ASSIGNMENT AND ASSUMPTION OF LEASE
THIS
ASSIGNMENT AND ASSUMPTION OF LEASE (this "Assignment")
made this 14th day of January, 2005, by and
between LMB AUBURN
HILLS I, LLC, an Ohio limited liability company
("Assignor"),
having an address of 2631 Erie Avenue,
Suite 21, Cincinnati, Ohio
45208, and AEI INCOME & GROWTH FUND XXI
LIMITED PARTNERSHIP,
a
Minnesota limited partnership, and AEI
INCOME & GROWTH
FUND 25
LLC, a Delaware limited liability company
(as tenants-in-common
together collectively referred to as, "Assignee"), having an
address of 1300 Wells Fargo Place, 30
Seventh Street East,
St.
Paul, Minnesota 55101.
W I T N E S S E T H:
WHEREAS,
Assignor is the owner of certain
real property
located at 3960 Baldwin Road, Auburn Hills, Oakland County,
Michigan (the "Property") as further
described on Exhibit A
attached hereto and made a part hereof;
WHEREAS,
Assignor has leased the Property to Sterling
Jewelers Inc., a Delaware corporation
("Sterling"), pursuant
to
that certain Lease Agreement dated April 28,
1999 (hereinafter
referred to as, the "Lease"); and
WHEREAS,
Assignor desires to
assign its right,
title and
interest in and to the Lease to AEI Income &
Growth Fund
XXI
Limited Partnership, an undivided forty
percent (40%) interest as
a tenant in common; and AEI Income &
Growth Fund 25
LLC, an
undivided sixty percent (60%) interest as a
tenant in common, and
Assignee desires to assume Assignor's
right, title and
interest
in and to the Lease;
NOW,
THEREFORE, in
consideration of the mutual agreements
hereinafter set forth, and other good and
valuable consideration,
the receipt and sufficiency of which are
acknowledged by each
of
the parties hereto, Assignor and Assignee do
hereby agree as
follows:
1.
Assignment. Assignor
hereby gives, grants, bargains,
sells, conveys, transfers and sets over unto Assignee, its
successors and assigns, as of the date first
above written (the
"Effective Date"), all of Assignor's right,
title and interest in
and to the Lease.
2.
Acceptance
of Assignment and Assumption.
Assignee
hereby accepts the foregoing assignment,
and hereby assumes
and
agrees to be bound by and perform all of
Assignor's obligations
and liabilities to be performed and/or
occurring under the Lease
on or after the Effective Date, including,
without limitation,
the obligations for return of security
deposits as provided
in
the Lease and/or required by law, and any
and all obligations for
any and all leasing commissions, brokerage
fees and similar
payments which become due and payable after
the Effective
Date,
including, without limitation, any and all
leasing
commissions,
brokerage fees and similar payments which
become due and
payable
in connection with the exercise of
any option or right under the
Lease.
3.
Indemnification.
(a) Assignor
hereby indemnifies
Assignee, and agrees to defend and hold harmless
Assignee from
and against any and all liability, loss, damage
and expense,
including without limitation reasonable
attorneys' fees,
which
Assignee may or shall incur under the Lease by
reason of any
failure or alleged failure of Assignor to
have complied with
or
to have performed, before the
Effective Date, the obligations of
the landlord thereunder which were to be
performed before
the
Effective Date.
(b) Assignee
hereby indemnifies Assignor, and agrees
to defend and hold harmless Assignor from
and against any and all
liability, loss, damage and expense,
including without limitation
reasonable attorneys' fees, which Assignor
may or shall incur
under the Lease by reason of any failure or
alleged failure of
Assignee to comply with or perform, on or
after the Effective
Date, all the obligations of the landlord
thereunder which are to
be performed on or after the Effective
Date.
4. Successors and Assigns.
The terms and
conditions of this
Agreement shall be binding upon and shall
inure to the benefit of
the parties hereto and their respective
successors and assigns.
5. Retained Rights.
Assignee hereby agrees
that Assignor may,
at Assignor's election and expense,
proceed at law or equity to
collect any delinquent rents accruing
under the Lease prior
to
the Effective Date. Assignor hereby agrees that
Assignee shall
have no obligation to collect any rent due
prior to the Effective
Date under the Lease; provided, however,
that in the event
Assignee is paid rent from a tenant that has
delinquent
rent
accruing prior to the Effective Date, and such
payment is in
excess of current rent due and payable
under the Lease and
any
collection costs incurred by Assignee to
collect such rents, then
Assignee agrees to pay such excess amount
to Assignor as soon
as
reasonably practicable after the date of
receipt by Assignee.
6. Counterparts. This Agreement may be executed in
several
counterparts, each of which shall be deemed
an original, and
all
of which together shall constitute one and
the same instrument.
[The remainder of this page has been
intentionally left
blank.
Signature
pages
to
follow.]
IN
WITNESS WHEREOF, the parties hereto have
caused this
instrument to be duly executed on the day and
year first set
forth above.
ASSIGNOR:
LMB AUBURN HILLS I, LLC,
an Ohio limited liability company
By: /s/ Lloyd
Bernstein
Name:
Lloyd Bernstein
Title: Sole
Member & President
STATE OF OHIO
)
) ss.
COUNTY OF HAMILTON
)
The
foregoing was
acknowledged before me this 7th day of
January, 2005, by Lloyd Bernstein, the Sole
Member and President
of LMB Auburn Hills I, LLC, an Ohio
limited liability
company,
for himself and for LMB Auburn Hills I,
LLC.
IN WITNESS
WHEREOF, I have hereunto set my hand and affixed
my official seal in the County and
State of aforesaid,
the day
and year last above-written.
/s/ Thomas Jay Sherman
Notary Public
[notary seal]
ASSIGNEE:
AEI INCOME & GROWTH FUND XXI
LIMITED PARTNERHSIP,
a Minnesota limited partnership
By: AEI FUND
MANAGEMENT XXI, INC.,
a Minnesota corporation, its
General Partner
By: /s/ Robert P
Johnson
Name:
Robert P Johnson
Title:
President
AEI INCOME & GROWTH FUND 25 LLC,
a Delaware limited liability
company
By: AEI FUND
MANAGEMENT XXI, INC.,
a Minnesota corporation, its
Managing Member
By: /s/ Robert P
Johnson
Name:
Robert P Johnson
Title:
President
STATE OF MINNESOTA )
) ss.
COUNTY OF RAMSEY )
The
foregoing was
acknowledged before me this 14th day of
January 2005, by Robert P. Johnson, in his capacity as the
President of AEI Fund Management XXI, Inc., a Minnesota
corporation, the general partner of AEI
INCOME & GROWTH FUND XXI
LIMITED PARTNERSHIP, a Minnesota limited partnership, who
acknowledged the execution of the foregoing
instrument to be
the
voluntary act and deed of said corporation
by authority of
its
board of directors on behalf of the
corporation.
IN
TESTIMOMNY
WHEREOF, I have
hereunto set my
hand and
affixed my official seal in the County and
State aforesaid,
the
day and year first above written.
/s/ Jennifer L Schreiner
Notary Public
[notary seal]
STATE OF MINNESOTA )
) ss.
COUNTY OF RAMSEY )
The
foregoing was
acknowledged before me this 14th day of
January, 2005, by Robert P. Johnson, in his
capacity as the
President of AEI Fund Management XXI, Inc., a Minnesota
corporation, the Managing Member of AEI
INCOME & GROWTH
FUND 25
LLC, a Delaware limited liability
company, who acknowledged the
execution of the foregoing instrument to be
the voluntary act and
deed of said corporation.
IN
TESTIMOMNY
WHEREOF, I have
hereunto set my
hand and
affixed my official seal in the County and
State aforesaid,
the
day and year first above written.
/s/ Jennifer L Schreiner
Notary Public
My Commission Expires:
1/31/05
[notary seal]
EXHIBIT A
Real property in County of Oakland,
State of Michigan, described
as follows:
Parcel 1:
A part of the Northwest 1/4 of
Section 5, town 3 north, range 10
east, City of Auburn Hills, Oakland County,
Michigan, being
more
particularly described as: Commencing at
the West 1/4 corner
of
said Section 5; thence North 85 degrees 35
minutes 59
seconds
East, 1317.14 feet along the East-West 1/4
line of Section 5
to
the Northwest corner of Lake Angelus
Subdivision, as recorded in
Liber 48, page 10 of Plats, Oakland
County Records; thence North
85 degrees 40 minutes 31 seconds East, 106.07
feet along
the
North line of said Lake Angelus Subdivision and
following the
East-West 1/4 line to a point on the East
line of Baldwin Road as
widened; thence North 02 degrees 16 minutes
14 seconds West,
1038.22 feet along said East line to the point
of beginning;
thence continuing along said East line North 02 degrees 16
minutes 14 seconds West 145.35 feet;
thence North 87 degrees 43
minutes 46 seconds East, 227.50 feet;
thence South 02 degrees 16
minutes 14 seconds East, 151.95 feet;
thence South 87 degrees 43
minutes 46 seconds West 205.50 feet; thence
along a curve to
the
right 23.29 feet, said curve having a radius
of 40.00 feet,
central angle of 33 degrees 22 minutes 01
seconds and
a long
chord bearing of North 75 degrees 35 minutes 13
seconds West,
22.97 feet to the point of beginning,
Parcel 2:
Including the benefit of the easements set
forth in the
Master
Declaration of Easements and Restrictions recorded in Liber
17340, page 136, Oakland County Records,
as modified by (i)
the
First Amendment recorded in Liber 18559,
page 572, Oakland County
Records, and (ii) the Second Amendment
recorded in Liber
19342,
page 502, Oakland County Records.
Parcel 3:
Also, together with an easement for ingress and
egress (shared
drive) as disclosed in Warranty Deed
recorded in Liber
20572,
page 717, Oakland County Records.
APN: 14-05-176-009
LEASE AGREEMENT
This Lease
Agreement is made and entered into as of the 29th day of
April, 1999, by and between LMB Auburn
Hills I, LLC, ("Landlord"), whose
address for the purpose of this lease is 2631
Erie Avenue, Suite
21,
Cincinnati, Ohio 45208, and Sterling Jewelers Inc. ("Tenant"), a
Delaware corporation, whose address for the
purpose of this Lease is 375
Ghent Road, Akron, Ohio 44333.
RECITALS
A. Landlord is the owner
of or has the right to acquire certain
premises pursuant to that certain Purchase and Sale
Agreement between
Landlord and Taubman Auburn Hills Associates Limited
Partnership,
a
Delaware limited partnership ("Taubman")
located in the City of
Auburn
Hills, State of Michigan consisting of
approximately 35,000 square feet
and more particularly described in Exhibit
A hereto ("Premises").
B. Tenant desires to have Landlord construct
on the Premises
according to ; Tenant's specifications and
in accordance with
plans to
be agreed to between Tenant and
Landlord ("Approved Plans"), a building
of approximately 5,800 square feet
("Building").
C. Landlord has agreed to pay for construction
of the Premises
and Building, including any
enhancements of change orders requested by
Tenant to the Approved Plans and tenant
improvements within the Premises
and Building according to the Approved Plans
(the Building
and such
tenant improvements being hereafter
collectively referred
to as the
"Improvements") in the sum of the
Allowance.
D. Tenant desires to have
Landlord cause the construction of the
Improvements and make payment for such construction
only up to the
amount of the Allowance.
E. Tenant hereby acknowledges that it
assumes all
risks with
respect to the correctness and adequacy for
its need of the construction
and Improvements based on the Approved
Plans.
F. The Tenant recognizes that this Lease
is intended to
be a
triple net lease and .agrees to assume
not only the obligations as set
forth in the Lease Agreement, but all
obligations with respect to the
operation, maintenance, reconstruction and
payment of any and all
sums
necessary to satisfy those conditions and
any other conditions that may
be imposed by any governmental agency,
except to the extent set forth in
this Lease.
WITNESSETH
In consideration of the mutual covenants herein
contained,
the
parties hereto hereby agree as follows:
1. PREMISES. Landlord
does hereby demise and lease unto Tenant,
and Tenant does lease and take from
Landlord the Premises, the Building
and the Improvements. Landlord and Tenant hereby
acknowledge and agree
that all rentals payable by Tenant under
this Lease are not calculated
on the basis of the square footage of the
Premises or Building or number
of parking spaces on the Premises,
and amounts payable by Tenant under
the Lease shall not be adjusted
regardless of any deviations in actual
square footage of the Premises or
Building or number of parking spaces
from the amounts set forth above.
Landlord shall, at its
sole cost and
expense and out of its own funds which are
not included in Exhibit B and
which shall not be subject to recoupment
under Section 5B or
otherwise
(hereinafter referred to as Non-Allowance Dollars"), obtain from
Taubman, for the benefit of Tenant, a
license for ingress and egress to
Ring Road, and shall construct, at its
sole cost and expense with Non-
Allowance Dollars, a temporary access road
across adjacent property to
the east of the Premises (" Adjacent Property"),
such license and
temporary road to be continuing until such time
as a permanent
cross-
access to Ring Road, across the Adjacent Property , has been
constructed.
2. COMMENCEMENT OF TERM.
The term of this Lease
(the "Term
")
shall commence on the date (the "Commencement
Date") which is the
earlier to occur of (a) the date of Tenant's opening of Tenant's
business from the Premises to the public,
or (b) ninety (90) days after
Landlord's delivery of the Building to
Tenant. The Commencement Date is
contingent upon Landlord's attainment of any and
all approvals,
other
than governmental approvals, which may be
required pursuant to any third
party agreement as to which Landlord is
bound as a result of Landlord's
ownership of the Premises. Landlord shall
deliver the Premises no later
than November 1, 1999. If Landlord cannot deliver
the Premises by
November 1, 1999 (which date shall be
extended on a day-for-day basis to
the extent of any delays in delivery resulting solely from the
occurrence of any "Force Majeure Events," as
defined herein below,
and/or resulting from the acts or omissions
of Tenant and/or any of its
employees, agents, representatives and/or
contractors), and Tenant has
not opened for business from the
Premises, Tenant may cancel this Lease
on sixty (60) days written notice to
Landlord, provided that if such
delivery occurs within such sixty (60) day
.period, such
termination
shall be nullified and this Lease shall
continue in
full force and
effect.
3. TERM
A. INITIAL TERM.
The initial Term of this Lease shall commence
on the Commencement Date and shall end at
11:59 p.m. on the last day of the
calendar month, which includes the
twentieth (20th) anniversary of the
Commencement Date.
B. OPTION TO RENEW.
Provided Tenant is not in default in the
performance of any of the material terms,
covenants and
conditions of
this Lease, Tenant shall have the option to
renew this Lease for two (2)
successive five (5) year periods
(collectively, the "Option Terms" and
individually an "Option Term") commencing
on the day following
the end
of the then applicable Term, upon all the
applicable terms,
covenants
and conditions set forth herein,
except that monthly Base Rent payable
during each Option Term shall be ninety
percent (90%) of the then fair
market monthly rental value of the Premises as of
the commencement
of
such Option Term, provided that in no event
shall the Base Rent be
adjusted as of the commencement of an
Option Term to an amount less than
the Base Rent in effect immediately
prior to such Option Term. The fair
market rental value of the Premises shall be determined by mutual
consent of the Tenant and Landlord,
provided, however, that if Tenant
and Landlord fail to mutually agree upon
the fair market rental value of
the Premises, at or prior to nine
months before the commencement of the
Option Period, then Tenant and Landlord shall
each select
an M.A.I.
Appraiser, and the two appraisers shall mutually select a third
appraiser, each to make an independent
determination of the fair market
retail value of the Premises, utilizing the
then current rental
rates
for similar properties within a five (5) mile
radius of the subject
property , and each to submit such
determinations to Tenant and Landlord
no later than six months prior to
commencement of the Option Period. The
fair market rental value shall be the
average of the amounts
submitted
by each of the three (3) M.A.I.
Appraisers, and such rate shall be the
new base rental rate for the Option
Period. Costs and expenses of the
three appraisers shall be divided and
paid equally as between Landlord
and Tenant. Within ten (10) days after
receipt of the fair market rental
value, Tenant may elect to terminate its
exercise of
the option to
extend by giving written notice to Landlord.
The option to renew
the
Term pursuant hereto shall be
conditioned upon Tenant's giving Landlord
written notice of its election to renew not
less than one (1) year prior
to the expiration of the then applicable
Term. Should Tenant
fail to
exercise the option to renew the Term hereof as
hereinabove
provided,
Tenant shall have no right thereafter to
renew the Term of this
Lease.
References in this Lease to tile "Term "
shall be deemed to
mean the
initial Term of this Lease as extended by the Option Terms, as
applicable.
4. RENT
A. BASE RENT.
Tenant agrees to pay to Landlord at the office
of Landlord or
at such other place as may be designated by Landlord
for each month of the Term, monthly base rent
("Base Rent")
as
follows:
Years
Monthly Amount
Annual Amount
1-5
$19,416.67
$233,000,00
6-10
$21,358.33
$256,300.00
11-15
$23,494.17
$281,930.00
16-20
$25,843.58
$310,123.00
Said Base Rent shall be payable monthly
in advance on the first day of
each calendar month without prior
notice, demand, offset, abatement or
deduction, except as specifically provided to the
contrary in this
Lease. Tenant shall pay prorated daily
Base Rent for any portion of a
month if the Commencement Date begins after
the first day of the month.
B. LATE
FEE. If Tenant fails
to pay when the same
is due
any Base Rent or Additional Rent, the
unpaid amounts shall bear interest
at the "Interest Rate" (as hereinafter
defined) from the date the unpaid
amount was initially due, to and including
the date of payment. In
addition, Tenant acknowledges that the late
payment of any
installment
of Base Rent or Additional Rent will cause
Landlord to incur
certain
costs and expenses, the exact amount of
which are extremely difficult or
impractical to fix. These costs and expenses may include, without
limitation, administrative and collection costs and processing and
accounting expenses. Accordingly, if any
installment of Base
Rent or
Additional Rent is not received by Landlord
from Tenant within ten
(10)
days after notice of nonpayment, Tenant shall immediately pay to
Landlord a late charge (the "Late Charge")
equal to three percent (3% )
of the delinquent amount. Landlord and Tenant agree
that this late
charge represents a reasonable estimate of
the costs and expenses
Landlord will incur and is fair
compensation to Landlord for its loss
suffered by reason of late payment by Tenant.
Upon accrual, all
such
late charges shall be deemed Additional
Rent. As used in this Lease, the
"Interest Rate" shall mean the lesser of
(i) the rate per annum equal to
the prime rate of interest published in the
Wall Street Journal
from
time to time as the base rate of corporate
loans at large U .S.
money
center banks, plus two percent (2% ), or
(ii) the maximum lawful rate.
B. ADDITIONAL
RENT. Except as specifically provided to the
contrary in this Lease, any sums of money
or charges to be paid by the
Tenant pursuant to the provisions of any
other sections of this Lease
other than Base Rent shall be deemed to be"
Additional Rent" whether or
not so designated pursuant to this Lease
and shall be payable without
offset, abatement or deduction, except as
specifically provided in this
Lease. Tenant's obligation for payment of
"Taxes" pursuant to Paragraph
7 below, "Landlord's Insurance Costs"
pursuant to Paragraph
8 below,
and "Landlord's Common Costs" pursuant to
Paragraph 10B below are
collectively referred to herein as
"Tenant's Recurring Additional Rent".
Tenant shall pay to Landlord or to
applicable third party , as the case
may be, Tenant's Recurring Additional Rent
within ten (10) days after
receipt of notice from Landlord or the
applicable third party delivered
to Tenant stating the amounts to be paid,
together with a copy of the
applicable invoice and/or statement
requiring said payment to be made.
Evidence of said payment shall be delivered
by Tenant to Landlord at
the same time said payment is made by
Tenant.
5 COSTS OF
CONSTRUCTION.
A. ALLOWANCE Landlord
shall pay for the construction of the
Premises and Improvements in the aggregate
amount ("Allowance"), without
regard to specific line items of the Budget
attached hereto as Exhibit B
("Budget"). Those line items on the Budget
identified as "Hard
Costs"
shall be constructed pursuant to one or more
construction
contracts
entered into between Landlord and its
subcontractors. A copy
of each
such contract shall be provided to
Tenant. Tenant shall have the right
to approve all such contracts, which
approval shall not be unreasonably
withheld. Tenant's approval or disapproval,
as the case may be, shall be
delivered to Landlord within ten (10) days
after receipt.
Landlord's
obligations with respect to the access road
as provided in Section 1 and
Utilities as provided in Section 9 shall be
paid for by Landlord
and
shall not count towards the Allowance.
B. EXPENSES IN EXCESS OF ALLOWANCE. To the extent landlord has
complied with the notification provisions
of this paragraph B,
Tenant
shall pay all expenses (except those
expenses that are to be paid for by
Landlord out of Non- Allowance Dollars) incurred by Landlord in
connection with the construction of the Premises
and Improvements,
if
any, which are in excess of the
Allowance.
(1) Tenant shall be
obligated to pay any excess expenses
identified on the Budget as "Hard Costs,"
only if Landlord has, not less
than two (2) working days prior to incurring
such expense,
notified
Tenant in writing ("Change Notice") of the
reason for such increase and
Tenant has failed to object as hereafter
provided.
(a) If within two (2) business days after receipt of
a Change Notice Tenant gives to
Landlord written notice of an objection
to the increase referred to in the Change
Notice ("Disapproval Notice"),
Tenant and Landlord shall within
forty-eight (48) hours thereafter meet
and confer, whether by telephone or in person,
for the purpose of
resolving Tenant's disapproval. In the
event Tenant and Landlord are not
able to agree to the increase contained in
the Change Notice, Landlord
shall then have the option to either (i)
not incur the expense set forth
in the Change Notice, or (ii) incur the
expense and submit the matter to
arbitration in accordance with paragraph D
of this Section 5.
(b) The notification
provisions and Tenant's right
to object to an increase shall not apply to
any unanticipated
expense
contemplated and governed by the terms of
any Construction
Contract or
any change order which is less than Five
Hundred Dollars ($500.00) in
amount and which, in the reasonable judgment of
Landlord, must be
approved in the field, without sufficient
time to give advance notice to
Tenant, to avoid undue delays in
construction or cost increases.
(2) Tenant shall not
be responsible for any expenses in
excess of the Allowance which result from
Landlord's failure to exercise
such diligence in connection with the
construction of the
Premises as
would be usually and customarily exercised
by a real estate
developer
performing services similar to those provided by
Landlord under
this
Lease Agreement.
(3) In
the event any Lender providing construction
financing to Landlord in connection with the construction of the
Premises and Improvements ("Lender") shall give written notice to
Landlord that the Lender anticipates the
total cost of construction of
the Premises and Improvements will
exceed the Allowance and that, as a
condition of further funding of the
construction, certain expenses set
forth on the Budget must be paid for in full or
in part by
Landlord,
such payment shall be deemed an expense
in excess of the Allowance and
Tenant shall be obligated to pay such
amount.
(4) Any
excess expenses for
which Tenant is
obligated
under this Section 5B shall be paid by
Tenant to Landlord within thirty
(30) calendar days after receipt by
Tenant from Landlord of an invoice
therefore. The invoice for any excess payment
required pursuant to
Section 5B(1) above shall be accompanied by
a copy of each Change Notice
to which such payment applies. The invoice for
any excess payment
required by Section 5B(3) above shall be
accompanied by a copy
of the
written demand from the Lender .
C.
ALLOWANCE IN
EXCESS OF ACTUAL EXPENSES.
Upon
completion of the construction of the Premises and Improvements,
Landlord shall as soon as reasonably
practicable determine the costs and
expenses actually incurred by Landlord for
construction of the Premises
and Improvements ("Final Costs").
Landlord shall provide
to Tenant a
copy of its determination of Final Costs, in
the Same format as
the
Budget, and shall make available for Tenant's
review, all
invoices,
receipts, bids, orders, and other documentation
evidencing the
Final
Costs. If the Final Costs are less than the
Allowance, Landlord
shall
pay the difference to Tenant on the
later to occur of: (i) fifteen (15)
.days after funding of permanent
financing for the construction of the
Premises and Improvements, or (ii) thirty (30) days after the
Commencement Date. Provided, however, that if
payment is not
made by
Landlord within thirty (30) days of the
Commencement Date, said payment
shall thereafter accrue interest for the
benefit of Tenant at the then-
existing "Prime Rate" published by the Wall
Street Journal.
D.
DISPUTES.
Landlord and
Tenant agree that all
disputes arising out of this Section 5 shall be
decided by binding
arbitration in accordance with the Construction
Industry Arbitration
Rules of the American Arbitration Association,
unless the parties
mutually agree otherwise. Notice of the
demand for arbitration shall be
filed in writing with the other party to this
Lease and with the
American Arbitration Association and may be
made at any time by
either
party but not sooner
than ten (10) calendar days after the party
electing arbitration
has
given to the other party written notice setting
forth the amount
of
payment acceptable to such noticing party ("Settlement
Offer"). The
award rendered by the arbitrator or arbitrators
shall be final and
judgment may be entered upon it in
accordance with applicable law in any
court having jurisdiction thereof. The
prevailing party in
any such
arbitration preceding shall be the party whose
last written
Settlement
Offer given prior to commencement of the
arbitration
proceeding, was
closest to the actual award. The
prevailing party shall be entitled to
recover from the other all costs of arbitration,
including
attorneys
fees.
6. TENANT CONSTRUCTION AND
ALTERATIONS.
A.
ALTERATIONS. Tenant, at Tenant's sole cost and expense,
during the Term of this Lease, may make
such nonstructural alterations,
improvements and or additions (collectively,
"Alterations")
to the
interior of the Premises it deems appropriate,
provided that (i)
the
structural integrity of the Premises or
Building shall not be
affected
or diminished; (ii) the value of the
Premises or Building is not thereby
diminished; (iii) the exterior appearance
(including the store front) of
the Premises and Building is not
thereby materially altered or changed;
and (iv) such Alterations are in
compliance with Applicable Law. In all
other instances except as provided
hereinbelow in Paragraph 6B, Tenant
shall secure prior written approval and consent
of Landlord before
making any Alterations, which consent shall
not be unreasonably withheld
by Landlord. At the time Landlord's approval of
any Alterations is
sought, Tenant shall submit to Landlord plans and
specifications
for
such work, together with a statement of the
estimated costs
of such
work. All such Alterations shall be
completed in a good and workmanlike
manner, diligently prosecuted to
completion, with first-class materials,
in accordance with all applicable
federal, state and local laws, rules,
regulations, codes, ordinances and other requirements (collectively,
"Applicable Laws"), including, without limitation, Applicable Laws
respecting access and use by disabled persons.
Tenant shall
make no
Alterations whatsoever to the exterior of the Building or exterior
portions of the Premises without the prior
written consent of Landlord,
which consent shall not be unreasonably
withheld. Upon termination of
this Lease, any Alterations made by
Tenant shall remain a part of the
Premises and be surrendered therewith.
Notwithstanding
whether prior
written approval is required from Landlord with regard to any
modifications that are to be made, Tenant shall
provide notice of
the
nature of any and all material
modifications or alterations made to the
Premises or Tenant Improvements located
thereon.
B. INITIAL TENANT IMPROVEMENTS. Upon the date Landlord
notifies Tenant of Landlord's delivery of
possession of the Building to
Tenant, Tenant may to the extent not already
completed by
Landlord,
undertake the Improvements to the Premises
which are required to
adapt
it to Tenant's use. Provided however, that
such Improvements shall be in
accordance with the Approved Plans and
shall be in compliance with such
Applicable Laws. Any and all change orders,
which involve appearance or
structural changes from the Approved Plans,
shall require the
approval
of Landlord, which shall not be
unreasonably withheld. If said approval,
or disapproval which specifies the
items and reasons for which Landlord
is objecting, is not received by Tenant within
five (5) business
days
after receipt of said changes by the Landlord,
Tenant may
deem the
changes approved and proceed. Tenant shall
be responsible for obtaining
any and all permits required for the
commencement of such construction
and occupancy of the areas upon
completion thereof. Tenant agrees that
any and all construction will be done
in a good and workmanlike manner,
diligently prosecuted to completion, and in accordance with all
Applicable Laws and the approved plans
therefor. During the
course of
construction of the Tenant Improvements and any
subsequent
permitted
Alterations pursuant to Paragraph 6A above,
Tenant or its contractor
shall maintain in effect a policy of "builder's all
risk" insurance
covering such work, in such form and
amounts, and such other insurance,
as may be reasonably required by
Landlord. Following completion of the
Tenant Improvements and any subsequent
permitted Alterations pursuant to
Paragraph 6A above, Tenant shall (i) record a
notice of completion
in
accordance with Applicable Laws, if applicable,
and (ii) deliver to
Landlord a set of ''as built" plans and
specifications for the Premises.
Except for the negligent acts of Landlord,
Tenant agrees to indemnify,
defend and hold Landlord harmless from and
against any loss,
damage,
claim, liability or expense (including,
without limitation,
attorneys'
fees and expenses) whatsoever in connection
with the performance of such
Tenant Improvements or Alterations
construction work and
if Landlord
shall be named as a party of any
litigation brought as a result of any
acts or omissions of Tenant relating to
said construction, Tenant agrees
to likewise indemnify, defend and
hold harmless Landlord in such action
and reimburse Landlord for all costs
and expenses, including reasonable
attorneys' fees and expenses, incurred by Landlord in connection
therewith.
C. LANDLORD'S
INDEMNITY AND WARRANT. Landlord represents and
warrants that to Landlord's actual knowledge as
of the date
of this
Lease, the Premises does not contain any "Hazardous
Substances"
(as
hereinafter defined) at such levels as would interfere
with Tenant's
operation of its business from the Premises
for its intended use
or as
would constitute a violation of Applicable
Laws.
7 TAXES AND ASSESSMENTS.
Tenant shall pay prior to delinquency and
show evidence of said payment, in
accordance with Paragraph 4C above, and
this Paragraph 7, any "Taxes and
Assessments" (as hereinafter defined)
accruing during the Term hereof with
respect to the Premises (which for
purposes of this Paragraph 7 shall be
deemed to include the land of the
Premises and the improvements located upon such
land, including, without
limitation, the Building). Any Taxes and
Assessments payable for the
partial tax years of the first and last
Lease Years of the Term shall be
prorated based on the ratio that the total
number of days in such Lease
Year bears to the total number of days in
the tax year. As used herein,
the term "Lease Year" shall be defined as
each twelve (12) month period
commencing on the
Commencement Date and each anniversary of
the Commencement Date,
except
that the last Lease Year shall end on the
last day of the calendar month
which includes the twentieth (20th)
anniversary of the Commencement Date
or the last day of the calendar month of any
option period which
is
exercised by the Tenant in accordance with
the terms of this Lease. As
used herein, the term "Taxes and
Assessments" shall include all general
and/or special real property and improvement
taxes, any for-in of
assessment, reassessment, special
assessment, license fee, license tax,
business license tax, commercial-rental tax,
in-lieu tax,
possessory
interest tax, levy , charge, penalty or
similar imposition whatever or
at all imposed by any authority
having the power to tax, including any
city , county, state or federal government,
or any school, street, storm-
drain, sidewalk, community-facility , park-and-ride, agricultural,
lighting, drainage and other improvement or
special assessment
district
thereof, or any agency or public body, upon or
against the
Premises
and/or any legal or equitable interest of Landlord
in the Premises,
including but not limited to the following: (a) any assessment,
reassessment, tax, fee, levy or charge in addition to, or in
substitution, partially or totally of, any
assessment, tax, fee, levy or
charge previously included within the
definition of real property tax,
it being acknowledged by Tenant and
Landlord that assessments, taxes,
fees, levies and charges may be imposed by
governmental agencies
for
such services as fire protection, street,
sidewalk and road maintenance,
refuse removal and for other governmental
services formerly
provided
without charge to property owners or
occupants (it being the intention
of Tenant and Landlord that all such new and increased
assessments,
reassessments, taxes, fees, levies and charges and all similar
assessments, reassessments, taxes, fees,
levies and charges imposed now
or hereafter be included within the definition
of real property
taxes
for the purposes of this Lease); (b)
any assessment, tax, fee, levy or
charge allocable to or measured by the
area of all or any part of the
Premises or the rent payable with respect
thereto; (c) any assessment,
tax, fee, levy or charge upon leasing
transactions involving Tenant with
respect to all or any part of the Premises; (d)
any assessment or
reassessment related to any change of
ownership, limited,
however, to
one (I) time per each ten (10) years
of the herein Lease term, of any
interest in the Premises or portion thereof held
by Landlord or
any
addition or improvement to the Premises or a
portion thereof, or
any
other assessment levied on the Premises
and attributed to the Premises.
Taxes and Assessments shall not include
Landlord's federal,
state or
local income, franchise, inheritance or
estate taxes. In addition to the
foregoing, Tenant shall pay, prior to delinquency, all taxes,
assessments, license fees and public
charges levied, assessed or imposed
upon its business operation, trade fixtures,
merchandise
and other
personal property in, on or upon the Premises. Any tax bills,
statements, or assessments for such taxes
shall be forwarded by Landlord
to Tenant, or Landlord shall cause
the taxing agency or entity to send
such tax bills,. statements, or assessments
directly to
Tenant and
Tenant shall make payment of all amounts
directly to the taxing
agency
or entity on or before the due date therefore.
Notwithstanding
the
foregoing, if Tenant fails to make such payment
on a timely basis,
Landlord may make such payment and any interest or penalties due
thereon. In such event, Tenant shall after
written notice to Tenant of
the amount paid by Landlord, reimburse
Landlord for such amount on or
before the due date for the next payment of
Base Rent. The reimbursement
amount shall be deemed additional rent
payable by Tenant.
8. INSURANCE.
A. LANDLORD'S
INSURANCE. Tenant shall pay to Landlord within
ten (10) days of receipt of a written demand from
Landlord in
accordance
with Paragraph 4C above, and
this Paragraph 8, all
premiums
for insurance
maintained by the Landlord for the Premises
and/or
the Building or Tenant Improvements (collectively,
"Landlord's
Insurance Costs"). The insurance required to be
maintained
hereunder by the
Landlord (the cost of which shall be
included in
Landlord's Insurance Costs) includes the following:
(1) HAZARD
INSURANCE. Insurance against loss or damage
to the Building and other improvements
upon the Premises by
fire and
extended coverage and from such other
hazards may be covered by a form
of "all-risk" insurance then in effect together with coverage of
earthquake, hurricane, and flood, all in an
amount sufficient to
cover
full replacement cost (without
depreciation) of the Building and other
improvements and to prevent any co-insurance
provision from
becoming
effective, but in any event not less than
ninety percent (90%)
of the
then insurable value of the Building and other improvements, and
including insurance with respect to not less
than twelve
(12) months
loss of rental income with respect to the
Premises and other
leasable
area within the Building. Tenant shall be
named as an additional insured
under such policy, as and to the extent its
interest may appear .
(2) PUBLIC
LIABILITY Commercial general liability
insurance, on an" occurrence basis",
against claims for personal injury,
bodily injury, death, property damage and
contractual liability covering
the indemnity obligations of Landlord under
this Lease, occurring in or
about the Premises. Such insurance shall
afford minimum protection of
Two Million Dollars ($2,000,000.00)
combined single limit. Tenant shall
be named as additional insured under
such policy, as and to the extent
its interest may appear.
(3) GENERAL. If by
reason of changed economic conditions
the insurance coverages and/or amounts referred to above become
inadequate, as reasonably determined by the
Landlord, the Landlord
may
obtain additional coverages and/or increase
the amount of such insurance
to such amount, as it deems proper.
Certificates o
