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 ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, 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 ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇.
▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
W I T N E S S E T H:
WHEREAS, Assignor is the owner of certain real property
located at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ (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/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Sole Member & President
STATE OF OHIO )
) ss.
COUNTY OF ▇▇▇▇▇▇▇▇ )
The foregoing was acknowledged before me this 7th day of
January, 2005, by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, 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/ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
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/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
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/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
Title: President
STATE OF MINNESOTA )
) ss.
COUNTY OF ▇▇▇▇▇▇ )
The foregoing was acknowledged before me this 14th day of
January 2005, by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 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/ ▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
Notary Public
[notary seal]
STATE OF MINNESOTA )
) ss.
COUNTY OF ▇▇▇▇▇▇ )
The foregoing was acknowledged before me this 14th day of
January, 2005, by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 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/ ▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
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 ▇▇▇▇▇▇▇ 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: ▇▇-▇▇-▇▇▇-▇▇▇
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 ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, and Sterling Jewelers Inc. ("Tenant"), a
Delaware corporation, whose address for the purpose of this Lease is ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇.
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 of Insurance shall be
delivered to the Tenant upon request. Notwithstanding anything to the
contrary contained herein, Landlord's obligation to carry insurance may
be satisfied by coverage under a so-called blanket policy or policies of
insurance; provided, however, that the coverage afforded thereunder will
not be reduced or diminished and the requirements set forth in this
Lease are otherwise satisfied by such blanket policy or policies.
Provided further, that in the event of coverage under any such blanket
policies, Landlord's Insurance Costs shall include a reasonable
proration of the cost of such blanket policy. Notwithstanding the
foregoing, Tenant shall have the right to provide such coverage as long
as such coverage is acceptable to Landlord.
B. TENANT'S INSURANCE. Tenant shall, at its sole cost,
maintain in effect during the Term of this Lease the following insurance
coverages. Prior to Tenant being able to elect the option to self
insure under any of the provisions of this Paragraph B, Tenant shall
submit to Landlord financial documentation which Landlord shall use to
obtain an opinion by Landlord's own insurance experts to determine
whether or not the Tenant has adequate net worth in order to be allowed
to self insure. Tenant shall submit said financial information on an
annual basis (or as reasonably required by Landlord but not to exceed
once per year) for the purposes of determining Tenant's ability to self-
insure the risks as provided for under this Paragraph 8B.
(1) HAZARD INSURANCE. Insurance against loss or damage
to Tenant's personal property and equipment upon the Premises by fire
and extended coverage and from such other hazards as may be covered by a
form of "all risk" insurance then in effect, all in an amount sufficient
to cover full replacement cost (without depreciation) thereof and to
prevent any co-insurance provision from becoming effective. Tenant shall
have the right to self-insure the foregoing risk providing that at any
time Tenant is self -insured, Tenant shall maintain a Standard & Poor's
debt rating of 'BB' or higher .
(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 Tenant 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. Landlord and
any lender or ground lessor to Landlord shall each be named as an
additional insured under such liability policy. Tenant shall have the
right to self-insure the foregoing risk.
(3) WORKER'S COMPENSATION. Worker's compensation
coverage in an amount adequate to comply with Applicable Laws; and
employer's liability coverage with a limit of not less than One Million
Dollars ($1,000,000.00), with waiver by Tenant's insurer of any right of
subrogation against Landlord by reason of any payment pursuant to such
coverage. Tenant shall have the right to self- insure the foregoing
risk.
(4) 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
require that Tenant obtain additional coverages and/or increase the
amount of such insurance to an amount consistent with such changed
economic conditions and consistent with other similarly situated retail
tenants in the Auburn Hills area. All policies of insurance required of
Tenant herein shall be issued by insurance companies with a general
policy holder's rating of not less than" A " and a financial rating of
not less than "VIII", as rated in the most current available "Standard &
Poor's Rating Handbook", and which are qualified to do business in the
state where the Premises is located. Tenant's policies of insurance
pursuant hereto shall be written as primary policies, and not
contributing with respect to any insurance maintained by Landlord.
Certificates evidencing the insurance required to be maintained by
Tenant pursuant hereto shall be delivered to Landlord prior to the
Tenant's entry upon the Premises and thereafter not less than thirty
(30) days prior to the expiration of the term of each policy. All
policies of insurance maintained by Tenant must contain a provision that
the company writing the policy will give to Landlord thirty (30) days'
prior written notice of any cancellation or lapse or the effective date
of any reduction in the amounts of insurance. Notwithstanding anything
to the contrary contained herein, Tenant's obligation to carry insurance
may be satisfied by coverage under a so-called blanket policy or
policies of insurance, provided, however, that the coverage afforded
thereunder will not be reduced or diminished and the requirements set
forth in this Lease are otherwise satisfied by such blanket policy or
policies.
9. UTILITIES. Landlord shall, at its sole cost and expense and
out of Non- Allowance Dollars, obtain such utility easements from
adjoining property owners and extend to the perimeter of the Premises,
such utilities as may be necessary to provide the utility services
required for the Premises. Tenant shall pay before delinquency all
charges for water, gas, heat, electricity , power, telephone service,
sanitary sewer (including cleaning), and other similar charges incurred
by Tenant with respect to and during its lease of the Premises,
including, without limitation, any hook-up or installation fees in
connection therewith (not including Landlord's obligation to extend the
proper utilities to the Premises). Landlord shall forward all bills,
statements or assessments for utilities to Tenant or shall cause any
such utility to send bills, statements or assessments directly to
Tenant. Tenant shall make all payments directly to the utility .Any such
amounts not timely paid by Tenant may be paid by Landlord plus any
interest or penalty 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.
10. MAINTENANCE AND REPAIR OF PREMISES.
A. TENANT'S OBLIGATIONS. It is understood and agreed that
this is a triple net lease by which Tenant has the obligation to repair,
replace and maintain in good order and condition the Premises and all
Tenant Improvements to be constructed thereon during the term of the
Lease without the obligation of Landlord to contribute any sums
whatsoever towards compliance therewith. Tenant shall repair, replace
and maintain in good order and condition the Premises, including without
limitation except as covered by 10B below (I) all interior portions of
the Premises and all property therein, (2) the Building foundation,
roof, exterior walls and structural parts of the Building, (3) any and
all automobile parking areas, access roads, truck loading area, delivery
areas, walkways, landscaped areas, driveways and sidewalks within the
Premises, and (4) the utility and mechanical systems serving the
Building. Tenant's obligations pursuant hereto shall include, without
limitation, maintenance, repair and replacement of Premises service
facilities such as the wiring, plumbing, heating and air conditioning
systems, all glass, including plate glass, exterior doors and automatic
door operators, interior of Premises ceiling and walls (including
painting or decorating), floors and floor covering, sewers and utility
services which now are or hereafter may be located on the Premises.
Tenant shall deliver to Landlord copies of all service contracts with
respect to Tenant's performance of its maintenance and repair
obligations pursuant hereto. ;
B. LANDLORD'S COMMON COSTS. Tenant shall pay, in accordance
with ▇▇▇▇▇▇▇▇▇ ▇▇ above, any costs or assessments required under or
pursuant to the Master Declaration, as defined in paragraph 14A hereof
and listed on Exhibit C hereto. Tenant hereby acknowledges that it will
be bound by said Master Declaration and any recorded amendments thereto.
Tenant shall review and approve said agreement(s) prior to Landlord's
acquisition of the Premises.
11. TENANT'S ASSIGNMENT OR SUBLETTING
A. Provided that Tenant is not then in default under any
material term of this Lease, Tenant shall have the right, with
Landlord's prior written consent which consent shall not be unreasonably
withheld, to assign, sublet or otherwise transfer any interest in this
Lease (collectively, any "assignment") or to sublet any portion of the
Premises to any third party; except that Tenant may, without Landlord's
prior written consent (but upon at least thirty (30) days prior written
notice to Landlord), assign or sublease to (i) another operating entity
licensed to use the applicable service ▇▇▇▇ of Tenant or any of its
subsidiaries or affiliates in the state where the Premises is located,
or (ii) to any other person or entity providing the use of the Premises
by the subtenant or assignee would not violate Section 14 hereof or
require Landlord's consent, as set forth in Exhibit D hereto. In the
event of any assignment or subletting, the assignor Tenant shall remain
liable for all rent payments due and for all covenants and obligations
of "Tenant" under this Lease.
B. Should Tenant desire to enter into an assignment or
sublease requiring Landlord's consent, Tenant shall request, in writing,
Landlord's consent to the proposed assignment or subletting at least ten
(10) days before the intended effective date of the proposed assignment,
which request shall include the following: (a) full particulars of the
proposed assignment including its nature, effective date, terms and
conditions; (b) a description of the identity , net worth and previous
business experience of the proposed transferee; (c) a complete business
plan prepared by the proposed transferee; and (d) any further
information relevant to the proposed assignment which Landlord may
reasonably request.
C. Any assignment or subletting requiring the consent of
Landlord pursuant to this Lease shall be evidenced by a written
instrument, with Landlord's consent provisions in form and content
reasonably satisfactory to Landlord and shall include an assumption of
the obligations of Tenant by the assignee (or the obligations of Tenant
allocable to the portion of the Premises to be subleased in the case of
a subletting). Tenant shall reimburse Landlord for Landlord's reasonable
attorneys' fees not to exceed Five Hundred Dollars ($500.00) per
occurrence incurred in the processing of and documentation for, each
such requested assignment or subletting, whether or not the assignment
or subletting is consummated.
D. The following terms and conditions shall apply to any
..subletting by Tenant of all or any part of the Premises and shall be
deemed included in all subleases under this Lease whether or not
expressly incorporated therein:
(1) Tenant hereby assigns and transfers to Landlord all
of Tenant's interest in all rentals and income arising from any sublease
of all or a portion of the Premises heretofore or hereafter made by Tenant,
and Landlord may collect such rent arid income and apply same toward
Tenant's monetary obligations under this Lease; provided, however, that
until a material breach shall occur in the performance of Tenant's
obligations under this Lease, Tenant may, except as otherwise provided in
this Lease, receive, collect and enjoy the rents accruing under such
sublease. Landlord shall not, by reason of this or any other assignment of
such sublease to Landlord, nor by reason of the collection of the rents from
a subtenant, be deemed liable to the subtenant for any failure of Tenant to
perform and comply with any of Tenant's obligations to such subtenant
under such sublease. Tenant hereby irrevocably authorizes and directs
any such subtenant, upon receipt of a written affidavit from Landlord
stating that a material breach exists in the performance of Tenant's monetary
obligations under this Lease, to pay toLandlord the rents and other charges
due and to become due under the sublease. The subtenant may rely upon any
such affidavit and request from Landlord and may pay such rents and other
charges to Landlord without any obligation or right to inquire as to
whether such breach exists and notwithstanding any notice from or claim
from Tenant to the contrary Tenant shall have no right or claim against said
subtenant, or, until the breach has been cured, against Landlord, for any
such rents and other charges so paid by said subtenant to Landlord For
purposes of this Paragraph D(I) any non-payment by Tenant of an amount equal
to One Thousand Dollars ($1000.00) or more shall constitute a "material
breach" of this Lease.
(2) In the event of a material breach by Tenant in the performance
of its obligations under this Lease, Landlord, at its option and without
any obligation to do so, may require any subtenant to attorn to Landlord,
in which event Landlord shall undertake the obligations of the sublandlord
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 deposit paid by such subtenant to Tenant
or for any other prior defaults or breaches of Tenant as sublandlord under
such sublease.
12. DAMAGE TO OR DESTRUCTION OF PREMISES If the Premises or an
portions thereof are so damaged or destroyed by fire or other casualty
so as to render the Premises in Tenant's reasonable determination unfit
for occupancy, and the Premises cannot reasonably be repaired and
restored within three hundred sixty five (365) calendar days from such
damage, then Tenant shall have the right to terminate this Lease by
giving written notice to Landlord within forty-five (45) days of such
damage, in the event of which termination the proceeds of the "all risk"
insurance policy with respect to the Premises and Building shall be paid
to and be the sole property of Landlord, Notwithstanding the foregoing,
if the Premises is materially damaged by casualty during the final
twelve (12) months of the Term rendering the Premises untenantable, and
the time required for the repair thereof is reasonably estimated to
exceed ninety (90) days (or such shorter period as in then remaining in
the Term), Landlord and Tenant each shall have the option to terminate
this Lease by giving written notice to the other of the exercise option
within forty-five(45) days after such casualty. In the event of any
termination of this Lease pursuant to this Paragraph 12, Tenant shall be
entitled to receive a prorated refund of any rent and other charges paid
in advance. In the event this Lease is not terminated pursuant to the
terms of this Paragraph 12 following any such casualty to the Premises,
then Landlord shall repair and restore the Premises to the former
condition just prior to the loss, and the insurance process shall be
applied to such repairs and restoration. Landlord shall not be liable
for the repair of any damage to Tenant's personal property or equipment,
all of which shall be promptly repaired by tenant at Tenant' s sole cost
following the substantial completion of repairs to the Premises by
Landlord. From the date of such fire or casualty until the Premises are
restored to tenantability in accordance with the provisions of this
Paragraph 12 set forth above, Tenant's obligation for the payment of
rent under this Lease shall be wholly or partially abated, based upon
the portion of Premises rendered untenantable as a result of such
casualty damage. Landlord and Tenant each waive the benefit of an
Applicable Laws providing either party with any right to terminate this
Lease in the event of casualty damage to the Premises, it being their
agreement that the rights of termination set forth in this Lease as a
result of casualty damage to the Premises shall be exclusive.
Tenant shall advise Landlord within five (5) days of any such
calamity of the nature of said damage or destruction and its request
that Landlord make a claim to the insurance company carrying coverage
for said damage or destruction, Tenant shall move forward as rapidly as
possible for the purposes of repairing any such damage or destruction.
13. CONDEMNATION.
A. COMPLETE TAKING. In the event that the whole of the
Premises is taken for public or quasi-public purposes by the government
of the United States, the State or City in which the Premises is
located, or any government or power whatsoever, or by any corporation
under the right of eminent domain, or should the whole of the Premises
be condemned by any court, city , country, state or governmental
authority or office, department or bureau of any city , country, state
or of the United States (collectively, any "Taking"), then in any such
event this Lease shall terminate as of the date title to the Premises
vests in the condemning authority . For the purposes hereof, such date
of vesting in the condemnor terminating this Lease shall operate as
though it were the date originally intended by the parties for
expiration of the tenancy created hereunder, and the rent reserved
herein shall be adjusted in the light of the condemnation, so that
Tenant shall pay rent to Landlord only up to the date of vesting in the
condemnor. Any prepaid or advance rental or other amounts to be paid by
Tenant under this Lease paid by Tenant to Landlord or third party for
that part of the Term extending beyond the date on which the title vests
in the condemnor shall be refunded within three (3) days after Landlord
has received an award of just compensation from the condemning authority
for the taking of the Premises, provided Tenant shall have duly
performed all the covenants and conditions of this Lease by it to be
performed.
B. PARTIAL TAKING. In the event of any Taking which does not
terminate this Lease as aforesaid: (i) Tenant's obligation for payment
of Base Rent shall be reduced in the same proportion that the amount of
floor area of the Premises taken bears to the floor area of the Premises
immediately before such Taking, (ii) Landlord shall, to the extent of
the condemnation award, at Landlord's own cost and expense, in the part
of the Premises which is not taken, restore the Premises to as near its
former condition as the circumstances will permit, and (iii) Tenant
shall do likewise with respect to Tenant's personal property and
equipment in the part of the Premises which is not taken.
C. AWARD. Landlord and Tenant shall each have separate
rights of damages against any public authority on account of any such
Taking, whether for the whole or a part of the Premises, and it is
expressly provided that neither party waives or forgoes any claim it
inay have on behalf of the Taking of its property or leasehold value.
Landlord and Tenant each waive the benefit of any Applicable Laws
providing either party with any right to terminate this Lease in the
event of condemnation or other Taking of the Premises, it being their
agreement that the rights of termination set forth in this Lease as a
result of condemnation or other Taking shall be exclusive. In the event
that a separate award cannot be obtained then Tenant and Landlord will
share proportionate to their loss said award.
14. PERMITTED USE.
A. PERMITTED USE. Tenant shall use the Premises for any
lawful purpose which does not violate the permitted uses defined in the
Master Declaration of Easements and Restrictions dated June 11, 1997 and
recorded in Oakland County, Michigan at Book 173401 Page 136 ("Master
Declaration") and those restrictions on use described in Exhibit D (the
restrictions contained in the Master Declaration and in Exhibit D being
collectively referred to as the "Restriction on Use"). Tenant shall
review and approve said Master Declaration prior to Landlord's
purchasing the subject property.
B. COMPLIANCE WITH LAWS. Subject to the terms and provisions
of Section 14C below, Tenant shall at its sole cost comply with all
Applicable Laws with respect to the Premises and Tenant's use and
occupancy thereof, and Tenant shall, except as otherwise provided
herein, at its sole cost, make any repairs, improvements or alterations
to the Premises necessary throughout the Lease Term to cause the
Premises to comply with all Applicable Laws. Tenant shall, at its
expense, procure all governmental licenses and permits required for
Tenant's use of Premises set forth herein and shall at all times comply
with all requirements of each such license and permit.
C. HAZARDOUS SUBSTANCES. Tenant covenants and agrees not to
permit any "Hazardous Substances" to be placed, held, located (except in
strict compliance with all applicable laws and regulations) or disposed
of upon, or released upon, under or at the Premises, or any part thereof
at any time during the term of this Lease. For purposes of this Lease,
"Hazardous Substances" means and includes asbestos, petroleum products
and any hazardous, toxic or dangerous waste, substance or material
defined as such in, or for proposes of, the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. 9601 et seq.) and so
called "Superfund" or "Superfund" law, or any other federal, state, or
local statute, law, ordinance, code, rule, regulation, order to decree
regulating, relating to or imposing liability or standards of conduct
concerning any hazardous, toxic or dangerous waste, substance or
material, as now or at any time hereafter in effect.
Tenant does and shall indemnify Landlord and hold Landlord harmless
from all loss, costs, claims, damages and expenses, including but not
limited to reasonable attorney's fees, incurred by Landlord as a result
of the presence, disposal, discharge or release of any Hazardous
Materials on the Premises during the term of this Lease which is caused
by Tenant, or Tenant's officers, employees, agents, contractors or
sublessees, and the indemnity of Tenant in favor of Landlord contained
in this Paragraph 14C shall survive the expiration or termination of
this Lease for a period of five (5) years.
Landlord does and shall indemnify Tenant and hold Tenant harmless
from all loss costs, claims, damages and expenses, including but not
limited to reasonable attorney's fees, incurred by Tenant as a result of
the presence, disposal, discharge, or release of any Hazardous Materials
on the Premises prior to Tenant taking possession of the subject
premises or from any other cause except as provided in the immediately
preceding paragraph, and the indemnity of Landlord in favor of Tenant
contained in this paragraph shall survive the expiration or termination
of this Lease for a period of . five (5) years.
15. COVENANT AGAINST MECHANIC'S LIEN. Tenant shall do all things
reasonably necessary to prevent the filing of any mechanic's or other
liens against the Premises, or the interest of any mortgages or holders
of any deed of trust covering the Premises, by reason of any work,
labor, services performed or any materials supplied or claimed to have
been performed or supplied to Tenant, or anyone holding the Premises, or
any part thereof, through or under Tenant. If any such lien shall at any
time be filed, Tenant shall either cause the same to be vacated and
canceled of record within thirty (30) days after the date of the filing
thereof or if Tenant in good faith determines that such lien should be
contested, Tenant shall furnish such security by surety bond or
otherwise as may be necessary or be prescribed by law to release the
same as a lien against the real property and to prevent any foreclosure
of such lien during the pendency of such contest. If Tenant shall fail
to vacate or release such lien in the manner and within the time period
aforesaid, then, in addition to any other right or remedy of Landlord
resulting from Tenant's said default, Landlord may, but shall not be
obligated to vacate or release the same either by paying the amount
claimed to be due or by procuring the release of such lien by giving
security , or in such other manner as may be prescribed by law. Tenant
shall repay to Landlord, on demand, all sums disbursed or deposited by
Landlord pursuant to the foregoing provisions of this Paragraph,
including Landlord's cost and expenses and reasonable attorneys' fees
incurred in connection therewith. However, nothing contained herein
shall imply any consent or agreement on the part of the Landlord,
Landlord's mortgagees or holders of deeds of trust of the Premises to
subject their respective estates or interest to liability under any
mechanic's or other lien law, whether or not the performance or the
furnishing of such work, labor, services or materials to Tenant or
anyone holding the Premises, or any part thereof, through or under
Tenant, shall have been consented to by Landlord and/or any of such
parties.
16. FIXTURES AND MACHINE. It is mutually agreed that all personal
property on the Premises, including merchandise of every kind, nature
and description, furnishings, equipment trade fixtures and including any
exterior signage placed at Tenant's expense on the Premises or Building
and all other personal property hereafter placed or kept on the Premises
by Tenant together with all trade fixtures (including, without
limitation, removable electrical and mechanical equipment and Tenant
Improvements and alterations made to said Premises pursuant to the
provisions of Section 6 hereinabove), are and shall continue to be the
sole property of the Tenant. However, all non--removable Tenant
Improvements which become an intrinsic part of the building shall be
upon installation, and shall continue to be during the Term, the $ole
property of the Landlord and shall be surrendered by Tenant with the
Premises upon the expiration of the Term or earlier termination of this
Lease. Tenant shall promptly repair any damage to the Building resulting
from removal of any of the above items by Tenant.
17 QUIET ENJOYMENT. Landlord covenants that, subject to
satisfaction of the "Conditions Precedent" (as hereinafter defined),
upon the Commencement Date, Landlord shall be the sole owner in fee
simple of or has a leasehold interest in the Premises, shall have good
and marketable title thereto, and shall have full right to lease the
Premises for the Term, and that Tenant upon payment of rent and
performing Tenant's obligations in this Lease may peaceably and quietly
have, hold and enjoy the premises during the Term until the expiration
thereof or earlier termination of this Lease, subject to the terms and
conditions of this Lease.
18. SUBORDINATION. It is understood and agreed that Landlord from
time to time may either seek to assign its interest in this Lease by
sale of the Premises and Tenant Improvements, or may seek to finance
said Premises and Tenant Improvements. In order to accommodate
Landlord's requirement hereunder, Tenant agrees that it s all provide
financial information to prospective purchasers or lenders in order to
assist said purchaser or lender in making a decision to acquire or loan
money against the Premises. Said financial information shall be provided
within twenty (20) day's of written request to do so. Landlord agrees
not to make any such request more o en than once per year. Landlord may
assign its rights under this Lease as security, to the holders of one or
more mortgages, trust deed, ground lease or other encumbrance now or
hereafter in force against all or any part of the land or improvements
constituting the Building. Upon the request of Landlord and thirty (30)
days prior written notice, Tenant shall execute a commercially
reasonable subordination agreement causing this Lease to be prior in
interest to the lien of one or more mortgages, trust deed, ground lease
or other encumbrance now in force against all or any part of the land
and improvements constituting the Premises, and to all advances made or
hereafter to be made upon the security thereof. Upon the request of
Landlord and thirty (30) days prior written notice, Tenant will
subordinate its rights hereunder to the lien of one or more mortgages,
trust deed, ground lease or other encumbrance now or hereinafter force
against all or any part of the land and improvements constituting the
Premises, and to all advances made or hereafter to be made upon the
security thereof, provided, however, that any such mortgage, deed of
trust, ground 1ease or other security document shall provide that the
secured party , in the event of its acquiring title to the Building
whether through foreclosure, or judicial process or otherwise, shall
recognize the validity of this Lease and shall honor the rights of
Tenant hereunder so long as Tenant (a) is not in default under this
Lease at the time such secured party acquired title to the Building, and
(b) agrees to attorn to such mortgagee as if it were the original
Landlord hereunder. Tenant agrees to enter into a subordination, non-
disturbance and attornment agreement in commercially reasonable form
with any such mortgagee, trust deed beneficiary , ground lessor or other
lien holder upon Landlord's request, and so long as such agreement does
not increase or expand the obligations and/or liabilities of Tenant as
set forth in this Lease. Tenant agrees to execute any form of estoppel
certificate or similar instrument in accordance with Section 23 below.
19. TENANT'S DEFAULT AND LANDLORD'S REMEDIES.
A. TENANT'S DEFAULT. Tenant shall be in default under
this Lease in the event of:
(1) The failure by Tenant to make any payment of Base
Rent, Additional Rent or any other monetary payment required to be made
by Tenant hereunder, whether to Landlord or to a third party , as and
when due, where such failure continues for a period of ten (10) days
following written notice thereof by or on behalf of Landlord to Tenant;
provided that any such notice of default shall be in lieu of, and not in
addition to, any notice of default required by Applicable Laws.
(2) The failure by Tenant to perform any other
obligation under this Lease (except as provided in clause (1) above),
where such failure continues for a period of thirty (30) days after
written notice thereof by or on behalf of Landlord to Tenant; provided,
however, that if the nature of such failure is such that more than
thirty (30) days are reasonably required for its cure, then Tenant shall
not be deemed to be in Default hereunder if Tenant commences such cure
within such thirty (30) day period and thereafter diligently prosecutes
such cure to completion; provided, further, that any such notice of
default shall be in lieu of, and not in addition to, any notice of
default required by Applicable Laws.
(3) The occurrence of any of the following events: (i) the
making by Tenant of any general arrangement or assignment for the benefit
of creditors; (ii) Tenant's becoming a "debtor" as defined in 11 U.S.C.
101 or any successor statute thereto (unless, in the case of a petition
filed against Tenant,the same is dismissed within sixty (60) days); (iii)
the appointment of a trustee or receiver to take possession of
substantially all of Tenant's assets located at the Premises or of Tenant's
interest in this Lease, where possession is not restored to Tenant within
thirty (30) days; or (iv) the attachment, execution or other judicial
seizure of substantially all of Tenant's assets located at the Premises
or of Tenant's interest in this Lease, where such seizure is not discharged
within thirty (30) days, provided, however, in the event that any provision
of this subparagraph (3) is contrary to any Applicable Law, such provision
shall be of no force or effect, and not affect the validity of the
remaining provisions.
B. LANDLORD'S REMEDIES.
(1) LANDLORD'S RIGHT TO TERMINATE LEASE. In the event of
any default by Tenant, then in addition to any other remedies available
to Landlord at law or in equity, including, without limitation,
injunction, Landlord shall have the immediate option to terminate this
Lease and all rights of Tenant hereunder by giving written notice of
such intention to terminate. In the event that Landlord shall elect so
to terminate this Lease, then Landlord may recover from Tenant: (a) the
worth at the time of award of any unpaid rent which had been earned at
the time of such termination; plus (b) the worth at the time of award of
the amount by which the unpaid rent would have been earned after
termination until the time of award exceeds the fair market rental value
of the Premises; plus (c) the worth at the time of award of the amount
by which the unpaid rent for the balance of the Term after the time of
award exceeds the fair market rental value of the Premises; plus (d) any
other amount necessary to compensate Landlord for all the detriment
proximately caused by Tenant's failure to perform its obligations under
this Lease or which in the ordinary course would be likely to result
therefrom; plus (e) at Landlord's election, such other amounts in
addition to or in lieu of the foregoing as may be permitted from time to
time by applicable law. The amounts recoverable by Landlord in
accordance with and pursuant to the preceding sentence shall be denied
actual damages for the purposes of this Paragraph B(1). The term "rent"
as used herein shall be deemed to include Base Rent, Additional Rent and
any other sums required to be paid by Tenant pursuant to the terms of
this Lease. Landlord shall reasonably compute all such sums, other than
the Base Rent, on the basis of the operating history of the Premises and
the amounts payable by Tenant prior to default. As used in clause (a)
and (b) above, the "worth at the time of award" is computed by allowing
interest at the Interest Rate. As used in clause (c) above, the "worth
at the time of award" is computed by discounting such amount at the
discount rate of the Federal Reserve Bank having jurisdiction over the
area of the Premises at the time of award plus two percent (2%). Amount
owed by Tenant shall be limited to Landlord's actual damages.
(2) LANDLORD'S RIGHT TO REENTER PREMISES. In the event of
any default by Tenant, Landlord shall also have the right to reenter the
Premises and remove all persons and property therefrom by summary
proceedings or otherwise; such property may be removed and stored in a
public warehouse or elsewhere at the cost of and for the account of Tenant
or disposed of in a reasonable manner by Landlord.
(3) RIGHT TO RECOVER RENTS OR RELET. In the event
Landlord shall elect to reenter as provided in Paragraph 19B(2) above,
or shall take possession of the Premises pursuant to legal proceedings
or pursuant to any notice provided by law or hereunder, and if Landlord
does not elect to terminate this Lease as provided by law, then Landlord
may from time to time, without terminating this Lease, either recover
all rental as it becomes due or relet the Premises or any part thereof
for such term or terms and at such rental or rentals and upon such other
terms and conditions as Landlord in its sole discretion may deem
advisable, with the right to make alterations and repairs to the
Premises. It is the intention of the parties that in addition to, and
without limitation upon, all other rights and remedies set forth in this
Lease, Landlord shall have the remedy of continuing the Lease in effect
after Tenant's default and abandonment and recover rent and additional
rent as it becomes due; provided, however, that notwithstanding the
foregoing Landlord shall at all times have a duty to mitigate its
damages.
(4) APPLICATION FOR RENT. In the event that Landlord shall
relet, then rentals received by Landlord from such reletting shall be
applied first, to the payment of any amount due under this Lease, other
than Base Rent due hereunder, owed by Tenant to Landlord; second to the
payment of any cost of such reletting; third, to the payment of the cost
of any alterations and repairs to the Premises; fourth, to the payment
of Base Rent due and unpaid hereunder; and the residue, if any, shall be
held by Landlord and applied in payment of future rent as the same may
become due and payable hereunder; Should that portion of such rentals
received from such reletting during any month, which is applied to the
payment of rent hereunder, be less than the rent payable during that
month by Tenant hereunder, then Tenant shall pay such deficiency to
Landlord. Such deficiency shall be calculated and paid monthly. Tenant
shall also pay to Landlord, as soon as ascertained, any costs and
expenses incurred by Landlord in such reletting, including but not
limited to reasonable brokerage commissions, or in making alterations
and repairs not covered by the rentals received from such reletting.
(5) NO TERMINATION. No reentry or taking possession of the
Premises by Landlord pursuant to this Paragraph 19B shall be construed
as an election to terminate this Lease unless a written notice of such
intention be given by Landlord to Tenant or unless the termination
thereof be decreed by a court of competent jurisdiction. Landlord may at
any time after such reletting elect to terminate this Lease for any such
default by Tenant.
(6) RIGHTS AND REMEDIES CUMULATIVE. All rights and remedies
of Landlord contained in this Lease shall be construed and held to be
cumulative, and no one of them shall be exclusive of the other, and
Landlord shall have the right to pursue anyone or all of such remedies
or any other remedy or relief which may be provided at law or in equity
, whether or not stated in this Lease. The expiration or termination of
this Lease and/or the termination of Tenant's right to possession shall
not relieve Tenant from liability under any indemnity provisions of this
Lease as to matters occurring or accruing during the Term hereof or by
reason of Tenant's occupancy of the Premises.
(7) LANDLORD'S RIGHT TO CURE DEFAULT AND SECURE COMPLIANCE.
Landlord shall have the right, but shall not be so obligated, to elect
to cure at any time, upon at least twenty (20) days prior written notice
to Tenant (except in the event of a bona fide emergency, wherein
reasonable telephonic notice shall be permitted), any default of Tenant
under this Lease. Whenever Landlord so elects, Tenant shall immediately
pay to Landlord upon demand, as Additional Rent, all costs and expenses
thereby incurred by Landlord. In addition, Tenant shall pay to Landlord,
as Additional Rent, all costs and attorneys' fees incurred by Landlord
in enforcing against Tenant any covenant, condition or term of this
Lease.
20. LANDLORD DEFAULT AND TENANT'S REMEDIES. Landlord shall not be
in default hereunder unless Landlord fails to perform any of the
covenants, provisions or conditions contained in this Lease on its part
to be performed, or fails to cure the breach of any warranty made by
Landlord hereunder, within thirty (30) days after written notice of
default (or more than thirty (30) days shall be required because of the
nature of the default, if Landlord shall fail to proceed diligently to
cure the default after written notice). Except as otherwise specifically
provided in this Lease, Tenant shall have no right to terminate this
Lease or withhold rent in the event of default by Landlord hereunder and
Tenant's remedy shall be limited to an action for damages, injunction or
specific performance of this Lease. Notwithstanding the foregoing, in
the event that Tenant obtains a judgment against Landlord for a default
by Landlord hereunder, Tenant shall have the right to offset the amount
of such judgment against the rent next coming due under this Lease,
together with interest thereon at the Interest Rate until the judgment
has been satisfied in full. If any part of the Premises is at any time
subject to a first mortgage or a first deed of trust and this Lease or
the rentals due from Tenant hereunder are assigned to a mortgagee,
trustee or beneficiary (called" Assignee" for purposes of this Article
20 only) and Tenant is given written notice of the assignment, including
the post office address of Assignee, then Tenant shall also give written
notice of any default by Landlord to Assignee, specifying the default in
reasonable detail and affording Assignee a reasonable opportunity to
make performance for and on behalf of Landlord. If and when Assignee has
made performance on behalf of Landlord, the default shall be deemed
cured.
21. SIGNS. Tenant shall have the right to construct and install
the exterior building sign(s) in accordance with the Plans and
Specifications approved by the city, county or municipality in which the
Premises is located. Tenant shall also have the right to display window
and door signs in accordance with the corporate identity signage
approved by the city , county or municipality in which the Premises is
located. Upon the expiration of the Term or earlier termination of this
Lease, Tenant shall, at Tenant's sole cost, remove all such signs from
the Premises, and repair any damage to the Premises (including, without
limitation, the Building facade) resulting from such removal. Tenant
shall have the right to relocate the pole sign, at Tenant's sole cost,
which currently exists on the Premises providing that such relocation
complies with applicable law.
22. WAIVER OF SUBROGATION. Notwithstanding any provision to the
contrary , Landlord and Tenant do hereby waive any and all right of
recovery , claim, action or cause of action against the other, their
respective agents and employees, for any loss or damage that may occur
to the Premises, or any contents therein, by reason of fire, the
elements or any other cause which could be insured against under the
terms of a standard all risk insurance policy or policies, or for which
Landlord or Tenant may be reimbursed as a result of insurance coverage
effecting any loss suffered by either party hereto, regardless of the
cause or origin, including the negligence of Landlord or Tenant, or
their respective agents and employees. All insurance policies carried by
either party covering the Premises, including but not limited to
contents, fire and other casualty insurance, shall expressly waive any
right on the part of the insurer against the other party for damage to
or destruction of the Premises resulting from the acts or omissions of
the other party .Any cost of any waiver shall be paid for by the Tenant.
23 ESTOPPEL CERTIFICATES. Tenant, from time to time upon twenty
(20) days prior written notice from Landlord, agrees to execute,
acknowledge and deliver to Landlord, in commercially reasonable form, a
written statement certifying that Tenant has accepted the Premises, that
this Lease is unmodified and in full force and effect or, if there have
been modifications, that this Lease is in full force and effect as
modified, setting forth the modifications, that Landlord is not in
default hereunder , the date to which the rent and other amounts payable
by Tenant have been paid in advance, if any. Tenant understands and
agrees that any such statement delivered pursuant to this paragraph be
relied upon by any prospective purchaser of the Building, any
prospective mortgagee of the Building and their respective successors
and assigns. Tenant's refusal to execute said document referenced above
shall constitute a material default under this lease.
24. SURRENDER OF PREMISES AT END OF TERM. Tenant agrees that upon the
termination of this Lease it will surrender, yield up and deliver the
Premises in good and clean condition, except the effects of reasonable wear
and tear and depreciation arising from lapse of time, or damage without
fault or liability of Tenant, and Tenant shall remove its inventory ,
equipment, fixtures, furniture and other personal property as and to the
extent provided in Section 16 above, and repair any damage to the Premises
resulting from such removal. Any such inventory , equipment, furniture
and/or other personal property which Tenant fails to so remove within three
(3) days after expiration or termination of this Lease shall be presumed to
be abandoned and shall thereupon be the property of Landlord and may be
retained, stored or disposed of by Landlord at Tenant's cost. Nothing herein
is to be construed to require or authorize Tenant to remove any property
which has become a fixture of the Premises.
25. Landlord Entry A. Landlord reserves the right at all
reasonable times during Tenant's business hours and upon prior
reasonable notice to tenant (except in the event of emergency, in which
case such right is exercisable by Landlord at any time without prior
notice) by itself or its duly authorized agents, to go upon the and
inspect the Premises and every part thereof and, to make such repairs,
alterations and additions as Landlord is obligated to make to the
Premises, provided, however, that Landlord shall not go upon or inspect
the Premises unless a manager or assistant manager of Tenant is present.
In exercising the foregoing right, Landlord shall not unreasonably
interrupt or disrupt access to the Premises by Tenant, Tenant's
employees, agents, invitees and customers.
26. PARAGRAPH TITLES. The titles of the various paragraphs of this
Lease have been inserted as a matter of convenience and for reference
only, and shall not be deemed in any manner to define, limit or describe
the scope or intent of the particular paragraphs to which they refer or
to affect the meaning or construction of the language contained in the
body of such paragraphs.
27 SEVERABILITY. If any provision of this Lease shall be declared
legally invalid or unenforceable, then the remaining provisions of this
Lease nevertheless shall continue in full force and effect and shall be
enforceable to the fullest extent permitted by law.
28. TIME OF ESSENCE. Time is of the essence of this Lease, and all
provisions of this Lease relating to the time of performance of any
obligation under this lease shall be strictly construed.
29 GOVERNING LAW. This Lease shall be governed by and construed
in accordance with the laws of the state in which the Premises is
located.
30. MULTIPLE COUNTERPARTS. This Lease may be executed in multiple
counterparts, each of which shall be deemed to be an original for all
purposes.
31. DEFINITIONS. References to this "Lease" shall include this
instrument and any properly executed amendment thereof or supplement
thereto.
32. WAIVERS. One or more waivers by Landlord or Tenant of a breach
of any covenant or condition by the other of them shall not be construed
as a waiver of the subsequent breach of the same covenant or condition,
and the consent or approval by Landlord or Tenant to or of any act by
either requiring the other's consent of approval shall not be deemed to
waive or render unnecessary either party's consent to or approval of any
subsequent similar act by the other party .
33 BINDING AGREEMENT. All rights and liabilities herein given to
or imposed upon the respective parties hereto shall extend to and bind
the respective heirs, executors, administrators, personal
representatives, successors and assigns of such parties. No rights,
however, shall inure to the benefit of any assigns of Tenant unless
Landlord has approved the assignment thereof to such assignee in
writing, if such approval is required by this Lease.
34. RECORDING. Tenant shall not record this Lease. Tenant may
request, or, upon the request of Landlord or Landlord's ground
lessor(s), mortgagee(s) or beneficiary(ies) under deed(s) of trust,
shall execute and acknowledge a short form or memorandum of this Lease
for recording purposes. Upon the expiration or earlier termination of
this Lease for any reason, Tenant, within three (3) days after request
by Landlord, shall deliver to Landlord a quitclaim deed conveying to
Landlord all interest Tenant may have had under this Lease, and such
other instruments as Landlord may reasonably request to evidence the
same.
35. RELATIONSHIP OF PARTIES. Nothing contained in this Lease shall
be deemed or construed by the parties hereto, or by any other party, to
create the relationship of principal and agent, or of partnership or of
joint venture, or of trustee and beneficiary , or of any other
association between the parties hereto and neither the method of payment
of any monies hereunder, nor any other provisions in this Lease, nor any
acts of the parties hereto, shall be deemed to create any of the
relationships set forth hereinabove. .
36. NOTICES. Any notices, statements, acknowledgments and consents
required to be given by or on behalf of either party to the other shall
be in writing and shall given by mailing such Registered or Certified
Mail, or by private overnight courier service requiring a signed
acknowledgment of delivery (such as Federal Express) addressed as
follows:
The Landlord at: LMB Auburn Hills I, LLC
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
If to the Tenant at:Sterling Jewelers Inc
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax Number: (▇▇▇)▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
or at such other address as may be specified by such a notice from time
to time. Any notice sent by registered or certified mail or courier
service shall be deemed to have been served as of the date it is mailed
or transmitted in accordance with the foregoing provisions; however, the
time period in which a response to any such notice must be given, or in
which action must commence or be taken, shall commence to run from the
date of receipt by the addressee thereof as shown on the return receipt
or acknowledgment of delivery for such notice. Rejection or other
refusal to accept or the inability to deliver because of changed address
of which no notice was given shall be deemed to be receipt of such
notice as of the date of such rejection, refusal or inability to
deliver. Notwithstanding anything to the contrary herein, Tenant may
give facsimile notice of the need of emergency repairs, followed
promptly by certified mail notice.
37 DELAYS IN PERFONNANCE. The performance by Landlord and Tenant
of any of their respective obligations or undertakings provided for in
this Lease, except the payment of rent or any other sums of money
payable by either party under this Lease, shall be excused and no
default shall be deemed to exist in the event and so long as the
performance of any such obligation or undertaking is prevented, delayed,
retarded or hindered by an act of God, fire, earthquake, flood,
hurricane, explosion, action of the elements, war, riot, failure of
transportation, strikes, lockouts, action of labor unions, condemnation,
laws, orders of government or civil or military authorities, inability
to procure labor, equipment, materials or supplies in the open market,
or any other cause directly beyond the control of Landlord or Tenant, as
the case may be, financial inability excepted (collectively, any "Force
Majeure Event").
38. INDEMNIFICATION. Landlord and Tenant agree to indemnify and
defend each other against and to hold each other harmless from any and
all claims or demands of any third party arising from or based upon any
alleged act, omission or negligence of the indemnifying party or its
contractors, concessionaires, licensees, agents, servants, invitees,
employee~ or anyone else for whom the indemnifying party may be of
alleged to be responsible, except to the extent that such matter is
covered by insurance maintained by the party otherwise entitled to
indemnification hereunder. In the event that either party shall without
fault on its part be made a party to any litigation commenced by any
third party against the other party, then such other party shall protect
and hold the party harmless from and with respect to such litigation,
and shall pay all costs, expenses and attorneys' fees incurred or paid
by the party without fault in connection with such litigation, together
with any judgments rendered against the party without fault.
39. CUMULATIVE RIGHTS. The rights, options, elections and remedies
of both parties contained in this Lease shall be cumulative and may be
exercised on one or more occasions and none of them shall be construed
as excluding any other or any additional, right, priority or remedy
allowed or provided by law.
40. HOLDOVER. In the event that Tenant remains in possession of
the Premises after the termination of this Lease without the exercise of
any option to extend the Term or wit1lout t1le execution of a new lease,
then Tenant shall be deemed to be occupying the Premises as a tenant
from month to month, subject to all of the conditions, provisions and
obligations of this Lease but without the rights to extend the Term,
except that the Base Rent for such holdover period shall be at one
hundred and twenty-five percent (125%) of the Base Rent charged for the
last year of the Term plus additional rent and all other amount$ owing
pursuant to this Lease. Acceptance by Landlord of any Base Rent or
Additional Rental after the expiration or earlier tem1ination of this
Lease shall not constitute a consent to a hold over hereunder,
constitute acceptance of Tenant as a tenant at sufferance or result in a
renewal of this Lease.
41. BROKERS. Other than Pacific Realty Partners (and t1leir agents
and affiliates), Landlord and Tenant hereby represent and warrant that
they have not had any dealings with any realtors, brokers or agents in
connection with the negotiation of this Lease (the "Brokers"). Each
party shall indemnify, defend and hold harmless the other from any cost,
expense or liability for any compensation, commission or charges claimed
by any realtors, Brokers or agents other than Brokers claiming by,
through or on behalf of the indemnifying party with respect to this
Lease and/or the negotiation hereof, except that Landlord shall have
sole responsibility .for any commission or charges claimed by Pacific
Realty Partners (and their agents and affiliates).
42. TRANSFER OF LANDLORD'S INTEREST. Should Landlord sell,
exchange or assign this Lease (other than a conditional assignment as
security for a loan) and the transferee assumes in writing Landlord's
obligations under this Lease, then Landlord, as transferor, shall be
relieved of, and such transferee shall be liable for, any and all
obligations on the part of Landlord accruing under this Lease from and
after the date of the transfer .
43. ATTORNEYS' FEES. In the event that at any time after the date
hereof either Landlord or Tenant shall institute any action of
proceeding against the other relating to the provisions of this Lease,
or any default hereunder, the party not prevailing in the action or
proceeding shall reimburse the prevailing party for the reasonable
expenses of attorneys' fees and all costs or disbursements incurred
therein by the prevailing party including, without limitation, any fees,
costs or disbursements incurred on any appeal from the action or
proceeding.
44. CONDITIONS PRECEDENT. Notwithstanding anything to the contrary
contained in this Lease, the performance by Landlord of its obligations
under this Lease is contingent upon the following (collectively, the
"Conditions Precedent") (a) Landlord's acquisition of the Premises on
terms and conditions acceptable to Landlord in Landlord's sole
discretion; and, (b) Landlord's obtaining of financing or other sources
of capital in an amount adequate to pay the cost of acquisition of the
Premises and Landlord's Contribution to the Tenant Improvements, upon
such terms and conditions as are acceptable to Landlord in Landlord's
sole discretion. If Landlord is unable to satisfy such Conditions
Precedent by June 15, 1999, Landlord and Tenant shall each have the
right to terminate this lease upon sixty (60) days' prior written notice
to the other party , in which case this Lease shall terminate and
neither party shall have any further or additional rights, remedies,
claims or liability arising out of this lease or the termination of this
lease; provided, however, that if Landlord is able to satisfy the
unsatisfied Conditions Precedent within such sixty (60) day period
following an election to terminate by Tenant pursuant hereto, such
election to terminate shall be null and void and this lease shall
continue in full force and effect.
45. NO OPERATINNG COVENANT. Anything contained in this lease,
expressly or impliedly, to the contrary notwithstanding, and
notwithstanding the agreement herein contained for the payment by Tenant
of Rent as hereinbefore provided, it is specifically and expressly
understood and agreed that Tenant shall be under no duty or obligation,
either express or implied, to open, or thereafter to continuously
conduct, its business in the Premises at any time during the Term.
Further, Tenant's failure to open for business in the Premises shall not
in any way be deemed an event of default under this lease nor shall such
a failure otherwise entitle Landlord to commence or to maintain any
action, suit, or proceeding, whether in law or in equity , relating in
any way to Tenant's failure to open or thereafter to continuously
conduct its business in the Premises, except as may be required per the
declaration of restrictive covenants.
46. EXHIBITS AND SCHEDULES. The following exhibits and schedules
are attached to this l..ease and incorporated herein by this reference.
Exhibit A Legal Description of Premises
Exhibit B Initial Budget Statement
Exhibit C Master Declaration
Exhibit D Restrictions on Use
47. The Recitals are incorporated herein by this reference.
IN WITNESS WHEREOF t the parties hereto have executed this Lease as of
the date first written above.
TENANT: LANDLORD:
Sterling Jewelerst Inc. LMB Auburn Hills I, LLC
A Delaware Corporation
/s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇, Manager
Its: EXECUTIVE VICE PRESIOENT
By: /s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇
Its: Secretary
EXHIBIT A
Legal Description
A PART OF THE ▇▇▇▇▇▇▇▇▇ ▇/▇ ▇▇ ▇▇▇▇▇▇▇ ▇, ▇-▇-▇., R-10-E., CITY OF
AUBURN HILLS, OAKLAND COUNTY, MICHIGAN, BEING MORE PARTICULARLY
DESCRIBED AS: COMMENCING AT THE WEST 114 CORNER OF SAID SECTION 5;
THENCE N. 85 35' 59" E., 1317.14 FEET ALONG THE EAST-WEST 114 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
N. 85 40'31"E., 106.07 FEET ALONG THE NORTH LINE OF SAID "LAKE ANGELUS
SUBDIVISION" AND FOLLOWING THE EAST-WEST 114 LINE TO A POINT ON THE EAST
LINE OF ▇▇▇▇▇▇▇ ROAD AS WIDENED; THENCE N. 02 ,18'14"W., 145.35 FEET;
THENCE N. 87 43'46"E., 227.50 FEET; THENCE S. O2 16'14"E., 151.95 FEET;
THENCE S. 87 43'46"W., 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 22'01" AND A LONG CHORD BEARING OF N. 75 35'13"W., 22.97 FEET TO ▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇.▇▇▇ ▇▇▇▇▇. g