ASSIGNMENT AND ASSUMPTION OF LEASE
THIS ASSIGNMENT AND ASSUMPTION OF LEASE (this "Assignment")
is made and entered into as of the 31st day of January, 2008 (the
"Effective Date"), by and between Eau Claire Equity Fund Limited
Partnership, a Tennessee limited partnership (the "Assignor") and
AEI Income & Growth Fund XXI Limited Partnership, a Minnesota
limited partnership, a fifty-four percent (54%) undivided
interest as tenants in common; AEI Income & Growth Fund 23, LLC,
a Delaware limited liability company, a sixteen percent (16%)
undivided interest as tenants in common; and AEI Income & Growth
Fund 26, LLC, a Delaware limited liability company, a thirty
percent (30%) undivided interest as tenants in common
(collectively, the "Assignee").
RECITALS:
A. Assignor and Assignee are parties to that certain
Agreement of Purchase and Sale dated January 15, 2008 (the
"Agreement"), pursuant to which Assignee is acquiring from
Assignor the real property and improvements, located on property
more particularly described on Exhibit A attached hereto and
incorporated herein by this reference (also referred to herein as
the "Property").
B. Pursuant to the terms of the Agreement, Assignor
desires to sell, assign, convey, transfer and set over to
Assignee and Assignee desires to assume all of Assignor's
interest in that certain Lease dated January 20, 1998 (the
"Lease"), by and between Assignor and Best Buy Stores, L.P., a
Delaware limited partnership (the "Tenant"), including without
limitation the obligations of Best Buy Co., Inc. pursuant to
Section 54 of the Lease, subject to the terms and conditions set
forth below.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the
parties, Assignor and Assignee hereby agree as follows:
1. Assignor is the Landlord under the Lease with full
right and title to assign the Lease to Assignee as provided
herein. The Lease is valid, in full force and effect and has not
been modified or amended. So far as is known to Assignor, there
is no default by Tenant under the Lease and no rent has been
either (i) waived, anticipated, discounted, compromised or
released or (ii) paid with respect to or applicable to any period
of time after the date hereof.
2. Assignor hereby irrevocably and unconditionally sells,
assigns, conveys, transfers and sets over unto Assignee, its
heirs, successors and assigns as of the date hereof (the
"Effective Date"), all of Assignor's right, title and interest
in, to and under the Lease, together with any and all guaranties
thereof.
3. Assignee hereby assumes and shall be liable for any and
all liabilities, claims, obligations, losses and expenses,
including reasonable attorneys' fees arising in connection with
the Lease which are actually incurred, and which arise by virtue
of acts or omissions occurring thereunder, or as a result of
Assignee's failure to fulfill the landlord's duties and
obligations accruing under the Lease on or after the Effective
Date. Assignor shall indemnify and hold Assignee harmless from
any and all liabilities, claims, obligations, losses and
expenses, including reasonable attorneys' fees arising in
connection with the Lease which arise by virtue of acts or
omissions occurring thereunder prior to the Effective Date, or as
a result of Assignor's failure to fulfill the landlord's duties
and obligations accruing under the Lease prior to the Effective
Date. Assignee shall be entitled to receive all income accruing
under the Lease from and after the Effective Date. Assignor
shall be entitled to receive all income accruing under the Lease
prior to the Effective Date.
4. Assignor shall direct the Tenant and any successor
tenant under the Lease to pay to Assignee the rent and all other
monetary obligations due or to become due under the Lease on or
after the Effective Date.
5. This Assignment shall be governed by and construed in
accordance with the laws of the state in which the Property is
located.
6. All rights and obligations of Assignee and Assignor
hereunder shall be binding upon and inure to the benefit of
Assignor, Assignee and the heirs, successors and assigns of each
such party.
7. This Assignment may be executed in any number of
counterparts, each of which shall be effective only upon delivery
and thereafter shall be deemed an original, and all of which
shall be taken to be one and the same instrument, for the same
effect as if all parties hereto had signed the same signature
page. Any signature page of this Assignment may be detached from
any counterpart of this Assignment without impairing the legal
effect of any signatures thereon and may be attached to another
counterpart of this Agreement identical in form hereto but having
attached to it one or more additional signature pages.
8. Whenever the context so requires in this Assignment,
all words used in the singular shall be construed to have been
used in the plural (and vice versa), each gender shall be
construed to include any other genders, and the word "person"
shall be construed to include a natural person, a corporation, a
firm, a partnership, a joint venture, a trust, an estate or any
other entity.
[Signatures are on the following page]
IN WITNESS WHEREOF, Assignor and Assignee have executed this
Assignment and Assumption of Lease as of the day and year first
above written.
ASSIGNOR: EAU CLAIRE EQUITY FUND LIMITED
PARTNERSHIP, a Tennessee limited
partnership
By: /s/ Xxxxxxxx X Xxxxx
Xxxxxxxx X. Xxxxx, Its Authorized Agent
STATE OF TENNESSEE )
COUNTY OF XXXXXXXXXX )
Personally came before me on January 30th, 2008, the above
named, Xxxxxxxx X. Xxxxx, as authorized agent for Eau Claire
Equity Fund Limited Partnership, to me known to be the person who
executed the foregoing instrument and acknowledged the same.
My Commission Expires: /s/ Xxxxxxx X Xxxxxx
1-30-10 Notary Public [notary seal]
ASSIGNEE: AEI Income & Growth Fund XXI
Limited Partnership, a Minnesota
limited partnership
By Its General Partner: AEI
Fund Management XXI, Inc., a
Minnesota Corporation
By: /s/ Xxxxxx X Xxxxxxx
Xxxxxx X. Xxxxxxx, President
STATE OF MINNESOTA )
COUNTY OF XXXXXX )
Personally came before me on January 30, 2008, the above
named, Xxxxxx X. Xxxxxxx, President of AEI Fund Management XXI,
Inc., the general partner of AEI Income & Growth Fund XXI Limited
Partnership, to me known to be the person who executed the
foregoing instrument and acknowledged the same.
My Commission Expires: /s/ Xxxxxxx X Xxxxxxxx
January 31, 2008 Notary Public
[notary seal]
AEI Income & Growth Fund 23, LLC,
a Delaware limited liability
company
By Its Managing Member: AEI
Fund Management XXI, Inc., a
Minnesota corporation
By: /s/ Xxxxxx X Xxxxxxx
Xxxxxx X. Xxxxxxx, President
STATE OF MINNESOTA )
COUNTY OF XXXXXX )
Personally came before me on January 30, 2008, the above
named, Xxxxxx X. Xxxxxxx, President of AEI Fund Management XXI,
Inc., the general partner of AEI Income & Growth Fund 23 LLC, to
me known to be the person who executed the foregoing instrument
and acknowledged the same.
My Commission Expires: /s/ Xxxxxxx X Xxxxxxxx
January 31, 2008 Notary Public
[notary seal]
AEI Income & Growth Fund 26, LLC,
a Delaware limited liability
company
By Its Managing Member: AEI
Fund Management XXI, Inc., a
Minnesota corporation
By: /s/ Xxxxxx X Xxxxxxx
Xxxxxx X. Xxxxxxx, President
STATE OF MINNESOTA )
COUNTY OF XXXXXX )
Personally came before me on January 30, 2008, the above
named, Xxxxxx X. Xxxxxxx, President of AEI Fund Management XXI,
Inc., the general partner of AEI Income & Growth Fund 26 LLC, to
me known to be the person who executed the foregoing instrument
and acknowledged the same.
My Commission Expires: /s/ Xxxxxxx X Xxxxxxxx
January 31, 2008 Notary Public
[notary seal]
LEASE
THIS LEASE, is entered into and effective as of January
20, 1998, between Eau Claire Equity Fund, Limited
Partnership, a Tennessee limited partnership,
(hereinafter called "Landlord") and BEST BUY STORES, L.
P. a Delaware corporation (hereinafter called "Tenant").
The parties mutually agree as follows:
1. THE PREMISES. Landlord, for and in consideration of the rents,
covenants, agreements and stipulations hereinafter mentioned, reserved
and contained, to be paid, kept and performed by Tenant, does hereby
Lease and rent unto Tenant, and Tenant hereby agrees to Lease and take
upon the terms and conditions hereinafter set forth a Building,
containing approximately 45,486 square feet constructed by Tenant and
then sold to Landlord (the "Building"), together with all other
improvements situated on the hereinafter described parcel of land
containing approximately 4.48 acres (the "Land") located at 0000
Xxxxxxxxxxxx Xxxxxx, Xxx Xxxxxx, Xxx Xxxxxx, Xxxxxx, Xxxxxxxxx and
legally described on Exhibit A attached hereto, subject to the terms
and requirements of the liens, restrictions and encumbrances set forth
in Exhibit B attached hereto (the "Covenant Documents").
The Land and Building together constitute the "Leased Premises"
hereunder.
2. BASE TERM. The Base Term of this Lease (the "Term") shall be
twenty (20) years commencing on January 20, 1998 (the "Commencement
Date") and ending, on January 19, 2018 (the "Expiration Date") unless
sooner terminated pursuant to any provision hereof. If the Commencement
Date and/or the Expiration Date are not finally determined on the date
this Lease is entered into, Landlord and Tenant shall also execute a
Memorandum of Lease Commencement in the form set out on Exhibit C
specifying the Commencement Date, and the Expiration Date applicable to
this Lease. Said Amendment shall be attached to and become a part of
this Lease.
3. RENT. Tenant hereby covenants and agrees to pay Landlord as
monthly fixed rent ("Base Rent" for the Premises during the Term the
sums set forth below:
1
Years Annual Monthly
Rent Rent
1-5 $ 430,000.00 $ 35,833.33
6-10 $ 451,500.00 $ 37,625.00
11-15 $ 474,075.00 $ 39,506.25
16-20 $ 497,778.00 $ 41,481.50
Such Base Rent shall be payable in advance and without
demand, deduction or set-off on the first day of every
calendar month commencing on the Commencement Date. Base
Rent shall be prorated for any partial month at the
beginning or end of the Term. Tenant shall pay Base Rent
and all other sums or additional rent due hereunder
(collectively, "rent") to Landlord at .the following
address unless otherwise notified in writing by
Landlord: Eau Claire Equity Fund Limited Partnership,
0000 Xxxx Xxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx
00000 [Telefax (000) 000-0000; Telephone (615) 321-
8566]
4. ACCEPTANCE OF PREMISES.' Tenant has constructed the
Building and other improvements on the Leased Premises
pursuant to the plans and specifications approved by
Tenant and contracts with architects and contractors
chosen by Tenant, all of which are itemized in Exhibit D
attached hereto (the "Construction- Documents") and
pursuant to the requirements of the Covenant Documents,
if any. Tenant therefore will be familiar with the
designs of the improvements and condition of the Leased
Premises as of the Commencement Date, and will be
presumed as of such Commencement Date to have accepted
the Leased Premises in their then existing condition. To
the maximum extent, permitted by law, Tenant waives the
implied warranty of suitability for the Leased Premises.
Landlord shall cooperate in Tenant's attempt to enforce
warranty and other obligations of contractors and
suppliers for the original construction of the Lease
Premises, but shall have no other responsibility or
liability for the design, construction or condition of
Leased Premises and makes no warranties with respect
thereto, and Landlord shall not be required to make any
repairs of any kind whatsoever during the term of this
Lease, except under the provisions of Section 19 hereof.
Landlord will transfer all contractor and supplier
warranties in its possession to Tenant, for the Term of
this Lease which transferred warranties shall revert back
to Landlord upon termination of said Lease.
2
5. MAINTENANCE AND REPAIRS BY TENANT. tenant
shall, at its expense (and Landlord shall
have no obligation), keep and maintain the
entire Leased Premises, both Building and
Land, in good order, condition and repair
(as demonstrated by the condition of the
Leased Premises at the beginning of the term
hereof), including but not limited to
maintenance and repair of all structural or
load-bearing elements, roofs, walls,
foundations, heating, ventilating and air
conditioning systems, a building security
and monitoring system, windows, walls,
doors, electrical systems and equipment,
mechanical equipment, plumbing and all other
components of the Building, mowing of lawns,
care and replacement of plantings,
replacing, resurfacing and striping of
walkways; driveways and parking areas, and
adjacent public sidewalks, removal of snow
'and ice from the Premises and adjacent
public sidewalks, removal of trash,
maintenance of utility lines and exterior
lighting on the Land, and any maintenance,
repairs or replacements (or fees or reserves
therefor) as may be required by any Covenant
Documents. All such maintenance and repair
shall keep the Leased Premises in a good
state of repair and in a clean, safe, and
sanitary condition and in compliance with
all applicable laws and
insurance regulations. Tenant must make all
repairs, corrections, improvements or
alterations necessitated by age, Tenant's
use, the elements or required pursuant to
governmental order or mandate, including but
not limited to the Americans with
Disabilities Act. Notwithstanding the
foregoing, and as long as (1) no notices have
been received from any governmental authority
as to the condition of the Leased Premises,
and (2) Tenant is keeping the teased Premises
a condition that prevents waste to, the value
of the same, Tenant shall be solely responsible
for the day-to-day maintenance decisions
for, and activities upon, the Leased
Premises,including but not limited to all
lawn care, trash removal, painting and other
cosmetic maintenance. Tenant expressly
waives the benefit of any statute now or
hereinafter in effect which would otherwise
afford Tenant the right to make repairs,
corrections,improvements or alterations at
Landlord's expense or to terminate this
Lease because of Landlord's failure to
keep the Leased Premises in good order,
condition or repair, or which would
otherwise require Landlord to make repairs,
corrections, improvements or alterations.
Any and all obligations that
Landlord or Tenant may incur under the
Covenant Documents as defined in Section 49
and any other agreements to which the Land
may be subject as of the Commencement Date
and any amendments thereto or modification
thereafter shall become the sole obligation
of Tenant during the Term of the Lease and
any extensions thereof.
If Tenant fails to perform its obligations under this
Section 5, or under another provision of this Lease,
Landlord may at its option (but shall not be required
to) enter upon the Leased Premises after ten (10) days
prior written notice to Tenant (except in the case of an
emergency, in which case no notice shall be required),
perform such obligations on Tenant's behalf and put the
same in good order, condition and repair, and the cost
thereof, together with interest at four percent (4%) per
annum over the "Prime Rate" established by the Wall
Street Journal (or if the Wall Street Journal no longer
publishes its Prime Rate, then the Prime Rate announced
by Norwest Bank Minnesota, N.A.) on the date of invoice
from Landlord to Tenant (but in no event more than the
maximum rate then allowable by law) ("Default Rate")
shall become due and payable as additional rental to
Landlord together with Tenant's next rental installment.
Except for the obligations of Landlord under Section 19
(relating to condemnation of the Premises), it is
intended by the parties hereto that Landlord have no
obligation, in any manner whatsoever, to repair and
maintain the Leased Premises the equipment therein or
any part thereof, whether structural or non-structural,
all of which obligations are intended to be that of,;
Tenant. In no event shall Landlord be obligated to for
repairs or replacement any part of the Leased Premises.
6. SPECIAL NET LEASE. This Lease is
what is commonly called a "Net, Net,
Net Lease" it being understood that
Landlord shall receive the rent set
forth in Section 3 and Section 41 free
and clear of -any and all other
impositions, taxes, liens, charges or
expenses of any nature whatsoever in
connection with the ownership and
operation of the Leased Premises. In
addition to the rent reserved by
Section 3 and Section 41, Tenant shall
pay to the parties respectively
entitled thereto all property taxes,
impositions, insurance premiums,
operating charges, maintenance charges,
construction costs and any other
charges, costs and expenses which arise
or may be contemplated under the
Covenant Documents or otherwise. Such
charges, costs and expenses shall
constitute additional rent, and upon
the failure of Tenant to pay any of
such costs, charges or expenses
including, without limitation,
utilities pursuant to Section 7 and
taxes and assessments pursuant to
Section 8, Landlord shall have the same
rights and remedies as otherwise
provided in this Lease for the failure
of Tenant to pay rent including but not
limited to the remedies provided in
Section 5 hereof relating to Landlord's
right (but not obligation) to perform
Tenant's obligations hereunder. It is
the intention of the parties except as
expressly provided herein that this
Lease shall not be terminable for any
reason by Tenant, and that Tenant shall
in no
4
event be entitled to any abatement of, or
reduction in, rent payable under this Lease,
except as otherwise expressly provided herein.
Any present or future law to the contrary shall
not alter this agreement of the parties.
7. UTILITIES. Tenant shall contract for in Tenant's name and
pay on time and hold Landlord free and harmless from all bills
or assessments for light, heat, water, gas, electric,
telephone, sewer rentals or charges, and any other expenses
arising, out of or incidental to the occupancy of said
Building and Leased Premises. No full or partial utility
deprivation including,. but not limited to, blackout,
brownout, or rationing shall give rise to any abatement of
rent nor give rise to any right of Tenant to offset rent or to
terminate the Lease.
8. TAXES AND ASSESSMENTS. As additional rent, Tenant agrees
and covenants to pay directly to the proper governmental
agency, on or before the date each installment becomes due and
payable, an amount equal to all "Real Property Taxes"
including but not limited to (1) the ad valorem or property,,.
taxes [covered below], and all other taxes including
commercial rental taxes and other similar taxes levied against
the Leased Premises, excepting income taxes, which become due
and payable during the Term of this Lease, and (ii) all
installments of general, special, ordinary or extraordinary
assessments including statutory interest, if any. Landlord
shall have the obligation to, if possible, (i) have the tax
bills mailed directly to Tenant by the proper governmental
agency;-.-and- (ii) for the last lease year of the- Term
hereof, furnish an apportionment between Landlord and Tenant
based on the number of days of Tenant's last lease year which
fall within the then current calendar year. Tenant may, in
good faith and in a lawful manner and upon giving, thirty (30)
days' prior written notice to Landlord of. its intention so to
do; contest in Landlord's name any tax assessment or charge
against the Leased Premises, but all costs and expenses
incidental to such contest shall be paid by Tenant, and in
case of an adjudication adverse to Tenant, then Tenant shall
promptly pay such tax, assessment or charge including
penalties or late charges, if any. Tenant shall indemnify and
save Landlord harmless against any loss or damage arising from
such contest and shall, if necessary to prevent a sale or
other loss or damage to Landlord, pay such tax, assessment or
charge under protest and take such other steps as may be
necessary to prevent any sale or loss. Tenant agrees, if
requested by Landlord's. lender, to pay its estimated share of
Real Property Taxes into a monthly escrow account.
5
Tenant shall promptly, furnish Landlord with satisfactory
evidence that all taxes have been paid. If Tenant shall fail
to pay any such taxes, Landlord shall have the right to pay
the same, in which case Tenant shall repay in full such amount
to Landlord with Tenant's next rent installment together with
interest at the Default Rate. As used herein, the term "Real
Property Tax" shall include any form of real estate tax or
assessment, general, special, ordinary or extraordinary, and
any license fees, commercial rental tax, including without
limitation, sales, use, gross receipts or value added taxes
levied on the rent payable hereunder, improvement bond or
other bonds, including statutory interest, levy or tax (other
than inheritance, personal income or estate taxes) imposed on
the Leased Premises by any authority having the direct or
indirect power to tax, including any city, state or federal
government, or any school, agricultural, sanitary, fire,
street, drainage or other improvement district thereof, as
against any legal or equitable interest of Landlord in the
Leased Premises or in the real property of which the Leased
Premises are a part, as against Landlord's right to rent or
other income therefrom, and as against Landlord's business of
leasing the Leased Premises. The term "Real Property, . Tax"
shall also include any tax, fee, levy, assessment or charge
(i) in% substitution of, partially or totally, any tax, fee,
levy, assessment or charge included within the definition of
"Real Property Tax", or (ii) the nature of which was
previously included within the definition of "Real Property
Tax", or (iii) which is imposed as a result of a transfer,
either partial or total, of Landlord's interest in the Leased
Premises or which is added to a tax or charge included within
tip. definition of "Real Property Tax" by reason such
transfer, or (iv) which is imposed by reason of this
transaction, any modifications or changes hereto, or any
transfers hereof. Tenant shall pay prior to delinquency all
taxes assessed against and levied upon trade fixtures,
furnishings equipment and all other personal property of
Tenant contained in the Leased Premises or elsewhere. When
possible, Tenant shall cause said trade fixtures, furnishings,
equipment and all other personal property to be assessed and
billed separately from the xxxx.xxxxxxxx of Landlord. If any
of Tenant's personal property shall be assessed with
Landlord's real property, Tenant shall pay the taxes
attributable to Tenant within ten (10) days after receipt of a
written statement setting forth the taxes applicable to
Tenant's property.
9. TENANT'S IMPROVEMENTS. Subject to the
terms of any Underlying Mortgage (as defined
in Section 34 hereof), any structural
alterations or improvements or any non-
structural improvements or alterations
costing more than Three Hundred Thousand and
No/100 Dollars ($300,000.00) shall require
Landlord's consent, which consent shall not be
unreasonably withheld. Landlord's consent shall be
automatically granted if Landlord does not respond to
Tenant's request within thirty (30) days after notice and
submission of 'preliminary plans and specifications from
Tenant. Subject to the preceding sentence and the terms
of any Underlying Mortgage, during the full Term of this
Lease, Tenant shall have the right, at any time during
the Term, and from time to time, at its own cost and sole
expense and liability to place or install within the
Leased Premises, such nonstructural leasehold
improvements as it shall desire. Unless expressly
released by Landlord in writing, all such improvements
shall be and remain, at the time of expiration or other
termination of this Lease, the property of Landlord
without payment or offset unless such improvements are
not attached to the Premises. NO such installation or
construction by Tenant shall violate any lawful rule or
regulation, plat or zoning construction or other law,
ordinance or regulation applicable thereto, and all
alterations and improvements shall be done and performed
in good and workmanlike manner. All costs of any such
improvements shall be paid by. Tenant and Tenant shall
allow no liens for labor or materials toattach to the
Leased Premises by virtue thereof. Tenant shall submit
drawings an& specifications of all alterations and
improvements to Landlord costing more than One Hundred
Thousand and No/100 Dollars ($100,000.00) for Landlord's
approval at least thirty (30) days prior to commencement
of work, which approval shall not be unreasonably
withheld. Landlord's approval of the same shall be
automatically granted if Landlord does not comment on the
same within said-thirty (30) day period.
Tenant shall give Landlord not less than ten (10) days
notice prior to , the commencement of any work in, on or
about the Leased Premises and Landlord shall have the
right to post notices of non-responsibility in or on the
Leased Premises as provided by law.
Landlord may require that Tenant remove any or all
alterations, improvements or additions made by Tenant to
the Leased Premises at the expiration of the Term and
restore the Leased Premises to its prior condition.
Any alterations, improvements and additions in, or about
the Leased Premises that Tenant desires to make, or
which require the consent of Landlord or which require
approval by Landlord of the drawings or specifications
therefor, shall be presented to Landlord in written
form, with proposed detailed plans. If Landlord shall
consent to the alterations, improvements and additions
or approve of the drawings and specifications, as the
case may be, the consent
or approval shall be deemed conditioned upon Tenant
acquiring a permit to do so from appropriate
governmental agencies, the furnishing of a. copy thereof
to Landlord prior to the commencement of the work and
the compliance by Tenant of all conditions of said
permit in a prompt and expeditious manner. Tenant shall
pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for
Tenant at, or for use in the Leased Premises, which
claims are or may be secured by any mechanic's or
materialmen's lien against the Leased Premises or any
interest therein.
To the extent that any alterations, improvements or
additions result in the removal from the Building of any
building components having salvage value and such
components have not been replaced with components having
equal or greater value, such salvage value shall paid to
Landlord.
Any and all alterations, improvements or additions to the
Building shall be performed in a good and safe
workmanlike manner; shall have all necessary approvals,
permits and licenses required by any governing body; and
Tenant. shall hold Landlord harmless from any and all
costs, expenses, attorney fees, fines, penalties,
judgments, or other sums resulting out of any such
alterations, improvements or additions by way of
citations for codes violations or other violations of
regulations or laws governing the Building and Leased
Premises.
10. INSURANCE. The Tenant agrees to provide and keep in-
force during the Term of this Lease and at its cost and
expense the following insurance coverage from an
insurance company or companies authorized to do business
in the state in which the Land is located:
a. Fire and All Risk. Fire and all risk
insurance in an amount not less than the Full
insurable Value (defined below) of -the
Building and improvements on the Land and/or
constructed or maintained in conjunction with
the Building pursuant to any Covenant
Documents, and to keep such insurance in full
force and effect for and during the time any
Buildings and improvements are located.on the
Leased Premises during the term of this Lease.
The coverage shall include all risks commonly
insured for properties similar to the Leased
Premises in the metropolitan area in which the
Land is located, including insurance against
damage caused by earthquake, flood,
hurricane, tornado, windstorm, and other
disasters ("Disaster Insurance") in such areas
where such natural disasters are reasonably
expected to occur. For the purpose hereof "Full
Insurable Value" shall mean the replacement
cost of the Building and such improvements
without allowance for depreciation but
excluding, except where covered by Disaster
Insurance, footings, foundations, and other
portions of improvements which are customarily
not insurable, an amount sufficient to cover
Tenant's inventory and personalty shall be
added to the amount determined to be the "Full
Insurable Value". Such policy or policies shall
insure Landlord and Tenant, and shall contain a
standard mortgagee clause providing for payment
of proceeds to any mortgagee or deed of trust
holder of the Leased Premises ("Landlord's
Lender"), as its interest may appear.
b. Public Liability and Property Damage. Public liability
'and property damage insurance with limits of not less than
Two Million and No/100Dollars ($2,000,00.00) for injury and
death to any one person, and Five Million and No/100 Dollars
($5,000,000.00) for injury or death in any one accident or
occurrence per location including property damage,. insuring
Landlord and Tenant, and with a cross-liability endorsement
covering claims by an insured against another insured.
c. Business Interruption. Business interruption
insurance covering all rent related to the Leased
Premises for a minimum of twelve (12) months.
d. Insurance Required by Covenant Documents or
Underlying Mortgages. Such insurance as is required to
be maintained by either Tenant or Landlord under the
Covenant Documents or any Underlying Mortgage, with such
coverages, notice requirements and insurance amounts as
are specified therein (the "Covenant and Mortgage
Insurance").
e. Additional Insureds/Loss Payees. Each policy shall
name Landlord and Landlord's Lender, if any, and any
third parties to be insured pursuant to the Covenant
Documents ("Covenant insureds") as Additional Insureds
and/or Loss Payees, as their interests may appear, and
shall contain a covenant that should
9
such policies be
canceled, assigned or
materially changed during
the policy period, the
insurer will mail a
notice thereof to
Landlord, and Landlord's
Lender and/or Covenant
Insureds, if any, at
least thirty (30) days in
advance. Certificates of
insurance evidencing the
existence and amounts of
such insurance, shall be
delivered to Landlord by
Tenant prior to Tenant's
occupancy of any portion
of the Leased Premises.
No such policy shall be
cancelable except after
thirty (30) days written
notice to Landlord.
Tenant shall, prior to
the expiration of any
such policy, furnish
Landlord, any Landlord's
Lender and any Covenant
Insureds with renewals or
"binders" thereof
together with evidence of
thepayment of premiums
therefor, or Landlord may
order such insurance and
charge the cost thereof
to Tenant, which amount
shall be paid by Tenant
upon demand. The
insurance, as to the
interest of Lender
therein, shall not be
invalidated by any act or
neglect of Landlord or
Tenant or any owner of
the Leased Premises, by
any foreclosure or any
other proceedings or
notices thereof relating
to the Leased Premises,
nor by any change in the
title or ownership of the
Leased Premises nor by
occupancy of the Leased
Premises for purposes
more hazardous than are
'permitted by such
policy.
f. Deductibles. Subject
to the requirements of
any Covenant and Mortgage
Insurance; the-fire and
all risk coverage
specified herein shall
have a deductible no
greater than twenty
percent (20%) of the Full
Insurable Value of the
Building and improvements
to be insured thereby.
Subject to the terms of
any Covenant Insurance,
the public liability and
property damage coverage
specified herein shall
have a deductible no
greater than Five Hundred
Thousand and No/100
Dollars ($500,000.00).
Provided, however, in the
event Tenant's "net
worth" (as defined by
generally accepted
accounting principles)
should go below One
Hundred Fifty Million and
No/100 Dollars
($150,000,000.00),
neither the fire and all
risk coverage specified
herein nor the public
liability and property
damage coverage specified
herein shall have
deductibles of greater
than One Hundred Thousand
and No/100 Dollars
($100,000.00). Tenant
shall be liable for any
deductible amount. The
policies of insurance
required to be carried by
Tenant shall be primary
and not in excess of any
other insurance available
to Landlord. It
10
shall be the responsibility
of Tenant not to violate nor
knowingly permit to be
violated any condition of the
policies required under this
Lease. Neither the issuance
of any such insurance policy
nor the minimum limits
specified in this Section 10
shall be deemed to limit or
restrict in any way Tenant's
liability arising under or
out of this Lease.
g. Waiver of Subrogation. To the extent such waivers
are permitted by insurance carriers, Landlord and Tenant
waive their respective right of recovery against the
other and the officers, employees, agents and
representatives of such other party for any direct or
consequential damage to the property of the other
including its interest in the Leased Premises by fire or
other . casualty to the extent such damage is insured
against under a policy or policies of insurance to be
maintained by Tenant hereunder. Each such insurance
policy carried by either Landlord or Tenant shall
include a waiver of the insurer's rights of subrogation.
Such waiver shall in no way be construed or interpreted
to limit or restrict any indemnity or other waiver made
by Tenant under the terms of this Lease.
h. No Impairment of Coverage. Tenant shall not carry
any stock of goods or do anything in or about the Leased
Premises which will impair or invalidate the obligation
of any policy of insurance on or in reference to the
Leased Premises or the Building. Landlord shall have the
right to require that the amount or types of insurance
coverages required of Tenant hereunder be adjusted from
time to time reflect insurance customarily required for
similar properties in the metropolitan area in which the
Land is located. Insurance coverages shall be written by
an insurance company or companies licensed to do
business in the state in which the Land is located with
a Best's rating of at least "A-1 NH.
Review of Coverage.
Landlord and Tenant agree to
review the insurance
coverages provided herein at
least once every five (5)
years and to increase the
limits, if necessary, in
accordance wit reasonable
commercial standards.
11
11. DAMAGE, DESTRUCTION,
OBLIGATION TO REBUILD. If the
Leased Premises are totally or
partially damaged or destroyed by
storm, fire, lightning,
earthquake, or from any other
cause whatsoever, during the Term
of this Lease whether or not such
damage or destruction is covered
by any insurance required to be
maintained under Section 10.
hereof, then, subject to terms of
any Underlying Mortgage, Tenant
shall repair, restore and rebuild
the premises in accordance with
applicable building and zoning
codes at the time of rebuilding
to substantially the same
condition immediately prior to
such damages or destruction and
this Lease shall remain in full
force and effect, provided,
however, that Tenant shall have
the right, with the consent of
Landlord (which shall not be
unreasonably withheld) to replace
the Leased Premises with a
different structure so long as
(a) the value the Leased Premises
with such structure is no less
than the value of the Leased
Premises immediately prior to the
date of casualty and no less than
the square footage shown in
Article 1 of this Lease, and (b)
the new structure can be built
and occupied under the then
applicable laws, codes,
ordinances, and zoning,
restrictions. Such repair,
restoration and rebuilding (all
of which are herein called
"repair") shall be commenced
within a reasonable time however
no more: than thirty (30) days
after such damage or destruction
has occurred and permits
necessary to authorize such
rebuilding have been issued
following reasonable pursuit of
such permits by Tenant, and shall
be diligently pursued to
completion.
a. Insurance Proceeds.
Subject to terms of any
Underlying Mortgage, the-
-proceeds of any insurance-
maintained under Section
10 hereof shall be made
available to Tenant for
payment of costs and
expense of repair,
provided however,': that
such proceeds may be made
available to Tenant
subject to reasonable
conditions, including, but
not limited to architects'
certification cost,
retention of percentage of
such proceeds pending
recordation of a notice of
completion and a lien and
completion bond (or
payment and performance
bond) to insure against
mechanic's or
materialmen's liens
arising out of the repair
and to insure completion
of the repair, all at the
expense of Tenant. In the
event the insurance
proceeds are insufficient
to the cost of repair,
then any amounts required
over the amount of the
insurance proceeds
received that are required
to complete said repair
shall be promptly deposit
with Landlord or a title
company acceptable to
Landlord and Tenant in
advance of commencing
repairs.
12
b. Abatement of Rent. Notwithstanding the partial or
total destruction of the Premises and any part thereof,
and notwithstanding whether the casualty is insured or
not, there shall be no abatement of rent or of any other
obligation of Tenant hereunder including, without
limitation, payment of operating expenses, insurance
premiums and Real Property Taxes, by reason of such
damage or destruction unless the Lease is terminated by
virtue of another provision of this Lease.
c. Waiver. Tenant waives the provisions of any
statutes which relate to termination of leases when the
thing leased is destroyed and agrees that such event
shall be governed by the terms of this Lease.
12. ABATEMENT. Except only as provided in Section 1 9,
the Tenant's obligations to pay rent and to perform all
of the other covenants and agreements which Tenant is
bound to perform under the terms of this Lease shall not
terminate, xxxxx or be diminished during any period that
the Leased Premises or any part thereof are untenantable
regardless of the cause of such untenantability.
13. COMPLIANCE WITH LAWS, ETC. Tenant, shall use the.
Leased Premises as a general business, or as a store for
other retail products and supplies, or, with the consent
of Landlord. (which shall not be unreasonably withheld)
for any other lawful purpose, and, in the use and
occupancy of the Leased Premises, and in the conduct of
its business and activities, shall at its own cost and
expense secure and maintain all necessary licenses and
permits required for the conduct of its business. Tenant
shall not use the Leased Premises or permit anything to
be done in or about the Leased Premises which 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. Tenant shall at
its sole cost and expense comply with all laws,
statutes, ordinances and governmental rules, regulations
or requirements of any board of fire underwriters
(including all modifications and improvements required
thereby) now in force or which may hereafter be in force
relating to or affecting the condition, use or occupancy
of the Leased Premises, including without limitation the
Americans With Disabilities Act. Tenant shall observe
all plat and deed restrictions of record. Without
limiting the generality of the
13
foregoing, Tenant will not
generate, store, bury, discharge
or release on or from the Leased
Premises any hazardous substances
or waste in a manner which would
give rise to penalty or liability
under the Resources Conservation
Recovery Act 42 U.S.C. 6901 et
sea., or any other federal, state
or local law.
Upon ten (10) days' notice,
Tenant shall provide Landlord
with copies of all documents
information evidencing. Tenant's
compliance with any laws,
ordinances, orders, rules and
regulations requested by
Landlord. Tenant shall notify
Landlord in writing immediately
of any threatened or actual
notice, citation, warning or
report regarding Tenant's alleged
failure to cause the Leased
Premises to comply with all laws,
ordinances, orders, rules and
regulations.
14. WASTE; NO LIENS; USE; NO HAZARDOUS
MATERIALS OR USES,
A. Except as to liens arising as
a result of work performed by or
at the direction of Landlord,
which shall be the sole
responsibility of Landlord,
Tenant agrees that during the
Term hereof it shall not do or
suffer any waste to the Land,
Building or Leased Premises, or
cause, suffer or permit any liens
to attach to or to exist against
the Land, Building or Leased
Premises by reason of any act or
omission of Tenant or person
claiming through Tenant or by
reason of its failure to perform
any act required of it hereunder
Agrees to save and hold harmless
Landlord from and against any
such lien(s) or claims of
lien(s). Provided, however,
Tenant shall not be required to
pay or discharge any lien against
the Leased Premises so long as
Tenant has given Landlord notice
of its intent to contest such
lien and Tenant is in good faith
contesting the validity or amount
thereof and has given to Landlord
such security as Landlord has
reasonably requested to assure
payment of such lien and to
prevent the sale, foreclosure or
forfeiture of the Land, Building
or Leased Premises by reason of
non-payment. In the event that
any lien does so attach, and is
not released within thirty (30)
days after written notice to
Tenant thereof or if Tenant has
not indemnified Landlord against
such lien within said thirty (30)
day period, Landlord, in its sole
discretion, may pay and discharge
the same and relieve the Leased
Premises therefrom, and Tenant
agrees to repay and reimburse
Landlord as additional rent upon
demand for the amount
so paid by Landlord. The
existence of any mechanic's,'
laborer's, materialmen's,
supplier's or vendor's lien, or
any right in respect thereof,
shall not constitute a violation
of this paragraph if payment is
not yet due and
14
payable upon the contract or for the goods or services
in respect of which any such lien has arisen. On final
determination of the lien or claim of lien Tenant will
immediately pay any judgment rendered, and all costs and
charges, and shall cause the lien to be released or
satisfied. In addition, Landlord may require Tenant to
pay Landlord's attorneys' fees and costs in
participating in such action if Landlord shall decide it
is in its best interest to do so.
Tenant shall not permit the Leased Premises to be used
for (a) illegal purposes; or (b) uses that are dangerous
to the Leased Premises or to the public; or (c) a
cocktail lounge, bar, disco, bowling alley, pool hall or
billiard parlor, adult bookstore, adult amusement
facility, or any facility selling, renting or displaying
pornographic materials, a secondhand store, auction
house or flea market. Tenant agrees that Tenant's use of
the Leased Premises and any assignee and/or sublessee of
Tenant use of the Leased Premises are limited by and
subject to the Covenant Documents as more fully set
forth on the attached Exhibit B. Tenant will not use or
permit the use of the land, Building or Leased Premises
in any manner which would result or would with the
passage of time result in the creation of any easement
or prescript right. Tenant shall not use. or occupy the
Leased Premises, or knowingly permit them to be used or
occupied, contrary to any statute, rule, order,
ordinance, requirement or regulation certificate of
occupancy affecting the same, or which would make void
or Voidable any insurance then in force with respect
thereto to which would make it impossible to obtain fire
or other insurance thereon required to be,furnished
hereunder at Tenant's expense, or which would cause
structural injury to the improvements or cause the value
or usefulness of the Leased Premises, or any portion
thereof, to diminish (reasonable,. wear and tear
excepted), or which would constitute a public or private
nuisance or waste, and Tenant agrees that it will
promptly, upon discovery of any such use, take all
necessary steps to compel the discontinuance of such
use.
During any period of time in excess of forty-eight
(48) hours when the Building is not open for business,
Tenant shall notify Landlord of any such closure of
the Building and take appropriate security and safety
measures to reasonably guard the Leased Premises from
damage, vandalism and the deposit of refuse or waste
in or about the Leased Premises and reasonably protect
persons in or about the Leased Premises from death and
personal injury. During such periods of time, Tenant
shall submit to Landlord, at least quarterly, a report
of such safety and security measures that have been
taken by Tenant, confirming that Tenant has inspected
the Leased Premises and reporting the condition of
15
the Leased Premises and any damage to the Leased Premises or any
personal injuries known to Tenant that have occurred in or about
the Leased Premises.
B. Hazardous Materials:
1. No Toxics. To the best of Tenant's knowledge, information and belief, no
electrical transformers, light fixtures or other equipment containing
polychlorinated biphenyl are or were located on the Leased Premises at any
time during or prior to Tenant's possession, construction of the Building,
and/or occupancy thereof, except as disclosed in the PSA (as defined in
Section 1 5 (b)). Tenant hereby represents and warrants that Tenant has not,
during the construction of the Building, and shall not install any asbestos
containing materials or equipment containing polychlorinated biphenyl, or any
Hazardous Materials (as defined in Section 15(e) hereof) in amounts in excess
of those prescribed by law, in the Leased Premises.
2. No Storage Tanks.. To the best of Tenant's knowledge, information and
belief, no storage tanks (either above-ground or underground) for gasoline or
any other substances are or were located on the Leased.Premises at any time
during or prior to Tenant's possession, construction of the- Building and/or
occupancy thereof, except as disclosed in the PSA. Upon the termination of
this Lease, or sooner if required by law, Tenant shall, remove and/or
remediate any Hazardous Materials and contaminated soil or around water, if
any, at Tenant's sole cost, and expense, which may then be present upon the
Land.
3. Indemnification. Tenant hereby agrees to indemnify, defend, protect, and
hold harmless Landlord and Landlord's Lender, if any, and Landlord's and
Landlord's Lender's employees, agents and representatives from and against any
and all loss, damages or liability including, without Limitation, (i) all
damages directly or indirectly arising out of the use, Generation, storage,
transportation, treatment, release, threatened release or disposal of.
Hazardous Materials upon the Land, including diminution
16
in value of the Leased Premises; and
(ii) the cost of any required or
necessary repair, remediation, cleanup
or detoxification and the preparation of
any closure or other required plans or
reports, whether such action is required
or necessary prior to or following
transfer of title to the Leased
Premises, to the full extent that such
action is attributable, directly or
indirectly, to the presence or use,
generation, storage, transportation;
release threatened release or disposal
of Hazardous Materials by Tenant and any
of Tenant's agents, employees,
contractors or invitees during the '
Term of this Lease. This agreement to
indemnify, defend, protect and hold
harmless Landlord and Landlord's Lender
(if any) shall be in addition to any
other obligations or liabilities Tenant
may have to Landlord or Landlord's
Lender, if any, at common law under all
statutes and ordinances or otherwise and
survive the termination of the Lease to
the extent of acts or omissions of
Tenant occurring prior to the
termination of the Lease.
15. TENANT REPRESENTATIONS. Tenant acknowledges,
represents, and. warrants to Landlord and Landlord's
successors and assigns that:
a. Occupation of Leased Premises. Tenant shall be ,deemed the prior owner
and occupant of the Leased Premises immediately prior to Landlord's purchase
of the Leased Premises from Tenant;
b. PSA. Tenant has caused to prepare a Phase I Environmental Site Assessment
of the Leased Premises, dated as of, 19_ (the "PSA") a complete copy of which
has been furnished and certified to Landlord and Landlord's Lender, if any;
c. No Environmental Audit by Landlord. Tenant acknowledges that in reliance
upon Tenant's presumed and stipulated prior knowledge of the use and physical
condition of the Leased Premises (as well as Tenant's warranties and
representation, set forth herein), Landlord has not itself performed an
environmental audit or preliminary site assessment on the Leased Premises;
17
d. No Violation of Health and Safety Laws.
Tenant represents, to the best of knowledge,
information and belief, that the Leased
Premises are not in violation of any federal,
state or local law, ordinance or regulation
relating to industrial hygiene, health and
safety, or, to the best of its knowledge,
information and belief, to the use,
generation, storage, transportation or
disposal of Hazardous Materials [as defined in
Section 15(e)] or to the environmental
condition on, under or about the Leased
Premises, including, but not limited to, soil
and ground water condition, and no notice from
any governmental body has been served upon or
delivered to Tenant claiming any such
violation;
e. No Hazardous Materials. Except as has been
previously disclosed to Landlord in the PSA, neither
Tenant nor, to the best of Tenant's knowledge,
information an belief, any third party has at any
time during or prior to Tenant's possession,
construction of the Building, and/or occupancy of the
Leased Premises used, generated, manufactured, stored
or disposed of on, under or about the Leased
Premises, or transported to or from the Leased
Premises, any Hazardous Materials. Tenant shall not
conduct, nor permit, any of the foregoing activities
to occur on the Leased Premises during the term. The
term "Hazardous Materials" as used in this Lease
shall include, but not be limited to, any flammable
materials, explosives radioactive materials,
hazardous or toxic substances which are or become
regulated by any local Governmental authority, the
state in which the Land is located or the United
States Government or which would require removal,
treatment or other remedial action. The term
"Hazardous Materials" includes, without limitation,
any material or substance which is (i) listed or
defined as a "hazardous waste," "extremely hazardous
waste," "restricted hazardous waste," or "hazardous
substance", or the like, under any municipal, state
or federal law, code or other regulation; (ii)
defined as "hazardous substances," "hazardous
materials," or "toxic substances" in the
Comprehensive Environmental Response Compensation and
Liability Act of 1980, as amended, 42 U.S.C. 9601
et sea., The Hazardous Materials Transportation Act
49 U.S.C. 1801, et seq., and the Resource
Conservation and Recovery Act, 42 U.S.C. 6901, et
sea.; (iii) petroleum products; (iv) asbestos; (v)
polychlorinated biphenyl; (vi) designated as a
"hazardous
18
substance" pursuant to Section
3.11 of the Federal Water
Pollution Control Act (33 U.S:C.
1317); (vii) any substance which
is subject to the reporting
requirements of the Federal
Emergency Planning and Community
Right-to-Know Act; (viii) defined
as a "hazardous substance"
pursuant to the Toxic Substances
Control Act, 15 U.S.C. 2601; or
(ix) any substance which
contaminates soil or ground water
and causes degradation of the soil
and/or water to the extent that
mitigation methods are needed to
restore the soil or water to its
natural state;
f. No Asbestos. Tenant agrees that no asbestos containing
materials will be installed within the Leased Premises or 'exposed
in the Leased Premises through demolition, renovation or otherwise,
at any time during or prior to Tenant's possession and/or occupancy
thereof; and
g. Signage. All signs located on the Leased Premises have been
approved and been installed in accordance with local ordinances and
any other agreements, i.e., Covenant Documents as listed on the
attached Exhibit B, to which the Land may be subject as of the
Commencement Date.
16. LANDLORD'S PERFORMANCE OF TENANT'S DUTIES.
a. Performance at Tenant's Sole
Expense. If Tenant should default
in the performance of any covenant
or agreement on its part to be
performed by virtue of any
provision of this Lease, Landlord
may, after ten (10) days'. notice
in the case of defaults in the
payment of rent, additional rent
or other monetary defaults, or
after thirty (30) days' notice in
the case of non-monetary defaults
(or, in the case of emergencies,
reasonable attempts at prior
notice), perform the same for the
account of Tenant, and Tenant
hereby authorizes Landlord to come
upon the Leased Premises for such
purposes and while on the Leased
Premises to do. all things
reasonably necessary to accomplish
the correction of such default. If
Landlord, at any time, is
compelled to pay or elects to pay
any sum of money by reason of the
failure of Tenant, after ten (10)
days' notice, to
19
comply with any provision of this
Lease, or if Landlord is compelled
to incur any expense, including
reasonable attorneys' fees and
costs, in instituting, prosecuting
or defending any action or
proceeding instituted by reason of
any default of Tenant hereunder,
the sum or sums so paid by Landlord
with all interest costs and damages
including any loss of rent, shall
be deemed to be additional rent
hereunder.
All covenants and agreements to be
performed by Tenant under any of
the term, of this Lease shall be
performed by Tenant at Tenant's
sole expense and without abatement
of rent or setoff. If Tenant shall
fail to observe and perform any
covenant, condition, provision or
agreement contained in this Lease
or shall fail to perform, any other
act required to be performed by
Tenant, Landlord may, upon notice
to Tenant, without obligation, and
without waiving or releasing Tenant
from any default or obligations of
Tenant, make any such payment or
perform any such obligation on
Tenant's part to be performed. All
sums so paid by Landlord and all
costs incurred by Landlord,
including reasonable attorneys'
fees and costs, shall be payable to
Landlord on demand together with
interest thereon at the Default
Rate, and Tenant covenants to pay
any such sums, and Landlord shall
have (in addition to any other
right or remedy hereunder) the same
rights and-remedies in-the event of
Tenant's non-payment thereof as in
the case of default by Tenant in
the payment of. rent.
b. Interest on Past Due Amounts. Any amount due from Tenant to
Landlord which is not paid within five (5) days after receipt by
Tenant of Landlord's written notice that said amount is past due
shall bear interest at the Default Rate from the date . such
payment is due until paid, but the payment of such interest shall
not excuse or cure any default by Tenant under this Lease.
c. Late Charqe. Upon receipt by Tenant of written notice from
Landlord that Tenant is more than ten (10) days' late in paying any
installment of rent due under this Lease, Tenant shall pay to
Landlord a late charge equal to five percent (5%) of each
delinquent amount of rent and any subsequent delinquent amount of
rent. The parties agree that the amount of such late charge
20
represents a reasonable estimate of the cost and expense
that would be incurred by Landlord in processing each
delinquent payment of rent by Tenant and that such late
charge shall be paid to Landlord as liquidated damages for
each delinquent payment, but that the payment of such late
charge shall not excuse or cure any default by Tenant
under this Lease.
d. Purpose of Interest and Late
Charge. The parties agree that
the payment of late charge and
the payment of interest
provided for in this Section 16
are distinct and separate from
one another in that the payment
of interest is to compensate
Landlord for the use of
Landlord's money by Tenant,
while the payment of a late
charge is to compensate
Landlord for the additional
administrative expense incurred
by Landlord in handling and
processing delinquent payments,
but excluding attorneys' fee
and attorneys' costs incurred
with respect to such delinquent
payments.
17. NOTICE TO MORTGAGEE. At the written
request of Landlord and for so long as
there remains of record a mortgage or
mortgages of Landlord's interest in the
property, and Tenant has been given
written notice of the identity and
address of such mortgagee(s), Tenant
shall use reasonable effort to-give-a-
duplicate -notice of each notice sent to
Landlord to such mortgagee. Failure to
give notice to mortgagee shall not
invalidate the Tenant's notice to
Landlord or expose Tenant to liability to
mortgagee. Tenant agrees that if in any
notice to Landlord the performance of
some act is required or compliance with
some provision hereof is requested and
Landlord does not, within the allotted
time, perform such act or comply with
such provision, then mortgagee shall have
thirty (30) days after mortgagee's
receipt of such notice in which to
perform such act or comply with such
provision for and on behalf of Landlord,
and Tenant shall have no right to take
action otherwise permitted it, or to
terminate this Lease, if the mortgagee
shall perform and comply within said
thirty (30) days. In the event the act or
thing to be complied with within said
thirty (30) day period cannot by its
nature reasonably be completed within
such period, mortgagee shall be deemed to
have complied therewith in the event it
commenced the performance of compliance
within said thirty (30) day period and
thereafter completes the same with due
diligence. The granting to the mortgagee
of additional time in which to comply
shall not be deemed in any manner to
release or relieve Landlord from the
obligations of Landlord
21
under this Lease. The said mortgagee is
hereby authorized to enter upon the
Leased. Premises following reasonable
notice to Tenant and while thereon to do
anything necessary to correct such
default. For purposes of this Lease any
reference to a mortgage or mortgages
shall include references to deeds of
trust and beneficiaries thereof.
1 8. SUBLETTING AND ASSIGNMENT. Provided
that Tenant shall remain liable under all
of the terms and conditions of this Lease
for the full remainder of the Term and any
extensions thereof, Tenant shall have the
absolute right to assign or sublet the
Premises, in whole or in part, without the
consent of the Landlord. So long as Tenant
is not publicly traded, a change of
ownership of fifty-one percent (51 %) or
more of Tenant shall be deemed an
assignment of this Lease for purposes of
this paragraph. Transfers in connection
with a public offering shall not be deemed
an assignment of Lease. If the stock of
Tenant is publicly held, there shall be no
restriction on subletting and assignment,
except for a use not approved by Landlord,
whose approval will not be denied or
delayed unreasonably, but in no event
shall Tenant be released of any obligation
hereunder. The Tenant shall have the right
to assign this Lease, or to sublet the
Leased Premises to any of Tenant's
affiliates, subsidiaries or parent
corporation(s). A change of ownership of
fifty-one (51 %)_or more of the.. stock
,of Tenant shall not be considered an
assignment if. it occurs in connection
with a bona fide merger or acquisition or
change in the state of incorporation of
Tenant. At least thirty (30): days prior
to commencement of any sublease or
assignment, and as a condition thereof,
Tenant shall furnish to Landlord (for
Landlord's review of the same for
compliance with the terms of this Lease) a
copy of the fully executed sublease or
assignment document.
a. No Release. No assignment or subletting of any form shall
serve to release Tenant of any obligations hereunder or alter the
primary liability of Tenant for the payment of rent and other
sums due Landlord hereunder or for the performance of any other
obligations to be performed by Tenant under this Lease, whether
or not the sublessee or assignee has attorned to the Landlord.
b. Acceptance of Rent or Performance. Landlord may accept any
rent or performance of Tenant's obligations from any person
22
other than
Tenant and such acceptance of any rent
or performance shall not constitute a
waiver or estoppel of Landlord's
rights to exercise its remedies for the
default or breach by Tenant of any of
the terms, covenants or conditions of
this Lease.
c. No Need to Exhaust Security. In the event of any default or
breach of Tenant's obligations under this Lease, Landlord may
proceed directly against Tenant, or any one else responsible for
the performance of Tenant's obligations under this Lease,
including the sublessee or assignee, without first exhausting
Landlord's remedies against any other person or entity
responsible therefor, or any security held by Landlord or Tenant.
d. Assumption. Any assignment or subletting permitted hereunder
shall be conditioned upon the assignee or sublessee assuming and
agreeing in a writing addressed to Landlord and Landlord's
Lender, if any, to conform and comply with each and every term,
covenant, condition and obligation herein to be observed or
performed by Tenant during the term of said assignment or
sublease.
e. Provisions to be Included in Sublease. The following terms
and conditions shall apply to any subletting by Tenant-of all or
any part of the Leased Premises shall be deemed included in all
subleases under this Lease whether or not expressly incorporated
therein.
(1) Assignment of Rents. Tenant hereby
assigns and transfers to Landlord all
of Tenant's interest in all rents and
income arising from any sublease of all
or a portion of the Leased Premises
heretofore or hereafter made by Tenant,
and Landlord may collect such rent and
income and apply same toward Tenant's
obligation under this Lease; provided,
however, that except during a period in
which a breach has occurred in the
performance of Tenant's obligations
under this Lease, and remains uncured
Tenant may, except as otherwise
provided in this Lease, receive,
collect and enjoy the rents accruing
23
under such sublease. Landlord shall pay to Tenant any
portion of such rents, .collected from any sublessee
that exceed the rental and other monetary obligations
then due from Tenant under the Lease. Landlord shall
not, by reason of this assignment of rents or any other
assignment of sublease to Landlord, nor by reason of the
collection of the rents from a sublessee, be deemed
liable to the sublessee 'for any failure of Tenant to
perform and comply with any of the Tenant's obligations
to such sublessee under such sublease. Tenant hereby
irrevocably authorizes and directs any such sublessee,
upon receipt of a written notice from Landlord stating
that a default exists in the performance of Tenant's
obligation under this' Lease, to pay to Landlord the
rents and other charges due and to become due under the
sublease. Sublessee shall rely 'upon any such statement
and request from Landlord and shall pay such rents and
other charges to Landlord without any obligation or
right to inquire as to whether such default exists and
notwithstanding any notice from or claim from Tenant to
the contrary, Tenant shall have no right or, claim
against said sublesseeor, until the default has been
cured, against Landlord, for any such rents and other
charges so paid by sublessee. to Landlord.
(2) Attornment. In the event of a breach by Tenant in
the performance of its obligations under this Lease, and
a resulting termination of Lease by Landlord, Landlord,
at its option and without any obligation to do so, may
require any sublessee to attorn (i.e., agree to become
tenant to a new owner or landlord of the same property)
to Landlord, in which event Landlord shall undertake the
obligations of the sublessor under such sublease from
the time of the exercise of said option to the
expiration of such sublease; provided, however, Landlord
shall not be liable for any prepaid rents or security
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deposit paid by such sublessee to such sublessor or
for any prior defaults or breaches of such sublessor
under such sublease.
(3) Consent of Landlord Required. Any matter or thing requiring
the consent of the sublessor under a sublease shall also require
the consent of Landlord herein, if Landlord's consent is required
under this lease.
(4) Conditions of Sublease. Each sublease shall provide that (i)
it is subject and subordinate to this Lease and any Underlying
Mortgage (defined in Section 34 below); (ii) Landlord may enforce
the provisions of the sublease including collection of rent;
(iii) if this Lease is terminated for any reason, Landlord may,
at its option, either (A) terminate the sublease, or (B) takeover
all of the rights and interest of Tenant; as sublessor, under
such sublease, in which case such sublessee shall attorn to .
Landlord; and (iv) any notices to be given to Tenant, as
sublessor, by the sublessee shall simultaneously be given
Landlord. If Landlord elects to takeover the rights and interest
of a Tenant, Landlord shall not (1) be liable for any previous
act or omission of Tenant under the sublease; (2) be subject to
any defense or offset in favor of the sublessee against Tenant;
or (3) be bound by any modification to the sublease made without
Landlord's written consent or by any prepayment by sublessee,
more than one month's rent.
19. CONDEMNATION. In the event all of the
Leased Premises, or such portion thereof
as will make the Leased Premises unusable
for the purposes of Tenant, be condemned
by any legally constituted authority for
any public use or purpose, then in either
of said events, the Term hereby granted
shall cease, at the option of either
Landlord or Tenant on thirty (30) days'
written notice from the time when
possession thereof is taken by said
public authorities, and rent shall be
accounted for as between Landlord and
Tenant as of that date.
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Said termination, however shall be without prejudice
to the rights of either Landlord or Tenant, or both,
to recover compensation and damage caused by
condemnation from the condemnor, except: (i) Tenant
shall have no rights for the value of its leasehold;
and (ii) neither Tenant nor Landlord shall have any
rights in any separate award made to the other' party
by the condemnor. In the event less than all of the
Leased Premises is taken or condemned for a public or
quasi-public use and the portion of the Leased
Premises is taken or condemned for a public or quasi-
public use and the portion of the Leased Premises
which is not taken may be reasonably suitable for the
purposes of Tenant by repair or restoration, this
Lease will not terminate. Landlord shall, in such
event, subject to the terms of any Underlying
Mortgage (as defined in Section 34 hereof) promptly
commence and diligently complete the repair and
restoration of the Leased Premises so that upon
completion the Building will constitute a complete
architectural unit with an appearance, character and
commercial value as nearly as possible equal to the
value of the Building immediately prior to the
taking, provided however, Landlord shall have no
obligation to expend more on reconstruction than the
net amount of a condemnation award or received by way
of settlement in lieu thereof or make a repair or
restoration if the estimated cost therefore would
reduce the Landlord's award. There shall be an
abatement of annual Base Rent after such taking which
shall be equal to the percentage of total area of the
Building after the taking and Landlord's restoration
thereof as relates to the total area of the Building
immediately prior to said taking thereunder, to the
termination of this Lease.
20. MUTUAL INDEMNIFICATION. Subject to
provisions of Section 10(f), each party
("Indemnifying Party") agrees to indemnify
and save harmless the other ("Indemnified
Party") against and from any and all of
the following if not covered by the
insurance to be maintained by Tenant
pursuant to Section 10 hereof: claims by
and on behalf of any persons, firms or
corporations, arising from the conduct or
management of, from any work or thing
whatsoever done by or on behalf of the
Indemnifying Party in or about, of its
activities upon or (in the case of Tenant)
occupancy, the Leased Premises during the
Term of this Lease, and will further
indemnify and save the Indemnified Party
harmless against and from any and all
claims arising from any breach or default
on the part of the Indemnifying Party in
the performance of any covenant or
agreement on the part of such Indemnifying
Party to be performed pursuant to the
terms of this Lease, or from any violation
or failure to comply with any law,
ordinance or regulation, or from any act
or negligence of such
Indemnifying Party, or any of its agents,
contractors, servants, employees,
26
licensees, or invitees or arising from any
accident, injury or damage whatsoever caused
to any person, firm or corporation, occurring
during the Term of this Lease, in or about
the Leased Premises, or upon or under the
sidewalks and the land adjacent thereto, and
from and against all costs, reasonable and
necessary counsel fees, expenses and
liabilities incurred in or about any such
claim or action or proceeding brought
thereon, and in case any action or proceeding
is brought against the Indemnified Party by
reason of any such claim, the Indemnifying
Party upon notice from the Indemnified Party
covenants to resist or defend such action or
proceeding by counsel reasonably satisfactory
to the Indemnified Party. Landlord's
liability is limited to Landlord's interest
in the Leased Premises and will be cancelled
automatically upon any failure by Tenant to
maintain in full force and effect. all
insurance required to be furnished by Tenant
under the provisions of this Lease.
21. INSPECTION OF PREMISES. Tenant agrees to permit Landlord and
any mortgagee of the Leased Premises, and their agents, to
inspect the Leased Premises at all reasonable times, and to come
upon the Leased Premises- if necessary to perform any act which
Tenant has failed to perform, as provided elsewhere in this
Lease. Tenant shall be given reasonable prior notice of any such
entry (except in the case of emergency) and any such entry shall
be undertaken in a manner that reasonably minimizes interference
with Tenant's use and operations and Tenant shall have the right
to have one or more of its employees present during such
inspection.
22. DEFAULT. At the election of Landlord, Tenant shall be in
default under this Lease if one or more of the following events
(herein called "Defaults") shall happen and be continuing,
namely:
a. Failure to make the punctual payment of any rent, additional
rent
or other monetary payment herein agreed to be
paid and such
failure shall continue for a period of five (5)
days after written
notice is given by Landlord to Tenant of such
failure;
b. Tenant shall have filed a petition in bankruptcy or prayed
for any relief under the Federal Bankruptcy Law or made an
assignment for the benefit of creditors or consent to the
entry of an order for relief in involuntary bankruptcy;
27
c. An attachment or execution shall have been levied upon the
Tenant's property in or interest under this Lease, which shall
not have been satisfied or released or the enforcement thereof
stayed or superseded by an appropriate proceeding within thirty
(30) days thereafter;
d. An involuntary petition in bankruptcy or for reorganization
or arrangement under the Federal Bankruptcy Law shall have been
filed against Tenant and either an order for relief is entered or
such involuntary petition is not withdrawn, dismissed, stayed or
discharged within sixty (60) days from the filing thereof;
e. A Receiver or Trustee shall have been appointed for the
property of Tenant or Tenant's business or assets and the order
or decree appointing such Receiver or Trustee shall have remained
in force undischarged or unstayed for thirty (30) days after the
entry of such order or decree;
f. Tenant admits in writing its inability to pay its debts as
they become due;
Tenant shall have failed to perform or observe any other
covenant, agreement or condition to be performed or kept by the
Tenant under the terms and provisions of this-Xxxxxx-and-such
failure shall continue for thirty (30) days after written notice
thereof has been given to Tenant by Landlord, unless Tenant shall
have commenced corrective action within such thirty (30) days and
thereafter diligently completes the same; the foregoing provision
shall not require Tenant to occupy the Leased Premises and Tenant
shall be entitled to vacate the Leased Premises so long as it
otherwise complies with its obligations hereunder, unless the
Covenant Documents otherwise provide; however said time period
shall be inclusive of any and all statutory time periods for
nonpayment of rent and reach of covenants in Lease.
23. LANDLORD'S REMEDIES UPON DEFAULT.
Upon the occurrence of any Default by
Tenant, Landlord, at its option, may have
one or more of the following remedies, in
addition to all of the rights and
remedies provided at law or in equity.
28
a. Entry by Landlord. Landlord may cure the default for the
account of Tenant, arid Tenant hereby authorizes Landlord to come
upon the Leased Premises for such purposes and while on the
Leased Premises to do all things reasonably necessary to
accomplish the correction of such Default. If Landlord, at any
time, is compelled to pay or elects to pay any sum of money by
reason of the occurrence of a Default by Tenant or if Landlord is
compelled to incur any expense, including reasonable attorneys'
fees and attorney's costs, property management fees, in
instituting, prosecuting or defending any action or proceeding
instituted by reason of any Default of Tenant hereunder, the sum
or sums so paid by Landlord with all interest costs and damages,
including any loss of rent, shall be deemed to be additional rent
hereunder and such action by Landlord shall not be deemed a
waiver by Landlord of Tenant's default or any other remedy
available to Landlord.
b. Performance By Landlord. Landlord may, upon notice to
Tenant, without obligation, and without waiving or releasing
Tenant from any Default or obligations of Tenant, make any such
payment or perform any such obligation on Tenant's part to be
performed. All sums so paid by Landlord and all costs incurred by
lessor, including reasonable attorney's fees and costs, shall be
payable to-Landlord-on -demand-together with interest thereon-
at-the Default Rate, and Tenant covenants to pay any such sums,
and Landlord shall have (in addition to any other right or remedy
hereunder) the same rights and remedies in the event of Tenant's
non-payment thereof as in the case of default by Tenant in the
payment of rent.
c. Repossession: Damages. Landlord may without further notice
repossess the Leased Premises and at any time thereafter may
terminate this Lease by written notice to Tenant. In such event,
Landlord shall be entitled to recover liquidated damages (in lieu
of paying any further deficiency amounts under Section 23(d)
below) a sum of money equal to the total of (i) the cost of
recovering the Leased Premises; (ii) the unpaid rent earned at
the time of termination, plus interest thereon; (iii) late
charges on unpaid rent and accrued interest thereon; (iv) the
present value of the balance of the rent for the remainder of the
term using a
29
discount rate of ten percent (10%);
(v) reasonable costs of. reletting
and refurbishing the Leased Premises
including, without limitation,
leasing commissions paid, tenant
improvement costs, rent concessions
and repairs to the Leased Premises;
and (vi) any other sum of money and
damages reasonably necessary to
compensate Landlord for the detriment
caused by Tenant's Default.
d. Termination of Right of Possession.
Landlord may immediately terminate
Tenant's right of possession of the
Leased Premises by written notice to
Tenant with or without terminating
this Lease,
ti and without notice or demand enter
upon the Leased Premises or any part
thereof and take absolute possession
of the same, expel or remove Tenant
and any other person or entity who
may be occupying the Leased Premises
and change the locks. In the event
that Landlord terminates Tenant's
right to possession without
terminating this Lease, Landlord
shall engage a commercial real estate
broker to relet the Leased Premises
or any part thereof for such terms
and such rents as Landlord may
reasonably elect. In the event
Landlord shall elect to so relet, the
rent received by Landlord from such
reletting, shall be applied first to
the payment of any sums owing from
Tenant to Landlord hereunder other
than rent due hereunder from Tenant.
to Landlord second to the payment of
any reasonable cost of such
reletting, including; without
limitation, refurbishing costs and
leasing commissions, and third, to
the payment. of rent due and unpaid
hereunder, and Tenant shall satisfy
and pay any deficiency upon demand
there for from time to time. Any such
entry into the possession of the
Leased Premises by Landlord under
this Section 23 shall be without
liability or responsibility for
damages to Tenant and shall not be in
lieu of or in substitution for any
other rights of Landlord hereunder at
law or in equity. Tenant further
agrees that Landlord may file suit to
recover any sums due Landlord under
the terms of this Section 23 and that
no recovery of any portion due
Landlord hereunder shall be any
defense to any subsequent action
brought for any amount not
theretofore reduced to judgment in
favor of Landlord. Reletting of the
Leased Premises shall not be
construed as an election on the part
of Landlord to terminate this Lease
and notwithstanding any such
reletting without termination,
Landlord may at any time
30
thereafter elect to terminate this Lease for such
previous breach and recover liquidated damages as of the
date of termination as set forth in Section 23(c) hereof.
e. No Termination Without Written Notice. No re-entry by
Landlord or any action brought by Landlord to oust Tenant from
the Leased Premises after the occurrence of a Default shall
operate to terminate this Lease unless Landlord shall give
written notice of termination to Tenant, in which event Tenant's
liability shall be as above provided. In the event of a Default
by Tenant, Landlord shall have the right of an injunction or a
restraining order against Tenant and the right to invoke any
remedy allowed by law or in equity Whether or not other remedies,
indemnities or reimbursements are herein provided.
f. Suit for Specific Performance or Damages. Landlord may bring
suit against Tenant for the specific performance of this Lease by
Tenant or for damages directly or indirectly arising out of
Tenant's breach of any term or covenant of this Lease.
Remedies Are Cumulative. The rights and remedies
given to Landlord in this Lease are distinct,
separate and cumulative remedies, and except as
provided herein, no one of them, whether or not
exercised by Landlord, shall be deemed to be an
exclusion of any of the others. No right or remedy
granted to Landlord herein is intended to be
exclusive of any other right or remedy hereunder or
now or hereafterexisting in law or equity or by
statute. In the event of termination of Tenant's
right to possession, by Landlord after the occurrence
of a Default, Tenant Waives any and all rights to
redeem the Leased Premises either provided by any
statute now in effect or hereafter enacted.
24. CONDITION OF PREMISES ON TERMINATION.
Upon termination of this Lease for any
reason, Tenant covenants and agrees to
remove all of its personal property,
including fixtures and equipment
installed by Tenant upon the Leased
Premises which are not permanently
attached (except utility connections and
equipment), and Tenant shall repair any
damage caused by the removal thereof, and
shall leave the Leased Premises in as
good repair and clean condition as at the
commencement of this Lease, normal and
reasonable
31
wear and tear and usage excepted. Tenant
shall, at Landlord's election, either (i)
remove at Tenant's sole expense, any title
encumbrances relating to the Leased Premises
caused by Tenant's interest in the Lease; or
(ii) provide Landlord with a bond for the
total amount of said title encumbrance.
All Fixtures (other than trade fixtures and
equipment not for the operation of the
Building), improvements, alterations and
equipment for the operation of the Building now
or hereafter permanently attached to the Leased
Premises, including without limitation all
plumbing, electrical, and HVAC equipment and
all doors, ceiling tiles and lighting fixtures,
shall be and remain Landlord's property and
shall not be removed from the Leased Premises
without Landlord's prior written consent. All
movable fixtures and equipment are and shall
remain Tenant's property, and Landlord agrees
to sign any and all waivers reasonably required
by Tenant in order to complete any fixture
financing arrangements relative to said movable
fixtures and equipment. Landlord shall have no
interest in any movable fixtures and equipment
owned by Tenant, or installed in or upon the
Leased Premises solely at the cost and expense
of. Tenant. In the event said property is
thereafter removed from the Leased Premises by
Tenant, or any party holding a lien on, a
security interest in, or a reversionary
interest in the property, or by any agent or
representative thereof or any purchaser
thereof, pursuant to the exercise or
enforcement of any rights incident to the
interests created, Tenant or party holding such
interest shall repair any damage necessitated
by the removal of such property as may be
necessary to restore the Leased Premises to
good condition and repair, excepting only
reasonable wear and tear, without any cost or
expense to Landlord.
25. SUCCESSORS AND ASSIGNS. Subject to Section
18, the obligations and responsibilities of the
parties to this Lease shall be binding upon,
and the rights and benefits shall inure to ,the
successors and assigns of the parties hereto;
but the liabilities of any successor to the
interest of the Landlord hereunder shall be
limited to the performance of those obligations
which arise and accrue during the period of
ownership of the Leased Premises by any such
successor. In the event that Landlord sells,
assigns or transfers the Leased Premises, and
the buyer/transferee assumes in writing all
obligations of Landlord under this Lease, then
from and after the effective date of such sale,
assignment or transfer, Landlord shall have no
further liability under this Lease.
32
26. NOTICES. Unless otherwise
specifically provided herein, all notices
and demands hereunder shall be in
writing, and shall be given by registered
or certified mail, return receipt
requested and shall be deemed given if it
is deposited in the United States mail,
with sufficient postage prepaid thereon
to carry it to the addressed destination
or shall be delivered by facsimile
transmission (with hard copy sent no
later than 24 hours following
transmission by United States mail,
postage prepaid), to Seller or Buyer at
the following addresses:
Eau Claire Equity Fund Limited Partnership
0000 Xxxx Xxx Xxxxxx, Xxxxx 000 Xxxxxxxxx,
Xxxxxxxxx 00000
,Facsimile: (000) 000-0000
Confirmation: (000) 000-0000
Best Buy Stores, L. P., Corporate Headquarters
0000 Xxxxxx Xxxxx Xxxxx
Xxxx Xxxxxxx, Xxxxxxxxx 00000
Attention: Legal Dept. - Real Estate
Facsimile: (000) 000-0000
Confirmation No: (000) 000-0000
Robins, Kaplan,. Xxxxxx & Xxxxxx
0000 Xx Xxxxx Xxxxx
000 XxXxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxxxxx, Esq.
Facsimile:
(612) 339-
4181
Confirmatio
n No: (612)
349-8500
Buyer and Seller may designate an
additional or another address upon giving
notice to the other parties pursuant to
this Section. Notice given in any other
manner other than as stated herein, shall
be deemed effective only upon receipt by
the party to whom such notice is given.
27. NO ORAL AGREEMENTS. It is expressly
agreed between Landlord and Tenant that
there is no verbal understanding or
agreement which in any
33
way changes the terms, covenants and
conditions herein set forth, and that no
modification of this Lease and no waiver
of any of its terms and conditions shall
be effective unless made in writing and
duly executed by the authorized officers
of the necessary parties or party.
Landlord and Tenant hereby agree that
all prior or contemporaneous oral
understandings; agreements or
negotiations relative to the leasing of
the Leased Premises are merged into this
Lease.
28. NO WAIVER. The failure of Landlord or Tenant to insist, in
one or more instances, upon the strict performance by Tenant or
Landlord of any of the provisions of this Lease shall not be
construed as a waiver of any right or remedy available for any
future breach of such provisions. Receipt by Landlord of rent
with knowledge of the breach of any provisions hereof shall not
be deemed a waiver of any right or remedy available for such
breach.
29. WARRANTIES OF TENANT; ESTOPPEL CERTIFICATE. Tenant warrants
to and for the benefit of any mortgagee of the Leased Premises
that as of the date of execution of this Lease it neither has nor
claims any defense to this Lease nor any offset against the
rentals payable or other obligations required of Tenant
hereunder, and Tenant warrants that it has not paid any rental-in
advance for a period of more than one (1) month-and covenants-
that it will not, without such mortgagee's written consent, at
any time during the term hereof prepay any rental for a period
longer than one month.
Tenant shall at any time and from time to
time upon not less than five (5) business
days prior written notice by Landlord,
execute, acknowledge and deliver to
Landlord a statement in writing
certifying that this Lease is unmodified
and in full force and effect (or if there
have been modifications, that the same is
in full force and effect as modified and
stating the modifications), that the
Lease has not been collaterally assigned,
the dates to which the Base Rent and any
other charges have been paid in advance,
if any, confirming the Term and extension
terms of the Lease, stating that the
Tenant has accepted the Leased Premises
in their then current condition and is in
possession of the Leased Premises,
stating whether or not to the best
knowledge of Tenant, Landlord is in
default in the performance of any
covenant, agreement or condition
contained in this Lease and, if so,
specifying each such default of which
Tenant may have knowledge, stating that
the
34
Tenant has no right of set-off against
past or future rents due under the Lease,
that no rent has been prepaid for more
than one (1) month in advance, and
containing any other information and
certifications which reasonably may be
requested by Landlord or the holder of any
Underlying Mortgages. Any such statement
delivered pursuant to this Section 29 may
be relied upon by a prospective purchaser
of the fee of the Leased Premises or any
mortgagee, ground lessor or other like
encumbrancer thereof, or any assignee of
any such encumbrancer upon the Leased
Premises.
30. CARDING. Landlord may place signs at the Leased Premises
"For Rent" or "For Sale" ninety days before the termination of
this Lease. Landlord may enter the premises at reasonable hours
and upon reasonable notice to exhibit same to prospective
purchasers, tenants and mortgagees and to inspect or make
repairs.
31. LANDLORD AND TENANT. This Lease shall create the
relationship of landlord and tenant
between Landlord and Tenant.
32. TIME OF ESSENCE. Time is of the essence of this
Lease.
33. DEFINITION. "Landlord" as used in this Lease shall include
the original Landlord hereunder, its successors and assigns.
"Tenant" shall include the original Tenant hereunder, its
successors and if this-Lease shall be validly assigned or sublet,
shall include also Tenant's assignee or sublessee, as to premises
covered by such assignment or sublease. "Landlord" and "Tenant"
include male and female, singular and plural, corporation,
partnership or individual, as may be appropriate for the
particular parties.
34. MORTGAGE. Landlord shall have the right to place
trust deeds or mortgages against the Leased
Premises as security for a loan obtained or
to be obtained by Landlord.
Tenant agrees to execute such documents as
may be reasonably required by the lending
agency making any such existing or
subsequent loans, including attornment
agreements, subordination agreements and
estoppel certificates, if requested;
provided that if a mortgage or trust deed
is to be placed on the Leased Premises,
the Landlord and lender shall execute a
subordination and non-disturbance
agreement in a form consistent with the
terms of this Lease and reasonably
acceptable to Tenant.
35
If Landlord's interest in the Leased
Premises is sold or conveyed upon the
exercise of any remedy provided for in any
Underlying Mortgages, or otherwise by
operation of law, then, so long as Tenant
is not in default hereunder; (a) this
Lease (and any amendments, modifications
and extensions thereof) will not be
affected in any way, and Tenant will
attorn and recognize the new owner as
Tenant's landlord under this Lease and
Tenant will confirm such attornment in
writing within ten (10) days after
request; and (b) the new owner shall not
be (i) liable for any act or omission of
Landlord under this Lease occurring prior
to such sale or conveyance; or (ii)
subject to any defense or offset,
abatement or reduction of rent because of
any default of Landlord under this Lease
occurring prior to such sale or
conveyance; (iii) .liable to Tenant for
any rent paid more than one (1) month in
advance; or (iv) bound by any amendment or
modification of this Lease made without
the lender's consent.
This Lease is subject and subordinate to
all mortgages, trust deeds, ground Leases
or other encumbrances which may now or
hereafter may affect the Leased Premises
(the "Underlying Mortgages") and to all
renewals, modifications, consolidations,
replacements and extensions of any such
Underlying Mortgages provided that the
holder of such Underlying Mortgage and
Tenant shall execute a subordination and
non-disturbance agreement in a form
consistent with the terms of this Lease
and reasonably acceptable to Tenant prior
to the date such Underlying Mortgage is
recorded as a lien against the Leased
Premises.
35. ZONING. Tenant covenants that the
Leased Premises are zoned properly so as
to enable Tenant to operate the Leased
Premises as a retail consumer electronics
store and for any activities usually
related thereto. Tenant shall furnish
Landlord and Landlord's Lender, if any, a
certificate from the appropriate
governmental authority addressed to
Landlord and Landlord's Lender, if any,
stating that the premises are so zoned and
such use does not violate any applicable
ordinance, permit, zoning or building
code. Prior to any change in use of the
Leased Premises, Tenant shall furnish
Landlord and Landlord's Lender, if any, a
similar certificate stating that the
proposed use of the Leased Premises is
permitted under all applicable zoning or
building codes or permits. Landlord cannot
guarantee future zoning or changes in
permitted uses, and Tenant assumes the
risk thereof.
36
36. LANDLORD'S CONSENT. In all matters referred to in this Lease,
where Landlord's consent or approval is required, Landlord agrees
that Landlord will not unreasonably withhold Landlord's consent or
approval, except where this Lease indicates that Landlord may act in
its discretion.
37. LEGAL EXPENSE: If Landlord retains the services of attorneys
and successfully recovers possession of the Leased Premises, or
successfully recovers any sum due but not paid after proper
notice has been given by Landlord prior to any suit being filed,
then all such costs and expenses, including reasonable attorneys'
fees and costs, incurred by Landlord shall be paid by Tenant. If
any action, arbitration or proceeding (including any appeal
thereof) is brought by Landlord or Tenant (whether or not such
action is prosecuted to judgment) to enforce its respective
rights under this Lease or to enforce a judgment ("Action"), (i)
the unsuccessful party therein shall pay all costs incurred by
the prevailing party therein, including reasonable attorneys'
fees and costs; and (ii) as a separate right, severable from any
other rights set forth in this Lease, the prevailing party
therein shall be entitled to recovery its reasonable attorneys'
fees and costs incurred in enforcing any judgment against the
unsuccessful party therein, which right to recover such post-
judgment attorneys' fees and costs shall be included in any such
judgment. The right to recover 'post-judgment attorneys' fees
shall (i) not be deemed waived if not included in any judgment;
(ii) survive the final judgment in any Action and-(iii) not be
deemed merged into, such judgment. The rights, and obligations
of the parties under this Section 37 shall survive the
termination of this Lease.
38. TITLE OF LANDLORD. Landlord expressly covenants and agrees
that as of the Commencement Date of the Term of this Lease, it
will be the owner of the fee simple title to the Land and
Building and other improvements subject to the Covenant Documents
as set forth on the attached Exhibit B and to the Underlying
Mortgages and documents related thereto, if any, and subject to
any liens, encumbrances or restrictions arising from or existing
during Tenant's prior ownership of the Leased Premises. Landlord
further covenants that Tenant, on paying the monthly rental and
observing and performing all other terms and conditions contained
in this Lease, shall have quiet and peaceful possession of the
Leased Premises for the full Term, or extensions thereof subject
to the provisions of this Lease.
37
3
39, LIMITATIONS ON LANDLORD'S LIABILITY. It is
expressly understood and agreed that if Tenant
obtains a money judgment against Landlord
resulting from any default or other claim
arising under this Lease, that judgment shall
be satisfied only out of Landlord's right,
title and interest in the Leased Premises, and
no other real, personal or mixed property of
Landlord (or any of the officers, directors,
stockholders or partners, as.applicable, which
comprise Landlord, if any) wherever situated
shall be subject to levy to satisfy such
judgment.
40. FINANCIAL STATEMENTS.Within ninety (90) days of the end of
each of Tenant's fiscal years during the Term of this. Lease
(including the optional renewal term, if exercised) Tenant shall
furnish to Landlord, at no cost to Landlord, a copy of the
audited financial statements for Tenant's fiscal year just ended.
Tenant acknowledges that this undertaking is of substantial value
to Landlord because Landlord's rights to such financial
statements may affect the availability or cost of Landlord's
financing.
41. OPTION TO EXTEND LEASE. Provided that Tenant has not been in
Default for a period of six months next preceding the termination
of this Lease, and the property is being occupied, both when
exercising its option to extend and at the commencement of the
renewal Term, Tenant shall have the option to extend the Term of
this Lease for three successive additional renewal terms of five
years each commencing at the expiration date of the original Term
or prior renewal Term hereof (as the case may be) on the same
terms and conditions as the original Term except that the annual
Base Rent shall be as follows:
ANNUA
L MONTHLY YEARS RENT RENT
21-25 $522,668.00 $43,555.67
26-30 $548,801.00 $45,733.42
31-35 $576,241.00 $48,020.08,
Tenant shall give Landlord written,
notice of its exercise of the option for
the first renewal Term not less than 270
days before the expiration date of the
original Term. Tenant shall give Landlord
written notice of its exercise of the
option for the second or third renewal
Term not less than two hundred-seventy
38
(270) days before the expiration date of the then
renewed Term, as the case may be.
42. GOVERNING LAW. This Lease shall be performed, construed and
enforced, in accordance with the laws of the state of in which
the Land is located.
43. HEADINGS. The headings used in this Lease are for
convenience only and shall not have any bearing or meaning with
respect to the content or context of this instrument.
44. HOLDING OVER. Tenant shall have no right to retain
possession of the Leased Premises beyond the expiration or
earlier termination of the Lease. If Tenant holds over after the
expiration of the Term, with or without the express or implied
consent of Landlord, such tenancy shall be from month-to-month
only, arid not a renewal hereof or an extension for any further
Term, and such month-to-month tenancy shall be subject to each
and every, term, covenant and agreement contained herein;
provided, however, that Tenant shall pay as Base Rent during any
holding over period, an amount equal to one hundred fifty percent
(150%) of the Base Rent payable immediately preceding the
expiration of the Term. Nothing in this Section 44 shall be
construed as a consent by Landlord, to any holding. over_ by
Tenant and Landlord expressly reserves the right to require
Tenant to surrender possession of the Leased Premises upon the
expiration of the Term or upon the earlier termination hereof and
to assert any remedy in law or equity to evict Tenant and/or
collect damages in connection with such holding over.
45. RIGHTS ARE CUMULATIVE. All rights, powers and privileges
conferred hereunder upon the parties shall be cumulative, but not
restricted to those given by law.
46. MEMORANDUM OF LEASE. Either party may, at its sole cost,
prepare and record a Memorandum of Lease at the location where
the deed of title to the Leased Premises is of record. The other
party shall join in executing such Memorandum on request.
39
47. AUTHORITY TO SIGN LEASE. If Tenant is a corporation, then
the persons executing this Lease on behalf of Tenant represent
and Warrant to Landlord that they are duty authorized to execute
and deliver this Lease on Tenant's behalf in accordance with a
duty adopted resolution of the Board of Directors of Tenant.
Landlord warrants to Tenant that the person or persons executing
this Lease on behalf of Landlord are duty authorized to execute
and deliver this Lease on Landlord's behalf.
48. INVALIDITY. If any term or provision of this Lease, the
deletion of which would not adversely affect the receipt of any
material benefit by either party hereunder, shall be held invalid
or unenforceable to any extent, the remaining terms, conditions
and covenants of this Lease shall not be affected thereby and
each of said terms, covenants and conditions shall be valid and
enforceable to the fullest extent permitted by law.
49. CONDITIONS AND COVENANTS. Each provision of this Lease
performable by Tenant shall be deemed both a covenant and a
condition. Landlord and Tenant hereby acknowledge that the Leased
Premises are subject to the Covenant Documents as set forth on
the attached Exhibit B. Tenant hereby agrees to assume, for the
Term of this Lease (including any extensions thereof) all of the
rights and obligations of the owner of the Leased Premises
pursuant to said covenants, conditions and-restrictions, and
Landlord shall cooperate with Tenant in Tenant's enforcement of
any rights thereunder. Tenant's failure to timely comply with or
satisfy any of the obligations contained therein shall be deemed
a material default under this Lease. Tenant shall promptly
furnish to Landlord any notices or mailings Tenant receives
related to the Covenant Documents.
Tenant will pay as additional rent hereunder
throughout the Term of this Lease (and will
indemnify and hold Landlord harmless from any
obligation to pay the same) all Landlord's
share of the costs and expenses of the
maintenance and operation of any such parking
and other common areas, at the times, in the
amounts and in the manner set forth in the
Covenant Documents as set forth on the
attached Exhibit B.
50. SECURITY. Tenant hereby assumes responsibility for and-shall
take all reasonable security measures for the Leased Premises.
40
51. INTERPRETATION. The Lease has been fully negotiated
and no 'provision shall be construed for or against
Tenant or Landlord, and this Lease shall be interpreted
in accordance with its general tenor in 'n effort to
reach an equitable result.
52. ASSIGNMENT. Except as permitted by-Section 18
hereof, Tenant shall not assign, collaterally or
otherwise, nor pledge, encumber or mortgage its interest
in this Lease or in the Leased Premises without
Landlord's Lender's or Landlord's prior written consent
(which' may be withheld in the discretion of '
Landlord's Lender or Landlord).
53. TELEFAX & COUNTERPART. This Lease may be executed
in one or more counterparts, each of which shall be
deemed an original, all of which together constitute the
same instrument. A faxed signature shall have the same
effect as an original.
54. GUARANTOR: Best Buy Co., Inc. is a Minnesota
corporation and the 100% owner of Best Buy Stores, L.
P., a Delaware limited partnership, the. Tenant under
the Lease. Best Buy Co., Inc. is the ultimate holder of
100% of the legal and beneficial interest of Best Buy
Stores, L. P. through Best Buy Co., Inc.'s sole
ownership of all the issued and outstanding voting
shares of both the general partner, BBC Property Co., a
Minnesota corporation, and the limited partner, BBC
Investment Co. 'Best Buy Co., Inc. as an inducement to
Eau Claire Equity Fund. Limited Partnership, a Tennessee
limited partnership to purchase the subject property and
enter into this Lease, all of which Best Buy Co., Inc.
acknowledges is valuable consideration, guarantees
payment of all sums and performance of all obligations
of Tenant .
[THIS SPACE INTENTIONALLY LEFT BLANK]
. 41
IN WITNESS WHEREOF, the parties have caused this
Lease to be duly executed as of the day and year
first written above.
Date: January 15, 1998 LANDLORD: EAU CLAIRE EQUITY
FUND, LIMITED PARTNERSHIP,
a Tennessee limited
partnership'
By: /s/ Xxxxxxx X Xxxxx
XXXXX XXXXXXX, General
Partner by his attorney in
fact Xxxxxxxx X Xxxxx
pursuant to Power of Attorney
dated December 15, 1997
Date: January 20, 1998 TENANT: BEST BUY STORES, L.
P., a Delaware limited partnership
By its general partner, BBC Property Co.,
a Minnesota corporation
By: /s/ Xxxxxx X Xxx
Name: Xxxxxx X Xxx
Its: V.P.
Date: January 20, 1998 GUARANTOR:- BEST-BUY CO. INC.,
a Minnesota corporation
By: /s/ Xxxxxx X Xxx
Name: Xxxxxx X Xxx
Its: Sr V.P.
Exhibit A to Lease
Property Description
Land ins the State of Wisconsin, County of Eau Claire, described as follows:
Part of Xxx 0, Xxxx xx Xxx Xxxxxx, described as follows: Lot 8, of the
Certifited Survey Map recorded in Volume 4, Page 97 and 98 of the Eau
Claire County Registry, located in the Nrothwest 1/4 of the Southeast
1/4, the Southwest 1/4 of the Southeast 1/4, and the Southeast 1/4 of
of the Southeast 1/4 all in Xxxxxxx 00, Xxxxxxxx 00 Xxxxx, Xxxxx 0
Xxxx, Xxxx of EauClaire, Eau Claire County, Wisconsin, more particularly
described as: Commencing at the Southwest corner of said Section 35,
thence N 88 43' 29" E. on the South section line, 2,582.70 feet to the
South 1/4 corner of said Section 35, thence N. 00 14' 29" W. on the
North-South 1/4 line, 1,031.35 feet; thence S 85 46' 32" E. 46.21
feet; thence continuing S 85 46' 32" E 160.00 feet to the Southwest
corner of said Lot 6, thence N 41 16' 57" E 257.49 fee to the Southerly
right-of-way of Commonwalth Avenue, thence N 88 45' 02" E.502.00 feet;
thence 113.97 feet along the arc of a curve to the left having a radius
of 300.45 feet, a central angle of 21 44' 04" and a113.29 foot chord
that bears N 77 53'00" E thence N 67 00' 58" E148.10 feet to the point
of beginning; thence 213.34 feet along the arc of a curve to the right
having a radius of 260.00 feet, a central angle of 47 00' 50" and a 207.41
foo tchord that bears S 89 28' 37" E;thence S 44 55' 58" E 183.73 feet;
thence S 32 15' 06" E 204.97 feet; thence S 41 39' 38" E 200.00 feet;
thence S 48 20' 22" W.268.25 feet; thence N 41 54'07" W 294.58 feet;
thence N 64 26'35" W 54.23 feet; thence N 41 54' 07" W 207.92 feet; thence
N 03 58'30"W 194.25 feet; thence N 24 18' 47" E 45.93 feet to the point
of beginning. Subject to existing easements.
Also known as: Xxx 0 xx Xxxxxxxxx Xxxxxx Xxx #000 recorded in Volume 3
of Certified Survey Maps, Page 390 as Document #596743, re-recorded as
Certified Survy Map #768 in Volume 4 of Certified Survey Maps, Page 97
as Document #607512.
Tax Parcel #15-4416
Together with those appurtenant easements as recited in Slope Easement
Agreement recorded as Document No. 597414, recorded as Document NO
597489, Reciprocal Easement and Operation Agreement recorded as Document
No. 597454, First and Second modification recorded as Document Nos.
687773 and698954, and Easement for Erection of a Panel recorded as
Document No. 597417.
