a 6% equity
position in the Partnership which owns and operates the recreation venture.
4). Tierra Oeste. The Registrant has committed approximately 28 acres of
land north of Ladera Dr., west of Unser Blvd, to a limited liability
corporation. The Registrant is a shareholder in said corporation. In July, 1995,
this limited liability corporation executed a sale agreement with a Las Vegas,
Nevada home builder for the purchase of developed lots. Construction of the
property is expected to commence in the fall of 1995.
5). Education and Community Projects. Approximately 50 acres of land have
been donated to the Technical-Vocational Institute for the construction of a
southwest mesa campus. The Company also donated approximately 8 acres to Youth
Development, Inc. The properties are located in the Gun Club Rd. area, although
they may be traded for sites further to the west along the proposed extension of
Rio Bravo Boulevard. In addition, the Registrant has agreed to donate 12 acres
to Albuquerque Public Schools and up to 10 acres to the Archdiose of Santa Fe,
in the same area.
d. Land Sales and Condemnation.
1). Land Sales. The Registrant has, in the last year, completed 10
transactions totaling 71 acres, not including lots sold to Sivage Thomas and
Scott Patrick, Inc.
2). Condemnation. During the fiscal year ended June 30, 1990, the City of
Albuquerque condemned approximately 30 acres of the Registrant's land for a
roadway to its new solid waste disposal facility. The Registrant received
$70,809 from the City for this property. The Registrant has been awarded $75,000
by the District Court, and is currently appealing the case.
3). Petroglyph National Monument Properties. On June 27, 1990, the United
States Congress established an approximately 7,000 acre national monument (the
Petroglyph National Monument) to preserve and protect the volcanic escarpment on
Albuquerque's West Mesa area. The Monument's proposed boundaries included
approximately 1,964 acres of the Registrant's land. The Company sold 444 acres
in fiscal year 1992, 713 acres in fiscal 1993, 118 acres in fiscal 1994, and 24
acres in fiscal 1995, to the National Park Service. Approximately 665 acres have
yet to be acquired by the Park Service and the Registrant has been given no
assurance when the final purchases of the property may occur. The Registrant's
Board of Directors has agreed that, subject to negotiation of acceptable terms
of sale, the Registrant will sell to the National Park Service the Registrant's
remaining lands included in the Monument.
e. Reinvestment Properties.
As part of the Registrant's plan to defer as much of the tax burden arising
from the sale of its lands to the Park Service for inclusion in the Petroglyph
National Monument, during the last fiscal year it reinvested its funds in the
properties described below. As a result of these purchases, the Registrant
believes that it has deferred approximately $ 3,500,000 of taxes. Development
Property.
During the fiscal year the Registrant purchased for $ 312,000 a 3.5 acre
tract of undeveloped land located at the corner of Coors and Bridge Boulevards
in Albuquerque that is zoned for commercial use and is now being studied for
commercial development in the near future.
Revenue Producing Property.
During the last fiscal year, as part of its tax deferral program related to
proceeds from the sale of its land included in the Petroglyph Monument, the
Registrant purchased land upon which commercial buildings were constructed and
leased to others. Those properties are:
a) The Registrant acquired a commercial building at Coors Boulevard and
Sequoia Road in Albuquerque at a cost of $2,630,000, $1,943,000 of which is
subject to a Mortgage upon which the Registrant must pay payments of $17,969.78.
This building has been leased to Walgreen Co. for 20 years at a fixed rent of
$19,173.37 per month plus additional rent based upon a formula of gross sales up
to a maximum rent of $460,161 in any one year.
b) The Registrant acquired a commercial building in Albuquerque's
Industrial Park at a cost of $1,059,000, $780,000 of which is subject to a
Mortgage upon which the Registrant must make monthly payments of $6,893. This
building has been leased to Circuit City Stores for 10 years at an escalating
rental beginning at $4.25 per square foot the first year and increasing in
stages to $5.55 per square foot in the tenth year. The lessee has also been
granted the right to extend the lease for two additional 5 year terms at
escalating rental rates during each of the years of any extended term. The rent
for the first year of the lease is $8,212.77 per month.
Current Real Estate Market Conditions.
The market conditions for the development and sale of properties in
Albuquerque are positive at the present time. The abundance of properties for
sale at relatively low prices due to foreclosures, failures, and takeovers which
existed for the past several years seems to have been almost all absorbed,
including properties held by the Resolution Trust Corporation. Multi family
vacancy rates are at a long time low and rents are climbing which has triggered
a spurt of new multi family residential development. For the foreseeable future
it appears that commercial and industrial will further stabilize and the boom in
single family residential construction will level off, but continue to be
strong.
Competition.
The Registrant's industrial parks - The Atrisco Urban Center, Volcano
Business Park and Ladera Industrial Park compete with other business and
industrial parks in the Albuquerque area, including some that are more
established and some that are located nearer the major population centers of
Albuquerque. The Registrant believes that a sale to Coca Cola by others within
the Business Park will add to the quality of the Park's tenants and will attract
other businesses to the Park.
Residential subdivisions on the Registrant's land compete with other areas
in the Albuquerque housing market (essentially Bernalillo County and portions of
Sandoval County and Valencia County), some of which are located in areas that
are nearer the population centers of Albuquerque, as well as with other
subdivisions on the western side of the City of Albuquerque. A number of large
subdivisions to the north of the Registrant's land are not fully sold. These
include Rio Rancho (about six miles north of the Registrant's land), Paradise
Hills (about five miles north of the Registrant's land), Volcano Cliffs and
Taylor Ranch (each about two to three miles north of the Registrant's land).
Development of a regional shopping center on Registrant's land has been
delayed indefinitely because of the establishment of a regional shopping center
located in the northwest portion of the City of Albuquerque (about 5 miles north
of the Registrant's land), as well as the development of other large strip
centers being constructed by competitors to the north of the Registrant's land,
but the Registrant signed a listing agreement with a broker to market Heritage
Plaza at the corner of I-40 and Unser to potential users as a neighborhood
center.
The mandate by the State Legislature for implementation of Impact Fees may
result in the Registrant's lands being disadvantaged because the fees that
surrounding counties may be permitted to charge may be less than those that will
be charged by Bernalillo County.
Employees.
As of June 30, 1995, the Registrant had ten full-time and six part-time
employees. The Registrant's president, who is also a director, is a full time
employee. The Registrant also had contractual relationships with five
individuals who provided various services to the Company.
Government Regulations.
The Registrant's ability to undertake an active program of development of
its land and management of its rental properties, (whether such development is
performed by the Registrant itself or by sale of the Registrant's land to others
for development), is dependent on the Registrant's ability to comply with laws
and regulations of the State of New Mexico and Bernalillo County, and the City
of Albuquerque, applicable to general environmental protection, land-use
planning, annexation, zoning and subdivisions. Both County and City regulate the
subdivision of land and impose zoning and building permit requirements. The
subdivision regulations of both Bernalillo County and the City of Albuquerque
require, as a condition of approval of proposed subdivisions, that adequate
provision be made by the developer for land use planning, water (both to
quantity and quality), liquid waste disposal, solid waste disposal, sufficient
and adequate roads and storm drain management.
Although the compliance with federal, state, and local provisions relating
to the protection of the environment, including laws regulating subdivisions and
land-use planning, has had no material effect upon the capital expenditures,
earnings and competitive position of the Registrant, no assurance can be given
that this situation will continue. Requests relating to flood drainage, traffic
flow and similar matters from the City of Albuquerque have occasionally delayed
the receipt of necessary building permits and required modification of
development proposals. The opening of the Double Eagle II Municipal Airport by
the City of Albuquerque to the north of the Registrant's Land on Paseo del
Volcan may have an impact on the use of and planning for the Registrant's Land
in the vicinity of the airport as will the creation of the Petroglyph National
Monument, although Management believes both facilities will favorably impact the
Company's Lands.
At the Registrant's request, the City of Albuquerque has created Special
Assessment Districts affecting the Atrisco Urban Center and the El Rancho
Atrisco areas for the financing of water, sewer, paving and other street
improvements, and levied assessment liens on them. This has provided a mechanism
for financing these improvements.
Approximately 3,000 acres of the Registrant's land is designated
"Developing Urban" by the current Albuquerque/Bernalillo County Comprehensive
Plan. According to the Plan, "Developing Urban" land is land without accepted
and approved platting, but which has adequate resource capabilities for
urbanization. Certain land use regulations contained in the Comprehensive Plan
apply to said land which may inhibit its development to its highest and best
use.
Availability of Water and Municipal Services.
The unavailability of sufficient water has often been a major inhibiting
factor in the land development business in the Southwest. The extent of the
Registrant's water rights has not been determined. However, lack of ownership of
water rights by the Registrant would not be an inhibiting factor to the
developing of the Registrant's land if adequate water were to be made available
through the City of Albuquerque and/or other water sources or by purchase by the
Registrant or a developer that might purchase and develop land. For example,
both Tierra West Mobile Home Park and the PG Corporation Complex leased or
purchased water rights and drilled wells to meet their water needs.
Under present annexation policies of the City of Albuquerque, annexation to
the City of Albuquerque of portions of the Registrant's land is a requirement by
City before it will extend water and sewer services to those portions within a
reasonable period of time after annexation. However, the cost of water
distribution and sewer lines would have to be borne by the developer, or by
subsequent purchasers of the annexed portions. If the Registrant were given
timely assurance by the City that such service would not be furnished and that
the City would not pursue annexation of the property, alternative methods of
providing water, sewer and other services would have to be developed to assure
compliance with subdivision and environmental regulations. Several alternative
sources are being investigated.
With the exception of the Atrisco Urban Center and the residential
subdivisions, most of the Registrant's land lies outside the municipal limits of
the City of Albuquerque and are not furnished with City of Albuquerque water or
other City of Albuquerque services. The Registrant experienced little difficulty
in having the Atrisco Urban Center and the residential subdivisions annexed to
the City of Albuquerque and furnished with services, but the same cannot be
assumed for other areas of Registrant's land.
Water Rights.
The Registrant's land lies within a declared underground water basin,
meaning that the Registrant's right to use surface or underground waters on the
Registrant's land arises exclusively from actual appropriation, if any, of those
waters for beneficial use in accordance with state law. In New Mexico, the legal
questions surrounding the right to use water are issues which generally must be
determined by the State Engineer, who administers the state water laws, and by
the courts if a conflict exists between a water user and the State Engineer or
between water users. Because such legal questions have not been before a New
Mexico court and because the Registrant has received water through the City
water system as development of the its land has progressed, it has not to date
sought a determination of its water rights.
Other Factors Affecting Development of Registrant's Land.
Various activist groups, as well as neighborhood organizations occasionally
have in the past taken actions which have, to some extent, delayed the
Registrant's plans for the development of some of its lands. During the past
fiscal year two activist groups filed appeals with the City of Albuquerque
related to the Registrant's Sector Plan. However, the Sector Plan was upheld
with only minor modifications.
ITEM 2: DESCRIPTION OF PROPERTIES
The major physical assets owned by the Registrant are its land which is
owned in fee simple. The land comprises approximately 59,000 acres of
undeveloped land held for long-term investment and approximately 280 acres of
land remaining from those which the Registrant has developed to various stages
of completion. The Registrant also owns the Atrisco Urban Center office
building, comprising approximately 11,097 square feet, which the Registrant uses
in its rental operations. This building has mortgages against it aggregating
approximately $324,000 as of June 30, 1995. Approximately 5,500 square footage
of the building is leased to Sunwest Bank at a monthly rental of $3,160. The
Registrant also owns two commercial buildings that are leased to others. See
"Item 1. Business - Reinvestment Properties."
The population of the Albuquerque metropolitan area has grown significantly
over the last 40 years. Physical expansion of the City of Albuquerque has taken
place on the north, south and east sides, but the bulk of the most recent growth
has been west of the Rio Grande River where the Registrant's land is located. In
fact, much of the real property directly west of the City of Albuquerque is the
Registrant's land., which was previously considered unmarketable and was,
therefore, generally viewed as being unavailable for the expansion of the City
of Albuquerque. The Registrant anticipates that growth of the West Side will
continue into the foreseeable future.
The Registrant's land is bisected by Interstate Highway I-40, the main
east-west thoroughfare through Albuquerque. Access to the Registrant's land from
Interstate 40 is provided by the Coors Boulevard interchange near the eastern
edge of the Registrant's land, by the Unser Boulevard interchange at the western
edge of the Atrisco Urban Center, by the 98th Street interchange to the west of
the Atrisco Urban Center and by the Paseo del Volcan interchange where I-40,
Paseo del Volcan and Central Avenue meet. Running north from the I-40
interchange, Paseo del Volcan transverses about 4 1/2 miles of the Registrant's
land to the Double Eagle II Airport. In 1994, the Registrant dedicated
approximately 180 acres to Bernalillo County's for the linking of Paseo del
Volcan and Rio Bravo. The County has built out Paseo del Volcan south of the
I-40 interchange. The County is expected to begin construction on Rio Bravo
during the current year. The Registrant and other landowners and developers (the
Northwest Loop Association) dedicated land and has paid a portion of the design
costs for the Northwest Loop, which has been approved by the New Mexico State
Highway Commission. The Northwest Loop will extend for approximately 39 miles
and will connect I-40 and New Mexico State Highway 44, traversing the western
portion of the Registrant's land. In 1995 the Registrant donated 169 acres for
development of the Northwest Loop. Completion of the Northwest Loop is not
expected for 15 to 20 years. Most of the Registrant's land is remote and not
readily accessible, not serviced by utilities, and Registrant believes that the
bulk of its land will not be available for development in the foreseeable
future.
There is no limitation on the kind of securities into which the Company may
exchange real estate. The Company has considered, and would exchange property
for partnership units or other securities issued by others for the purpose of
developing the Company's land.
A large portion of the undeveloped land is leased for agricultural uses
(see "Item 1. "Business." The bulk of the Registrant's undeveloped land is held
for long term investment.
In the opinion of the Company's Management, its property is adequately
covered by insurance.
ITEM 3: LEGAL PROCEEDINGS
Other than ordinary routine litigation incidental to the Company's
business, the Company and/or members of its management are currently parties in
the following legal proceedings:
1. Westland et al v. Kenny Romero, et al.
Since 1989, the Company has reported the above captioned litigation filed
by the Company in the District Court for Bernalillo County, New Mexico in which
sought damages from the Defendants for abuse of legal process. On August 7,
1995, this action was settled by agreement between the parties, the terms of
which are subject to a non-disclosure agreement.
2. Westland's El Campo Santo, Inc. (a wholly owned subsidiary) v. Nick Cordova
The Company's wholly owned subsidiary, Westland's El Campo Santo, Inc.
("ECS") which owns a cemetery in Albuquerque that is primarily devoted to the
burial of the Company's shareholders, sued Nick Cordova ("Cordova"), an
independent grave digger who digs graves for the county, mortuaries and
individuals, in an effort to obtain burial information related to the interment
by Cordova of indigent persons for Bernalillo County and others. On October 26,
1994, this action was settled by agreement between the parties, the terms of
which are subject to a non-disclosure agreement.
3. Anzures vs. Crestview Funeral Home, Inc. and Westland Development Co., Inc.
On November 3, 1994, a relative of an unidentified indigent person who was
buried at County expense in a cemetery owned by El Campo Santo, Inc., sued the
funeral home and the Company claiming that both of the defendants breached their
obligation to bury the relative decently by keeping track of the location of the
gravesite, and that the breach caused the plaintiff extreme emotional distress
and upset. The complaint also alleges that the Company and the funeral home
conspired to prevent the Plaintiff from learning the whereabouts of their
deceased relative.
The funeral home has settled with the plaintiff. The Company does not
believe that it is liable to the plaintiff because it had neither a contractual
obligation to the deceased or his family or any duty to bury the deceased or
locate the deceased's gravesite.
To determine the cost of this matter, and to limit its exposure to
liability, the Company settled this matter on September 18, 1995, the terms of
which are subject to a non-disclosure agreement.
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended June 30, 1995.
PART II
ITEM 5: MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Information required by this item is incorporated by reference to the item
in the Registrant's Annual Report to Shareholders for the year ended June 30,
1995 entitled "Market Price and Dividends on Westland's Common Equity and
Related Stockholder Matters."
ITEM 6: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
The information required by this item is incorporated by reference to the
item in the Registrant's Annual Report to Shareholders for the fiscal year ended
June 30, 1995 entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operation."
ITEM 7: FINANCIAL STATEMENTS
The information required by this item is incorporated by reference to the
Financial Statements in the Registrant's Annual Report to Shareholders for the
fiscal year ended June 30, 1995 which is attached as an exhibit to this report.
ITEM 8: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There have been no changes in or disagreements with Accountants of the kind
described by Item 304 of Regulation S-B at any time during the Registrant's two
(2) most recent fiscal years.
PART III
ITEM 9: DIRECTORS, EXECUTIVE OFFICERS PROMOTERS AND CONTROL PERSONS; COM
PLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
The information required by this item is incorporated by reference to the
items in the Registrant's Definitive Proxy Statement for the November 15, 1995,
Annual Meeting of Shareholders entitled "Election of Directors" and "Directors
and Executive Officers". All reports required by Section 16(a) of the Exchange
Act to be filed during the fiscal year were filed.
ITEM 10: EXECUTIVE COMPENSATION
The information required by this item is incorporated by reference to the
item in the Registrant's Definitive Proxy Statement for the November 15, 1995,
Annual Meeting of Shareholders entitled "Executive Compensation".
ITEM 11: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this item is incorporated by reference to the
item in the Registrant's Definitive Proxy Statement for the November 15, 1995,
Annual Meeting of Shareholders entitled "Voting Securities and Principal Holders
Thereof".
ITEM 12: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is incorporated by reference to the
item in the Registrant's Definitive Proxy Statement for the November 15, 1995,
Annual Meeting of Shareholders entitled "Voting Securities and Principal Holders
Thereof" and "Executive Compensation".
ITEM 13: EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-KSB
(a) Exhibits:
1. Financial Statements, incorporated by reference to the Registrant's
Annual Report to Shareholders for each of the two years ended June 30, 1995:
Report of Independent Certified Public Accountants
Balance Sheet
Statements of Earnings
Statement of Stockholders' Equity
Statements of Cash Flows
Notes to Financial Statements
2. Exhibits:
(3) Articles of Incorporation and Bylaws:
(3)(i) Articles of Incorporation filed as an exhibit to the registrant's
Registration Statement on Form 10-K on September 28, 1982 and incorporated
herein by reference.
(3)(ii) Restated Bylaws filed as an exhibit with the registrant's Annual
Report on Form 10-KSB for the fiscal year ended June 30, 1993.
(10) Material Contracts:
(10.1) Consulting Agreement with Sosimo Padilla, dated December 18, 1992,
as filed with the Registrant's Annual Report on Form 10-KSB for the fiscal year
ended June 30, 1993, and incorporated herein by reference.
(10.2) Consulting Agreement with Polecarpio (Lee) Anaya, dated December 18,
1992, as filed with the Registrant's Annual Report on Form 10-KSB for the fiscal
year ended June 30, 1993, and incorporated herein by reference.
(10.3) Employment Agreement with Barbara Page, dated December 18, 1992, as
filed with the Registrant's Annual Report on Form 10-KSB for the fiscal year
ended June 30, 1993, and incorporated herein by reference.
(10.4) Lease Agreement dated April 25, 1994, between Central Avenue Partn
ers and Walgreen Co.
(10.5) Assignment of Lease dated April 20, 1995, from Central Avenue
Partners to the Registrant.
(10.6) Lease Agreement dated March 14, 1995, between George Brunacini and
Jeannette Brunacini and Circuit City Stores, Inc.
(10.7) Assignment of Lease dated June 28, 1995, from George Brunacini and
Jeannette Brunacini to the Registrant.
(11) Statement regarding computation of per share earnings is incorporated
by reference to Note A(8) to the Financial Statements incorporated herein by
reference to Registrant's Annual Report to Shareholders for the Fiscal year
ended June 30, 1995.
(13) Annual Report to Shareholders for the Fiscal year ended June 30, 1995.
(21) Subsidiaries of the Registrant
The registrant has two subsidiaries, they being El Campo Santo, Inc., and
Westland Community Services, Inc., both New Mexico non-profit corporations.
All other exhibits required by Item 601 of Regulation S-B are inapplicable
to this Registrant in this filing.
(b) Reports on Form 8-KSB:
During the last quarter of the period covered by this report, the
Registrant filed no reports on Form 8-K:
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
WESTLAND DEVELOPMENT CO., INC.
By /s/ Barbara Page
Barbara Page, President, Principal
Executive Officer, Chief
Financial Officer and
Director
Date: September 26, 1995
In accordance with the Exchange Act, this report has been signed below by
the following person in behalf of the registrant and in the capacities and on
the dates indicated.
By /s/ David C. Armijo
David C. Armijo, Secretary-Treasurer
and Principal Financial
Officer
Date: September 26, 1995
In accordance with the Exchange Act, this report has been signed below by
the following persons in behalf of the registrant and in capacities and on the
dates indicated.
By /s/ David C. Armijo
David C. Armijo, Director
Date: September 26, 1995
By /s/ Polecarpio (Lee) Anaya
Polecarpio (Lee) Anaya, Director
Date: September 26, 1995
By /s/ Sosimo S. Padilla
Sosimo S. Padilla, Chairman of the
Board of Directors
Date: September 26, 1995
By /s/ Josie G. Castillo
Josie G. Castillo, Director
Date: September 26, 1995
By /s/ Carmel T. Chavez
Carmel T. Chavez, Director
Date: September 26, 1995
By /s/ Raymundo H. Mares
Raymundo H. Mares, Director
Date: September 26, 1995
By /s/ Carlos Saavedra
Carlos Saavedra, Director
Date: September 26, 1995
By /s/ Barbara Page
Barbara Page, Director
Date: September 26, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUL-01-1994
<PERIOD-END> JUN-30-1995
<CASH> 1917803
<SECURITIES> 0
<RECEIVABLES> 719938
<ALLOWANCES> 0
<INVENTORY> 5669344
<CURRENT-ASSETS> 0
<PP&E> 778029
<DEPRECIATION> 347424
<TOTAL-ASSETS> 13182499
<CURRENT-LIABILITIES> 0
<BONDS> 628900
<COMMON> 69600
0
0
<OTHER-SE> 4898210
<TOTAL-LIABILITY-AND-EQUITY> 13182499
<SALES> 2894867
<TOTAL-REVENUES> 3007533
<CGS> 528395
<TOTAL-COSTS> 558920
<OTHER-EXPENSES> 1872876
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 125631
<INCOME-PRETAX> 718549
<INCOME-TAX> 330200
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 388349
<EPS-PRIMARY> .50
<EPS-DILUTED> 0
</TABLE>
September 26, 1995
Dear Shareholders:
In our 1992 letter to shareholders your board advised you of its intention
to bring the company back to financial stability. That has been accomplished.
Our goal now is to be more involved in joint ventures, limited partnerships and
land leases which will provide and generate long term revenues for the company,
while still generating an acceptable level of revenue to pay a reasonable
dividend and pay the Company's operating expenses. Projects commenced during
fiscal 1994 and 1995 include P.G. Corporation (the baseball fields on Paseo del
Volcan), Ladera Sommerville (240 units of multi-family housing), Ladera Terra
West (single family lots), Westland's House No. 1 (a 40 bed assisted living
unit) and Volcano Mini Self Storage Warehouse with 172 units.
It is my hope to ensure that after my tenure your company will continue to
have revenues to operate for many years and the next president will not have to
come into a company as I did six years ago with $20 million of debt, a little
over $10,000 in the bank account with several nearly empty shopping centers and
minimal revenues. The other most important goal is to provide you, the
shareholders, with dividends. We have mailed four dividends during the past four
years. The most recent was mailed out in September 1995 for $.60 per share. A
sixty cent dividend on a share valued at $9.50 to $10.00 per share is an
excellent dividend. Dividends can only be paid from profits. We hope to continue
to to be profitable so we can continue to pay dividends every year.
Also, as you are aware the average selling price of stock has risen since
November 1990 from around $8.00 to around $10.00, approximately a 25% increase
in value.
Please review the enclosed financial statements wherein you will see that
our balance sheets show an increase of $3.2 million dollars in total assets over
last year.
Call me if you have questions.
Sincerely,
Barbara Page
President and Chief Executive Officer
BUSINESS OF WESTLAND
Westland owns a large tract of land consisting of approximately 59,000
acres (the "Land") located on the west side of the City of Albuquerque, New
Mexico. Most of the Land is held for long-term investment and is leased to
others for grazing purposes while the balance is held for development, sales and
leasing activities. Approximately 48,000 acres of this Land was originally part
of the Atrisco Land Grant, which was granted to a group of Spanish settlers in
1692.
Approximately 700 acres remain within the monument boundary to be purchased
by National Park Service for the Petroglyph National Monument. In addition, as
of June 30, 1995, Westland owned approximately one-half (0.5) acre of developed
commercial real estate not connected to the Land.
Westland generates cash internally through its land operations (grazing
leases, real estate sales and commercial leases) and externally through long and
short-term borrowing. The profitability and resulting cash flows of Westland's
land operations depend on numerous factors, such as demand for grazing leases,
land leases, supply of competitively priced properties for residential,
industrial or commercial uses. Over the long term, Westland expects that
residential and industrial growth on Albuquerque's west side will increase
demand for Westland's Land, thus increasing Westland's ability to generate
revenue from land development and sales. In the short term, however, periodic
local economic conditions may decrease the number of land sales and hinder
development, such as during the period from 1986 through 1992.
Westland's basic business philosophy has been to hold certain areas of the
Land in trust for shareholders and to enhance the value of other areas of the
Land through careful planning and development to insure perpetual benefit to the
Company and its shareholders.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
In the past fiscal year, land sales increased over the prior year as the
real estate economy of Albuquerque continued its recovery from recession. During
this period the Company began sales of improved residential lots to builders and
acquired operating properties leased by large national retailers. Increased land
revenues are due to not only the recovery of the housing market in the U.S. but
also Westland's strategy initiated in fiscal 1994 to generate more revenue by
developing infrastructures and selling finished lots to builders rather than raw
land sales, as well as investment in long-term, single tenant leased buildings.
During the last fiscal year sale of lands to the National Park Service
("NPS") as part of its acquisition of the lands included in the Petroglyph
National Monument continued to decline as a major source of the Company's
revenue. During 1992, the Company sold approximately 444 acres to NPS for
$4,873,000, or about 94% of its total revenue. In 1993, the Company sold
approximately 713 acres to NPS for $2,082,500 and approximately 11,000 acres of
land that adjoined the northwestern portion of the Company's Land. In 1994, such
sales were $1,058,000 or 43% of total revenue and in 1995, $329,000 or 11% of
revenue.
With the recovery of the real estate market in Albuquerque, Management
believes that the Company is no longer dependent on large bulk sales of its Land
and that its income will strengthen with the sale of small improved parcels and
lots even though the costs associated with such sales will always be a larger
percentage of revenue than the expenses associated with large bulk sales.
Albuquerque continues to be one of the fastest growing cities in the Southwest
and, because of certain geographical and other limitations on its growth,
Westland's Lands lie directly in the path of future predictable growth patterns.
Sales of improved residential lots in 1995 were approximately $745,000, as the
Company's commitment to this program increased and prices have exhibited modest
growth in the last year.
Westland's future revenues will continue to be largely dependent upon the
sale of land. The Company's assets are illiquid, comprising principally
undeveloped land. Sales are dependent upon the market conditions in Albuquerque,
New Mexico, which now appear to have recovered from the depressed state of
several years ago.
Westland anticipates making capital commitments for land development
projects over the next few years if the economy and opportunities continue to
improve to the extent that such expenditures would be warranted. Capital
commitments may include assessments for roads, water and sewer lines on its
Land. Infrastructure improvements are paid for by assessments which increase the
value of Westland's Land and make further development possible. Westland intends
to incur capital expenditures when management determines such investments will
increase the value of the Land and generate future revenue.
Land is Westland's principal capital resource, but because the Land is
valued, for financial accounting purposes, at its 1907 value plus the cost of
improvements, Westland's balance sheet does not reflect the true value of this
asset. The Company has no current appraisals of the Land and, therefore, the
actual value of the land is not known. The carrying value of the Land was
decreased during the fiscal years ended June 30, 1993 primarily to reflect land
sales. The carrying value will be increased or decreased regularly as Westland
acquires, sells or develops parcels of land. Management believes the June 30,
1995 carrying value of the Land is substantially less than the current market
value of the Land. Westland's balance sheet also shows income-producing
properties, which consist of commercial real estate and improvements held for
future development. The actual value of Westland's Land varies, depending on
national and local market conditions and the amount and proximity of roads,
utilities and other amenities to the land under development. As Albuquerque
continues to grow, the land value of both developed and undeveloped Land should
increase.
The Company is continuing to study the feasibility of establishing various
agricultural developments for portions of its Land. Such development is
contingent on the availability of adequate water.
Westland is moving forward on the establishment of its Sector Plan in the
area North of Interstate 40 and South of the area designated for the Petroglyph
National Monument between Unser and Paseo del Volcan for the development of that
portion of its properties. The Sector plan excludes land located in the
Monument. Westland has also negotiated a limited partnership agreement for the
development of a destination resort on five hundred forty (540) acres of land
south of and adjacent to the Monument.
Financial Condition:
During fiscal 1995, total assets increased to $13,182,000 from $9,936,000,
while liabilities increased from $4,645,000 to $8,215,000. This was the result
of investment of $3,629,000 in income producing and other properties and the
accompanying borrowings on notes and mortgages, which amounted to $2,874,000.
This significant net investment along with the increase in deposits of cash for
the retirement of bonds outstanding and payment of dividends of $768,000,
decreased cash and equivalents by $873,000, even though operations provided
$1,015,000.
As a result, the Company established a $2,000,000 line of credit,
collateralized by certain real property, at a local bank to provide funds
necessary for its continued expansion. At June 30, 1995, the line had not been
used.
During fiscal 1996 the Company will be obligated to pay income tax of
approximately $830,000 should certain replacement properties totaling $2,100,000
for lands sold to NPS not be acquired. The Company is presently appraising
various opportunities to acquire like-kind properties, the cost of which will
offset the taxable gain.
Management believes that the uncommitted balance of cash, cash equivalents,
investments and its borrowing capacity are sufficient to meet all of the
Company's obligations during 1996 without considering additional revenues that
may be generated during that period.
Results of Operations:
In 1995, land revenues increased by $471,000 from $2,366,000 in 1994 to
$2,837,000. This caused the cost of land revenues to increase to $528,000, or
$415,000 from $113,000 in fiscal 1994. Management expects this trend of
increasing cost of sales to continue as more and smaller improved tracts are
sold. Rental revenue increased from $48,000 to $113,000 due to the acquisition
of large, single tenant properties, and the related costs decreased from $44,000
to $31,000. These increases are expected to continue as the Company expands its
activities in these areas.
General and Administrative expenses increased to $1,699,000 in 1995, which
was $391,000 more than the same expenses incurred in 1994. Legal expenses
increased to $172,000 from $163,000 in 1994, primarily because of the settlement
of certain litigation. These settlements are expected to decrease such costs in
the future. Those costs attributable to the growth of the Company's activities
should be expected to continue to rise with revenue.
In 1994, the Company sold a warehouse and office property at a gain of
$418,000, incurred initial expenses of $174,000 in a partnership development
project and experienced a decline in value of some of its investments of
$339,000. Such events are essentially non-recurring, while other income, which
increased by $115,000,is expected to remain higher than in previous years due to
increased sales of soil and cemetery plots.
MARKET PRICE OF AND DIVIDENDS ON WESTLAND'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
Market Information: No established public trading market exists for
Westland's outstanding shares and, to the best of Westland's knowledge, no
dealer has made, is making, or is attempting to create such a market from which
to determine an aggregate market value of the voting stock of Westland. In 1989,
Westland entered into an initial arrangement with an independent stockbroker to
broker transactions between shareholders and heirs in Westland's stock. The
broker has informed Westland that the price at which Westland's common stock had
been bought and sold by Westland's shareholders during the last two fiscal years
preceding the date of this Report was seven dollars and fifty cents ($7.50) to
eight dollars ($8.00) per share and during the ninety (90) days preceding this
report shares have been bought and sold for $9.50 to $10.00 per share.
Since 1982, the outstanding shares have been subject to restrictions
imposed by a majority of Westland's shareholders which amended Westland's
Articles of Incorporation to prohibit (with certain exceptions) transfer of
Westland stock to persons other than lineal descendants of the original
incorporators of the Town of Atrisco (a New Mexico Community Land Grant
Corporation).
Holders: The following table sets forth the approximate number of holders
of record of each class of Westland's common stock as of September 15, 1995:
Number of
Title of Class Record Holders
No Par Value Common 5,366
Class A, $1.00 Par Value 0
Class B, $1.00 Par Value 16
Dividends: During each of the last two (2) fiscal years ended June 30, 1994
and June 30, 1995, Westland declared and paid cash dividends to shareholders
aggregating a total during the two years of $1,151,562. Also, subsequent to June
30, 1995, the Company has paid an additional cash dividend of $0.60 per share
for an aggregate of $475,625.
ON WRITTEN REQUEST, THE COMPANY WILL PROVIDE, WITHOUT CHARGE, A COPY OF ITS
ANNUAL REPORT ON FORM 10-KSB FOR THE FISCAL YEAR ENDED JUNE 30, 1995 TO BE FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION (INCLUDING THE FINANCIAL STATEMENTS
AND THE SCHEDULES THERETO) TO ANY RECORD HOLDER OR BENEFICIAL OWNER OF THE
COMPANY'S SHARES AS OF THE CLOSE OF BUSINESS ON OCTOBER 2, 1995. ANY EXHIBIT
WILL BE PROVIDED ON REQUEST UPON PAYMENT OF THE REASONABLE EXPENSES OF
FURNISHING THE EXHIBIT. ANY SUCH WRITTEN REQUEST SHOULD BE ADDRESSED TO DAVID C.
ARMIJO, SECRETARY, WESTLAND DEVELOPMENT CO., INC., 401 COORS BOULEVARD, N.W.,
ALBUQUERQUE, NEW MEXICO 87121.
WESTLAND DEVELOPMENT CO., INC.
FINANCIAL STATEMENTS AND
REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
WESTLAND DEVELOPMENT CO., INC.
June 30, 1995 and 1994
Report of Independent Certified Public Accountants
Stockholders
Westland Development Co., Inc.
We have audited the accompanying balance sheet of Westland Development Co.,
Inc., as of June 30, 1995, and the related statements of earnings, stockholders'
equity, and cash flows for each of the two years in the period ended June 30,
1995. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Westland Development Co., Inc.,
as of June 30, 1995, and the results of its operations and its cash flows for
each of the two years in the period ended June 30, 1995 in conformity with
generally accepted accounting principles.
/s/ GRANT THORNTON LLP
GRANT THORNTON LLP
Oklahoma City, Oklahoma
August 4, 1995
<TABLE>
WESTLAND DEVELOPMENT CO., INC.
BALANCE SHEET
June 30, 1995
<CAPTION>
ASSETS
<S> <C> <C>
Cash and cash equivalents ....................................................................... $1,917,803
Receivables
Real estate contracts (note B) ........................................................... $ 622,775
Less related deferred profit ................................................... 134,181
-------
488,594
Other accounts receivable ................................................................ 228,967
Accrued interest ......................................................................... 2,377 719,938
-------
Land and improvements held for future development
(notes C and E) .......................................................................... 5,669,344
Income-producing properties, net (notes D and E) ................................................ 3,781,805
Property and equipment, net of accumulated depreciation of
$347,424 (note E) ........................................................................ 430,605
Investments in partnerships and joint ventures .................................................. 175,682
Other (note E) .................................................................................. 487,322
----------
$13,182,499
===========
</TABLE>
<TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Accounts payable, accrued expenses, and other liabilities ....................................... $ 861,981
Accrued interest payable ........................................................................ 52,839
Deferred income taxes (note F) .................................................................. 3,265,000
Notes, bonds, mortgages, and assessments payable (note E) ....................................... 4,034,869
---------
Total liabilities .............. 8,214,689
Commitments and contingencies (notes E and K) --
Stockholders' equity (notes G and M)
Common stock - no par value; authorized, 736,668 shares;
issued and outstanding, 716,608 shares ......................................... 8,500
Class A common stock - $1 par value; authorized, 736,668
shares; issued, none --
Class B common stock - $1 par value; authorized, 491,112
shares; issued and outstanding, 61,100 shares .................................. 61,100
Additional paid-in capital ............................................................... 423,777
Retained earnings ........................................................................ 4,474,433 4,967,810
--------- ----------
$13,182,499
===========
<FN>
The accompanying notes are an integral part of this statement.
</FN>
</TABLE>
<TABLE>
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF EARNINGS
Year ended June 30,
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Revenues
Land ......................................................................... $ 2,836,926 $ 2,365,947
Deferred profit recognized on installment sales .............................. 57,941 22,276
Rentals ...................................................................... 112,666 48,315
--------- ---------
3,007,533 2,436,538
Costs and expenses
Cost of land revenues ........................................................ 528,395 113,011
Cost of rentals .............................................................. 30,525 44,457
Other general and administrative ............................................. 1,698,723 1,307,719
Loss on trading securities ................................................... 2,576 339,236
Legal ........................................................................ 171,577 162,934
--------- ---------
2,431,796 1,967,357
--------- ---------
Operating income ................................ 575,737 469,181
Other (income) expense
Interest income .............................................................. (135,852) (134,169)
Gain on sale of property and equipment ....................................... (1,958) (418,522)
Other income ................................................................. (130,633) (16,099)
Interest expense ............................................................. 125,631 102,398
Equity in loss of partnerships and joint ventures ............................ -- 173,900
-------- --------
(142,812) (292,492)
-------- --------
Earnings before income taxes .................... 718,549 761,673
Income tax expense (note F) ......................................................... 330,200 257,235
-------- --------
NET EARNINGS .................................... $ 388,349 $ 504,438
=========== ===========
Weighted average common and common equivalent shares outstanding .................... 770,242 767,708
=========== ===========
Earnings per common and common equivalent shares .................................... $ .50 $ .66
=========== ===========
<FN>
The accompanying notes are an integral part of these statements.
</FN>
</TABLE>
<TABLE>
WESTLAND DEVELOPMENT CO., INC.
STATEMENT OF STOCKHOLDERS' EQUITY
Years ended June 30, 1995 and 1994
<CAPTION>
Class A Class B
Common stock Common stock Common stock
no par value $1 par value $1 par value Additional
--------------- --------------- -------------- paid-in Retained
Shares Amount Shares Amount Shares Amount capital earnings Total
------ ------ ------ ------ ------ ------ ------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balances at
July 1, 1993 ......... 716,608 $8,500 -- $ -- 51,100 $51,100 $378,677 $ 4,733,208 $ 5,171,485
Net earnings .......... -- -- -- -- -- -- -- 504,438 504,438
Cash dividend paid
- $.50 per share ..... -- -- -- -- -- -- -- (383,854) (383,854)
------- ----- ----- ----- ------ ------ ------- --------- ---------
Balances at
June 30, 1994 ........ 716,608 8,500 -- -- 51,100 51,100 378,677 4,853,792 5,292,069
Net earnings ......... -- -- -- -- -- -- -- 388,349 388,349
Options exercised .... -- -- -- -- 10,000 10,000 45,100 -- 55,100
Cash dividend paid
- $1.00 per share .... -- -- -- -- -- -- -- (767,708) (767,708)
------- ----- ----- ----- ------ ------ ------- --------- ---------
Balances at
June 30, 1995 ........ 716,608 $8,500 -- $ -- 61,100 $61,100 $423,777 $ 4,474,433 $ 4,967,810
======= ====== ===== ====== ====== ======= ======== =========== ===========
<FN>
The accompanying notes are an integral part of this statement.
</FN>
</TABLE>
<TABLE>
WESTLAND DEVELOPMENT CO., INC.
STATEMENTS OF CASH FLOWS
Year ended June 30,
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Increase (Decrease) in Cash and Cash Equivalents
Cash flows from operating activities
Cash received from land sales and collections on real estate
contracts receivable ....................................................... $ 2,199,392 $ 2,405,651
Development and closing costs paid on land sales ..................................... (1,721,712) (36,474)
Cash received from rental operations ................................................. 87,102 23,745
Cash paid for rental operations ...................................................... (23,599) (13,005)
Cash paid for property taxes and maintenance ......................................... (126,661) (71,602)
Purchase of trading securities ....................................................... (9,001,032) (2,000,017)
Proceeds on sale of trading securities ............................................... 10,920,073 1,773,403
Interest received .................................................................... 137,115 138,084
Interest paid ........................................................................ (125,529) (71,110)
Income taxes received ................................................................ 49,800 205,865
Legal and other general and administrative costs paid ................................ (1,504,041) (1,465,182)
Other ................................................................................ 123,693 16,100
------------ -----------
Net cash provided by operating activities ...................... 1,014,601 905,458
Cash flows from investing activities
Capital expenditures ................................................................. (3,629,023) (77,862)
Sinking fund deposit ................................................................. (256,385) (153,219)
Proceeds from the sale of income-producing and other properties ...................... -- 677,761
Investments in partnerships and joint ventures ....................................... (30,158) (175,795)
------------ -----------
Net cash provided by (used in) investing activities ............ (3,915,566) 270,885
Cash flows from financing activities
Borrowings on notes, mortgages, and assessments payable .............................. 2,873,864 21,049
Repayments of notes, mortgages, and assessments payable .............................. (133,721) (326,855)
Proceeds from issuance of bonds ...................................................... -- 252,900
Exercise of stock options ............................................................ 55,100 --
Payment of dividends ................................................................. (767,708) (383,854)
------------ -----------
Net cash provided by (used in) financing activities ............ 2,027,535 (436,760)
------------ -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS ................................ (873,430) 739,583
Cash and cash equivalents at beginning of year .............................................. 2,791,233 2,051,650
------------ -----------
Cash and cash equivalents at end of year .................................................... $ 1,917,803 $ 2,791,233
============ ===========
Reconciliation of Net Earnings to Net Cash Provided by Operating Activities
Net earnings ................................................................................. $ 388,349 $ 504,438
Adjustments to reconcile net earnings to net cash provided by
operating activities
Depreciation ................................................................ 45,281 24,934
Gain on sale of property and equipment ...................................... (1,958) (418,522)
Equity in loss of partnership ............................................... -- 173,900
Sale of land for real estate contract ....................................... (425,827) --
Collections on real estate contracts receivable ............................. 96,387 40,207
Profit recognized on installment sales ...................................... (57,941) (22,779)
Deferred income taxes ....................................................... 247,000 438,000
Change in
Income taxes receivable/payable ................................ 133,000 25,100
Rents receivable ............................................... (1,836) (24,570)
Trading securities ............................................. 1,919,041 115,689
Other accounts receivable ...................................... (190,015) 2,272
Accrued interest receivable .................................... 1,263 848
Land and improvements held for future development .............. (1,417,088) 76,538
Other assets ................................................... 5,056 19,963
Accounts payable, accrued expenses,
and other liabilities .................................... 266,259 (81,848)
Accrued interest payable ....................................... 7,630 31,288
------------ -----------
Net cash provided by operating activities ............... $ 1,014,601 $ 905,458
=========== =========
<FN>
Noncash investing and financing activities:
During the year ended June 30, 1995, the Company exchanged an account receivable of $100,000 for a partnership interest and
contributed land with a cost of approximately $22,000 to a partnership. In addition, assessments payable of approximately $25,000
were assumed by the purchaser in association with certain land sales.
During the year ended June 30, 1994, the Company repossessed 163 acres of land with a cost of approximately $54,000 and contributed
three acres of land with a cost of approximately $21,000 to a partnership.
The accompanying notes are an integral part of these statements.
</FN>
</TABLE>
WESTLAND DEVELOPMENT CO., INC.
NOTES TO FINANCIAL STATEMENTS
June 30, 1995 and 1994
NOTE A - SUMMARY OF ACCOUNTING POLICIES
1. History of Company and Beginning Basis of Financial Reporting
In 1892, the descendants of the owners of a land grant deeded in 1692
by the Kingdom of Spain became incorporators of a land grant
corporation named Town of Atrisco. Ownership of the Town of Atrisco
was based on proportionate ownership of the land grant. In 1967, the
Town of Atrisco was reorganized and became Westland Development Co.,
Inc. (the "Company"), with the heirs receiving shares in the Company
in proportion to their ancestors' interest in the Town of Atrisco
corporation. The net assets of $232,582 at the date of reorganization
were assigned as follows:
Value of no par common stock as stated in the
Articles of Incorporation $ 8,500
Additional paid-in capital 224,082
-------
$232,582
========
The Company estimated that it owned approximately 49,000 acres of land
at the date of incorporation as Westland Development Co., Inc. Such
acreage was used as the beginning cost basis for financial reporting
purposes and was valued at $127,400 ($2.60 per acre) based on an
appraisal in 1973 which determined the approximate value of the land
in 1907. This date approximates the date that the Patent of
Confirmation covering the land comprising the Atrisco Land Grant was
given to the Town of Atrisco by the United States of America. Since
the date of the Patent of Confirmation, the Company's acreage has
increased in market value, but a full determination of such value has
not been made.
The Company includes its wholly-owned subsidiary, El Campo Santo, Inc.
on a consolidated basis. El Campo Santo, Inc. is a wholly-owned
nonprofit corporation created to manage cemeteries set aside on
Company land for the stockholders. El Campo Santo, Inc. has no
significant assets, liabilities, or operations. All material
intercompany accounts and transactions have been eliminated.
2. Nature of Operations
The Company develops, sells, or leases its land holdings, all of which
are located near Albuquerque, New Mexico. The Company may use joint
ventures or participation in limited partnerships to accomplish these
activities. Revenue sources for the years ended June 30, 1995 and 1994
consist primarily of proceeds from vacant land sales and rentals from
developed properties, such as single-tenant retail stores and office
space. Land sales are primarily to commercial developers and others in
the Albuquerque area and certain governmental agencies, and the terms
of sale include both cash and internal financing by the Company. Such
sales are collateralized by the land. The Company has relied primarily
upon cash land sales over the past several years due to the collection
risk associated with real estate contracts.
3. Cash and Cash Equivalents
Cash and cash equivalents are considered to include highly liquid
investments with maturities of three months or less and money market
funds. The Company maintains its cash in bank deposit accounts which,
at times, may exceed federally insured limits and in money market
funds which are not insured. The Company has not experienced any
losses in such accounts and believes it is not exposed to any
significant credit risk on cash and cash equivalents.
4. Land and Improvements Held for Future Development
Land and improvements held for future development are recorded at cost
not to exceed net realizable value. Improvements consist of abstracts,
surveys, legal fees, master and sector plans, infrastructure
improvements, and other costs related to land held by the Company
which are allocated to respective tracts primarily by specific
identification of costs.
5. Income-Producing Properties and Property and Equipment
Income-producing properties and property and equipment are stated at
cost, less accumulated depreciation, computed on a straight-line basis
over their estimated useful lives of three to thirty years. The cost
of the building in which the Company has its offices, a portion of
which is rented to others, has been allocated to property and
equipment and income-producing properties based upon square footage.
6. Recognition of Income on Real Estate Transactions
The Company recognizes the entire gross profit on sales where the down
payment is sufficient to meet the requirements for the full accrual
method. Transactions where the down payment is not sufficient to meet
the requirements for the full accrual method are recorded using the
deposit or installment method. Under the deposit method, cash received
is recorded as a deposit on land sale. Under the installment method,
the Company records the entire contract price and the related costs at
the time the transaction is recognized as a sale. Concurrently, the
gross profit on the sale is deferred and is subsequently recognized as
revenue in the statements of earnings as payments of principal are
received on the related contract receivable.
7. Income Taxes
Deferred income tax assets or liabilities are determined based on the
difference between financial statement and tax bases of certain assets
and liabilities as measured by the enacted tax rates in effect using
the liability method.
8. Earnings Per Common Share
Earnings per common share are based upon the weighted average number
of common and dilutive common equivalent shares outstanding during the
year. Common equivalent shares include the number of no par value
common shares which may be issued in connection with eliminating
fractional shares (which resulted from the determination made by the
Court in the heirship case) and the number of no par value common
shares for which the Court ruled that no incorporator or heirs
existed.
9. Investments in Partnerships and Joint Ventures
Investments in partnerships and joint ventures are accounted for on
the equity method.
10. Trading Securities
Debt and equity securities that are bought and held principally for
sale in the near term are reported at fair value, with unrealized
gains and losses included in earnings.
NOTE B - REAL ESTATE CONTRACTS RECEIVABLE
Real estate contracts receivable are summarized as follows at June 30,
1995:
Promissory note from developer,
due December 31, 1995, bearing
interest at 10%; collateralized
by land $425,827
Contracts, due in aggregate annual
installments of $50,139, with
interest rates ranging from 10% to
12%; collateralized by land 196,948
--------
$622,775
========
Principal collections (based upon stated contract maturities and
assuming all delinquent amounts will be collected in 1996) due on the
real estate contracts receivable for the years ended June 30 are as
follows:
1996 $483,396
1997 29,346
1998 14,357
1999 85,118
2000 2,100
Thereafter 8,458
--------
$622,775
========
NOTE C - LAND AND IMPROVEMENTS HELD FOR FUTURE DEVELOPMENT
The Company estimates that it presently owns in excess of 58,000 acres
of land, primarily including land located within the boundaries of the
Town of Atrisco Land Grant and land located elsewhere which the
Company has acquired since incorporation. Plans for ultimate
development of the properties have not been finalized.
Land and improvements consist of the following at June 30, 1995:
Land ....... $1,061,999
Improvements 4,607,345
---------
$5,669,344
==========
NOTE D - INCOME-PRODUCING PROPERTIES
Income-producing properties consist of two single-tenant retail store
buildings and one-half of the Company's office building and are
summarized as follows at June 30, 1995:
Buildings and equipment ......... $2,910,797
Less accumulated depreciation 94,992
---------
2,815,805
Land ............................ 966,000
---------
$3,781,805
==========
The Company's rentals from income-producing properties are principally
obtained from tenants through rental payments as provided for under
noncancelable operating leases. The lease terms range from one to
twenty years and typically provide for guaranteed minimum rent,
percentage rent, and other charges to cover certain operating costs.
The Company sold its commercial warehouse during the year ended June
30, 1994 resulting in a gain of approximately $418,000.
Minimum future rentals from income-producing properties on
noncancelable tenant operating leases as of June 30, 1995 are as
follows:
Year ended June 30
1996 $ 546,000
1997 555,000
1998 558,000
1999 569,000
2000 554,000
Thereafter 4,285,000
---------
$7,067,000
==========
NOTE E - NOTES, BONDS, MORTGAGES, AND ASSESSMENTS PAYABLE
Notes, bonds, mortgages, and assessments payable are summarized as
follows at June 30, 1995:
Mortgage notes with a bank, due in
aggregate monthly installments of
$4,650 at June 30, 1995, including
interest at 7.5%, due at various dates
from August, 1998 through November,
1999; collateralized by
income-producing properties and
related equipment $ 324,159
Assessments for the installation of
water and sewer lines and paving, due
in aggregate semiannual installments
of $47,802 through January, 2002, plus
interest at rates ranging from 7.22%
to 10%; collateralized by land and
improvements with an approximate equal
carrying value 197,696
Promissory note with an insurance
company, due in monthly installments
of $17,970 through May, 2015,
including interest at 9.37%;
collateralized by income-producing
properties 1,942,721
Real estate contract with a developer,
due September 10, 1995, bearing
interest at 10%; collateralized by
income producing properties 700,000
Bonds payable, due June 30, 1998, with
annual interest at 7%; collateralized
by partial proceeds of sale of land
for national park 628,900
Promissory note with developer, due
December 14, 1998, bearing interest at
6%; collateralized by land and
improvements held for future
development 194,074
Notes payable to a finance company,
due in aggregate monthly installments
of $1,570, including interest at rates
ranging from 9.75% to 11%, due at
various dates through July, 1999;
collateralized by vehicles 47,319
----------
$4,034,869
==========
The Company has general obligation bonds outstanding of $628,900 which
provide for 7% annual interest payments and mature June 30, 1998.
Pursuant to the bond indenture, the Company must deposit with the bond
trustee an additional amount not to exceed 20% of the face amount of
all such issued and outstanding Series B bonds less the amount of
interest accumulated or accrued on funds previously deposited pursuant
to the terms of the agreement, or 20% of the Company's net income from
the sale of such properties, whichever is less. As of June 30, 1995,
all required deposits due July 15, 1994 were on deposit with the bond
trustee and are included in other assets in the amount of $393,812.
The Company may redeem the bonds prior to maturity by payment of the
principal amount plus a premium of 2% of the principal balance, plus
accrued interest, through the date of redemption. The bonds are
collateralized by 20% of the net income, as defined in the bond
indenture, to be received from the sale of approximately 2,000 acres
of land to the United States Government for inclusion in the
Petroglyph National Monument (Note K).
The Company maintains a line of credit with a bank which provides a
maximum of $2,000,000 at the bank's prime rate of interest and is
collateralized by specific tracts of land. Interest is payable
quarterly with the balance payable at maturity, December 1, 1996. At
June 30, 1995, the Company has no balances outstanding under the line
of credit. At June 30, 1995, the Company had approximately $375,000 of
outstanding letters of credit to the City of Albuquerque in connection
with subdivision improvements to be done by the Company.
Aggregate required principal payments of the notes, bonds, mortgages,
and assessments payable as of June 30, 1995 are as follows:
Year ended June 30
1996 $1,051,661
1997 150,689
1998 735,843
1999 290,221
2000 73,531
Thereafter 1,732,924
----------
$4,034,869
==========
NOTE F - INCOME TAXES
An analysis of the deferred income tax assets and liabilities as of
June 30, 1995 is as follows:
Deferred tax assets
Tax loss and contribution carryforwards $ 272,355
Accrued expenses ...................... 35,050
Investments ........................... 70,156
Property and equipment ................ 120,269
Other ................................. 65,318
Valuation allowance ................... (308,668)
--------
254,480
Deferred tax liabilities
Deferred tax gain on involuntary
conversion of land 3,519,480
---------
Net deferred tax liability $3,265,000
==========
Income tax expense (benefit) for continuing operations consists of the
following:
June 30,
--------
1995 1994
---- ----
Current
Federal $83,200 $(174,765)
State -- (6,000)
------ --------
83,200 (180,765)
Deferred
Federal 209,950 382,000
State 37,050 56,000
------- --------
247,000 438,000
------- --------
$330,200 $ 257,235
======== =========
The income tax provision for continuing operations is reconciled to
the tax computed at statutory rates as follows:
June 30,
--------
1995 1994
---- ----
Tax expense at statutory rates ...... $ 244,307 $ 258,970
State income taxes at statutory rates 43,113 38,084
Adjustment of estimated income tax
liabilities of prior year ......... (49,800) (39,819)
Change in valuation allowance ....... 92,786 --
Other ............................... (206) --
--------- ---------
Total expense from continuing
operations ....................... $ 330,200 $ 257,235
========= =========
NOTE G - COMMON STOCK AND STOCK OPTIONS
Under its Articles of Incorporation, the Company is authorized to
issue 1,964,448 shares of common stock classified as follows:
(a) 736,668 shares of no par value common stock to represent $8,500
estimated value of land held by the Town of Atrisco;
(b) 736,668 shares to be sold for $1.45 a share, designated as Class
A, $1 par value common stock. Class A stock is to be sold only to the
stockholders of record as of the date of incorporation as follows:
At the first sale of such stock, each stockholder shall have the right
to purchase up to the number of shares obtained by dividing the total
number of stockholders of record on the date of incorporation into
736,668 shares.
Any stock remaining unpurchased shall be offered for sale at
subsequent sales, and only stockholders who purchased stock at a
preceding sale shall have the right to purchase stock at a subsequent
sale, each one being entitled to purchase up to the number of shares
obtained by dividing the total number of stockholders of record who
purchased at the preceding sale into the total number of unpurchased
shares remaining after the preceding sale.
(c) 491,112 shares to be sold for a price to be determined by the
Board of Directors, designated as Class B, $1 par value common stock.
Those acquiring no par value common stock and Class A, $1 par value
common stock have no preemptive rights to purchase Class B, $1 par
value common stock.
The following summarizes, at June 30, 1995, the number of shares of
common stock which, upon judicial determination, can be distributed
(no par) or offered for sale (Class A) to stockholders of record as of
the date of incorporation:
Price
Number ----------------
of Per
shares share Total
------ ----- -----
Shares issuable
No par value common ........ 5,047 -- $ --
Class A, $1 par value common 736,668 1.45 1,068,169
------- ----------
741,715 $1,068,169
======= ==========
There is no established market value for the Company's common stock.
At June 30, 1995, 716,608 shares of the Company's no par value common
stock were issued and outstanding. Of the 5,047 shares of no par value
common stock issuable, 1,872 shares may be issued in connection with
eliminating fractional shares which resulted from the determinations
made by the Court in the heirship case and 3,175 shares represent
shares for which the Court in the heirship case ruled that no
incorporator or heirs existed. The Company also has reacquired and
canceled 15,013 shares of no par value common stock which have been
constructively retired. These shares have not been formally retired
and, as such, may be issuable to stockholders of record as of the date
of incorporation.
During 1985, the stockholders of the Company approved a stock option
plan for certain directors and employees. During 1987, the plan was
terminated. At the time of termination, options for 48,000 Class B
shares had been granted at $5.51 per share. At June 30, 1995 and 1994,
options for 38,000 and 18,000 Class B shares, respectively, were
exercisable. Options for 10,000 shares were exercised during 1995.
These options expire in December, 1996.
NOTE H - SEGMENT INFORMATION
The Company operates primarily in two industry segments. They are as
follows:
Land- Operations involve the development and sale of
tracts, both residential and commercial. In addition,
included are incidental revenues from leasing of
grazing rights.
Rentals- Operations involve rentals from two single-tenant
retail store buildings and one-half of the Company's
office building.
Financial information for each industry segment is summarized as
follows:
Land Rentals
---- -------
1995
Revenues ............ $2,894,867 $ 112,666
Operating profit .... 2,366,472 82,141
Identifiable assets . 6,341,330 3,807,369
Capital expenditures -- 3,688,900
Depreciation ........ -- 16,508
1994
Revenues ........... $2,388,223 $48,315
Operating profit ... 2,275,212 3,858
Identifiable assets 4,522,005 98,101
Capital expenditures 77,862 --
Depreciation ....... -- 11,261
Other corporate assets consist primarily of cash, furniture,
equipment, and one-half of an office building, of which the remaining
one-half is included in income-producing properties.
NOTE I - BENEFIT PLAN
The Company has established a Simplified Employee Pension (SEP/IRA)
plan under Section 408(k) of the Internal Revenue Code. The Company
annually may make a voluntary matching contribution of a maximum of
11% of each eligible employee's compensation. Company contribution
expense was approximately $47,000 and $35,000 for 1995 and 1994,
respectively.
NOTE J - SALES TO MAJOR CUSTOMERS
Sales to major customers are summarized as follows:
During the year ended June 30, 1995, sales to four customers
individually accounted for 26 percent, 16 percent, 15 percent, and
13 percent of total revenues.
During the year ended June 30, 1994, sales to two customers
individually accounted for 43 percent and 30 percent of total
revenues.
NOTE K - SALE OF LAND FOR NATIONAL PARK
On June 28, 1990, the Petroglyph National Monument ("National
Monument") was established by an act of the United States Congress
("Congress"). Under the bill passed by Congress, the National Park
Service is authorized to acquire acreage within the National Monument
using funds specifically appropriated by Congress each year. The
Company owned approximately 2,000 acres within the National Monument
boundary. In 1995, approximately 24 acres were transferred to the
National Park Service for cash of $329,900. In 1994, approximately 118
acres were transferred to the National Park Service for cash of
$1,058,000. The Company's remaining land within the National Monument
boundary is expected to be sold in a series of transactions over the
next several years.
NOTE L - LITIGATION
The Company is engaged in various lawsuits either as plaintiff or
defendant which have arisen in the conduct of the business of the
Company which, in the opinion of management, based upon advice of
counsel, would not have a material effect on the Company's financial
position.
NOTE M - RELATED PARTY TRANSACTIONS
The Company purchases its directors' and officers' liability insurance
through a corporation controlled by a member of the Board of
Directors. Total premiums for this policy paid in 1995 and 1994 were
$60,000 and $75,000, respectively.
During the year ended June 30, 1995, the Company acquired certain
property from an ownership group which included a member of the Board
of Directors. Under the sales agreement, the Board member received
proceeds in the amount of $74,090.
NOTE N - SUBSEQUENT EVENTS
On August 11, 1995, the Board of Directors declared a cash dividend of
$.60 per common share payable on September 8, 1995 to stockholders of
record on August 22, 1995.
DIRECTORS AND OFFICERS OF WESTLAND
SOSIMO S. PADILLA, Chairman of the Board of Directors and Director. Member
of the Executive Committee. Mr. Padilla is retired from the circulation
department of the Albuquerque Publishing Company and was owner/operator of
Western Securities Transportation Corporation for over thirty years.
BARBARA PAGE, President, Chief Executive Officer and Director. Member of
the Executive Committee. Ms. Page is employed by Westland Development Co., Inc.
as its President and Chief Executive Officer.
POLECARPIO (LEE) ANAYA, Vice President, Assistant Secretary/Treasurer and
Director. Chairman of the Executive Committee. Mr. Anaya is owner/operator of
Lee's Conoco.
DAVID C. ARMIJO, Secretary/Treasurer and Director. Member of the Executive
Committee. Mr. Armijo is an insurance broker and serves as President and
Chairman of the Board of California's All-Risk Insurance Agency, Inc. in Los
Angeles.
RAYMUNDO MARES, Director. Member of the Executive Committee and Chairman of
the Board of Directors of El Campo Santo, Inc. Mr. Mares is a retired employee
of the maintenance department of the University of New Mexico.
CARMEL CHAVEZ, Director. Alternate member of the Executive Committee and
Director of El Campo Santo, Inc. Mr. Chavez is a retired employee of the
Albuquerque Public Schools.
JOSIE G. CASTILLO, Director. Alternate member of the Executive Committee,
Vice Chairman of El Campo Santo, Inc. and member of the Disclaimer Committee.
Ms. Castillo retired in 1995 from the Human Services Department of the State of
New Mexico.
CARLOS SAAVEDRA, Director. Alternate member of the Executive Committee and
Chairman of the Disclaimer Committee. Dr. Saavedra is a former director of
bilingual education for the Colorado Department of Education and the Oakland
Unified School District, Oakland, California. Dr. Saavedra retired from
education in 1985.
ABELINO HERRERA, Director. Alternate member of the Executive Committee and
member of the Disclaimer Committee. Mr. Herrera was employed as a mailman by the
Albuquerque Public Schools until 1981, when he retired.
EXHIBIT 10.4
LEASE
By this Lease, made in multiple copies the day of , 1994, between CENTRAL
AVENUE PARTNERS, a New Mexico general partnership, hereinafter called
"Landlord," and WALGREEN CO, an Illinois corporation, hereinafter called
"Tenant"; Landlord hereby leases to Tenant, and Tenant hereby rents from
Landlord, for the term commencing October 1, 1994, and continuing to and
including September 30, 2044, subject to prior termination as hereinafter
provided, the premises to include both a building and other improvements and
certain real estate located at the northeast corner of Coors Boulevard and
Sequoia Road, in the City of Albuquerque, State of New Mexico, the building to
be erected and completed by Landlord to include not less than 115 feet of
frontage facing Coors Boulevard and not less than 135 feet of depth, being an
area containing 15,525 square feet of first floor area (the "Building"), and
together with all improvements, appurtenances, easements and privileges
belonging thereto, said Building and improvements being all as shown on the plan
attached hereto and made a part hereof as Exhibit "A," all as legally described
in Exhibit "B" attached hereto and made a part hereof and the Building, real
estate and other improvements to be constructed thereon are hereinafter
collectively referred to as the "Leased Premises "
THE TERMS, COVENANTS AND CONDITIONS OF SAID LETTING ARE AS FOLLOWS: USE
1. Subject to Article 13 of this Lease and so long as Tenant shall operate
in the Leased Premises, Tenant shall operate a store similar in nature to a
majority of its other stores in the Albuquerque metropolitan area, with the
right to sell such merchandise and provide such services, as Tenant may, from
time to time, sell and provide in a majority of its other stores in the
Albuquerque metropolitan area. Nothing contained herein shall be construed so as
to prohibit Tenant from expanding or eliminating any department(s) or from
expanding or eliminating any line(s) of merchandise in the Leased Premises,
provided, however, the liquor department shall not exceed twenty-five percent
(25%) of the gross floor area of the Leased Premises.
2. Tenant shall pay rent for the Leased Premises, as follows:
(a) A fixed rent of $19,173.37 per month, commencing on the date provided
in Article 6 hereof. Fixed rent shall be payable on the first day of each and
every month in advance and shall be properly apportioned for any period less
than a full calendar month.
(b) If a sum equal to - -
2.0% of the Gross Sales, as hereinbelow defined, except from the sale of
food, alcoholic beverages and prescriptions,
plus 1.0% of the Gross Sales from the sale of food and alcoholic beverages,
plus 0.5% of the Gross Sales from the sale of prescriptions
made by Tenant in the operation of Tenant's store in the Leased Premises in
any lease year [as defined in Section (c) of Article 3] shall exceed the total
fixed rent for such lease year, then and in such event, and within forty-five
(45) days after the end of each lease year, Tenant shall pay to Landlord the
amount of such excess as additional percentage rent. however, in no event shall
the total of fixed rent plus additional percentage rent (if any) payable by
Tenant in any lease year exceed $460,161.00 per lease year, which amount shall
be proportionately decreased for any lease year that is not comprised of a full
twelve (12) months. Within forty--five (45) days after the end of each lease
year Tenant shall furnish to Landlord a statement of the total amount of such
Gross Sales for such lease year. The aforesaid amount(s) shall be
proportionately adjusted in the case of a lease year of more or less than a full
twelve (12) calendar months.
(c) The term "Gross Sales" as used herein is defined as the total amount of
all receipts, whether for cash or on credit (less returns and refunds) from
sales of drugs, food, drinks, goods, wares and merchandise of every sort
whatsoever, made by Tenant in the operation of Tenant's store on the Leased
Premises, or made by any concessionaire on the Leased Premises. The following
shall be specifically excluded from Gross Sales: receipts from sales of
non-alcoholic beverages (including milk); receipts from sales of tobacco
products; receipts from the sale of prescription items pursuant to third party
prescription plans, as defined below; receipts and commissions from the
operation of public telephones; license fees received from the operation of
automatic teller machines to the extent such fees do not exceed five percent
(5%) of fixed rent paid in any lease year; credit card processing fees;
intercorporate and interstore sales or transfers; sales of government bonds,
savings stamps and other government securities; sales of postage stamps and
ready stamped postcards and envelopes; sales of government lottery tickets;
sales at a discount to employees; sales at a discount to doctors, dentists,
hospitals, nurses, drug stores or wholesale drug or supply houses; accounts
receivable written off as uncollectible. Tenant shall also have the right to
deduct and exclude from Gross Sales a sum equal to any approximate amounts which
may be paid by Tenant or which Tenant may add to or include in its selling
prices of various articles by reason of any sales taxes, use taxes, retailers'
occupation taxes, excise taxes at the retail level and the like, now or
hereafter imposed and however entitled, and which are based upon the amounts of
sales or the Units of sales.
Third party prescription plans shall be deemed to be those health benefit
plans wherein all or any portion of the cost of prescription items and
pharmaceuticals for any individual patient are paid or reimbursed by an
organization such as a governmental agency, an entity created by state or
federal law, an insurance carrier, a health maintenance organization, a union, a
trust or benefit organization or an employer or employer group pursuant to an
agreement between Tenant and such organization.
Tenant shall cause to be kept, in accordance with its customary accounting
procedure, records of the Gross Sales made by Tenant in the operation of
Tenant's store on the Leased Premises. Landlord and Landlord's duly authorized
representative, at reasonable times during business hours, shall have access to
such records at the place where the same are kept, for the purpose of inspecting
and auditing the same, provided that any such inspection and audit be made by
Landlord within six (6) months after the expiration of any lease year. If
Landlord does not object in writing to any statement above mentioned within said
time period, such statement shall be conclusively presumed to be correct, and
thereafter Tenant shall not be required to preserve the records from which such
statement was compiled. Landlord agrees not to divulge to anyone the information
obtained by Landlord and Landlord's representative from such records or from the
statements above mentioned, except to any mortgagee or prospective purchaser of
the property and except as may be necessary for the enforcement of Landlord's
rights under this Lease. Nothing herein contained, however, shall be deemed to
confer upon Landlord any interest in the business of Tenant on the Leased
Premises.
(d) Until further notice by Landlord to Tenant, rent checks shall be
payable to and mailed to:
Central Avenue Partners
c/o Peterson Properties
2325 San Pedro, N.E., Suite 2-A
Albuquerque, New Mexico 87110
INITIAL TERM. TERM. LEASE YEAR. OPTIONS
3. (a) The Initial Term of this Lease shall commence on the date that
Tenant accepts possession of the Building and shall continue to and include the
day immediately preceding the date that the Term of this Lease commences as
below provided. Tenant shall have no obligation to pay rents or other charges
during the Initial Tern nor shall any of the same accrue; all rents and other
charges specified in this Lease shall commence as of the date that the Term
commences, unless otherwise expressly provided herein.
(b) If the fixed rent shall not have begun to accrue on the date above
specified for the commencement of the Teen of this Lease, then the Term shall
not commence until the date on which the fixed rent begins to accrue and shall
continue for fifty (50) years thereafter; provided, however, that if such
commencement date be other than the first day of the calendar month then the
Term shall continue to and include the last day of the same calendar month of
the fiftieth year thereafter.
(c) The first lease year shall commence on the date fixed rent begins to
accrue and, if such commencement be on the first day of a calendar month shall
end twelve (12) months thereafter, or, if such commencement be other than the
first day of the calendar month, shall end on the last day of the same calendar
month of the first year thereafter, and each succeeding lease year shall be each
succeeding twelve (12) months period.
(d) Tenant shall have the right and option, at Tenant's election, to
terminate this Lease effective as of the last day of the two hundred fortieth
(240th) full calendar month of the Term, effective as of the last day of the
three hundredth (300th) full calendar month of the Term, effective as of the
last day of the three hundred sixtieth (360th) full calendar month of the Term,
effective as of the last day of the four hundred twentieth (420th) full calendar
month of the Term, effective as of the last day of the four hundred eightieth
(480th) full calendar month of the Term and effective as of the last day of the
five hundred fortieth (540th) full calendar month of the Term. If Tenant shall
elect to exercise any such option, Tenant Shall send notice thereof to Landlord,
at least six (6) months prior to the date this Lease shall so terminate, but no
notice shall be required to terminate this Lease upon the expiration of the full
term.
DELIVERY OF POSSESSION
4. (a) Landlord shall put Tenant into exclusive physical possession of the
Leased Premises on October 1, 1994 or as soon as possible thereafter, and in any
case not later than October 1, 1995, and at the same time deliver to Tenant a
full set of keys to the Building, provided that if Landlord shall so put Tenant
into possession between October 1 and December 1, then the Initial Term shall be
extended by the period between the date of such possession and December 1.
Landlord shall send written notice to Tenant, Attention: Director of
Construction, at least forty-five (45) days [but not more than sixty (60) days]
before such possession is to be delivered. Such notice shall set forth the date
of delivery of possession, which shall be on a Monday (unless such date is a
legal holiday, in which case possession shall be delivered the next business
day). If possession is not delivered by the latest date above mentioned, Tenant
may, in addition to Tenant's remedies at law, equity or under this Lease, cancel
this Lease by notice to Landlord. The Leased Premises upon delivery shall be in
good condition and repair, free of hazardous and toxic materials and substances,
and shall fully comply with all lawful requirements and shall be constructed in
accordance with Article 5 hereof. Tenant shall have the right, without being
deemed to have accepted possession, to enter upon the Leased Premises as soon
thereafter as practical, to take measurements and install its fixtures and
exterior signs (including, but not limited to, the installation of permanent and
temporary signs), but such entry or the opening for business shall not
constitute a waiver as to the condition of the premises or as to any work to be
done or changes to be made by Landlord, or as to any other obligations of
Landlord hereunder.
(b) Landlord represents that other than as disclosed in that certain report
dated March 22, 1994, prepared by Western Technologies, Inc. and entitled Phase
I Environmental Site Assessment, 1.58 Acre Property located at the northeast
corner of Coors Boulevard and Sequoia Road, N.W., Albuquerque, New Mexico (the
"Report"), Landlord has no knowledge concerning any current or previous use of
the land and/or Building comprising the Leased Premises which would lead a
reasonable person to suspect that hazardous wastes or hazardous substances were
deposited, stored, disposed of or placed upon, about or under said land and/or
buildings. In order to make the foregoing representation, Landlord states that
it has made due inquiry or investigation as appropriate. Landlord has provided
to Tenant, at Landlord's sole cost and expense, a copy of the Report. In the
event tile Report discloses the existence of any toxic or hazardous substances
in, on or under the Leased Premises, including, but not limited to, the
existence of any underground storage tanks, Landlord, at Landlord's sole cost
and expense, prior to the date Landlord delivers possession of the Leased
Premises to Tenant, as provided in Article 4, shall properly remove, and dispose
of any such underground storage tanks and shall properly remove and dispose of
any hazardous and toxic materials and substances. All such disposal and removal
shall be conducted in accordance with all federal, state and local laws,
ordinances, and rules or regulations, or other binding determinations of any
federal, state, local, or other governmental entity exercising executive,
legislative, judicial, regulatory, or administrative functions (whether now or
hereafter existing) pertaining to hazardous or toxic materials or substances or
underground storage tanks. In the event of any such removal and disposal by
Landlord hereunder, upon completion of the same the Leased Premises shall again
be tested by the environmental engineer and/or contractor and the results
delivered to Tenant; Landlord shall also deliver in such event all necessary
governmental inspections and approvals with respect to the removal, remediation
and disposal work. Tenant shall have no obligation to accept delivery of
possession of the Leased Premises until Landlord has complied with the
provisions of this Section.
(c) It shall be a condition precedent to the delivery of possession of the
Leased Premises to Tenant that Landlord shall have first delivered to Tenant
satisfactory evidence of Landlord's title together with each instrument, if any,
required by Section (b) of Article 18. Tenant's acceptance of possession of the
Leased Premises in the absence of full satisfaction of said condition precedent
shall in no manner be deemed a waiver thereof or of any of the requirements of
Article 18.
CONSTRUCTION BY LANDLORD
5. (a) Before delivering possession of the Leased Premises to Tenant,
Landlord shall obtain all required zoning and permits for the construction and
operation of the Leased Premises and the Building and shall erect and complete
the Building, which Building shall be a modern one-story structure. The Building
shall be of such exterior and structural design and character as is acceptable
to Tenant and as will also meet Tenant's requirements for its permanent exterior
signs, which may extend above the Building and shall be at locations visible
from the entire Parking Area The Leased Premises and Building shall be erected
and completed by Landlord, in accordance with the plans and specifications
described below, and shall contain Tenant's specific requirements for the
operation of Tenant's business, which requirements will include, among other
things, the items and installations listed in the Criteria Specifications for
Self-Serve Walgreen Store prepared by Walgreen Co., revised January 1, 1994, and
Criteria Plans, including the drawings referenced on Exhibit "C" attached
hereto, heretofore delivered to Landlord and incorporated herein by reference
and made a part hereof. All such work by Landlord shall be done by contractors
selected by Landlord and acceptable to Tenant and shall comply with the
requirements of public authorities. All such work shall be done in a firstclass,
good, and workmanlike manner, free and clear of all liens and encumbrances for
labor and materials furnished to Landlord. Tenant shall reimburse Landlord for
any cost increase resulting from constructing the Building in accordance with
the drawings referenced in Exhibit "C" instead of the drawings originally sent
to Landlord dated July 1, 1993 and referenced in Exhibit "C-1" attached to the
Lease (excluding the additional cost of brick veneer).
(b) Within one (1 ) month after the execution and delivery of this Lease,
Tenant shall furnish to Landlord a fixture plan and base sheets relative to the
Building, so that Landlord may be enabled to prepare and furnish to Tenant plans
and specifications covering Tenant's specific requirements. The plans (which
shall be on mylar or vellum) and specifications (the "Plans") prepared by
Landlord shall be furnished to Tenant for Tenant's approval within forty-five
(45) days after the execution and delivery of this Lease or the receipt of said
fixture plan and base sheets from Tenant, whichever is later. All areas of
design and engineering must be certified by and under the direct supervision of
architects and engineers licensed and registered in the State of New Mexico.
Tenant agrees to approve or reject said Plans, within thirty (30) days, and if
not approved or rejected within said period, said Plans shall be deemed
approved. In the event Tenant shall reject such Plans within the period provided
above, then Tenant shall return said Plans to Landlord indicating the items so
rejected. Landlord shall then have thirty (30) days to resubmit the Plans to
Tenant, and Tenant shall have thirty (30) days for approval or rejection. If not
approved or rejected within said period, said Plans shall be deemed approved;
provided, however, that in no event shall the standards of quality of approved
Plans, or of those deemed approved, be less than those required by the Criteria
Plans and Criteria Specifications above described, which shall control. If said
Plans are rejected after being resubmitted to Tenant, and the parties are unable
to agree on approved Plans within thirty (30) days thereafter, then either party
may cancel this Lease upon thirty (30) days written notice to the other. Any
such cancellation notice shall be null and void if the plans are approved during
the thirty (30) day notice period.
Thereafter, Tenant, at Tenant's sole cost and expense, shall have the right
to make changes, substitutions and eliminations in said Plans provided, however,
that Tenant shall pay all costs and expenses on account of any such changes,
substitutions and eliminations. Landlord and Tenant agree to cooperate with each
other and to diligently and in good faith make all reasonable modifications to
keep the cost of the Building and improvements as economical as is reasonably
practicable.
(c) Prior to delivery of possession of the Leased Premises to Tenant,
Landlord shall provide to Tenant a mylar sepia of the final Plans prepared by
Landlord as above provided.
(d) All plans and specifications shall be deemed to be Owned by Tenant
regardless of by whom prepared; Landlord shall take all actions as may be
appropriate or necessary at any time and from time to time in order to evidence
such ownership in Tenant. Such plans and specifications may be used by Tenant in
their approved form or as modified by Tenant in connection with any alteration
or renovation of the Leased Premises.
RENT COMMENCEMENT
6. Tenant shall commence paying fixed rents pursuant to Article 2 hereof as
of the date that is the earlier of (a) the date Tenant opens its store for
business in the Leased Premises, or (b) the date that is two (2) months after
Landlord has completed all construction and has delivered possession as above
provided. Such two (2) month time period shall be subject to extension equal to
any delays occasioned by strikes, casualties, governmental restrictions,
priorities or allocations, inability to obtain materials or labor, denial of
licenses to operate a pharmacy and to conduct its business, any cause the fault
of Landlord or other causes beyond Tenant's control. Anything to the contrary in
this Lease notwithstanding, Tenant shall have no obligation to pay rent or other
charges until Landlord has provided all of the information and instruments
required by Article 18 of this Lease and after such event, Tenant shall remit to
Landlord all monies withheld. Nothing contained in this Lease shall be construed
to obligate Tenant to open its store for business nor to obligate Tenant (or its
successors or assigns) to continue to operate its store in the Leased Premises.
PARKING
7. During the Term of this Lease, Tenant, at Tenant's cost and expense,
shall maintain the landscaping at the Leased Premises and maintain and repair
the parking areas located within the Leased Premises. However, Tenant shall have
no obligation for any replacements of the landscaping, light poles, parking
areas or other improvements thereon or any other item which under generally
accepted accounting principles are classified as a capital expense (the same to
remain Landlord's responsibility to perform). Tenant acknowledges that
maintenance of that portion of the Leased Premises situated within "25' Access
Road Area" shown on Exhibit "A" is more specifically described in the
"Declaration of Restrictions and Cross Easements" (hereinafter "Declaration"), a
copy of which is attached hereto as Exhibit "E". It is understood and agreed
that (a) Tenant shall comply with the restrictions contained in the Declaration
as such restrictions may affect the Leased Premises and (b) Landlord will
enforce the covenants contained in the Declaration and will not enter into any
agreements modifying the Declaration, or permitting blockage of access areas
serving the Leased Premises Without the prior written consent of Tenant.
Landlord shall provide Tenant with copies of all notices received by Landlord
pursuant to the Declaration within two (2) business days of Landlord's receipt
thereof, and at Tenant's request shall pursue all causes of action that Landlord
may be entitled to pursue under the Declaration.
EXCLUSIVES
8. (a) Landlord covenants and agrees that, during the term of this Lease
and any extensions or renewals thereof, no additional property which Landlord,
directly or indirectly, may now or hereafter own or control, and which is
contiguous to the Leased Premises will be used for any one or combination of the
following: (I) the operation of a drug store or a so-called prescription
pharmacy or for any other purpose requiring a qualified pharmacist or other
person authorized by law to dispense medicinal drugs, directly or indirectly,
for a fee or remuneration of any kind; (ii) tile sale of so called health and/or
beauty aids and/or drug sundries; (iii) the operation of a business in which
alcoholic beverages shall be sold for consumption off the premises, and/or (iv)
the operation of a business in which photofinishing services and/or photographic
film are offered for sale. In the event that Tenant files suit against any party
to enforce the foregoing restrictions, Landlord agrees to cooperate fully with
Tenant in the prosecution of any such suit.
Notwithstanding the foregoing, if Tenant closes its store to the public for
six (6) months or more, then all of the foregoing exclusive use restrictions
shall terminate, except in the event that Tenant discontinues business as a
result of fire or other casually beyond Tenant's control so long as Tenant
reopens its business within sixty (60) days after the Leased Premises have been
restored or the cause for such discontinuance has ceased. In no event shall said
restrictions terminate in the event that Tenant discontinues business and a
permitted assignee or sublessee of Tenant commences business operations in the
Leased Premises within six (6) months after taking possession of the Leased
Premises, selling any such item or items so restricted as a material part of
such assignee's or sublessee's business.
(b) In the event that any action, claim or suit is brought by any party
against Tenant alleging that Tenant's operations in the Leased Premises are in
violation of any use restriction contained in any instrument executed by
Landlord and in the event that a court of competent jurisdiction shall hold
that Tenant's operations in the Leased Premises are in violation of any use
restriction, Tenant, at Tenant's option shall have the right to terminate this
Lease upon thirty (30) days written notice thereof to Landlord.
UTILITIES
9. Tenant shall pay when due all bills for water, trash removal, sewer
rents, sewer charges, heat, gas and electricity and other utilities and services
used in or serving the Building or the Leased Premises from the commencement of
the Initial Term and until the expiration of the Term. The source of supply and
vendor of each such commodity shall be the local public utility company or
municipality commonly serving the area. Landlord shall furnish to said Building
and to the Leased Premises at all times sufficient gas and water service lines,
also sewer lines and sewer connections, all of the capacity initially specified
by Tenant, and electric service lines of the voltage and amperage initially
specified by Tenant, all connected to an adequate source of supply or disposal.
In addition, Landlord shall furnish to said Building conduit for telephone lines
of a capacity specified by Tenant. If Tenant shall require additional service
line capacity of any of such utilities and if same are available on Landlord's
premises, Tenant, at Tenant's expense, shall have the right to the use of the
same.
REPAIRS. Conformity WITH THE LAW
10. (a) Except as provided below, Tenant shall repair and replace heating
and cooling equipment and doors and door equipment serving the Building, and
shall make plate glass replacements unless required by fault of Landlord or its
agents, and shall make repairs to the interior of the Building. Tenant shall
also paint the exterior of the Building and make minor repairs (i.e., patching)
to the exterior. Landlord shall maintain and make all repairs to the exterior
and structural portions of the Building, roof, and to pipes, ducts, wires and
conduits leading to and from the Leased Premises and/or the Building. Landlord
shall make all repairs required by the fault of Landlord or its agents, by fire
or other insured casualty (as provided in Paragraph 14 below) or the elements.
In the event that any hazardous or toxic material or substance or any
underground storage tank is discovered at any tinge in, under or about the
Leased Premises and/or the Building (unless introduced by Tenant), Landlord
shall, at Landlord's expense, remove and dispose of the same in the manner
described in and provide all documentation required by Section (b) of Article 4.
Landlord hereby indemnifies and saves and holds Tenant harmless from and against
any liability, obligation, damage or cost, including, without limitation,
attorneys' fees and costs, resulting directly or indirectly from the presence,
removal or disposal of any such hazardous or toxic material or substance or any
underground storage tank. This indemnification shall survive the termination or
expiration of this Lease for any reason. The provisions of this paragraph shall
be complied with as required from time to time.
(b) If in an emergency situation, a repair to the Leased Premises and/or
the Building which Landlord is obligated to perform is required, Tenant shall
make all reasonable efforts to contact Landlord or Landlords managing agent by
telephone and/ or facsimile to advise Landlord of the need for the repair. If
after making reasonable efforts to contact Landlord, either Tenant is unable to
contact Landlord or Landlord's managing agent, or Tenant succeeds in contacting
Landlord or Landlord's managing agent and Landlord fails to undertake action to
correct the emergency situation within one business day, Tenant may perform the
repair, in such manner as Tenant deems reasonably necessary, on account of
Landlord. Upon completion of the repair, Landlord shall be required to reimburse
Tenant for the actual cost of the repair. Landlord's payment shall be due within
thirty (30) days after receipt of Tenant's bill accompanied by reasonable
evidence that Tenant has paid for the repair In the event Landlord fails to make
payment to Tenant for said repair within said thirty (30) days, such failure
shall be deemed a default under this Lease and Tenant shall have all remedies
set forth in Article 17 and those available at law or in equity, provided
however, Tenant shall not have the right to cancel this Lease as a result of
Landlord's failure to make such payment as herein provided.
For the purpose of this section, an emergency situation means a condition
or state of facts which if not corrected would result in further damage to the
Leased Premises, the Building or its contents or which would prevent Tenant from
conducting its business at the Leased Premises in a reasonable manner.
(c) Tenant shall comply with the valid requirements of public authorities
regarding the manner of the conduct of Tenant's particular business in the
Building and the Leased Premises including all changes or installations so
required. Except as required above, Landlord shall make all changes or
installations and pay the cost, if any, of all inspections required to comply
with valid requirements of public authorities as they apply to the Leased
Premises or the Building.
SIGNS. TENANT'S FIXTURES
11. (a) Tenant may, at Tenant's cost, install and operate interior and
exterior electric and other signs, and in so doing shall comply with all lawful
requirements. Subject to governmental regulations, and the provisions of the
Declaration, defined and referred to in Article 7 hereof, Tenant shall have the
right to install mechanical equipment, including a satellite dish .or other
antenna for telecommunications affixed to the roof of the said Building in
accordance with the Plans referenced in Article 5 of this Lease, but shall
indemnify Landlord from any costs and expenses (including the costs for repairs)
relating thereto. Tenant may, at Tenant's option install within the Leased
Premises pay telephones, ail commissions, fees and charges for which shall
remain the property of Tenant.
(b) Tenant shall at all times have the right to remove all fixtures,
machinery, equipment, appurtenances and other property furnished or installed by
Tenant or by Landlord at Tenant's expense, it being expressly understood and
agreed that said property shall not become part of the Building but shall at all
times be and remain the personal property of Tenant and shall not be subject to
any Landlord's lien.
(c) Landlord shall, as soon as is possible after the date hereof, install a
sign foundation with conduit at the location shown on Exhibit "A," upon which
Tenant may install its readerboard and sign panel. Landlord shall also install
sign foundations and conduit for Tenant's directional monument signs. Such pylon
sign and directional signs shall be electrified by Landlord as soon as is
practical thereafter. Tenant may install the same prior to the date that it
accepts possession of the Leased Premises and such installation of said
readerboard and sign panel shall be deemed neither acceptance of possession of
the Leased Premises nor a waiver of any condition precedent to the delivery of
possession of the Leased Premises.
ALTERATIONS
12. (a) Tenant, at Tenant's cost and expense, may make alterations and
additions to the Building. Tenant shall obtain Landlord's consent, which shall
not be unreasonably withheld or delayed, before making any structural changes to
the Building. Tenant may, without Landlord's consent, however, make changes to
storefronts, partitions, floors, electric, plumbing and heating, ventilating and
cooling systems or components thereof. Tenant, at Tenant's sole cost and in
compliance with governmental requirements, if any, shall have the right to
reconfigure or otherwise modify the parking areas on the Leased Premises
(including without limitation, curb cuts, entrances and exits) as Tenant deems
necessary or desirable. Landlord shall cooperate in securing necessary permits
and authority. Tenant shall not permit any mechanics' or other liens to stand
against the property for work or material furnished Tenant and shall indemnify
Landlord from any costs or expenses relating to any repairs or alterations
completed by Tenant. Notwithstanding the foregoing, Tenant shall not make any
changes to the exterior of the Building or the Parking areas on the Leased
Premises which violate the provisions of the Declaration.
(b) Landlord covenants and agrees that during the continuance of this
Lease, Landlord shall not, without Tenant's written consent, make any
alterations or additions to the Leased Premises, including, but not limited to,
any modifications to the storefront, signboard or fascia of the Building or to
the Parking Areas. Landlord shall not permit any mechanics' or other liens to
stand against the property for work or material furnished by or on behalf of
Landlord and shall indemnify Tenant from any costs or expenses relating to any
repairs or alterations completed by Landlord.
ASSIGNMENT AND SUBLETTING
13. (a) Tenant's interest under this Lease may, at. any time and from time
to time, be assigned and re-assigned, provided that any such assignment or
reassignment be only to a corporation which is subsidiary to or affiliated with
Tenant, or to a corporation resulting from any consolidation, reorganization or
merger to which Tenant, or any of its subsidiaries or affiliates, may be a
party. Tenant may also, at any time and from time to time, sublet or license or
permit a portion or portions of the Building to be used for concessions, leased
or licensed departments and demonstrations in connection with and as part of the
operation of Tenant's store, the Gross Sales therefrom to be included in the
Gross Sales of Tenant.
(b) At any time and from time to time, Tenant may sublet a portion of the
Leased Premises and/or Building, to any person, firm or corporation, other than
a corporation described in Section (a) hereof, for any lawful purpose. In such
case, the Gross Sales of such subtenant (but not the subrentals paid by such
subtenant) shall be included in the Gross Sales of Tenant.
(c) (I) At any time and from time to time, Tenant may discontinue the
operation of its store in the Leased Premises and/or Building. At any time
Tenant may assign this Lease or Tenant may sublet all or parts of the Leased
Premises and/or Building to any person, firm or corporation, for any lawful
purpose. In the event of any subletting, Tenant shall pay to Landlord the rent
provided in Article 2 of this Lease. Tenant shall notify Landlord in writing of
any proposed sublease or assignment, together with the name, address, phone
number, any financial information regarding the proposed sublessee or assignee
that Tenant may have in its possession, and the nature of the business of the
proposed sublessee or assignee. Within forty-five (45) days after Landlord's
receipt of Tenant's notice of a proposed assignee or sublessee, Landlord may
terminate this Lease by written notice to Tenant. If Landlord so terminates this
Lease, neither party shall have any further or unaccrued obligation or liability
to the other. Said termination shall be effective as of the last day of (he
calendar month immediately succeeding the month in which Landlord notifies
Tenant of the termination of this Lease. If Landlord fails to notify Tenant of
termination within said forty-five (45) day period, such termination right shall
be deemed waived but only as to such subletting or assignment. Notwithstanding
the above, if such sublease or assignment is in connection with Tenant's
sublease or assignment of three (3) or more of Tenant's other stores in
Albuquerque, New Mexico to a single or related entity, Landlord shall have no
such right to terminate.
(ii) In the event of a subletting pursuant to Section (c)(i) above, then at
any time thereafter, Landlord may, by written notice to Tenant, terminate this
Lease provided, however, Landlord shall concurrently with such termination agree
to attorn to and be bound by the terms of any such sublease. Upon such
termination, neither Landlord nor Tenant shall have any further or unaccrued
obligation or liability to the other. Prior to such termination, Landlord shall
reimburse Tenant the unamortized cost of any leasehold improvements made by
Tenant to the Leased Premises in connection with said subletting, together with
all costs and all brokerage fees incurred by Tenant as a result of such
subletting.
(d) If Tenant shall cease the conduct of business on the Leased Premises
for a continuous period in excess of six (6) months (except by reason of
strikes, fire, casualty or other causes beyond reasonable control of Tenant,
except by reason of repairs or remodeling and except by reason of assignment or
subletting as above provided) and the Leased Premises remain continuously vacant
during such period, Landlord shall have the right and option to terminate this
Lease upon written notice to Tenant, effective on the last day of the next
succeeding calendar month following receipt of such notice; provided, however,
that if Tenant shall send written notice to Landlord of Tenant's intent to
sublet the Leased Premises during such period when Landlord shall have the
Option, pursuant to this Section to terminate this Lease, Landlord shall have
the right within thirty (30) days after receipt of such notice from Tenant to
terminate this Lease upon written notice to Tenant effective on the last day of
the next succeeding calendar month following Tenant's receipt of such notice and
from and after such date, neither party shall have any liability or further
obligation to the other under this Lease. If Landlord shall not so notify Tenant
within thirty (30) days of receipt of Tenant's notice that Landlord has
exercised its option to cancel this Lease, the termination options contained in
this Section shall be void and of no further force and effect.
Notwithstanding any assignment of this Lease, Walgreen Co. shall not be
released from liability. However, in the event of a default by any such
assignee, Landlord shall give Walgreen Co. notice of such default, shall accept
cure of such default by Walgreen Co. within thirty (30) days after such notice
and shall permit Walgreen Co. to re-enter anal repossess the Leased Premises for
the then unelapsed portion of the Term of this Lease upon all of the provisions
of this Lease.
FIRE
14. (a) If the Building and/or Leased Premises and/or any improvements
thereon shall be damaged or destroyed by fire or other casualty, then Landlord,
shall repair and restore the Building and/or Leased Premises and/or any
improvements thereon to their condition immediately prior to such damage or
destruction; but only to the extent possible based upon the insurance proceeds
available to Landlord, and the fixed rent and all other charges shall abate
proportionately according to the extent of such damage or destruction. Landlord
shall commence such restoration as soon as possible after such occurrence [but
in no event later than sixty (60) days thereafter] and shall diligently pursue
such repair or restoration to completion [which shall be not later than one
hundred eighty (180) days after such occurrence]. Subject to the payment of
proceeds by Tenant as expressly set forth in Section (b) below, under no
circumstances shall Tenant be liable for any loss or damage, (excluding Tenant's
property) including but not limited to damage to the Building or Leased Premises
resulting from fire or other casualty.
(b) If the damage or destruction referred to in Section (a) hereof amounts
to at least twenty-five percent (25%) of the Building and occurs during the last
three (3) years of the entire.Term of this Lease or during the last three (3)
years prior to any of Tenant's options to terminate, then and in such events,
Landlord and Tenant shall have the right and option, to terminate this Lease
effective as of the date of such happening; and any unearned rents paid in
advance shall be refunded. Landlord shall not have the right to exercise the
option under this Section during any period which shall be less than thirty-six
(36) months and more than twelve (12) months prior to any such optional
termination date if Tenant shall, within one (1) month after such happening,
advise Landlord that Tenant will not exercise Tenant's option to terminate this
Lease as of the next optional termination date thereunder, and further, Landlord
shall have the right to exercise the option under this Section during any period
which shall be twelve (12) months or less prior to any such optional termination
date only if Tenant shall have theretofore exercised Tenant's option to
terminate this Lease as of the next optional termination date. Notwithstanding
any termination of the Lease by Tenant hereunder, Tenant shall provide Landlord
with a sufficient amount of the proceeds of the insurance required to be
maintained by Tenant under Article 20 hereof and such other proceeds which may
be necessary to enable Landlord to reconstruct or repair the Building and/or
improvements on the Leased Premises to their condition immediately prior to
damage or destruction. In the event Tenant shall elect to cancel this Lease
hereunder, any proceeds payable by Tenant to Landlord under this Section (b)
Shall be exclusive of the cost of improvements made by or on behalf of Tenant to
the Leased Premises and/or Building. In the event Tenant shall elect not to
cancel this Lease hereunder, Landlord and Tenant shall enter into a construction
escrow agreement satisfactory to Landlord and Tenant appointing a third party as
escrow agent to disburse such proceeds as Landlord's repair and reconstruction
work progresses and to monitor the repair and reconstruction of the Building and
improvements by Landlord.
(c) If the fire or casualty is not an insurable casualty under Tenant's
fire and extended coverage insurance, Landlord or Tenant may cancel this Lease
upon notice to the other. Tenant may void Landlord's notice of termination by
notifying Landlord within thirty (30) days after receipt of such notice of
termination that Tenant shall provide Landlord with a sufficient amount of money
necessary for Landlord to reconstruct or repair the Building and/or improvements
on the Leased Premises, as required by this Article 14. Landlord may void
Tenant's notice of termination by notifying Tenant within thirty (30) days after
receipt of such notice of termination that Landlord intends to reconstruct or
repair the Building and/or Landlord's improvements of the Leased Premises as
required by this Article 14, at Landlord's own cost and expense.
LANDLORD'S RIGHT TO INSPECT
15. Landlord may at reasonable times during Tenant's business hours, and
after so advising Tenant, enter the Building for the purpose of examining and of
making repairs and during the last six (6) months of the Term may place the
usual "For Rent" signs in the Leased Premises, but not so as to interfere with
Tenant's business.
SURRENDER
16. At the expiration or termination of this Lease, Tenant shall surrender
immediate possession of the Leased Premises in as good condition as when
delivered to Tenant, reasonable wear and tear, changes and alteration, damage by
fire, casualty and the elements, and other repairs which are Landlord's
obligation excepted. Any holding over by Tenant shall not operate, except by
written agreement, to extend or renew this Lease or to imply or create a new
lease, but in such case Landlord's rights shall be limited to either the
immediate termination of Tenant's occupancy or the treatment of Tenant's
occupancy as a month to month tenancy, any custom or law to the contrary
notwithstanding. Tenant shall repair damage caused by the removal of Tenant's
fixtures and equipment.
DEFAULT AND REMEDIES
17. If any rent is due and remains unpaid for ten (10) days after receipt
of notice from Landlord, or if Tenant breaches any of the other covenants of
this Lease and if such other breach continues for thirty (30) days after receipt
of notice from Landlord, Landlord shall (then but not until then, have the right
(a) to sue for rent, (b) to repenter without terminating this Lease, provided
that Landlord shall use its best efforts to relet the Leased Premises for
Tenant's account and otherwise to mitigate its damages [it being expressly
understood that Tenant shall remain liable on a monthly basis for the difference
between what Tenant's obligations under this Lease are and what Landlord
actually collects, and further provided that if Landlord elects to re-enter
without terminating this Lease, this Lease shall nonetheless expire as of the
next optional termination date as set forth in Article 3(d), or (c) to terminate
this Lease and re-enter the Leased Premises; but if Tenant shall pay said rent
within said ten (10) days, or in good faith within said thirty (30) days
commence to correct such other breach, and diligently proceed therewith, then
tenant shall not be considered in default. If Landlord shall from time to time
fail to pay any sum or sums due to Tenant and if such failure continues for
thirty days after receipt of notice from Tenant, Tenant shall have the right and
is hereby irrevocably authorized and directed to deduct such sum or Sails from
fixed and percentage rent and other sums due Landlord, together with interest
thereon at the so-called prime rate charged from time to time by The First
National Bank of Chicago, plus two per cent until fully reimbursed. If Landlord
shall from time to time fail to perform any act or acts required of Landlord by
this Lease and if such failure continues for thirty (30) days after receipt of
notice from Tenant, Tenant shall then have the right, at tenant's option, to
perform such act or acts, in such manner as Tenant deems reasonably necessary,
and the full amount of the cost and expense so incurred shall immediately be
owing by Landlord to Tenant, and Tenant shall have the right and is hereby
irrevocably authorized and directed to deduct such amount from fixed and
percentage rent and other sums due Landlord, together with interest thereon at
the so-called prime rate charged from time to tine by The First National Bank of
Chicago, plus two per cent until fully reimbursed. If Landlord shall in good
faith within said thirty (30) days commence to correct such breach, and
diligently proceed therewith to completion, then Landlord shall not be
considered in default. No delay on the part of either party in enforcing any of
the provisions of this Lease shall be considered as a waiver thereof. Any
consent or approval granted by either party under this Lease must be in writing
and shall not be deemed to waive or render unnecessary the obtaining of consent
or approval with respect to any subsequent act or omission for which consent is
required or sought.
TITLE AND POSSESSION
18. (a) Landlord covenants, represents and warrants that Landlord has
entered into a contract to acquire legal title to the Leased Premises and has
the right to make this Lease, that said entire property is now and shall be as
of the date of Tenant's recording of a Memorandum of this Lease, free and clear
of all liens, encumbrances and restrictions, except for those items set forth on
Exhibit "D" attached hereto and made a part hereof, none of which shall limit,
interfere with or prohibit Tenant's use and occupancy of the Leased Premises or
interfere with any of Tenant's rights under this Lease, and that upon paying the
rents and keeping the agreements of this Lease on its part to be kept and
performed, Tenant shall have peaceful and uninterrupted possession during the
continuance of this Lease. Upon acquisition of legal title, Landlord shall
execute an agreement prepared by Tenant, ratifying and adopting this Lease
("Ratification Agreernent") and Landlord, at Landlord's expense, shall furnish
Tenant evidence of Landlord's title and the status thereof as of the date of
such acquisition and as of the date of the recordation of such Ratification
Agreement.. Such evidence shall be in form and substance reasonably satisfactory
to Tenant.
(b) . If at the date of this Lease the Leased Prernises, or any part
thereof is subject to any mortgage, deed of trust or other encumbrance in the
nature of a mortgage, which is prior and superior to this Lease, it is a further
express condition hereof that Landlord shall thereupon furnish and deliver to
Tenant, in form and substance acceptable to Tenant, an agreement executed by
such mortgagee or trustee, either (i) making such mortgages deed of trust or
other encumbrance in the nature of a mortgage subject and subordinate to this
Lease and to the leasehold estate created hereby and to all of Tenant's rights
hereunder, or (ii) obligating such mortgagee or trustee and any successor
thereto to be bound by this Lease and by all of Tenant's rights hereunder,
provided that Tenant is not then in continued default, after notice, in the
payment of rents or otherwise under the terms of this Lease.
(c) It is understood and agreed that Tenant shall, in no event, be
obligated to accept possession of the Leased Premises until the Landlord has
complied with the provisions of this Article.
(d) (i) if required by Landlord's institutional lender, Tenant shall
subordinate the lien of this Lease to the lien of such mortgage encumbering the
Leased Premises, so long as such lender simultaneously with such subordination
and as a condition of the same, executes in recordable form a Subordination,
Non-Disturbance and Attornment Agreement in form and substance acceptable to
Tenant and agrees to be bound by all of the terms and conditions of this Lease.
In the event of a conflict between the terms of such mortgage and the terms of
this Lease, the terms of this Lease shall prevail.
(ii) Landlord and Tenant agree to execute and deliver to the other within
twenty (20) days from receipt of either party's written request, estoppel
certificates in a form acceptable to the party to whom such request is made,
which certificates shall include information as to any modification of this
Lease, and to the best of Tenant's or Landlord's knowledge, whether or not the
other party is in default of this Lease.
REAL ESTATE TAXES
19. (a) Landlord, upon execution of this Lease, shall make a mailing
address change on the property tax records so that the tax bill and tax notices
for only the Leased Premises will be mailed to Tenant at the following address:
Walgreen Co., 300 Wilmot Road, Deerfield, Illinois 60015, Attention: Tax
Department. After said property tax records are changed, Tenant prior to
delivery, shall send to Landlord copies of all tax bills and tax notices
received by Tenant with respect to the Leased Premises if Landlord is obligated
to pay for such taxes. Prior to the date that the tax bill is mailed directly to
Tenant, Landlord, prior to delinquency, shall send to Tenant a copy of the tax
bill for the Leased Premises if Tenant is obligated to pay for such taxes.
(b) Upon receipt of the aforesaid tax bills, Tenant shall pay, when due and
before delinquency, the general real estate taxes (including all special benefit
taxes and special assessments but excluding so-called impact fees) levied and
assessed against the Leased Premises, commencing when Tenant is required to
commence paying fixed rents under this Lease and continuing for the remainder of
the Term. However, the general taxes levied or assessed for the year during
which Tenant commences paying fixed rent shall be prorated between Landlord and
Tenant so that Tenant shall pay only such part thereof as the period commencing
on such date and ending December 31st bears to such entire tax year, and the
general taxes levied or assessed for the year during which this Lease expires or
is terminated shall be prorated between Landlord and Tenant so that Tenant shall
pay only such part thereof as the period commencing on January 1st and ending on
the date this Lease expires or is terminated bears to such entire tax year.
Within thirty (30) days after payment of any such taxes, or as soon thereafter
as receipt bills are available, Tenant shall furnish to Landlord photocopies of
bills indicating such payments.
If Landlord is required to pay to its lender a monthly escrow for taxes
levied and assessed against the Leased Premises, Tenant shall pay to Landlord
its pro rata share of such taxes on a monthly basis. At the end of each tax year
for which said taxes are levied, Landlord shall furnish to Tenant a statement
from its lender and a copy of tile paid tax bill as furnished to Landlord by its
lender, and any overage paid by Tenant to Landlord shall be reimbursed to Tenant
and any shortage shall be paid to Landlord.
(c) Tenant shall have the right; and is hereby irrevocably authorized and
directed to deduct and retain amounts payable under the provisions of this
Article from additional percentage rents payable under Section (b) of Article 2
for such tax year, or in the alternative, if such taxes for any tax year are
payable after percentage rents under Section (b) of Article 2 for such tax year
are payable, then Tenant shall have no liability under this Article to the
extent of such percentage rents paid for such tax year. In such event, Landlord
shall refund to Tenant the amount of such overpayment of percentage rent.
(d) All special benefit taxes and special assessments shall be spread over
the longest time permitted and Tenant's liability for installments of such
special benefit taxes and special assessments not yet due shall cease upon the
expiration or termination of this Lease. In no event shall Tenant be obligated
to pay any impact fees whether or not billed by the taxing authority as a
special benefit tax or a special assessment.
(e) (i) Tenant shall have the right to contest the validity or the amount
of any tax or assessment levied against the Leased Premises or any improvements
thereon, provided that Tenant shall not take any action which will cause or
allow the institution of foreclosure proceedings against the Leased Premises.
Landlord shall cooperate in the institution of any such proceedings to contest
the validity or amount of real estate taxes and will execute any documents
required therefor.
(ii) Landlord covenants and agrees that if there shall be any refunds or
rebates on account of any tax, governmental imposition or levy paid by Tenant
under the provisions of this Lease, such refund or rebate shall belong to
Tenant. Any such refunds or rebates which shall be received by Landlord shall be
trust funds and shall be forthwith paid to Tenant. Landlord shall, on request of
Tenant, sign any receipt which may be necessary to secure the payment of any
such refund or rebate, and shall pay over to Tenant such refund or rebate as
received by Landlord.
INSURANCE
20. Tenant may self-insure or shall obtain an all risk fire and extended
coverage insurance policy covering the Building and the other improvements
constructed by Landlord on the Leased Premises to the extent of not less than
one hundred percent (100%) of the full insurable value less foundations, with
companies which are authorized to do business in the State of New Mexico and are
governed by She regulatory authority which establishes maximum rates in the
vicinity. Tenant, upon request of Landlord's lender shall also carry earthquake
and/or flood damage insurance to the same extent as may be acceptable to Tenant
and as customary for all risk coverage. Tenant shall also procure an continue in
effect public liability and property damage insurance with respect to the
operation of the Leased Premises. Such public liability insurance shall cover
liability for death or bodily injury in any one accident, mishap or casualty in
a sum of not less than One Million Dollars ($1,000,000.00), and shall cover
liability for property damage in one accident, mishap or casualty in the amount
of not less than One Hundred Thousand Dollars ($100,000.00). Tile proceeds from
Tenant's insurance shall be paid and applied only as set forth in Article 14
hereof. Any insurance carried or required to be carried by tenant pursuant to
this Lease may, at Tenants option, be carried under an insurance policy(ies),
self-insurance or pursuant to a master policy of insurance or so-called blanket
policy of insurance covering other locations of Tenant or its corporation
affiliates, or any combination thereof; provided, however, that in the event
Tenant carries any of such insurance under any policy, Tenant shall have the
right and is hereby irrevocably authorized and directed to deduct and retain the
amounts of said premiums in any lease year from percentage rents payable under
Section (b) of Article 2 for such lease year, provided such premiums are at
market rates and excludes premiums for Tenant's personal property. From time to
time and upon request from Landlord to Tenant's Tax Department, 300 Wilmot Road,
Deerfield, Illinois 60015, Tenant shall cause to be issued to Landlord a current
Certificate of Insurance naming Landlord as additional insured under Tenant's
property insurance policy.
Notwithstanding the foregoing, Tenant may self-insure only so long as the
consolidated net worth of Walgreen Co. is not less than Three I hundred Million
Dollars ($300,000,000.00). Proceeds of self-insurance shall be paid to the same
extent as would an all risk fire and extended coverage insurance policy issued
by a reputable insurance company authorized to do business in the State of New
Mexico and which is governed by the regulatory authority which establishes
maximum rates in the vicinity (such as Hartford Casualty insurance Company or
such other insurer as Landlord's lender may designate from tine to time by
notice to Landlord and Tenant), with such endorsements as Landlord's lender
would normally require with respect to such a policy covering property serving
as collateral for a loan by Landlord's lender. On Landlord's request, Tenant
will deliver to Landlord written confirmation of the coverage in a letter or
certificate of Insurance.
MUTUAL INDEMNITY
21. Except for loss, cost and expense caused by fire or other casualty,
Landlord and Tenant shall each indemnify and hold harmless the other against and
from any and all loss, cost and expense resulting from their own respective
negligent acts and omissions or the negligent acts and omissions of their
respective employees in the course of their employment.
CONDEMNATION
22. If the entire Leased Premises shall be taken by reason of condemnation
or under eminent domain proceedings, Landlord or Tenant may terminate this Lease
as of the date widen possession of the l.eased Premises is taken. If a portion
of the Leased Premises shall be taken under eminent domain or by reason of
condemnation and if in the opinion of Tenant, reasonably exercised, the
remainder of the Leased Premises are no longer suitable for Tenant's business,
this Lease, at Tenant's Option, to be exercised by notice to Landlord within
sixty (60) days of such taking, shall terminate; any unearned rents paid or
credited in advance shall be refunded to Tenant. If this Lease is not so
terminated, Landlord forthwith and with due diligence, shall restore tl-se
Leased Premises. Until so restored, fixed rent shall abate to the extent that
the operation of the Leased Premises. Such public liability insurance shall
cover liability for death or bodily injury in any one accident, mishap or
casualty in a sum of not less than One Million Dollars ($1,000,000.00), and
shall cover liability for property damage in one accident, mishap or casualty in
the amount of not less than One Hundred Thousand Dollars ($100,000.00). The
proceeds from Tenant's insurance shall be paid and applied only as set forth in
Article 14 hereof. Any insurance carried or required to be carried by Tenant
pursuant to this Lease may, at Tenants option be carried under an insurance
policy(ies), self-insurance or pursuant to a master policy of insurance or
so-called blanket policy of insurance covering other locations of Tenant or its
corporation affiliates, or any combination thereof; provided, however, that in
the event Tenant carries any of such insurance under any policy, Tenant shall
have the right and is hereby irrevocably authorized and directed to deduct and
retain the amounts of said premiums in any lease year from percentage rents
payable under Section (b) of Article 2 for such lease year, provided such
premiums are at market rates and excludes premiums for Tenant's personal
property. From lime to time and upon request from Landlord to Tenant's Tax
Department, 300 Wilmot Road, Deerfield, Illinois 60015, Tenant shall cause to be
issued to Landlord a current Certificate of Insurance naming Landlord as
additional insured under Tenant's property insurance policy.
Notwithstanding the foregoing, Tenant may self-insure only so long as the
consolidated net worth of Walgreen Co. is not less than Three I Hundred Million
Dollars ($300,000,000.00). Proceeds of self-insurance shall be paid to the same
extent as would an all risk fire and extended coverage insurance policy issued
by a reputable insurance company authorized to do business in the State of New
Mexico and which is governed by the regulatory authority which establishes
maximum rates in the vicinity (such as Hartford Casualty Insurance Company or
such other insurer as Landlord's lender may designate from time to time by
notice to Landlord and Tenant), with such endorsements as Landlord's lender
would normally require with respect to such a policy covering property serving
as collateral for a loan by Landlord's lender. On Landlord's request, Tenant
will deliver to Landlord written confirmation of the coverage in a letter or
certificate of insurance.
MUTUAL INDEMNITY
21. Except for loss, cost and expense caused by fire or other casualty,
Landlord and Tenant shall each indemnify and hold harmless the other against and
from any and all loss, cost and expense resulting from their own respective
negligent acts and omissions or the negligent acts and omissions of their
respective employees in the course of their employment.
CONDEMNATION
22. If the entire Leased Premises shall be taken by reason of condemnation
or under eminent domain proceedings, Landlord or Tenant may terminate this Lease
as of the date when possession of the Leased Premises is taken. If a portion of
the Leased Premises shall be taken under eminent domain or by reason of
condemnation and if in the opinion of Tenant, reasonably exercised, the
remainder of the Leased Premises are no longer suitable for Tenant's business,
this Lease, at Tenant's option, to be exercised by notice to Landlord within
sixty (60) days of such taking, shall terminate; any unearned rents paid or
credited in advance shall be refunded to Tenant. If this Lease is not so
terminated, Landlord forthwith and with due diligence, shall restore the Leased
Premises. Until so restored, fixed rent shall abate to tile extent that Tenant
shall not be able to conduct business, and thereafter fixed rent for the
remaining portion of the Term shall be proportionately reduced.
Tenant shall be entitled to the award in connection with any condemnation
insofar as the same represents compensation for or damage to Tenant's fixtures,
equipment, leasehold improvements or other property, moving expenses as well as
tile loss of leasehold (i.e. the unexpired balance of the lease term immediately
prior to such taking). Landlord shall be entitled to the award insofar as same
represents compensation for or damage to the fee remainder. Any mortgagee of
Landlord shall be compensated out of Landlord's award
For the purposes of this Article, the term "condemnation or under eminent
domain proceedings" shall include conveyances and grants made in anticipation of
or in lieu of such proceedings.
BROKERAGE
23. Landlord and Tenant represent that they have dealt with no broker or
agent with respect to this Lease except Retail Development Consultants, Inc.,
the commission and fee of whom shall be paid by Landlord. Landlord hereby
indemnifies and saves and holds Tenant harmless against any claims for brokerage
commissions or compensation or other claims of any kind (including reasonable
attorney's fees and costs) arising out of the negotiation and execution of this
Lease or Tenant's interest or involvement with respect to the Leased Premises.
PREVAILING PARTY
24. In the event of litigation between Landlord and Tenant in connection
with this Lease, the reasonable attorneys' fees and Court costs incurred by the
party prevailing in such litigation shall be borne by the nonprevailing party.
NOTICES
25. All notices hereunder shall be in writing and sent by United States
certified or registered mail, postage prepaid, or by overnight delivery service
providing proof of receipt, addressed if to Landlord, to the place where rent
checks are to be mailed, and if to Tenant, to 200 Wilmot Road, Deerfield,
Illinois 60015, Attention: Law Department, and a duplicate to the Leased
Premises, provided that each party by like notice may designate any future or
different addresses to which subsequent notices shall be sent. Notices shall be
deemed given upon receipt or upon refusal to accept delivery.
RIGHT OF FIRST REFUSAL
26. From and after the date that is Ten (10) years after the date of this
Lease, in the event that Landlord shall receive a Bona Fide Offer to purchase
the Leased Premises at any time and from time to time during the Term of this
Lease or any extensions thereof from any person or entity, Landlord shall so
notify Tenant together with a true and correct copy of said Bona Fide Offer. For
purposes hereof, a "Bona Fide Offer" shall be deemed to be one made in writing
by a person or entity that is not related or affiliated with Landlord in which
Landlord intends to accept (subject to this Article). Tenant may, at Tenant's
option and within ten (10) working days after receipt of Landlord's notice of
said Bona Fide Offer and receipt of a copy thereof, offer to purchase the Leased
Premises at the price and upon the terms and conditions as are contained in said
Bona Fide Offer, in which event. Landlord shall sell the Leased Premises to
Tenant upon said terms and conditions and that said price; furthermore, in such
event, Landlord shall convey the Leased Premises to Tenant by warranty deed.
Landlord covenants that it shall accept no such Bona Fide Offer or convey the
premises Until it has complied with the terms of this Article. Any conveyance of
the Leased Premises made in the absence of full satisfaction of this Article
shall be void. Tenant may enforce this Article, without limitation, by
injunction specific performance or other equitable relief.
TRANSFER OF TITLES
27. (a) In the event that Landlord conveys its interest in the Leased
Premises to any other person or entity, Tenant shall have no obligation to pay
rents or any other charges under this Lease to any such transferee until Tenant
has been notified of such conveyance and has received satisfactory evidence of
such conveyance together with a written direction from such transferee as to the
name and address of the new payee of rents and other charges. It is understood
and agreed that Tenant's withholding of rent and other charges until its receipt
of such satisfactory evidence shall not be deemed a default under this Lease.
(b) In the event Landlord sells its interest in the Leased Premises,
Landlord shall be relieved of any and all liability under any of Landlord's
covenants and obligations contained in or derived from this Lease arising out of
any act, occurrence, or omission occurring thereafter, and the assignee or
purchaser at any such sale or any subsequent sale of the Leased Premises or
assignment of this Lease, shall be deemed without any further agreement between
the parties and any such assignee or purchaser, to have assumed and agreed to
carry out any and all of tire covenants and obligations of Landlord under this
Lease.
RENT TAX
28. In the event that any governmental authority imposes a tax, charge,
assessment or other imposition upon tenants in general which is based upon the
rents payable under this Lease, Tenant shall pay the same to said governmental
authority or to Landlord if Landlord is responsible to collect the same (in
which case Landlord shall remit the same in a timely manner and, upon request of
Tenant, evidence to Tenant said remittance). Tenant is hereby authorized and
directed to deduct the amount of such taxes, charges, assessments or impositions
from additional percentage rents payable under Section (b) of Article 2 for such
lease year or, in the alternative, in the event that such imposition or a
portion thereof is due after percentage rents, payable under Section (b) of
Article 2 have been paid, Tenant shall have no liability under this Article to
the extent that percentage rents for said lease year have been paid. Nothing
contained herein shall be deemed to obligate Tenant with respect to any income,
inheritance or successor tax or imposition.
LIQUOR LICENSE
29. Notwithstanding any other provisions herein, it is an express condition
of this Lease that Tenant shall be able to obtain licenses from appropriate
governmental authorities permitting the display and sale on the Leased Premises
of alcoholic liquor for consumption off the Leased Premises. Further, until
Tenant is able to obtain such licenses, Tenant shall have no obligation to
accept delivery of possession of the Leased Premises, and if Tenant shall not
secure such licenses on or before the date Tenant is to accept delivery of
possession, Tenant shall have the right and option to cancel this Lease. If
Tenant shall obtain the necessary licenses, or if Tenant elects to waive this
condition, Tenant shall accept delivery of possession promptly thereafter,
except that the two month period set forth in Article 6 shall not commence until
Tenant so accepts delivery of possession. Tenant shall be required to promptly
make proper application, pay the requisite fees, and diligently pursue tire
obtaining of the said liquor license.
MISCELLANEOUS
30. Captions of the several articles contained in this l ease are for
convenience only and do not constitute a part of this Lease and do not limit,
affect or construe the contents of such articles.
If any provision of this Lease shall be held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall in no way be affected or impaired thereby.
If more than one person or entity is Landlord, the obligations imposed on
Landlord under this Lease shall be joint and several.
All provisions of this Lease have been negotiated by both parties at arm's
length and neither party shall be deemed the scrivener of this Lease. This Lease
shall not be construed for or against either party by reason of the authorship
or alleged authorship of any provision hereof.
This instrument shall merge all undertakings between the parties hereto
with respect to the Leased Premises and shall constitute the entire lease unless
otherwise hereafter modified by both parties in writing. Tenant shall have the
right to cancel this Lease if satisfactory evidence of Landlord's title shall
not be received at 200 Wilmot Road, Deerfield, Illinois 60015, within thirty
(30) days after execution and recordation of the Ratification Agreement. This
instrument shall also bind and benefit, as the case may require, the heirs,
legal representatives, assigns and successors of the respective parties, and all
covenants, conditions and agreements herein contained shall be construed as
covenants running with the land. This instrument shall not become binding upon
the parties until it shall have been executed and delivered by both Landlord and
Tenant.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease, under
seal, as of the day and year first above written. WALGREEN CO.
Vice President
Attest:
Witnesses:
By:
Assistant Secretary
CENTRAL AVENUE PARTNERS
By: Peterson Properties Real
Estate Services, Inc., Managing
General Partner
James A. Peterson, President
By: Retail Development Consultants, Inc., General Partner
Steve J.(Johnson,President
Witnesses:
.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease, under
seal, as of the day and year first above written. WALGREEN CO.
By
Attest:
Witnesses:
Vice President
CENTRAL AVENUE PARTNERS
By: Peterson Properties Real
Estate Services, Inc. Managing
General Partner
By: Retail Development
Consultants, Inc.,
General Partner
By
Witnesses:
STATE OF ILLINOIS
COUNTY OF LAKE
) SS )
On this day of l994, before me appeared Julian A. Dettinger, to me
personally known, who, being by me duly sworn, did say that he is the Vice
President of WALGREEN CO., an Illinois corporation, and that the seal affixed to
said instrument is the corporate seal of said corporation, and that said
instrument was signed and sealed in behalf of said corporation by authority of
its board of directors and said Julian Dettinger acknowledged said instrument to
be the free act and deed of said corporation.
SEAL
STATE OF NEW MEXICO
COUNTY OF BERNALILLO
(Signature)
(My commission expires 5-18-96)
On this 25th day of As)ril , 1994, before me appeared James A. Peterson,
President of PETERSON PROPERTIES REAL ESTATE SERVICES, INC, a New Mexico
corporation, and that tide seal affixed to said instrument is the corporate seal
of said corporation, and that said instrument was signed and sealed in behalf of
said corporation by authority of its board of directors and said President
acknowledged said instrument to be the free act and deed of said corporation.
Seal
OFFICIAL SEAL
COLLEEN R. MCGRATH (Signature)
NOTARY PUBLIC - STATE OF NEW MEXICO
Notary Bond Filed With Secretary of State
My commission expires 10/18/97
NOTARY PUBLIC
(Title)
(My commission expires 10/18/97)
STATE OF ILLINOIS
COUNTY OF LAKE
On this 25th day of 1994, before me appeared Steven J. Johnson, to me
personally known, who, being by me duly sworn, did say that he is the Vice
President of WALGREEN CO., an Illinois corporation, and that the seal affixed to
said instrument is the corporate seal of said corporation, and that said
instrument was signed and sealed on behalf of said corporation by authority of
its board of directors and said President acknowledged said instrument to be the
free act and deed of said corporation.
OFFICIAL SEAL
COLLEEN R. MCGRATH (Signature)
NOTARY PUBLIC - STATE OF NEW MEXICO
Notary Bond Filed With Secretary of State
My commission expires 10/18/97
NOTARY PUBLIC
(Title)
(My commission expires 10/18/97)
STATE OF ILLINOIS
COUNTY OF LAKE
(Signature)
(STATE OF NEW MEXICO)
COUNTY OF BERNALILLO)
SS
On this 25th day of April , 1994, before me appeared James A. Peterson,
President of PETERSON PROPERTIES REAL ESTATE SERVICES, INC., a New Mexico
corporation, and that the seal affixed to said instrument is the corporate seal
of said corporation, and that said instrument was signed and sealed in behalf of
said corporation by authority of its board of directors and said President
acknowledged said instrument to be the free act and deed of said corporation.
(signature)
NOTARY PUBLIC
(Title)
(My commission expires 10/18/97)
(STATE OF NEW MEXICO)
(COUNTY OF BERNALILLO)
SS
On this 25th day of April, 1994, before me appeared Steven J. Johnson, to
me personally known, whoa being by me duly sworn, did say that he is the
President of RETAIL DEVELOPMENT CONSULTANTS, INC, General Partner, and that the
seal affixed to said instrument is the corporate seal of said corporation, and
that said instrument was signed and sealed in behalf of said corporation by
authority of its board of directors and said President acknowledged said
instrument to be the free act and deed of said corporation.
Seal
OFFICIAL SEAL
COLLEEN R. MCGRATH
NOTARY PUBLIC - STATE OF NEW MEXlCO
Notary Bond Filed With Secretary of State
My commission expires 10/18/97
(Signature)
EXHIBIT "B"
Legal Description - Leased Premises
A tract of land situate within the Town of Atrisco Grant, projected section
2 , Township 10 North, Range 2 East , New Mexico Principal Meridian within the
City of Albuquerque, Bernalillo County, New Mexico being a southerly portion of
TRACT B-2, NORTHEAST UNIT, TOWN OF ATRISCO GRANT as the same is shown and
designated on said plat filed for record in the office of the County Clerk of
Bernalillo County, New Mexico on January 19, 1987 in Volume C32, Folio 150
together with a southerly portion of TRACT B-1, LAND OF E. FISH as the same is
shown and designated on said plat filed for record in the office of the County
Clerk of Bernalillo County, New Mexico on July 26, 1916 in Volume B11, Folio 154
and also being a portion of TRACT B-A, CIRCLE K CORPORATION as the same is shown
and designated on said plat filed for record in the office of the County Clerk
of Bernalillo County, New Mexico on May 26, 1987 in Volume C33, 152 and being
more particularly described as follows:
BEGINNING at the southeast corner of the herein described tract, said point
being the intersection of the westerly line of a 20 foot Public Alley and the
northerly rlght-of-way line of Sequoia Road N.W.;
THENCE 8 67 ' 3l ' 11" " , 26. 93 feet to a point of curvature;
THENCE 73.29 feet along a curve to the right whose radius is 366.07 feet
through a central angle of 11'28'16" and whose long chord bears S 73 15'19" W
73.17 feet to a point of compound curvature;
THENCE 64.56 feet along a curve to the right whose radius is 150.00 feet
through a central angle of 24'39'37" and whose long chord bears N 88'4O'44" W,
64.06 feet to a point of reverse curvature,
THENCE 33.27 feet along a curve to the left whose radius 19 150.00 feet
through a central angle of 12'42'31" and whose long chord bears N 82'42'11 W,
33.20 feet to a point of tangency,
THENCE N 89'03'27" W. 126.20 feet to a point of curvature;
THENCE 75.46 feet along a curve to the right whose radius 50.00 feet
through a central angle of 86'28'23" and whose long chord bears N 45 ' 49 ' 15"
W. 68.50 feet to a point of tangency;
THENCE N 02'35'04" W. 109.94 feet to the northwest corner;
THENCE 89'22'04" E, 59.28 feet to a point;
THENCE N 76 16' 41" E, 272.05 feet to the northeast corner;
THENCE S 13 43'19" E, 205.00 feet to the point. of beginning and
containing 1.4907 acres more or less.
SEE ATTACHMENT "A"
EXHIBIT "B"
Legal Description - Leased Premises
AT TACHMENT "A"
SCALE 1"=100'
TRACT B-l
NORTHEAST UNIT
TOWN OF ARlSCO GRANT
TRACT B 2
NORTHEAST UNIT
TOWN OF ATRISCO GRANT
EXHIBIT "C"
INDEX TO DRAWINGS
DRAWING NO. DATE
D1 January 1, 1994
A0.1 January 1, 1994
A1.1 January 1, 1994
CO.O January 1, 1994
Al.2 January 1, 1994
A2.1 January 1, 1994
A2.2 January 1, 1994
A2.3 January 1, 1994
A3.1 January 1, 1994
A4.1 January 1, 1994
A4.2 J January 1, 1994
A4.3 January 1, 1994
A4.4 January 1, 1994
A5.1 January 1, 1994
A5.2 January 1, 1994
S0.1 January 1, 1994
S0.2 January 1, 1994
MPO.1 January 1, 1994
M1.1 January 1, 1994
M2.1 January 1, 1994
M2.2 January 1, 1994
P1.1 January 1, 1994
P2.1 January 1, 1994
E0.1 January 1, 1994
E1.1 January 1, 1994
E1.2 January 1, 1994
E1.3 January 1, 1994
E1.4 January 1, 1994
E1.5 January 1, 1994
E1.6 January 1, 1994
E2.1 January 1, 1994
E3.1 January 1, 1994
E4.1 January 1, 1994
E4.2 January 1, 1994
E4.3 January 1, 1994
E4.4 January 1, 1994
E4.5 January 1, 1994
E4.6 January 1, 1994
E4.7 January 1, 1994
EXHIBIT "C1 "
DRAWING NO DATE
AO.1 July 1, 1993
A1.1 July 1, 1993
Al.2 July 1, 1993
A2.1 July 1, 1993
A2.2 July 1, 1993
A2.3 July 1, 1993
A3.1 July 1, 1993
A4.1 July 1, 1993
A4.2 July 1, 1993
A4.3 July 1, 1993
A4.4 July 1, 1993
A5.1 July 1, 1993
A5.2 July 1, 1993
SO.1 July 1, 1993
S0.2 July 1, 1993
MPO.1 July 1, 1993
M1.1 July 1, 1993
M2.1 July 1, 1993
M2.2 July 1, 1993
M1.1 July 1, 1993
M2.1 July 1, 1993
M2.2 July 1, 1993
P1.1 July 1, 1993
P2.1 July 1, 1993
EO.1 July 1, 1993
E1.1 July 1, 1993
E1.2 July 1, 1993
E1 3 July 1, 1993
E1.4 July 1, 1993
E1.5 July 1, 1993
E2.1 July 1, 1993
E3.1 July 1, 1993
E4.1 July 1, 1993
E4.2 July 1, 1993
E4.3 July 1, 1993
E4.4 July 1, 1993
E4 5 July 1, 1993
E4.6 July 1, 1993
E4.7 July 1, 1993
1. Reservations contained in Patent from United States of America filed
August 21, 1905, recorded in Book 35, Page 91, Records of Bernalillo County, New
Mexico.
2. Covenants, conditions, restrictions and easements as noted on Replat of
Tract A-43 of the N.E. Unit & Vacated Portions of Corona Drive & Blanco Place,
N.W., Town of Atrisco Grant, recorded December 21, 1984 in Volume C25, Folio
]94, as Document No. 84-97111, Records of Bernalillo County, New Mexico.
3. Access Easement Reserved Across the westerly portion of insured premises
and a buffer zone easement reserved across the northwesterly portion of the
insured premises, as shown Replat of Tract A-43 of the N.E. Unit & Vacated
Portions of Corona Drive & Blanco Place, N.W., Town of Atrisco Grant, recorded
December 2l, 1984 in Volume C25, Folio 194, as Document No. 84-97111, Records of
Bernalillo County, Mew Mexico.
4. Easement granted to Public Service Company of New Mexico and Mountain
States Telephone and Telegraph Company, filed August 28, 1987, recorded in Book
Misc. 52gA, Page 579, as Document No. 87-9072S, Records of Bernalillo County,
New Mexico.
5. Easement granted to Public Service Company of New Mexico and Mountain
States Telephone and Telegraph Company, filed August 28, 1987, recorded in Book
Misc. 528R, Page 586, as Document No. 87-97034, Records of Bernalillo County,
New Mexico.
6. Covenants, conditions, restrictions and easements contained in
Declaration of Restrictions and Cross-Easements by Central Avenue Partners, a
New Mexico corporation, and Sequoia-Coors, Incorporated, a New Mexico
corporation, dated 1994, filed ~~~~ , 1994, recorded in Book , Page , as
Document No. , Records of Bernalillo County, New Mexico.
EXHIBIT "D"
Title Restrictions
1. Reservations contained in Patent from United States of America filed
August 21, 1905, recorded in Book 35, Page 91, Records of Bernalillo County, New
Mexico.
2. Covenants, conditions, restrictions and easements as noted on Replat of
Tract A-43 of the N.E. Unit & Vacated Portions of Corona Drive & Blanco Place,
N.lV., Town of Atrisco Grant, recorded December 21, 1984 in Volume C25, Folio
194, as Document No. 84-97111, Records of Bernalillo County, New Mexico.
3. Access Easement Preserved Across tile westerly portion of insured
premises and a buffer zone easement reserved across the northwesterly portion of
the insured premises, as shown on Replat of Tract A-43 of the N.E. Unit &
Vacated Portions of Corona Drive & Blanco Place, N.W., Town of Atrisco Grant,
recorded December 21, 1984 in Volume C25, Folio 194, as Document No. 84-97111,
Records of Bernalillo County, New Mexico.
4. Easement granted to Public Service Company of New Mexico and Mountain
States Telephone and Telegraph Company, filed August 28, 1987, recorded in Book
Misc. 528A, Page 579, as Document No. 87-90728, Records of Bernalillo County,
New Mexico.
5. Easement granted to Public Service Company of New Mexico and Mountain
States Telephone and Telegraph Company, filed August 28, 1987, recorded in Book
Misc. 528A, Page 586, as Document No. 87-97034, Records of Bernalillo County,
New Mexico.
6. Covenants, conditions, restrictions and easements contained in
Declaration of Restrictions and Cross-Easements by Central Avenue Partners, a
New Mexico corporation, and Sequoia-Coors, Incorporated, a New Mexico
corporation, dated , 1994, filed , 1994, recorded in Book , Page , as Document
No. , Records of Bernalillo County, New Mexico.
EXHIBIT "E"
Declaration of Restrictions
and Cross-Easements
This Declaration of Restrictions and Cross-Easements is executed as of the
day of , 1 9 , by and between Central Avenue Partners, a New Mexico General
partnership (hereinafter "Central") and SequoiaCoors, Incorporated, a New Mexico
Corporation (hereinafter "SC Inc.").
WHEREAS, Central is, or will become, the fee owner of that certain parcel
of real estate described as Parcel A located at the Northeast corner of Coors
Boulevard and Sequoia Road, NW in the City of Albuquerque, County of Bernalillo,
State of New Mexico, which parcel is more particularly described in Exhibit A
and shown on Exhibit "B" attached hereto and by this reference incorporated
herein;
WHEREAS, SC Inc. is, or will become, the fee owner of that certain parcel
of real estate described as Parcel B. adjoining parcel A at the Northeast corner
of Coors Boulevard and Sequoia Road, NW in the City of Albuquerque, County of
Bernalillo, State of new Mexico, which parcel is more particularly described in
Exhibit "A" and shown on Exhibit "B";
WHEREAS, Central and SC Inc. wish to make certain agreements and place
certain restrictions as to their respective parcels and to establish
cross-easements upon said parcels A and B within the "Common Areas" of each
parcel which shall for the purposes herein mean those areas used from time to
time for parking, ingress/ egress, pedestrian walkways, service drives and
landscaping, for the mutual benefit of Parcel A and Parcel B.
NOW, THEREFORE{, in consideration of the above premises and the mutual
covenants hereinafter expressed, Central and SC Inc. hereby declare, grant, and
establish the following restrictions, easements and covenants for the mutual
benefit of Parcel A and Parcel B:
1. Central hereby grants and establishes for the benefit of the owner of
Parcel B. their lessees, customers and invitees, mutual non-exclusive
cross-easements of ingress, egress and parking over an across the Common Areas
of Parcel A as such may exist from time to time.
2. SC Inc. hereby grants and establishes for the benefit of the owners of
Parcel A, their lessees, customers and invitees, mutual non-exclusive
cross-easements of ingress, egress and parking over and across the Common Areas
of Parcel "B" as such may exist from time to time.
3. Central and SC Inc. hereby establish and grant for the benefit of each
Parcel and the owners thereof and their successors and assigns, non-exclusive
mutual easements across, through and under the Common Areas of each respective
Parcel as such are maintained from time to time, for utility services including
but not limited to water, storm sewer, drainage, sanitary sewer, gas and
electrical distribution systems, currently existing, or to be constructed in the
future, in the Common Areas. Any installed utility line or system may, however,
be relocated, provided that such relocation shall not interfere with, or
increase the cost of, or diminish the other tract's utility services, and may
also be used and extended by the other tract. The aforesaid mutual utility
easements shall include the right, on prior notice given by one to the other, to
construct and to repair the facilities referred to therein to the extent
necessary to fully enjoy the benefits of the rights so granted, but nothing
contained in this sentence shall in any way modify, limit or lessen the
obligations of the respective party, elsewhere in the paragraph. The party
exercising any such construction or repair right shall repair any damage to the
Common Areas caused by such exercise, and further agrees to indemnify and hold
harmless the other party from and against any claims arising from or caused by
said construction and repair. The party exercising the aforementioned
construction or repair right shall give the other party at least thirty (30)
days prior written notice unless the repairs are caused by an "emergency", which
shall mean any sudden unexpected happening in which a failure to act immediately
by one party would cause appreciable damage to person or property, in which
event such repairs may be made as soon as is appropriate, but in a reasonable
manner. All construction or repairs shall be done in such a manner so as not to
interfere with or obstruct access to the other party's property and shall be
done in a careful and workmanlike manner.
4. No barriers shall be constructed along the common property lines in the
Common Areas of Parcels A and B. except for curbing, sidewalks, parking and
landscaping shown on Exhibit "B" hereto or as such may exist, or be replaced or
revised from time to time . No substantial change shall l be made to the grades
of each tract.
5. No buildings shall be constructed at any time within the land area of
Parcels A or B east of the "Building Setback Line" shown on Exhibit "B" hereto.
Canopies, footings or foundations which extend into the common area or "No
Building Area", together with any columns or posts supporting same shall not be
deemed a violation of any of the provisions of this Agreement and shall not be
deemed to be part of the Common Area.
6. Central and SC Inc. hereby declare that those portions of Parcels A and
B within the area which is striped and designated "25' Access Road Areas on
Exhibit "B" hereto shall be and forever remain a non-exclusive access road and
driveway for the benefit of the owners of Parcels A and B. their lessees,
customers and invitees for ingress and egress to and from said Parcels A and B.
The parties further agree as follows:
a) The Access Road Area shall be maintained equally by the owners of Parcel
A and Parcel A, provided however, if any damage to the Access Easement is caused
by the owner of either Parcel, or its lessees or employees, that party shall be
responsible for repairing any such damage at its sole expense.
b) Except in the event of any emergency, all decisions related to
maintenance and repair of the Access Road Area shall be mutually agreed upon by
the owners of Parcel A and Parcel B. in advance.
c) If emergency repairs to the Access Easement are undertaken by the owner
of one Parcel without the consent of the other, reimbursement by the
non-consenting owner shall be limited to reasonable costs under the
circumstances.
d) If the owner of either Parcel A or Parcel B is entitled to payment from
the other pursuant to the terms of this Agreement, the reimbursement shall be
made within thirty (30) days aster receipt of written request therefor, or
thereafter, interest shall accrue on any unpaid amount at the rate of one and
one-half percent (1.5%) per month until paid in full.
e) The Access Easement as shown on Exhibit "B" hereto, shall not be changed
without the mutual consent of the owners of Parcel A and Parcel B. which consent
shall not be unreasonably withheld.
f) If a dispute arises regarding the necessity for maintenance and repairs,
or the amount of reimbursement, any such dispute shall be settled through
binding arbitration in Albuquerque, New Mexico utilizing the Rules of the
American Arbitration Association for commercial transactions; all other matters
related to this Agreement may be enforced through judicial proceedings.
g) In the event any of the parties enforce the provisions hereof through
arbitration or judicial proceedings, the prevailing party shall be entitled to
reasonable attorney's fees and court costs from the non-prevailing party.
7. All notices required to be given pursuant to the provisions of this
Agreement shall be in writing and either delivered by courier or mailed postage
prepaid, by certified or registered mail, return receipt requested, addressed to
the parties as follows:
TO: Sequoia-Coors, Incorporated
c/o Mr. Clyn Inman, Secretary-Treasurer
3108 Texas, NE
Albuquerque, NM 87110
TO: Central Avenue Partners
c/o Peterson Properties Real Estate Services, Inc.
2325 San Pedro, NE, Suite 2-A
Albuquerque, NM 87110
or to such address as is thereafter provided by the parties hereto. If any
notice is mailed, it shall be deemed received upon the earlier of actual receipt
or on the third business day following the date of mailing. If any written
notice is hand delivered or delivered by courier, it shall be deemed received
upon delivery.
8. The easements and covenants established by this Declaration shall run in
perpetuity and are intended to be and shall be construed as covenants running
with the land, binding upon, and inuring to the benefit of and enforceable by
the undersigned parties, and all subsequent owners of the respective Parcels or
any part thereof. The covenants and easements established hereby are not
intended and shall not be construed as a dedication of such rights in the Common
Area or Access Road Area for public use, and this Declaration shall not be
deemed to vest any rights in any customers, invitees or the public at large, but
are solely for the benefit of the owners of the respective tracts and their
lessees, customers and invitees to the extent heretofore established.
9. These covenants and easements may be modified, amended or cancelled by a
writing executed by the fee owner of Parcel A and by the fee owners of a
majority of tile land area of Parcel B at the time of such modification,
amendment or cancellation.
EXECUTED as of the date first above written.
CENTRAL AVENUE PARTNERS, a New Mexico general partnership
By: PETERSON PROPERTIES REAL ESTATE
SERVICES, INC., a New Mexico Corporation, as Managing General Partner
By:
JAMES A. PETERSON, President
By: RETAIL DEVELOPMENT CONSULTANTS, INC., a New Mexico Corporation,
as General Partner
By:
.
STEVEN J. JOHNSON, President
Sequoia-Coors, Incorporated, a
New Mexico Corporation
ARTHUR W. BROWN, President
EXHIBIT "E"
Declaration of Restrictions and Cross-Easements
By:
STATE OF NEW MEXICO )
)
COUNTY OF BERNALILLO)
of
CLYN INMAN, Secretary-Treasurer
This instrument was acknowledged before me this day , 1994, by James A.
Peterson, President of Peterson Properties Real Estate Services, Inc., a New
Mexico Corporation, Managing General Partner of Central Avenue Partners, a New
Mexico General Partnership, on behalf of said corporation and partnership.
My Commission Expires:
STATE OF NEW MEXICO )
)
COUNTY OF BERNALILLO)
NOTARY PUBLIC
This instrument was acknowledged before me this _ day of , 1994, by Steven
J. Johnson, President of Retail Development Consultants, Inc., a New Mexico
Corporation, General Partner of Central Avenue Partners, a New Mexico General
Partnership, on behalf of said corporation and partnership.
NOTARY PUBLIC
My Commission Expires:
STATE OF NEW MEXICO )
)
COUNTY OF BERNALILLO)
This instrument was acknowledged before me this day , 1994, by Arthur W.
Brown, President of Sequoia-Coors Inc., a New Mexico Corporation, on behalf of
said corporation.
NOTARY PUBLIC
My Commission Expires:
STATE OF NEW MEXICO )
)
C OUNTY OF BERNALILLO)
This instrument was acknowledged before me this day , 1994, by Clyn Inman,
Secretary-Treasurer of Sequoia-Coors Inc., a New Mexico Corporation, on behalf
of said corporation.
NOTARY PUBLIC
Hy Commission Expires:
EXHIBIT "E"
Declaration of Restrictions
and Cross-Easements
EXHIBIT "A"
LEGAL DESCRIPTION OF
PARCELS A & B
(to be inserted)
FIRST AMENDMENT TO_LEASE
AND MEMORANDUM OF LEASE
This FIRST AMENDMENT TO LEASE AND MEMORANDUM OF LEASE is made and entered
into this l2th day of December, 1994, by and between CENTRAL AVENUE PARTNERS, a
New Mexico general partnership, as Landlord, and WALGREEN HASTINGS CO., a
Nebraska corporation, as Tenant;
WITNESSETH:
WHEREAS, by lease dated April 25, 1994 (the "Lease"), recorded by
memorandum thereof of even date on October 25, 1994 in Book 94-29, Pages
9456-9464, in the Official Records of Bernalillo County, New Mexico, as Document
Number 94128271, Landlord leased to Walgreen Co., an Illinois corporation,
Tenant's predecessor in interest, certain premises (the "Leased Premises"),
located at the northeast corner of Coors Boulevard and Sequoia Road in the City
of Albuquerque, County of Bernalillo, State of New Mexico as legally described
in Exhibit"B" attached to the Lease and memorandum thereof, for the term and
upon the covenants and conditions therein set forth; and
WHEREAS, Landlord acquired legal title to portions of the Leased Premises
on October 13, 1994 and October 14, 1994; and
WHEREAS, an increased area acquired by Landlord shall be the new Leased
Premises; and
WHEREAS, Landlord and Tenant hereby desire to modify the Lease and
memorandum thereof accordingly as hereinafler provided;
NOW, THEREFORE, in consideration of the premises and of the terms and
conditions set forth herein, it is agreed by the parties as follows:
1. The legal description attached to the Lease and memorandum thereof as
Exhibit"B" is hereby deleted and a new legal description attached hereto as
Exhibit"/\" is inserted in lieu thereof.
2. In all other respects, the Lease and memorandum thereof and all of Use
applicable terms thereof shall remain unmodified and shall continue in full
force and effect.
3. This instrument shall also bind and benefit, as the case may require,
the heirs, legal representatives, assigns and successors of the respective
parties, and all covenants, conditions and agreements herein contained shall be
construed as covenants running with the land.
IN WITNESS WHEREOF, Landlord and Tenant have executed this First Amendment
to Lease and Memorandum of Lease as of the day and year first above written.
WALGREEN HASTINGS CO. CENTRAL AVENUE PARTNERS
By Peterson Properties Real Estate
Services, Inc., Managing General
Partner
By Vice President By James A. Peterson
President
By Retail Development Consultants,
Attest: Assistant Secretary Inc., General Partner
By Steven J. Johnson
President
Witnesses: Witnesses:
Print Name:Colleen R. McGrath
Print Name: Mae Peterson
STATE OF ILLINOIS)
) SS.
COUNTY OF LAKE )
The foregoing instrument was acknowledged before me this day of , 1994 by ,
Vice President of WALGREEN HASTINGS CO., a Nebraska corporation, on behalf of
the corporation. He is personally known to me to be the person whose name is
subscribed to the foregoing instrument, and acknowledged that he executed and
delivered the foregoing instrument for the purposes and consideration therein
expressed, as the act of said corporation.
Notary Public
(Seal)
STATE OF NEW MEXICO )
) SS.
COUNTY OF BERNALILLO)
The foregoing instrument was acknowledged before me this 1 vth day of
Decenter , 1994 by James A. Peterson, President of . PETERSON PROPERTIES REAL
ESTATE SERVICES, INC., a New Mexico corporation, on behalf of the corporation.
He is known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged that he executed and delivered the foregoing
instrument for the purposes and consideration therein expressed, and Whereof
said corporation.
Betty L. Peterson
Notary Public
(Seal)
STATE OF NEW MEXICO )
) SS.
COUNTY OF BERNALILLO)
Notary Bond Filed with Secretary of State
My Commission Expires 2-16-97
The foregoing instrument was acknowledged before me this 12th day of
December , 1994 by Steven J. Johnson, President of RETAIL DEVELOPMENT
CONSULTANTS, INC., a New Mexico corporation, on behalf of the corporation. He is
known to me to be the person whose name is subscribed to the foregoing
instrument, and acknowledged that he executed and delivered the foregoing
instrument for the purposes and consideration therein expressed, and as the act
of said corporation.
Betty L. Peterson
Notary Public
(Seal)
OFFICIAL SEAL
BETTY L. PETERSON
NOTARY PUBLIC NEW MEXICO
Notary Bond Filed with Secretary of State
My Commission Expires 2-16-97
EXHIBIT "'A"
LEGAL DESCRIPTION
Tract B-2-B, NORTHEAST UNIT, TOWN Ol: ATRISCO, as the same is shown and
designated on the plat thereof filed for record in the office of the County
Clerk of Bernalillo County, New Mexico on October 21, 1994, in Volume 94-C,
Folio 359, and being more particularly described by metes and bounds as follows:
BEGINNING at the southeast corner of the herein described tract, said point
being the intersection of the westerly line of a 20 foot Public Alley and the
northerly right-of-way line of Sequoia Road N.W.;
THENCE S 67 31' 11" W. 26.93 feet to a point of curvature;
Thence 73.39 feet along a curve to Use right whose radius is 366.07 feet
through a central angle of 11 29' 15" and whose long chord bears S 73O 15' 49"
W. 73.27 feet to a point of non-tangency;
THENCE N 89 20' 17" W. 130.83 feet to a point;
THENCE N 78 14' 22" W. 50.37 feet to a point;
THENCE N 88 23' 37" W. 49.91 feet to a point of curvature;
THENCE 81.69 feet along a curve to the right whose radius is 50.00 feet
through a central angle of 93 36' Z0" and whose long chord bears N 41 35' Z7" W.
72.90 feet to a point of tangency;
THENCE N 05 12' 43" E, 59.38 feet to a point of curvature;
THENCE 24.90 feet along a curve to the right whose radius is Z5.00 feet
through a central angle of 57 03' 49" and whose long chord bears N 33 44' 38" E,
23.88 feet to a point of non-tangency;
THENCE N 00 40' 24" E, 35.00 feet to the northwest corner;
THENCE S 89 19' 36" E, 72.69 feet to a point;
THENCE N 76 16' 41" E, 238.22 feet to the northeast corner;
THENCE S 13 43' 19" E, 212.00 feet to the point of beginning and containing
1.5441 acres more or less.
STATE OF ILLINOIS
COUNTY OF LAKE
This instrument was acknowledged before me this 25th day of August, 1994,
by Allan M. Resnick, of WALGREEN HASTINGS CO., a Nebraska corporation.
Notary Public
My commission expires:
5-18-96
.
OFFICIAL SEAL
ELENA KRAUS
NOTARY PUBLIC. STATE OF ILLINOIS
MY COMMISSION EXPIRES 5/ lRl9fi
STATE OF NEW MEXICO )
) SS.
COUNTY OF BERNALILLO)
This instrument was acknowledged before me this 1st day of September ,
1994, by James A. Peterson, President of Peterson Properties Real Estate
Services, Inc., a New Mexico corporation, Managing Partner of CENTRAL AVENUE
PARTNERS, a New Mexicewneral partnership.
My commission expires: February 16, 1997
STATE OF NEW MEXICO )
) SS.
COUNTY OF BERNALILLO)
This instrument was acknowledged before me this 2d day of September , 1994,
by Amar Tesch, Vice President of Retail Development Consultants, Inc., a New
Mexico corporation, General Partner of CENTRAL AVENUE PARTNERS, a New Mexico
general partnership.
Notary Public
My commission expires: February 16, 1997
OFFICIAL SEAL
BETTY L PETERSON
NOTARY PUBLIC NEW MEXICO
Notary Bond Filed with Secretary of State
My Commission Expires: February 16, 1997
EXHIBIT "A"
Legal Description
A tract of land situate within the Town of Atrisco Grant , projected
Section 2, Township 10 North, Range 2 East, New Mexico Principal Meridian within
the city of Albuquerque, Bernalillo County, New Mexico being a southerly portion
of TRACT B-2, NORTHEAST UNIT, TOWN OF ATRISCO GRANT as the same is shown and
designated on said plat filed for record in the office of the County Clerk of
Bernalillo County, New Mexico on January 19 , 1987 in Volume C32. Folio 150
together with a southerly portion of TRACT B-1, LAND OF E. FISH as the same is
shown and designated on said plat tiled for record in the office ox the County
Clerk of Bernalillo County, New Mexico on July 26, 1976 In Volume B11, Folio 154
and also being a portion of TRACT B-A, CIRCLE R CORPORATION as the same is shown
and designated on said plat filed for record in the office of the County Clerk
of Bernalillo County, New Mexico on May 26, 1987 in Volume C33, 152 and being
more particularly described as follows:
BEGINNING at the southeast corner of the herein described tract, said point
being the intersects on of the westerly line of a 20 foot Public Alley and the
northerly right-of-way line of Sequoia Road N . W .
THENCE 8 67'31'11" W. 26.93 feet to a print of curvature;
THENCE 73.29 feet along a curve to the right whose radius is 366.07 feet
through a central angle of 11'28'16" and whose long chord bears S 73"15'19" W.
73.17 feet to a point of compound curvature
THENCE 64.56 feet along a curve to the right whose radius 49 150.00 feet
through a central angle of 24g39'37" and whose long chord bears to 88 ' 4o ' 44"
W. 64.06 feet to a point of reverse curvature
THENCE 33.27 feet along a curve to the left whose radius is 150.00 feet
through a central angle of 12f42'31" and whose long chord boars N 82-42'11" W.
33.20 feet to a point of tangency
THENCE N 89'03'27" W. 126.20 feet to a point of curvature
THENCE 75.46 feet along a curve to the tight whose radius is 50,00 feet
through a central angle of 86'28'23" and whose long chord boars N 4S'49'15" W.
68.50 feet to a point of tangency
THENCE N 02'35'04" W. 109.94 feet to the northwest corner)
THENCE N 89o22'04" E, S9,28 feet to a point;
THENCE N 76416'41" E, 272.05 feet to the northeast cornet
THENCE S 13'43'19" E, 208.00 feet to the point OF beginning and containing
1.4901 aorta more or leas. ,
RELEASE OF MEMORANDUM OF LEASE
The undersigned, CENTRAL AVENUE PARTNERS, a New Mexico General Partnership,
as Landlord, and WALGREEN HASTINGS CO., a Nebraska corporation, successor in
interest to Walgreen Co., as Tenant, executed a Memorandum of Lease dated April
25, 1994, recorded on July 26, 1994 in Book 94-22, Page 1891, as Document No.
94093623, in the official records of Bernalillo County, New Mexico
("Memorandum") encumbering the real property located in the County of
Bernalillo, State of New Mexico, legally described in Exhibit "A" attached
hereto and made a part hereof.
The undersigned parties hereby declare that the Memorandum is released from
the real estate described above.
IN WITNESS WHEREOF, the undersigned have set their hands and seals
effective on the 25th day of August, 1994.
CENTRAL AVENUE PARTNERS WALGREEN HASTING CO., a
a New Mexico general partnership Nebraska Corporation
By: Peterson Properties Real
Estate Services, Inc.,
a New Mexico corporation, Its
Managing Partner
By: Retail Development Consultants,
Inc., a New Mexico corporation,
General Partner
After recording, return to:
WESTLAND DEVELOPMENT CO., INC.
401 Coors Blvd., NW
Albuquerque, NM 87121
EXHIBIT 10.5
ASSIGNMENT AND ASSUMPTION OF LEASE
THIS ASSIGNMENT AND ASSUMPTION OF LEASE is entered into as of _ day of ,
1995, by and between CENTRAL AVENUE PARTNERS, a New Mexico general partnership
("Assignor") and WESTLAND DEVELOPMENT CO., INC., a New Mexico corporation
("Assignee").
RECITALS:
WHEREAS, pursuant to that certain Deposit Receipt and Real Estate Purchase
Contract ("Purchase Agreement"), dated August 22, 1994, between Assignor and
Assignee, covering that certain real property more particularly described on
Exhibit "A" attached hereto and by this reference incorporated herein ("Real
Property"), Assignor is concurrently, with the execution of this Assignment and
Assumption, conveying to Assignee all of its right, title and interest in and to
said Real Property;
WHEREAS, Assignor, as Landlord, and Walgreen Co., Inc., an Illinois
corporation, as Tenant, executed that certain Lease dated April 25, 1994
("Lease"), covering said Real Property;
WHEREAS, by Assignment of Lease Agreement dated June 21, 1994, Walgreen Co.
assigned all of its right, title and interest under the Lease to Walgreen
Hastings Co., a Nebraska corporation, and Walgreen Hastings Co. assumed all of
such right, title and interest; and
WHEREAS, pursuant to the aforesaid Purchase Agreement and as a part of the
conveyance of its interest in said Real Property to Assignee by Assignor, the
parties are executing this Assignment and Assumption of Lease. NOW, THEREFORE,
in consideration of the above premises, the mutual covenants hereinafter
expressed, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Assignor hereby assigns, transfers and conveys to Assignee all of its
right, title and interest as Landlord, under, in and to the aforesaid Lease.
2. Assignor hereby represents and warrants that as of the date hereof:
a. The Lease is in full force and effect;
b. default by the
c. default from
d. To the best of Assignor's actual knowledge, no circumstance or condition
exists which with the giving of notice or the passage of time, or both, would
constitute a default by the Landlord under the Lease;
e. To the best of Assignor's actual knowledge, no default by the Tenant
under the Lease exists as of the date hereof; and
f. To the best of Assignor's actual knowledge, no circumstance or condition
exists which with the giving of notice or the passage of time, or both, would
constitute a default by the Tenant under the Lease.
3. Assignee hereby agrees to and hereby accepts the foregoing assignment,
and, in addition, expressly assumes and agrees to keep, perform and fulfill all
of the terms, covenants, obligations and conditions required to be kept,
performed and fulfilled from and after the date hereof by the Landlord under or
with respect to the aforesaid Lease, and Assignee further agrees to indemnify,
defend and hold harmless Assignor from and against any and all liability, loss,
cost, damage or expense (including, without limitation, attorney's fees and
costs) directly or indirectly arising out of or related to its obligations
arising from and after the date hereof as Assignee of the Lease.
4. Assignor agrees to indemnify, defend, and hold harmless Assignee from
and against any and all liability, loss, cost, damage, or expenses (including
without limitation, attorneys' fees and costs) directly or indirectly arising
out of or related to the failure of Assignor to perform the obligations of the
Landlord under the Lease prior to the date hereof.
5. This Assignment and Assumption of Lease shall be binding upon and inure
to the benefit of the parties, their respective heirs, personal representatives,
successors and assigns.
6. This Assignment and Assumption of Lease may be executed in a number of
identical counterparts. If so executed, each such counterpart is to be deemed an
original for all purposes, and all such counterparts shall collectively
constitute one agreement, but for the purpose of proving the existence of this
Assignment and Assumption of Lease it shall not be necessary to produce or
account for more than one such counterpart except for the purpose of
demonstrating that any party is a signatory thereto.
IN WITNESS WHEREOF, the parties have caused this Assignment and Assumption
of Lease to be executed as of the date first above written.
ASSIGNOR: CENTRAL AVENUE PARTNERS,
a New Mexico general partnership
By: Peterson Properties Real Estate
Services, Inc., a New Mexico corporation,
as Managing General Partner
By:
James A. Peterson, President
By: Retail Development Consultants,
Inc., a New Mexico corporation, as
General Partner
By:
Steven J. Johnson, President
ASSIGNEE: WESTLAND DEVELOPMENT CO., INC., a New
Mexico corporation
By:
Barbara Page, President/CEO
ACKNOWLEDGMENTS
STATE OF NEW MEXICO )
)SS.
COUNTY OF BERNALILLO)
The foregoing instrument was acknowledged before me this day of , 1995, by
James A. Peterson, President of Peterson Properties Real Estate Services, Inc.,
Managing General Partner of Central Avenue Partners, a New Mexico general
partnership, on behalf of said partnership.
STATE OF NEW MEXICO )
)SS.
COUNTY OF BERNALILLO)
The foregoing instrument was acknowledged before me this day of , 1995, by
Steven J. Johnson, President of Retail Development Consultants, Inc., General
Partner of Central Avenue Partners, a New Mexico general partnership, on behalf
of said partnership.
My commission expires:
STATE OF NEW MEXICO )
)SS.
COUNTY OF BERNALILLO)
The foregoing instrument was acknowledged before me this day of , 1995, by
Barbara Page, President/CEO of Westland Development Co., Inc., a New Mexico
corporation, on behalf of said corporation.
Notary Public
for the purpose of proving the existence of this Assignment and Assumption
of Lease it shall not be necessary to produce or account for more than one such
counterpart except for the purpose of demonstrating that any party is a
signatory thereto.
IN WITNESS WHEREOF, the parties have caused this Assignment and Assumption
of Lease to be executed as of the date first above written.
ASSIGNOR: CENTRAL AVENUE PARTNERS,
a New Mexico general partnership
By: Peterson Properties Real Estate
Services, Inc., a New Mexico
corporation, as Managing General
Partner
By: James A. Peterson, President
By: Retail Development Consultants,
Inc., a New Mexico corporation, as
General Partner
By:
Steven a. Johnson, President
ASSIGNEE: WESTLAND DEVELOPMENT CO., INC., a New
Mexico corporation
By:
Barbara Page, President/CEO
ACKNOWLEDGMENTS
STATE OF NEW MEXICO )
)SS.
COUNTY OF BERNALILLO)
The foregoing instrument was acknowledged before me this 29th day of March,
1995, by James A. Peterson, President of Peterson Properties Real Estate
Services, Inc., Managing General Partner of Central Avenue Partners, a New
Mexico general partnership, on behalf of said partnership.
My commission expires:
Februarv 16. 1997
STATE OF NEW MEXICO )
)SS.
COUNTY OF BERNALILLO)
The foregoing instrument was acknowledged before me this 29th day of March
, 1995, by Steven J. Johnson, President of Retail Development Consultants, Inc.,
General Partner of Central Avenue Partners, a New Mexico general Partnership,
on, behalf of said partnership.
My commission expires:
February 16. 1997
STATE OF NEW MEXICO )
)SS.
COUNTY OF BERNALILLO)
The foregoing instrument was acknowledged before me this _ day of , 1995,
by Barbara Page, President/CEO of Westland Development Co., Inc., a New Mexico
corporation, on behalf of said corporation.
Notary Public
My commission expires:
LEGAL DESCRIPTION OF THE REAL PROPERTY
Tract B-2-B of Plat of Tracts B-2-A and B-2-B, Northeast Unit, Town of
Atrisco, within the town of Atrisco Grant, Projected Section 2, Township 10
North, Range 2 East, N.M.P.M., City of Albuquerque, New Mexico, as the same is
shown and designated on the Plat of said Addition, filed in the Office of the
County Clerk of Bernalillo County, New Mexico, on October 21, 1994 in Volume
94C, Folio 359.
ASSIGNMENT OF LEASE AGREEMENT
THIS AGREEMENT, made as of the day of June, 1994, by and between WALGREEN
CO., an Illinois corporation, as Assignor and WALGREEN HASTINGS CO., a Nebraska
corporation, as Assignee.
RECITALS:
WHEREAS, Assignor and Central Avenue Partners., a New Mexico general
partnership, ("Landlord") entered into a lease agreement dated April 25, 1994
("Lease Agreement"), whereby Assignor leased from Landlord the premises located
in Albuquerque, New Mexico at the northeast corner of Coors Boulevard and
Sequoia Road; and
WHEREAS, Assignor desires to assign to Assignee all of assignor's right,
title and interest under the Lease Agreement and Assignee desires to assume all
of such right, title and interest.
NOW, THEREFORE, in consideration of the payment of Ten (10) Dollars from
Assignee to Assignor and other valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Assignor hereby assigns to assignee all of Assignor's right , title and
interest in and under the Lease Agreement, to have and to hold unto assignee,
its successors and assigns.
2. Assignee hereby accepts the assignment of the Lease Agreement and
assumes all of Assignor's obligation thereunder.
3. The provisions of this Agreement shall be binding upon and shall inure
to the benefit of the parties hereto, their legal representatives, successors
and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
ASSIGNOR
WALGREEN CO.
By:
Vice President
ASSIGNEE
WALGREEN HASTINGS CO.
By:
Vice President
EXHIBIT 10.6
LEASE
AGREEMENT of Lease made this day of 1995, by and between GEORGE BRUNACINI
and JEANNETTE BRUNACINI, husband and wife ("Landlord") and CIRCUIT CITY STORES,
INC., a Virginia corporation ("Tenant"),
WITNESSETH:
1. DEMISE - DEMISED PREMISES - Landlord, for and in consideration of the
covenants and conditions hereinafter contained on the part of the Tenant to be
performed, and in consideration of the rental hereinafter reserved, does hereby
grant, lease, demise and let unto Tenant and Tenant does hereby rent and take
from Landlord those premises described as:
Legal Description: Lot C-4B1, Albuquerque Industrial Park.
as more fully described or shown on Exhibit "A", attached hereto and made a
part hereof ("Land"), together with the buildings and improvements more fully
described on Exhibit "B", attached hereto and made a part hereof ("Leasehold
Improvements"), to be constructed thereon by Landlord, all rights and easements
appurtenant thereto, and all of the fixtures, apparatus, equipment and
improvements to be provided by Landlord and located therein or thereon, all of
which are hereinafter called the "Demised Premises".
2. USE-WARRANTIES AND REPRESENTATIONS BY LANDLORD Landlord agrees that
Tenant, and those holding by, through and under Tenant, may use the Demised
Premises for any lawful purpose, except as otherwise expressly provided herein.
It is the intention of Tenant to use the Demised Premises for the purpose of
testing, repair, assembly, storage and distribution electronic equipment and
appliances, and activities related thereto.
3 TERM-OPTION - (a) This Lease shall be effective from the date first above
set forth ("Effective Date"); the term of this Lease shall commence on
substantial completion of the Leasehold Improvements and actual delivery of the
Demised Premises to Tenant, which date shall be no later than three ( 3) months
from the Effective Date or June 1, 1995, whichever occurs later, said date is
hereinafter called the "Commencement Date" of this Lease, and the original term
shall extend and continue for a period of ten (10) years from and after the
Commencement Date. Landlord and Tenant shall execute a statement acknowledging
the Commencement Date which shall be attached hereto as Exhibit "C" and
incorporated herein by reference.
(b) Tenant is hereby granted two (2) five (5) year options to renew and
extend the term of this Lease following the expiration of the initial term of
this Lease ("Option Term(s)"). The options shall only be exercised by written
notice to Landlord given at least six (6) months prior to the date on which the
initial Lease term expires, if exercising the initial option, and thereafter six
(6) months prior to the date on which the first Option Term expires and provided
further that Tenant is not in default under the current Lease obligations.
However, in the event the first option is not exercised, the remaining option
shall immediately expire. The Lease provisions for any Option Term shall be the
same as are in effect for the initial term, excepting rent which shall be as set
forth in Paragraph 4 hereinafter.
4. RENT - Rent shall accrue from and after the Commencement Date and shall
be payable by Tenant in lawful money of the United States of America, in advance
on or before they first day of each calendar month, prorated if the first or
last month is not a full calendar month, as follows:
First year, $4.25 per square foot of GLA (as hereinafter defined) per year
for a monthly rent of $8,212.77;
Second year, $4.38 per square foot per year for a monthly rent of
$8,463.99;
Third year, $4.51 per square foot per year for a monthly rent of $8,715.20;
Fourth year, $4.64 per square foot per year for a monthly rent of
$8,966.41;
Fifth year, $4.78 per square foot per year for a monthly rent of $9,236.95;
Sixth year, $4.93 per square foot per year for a monthly rent of $9,526.81;
Seventh year, $5.07 per square foot per year for a monthly rent of
$9,797.35;
Eighth year, $5.23 per square foot per year for a monthly rent of
$10,106.54;
Ninth year, $5.38 per square foot per year for a monthly rent of
$10,396.40;
Tenth year, $5.55 per square foot per year for a monthly rent of
$10,724.91.
In the event the Commencement Date is not the first day of a month, the
Lease term shall end, unless sooner terminated, on the
last day of the month in which the tenth anniversary occurs, or the month
in which the fifth anniversary of an Option Term occurs, with rent being
prorated for the last month.
Coincident with the execution of this Lease, Tenant is paying Landlord the
first month's rent in the amount of $8,212.77.
In the event the option to renew for one or both of the Option Term(s) is
exercised by Tenant, the rent shall be increased each year of the Option Term(s)
by the lesser of (i) two (2) times the increase in the CPI-U for the Albuquerque
metropolitan area for the prior year, or (ii) 3k above the rent for the prior
year.
The parties agree that the gross leasable area of the building on the
Demised Premises is 23,189 square feet ("GLA").
5. ASSIGNMENT - SUBLETTING - Tenant and its assignees may assign this Lease
or sublet a portion or portions or all of the Demises Premises, with Landlord's
written consent, which consent shall not be unreasonably delayed or withheld.
Each assignee or subtenant shall hold subject to all provisions of this Lease,
and no assignment or subletting shall release Tenant from the obligations of
this Lease. Notwithstanding the provisions of this Paragraph, Tenant shall have
the right to assign this Lease or sublet the Demised Premises to a parent,
subsidiary or affiliate company without Landlord's written consent.
6. REQUIREMENTS OF LAW - Tenant shall promptly comply with all statutes,
ordinances, rules, orders, regulations, and requirements of the Federal, State
and Municipal governments and of any and all of their Departments and Bureaus,
including without limitation Environmental Requirements (as such term is defined
in Paragraph 31 below) (collectively called "governmental requirements") which
are applicable to the use by Tenant of the Demised Premises, or Tenant's
business and operations on the Demised Premises during the term or any renewal
thereof. Landlord shall, at its sole expense, comply with any applicable laws
enacted after the Commencement Date requiring alteration of any portion of the
Demised Premises required to be maintained by Landlord pursuant to this Lease,
unless such alterations are required solely because of the nature of Tenant's
business and activities on the Demised Premises, rather than by virtue of
ownership of the Demised Premises. Tenant shall, at its sole expense, comply
with any such laws which require (i) alterations of any portion of the Demised
Premises required to be maintained by Tenant hereunder and (ii) alterations of
any portion of the Demised Premises required to be maintained by Landlord which
are required solely because of the nature of Tenant's business and activities
thereon; provided however, if such repairs by Tenant have a depreciable life in
excess of the balance of the Lease term (including the renewal term) pursuant to
Internal Revenue Service depreciation schedules in effect at the time of such
repairs, or other nationally recognized depreciation schedules, Landlord shall
reimburse Tenant upon demand for the portion of the cost of such repairs
attributable to the period of time after the Lease term (including renewal term)
expires. Either party may elect, by notifying the other party of such election,
to terminate this Lease in the event the cost of any repairs required to be made
by the electing party pursuant to applicable laws enacted after the commencement
date exceeds 25k of the rent paid by Tenant for the immediately prior Lease
year. This Lease shall terminate upon the date of such election unless the
nonelecting party notifies the electing party within thirty (30) days of such
election, of its intent to make the required repairs on behalf of the electing
party, whereupon the termination election shall be null and void, this Lease
shall remain in full force and effect, and the non-electing party shall complete
the required alterations at its sole expense within the time limits and in the
manner required by the applicable law. Prior to the commencement date, Landlord
shall, at Landlord's expense, obtain any requisite subdivision approvals
rendered necessary by making of this Lease. In case either party, after the time
required to remedy defaults under this Lease, shall fail or neglect to comply
with the governmental requirements set forth in this Paragraph 6, or any of
them, and required to be complied with by the party, then the other party or its
agents may, by entry if required, comply with any and all of the governmental
requirements at the risk and expense of the defaulting party, and recover such
expense from the defaulting party; any sums owing by Tenant to be added to the
next monthly installment of rent and to be collectible as rent, and any sum
owing by Landlord to be deductible from rents or other sums otherwise payable by
Tenant to Landlord.
7. REPAIRS - (a) Except as provided elsewhere in this Lease, Tenant shall,
at Tenant's expense, maintain and repair the Leasehold Improvements, including
but not limited to heating, air conditioning, pavement, plumbing and electrical
fixtures. Tenant shall also maintain and repair any additions to the Demised
Premises made by Tenant and shall replace glass broken during the term of the
Lease. Tenant shall not clog any plumbing, sewers, waste pipes, drains or water
closets used by Tenant. Tenant shall also, at Tenant's expense, repair all
damage to the walls, ceilings, doors and door frames caused by Tenant's use. All
landscaping shall be maintained by Tenant at its expense. If, within fifteen
(15) days after written notice by Landlord, Tenant fails to provide any
maintenance or repairs required of Tenant and to complete the same with
reasonable diligence, then Landlord may provide such repairs or maintenance for
the account of Tenant and the cost thereof shall be added to the next monthly
installment of rent payable hereunder and shall be collectible as rent. (b)
During all terms of this Lease Landlord shall maintain and repair the
foundation, roof, roof structure, gutters and downspouts, and structural walls
and structural elements of the Leasehold Improvements, and damage due to fire or
casualty, to the extent this Lease requires Landlord to insure against such fire
or casualty. All repairs and maintenance to be made by Landlord shall be at
Landlord's risk and expense.
8. ALTERATIONS BY TENANT - Tenant may, at Tenant's option and Tenant's risk
and expense, make such alterations, additions, and improvements to the Demised
Premises as Tenant may deem necessary for the conduct of Tenant's business
therein; provided, however, that the written approval of Landlord shall be first
obtained, which approval shall not be unreasonably delayed or withheld. Tenant
shall have the right to install a sign on the exterior of the building portion
of the Demised Premises and/or a free standing sign on the Demised Premises
pursuant to all applicable governmental ordinances and subject to the prior
written approval of Landlord. Landlord hereby approves the alterations,
additions and improvements to be constructed on the Demised Premises which are
itemized on Exhibit "D", attached hereto and made a part hereof. Tenant shall
also have the right to make non-structural alterations, additions and
improvements to the Demised Premises without Landlord's written consent provided
said alterations, additions and improvements do not affect any electrical,
plumbing, HVAC, mechanical or other building systems of the Demised Premises,
and the cost therefor does not exceed $50,000.00. Upon the expiration of this
Lease, or earlier termination thereof, Tenant shall be under no obligation to
restore the Demised Premises to their original condition, but all alterations,
additions, or improvements made to or put upon the Demised Premises shall become
the property of the Landlord and shall remain upon and be surrendered with the
Demised Premises as a part thereof. Notwithstanding anything aforesaid, Tenant
shall have the right to install and remove from time to time and at the
termination of this Lease (provided Tenant is not in default under the Lease),
whether the same be attached to the building on the Demised Premises or be
free-standing, Tenant's signs, trade fixtures and equipment, and business
fixtures and equipment, to include, without limitation, moveable office
partitions, and furniture, as well as any building machinery and building
equipment belonging to Tenant, including, without limitation, oil burners and
stokers, free standing heating and electrical fixtures, but excluding HVAC duct
work, attached HVAC, electrical and plumbing fixtures, and permanent walls and
partitions. Tenant shall promptly repair any damage to the Demised Premises
caused by the removal by Tenant of any of Tenant's property therefrom and this
covenant shall survive the expiration or termination of this Lease.
9. LANDLORD'S RIGHT OF ACCESS - Landlord, its agents, servants and
employees shall have the right to enter the Demised Premises during business
hours, with reasonable frequency, for the purpose of inspecting the same to
ascertain whether Tenant is performing the covenants of this Lease, and during
business hours or otherwise in the event of need, under special arrangements
with Tenant, for the purpose of making required repairs, alterations,
improvements or additions, and Landlord shall be allowed to take all material
into and upon the Demised Premises that may be required therefor without the
same constituting an eviction of Tenant in whole or in part, and, except as
otherwise provided, the rent reserved shall in nowise abate while said repairs
are being made by reason of loss or interruption of the business of Tenant
because of the prosecution of any such work. Landlord agrees to cause as little
inconvenience as reasonably possible to Tenant in connection therewith. During
the one hundred eighty (180) days preceding the expiration of this Lease, Tenant
shall permit Landlord or Landlord's agents to show the Demised Premises to
prospective tenants with reasonable frequency during business hours and to place
and keep in one or more conspicuous places upon the exterior of the Demised
Premises, not interfering with Tenant's use of the Demised Premises, a notice in
the usual form "To Let", and a notice in the usual form "For Sale", which
notices Tenant shall permit to remain thereon without molestation. Landlord
and/or their agents, servants and employees and governmental authorities shall
have the right to enter the Demised Premises during business hours for the
purpose of conducting the remediation pursuant to the Plan, as it may be
modified from time to time, and for inspections related thereto.
LANDLORD'S LIMITATION OF LIABILITY- TENANT'S INDEMNITY
(a) Landlord shall not be liable for any damage or injury to the person,
business (or any loss of income therefrom), goods, wares, merchandise or other
property of Tenant, Tenant's employees, invitees, customers or any other person
in or about the Demised Premises, whether such damage or injury is caused by or
results from:
(i) Fire, steam, electricity, water, gas or rain;
(ii) The breakage, leakage, obstruction or other defects of pipes,
sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures
or any other causes;
(iii) Conditions arising in or about the Demised Premises or upon other
portions of the building of which the Demised Premises are a part, or from other
sources or places, not caused by or resulting from Landlord's breach of the
Lease; or
(iv) Any act or omission of any other tenant of any portion of the building
of which the Demised Premises are a part.
(b) Tenant shall defend, indemnify and save harmless Landlord and its
agents and employees against and from all liabilities, obligations, damages,
penalties, claims, costs, charges and expenses, including reasonable attorneys'
fees, which may be imposed upon or incurred by or asserted against Landlord
and/or its agents by reason of any of the following occurring during the term of
the Lease or during any period of time prior to the Commencement Date that
Tenant may have been given access to or possession of all or any part of the
Demised Premises: (i) any work or thing done in, on or about the Demised
Premises or any part thereof by or at the instance of Tenant, its agents,
contractors, subcontractors, servants, employees, licensees or invitees; (ii)
any negligence or otherwise wrong act or omission on the part of Tenant or any
of its agents, contractors, subcontractors, servants, employees, subtenants,
licensees or invitees; (iii) any accident, injury or damage to any person or
property occurring in, on or about the Demised Premises or any part thereof;
(iv) any failure on the part of Tenant to perform or comply with any of the
covenants, agreements, terms provisions, conditions or limitations contained in
this its part to be performed or complied with. In case any action or proceeding
is brought against Landlord by reason of any such claim, Tenant, upon written
notice from Landlord, shall, at Tenant's expense, resist or defend such action
or proceeding by counsel approved by Landlord in writing, which approval
Landlord shall not unreasonably withhold.
Lease on
The indemnification of this Paragraph 10(b) shall survive the expiration or
termination of this Lease.
Notwithstanding the provisions of this Paragraph 10(b), Tenant shall not
defend, indemnify nor save harmless, the Landlord for the negligence or willful
misconduct of Landlord or Landlord's agents and employees.
11. DESTRUCTION BY FIRE OR OTHER CAUSES - Landlord shall, at Landlord's
expense, provide and maintain adequate insurance on the Demised Premises (being
not less than eighty per cent (80k) of actual replacement value and sufficient
to meet co-insurance requirements) against loss or damage by fire, with extended
coverage endorsement. Tenant shall reimburse and pay Landlord during the term,
as they become payable, the premiums for such fire insurance (fairly apportioned
if lease periods and premium periods do not coincide). Payment of such premiums
shall constitute additional rent payable by Tenant to Landlord on the first rent
payment date not less than thirty (30) days after presentation to Tenant of a
receipted bill for such premiums; and in default by Tenant, Landlord may collect
the same as rent. In the event of such a loss, Landlord shall receive and apply
all the proceeds thereof to repair the damages. Landlord will undertake
immediately the repair and reconstruction of the Demised Premises at Landlord's
expense and will complete such work with due and reasonable diligence. During
the period commencing with the date the damage occurred and ending with the
completion of the requisite repairs or restoration, the rent payable hereunder
shall abate and the obligation of Tenant to pay the same shall cease to the
extent and in proportion to the area rendered untenantable by the damage or by
the work or restoration and repair. All policies shall contain a clause
providing Tenant shall not be liable to the Landlord or Landlord's assignees for
damages by fire or other casualty within the coverage of insurance described in
the standard fire insurance policy with extended coverage available to Landlord
even if the damage be caused by the negligence or default of Tenant, Tenant's
employees, agents or invitees; provided, however, that if any insurance carrier
does not permit such waiver of the right of subrogation, Tenant shall be named
as an insured under Landlord's policy, at no cost to Tenant.
LIABILITY INSURANCE - WAIVER OF SUBROGATION
(a) Tenant shall at all times during the term of this Lease carry public
liability insurance covering the Demised Premises which insurance shall insure
against liability for personal injury or death and property damage in an amount
not less than Three Million Dollars ($3,000,000.00). Landlord shall be named as
an additional insured on any such policy and the coverage shall require the
insurance company to provide thirty (30) days prior written notice to Landlord
of its intent to cancel the policy. In the event Tenant fails to maintain the
coverage required by this paragraph, Landlord shall have the right to provide
coverage and Tenant shall reimburse Landlord for said expenditure at the time of
the next rent payment. The insurance company used by Tenant for the public
liability insurance required by this paragraph shall be approved by Landlord,
which consent shall not be unreasonably delayed or withheld. A copy of the
policy or certificate of insurance shall be delivered to Landlord by Tenant
prior to the Commencement Date and prior to the expiration of any such policy
during the term of the Lease.
(b) All insurance which is carried by either party with respect to the
Demised Premises, whether or not required, shall include provisions which either
designate the other party as one of the insureds or deny to the insurer
acquisition by subrogation of rights of recovery against the other party to the
extent such rights have been waived by the insured party prior to occurrence of
loss or injury, insofar as, and to the extent that such provisions may be
effective without making it impossible to obtain insurance coverage from
responsible companies qualified to do business in the state in which the Demised
Premises are located (even though extra premium may result therefrom). Each
party shall be entitled to have duplicates or certificates of any policies
containing such provisions. Each party hereby waives all rights of recovery
against the other for loss or injury against which the waiving party is or may
be protected by insurance containing said provisions.
13. HEAT. LIGHT. TAXES - (a) Tenant shall pay all charges for gas, steam,
electricity, water and other utilities and services, and including trash removal
and sewage charges used in connection with the Demised Premises during the term
of this Lease. Landlord covenants and agrees that all such utilities (including
both storm, if available, and sanitary sewers) shall be available to the Demised
Premises and shall be in good working order at the commencement date. Tenant
acknowledges and agrees that it is accepting any interior fixtures related to
the utilities in "as is" condition.
(b) Landlord shall bear the cost of and pay when due and in time to take
advantage of all discount allowances if any, otherwise before any of the same
shall be in default or carry interest or penalties for late payment, all real
estate taxes and Middle Rio Grande Conservancy District fees (hereinafter
collectively "real estate taxes") assessed against the Demised Premises and the
Leasehold Improvements and against any entire premises of which the Demised
Premises may be a part. During all terms of this Lease, Tenant shall annually
pay Landlord for all real estate taxes assessed against the Demised Premises,
within thirty (30) days after receipt by Tenant of the paid tax bill. Such
amount shall constitute additional rent under this Lease.
Landlord shall bear the cost of and pay when due all assessments against
the Demised Premises for municipal or public improvements and service
facilities.
In consideration of Tenant's undertaking to reimburse Landlord for the real
estate taxes on the Demised Premises, Landlord agrees as follows with Tenant
with respect to such real estate taxes:
(i) Tenant shall have the right, in good faith, by appropriate proceedings,
to contest any assessment or reassessment, or the real estate taxes, or the
validity of either, or of any increase in the assessment, or the rate and,
provided this may lawfully be done, and if Tenant provides Landlord with
appropriate security, Landlord shall withhold payment of the real estate taxes
as directed by Tenant in writing in any case where Tenant shall have notified
Landlord of Tenant's intention to make a contest as aforesaid.
(ii) Landlord shall, within five (5) days after learning of any increase or
change in the assessment, the rate or the real estate taxes, advise Tenant in
writing thereof and Tenant shall, within ten (10) days of the receipt of said
notice from Landlord/ advise Landlord in writing in the event Tenant elects to
make a contest.
(iii) In the contest, Tenant is authorized to act in its own name and in
the name of Landlord, if legally necessary or desirable to use Landlord's name,
and Landlord agrees that it will, at Tenant's request, provided it is not put to
any expense thereby, cooperate with Tenant in any way Tenant may reasonably
require in connection with such contest.
(iv) Any contest conducted by Tenant hereunder shall be at Tenant's expense
and in the event any penalties, interest or late charges become payable with
respect to the real estate taxes as the result of such contest, Tenant shall
reimburse Landlord for the same.
(v) If Tenant shall have given Landlord notice of Tenant's intent to make
such a contest and in the further event that it becomes proper and appropriate
for Landlord to pay the real estate taxes as to which the contest relates,
Landlord shall nevertheless make the payment under protest and Tenant shall
reimburse Landlord within thirty (30) days for said payment.
14. EMINENT DOMAIN - If the whole or any part of the Demised Premises shall
be taken by lawful authority for any public or a quasi-public use or purpose
this Lease shall, as to the part so taken, terminate on the date title shall be
acquired, and the rent reserved shall abate fairly and in proportion to the part
so taken and shall entirely abate if the entire Demised Premises is taken. In
all cases of a partial taking of the Demised Premises (except for a minor street
widening not injurious to the use of the Demised Premises by Tenant) Tenant may,
at its election, by delivering written notice to the effect to Landlord,
terminate this Lease and vacate the Demised Premises, and in that event, the
liability of Tenant for performance of the Lease shall terminate and come to an
end and all rents shall abate. Any award or compensation given in connection
with the taking of the land or building shall be allocated between Landlord and
Tenant fairly and equitably and without giving preference to either party,
taking into consideration the respective interests of the parties in the real
property comprising the Demised Premises and the Leasehold Improvements, the
portion or portions of the property taken, the utility of any remaining premises
and the income of the parties therefrom, the extent of abatement of the rent,
the period Tenant may continue in possession after the taking and the terms and
circumstances of such occupancy, the extent Landlord is deprived of income, the
remainder of the term of the Lease, the value of Landlord's reversionary
interest, the value or Tenant's leasehold interest, the value of the land taken,
the depreciated cost of the Leasehold Improvements and all other relevant
matters; which determination shall be made, if the parties cannot agree, by and
in accordance with the procedures of the American Arbitration Association upon
application by either party. Any amount due upon any mortgage on the property
shall be charged against and paid out of the share of Landlord in the award.
Notwithstanding the aforesaid, any award for the taking of the personal property
and fixtures of Tenant and any award for the cost of moving and moving expenses,
shall belong to and be paid exclusively to Tenant.
15. TENANT'S RIGHT TO PERFORM - In the event Landlord violates or fails to
perform any material provision or agreement of the Lease to be performed or
complied with by Landlord and fails to undertake to cure any violation or
failure to perform within fifteen (15) days after written notice thereof to
Landlord, and to complete the same with reasonable diligence, Tenant may, in
addition to all remedies available to it, be entitled to perform on behalf of
Landlord and deduct from the rent any expenses thereby incurred, or if Tenant
elected to do so Tenant shall have the right to cancel and terminate this Lease
at any time after expiration of said fifteen (15) day period while the violation
or failure continues, provided Landlord is not exercising reasonable diligence
to cure the violation or failure. Tenant may also pay any installments of any
mortgage debt against or including the Demised Premises if Landlord is in
default and deduct all such payments from the rent.
16. SUBORDINATION - This Lease and all the rights of Tenant hereunder are
and shall be subject and subordinate at all times to the lien or liens of any
and all mortgages in any amount or amounts whatsoever placed on the Demises
Premises or larger premises of which the Demised Premises form a part, either
prior or subsequent to the date hereof, provided that the mortgagee agrees with
Tenant by writing delivered to Tenant, that Tenant shall not be disturbed in
possession and this Lease shall remain in full effect as long as Tenant performs
its obligation hereunder. It shall not be necessary for Tenant to execute any
further instrument or act to effectuate such subordination, but Tenant shall
execute and deliver upon demand such further instrument or instruments
evidencing such subordination of this Lease as may be desired by any mortgagee
or proposed mortgagee, or necessary to effectuate the provisions of this
Paragraph 16, which also contains the above-mentioned non-disturbance provision.
17. NON-WAIVER OF LANDLORD'S OR TENANT'S RIGHTS - The failure of either
Landlord or Tenant to insist upon strict performance of any of the covenants or
conditions of this Lease or to exercise any right herein conferred in any one or
more instances, shall not be construed as a waiver or relinquishment for the
future of any such covenants, conditions or rights, but the same shall be and
remain in full force and effect.
18. QUIET ENJOYMENT - Landlord covenants that Tenant on paying the rent and
performing the covenants aforesaid shall and may peaceably and quietly have,
hold and enjoy the said Demised Premises for all terms aforesaid.
l9. SURRENDER - Tenant shall quit and surrender the Demised Premises at the
expiration of the term, broom clean and in good order and condition, ordinary
wear and use, damage by fire or other casualty and repair and replacement
obligations of Landlord excepted.
20. NOTICES - Any notice given pursuant to this Lease shall be valid only
if given in writing by registered or certified mail, return receipt requested,
with sufficient postage attached. Notices to Landlord shall be addressed to:
George Brunacini
P.O. Box 6992
Albuquerque, NM 87197
with copy to:
Hunt, Reecer & Davis, P.C.
Attn: Kenneth A. Hunt, Esq.
P.O. Box 30088
Albuquerque, NM 87190-0088
Notices to Tenant shall be addressed to:
Circuit City Stores, Inc.
9950 Mayland Drive
Richmond, VA 23233
Attention: Corporate Secretary
and
Circuit City Stores, Inc.
9950 Mayland Drive
Richmond, VA 23233
Attention: Vice President - Real Estate
The date of any notice provided for in this Lease shall be the date
received by the addressee. The person and place to which notice may be given may
be changed from time to time by Landlord or Tenant respectively upon written
notice to the other, effective five (5) days after delivery of such notice.
21. SUCCESSORS AND ASSIGNS - ENTIRE AGREEMENT - The terms, agreements,
covenants and conditions contained in the Lease are binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
assigns. This Lease constitutes the entire understanding between the parties
hereto and the parties shall not be bound by any agreements, understandings or
conditions respecting the subject matter hereof other than those expressly set
forth in this Lease.
22. ALTERATIONS BY LANDLORD - (a) Landlord shall, at Landlord's sole cost,
construct on the Land in compliance with all applicable laws and governmental
requirements, the Leasehold Improvements.
(b) The Leasehold Improvements shall be completed by Landlord and
possession of the entire Demised Premises, together with a Certificate of
Occupancy, if required, shall be tendered by Landlord to Tenant on the
Commencement Date. For each week or portion of a week Landlord does not deliver
possession of the Demised Premises in accordance with this Paragraph 22, Tenant
shall receive one (1) month's free rent.
(c) Landlord shall and does hereby warrant, for the period of one (1) year
following the Commencement Date or date of delivery of the Demised Premises to
Tenant, if after the Commencement Date ("Warranty Date"), the materials,
equipment and workmanship of the Leasehold Improvements required of Landlord
under this Lease and Landlord shall repair or replace all materials, equipment
and workmanship related thereto found to be defective within one (1) year
following the Warranty Date.
(d) Tenant may, without payment of rent, enter the Demised Premises prior
to the Commencement Date solely for the purpose of preparing the Demised
Premises for use by Tenant, but Tenant shall not interfere with the work being
performed by Landlord, and provided Tenant has liability insurance as required
by Paragraph 12 hereinabove in place. No such occupancy shall be deemed an
acceptance of the Demised Premises nor a waiver of any failure by Landlord to
complete any of the Leasehold Improvements required by this Lease.
(e) Upon completion of the Leasehold Improvements, delivery of a
Certificate of Occupancy, if required, and acceptance of possession, Landlord
and Tenant shall execute Exhibit "C" specifying the Commencement Date of this
Lease.
23. CONDITION OF DEMISED PREMISES - Tenant's acceptance of possession of
the Demised Premises shall constitute Tenant's acknowledgement that the Demised
Premises meet the requirements of Exhibit "B" and Paragraph 22, subject to the
warranty of Landlord provided for in Paragraph 22(c).
24. HOLDOVER - In the event Tenant holds over after expiration or other
termination of this Lease, rent shall increase to one and one-half (1 1/2) times
the then current monthly rent and additional rent. Further, Tenant's occupancy
shall be on a month-to-month basis for the period of the actual holdover, and
any resulting holdover may be terminated by either party at any time on thirty
(30) days written notice.
25. TIME TO R D Y DEFAULT-LATE PAYMENT PENALTY - Landlord shall have no
right to exercise any remedy for default by Tenant under this Lease, and Tenant
shall not be, or be deemed to be, in default unless and until Landlord shall
give to Tenant the prescribed notice by mail, addressed to Tenant at the place
of notices to be given as herein provided, specifying the default and (a) if the
default is in payment of money, unless Tenant fails to remedy the default within
ten (10) days after receipt of such notice, or (b) if the default is other than
in payment of money, unless Tenant fails to begin to cure the default within
fifteen (15) days after receipt of the notice and to proceed expeditiously to
cure the default. A late payment penalty of 5k of any overdue amount required to
be paid by Tenant pursuant to this Lease, shall be assessed on any payment that
is not received by Landlord within five (5) days of its due date.
26. REMEDIES OF LANDLORD FOR DEFAULT - On the occurrence of any material
default by Tenant, Landlord may at any time thereafter, after appropriate notice
as provided for herein, exercise any right or remedy which Landlord may have,
including:
(a) Terminate Tenant's right to possession of the Demised Premises by any
lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Demised Premises to Landlord. In such
event, Landlord shall be entitled to recover from Tenant all damages incurred by
Landlord by reason of Tenant's default, including (i) the worth at the time of
the award of the unpaid rent and other charges which have been earned at the
time of the termination; (ii) the worth at the time of the award of the amount
by which the unpaid rent and other charges which would have been earned after
termination until the time of the award exceeds the amount of such rental loss
that Tenant proves could have been reasonably avoided, provided however, this
remedy shall only be available to Landlord if Tenant fails, within ten (10) days
after written notice to Tenant, to pay any rent deficit on a monthly basis for
the remainder of the Lease term; (iii) the worth at the time of the award of the
amount by which the unpaid rent and other charges which would have been paid for
the balance of the term after the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided; and (iv) any
other amount necessary to compensate Landlord for all the detriment proximately
caused by Tenant's failure to perform its obligations under the terms of this
Lease or which in the ordinary course of things would be likely to result
therefrom, including, but not limited to, any costs or expenses incurred by
Landlord in maintaining or preserving the Demised Premises after such default,
the costs of recovering possession of the Demised Premises, expenses of
reletting, including necessary renovations or alterations of the Demised
Premises, Landlord's reasonable attorneys' fees incurred in connection
therewith, and any real estate commission paid or payable. As used in sub-parts
(i) and (ii) above, the "worth at the time of the award" is computed by allowing
interest on the unpaid amounts at the rate of 15% per annum, or such lesser
amount as may then be the maximum lawful rate. As used in sub-part (iii) above,
the "worth at the time of the award" is computed by discounting such amount at
the discount rate of the Federal Reserve Bank of Kansas City at the time of the
award, plus A. If Tenant shall have abandoned the Demised Premises, Landlord
shall have the option of (i) retaking the possession of the Demised Premises and
recovering from Tenant the amounts specified in this paragraph or (ii)
proceeding under paragraph (b) hereinafter;
(b) Maintain Tenant's right to possession, in which case this Lease shall
continue in effect whether or not Tenant shall have abandoned the Demised
Premises. In such event, Landlord shall be entitled to enforce all of Landlord's
rights and remedies under this Lease, including the right to recover the rent as
it becomes due hereunder;
(c) pursue any other remedy now or hereafter available to Landlord under
the laws or judicial decisions of the State of New Mexico.
27. ATTORNEY'S FEES - The non-prevailing party in any judicial proceedings
to enforce the provisions of the Lease shall pay the reasonable attorney's fees
and court costs of the prevailing party.
28. SEVERABILITY - A determination by a court of competent jurisdiction
that any provision of this Lease or any part hereof, is illegal or
unenforceable, shall not cancel or invalidate the remainder of such provision or
this Lease, which shall remain in full force and effect.
29. CHOICE OF LAW - The laws of the State of New Mexico shall govern this
Lease.
30. FORCE MAJEURE - I f Landlord or Tenant cannot perform any of their
respective obligations under the terms of this Lease due to event(s) beyond
their control, the time provided for performance of such obligations shall be
extended by a period of time equal to the duration of such event(s). If either
party to the Lease desires to invoke the provisions of this subparagraph, it
shall provide written notice to the other party of the reasons for the delay and
the invoking party shall use best reasonable efforts to mitigate the effects of
such occurrence. Event(s) beyond Landlord's or Tenant's control include, but are
not limited to, acts of God, war, civil commotion, labor disputes, strikes,
fire, flood, or other casualty, shortages of labor and materials, government
regulation or restriction and weather conditions, but shall in no event include
defaults due to Landlord's or Tenant's failure to meet their respective monetary
obligations hereunder.
31. ENVIRONMENTAL COMPLIANCE
(a) As used in this Lease, the following terms shall have the meaning
indicated below:
(i) "Hazardous Material"
means any substance:
(1) the presence of which requires investigation or remediation under any
federal, state or local statute, regulation, ordinance, order, action, policy or
common law; or
(2) which is or becomes defined as a "hazardous waste", "hazardous
substance", pollutant or contaminate under any federal, state or local statute,
regulation, rule or ordinance or amendments thereto including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act (42 U.S.C. Section 9601 et sea.); or
(3) which is toxic, explosive, corrosive, flammable, infectious,
radioactive, carcinogenic, mutagenic, or otherwise hazardous and is or becomes
regulated by any governmental authority, agency, department, commission, board,
agency or instrumentality of the United States, the State of New Mexico or any
political subdivision thereof; or
(4) the presence of which on the Demised Premises causes or threatens to
cause a nuisance upon the Demised Premises or to adjacent properties or poses or
threatens to pose a hazard to the health or safety of persons on or about the
Demised Premises; or
(5) the presence of which on adjacent properties could constitute a
trespass; or
(6) without limitation which contains gasoline, diesel fuel or other
petroleum hydrocarbons; or
(7) without limitation which contains polychlorinated bipheynols (PCBs),
asbestos or urea formaldehyde foam insulation.
(ii) "Environmental Requirements" means all applicable present and future
statutes, regulations, rules, ordinances, codes, licenses, permits, orders,
approvals, plans, authorizations, concessions, franchises, and similar items, of
all governmental agencies, departments, commissions, boards, bureaus, or
instrumentalities of the United States, states, tribes and political subdivision
thereof and all applicable judicial, administrative, and regulatory decrees,
judgments, and orders relating to the protection of human health or the
environment, including, without limitation:
(A) All requirements, including but not limited to those pertaining to
reporting, licensing, permitting, investigation, and remediation of emissions,
discharges, releases, or threatened releases of "Hazardous Material", chemical
substances, pollutants, contaminants, or hazardous or toxic substances,
materials or wastes whether solid, liquid, or gaseous in nature, into the air,
surface water, groundwater, or land, or relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
chemical substances, pollutants, contaminants, or hazardous or toxic substances,
materials, or wastes, whether solid, liquid, or gaseous in nature including
without limitation any such requirements arising under the following, and all
regulations promulgated thereunder or in connection therewith:
Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42
U.S.C. 9601 et seq. ("CERCLA")
Resource Conservation and Recovery Act of 1976, 42 U.S.C. 6901 et seq. ..
Clean Air Act, 42 U-.S.C. 7401-7626
Water Pollution Control Act (commonly referred to as the Clean Water Act),
33 U.S.C. 1251 et seq.
Federal Insecticide, Fungicide, and Rodenticide Act, as amended by the
Federal Environmental Pesticide Control Act of 1972 and by the Federal Pesticide
Act of 1978, 7 U.S.C. 136 et sea.
Toxic Substance Control Act, 15 U.S.C. 2601 et seq.
Safe Drinking Water Act, 42 U.S.C. 300(f) et seq.
Water Quality Act, 74-6-1 et sea., NMSA 1978
Air Quality Control Act, 74-2-1 et seq., NMSA 1978
Radiation Protection Act, 74-3-1 et seq., NMSA 1978
Pesticide Control Act, 76-4-1 et seq., NMSA 1978
Solid Waste Act, 74-9-1 et seq., NMSA 1978
Hazardous Waste Act, 74-1-1 et seq., NMSA 1978
Ground Water Protection Act, 74-6B-1 et seq., NMSA 1978
Radioactive and Hazardous Materials Act, 74-4A-2 et sea., NMSA 1978;
and
(B) All requirements pertaining to the protection of the health and safety
of employees or the public, including;
(iii) "Environmental Damages" means all claims, judgments, damages, losses,
penalties, fines, liabilities (including strict liability), encumbrances, liens,
costs, and expenses of investigation and defense of any claim, whether or not
such claim is ultimately defeated, and of any good faith settlement, of whatever
kind or nature, contingent or otherwise, matured or unmatured, foreseeable or
unforeseeable, including without limitation reasonable attorney's fees and
disbursements and consultant's fees, any of which are incurred at any time as a
result of the existence of "Hazardous Material" upon, about, or beneath the
Demised Premises or the property of which the Demised Premises are a part
(collectively, the "Property") or migrating or threatening to migrate to or from
the Property, or the existence of a violation of "Environmental Requirements"
pertaining to the Property, including without limitation:
(1) Damages for personal injury, or injury to property or natural resources
occurring upon or off of the Demises Premises or the Property, foreseeable or
unforeseeable, including, without limitation, lost profits, consequential
damages, the cost of demolition and rebuilding of any improvements on real
property, interest and penalties;
(2) Fees incurred for the services of attorneys, consultants, contractors,
experts, laboratories and all other costs incurred in connection with the
investigation or remediation of such "Hazardous Material" or violation of
"Environmental Requirements", including, but not limited, to the preparation of
any feasibility studies or reports or the performance of any cleanup,
remediation, removal, response, abatement, containment, closure, restoration or
monitoring work required by any federal, state, tribal or local governmental
agency or political subdivision, or reasonably necessary to make full economic
use of the Demised Premises or the Property or any other property or otherwise
expended in connection with such conditions, and including without limitation
any attorney's fees, costs and expenses incurred in enforcing this Lease or
collecting any sums due hereunder;
(3) Liability to any third person or governmental agency to indemnify such
person or agency for costs expended in connection with the items referenced in
subparagraph (ii) herein; and
(4) Diminution of the value of the Demised Premises or the Property, and
damages for the loss of business and restriction on the use of or adverse impact
on the marketing of the Property.
(b) Tenant, its successors, assigns and guarantors, agree to indemnify,
defend, reimburse and hold harmless: (i) Landlord; and (ii) the directors,
officers, shareholders, employees, partners, agents, contractors,
subcontractors, experts, licensees, affiliates, lessees, mortgagees, trustees,
heirs, devisees, successors, assigns and invitees (collectively "Affiliates") of
Landlord, from and against (1) any and all "Environmental Damages" arising from
the presence of "Hazardous Material" upon, about or beneath the Demised Premises
or the Property or migrating to or from the Property, or arising in any manner
whatsoever out of the violation of any "Environmental Requirements" pertaining
to the Property and the activities thereon, either of which conditions arise
following Tenant's execution of this Lease, but only to the extent such
"Environmental Damages" arise as a result of the activities of Tenant or its
Affiliates, or any assignee or subtenant of Tenant or the Affiliates of any such
assignee or subtenant, and (2) the breach of any warranty or covenant or the
inaccuracy of any representation of Tenant contained in this Lease.
Tenant's indemnification obligation shall include, but not be limited to,
the burden and expense of defending all claims, suits and administrative
proceedings (with counsel reasonably approved by the indemnified parties), even
if such claims, suits, or proceedings are groundless, false or fraudulent, and
conducting all negotiations of any description, and paying and discharging, when
as the become due, any and all judgments, penalties or other sums due against
such indemnified persons.
The obligations of Tenant in this Paragraph 31(b) shall survive the
expiration or termination of this Lease. The obligations of Tenant under this
Paragraph 31(b) shall not be affected by any investigation by or on behalf of
Landlord, or by any information which Landlord may have or obtain with respect
thereto.
(c) Except as otherwise modified by this Lease, Landlord, its successors,
assigns and guarantors, agree to indemnify, defend, reimburse and hold harmless:
(i) Tenant; and (ii) the directors, officers, shareholders, employees, partners,
agents, contractors, subcontractors, experts, licensees, affiliates, lessees,
mortgagees, trustees, heirs, devisees, successors, assigns and invitees
(collectively "Affiliates") of Landlord, from and against (1) any and all
"Environmental Damages" arising from the presence of "Hazardous Material" upon,
about or beneath the Demised Premises or the Property or migrating to or from
the Property, or arising in any manner whatsoever out of the violation of any
"Environmental Requirements" pertaining to the Property and the activities
thereon, either of which conditions arise following Landlord's execution of this
Lease, but only to the extent such "Environmental Damages" arise as a result of
the activities of Landlord or its Affiliates, or any assignee or subtenant of
Landlord or the Affiliates of any such assignee or subtenant; and (2) the breach
of any warranty or covenant or the inaccuracy of any representation of Landlord
contained in this Lease; (3) any and all "Environmental Damages" arising from
the presence of "Hazardous Materials upon, about or beneath the Demised Premises
or the Property or migrating to or from the Property, or arising in any manner
whatsoever out of the violation of any "Environmental Requirements" pertaining
to the Property and the activities thereon prior to the Commencement Date.
Landlord's indemnification obligation shall include, but not be limited to,
the burden and expense of defending all claims, suits and administrative
proceedings (with counsel reasonably approved by the indemnified parties), even
if such claims, suits, or proceedings are groundless, false or fraudulent, and
conducting all negotiations of any description, and paying and discharging, when
as the become due, any and all judgments, penalties or other sums due against
such indemnified persons.
The obligations of Landlord in this Paragraph 31(c) shall survive the
expiration or termination of this Lease. The obligations of Landlord under this
Paragraph 31(c) shall not be affected by any investigation by or on behalf of
Tenant, or by any information which Tenant may have or obtain with respect
thereto.
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
duly executed and their respective seals to be hereunto affixed as to she day
and year first above written.
TENANT:
CIRCUIT CITY STORES, INC., a Virginia corporation
By:
Its: Vice President
STATE OF NEW MEXICO )
)
COUNTY OF BERNALILLO)
This instrument was acknowledged before me this 14th day of March, 1995, by
GEORGE BRUNACINI and JEANNETTE BRUNACINI, Husband and wife.
MY COMMISSION EXPIRES:
STATE OF VIRGINIA)
)
COUNTY OF HENRICO)
This instrument was acknowleged before me this 18TH day of March, 1995, by
Benjamin B. Cummings, Jr., Vice President of CIRCUIT CITY STORES, INC., a
Virginia corporation.
MY COMMISSION EXPIRES:
5/31/95
JOYCE C. WOODSEN
NOTARY PUBLIC
EXHIBIT "A"
Legal Description
Lot C-4B1, Albuquerque Industrial Park Site, Albuquerque, New Mexico as the
same is shown and designated on the Plat of Lots C-4B1 and C-4B2 filed in the
office of the County Clerk of Bernalillo County, New Mexico on December 29,
1989, Plat Book C40, folio 80.
EXHIBIT "B"
Leasehold Improvements
ATTACHED HERETO
EXHIBIT "C"
Commencement Date
Statement
TO BE ATTACHED
EXHIBIT "D"
Tenant Improvements
TO BE ATTACHED
ADDENDUM TO LEASE
THIS ADDENDUM is entered into effective April 3 9 , 1995, by and between
GEORGE BRUNACINI and JEANNETTE BRUNACINI, husband and wife ("Landlord'), and
CIRCUIT CITY STORES, INC., a Virginia corporation (" Tenant").
WHEREAS, Landlord and Tenant entered into a lease dated March 14, 1995
("Lease") involving the Premises described as Lot C-4B1, Albuquerque Industrial
Park; and
WHEREAS, the parties desire to amend certain terms and conditions of the
Lease.
NOW, THEREFORE, in consideration of the above and other good and valuable
consideration, the receipt of which is hereby acknowledged, it is agreed as
follows:
A new paragraph 32. shall be added to the Lease which will read as follows:
32. MANAGEMENT FEES - Tenant shall pay to Landlord, or such other
management company as Landlord shall designate, a management fee not to exceed
three percent (3a) of the rent designated in Paragraph 4 of the Lease, which
shall be payable monthly at the time the rent is due and payable.
2. Except as herein modified and amended, the remaining terms and
conditions of the Lease shall remain in full force and effect.
IN WITNESS WHEREOF, the undersigned have executed this document the
effective date set forth hereinabove.
LANDLORD:
GEORGE BRUNACINI
JEANNETTE BRUNACINI
TENANT:
CIRCUIT CITY STORES, INC., a Virginia corporation
By: Benjamin B. Cummings, Jr.
Its: Vice President
EXHIBIT 10.7
ASSIGNMENT OF LEASE
COMES NOW, George Brunacini and wife, Jeannette Brunacini, as "Assignor",
of the certain Lease by and between George George Brunacini and wife, Jeannette
Brunacini, as Lessor and Circuit City Stores, Inc., a Virginia corporation as
Lessee dated March 14, 1995,(the "Lease") and hereby assigns its interest in
said Lease to Westland Development Co., Inc., a New Mexico corporation, as
Assignee, which assignment is subject to all the terms, conditions, obligations
and addendums thereto as set forth in said Lease, a copy of which is attached
hereto as Exhibit 1.
In Witness Whereof the undersigned has set its hand as of this day of June,
1995.
George Brunacini
Jeannette Brunacini
STATE OF NEW MEXICO )
)SS.
COUNTY OF BERNALILLO)
The foregoing instrument was acknowledged, sworn to and subscribed before
me this 28th day of June 1995, by the aforesaid George Brunacini and Jeannette
Brunacini.
Maxine M. Brunacini
Notary Public
My Commission Expires
July 18, 1995
