1
EXHIBIT 10.22
LEASE
THIS LEASE, dated this 1st day of July, 1997, is made and entered into
by and between XXXXXX FAMILY INVESTMENTS, L.L.C., a South Dakota limited
liability company, hereinafter referred to as "Landlord", and XXXXXX DRUG CO.,
A/K/A XXXXXX WHOLESALE DRUG COMPANY, a South Dakota corporation, hereinafter
referred to as "Tenant".
1. Premises
Landlord hereby leases to Tenant, and Tenant hereby leases from
Landlord, for the term and subject to the agreements, conditions and provisions
hereinafter set forth, to each and all of which Landlord and Tenant hereby
mutually agree, all that certain real property, together with all improvements
thereon, without limitation, as follows:
Lot A of Tract 2 of Sioux Empire Development Park Two Addition to the
City of Sioux Falls, Minnehaha County, South Dakota, according to the
recorded plat thereof.
For the sake of convenience, except when the context provides otherwise, the
foregoing real property and improvements are herein collectively called "the
premises", "the demised premises" or "the leased premises".
2. Term
(a) The term of this Lease shall commence on the 1st day of July,
1997, and shall end June 30, 2006.
(b) Tenant shall have the option to extend the term of this Lease for
not less than the entire premises leased at the end of the initial term on all
the provisions contained herein (except the renewal provisions) for two (2)
separate ten year (10-year) renewal periods by giving to Landlord notice of the
exercise of such option at least ninety (90) days prior to the expiration of The
Initial term or the initial extended term; provided, however, that if Tenant is
in default on the date of the giving of such option notice or this Lease is not
otherwise in full force and effect, the option notice shall be totally in
effective or, if Tenant is in default on the date as of which the extended term
is to commence, such extended term shall not commence and this Lease shall
expire at the end of the initial term or the initial extended term then in
effect. The Base Rent payable during the extended term(s) hereof shall be
subject to Landlord's and Tenant's agreement and in no event less than the then
prevailing rental paid by Tenant at the expiration of the initial term of this
Lease or the initial extended term, as the case may be, adjusted as of the
commencement of the extended term for which the option is exercised, both
otherwise such extended term(s) shall be upon the same terms and conditions as
set forth herein.
DUPLICATE ORIGINALS
1
2
Upon adjustment of the Base Rent and any other provisions of this lease
in accordance with this Paragraph 2, the parties shall immediately execute an
amendment to this Lease stating such adjustment.
3. Rental
(a) Commencing on the Rental Commencement Date as defined in Paragraph
2(a) above, Tenant shall pay to Landlord, throughout the term of this Lease, the
following amounts as base rental for the premises (the "Base Rent") subject to
adjustment as provided in this Paragraph 3, on or before the 10th day of the
first full calendar month of the term hereof and on or before the tenth day of
each and every successive calendar month thereafter during the term hereof.
The monthly Base Rent for the premises is Ten Thousand Dollars
($10,000.00).
(b) The monthly Base Rent set forth in Paragraph 3(a) above shall be
subject to adjustment annually on each anniversary of the Rental Commencement
Date (the "Adjustment Date") as follows:
The base for computing the adjustment shall be the final Consumer Price
Index for all Urban Consumers in the United States published by the United
States Department of Labor, Bureau of Labor Statistics (the "Index"), which is
published for the month most recently preceding the Rental Commencement Date
("Beginning Index"). If the Index published most recently preceding an
Adjustment Date ("Adjustment Index") has increased or decreased with respect to
the Beginning Index, the monthly Base Rent for the period until the next annual
Adjustment Date shall be set by multiplying the monthly Base Rental by a
fraction, the numerator of which is the Adjustment Index and the denominator of
which is the Beginning Index. In no case shall the monthly Base Rent be less
than the full monthly Base Rent set forth in Paragraph 3(a). On adjustment of
the monthly Base Rent as provided in this Lease, the parties shall immediately
execute an amendment to the Lease stating the new monthly Base Rent.
If the Index is changed so that the base year differs from that used as
of the month most recently preceding the month in which the term commences, the
Index shall be converted in accordance with the conversion factor published by
the United States Department of Labor, Bureau of Labor Statistics. If the Index
is discontinued or revised during the term, such other government index or
computation with which it is replaced shall be used in order to obtain
substantially the same result as would be obtained if the Index has not be
discontinued or revised.
4. Absolutely Net Lease
The parties understand and agree that this Lease is deemed an
absolutely net lease wherein Tenant shall pay and be responsible for all
premises expenses and operating costs including, without limitation, all present
and future costs of any kind paid or incurred in operating, cleaning, equipping,
protecting, lighting, repairing, heating, air-conditioning and maintaining the
premises.
2 DUPLICATE ORIGINALS
3
5. Taxes, Assessments and Public Utilities
Tenant shall pay for all water, light, power, gas, heat, rubbish
removal, telephone service and all other services and utilities supplied now and
in the future to the demised premises and Landlord shall have no responsibility
therefor.
In addition to the monthly rental and other charges to be paid by
Tenant hereunder, Tenant shall reimburse Landlord, upon demand, for any and all
taxes payable by Landlord (other than net income taxes) whether or not now
customary or within the contemplation of the parties hereto: (a) upon, measured
by or reasonably attributable to the cost or value of Tenant's equipment,
furniture, fixtures and other personal property located in the premises or by
the cost or value of any leasehold improvements made in or to the premises by or
for Tenant, regardless of whether title to such improvements shall be in Tenant
or Landlord; (b) upon or measured by the monthly rental payable hereunder
including, without limitation, any gross receipts tax or excise tax levied by
the City of Aberdeen, the County of Xxxxx, the State of South Dakota, the
Federal Government or any other governmental body with respect to the receipt of
such rental; (c) upon or with respect to the possession, leasing, operation,
management, maintenance, alteration, repair, use or occupancy by Tenant of the
premises or any portion thereof. If it shall not be lawful for Tenant so to
reimburse Landlord, the monthly rental payable to Landlord under this Lease
shall be revised to net Landlord the same net rental after imposition of any
such tax upon Landlord as would have been payable to Landlord before the
imposition of any such tax. All taxes and assessments payable for a period
partly within and partly without the term of this Lease shall be prorated
between Landlord and Tenant.
Tenant shall pay, before delinquency, all taxes on all personal
property belonging to or used by Tenant on the premises.
6. Use of Premises
Tenant agrees that the demised premises shall be used and occupied only
as a wholesale warehouse and office facility and for no other purpose or
purposes without Landlord's prior written consent. Tenant shall not do or permit
to be done in or about the premises, nor bring or keep or permit to be brought
or kept therein, anything which is prohibited by or will in any way conflict
with any law, statute, ordinance or governmental rule or regulation now in force
or which may hereafter be enacted or promulgated, or which is prohibited by any
fire insurance policy covering the premises, or will in any way increase the
rate of or affect any fire or other insurance upon the premises or any of its
contents beyond those normally 'in effect for use as a wholesale warehouse and
office facility, or cause a cancellation of any insurance policy covering the
premises or any part thereof or any of its contents. Tenant shall not do or
permit anything to be done in or about the premises for any unlawful purpose,
nor shall Tenant cause, maintain or permit any nuisance in, on or about the
premises or commit or suffer to be committed any waste in, on or about the
premises.
3 DUPLICATE ORIGINALS
4
7. Fixtures and Equipment
Tenant may install in the demised premises, at its own cost and
expense, any fixtures, equipment and signs it deems necessary in addition to
furniture, fixtures and equipment leased herein, for the conduct of said
business, which fixtures, equipment and signs may either be leased by Tenant or
purchased by Tenant from a conditional seller or otherwise. Landlord shall not
be responsible for the safekeeping of any such fixtures, equipment or other
goods. All furniture, fixtures, equipment and signs installed by Tenant in or
about the demised premises shall, at all times, be and remain personal property,
regardless of the method in which the same is affixed to the demised premises,
and shall remain the personal property of the Tenant.
8. Maintenance and repairs
By entry hereunder, Tenant accepts the premises as being in the
condition in which Landlord is obligated to deliver the premises. Landlord has
no obligation and has made no promise to alter, remodel, improve, repair,
decorate or paint the premises or any part thereof. No representations
respecting the condition of the premises have been made by Landlord to Tenant,
except as specifically set forth in this Lease. Except as otherwise provided in
the hereinafter entitled paragraph "Destruction of Premises", Tenant, at all
times during the term hereof and at its condition and repair including, without
limitation, the roof and all exterior walls, all landscaped areas and parking
lots. Tenant agrees, at the expiration of this Lease or upon the earlier
termination thereof, to quit and surrender the leased premises in good condition
and repair, ordinary wear and damage by act of God or war or other causes beyond
the control of Tenant excepted.
Tenant, at its sole cost and expense, shall promptly comply with all
present and future governmental requirements pertaining to the use or occupancy
of the premises. Tenant hereby waives all rights to make repairs at the expense
of the Landlord or in lieu thereof to vacate the premises.
9. Insurance
Tenant shall obtain and maintain in full force during the term hereof,
at its own expense, public liability insurance in minimum amounts of $1,000,000
for injury or death of one person, $1,000,000 for injury or death arising out of
any one occurrence, and $350,000 for damage to property, such coverage to
protect the Tenant and Landlord and any such other persons, firms or
corporations as are designated by Landlord.
Tenant shall also obtain and maintain in full force during the term
hereof at its own expense, fire, extended coverage and special form insurance on
the improvements on the leased premises in an amount equal to not less than one
hundred percent (100%) of the actual replacement cost (exclusive of foundation
and excavation costs) of such improvements, which insurance shall name Landlord
and Tenant as co-insureds and shall contain a loss-payable endorsement in favor
of the beneficiary of any mortgage covering the subject real property and
provide that such policies cannot be cancelled without thirty (30) days prior
notice to such parties.
4 DUPLICATE ORIGINALS
5
Tenant, at its expense, shall maintain for the benefit of landlord
so-called rental value insurance, protecting the Landlord from loss of rent or
income occasioned by damages to the premises as covered by such policies of
insurance, such loss of income to be guaranteed for a period of six (6) months
from the date of occurrence of the damage, in the full amount of all rentals due
and payable under Paragraph 3 above.
Each party hereby waives its entire right of recovery against the other
party for losses which are insured against under-insured policies carried by
each of such parties to the extent expressly permitted by the issuers of such
insurance policies.
All policies of insurance which Tenant is required to carry hereunder
shall be issued by good and responsible companies authorized to write such
insurance in South Dakota and shall provide that no cancellation or material
change in the coverage shall be made except after thirty (30) days prior notice
to Landlord. Tenant may, at its option, satisfy its obligations under this
paragraph by bringing said risks within the coverage of any so-called blanket
policy or policies of insurance which it may now or hereafter carry by an
appropriate amendment, rider, endorsement or otherwise so long as Landlord is
provided a certificate establishing that the coverage allocated to the premises
is in compliance with the terms of this Lease. Copies of all insurance policies
required under the provisions of this Lease shall be delivered to Landlord
punctually.
10. Indemnification
Tenant hereby waives all claims against Landlord for damage to any
property or injury to or death of any person in, upon or about the premises
arising at any time and from any cause except to the extent that such is caused
by the sole and exclusive negligence or willful misconduct of Landlord. Tenant
shall hold Landlord harmless from any damage to any property or injury to or
death of any person arising from the use of the premises by Tenant, except to
the extent that such is caused by the sole and exclusive negligence or willful
misconduct of Landlord and, to such extent, Landlord agrees to hold Tenant
harmless from any such damage, injury or death. The foregoing indemnity
obligations shall include actual attorneys' fees paid or incurred in good faith,
investigation costs and all other reasonable costs and expenses incurred by the
party indemnified from the first notice that any claim or demand is to be made
or may be made. The provisions of this Paragraph 10 shall survive the
termination of this Lease with respect to any damage, injury or death occurring
before such termination.
11. Damage and Destruction of Premises
In the event of a total or partial destruction of the improvements
constructed on the leased premises during the term of the Lease, from any cause
covered by the insurance described in Paragraph 9 of the Lease, Tenant shall
promptly repair the same, but such destruction shall not annul or void the
Lease; provided that the holder of any encumbrance makes the insurance proceeds
available to Tenant or in lieu thereof, the lender may hold said proceeds in
trust to be distributed to Tenant, or Tenant's subcontractors as the work
progresses and Tenant delivers certification of the same. The proceeds received
from the rental value insurance described in said Paragraph 9 shall be paid to
Landlord during the six (6) month period covered by said insurance but,
subsequent to said
5 DUPLICATE ORIGINALS
6
date, the rent reserved to be paid hereunder shall be equitably adjusted
according to the amount and value of the undamaged space. Notwithstanding the
provisions of this Paragraph 11, in the event there is total destruction, or
partial destruction of the extent of fifty percent cent (50%) or more of the
improvements constructed on the leased premises during the last one hundred
twenty (120) days of the initial term, or during the last one hundred twenty
(120) days of the extended term under any option to extend this Lease, Tenant
can elect to terminate this Lease by written notice delivered to Landlord not
more than thirty (30) days after the destruction or damage, provided that in the
event Tenant elects to so terminate, the insurance proceeds payable under the
insurance described in Paragraph 9 shall be the property of the Landlord.
In the event of damage or destruction by any casualty other than a
casualty insured under the insurance referred to hereinabove, Landlord may
restore the premises or, at Landlord's option, may elect to terminate the Lease
and thereupon be released from further obligation under the Lease by giving
written notice thereof to Tenant within twenty (20) days after the occurrence of
such casualty, unless Tenant elects to restore the premises, by written notice
of such election to Landlord, delivered to Landlord within twenty (20) days
after the receipt of Landlord's written election to terminate the Lease, in
which event Tenant shall, as soon as reasonably possible, commence and proceed
diligently to restore the premises substantially to the condition thereof
immediately prior to such damage or destruction. If neither party elects to
restore the improvements, the Lease shall be terminated and thereupon the
Landlord and Tenant shall be released from further obligation thereunder, except
that Landlord shall be obligated to repay Tenant any unused prepaid rent paid to
Landlord.
12. Alterations
Tenant shall not make, or suffer to be made, any alterations, additions
or improvements to or of the premises or any part thereof, without the prior
written consent of the Landlord. Any alterations, additions or improvements to
the premises shall be for Tenant's account on the basis of plans and
specifications approved by Landlord and shall become at once a part of the
realty and shall belong to the Landlord without compensation. If written consent
of the Landlord to any such proposed repairs or alterations by Tenant shall have
been obtained, Tenant agrees to advise Landlord in writing of the date upon
which such repairs or alterations will commence in order to permit Landlord to
post a notice of non-responsibility. Tenant agrees to save and hold Landlord
free and harmless against any liability, loss or damage (and to defend Landlord
by attorneys of Tenant's selection, at Tenant's sole expense) on account of any
mechanic's lien claim for work performed or materials furnished in connection
with such alterations.
13. Assignment and Subletting
Tenant shall not either voluntarily, or by operation of law, assign,
transfer, mortgage, pledge, hypothecate or encumber this Lease or any interest
therein or in the shares of Tenant, and shall not sublet the premises or any
part thereof, or any right or privilege appurtenant thereto, or allow any other
person (the employees, agents, servants and invitees of Tenant excepted) to
occupy or use the premises, or any portion thereof, without first obtaining the
written consent of Landlord, which consent shall not be unreasonably withheld. A
consent to one assignment,
6 DUPLICATE ORIGINALS
7
subletting, occupation or use shall not be deemed to be a consent to any
subsequent assignment, subletting, occupation or use. Consent to any such
assignment or subletting shall in no way relieve Tenant of any liability under
this Lease. Any such assignment or subletting without such consent, whether
direct or indirect, shall be void and shall, at the option of the Landlord,
constitute a default under the terms of this Lease.
In the event that Landlord shall consent to a sublease or assignment
hereunder, Tenant shall pay Landlord all reasonable fees, not to exceed Five
Thousand Dollars ($5,000.00), incurred in connection with the processing of
documents necessary to the giving of such consent.
14. Quiet Enjoyment
The Tenant, upon paying the rent herein provided and performing all and
singular the covenants and conditions of the Lease on its part to be performed,
shall and may peaceably and quietly have, hold and enjoy legal possession to the
demised premises during the term hereof.
15. Events of Default
The occurrence of any one or more of the following events ("Events of
Default") shall constitute a breach of this Lease by Tenant: (a) if Tenant shall
fail to pay any rental when and as the same becomes due and payable and such
failure shall continue for more than three (3) days after Tenant receives notice
of nonpayment from Landlord; or (b) if Tenant shall fail to pay any other sum
when and as the same becomes due and payable and such failure shall continue for
more than ten (10) days after Tenant receives notice of nonpayment from
Landlord; or (c) if Tenant shall fail to perform or observe any other term
hereof to be performed or observed by Tenant, such failure shall continue for
more than thirty (30) days after Tenant receives notice thereof from Landlord,
and Tenant shall not, within such period, commence with due diligence and
dispatch the curing of such default or, having so commenced, shall thereafter
fail or neglect to prosecute or complete with due diligence and dispatch the
curing of such default; or (d) if Tenant shall make a general assignment for the
benefit of creditors, or shall admit in writing its inability to pay its debts
as they become due, or shall file a petition in bankruptcy, or shall be
adjudicated as bankrupt or insolvent, or shall file a petition in any proceeding
seeking any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, or shall file an answer admitting or fail timely to contest the
material allegations of a petition filed against it in any such proceeding, or
shall seek or consent to or acquiesce in the appointment of any trustee,
receiver or liquidator of Tenant or any material part of its properties; or (e)
if within sixty (60) days after the commencement of any proceeding against
Tenant seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, such proceeding shall not have been dismissed, or if, within
sixty (60) days after the appointment without the consent or acquiescence of
Tenant, of any trustee, receiver or liquidator of Tenant or of any material part
of its properties, such appointment shall not have been vacated; or (f) if this
Lease or any estate of Tenant hereunder shall be levied upon under any
attachment or execution and such attachment or execution is not vacated within
ten (10) days.
7 DUPLICATE ORIGINALS
8
16. Termination Upon Default
If an Event of Default shall occur, Landlord at any time thereafter may
give a written termination notice to Tenant, and on the date specified in such
notice (which shall be not less than three (3) days after the giving of such
notice) Tenant's right to possession shall terminate and this Lease shall
terminate, unless on or before such date all arrears of rental and all other
sums payable by Tenant under this Lease (together with interest thereon at the
then maximum legal rate) and all costs and expenses incurred by or on behalf of
Landlord hereunder shall have been paid by Tenant and all other breaches of this
Lease by Tenant at the time existing shall have been fully remedied to the
satisfaction of Landlord. Upon such termination, Landlord may accumulatively
recover from Tenant: (a) the worth at the time of award of the unpaid rental
which had been earned at the time of termination; and (b) the worth at the time
of award of the amount by which the unpaid rental which would have been earned
after termination until the time of award exceeds the amount of such rental loss
that Tenant proves could have been reasonably avoided; and (c) the worth at the
time of award of the amount by which the unpaid rental for the balance of the
term of this Lease after the time of award exceeds the amount of such rental
loss that Tenant proves could be reasonably avoided; and (d) any other amount
necessary to compensate Landlord for all the detriment proximately caused by
Tenant's failure to perform its obligations under this Lease or which, in the
ordinary course of events, would be likely to result therefrom. The "worth at
the time of award" of the amounts referred to in clauses (a) and (b) above shall
be computed by allowing interest at the then maximum legal rate. The worth at
the time of award of the amount referred to in clause (c) above shall be
computed by discounting such amount at the discount rate of the Federal Reserve
Bank of Minneapolis, Minnesota at the time of award plus one percent (1%). For
the purpose of determining unpaid rental under clauses (a), (b) and (c) above,
the monthly rent reserved in this Lease shall be deemed to be the sum of the
amounts last payable by Tenant pursuant to Paragraph 3 above.
17. Continuation After Default
Even though Tenant has breached this Lease and abandoned the premises,
this Lease shall continue in effect for so long as Landlord does not expressly
terminate, in writing, Tenant's right to possession, and Landlord may enforce
all its rights and remedies under this Lease, including the right to recover the
rental as it becomes due under this Lease. Acts of maintenance, preservation,
efforts to relet the premises or the appointment of a receiver upon the
initiative of Landlord to protect Landlord's interest under this Lease shall not
constitute a termination of Landlord's right to possession.
18. Other Relief
The remedies provided for in this Lease are in addition to any other
remedies available to Landlord at law or in equity by statute or otherwise.
8 DUPLICATE ORIGINALS
9
19. Landlord's Right to Cure Defaults
All agreements and provisions to be performed by Tenant under any of
the terms of this Lease shall be at its sole cost and expense and without any
abatement of rental. If Tenant shall fail to pay any sum of money and such
failure is unexcused under the terms hereof, other than rental required to be
paid by it hereunder, or shall fail to perform any other act on its part to be
performed hereunder and such failure shall continue for thirty (30) days after
notice thereof by Landlord, Landlord may, but shall not be obligated so to do
and without waiving or releasing Tenant from any obligations of Tenant, make any
such payment or perform any such other act on Tenant's part to be made or
performed as in this Lease provided. All sums so paid by Landlord and all
necessary incidental costs shall be deemed additional rent hereunder and shall
be payable to Landlord on demand, and Landlord shall have (in addition to any
other right or remedy of Landlord) the same rights and remedies in the event of
the nonpayment thereof by Tenant as in the case of default by Tenant in the
payment of rental.
20. Attorney's Fees
In the event of any action or proceeding brought by either party
against the other under this Lease, the prevailing party in any final judgment
or the nondismissing party in the event of a dismissal without prejudice shall
be entitled to the full amount of all reasonable expenses including all costs
and actual attorney's fees paid or incurred in good faith in connection
therewith.
21. Eminent Domain
If all or any part of the premises shall be taken as a result of the
exercise of the power of eminent domain, this Lease shall terminate as to the
part so taken as of the date of taking and in the case of a partial taking,
either Landlord or Tenant shall have the right to terminate this Lease as to the
balance of the premises by written notice to the other within thirty (30) days
after such date; provided, however, that a condition to the exercise by Tenant
of such right to terminate shall be that the portion of the premises taken shall
be of such extent and nature as substantially to handicap, impede or impair
Tenant's use of the balance of the premises and that a condition to exercise by
Landlord of such right to terminate shall be that the portion of the premises
taken shall be of such extent and nature as substantially to handicap, impede or
impair Landlord's leasing or use of the balance of the premises. In the event of
any taking, Landlord shall be entitled to any and all compensation, damages,
income, rent, awards or any interest therein whatsoever which may be paid or
made in connection therewith, and Tenant shall have no claim against Landlord
except, in the event of a taking which terminates this Lease, for the value of
the then unexpired term of this Lease as if this Lease had not terminated, which
shall be valued in accordance with the same principles and assumptions used to
determine, for condemnation purposes, the value of the premises and Landlord's
interest therein. In the event of a partial taking of the premises which does
not result in a termination of this Lease, the monthly rental thereafter to be
paid shall be equitably reduced. In the event of a dispute as to the value of
Tenant's interest in the then unexpired term of this Lease, the parties shall
resolve such dispute by arbitration.
9 DUPLICATE ORIGINALS
10
22. Subordination
This Lease shall be subject and subordinated all times to (a) all
ground or underlying leases now in effect or which may hereafter be executed
affecting the premises, and (b) the lien of all mortgages and deeds of trust in
any amount or amounts whatsoever, now or hereafter placed on or against the
premises or on or against Landlord's interest or estate therein or on or against
all such ground or underlying leases, all at the option of the holder(s) thereof
and without the necessity of having further instruments executed on the part of
Tenant to effectuate such subordination. Nothwithstanding the foregoing; (x) in
the event of termination for any reason whatsoever of any such ground or
underlying lease, this Lease shall not be barred, terminated, cut off or
foreclosed, nor shall the rights and possession of Tenant hereunder be disturbed
if Tenant shall not then be in default in the payment of rental or other sums or
be otherwise in default under the terms of this Lease, and Tenant shall attorn
to the Landlord of any such ground or underlying lease or, if requested, enter
into a new lease for the balance of the original or extended term hereof then
remaining, upon the same terms and provisions as are in this Lease contained;
(y) in the event of a foreclosure of any such mortgage or deed of trust or of
any other action or proceeding for the enforcement thereof, or of any sale
thereunder, this Lease will not be barred, terminated, cut off or foreclosed nor
will the rights and possession of Tenant thereunder be disturbed if Tenant shall
not then be in default in the payment of rental or other sums or be otherwise in
default under the terms of this Lease, and Tenant shall attorn to the purchaser
at such foreclosure, sale or other action or proceeding; and (z) Tenant agrees
to execute and deliver, upon demand, such further instruments evidencing such
subordination of this Lease to said deed, to such ground or underlying leases,
and to the lien of any such mortgages or deeds of trust as may be reasonably
required by Landlord. Tenant's covenant to subordinate this Lease to ground or
underlying leases and mortgages or deeds of trust hereafter executed is
conditioned upon each such senior instrument containing the commitments
specified in the preceding clauses (x) and (y), and, at Tenants request,
Landlord shall provide Tenant with written confirmation of such commitments from
the holders of instruments which, as a matter of law, are senior to this Lease
and Tenant's interest hereunder.
23. No Merger
The voluntary or other surrender of this Lease by Tenant, or a mutual
cancellation thereof, shall not work a merger, and shall, at the option of
Landlord, terminate all or any existing subleases or subtenancies, or may, at
the option of Landlord, operate as an assignment to it of any or all such
subleases or subtenancies.
24. Sale
In the event the Landlord hereunder, or any successor owner of the
premises shall sell or convey the premises, or portions thereof, other than a
transfer for security purposes, all liabilities and obligations on the part of
the Landlord, or such successor owner, under this Lease accruing thereafter,
shall terminate, and thereupon all such liabilities and obligations shall be
binding upon the new owner. Tenant agrees to attorn to such new owner.
10 DUPLICATE ORIGINALS
11
25. Estoppel Certificate
At any time and from time to time but on not less than ten (10) days
prior written request by Landlord, Tenant shall execute, acknowledge and deliver
to Landlord, promptly upon request, an estoppel certificate in form satisfactory
to Landlord. Any such certificate may be relied upon by any prospective
purchaser, mortgagee or beneficiary under any mortgage or deed of trust of the
premise or any part thereof.
26. Holding Over
If, without objection by Landlord, Tenant holds possession of the
premises after expiration of the term of this Lease, Tenant shall become a
tenant from month to month upon the terms herein specified but at a monthly
rental equivalent to the then prevailing rental paid by Tenant at the expiration
of the term of this Lease pursuant to all the provisions of this Lease, payable
in advance on or before the first day of each month. Each party shall give the
other written notice at least one month prior to the date of termination of such
monthly tenancy of its intention to terminate such tenancy. If Tenant holds
possession of the premises after expiration of the term of this Lease,
notwithstanding Landlord's objection, Tenant shall pay monthly rental at twice
the amounts otherwise then payable under the terms hereof.
27. Abandonment
Subject to applicable provisions of State and local law, if Tenant
shall abandon or surrender the premises, or be dispossessed by process of law or
otherwise, any personal property belonging to Tenant and left on the premises
shall be deemed to be abandoned, at the option of Landlord.
28. Waiver
The waiver by Landlord or Tenant of any agreement, condition or
provision herein contained shall not be deemed to be a waiver of any subsequent
breach of the same or any other agreement, condition or provision herein
contained, nor shall any custom or practice which may evolve between the parties
in the administration of the terms hereof be construed to waive or to lessen the
right of Landlord or Tenant to insist upon the performance by the other party in
strict accordance with said terms. The subsequent acceptance of rental hereunder
by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant
of any agreement, condition or provision of this Lease, other than the failure
of Tenant to pay the particular rental so accepted, regardless of Landlord's
knowledge of such preceding breach at the time of acceptance of such rental.
29. Notices
All notices and demands which may or are required to be given by either
party to the other hereunder shall be in writing and shall be deemed to have
been fully given when deposited in the United States mail, certified or
registered, postage prepaid, and addressed as
11 DUPLICATE ORIGINALS
12
follows: To Tenant at X.X. Xxx 0000, Xxxxxxxx, Xxxxx Xxxxxx 00000-0000, or to
such other place as Tenant may, from time to time, designate in a notice to
Landlord; to Landlord at X.X. Xxx 0000, Xxxxxxxx, Xxxxx Xxxxxx 00000-0000, or to
such other place as Landlord may, from time to time, designate in a notice to
Tenant. Tenant hereby appoints as its agent to receive the service of all
dispossessory or distraint proceedings and notices thereunder the person in
charge of or occupying the premises at the time, and if no person shall be in
charge of or occupying the same, then such service may be made by attaching the
same on the main entrance of the premises.
Tenant shall pay, before delinquency, all taxes on all real and/or
personal property belonging to, leased by, or used by Tenant on the premises,
including real estate taxes on the demised premises.
30. Complete Agreement
There are no oral agreements between Landlord and Tenant affecting this
Lease, and this Lease supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings, if any, between Landlord
and Tenant with respect to the subject matter of this Lease or the premises.
There are no representations between Landlord and Tenant other than those
contained in this Lease.
31. Corporate Authority
Each of the persons executing this Lease on behalf of Tenant does
hereby covenant and warrant that Tenant is a duly authorized and existing
corporation, that Tenant has and is qualified to do business in the State of
South Dakota, that the corporation has full right and authority to enter into
this Lease, and that each and every person signing on behalf of the corporation
was authorized to do so.
32. Mechanic's Liens
Tenant covenants to keep the demised premises and the improvements
thereon, at all times during the term hereof, free of mechanic's liens and other
liens of like nature and at all times fully to protect and indemnify Landlord
against all such liens or claims which may ripen into such liens and against all
attorney's fees and other costs and expenses growing out of or incurred by
reason of or on account of any such claim or lien, and Landlord agrees to do
likewise with respect to work done by or for Landlord. Should Tenant or Landlord
fail to fully discharge any such lien or claim, the other, at its option, may
pay the same or any part thereof, and shall be the sole judge of the legality of
such lien or claim. All amounts so paid by Landlord or Tenant, together with
interest thereon at the then maximum legal rate from time of payment until
repayment, shall be repaid by the other. If the Tenant shall desire to contest
any mechanic's lien claim, it shall furnish the Landlord adequate security in
the amount of the claim or a bond of a responsible corporate surety in such
amount. If a final judgment establishing the validity or existence of a lien for
any amount is entered, the Tenant shall pay and satisfy the same at once.
12 DUPLICATE ORIGINALS
13
33. Memorandum of Lease
A Memorandum of Lease, suitable for recording in the office of the
Register of Deeds of Xxxxx County, State of South Dakota, and satisfactory in
form to both Landlord and Tenant, shall be executed and recorded. Said document
shall be entitled "Memorandum of Lease" and shall incorporate the legal
description of the demised premises.
34. Amendment and Modification
This Lease may be modified or amended only by a writing duly authorized
executed executed by both Landlord and Tenant. It may not be amended or modified
by oral agreements or understandings between the parties or by any acts or
conduct of the parties with reference thereto unless reduced to writing.
The marginal headings used herein are for convenience only and shall not be
resorted to for purposes of interpretation or construction hereof.
35. Successors
All of the terms, covenants and conditions hereof shall be binding upon
and inure to the benefit of the successors and assigns of the parties hereto,
provided that nothing in this paragraph shall be deemed to permit any assignment
contrary to the provisions of Paragraph 13 above.
36. Miscellaneous
The words "Landlord" and "Tenant" as used herein shall include the
plural as well as the singular. Time is of the essence of this Lease and each
and all of its provisions. Reference to time periods in days, unless otherwise
specified, shall be to calendar days. The exhibit(s) attached to this Lease are
by this reference made a part hereof. All amounts of money payable by Tenant to
Landlord, if not paid when due, shall bear interest from the due date until paid
at the then maximum legal rate. If any provision of this Lease shall be
determined to be illegal or unenforceable, such determination shall not affect
any other provision of this Lease and all such other provisions shall remain in
full force and effect.
IN WITNESS WHEREOF, the parties have executed this Lease dated the day
and year first above written.
LANDLORD: TENANT:
XXXXXX FAMILY INVESTMENTS, L.L.C. XXXXXX DRUG CO.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxx Xxxxxxxx
----------------------------- --------------------------------
Its: President Its: President
---------------------------- --------------------------------
13 DUPLICATE ORIGINALS
14
MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE is entered into as of the 1st day of June,
1999, in order to make a public record of that certain Lease by and between
XXXXXX FAMILY INVESTMENTS, L.L.C., a South Dakota limited liability company
("Lessor") and XXXXXX DRUG CO., a South Dakota corporation ("Lessee"), dated
July 1, 1997, as amended by that certain First Amendment to Lease by and
between Lessor and Lessee, dated as of June 1, 1999 (collectively, the "Lease").
1. Premises. Lessor hereby leases to Lessee, and Lessee hereby leases
from Lessor, for the term and subject to the terms, agreements, conditions and
provisions set forth in the lease, the following described real property located
in Sioux Falls, South Dakota, together with any and all improvements affixed
thereto, without limitation (the "Leased Property"):
Lot A of Tract 2 of Sioux Empire Development Park Two Addition to the
City of Sioux Falls, Minnehaha County, South Dakota, according to the
recorded plat thereof.
2. Term and Extension of Term. The term of the Lease shall commence
on July 1, 1997, on which date possession of the Leased Property shall be
delivered to Lessee by Lessor, and, unless sooner terminated as provided in the
Lease, shall end on June 30, 2006. In addition, Lessee shall have the option to
extend the term of the Lease, for not less than the entire Leased Property at
the end of the initial term, on all the provisions contained herein for one (1)
five-year renewal period by giving Lessor notice of the exercise of such option
at least ninety (90) days prior to the expiration of the initial term.
3. Further Information. Anyone seeking further information with
respect to the Lease should direct all inquiries to:
Xxxxxx Family Investments, L.L.C.
X.X. XXX 0000
Xxxxxxxx, XX 00000-0000
Phone: (000) 000-0000.
[the remainder of this page intentionally blank]
15
IN WITNESS WHEREOF, the parties hereto have executed this Memorandum
of Lease as of the date first written above.
LESSOR: LESSEE:
XXXXXX FAMILY INVESTMENTS, XXXXXX DRUG CO.
L.L.C.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
-------------------------- -------------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxxxx
-------------------------- -------------------------------
Title: President Title: Vice Chairman
-------------------------- -------------------------------
STATE OF South Dakota)
)ss:
COUNTY OF Xxxxx )
On this 8th day of July, 1999, before me appeared Xxxxxx X. Xxxxxx, to
me known to be the person described in and who executed the foregoing
instrument, as the President of Xxxxxx Family Investments, L.L.C., a limited
liability company organized under the laws of the State of South Dakota, and
acknowledged that he/she executed the same as the free act and deed of said
limited liability company and is acting for and on behalf of and as President of
said limited liability company.
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my
official seal in the County and State aforesaid on the day and year first above
written.
/s/ Xxxxxxx Xxxxx
--------------------------------------
Notary Public
My Commission Expires: 9/7/03
------------
2
