PURCHASE AGREEMENT
for the
OLD COUNTRY BUFFET, NORTHLAKE, ILLINOIS
This Purchase Agreement (the "Agreement") entered into on
the 17 day of April, 1998, by and between The Alpha Group, LLC or
its assigns, such assigns to be approved by Buyer which approval
will not be unreasonably withheld (the "Seller") and AEI Real
Estate Fund XVIII Limited Partnership, a Minnesota Limited
Partnership, or its assigns, such assigns to be approved by
Seller which approval will not be unreasonably withheld (the
"Buyer"). If Buyer shall desire further assignment said
assignment shall occur five (5) business days prior to the date
set forth in paragraph 2. hereof.
1. Property. Seller entered into an Agreement of Sale with
Sam's West, Inc. ("Sam's") on September 11, 1997, which Agreement
was amended by the First Amendment to Agreement of Sale on
December ____, 1997 and was further amended by the Second
Amendment to Agreement of Sale on March 9, 1998, (the "Sam's
Agreement"), for the purchase of an undivided 100% interest in
the fee title to that certain real property legally described on
the attached Exhibit "A" (the "Parcel"). Seller desires to sell
and Buyer desires to purchase the Parcel and a percentage
interest in and to the improvements to be completed on the Parcel
by OCB Realty Co., (hereinafter "Tenant") as an Old Country
Buffet restaurant (the "Improvements") and (the Parcel and the
Improvements collectively, the "Property"). On the Closing Date
referred to in paragraph 2, Seller shall assign its rights (and
Buyer shall assume only Seller's obligation to pay the Purchase
Price and those matters of record created by separate instrument
other than the Sam's Agreement) in and to the Sam's Agreement to
Buyer.
2. Closing Date. Buyer's purchase of the Parcel shall occur on
the earlier of May 15, 1998 or five (5) business days after
receipt and approval by Buyer of the last due diligence documents
in the contingency period including the receipt of the building
permit (the "Closing Date"). The Closing Date is subject to all
conditions precedent as referenced herein.
3. Lease. The Property is to be developed by Tenant, subject
to a Lease on the Property by and between Seller, as Landlord,
and Tenant (the "Lease"), the form of which Lease is attached
hereto as Exhibit "C". Said attached Lease has been approved by
the Buyer, and Seller will on the Closing date, assign all right,
title and interest in and to said executed Lease to Buyer on the
Closing Date.
4. Rent Commencement Date. The day the Tenant opens the
Property for business, or September 28, 1998, whichever comes
first, Tenant will commence paying rent as set forth in the Lease
attached hereto on Exhibit "C".
5. Escrow. $10,000 will be paid to Commonwealth Title (the
"Closing Agent") to be released to Seller on the Closing Date
subject to the terms of this Agreement. Upon execution of this
Agreement, a copy of this Agreement will be delivered to the
Closing Agent by Seller and will serve as escrow instructions
together with any additional instructions required by Seller
and/or Buyer or their respective counsels. Seller and Buyer
agree to cooperate with the Closing Agent and sign any additional
instructions reasonably required by the Closing Agent to close
escrow. If there is any conflict between any other instructions
and this Agreement, this Agreement shall control.
6. Purchase Price and Option to Repurchase & Seller's
Remedies.
6.01 Purchase Price.
The purchase price for the Property is $1,300,000 (the "Purchase
Price"), which as a contingency to Buyer's obligations hereunder
must be supported by an MAI appraisal of the Property reasonably
satisfactory to Buyer. Buyer shall have the right to review and
approve such appraisal until no later than April 17, 1998. The
appraisal shall be obtained by Buyer.
If all conditions as outlined in this Agreement have been
satisfied, on the Closing Date, Buyer shall disburse the
following funds to the Closing Agent for the purchase of the
Parcel:
(a) $320,000 shall be disbursed to Sam's West, Inc. for purchase
of the Parcel;
(b) $10,000 will be disbursed to the Seller for the
reimbursement of the deposit on the Parcel and the
acquisition/closing costs of the Parcel from Wal-Mart;
Closing costs in connection with this transaction shall be paid
as set forth in paragraph 12 herein.
The following funds shall be disbursed in accordance with the
provisions of this Agreement on or before September 28, 1998
("Second Funding") and such are subject to the following
conditions being satisfied, the Tenant is not in material default
under the Lease and Tenant having paid the first full months rent
under the Lease:
(a-1) $370,000 less interest accrued on the disbursement of
$330,000 from the Closing Date until the latter of the Rent
Commencement Date or up to and including the Second Funding
Date or such date as the Closing Agent has received the
Rent, as defined below. The net proceeds will be paid by
Buyer to Seller on or after the Rent Commencement Date as
set forth below provided that the Tenant has paid the first
full months rent under the lease.
Buyer shall give evidence to Seller five (5) days prior to
the Second Funding that funds have been deposited with the
Closing Agent in an interest bearing escrow account, and are
available and ready for disbursement, subject to the
conditions above.
It is the intent of the parties that the initial first full
months rent from the Tenant ("Rent") shall be deposited with
the Closing Agent by the Tenant on or before September 28,
1998. Upon receipt of said Rent, the Closing Agent is
instructed to, immediately on that day or the next business
day, thereafter disburse the net proceeds, as defined above,
due Seller, less any prorations and Seller's portion of the
closing costs in connection with the Second Funding,
provided that the Tenant is not in material default (as
required above), the Tenant leasehold policy has been paid
for by Seller (paragraph 12 herein), and the Seller is not
in breach of any surviving representation or warranty
(paragraph 15 herein), and disburse the Rent to Buyer to
complete the Second Funding, without further consent or
instruction from either Seller or Buyer, however Closing
Agent will comply as instructed and set forth in the Buyer's
closing instruction letter, said closing instruction letter
to be prepared in accordance with this Agreement and in no
event will supersede the business terms set forth herein,
subject to a standard escrow agreement as required by the
Closing Agent as of the Closing Date.
In the event the Closing Agent does not receive the Rent
from the Tenant by October 15, 1998 or Buyer shall notify
Seller and Closing Agent that Seller is in default hereunder
or the Tenant is in material default under the Lease, all
funds deposited by Buyer in accordance with paragraph 6.01
(a-1) hereof including interest accrued thereon shall
immediately be returned to Buyer.
Closing costs in connection with this transaction shall be paid
as set forth in paragraph 12 herein.
The following funds shall be disbursed in accordance with the
provisions of the Lease attached hereto as Exhibit "C" ("Final
Funding") and are subject to all conditions under the Lease being
satisfied:
(b-1) $600,000 as the "Construction Allowance" to be paid by
Buyer to Tenant under the terms and conditions as provided
for in the Lease attached hereto as Exhibit "C".
This provision shall survive the Closing Date.
6.02. Option to Repurchase & Seller's Remedies
In the event the Buyer has closed escrow on the subject property
as described in paragraph 2 and 6.01, and (a) Seller has
satisfied its obligations as outlined in this Agreement, (b) is
not in breach of any surviving representation or warranty, (c)
Tenant is not in material default under the Lease, (d) and Tenant
has paid the Rent (and the failure of any of the above to occur
until cured; however such cure period shall not extend later than
October 15, 1998, shall relieve Buyer of the obligation to make
the Second Funding), if then Buyer fails to fund the Second
Funding as outlined in paragraph 6.01 (a-1), Seller shall be
granted, by the Buyer, the unconditional right to Repurchase the
subject property as Sellers sole remedy for Buyers Default. This
Repurchase option shall be as follows:
Buyer shall relieve Seller of any and all obligations outlined in
this Agreement. This Agreement shall immediately become null and
void, with all obligations between the parties, expressed or
implied, terminated. Seller shall have the unconditional right
to Repurchase from the Buyer the Property for two hundred fifty
thousand dollars ($250,000) plus closing costs. Sellers
Repurchase price and release of all obligations in this agreement
shall be considered Liquidated Damages. Buyer agrees to use its
best efforts comply with and assist the Closing Agent in
effecting Sellers Repurchase option.
Additionally, the Closing Agent is instructed without further
consent or instruction from Buyer and Seller to, upon receipt of
Sellers two hundred fifty thousand dollars ($250,000) immediately
close escrow and disburse all funds due Buyer under this
Repurchase option.
6.03 Liquidated Damages Should Buyer fail or refuse to complete
the Second Funding without right to do so as set forth above, in
paragraph 6.02, in breach of this Agreement, Seller shall be
entitled to liquidated damages. By initialing this section Buyer
and Seller agree that Sellers' actual damages would be difficult
and impractical to ascertain, that the Repurchase option and
relief of Sellers obligations made pursuant to paragraph 6.02,
above is a reasonable estimate of Seller's actual damages, and
that in the event of Buyer's wrongful failure or refusal to
complete the Second Funding, Seller shall be entitled to such
liquidated damages, as Seller's sole damages remedy.
Seller /s/ REH Buyer /s/ RPJ
7. Interest. Seller shall pay to Buyer ten percent (10.0%)
interest per annum on all funds disbursed hereunder from the
Closing Date until the Rent Commencement Date which interest
shall accrue and be paid by Seller either out of Seller's
proceeds as set forth in paragraph 6.01 (a-1). If Tenant shall
fail to pay its Rent by October 15, 1998, Seller shall pay
immediately, to Buyer, such interest out-of-pocket upon such
default by Tenant. Such payment is subject to terms of paragraph
6.01 (a-1) herein.
8. Funds Verification. Buyer is to provide evidence
satisfactory to Seller, of the availability of funds for the
purchase of the Property, at any time as reasonably requested by
Seller.
9. Title. Seller shall deliver to Buyer a commitment for an
ALTA OwnerOs Policy of Title Insurance (ALTA owner-most recent
edition) issued by a nationally recognized title insurance
company acceptable to Buyer (the "Title Company"), insuring
marketable title in the Parcel or Property, subject only to such
matters as Buyer may approve and contain such endorsements as
Buyer may require, including extended coverage and ownerOs
comprehensive coverage (the "Title Commitment"). The Title
Commitment shall show Sam's West, Inc. as the present fee owner
of the Parcel and show Buyer as the fee owner to be insured, and
shall reflect the Title Company's commitment to issue a future
improvements endorsement raising the amount of title coverage to
the entire amount of the purchase price paid for the Property
upon final disbursement. The Title Commitment shall also include
an itemization of all outstanding and pending special assessments
and an itemization of taxes affecting the Parcel or Property and
the tax year to which they relate, shall state whether taxes are
current and if not, show the amounts unpaid, the tax parcel
identification numbers and whether the tax parcel includes
property other than the Property to be purchased. All easements,
restrictions, documents and other items affecting title shall be
listed in Schedule "B" of the Title Commitment. Copies of all
instruments creating such exceptions must be attached to the
Title Commitment.
Buyer shall be allowed ten (10) business days after receipt
of the Title Commitment and copies of all underlying documents or
until the end of the Contingency Period, whichever is later to be
consistent with Article 12.01 hereof, for examination and the
making of any objections thereto, said objections to be made in
writing or deemed waived. If any objections are so made, the
Seller shall be allowed thirty (30) days to cure such objections
or in the alternative to obtain a commitment for insurable title
insuring over Buyer's objections. If Seller shall decide to make
no efforts to cure Buyer's objections, or is unable to obtain
insurable title within said thirty (30) day period, this
Agreement shall be null and void and of no further force and
effect and neither party shall have any further duties or
obligations to the other hereunder.
The Buyer shall also have ten (10) business days to review
and approve any easement, lien, hypothecation or other
encumbrance placed of record affecting the Parcel or Property
after the date of the Title Commitment. If necessary, the
Closing Date or Second Funding shall be extended by the number of
days necessary for the Buyer to have ten (10) business days to
review any such items. Such ten (10) business day review period
shall commence on the date the Buyer is provided with a legible
copy of the instrument creating such exception to title. The
Seller agrees to inform the Buyer of any item executed by the
Seller placed of record affecting the Parcel or Property after
the date of the Title Commitment. If any objections are so made,
the Seller shall be allowed thirty (30) days to cure such
objections or in the alternative to obtain a commitment for
insurable title insuring over Buyer's objections. If Seller
shall decide to make no efforts to cure Buyer's objections, or is
unable to obtain insurable title within said thirty (30) day
period, this Agreement shall be null and void and of no further
force and effect and neither party shall have any further duties
or obligations to the other hereunder.
10. Site Inspection. Buyer has inspected and approved the
Parcel.
11. Due Diligence and Contingency Periods.
11.01 Due Diligence Documents and Contingency Period. Buyer
shall have until the later of April 17, 1998 or the end of the
tenth (10th) day, except as noted herein, after the delivery of
all of the Due Diligence Documents, as described below, to review
and approve the same. These documents shall be delivered by
Seller at Seller's expense unless specifically designated herein
to be obtained by Buyer, and such documents to be of current or
recent date, (the "Contingency Period"). Said documents will be
certified to Buyer prior to the Closing Date, however shall not
be subject to the Contingency Period.
(a) The Parcel will be platted as a separate legal lot and
satisfactory proof thereof provided to Buyer including
all costs associated therewith have been paid in full
or escrowed therefore, subject to Buyer's right to
review and approve the same within three (3) business
days after receipt (" 3 Day Contingency Period").
Buyers approval of those items in the Contingency
Period shall not be unreasonably withheld or delayed;
(b) Approval of Tenant Site Plans;
(c) The Title Commitment;
(d) Preliminary ALTA boundary survey of the Property as
described on Exhibit "C" attached hereto;
(e) Phase I and Phase II environmental assessment report
prepared in accordance with current ASTM standards by
Terracon, Inc., containing evidence that the Property
complies with all federal, state and local
environmental regulations;
(f) Site plan and map(s) showing site;
(g) Demographic report showing data on trade area and the
neighborhood, if available, to be obtained by Buyer;
(h) Soils report;
(i) Lease and Lease Guarantee of Buffets, Inc., and
Assignment of the Lease, if any;
(j) A current Certificate of Good Standing for the Tenant,
together with all other documents Buyer or Title
Company deem necessary to support the authority of the
persons executing any documents on behalf of the Seller
or Tenant, the cost of obtaining such documents for the
Tenant will be equally shared by Seller and Buyer, said
costs to Seller not to exceed $100 and shall be
obtained and approved by Buyer not later than April 17,
1998; however, the Title Company shall have until the
closing date to obtain all documents deemed necessary
for both Tenant and Seller;
(k) Building Permit, satisfactory to Tenant, subject to the
3 Day Contingency Period;
(l) Zoning compliance letter from the municipality or
county exercising land use control over the Property in
form and substance satisfactory to Buyer, to be
obtained and approved by Buyer not later than April 17,
1998;
(m) Financial statements Tenant as required within the
Lease on Exhibit "C" attached hereto, to be obtained
and approved by Buyer, not later than April 17, 1998;
and
(n) MAI appraisal, supporting the purchase price with the
contemplated Improvements thereon, to be obtained by
and acceptable to Buyer as outlined in paragraph 6.01
hereof.
(All of the above described documents (a) through (n) are
hereinafter collectively the "First Due Diligence Documents").
After receipt and review of the Due Diligence Documents
Buyer may cancel this Agreement for any reason in its sole
discretion by delivering a cancellation notice, return receipt
requested, to Seller and Closing Agent prior to the end of the
Contingency Period. Such notice shall be deemed effective upon
receipt by Seller.
It shall be a condition precedent to Buyer's obligations to close
hereunder that there have been no material adverse changes in any
of the information reflected in the Due Diligence Documents after
the date of such document and prior to closing.
Until this Agreement is terminated or the Closing has
occurred, the Seller shall deliver to the Buyer any documentation
that comes in the SellerOs possession that modifies any of the
Due Diligence Documents, including the Lease and the Guaranty, or
could render any of the Due Diligence Documents materially
inaccurate, incomplete or invalid. The Buyer shall, in any
event, have five (5) days before the Closing Date to review and
approve any such document and, if necessary, the Closing Date
shall be extended by the number of days necessary for the Buyer
to have five (5) days to review and approve any such document or
documents such approval not to be unreasonably withheld or
delayed.
11.02 Form of Closing Documents. Prior to the end of the
Contingency Period but in no event later than April 17, 1998,
unless otherwise noted in paragraph 11.01 or below, Seller and
Buyer (and where applicable, Tenant) shall agree on the form of
the following documents to be delivered to Buyer on the Closing
Date by Seller as set forth in Article 17 hereof:
(a) General warranty deed;
(b) FIRPTA Affidavit;
(c) Opinion of Counsel re: enforceability of the Lease
prepared by Buyer's attorney licensed in the State in
which the Parcel is located, such Counsel to be
selected and paid for by Buyer; Seller is to provide
executed Lease not later than April 3, 1998 and Buyer
to obtain Opinion not later than April 17, 1998;
(d) Resolution of Tenant re: due authority of the Tenant to
execute the Lease, Buyer to obtain not later than
April 20, 1998;
(e) Estoppel from Tenant to be executed at closing and
reaffirmed on the Rent Commencement DateBuyer to obtain
not later than April 20, 1998;
(f) Estoppel from Seller Buyer to obtain not later than
April 20, 1998;
(g) Form Lease Guaranty of Buffets, Inc., as attached
hereto; and
(h) Lease and Assignments of Lease, if any Buyer to obtain
not later than April 20, 1998;
In the event that Seller and Buyer do not reach mutual
agreement on the form of the above described documents (a)
through (h) prior to the end of the Contingency Period, this
Agreement may be terminated by either Seller or Buyer and neither
party shall have any further duties or obligations to the other
hereunder.
12. Closing Costs. It is understood between Seller and Buyer,
that Seller shall pay for all closing costs associated with the
Sam's Agreement, the premium for a standard coverage title policy
containing the future improvements endorsement and reflecting an
insured amount of $1,300,000 subject to pending disbursements,
and documentary transfer taxes payable in connection with the
Warranty Deed (the amount of such transfer taxes shall not be
posted on the Warranty Deed but shall be attested to by Seller in
a separate affidavit), the costs of the updating and certifying
all Due Diligence Documents prior to the Closing Date unless
otherwise noted herein, or any other cost as defined under the
Sam's Agreement. Recording fees, escrow fees and all
miscellaneous fees and charges shall be equally split between
Seller and Buyer. The cost of obtaining Tenant's Certificate of
Good standing in the State of Illinois shall be equally split
between Seller and Buyer, such cost not to exceed $100 to Seller.
Buyer shall pay for an Opinion of Counsel regarding the
enforceability of the Lease in the State the Parcel is located as
defined in paragraph 11.02 (d) herein. The Seller is responsible
to pay for the cost of the Tenant's leasehold title insurance
policy on or before the Second Funding as required by the Tenant.
The obligations of this paragraph survive the Closing Date.
13. Real Estate Taxes and Assessments. Seller represents to
Buyer that to the best of its knowledge, all real estate taxes
and installments of special assessments due and payable on or
before the Closing Date have been or will be paid in full as of
the Closing Date. It is understood between Seller and Buyer that
all unpaid levied and pending special assessments are paid by the
Tenant as defined in the Lease and shall be the responsibility of
the Tenant under the Lease after the Closing Date. The
obligations of this paragraph shall survive the Closing Date.
14. Prorations. Except as otherwise set forth herein, the Buyer
and the Seller, as of the Closing Date, shall prorate to the
Closing Date: (i) ad valorem taxes, personal property taxes,
charges or assignments affecting the Property (on a calendar year
basis), (ii) utility charges, including charges for water, gas,
electricity, and sewer, if any, (iii) other expenses relating to
the Property which have accrued but not paid as of the Closing
Date, based upon the most current ascertainable tax ▇▇▇▇ and
other relevant billing information, including any charges arising
under any of the encumbrances to the Parcel or Property. To the
extent that information for any such proration is not available
on the Closing Date or if the actual amount of such taxes,
charges or expenses differs from the amount used in the
prorations at closing, then the parties shall make any
adjustments necessary so that the prorations at closing are
adjusted based upon the actual amount of such taxes, charges or
expenses. The parties agree to make such reprorations as soon as
possible after the actual amount of real estate taxes, charges or
expenses prorated at closing becomes available.
15. Seller's Representations and Warranties. These Seller's
representations and warranties deemed to be true and correct as
of the Closing Date and shall survive the closing until the day
of the Second Funding. Seller represents and warrants as of this
date and to the best of SellerOs knowledge after due inquiry
that:
(a) Except for this Agreement and the Letter of Intent with
Buffets, Inc. executed September 16, 1997, the executed
Agreement of Sale with Sam's West, Inc. dated September
11, 1997, and the First Amendment to the Agreement of
Sale dated December ___, 1997 and the Second Amendment
to the Agreement of Sale dated March 9, 1998, and the
Lease as referenced on Exhibit "D", it is not aware of
any other agreements or leases with respect to the
Property;
(b) Seller has all requisite power and authority to
consummate the transaction contemplated by this
Agreement and has by proper proceedings duly authorized
the execution and delivery of this Agreement and the
consummation of the transaction contemplated hereunder;
(c) Seller does not have any actions or proceedings
pending, which would materially affect the Property or
Tenant, except matters fully covered by insurance;
(d) The consummation of the transactions contemplated
hereunder, and the performance of this Agreement and
the delivery of the warranty deed to Buyer, will not
result in any breach of, or constitute a default under,
any instrument to which Seller is a party or by which
Seller may be bound or affected;
e) All of Seller's covenants, agreements, and
representations made herein, and in any and all
documents which may be delivered pursuant hereto, shall
survive the delivery to Buyer of the warranty deed and
other documents furnished in accordance with this
Agreement, and the provision hereof shall continue to
inure to Buyer's benefit and its successors and assigns
up to the Second Funding;
(f) The Parcel or Property is in good condition,
substantially undamaged by fire and other hazards, and
has not been made the subject of any condemnation
proceeding;
(g) The use and operation of the Parcel or Property now is
in full compliance with applicable local, state and
federal laws, ordinances, regulations and requirements;
and
(h) Seller has not caused or permitted any, and to the best
of Seller's knowledge, the Parcel or Property is not in
violation of any federal, state or local law, ordinance
or regulations relating to industrial hygiene or to the
environmental conditions, on, under or about the Parcel
Property, including, but not limited to, soil and
groundwater conditions. There is no proceeding or
inquiry by any governmental authority with respect to
the presence of hazardous materials on the Parcel or
Property or the migration of hazardous materials from
or to other property.
16. Buyer's Representations and Warranties. Buyer represents
and warrants to Seller that:
(a) Buyer has all requisite power and authority to
consummate the transaction contemplated by this
Agreement and has by proper proceedings duly authorized
the execution and delivery of this Agreement and the
consummation of the transaction contemplated hereunder;
(b) To Buyer's knowledge, neither the execution and
delivery of this Agreement nor the consummation of the
transaction contemplated hereunder will violate or be
in conflict with any agreement or instrument to which
Buyer is a party or by which Buyer is bound; and
(c) These Buyer's representations and warranties deemed to
be true and correct as of the Closing Date and shall
survive the closing.
17. Closing.
(a) On or before the Closing Date, Seller, except as noted, will
deposit into Escrow with the Closing Agent the following
documents:
(1) A general warranty deed conveying insurable title to
the Property to Buyer, in form and substance as agreed
to between Sam's and Buyer during the Contingency
Period;
(2) Estoppel letter from Tenant, in form and substance as
agreed to between Seller, Buyer and Tenant during the
Contingency Period;
(3) Affidavit of Seller, in form and substance as agreed to
between Seller and Buyer during the Contingency Period;
(4) FIRPTA Affidavit, in form and substance as agreed to
between Seller and Buyer during the Contingency Period;
(5) Assignment of Lease, in form and substance as agreed to
between Seller and Buyer during the Contingency Period;
(6) The Lease as agreed to between Buyer and/or Tenant and
executed by Seller and Tenant, prior to Contingency
Period;
(7) Lease Guaranty of Buffets, Inc. as agreed to between
Seller and buyer during the Contingency Period;
(8) Opinion of Counsel regarding enforceability of the
Lease and compliance with local law (from an attorney
acceptable to Buyer in the state where the Parcel or
Property is located) in form and substance as agreed to
by Buyer during the Contingency Period, Buyer will
confirm the receipt of the same; and
(9) Resolution of Tenant regarding due authority of Tenant
and execution and delivery of the Lease by Tenant, in a
form and substance as agreed to between Seller and
Buyer during the Contingency Period Buyer will confirm
the receipt of the same.
(b) On or before the Closing Date, Buyer will deposit funds set
forth in paragraph 6.01 (a) and (b) with the Closing Agent. On
or before five (5) days prior to the date of the Second Funding
or the Final Funding, Buyer will deposit funds as required and
set forth in paragraph 6.01 (a-1) and (b-1) with the Closing
Agent.
(c) Both parties will sign and deliver to the Closing Agent any
other documents reasonably required by the Closing Agent and/or
the Title Company.
18. Termination. This Agreement may be terminated prior to the
Closing Date at Buyer's option and any funds disbursed by the
Buyer to the Seller, returned to Buyer in full immediately in the
event of any of the following occurrences in addition to other
remedies available to Buyer as set forth herein :
(a) Seller fails to comply with any of the terms hereof;
(b) A default exists in any material financial obligation
of Seller or Tenant;
(c) Any representation made or contained in any submission
from Seller or Tenant, or in the Due Diligence
Documents, proves to be untrue, substantially false or
misleading at any time prior to the Closing Date;
(d) There has been a material adverse change in the
financial condition of Seller or Tenant or there shall
be a material action, suit or proceeding pending or
threatened against Seller which affects Seller's
ability to perform under this Agreement or against
Tenant which affects Lessee's ability to perform under
the Lease;
(e) Any bankruptcy, reorganization, insolvency, withdrawal,
or similar proceeding is instituted by or against
Seller or Tenant;
(f) Seller or Tenant shall be dissolved, liquidated or
wound up;
(g) Notice given by Buyer pursuant to the terms hereof;
(h) Buyer, Tenant or Seller fail to successfully negotiate
documents contemplated hereunder or as required in
Sam's Agreement; and
(i) Seller or Tenant fails to obtain city, state or federal
approvals and permits required.
Notwithstanding (a) through (i) above, if Seller shall
refuse to close the transaction contemplated herein and Buyer is
ready, willing and able to close the transaction, Buyer is
entitled to all remedies available to it at law or equity.
If Buyer shall not have exercised a right of termination as
allowed hereunder and Seller is otherwise in compliance with the
terms hereof, Seller shall retain all only the remedies available
to it at law or equity through the Closing Date, after such date
Seller shall retain only the remedies as set forth in paragraph
6.02 and 6.03.
19. Damages, Destruction and Eminent Domain. If, prior to the
Closing Date, the Parcel or Property, or any part thereof, should
be destroyed or further damaged by fire, the elements, or any
cause, due to events occurring subsequent to the date of this
Agreement, this Agreement shall become null and void, at Buyer's
option, exercised by written notice to Seller within ten (10)
business days after Buyer has received written notice from Seller
of said destruction or damage. Seller, however, shall have the
right to adjust or settle any insured loss until (a) all
contingencies set forth in Article 8 hereof have been satisfied,
or waived; and (b) any period provided for above in Article 8
hereof for Buyer to elect to terminate this Agreement has expired
or Buyer has, by written notice to Seller, waived Buyer's right
to terminate this Agreement. If Buyer elects to proceed and to
consummate the purchase despite said damage or destruction, there
shall be no reduction in or abatement of the Purchase Price, and
Seller shall pay the deductible, if any, to Buyer, and assign to
Buyer the Seller's right, title and interest in and to all
insurance proceeds resulting form said damage or destruction to
the extent that the same are payable with respect to damage to
the Parcel or Property, subject to rights of the Tenant.
If prior to the Closing Date, the Parcel or Property, or any
part thereof, is taken by eminent domain, which taking delays
commencement of the Lease or delays payment of rent by the Tenant
or renders the Lease invalid, this Agreement shall become null
and void, at Buyer's option. If Buyer elects to proceed and to
consummate the purchase despite said taking, there shall be no
reduction in, or abatement of, the Purchase Price and Seller
shall assign to Buyer all the Seller's right, title and interest
in and to any award made, or to be made, in the condemnation
proceeding pro-rata in relation to the Parcel or Property.
In the event that this Agreement is terminated by Buyer as
provided above, any funds disbursed hereunder shall be returned
to Buyer immediately after execution by Buyer of such documents
reasonably requested by Seller to evidence the termination
hereof.
20. Notices. All notices from either of the parties hereto to
the other shall be in writing and shall be considered to have
been duly given or served if sent by first class certified mail,
return receipt requested, postage prepaid, or by a nationally
recognized courier service guaranteeing overnight delivery to the
party at his or its address set forth below, or to such other
address as such party may hereafter designate by written notice
to the other party.
If to Seller: The Alpha Group, LLC
C/O Colliers ▇▇▇▇▇▇ International
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇
Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer: AEI Fund Management, Inc.
1300 Minnesota World Trade Center
▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Phone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Notice shall be deemed received 48 hours after proper
deposit in U.S. Mail, or 24 hours after proper deposit with a
nationally recognized overnight courier.
21. Miscellaneous.
(a) This Agreement may be amended only by written agreement
signed by both Seller and Buyer, and all waivers must be in
writing and signed by the waiving party. Time is of the essence.
This Agreement will not be construed for or against a party
whether or not that party has drafted this Agreement. If there
is any action or proceeding between the parties relating to this
Agreement, the prevailing party will be entitled to recover
attorney's fees and costs. This is an integrated agreement
containing all agreements of the parties about the Parcel or
Property and the other matters described, and it supersedes any
other agreement or understandings. Exhibits attached to this
Agreement are incorporated into this Agreement.
(b) This Agreement shall be assignable by Buyer, at its option,
in whole or in part, in such manner as Buyer may determine, to an
affiliate of affiliates of Buyer.
(c) The Buyer and Seller each warrant to the other that neither
party hereto has had any dealing with any real estate brokers or
salespersons which would result in a claim for a commission.
(d) Seller remains liable for all obligations under the Sam's
Agreement that may survive the Closing Date up to the Second
Funding date and shall provide evidence, reasonably satisfactory
to Buyer, that such obligations have been satisfied or that
sufficient funds are available or escrowed with an independent
third party, such as a title company, in order to complete the
same.
Buyer is submitting this offer by signing a copy of this
Agreement and delivering it to Seller. Seller has until April
16, 1998 within which time to accept this offer by signing and
returning this Agreement to Buyer. When executed by both
parties, this Agreement will be a binding agreement for valid and
sufficient consideration which will bind and benefit Seller,
Buyer and their respective successors and assigns.
IN WITNESS WHEREOF, Seller and Buyer have executed this
Agreement effective as of the day and year above first written.
SELLER:
THE ALPHA GROUP, LLC
By: /s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇
Its: member
STATE OF Benton)
) ss.
COUNTY OF Arkansas)
On this 16th day of April, 1998, before me, the undersigned,
a Notary Public in and for said State, personally appeared ▇▇▇▇▇▇
▇ ▇▇▇▇▇▇, personally known to me to be the person who executed
the within instrument as the member of The Alpha Group, an
Arkansas corporation, on behalf of said corporation.
/s/ Gay L ▇▇▇▇▇▇
Notary Public
[notary seal]
BUYER:
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
BY: AEI FUND MANAGEMENT XVIII, INC.
By: /s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, its President
STATE OF Minnesota)
) ss.
COUNTY OF ▇▇▇▇▇▇)
On this 17th day of April, 1998, before me, the undersigned,
a Notary Public in and for said State, personally ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, personally known to me to be the person who executed the
within instrument as the President of AEI Fund Management XVIII,
Inc., a Minnesota corporation, as Corporate General Partner of
AEI Real Estate Fund XVIII Limited Partnership, on behalf of said
corporation.
/s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Notary Public
[notary seal]
EXHIBIT "A"
LEGAL DESCRIPTION
See attached
Part of the Northeast Quarter of Section 6, Township 39 North,
Range 12 East of Third Principal Meridian, in ▇▇▇▇ County,
Illinois, described as follows:
Commencing at the Southeast corner of Lot 7 in Block 9 as
designated upon the Plat of The H.O. Stone Northlake Addition
being a subdivision of part of the Northeast Quarter of said
Section 6, the Plat of which subdivision is recorded as Doc. No.
14036603 in the Recorder's Office of ▇▇▇▇ County, Illinois;
thence North 61 degrees 02 minutes 56 seconds West along the
South line of said Blokc 9, a distance of 298.67 feet to the
Southwest corner of Lot 18 in Block 9 of said subdivision;thence
North 0 degrees 00 minutes 41 seconds East, a distance of 32.74
feet; thence North 45 degrees 04 minutes 00 seconds East, a
distance of 21.88 feet to the Point of Beginning; thence North 89
degrees 59 minutes 19 seconds West, a distance of 55.72 feet;
thence North 50 degrees 32 minutes 46 seconds West, a distance of
35.35 feet; thence North 61 degrees 36 minutes 58 seconds West, a
distance of 50.12 feet; thence North 0 degrees 00 minutes 47
seconds East, a distance of 106.46 feet; thence North 89 degrees
55 minutes 14 seconds West, a distance of 13.18 feet; thence
North 0 degrees 00 minutes 00 seconds East, a distance of 33.41
feet; thence South 89 degrees 51 minutes 03 seconds East, a
distance of 231.68 feet; thence South 31 degrees 21 minutes 45
seconds East, a distance of 48.81 feet; thence South 0 degrees 00
minutes 00 seconds East, a distance of 143.92 feet; thence North
89 degrees 59 minutes 19 seconds West, a distance of 116.82 feet
to the Point of Beginning containing 43,417 square feet (0.9967
acres) more or less, all being situated in ▇▇▇▇ County, Illinois.
Part of the Northeast Quarter of Section 6, Township 39 North,
Range 12 East of Third Principal Meridian, in ▇▇▇▇ County,
Illinois, described as follows:
Beginning at the Northeast corner of ▇▇▇ ▇▇ ▇▇▇▇▇ ▇ as designated
upon the Plat of the H.O. Stone Northlake Addition being a
subdivision of part of the Northeast Quarter of said Section 6,
the Plat of which subdivision is recorded as Don. No. 14036603 in
the Recorder's Office of ▇▇▇▇ County, Illinois; thence South 1
degree 59 minutes 01 seconds West along the East line of said
Block 6 and Block 9 in The H.O. Stone Northlake Addition, a
distance of 930.12 feet to the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇ ▇▇▇▇▇ ▇;
thence North 61 degrees 02 minutes 56 seconds West along the
South line of said ▇▇▇ ▇, ▇▇▇ ▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇ 9 in the H.O Stone
Northlake Addition, a distance 298.67 feet to the ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇ ▇; thence South 2 degrees 00 minutes
57 seconds West, a distance of 11.22 feet to a pint in the Center
line of a 20" alley in the H.O. Stone Northlake Addition; thence
North 61 degrees 02 minutes 56 seconds West along the centerline
of said alley, a distance of 446.18 feet to a pint on the East
line of ▇▇▇ ▇▇ ▇▇▇▇▇ ▇ extended Nrotherly in the H.O. Stone
Northlake Addition; thence South 2 degrees 01 minutes 28 seconds
West along the East line of said ▇▇▇ ▇▇ ▇▇▇▇▇ ▇ and the Northerly
extension thereof, a distance of 136.14 feet to the ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇ ▇; thence North 61 degrees 02 minutes
21 seconds West along the Southerly line of said Blcok 8, a
distance of 273.02 feet to the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇ ▇▇▇▇▇ ▇
in the H.O Stone Northlake Addition; thence North 0 degrees 21
minutes 56 seconds West along the West line of said Block 8 and
the Northerly extension thereof, a distance of 139.39 feet to a
point on the Westerly extension of the South line of Lot 5 as
designated upon the Plat of Ether's Resubdivision, being a
resubdivision of lts 11 to 22 inclusive and lot 32 together with
the vacated alley in Block 8 in the H.O. Stone Northlake Addition
Subdivision, the Plat of said Resubdivision is recorded as Doc.
No. 14036604 in the Recorder's Office of ▇▇▇▇ County, Illinois;
thence North 89 degrees 38 minutes 04 seconds East along the
South line of said Lot 5 of ▇▇▇▇▇'▇ Resubdivision extended, a
distance of 20.00 feet to the Southwest corner of said Lot 5 of
▇▇▇▇▇'▇ Resubdivision; thence North 0 degrees 21 minutes 56
seconds West along the West line of Lots 2 through 5 of said
▇▇▇▇▇'▇ Resubdivision, a ditance of 239.90 feet to the Southwest
corner of Lot 1 of said ▇▇▇▇▇'▇ Resubdivision; thence North 13
degrees 17 minutes 01 seconds East, a distance of 20.55 feet to
the Southewest corner of ▇▇▇ ▇ ▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇.▇. ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ Addition; thence North 17 degrees 23 minutes 47 seconds
East, a distance of 94.10 feet to a point on the West line of ▇▇▇
▇ ▇▇▇▇▇ ▇, 35.00 feet South of the Northwest corner of said ▇▇▇ ▇
▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Addition; thence North 36
degrees 49 minutes 52 seconds East, a distance of 43.70 feet to
the ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇ ▇ ▇▇▇▇▇ ▇; thence North 90
degrees 00 minutes 00 seconds East along the North line of The
H.O Stone Northlake Addition, a distance of 796.80 feet to the
Point of Beginning containing 645,623 square feet (14.8215 acres)
more or less, all being situated in ▇▇▇▇ County, Illinois.
EXHIBIT "B"
SURVEY REQUIREMENTS
1. The plat or map of such survey must bear the name, address
and signature of the licensed land surveyor who made the
survey, that surveyor's official seal and license number (if
any, or both), and the date of the survey, with the
following certification:
I, _________________________, a registered land surveyor, in
and for the State of ___________ do hereby certify to AEI
Real Estate Fund XVIII Limited Partnership., a Minnesota
limited partnership, or its assigns (PLEASE CONTACT AEIOS
CLOSING MANAGER AT 1-800-328-3519 FOR INFORMATION), and
____________________ (insert name of title company), that
this is a true and correct plat of a survey of
(Insert Legal Description)
which correctly shows the location of all buildings,
structures and improvements on said described Parcel; that
there are no visible encroachments onto adjoining
properties, streets, alleys, easements or setback lines by
any of said buildings, structures or improvements; that
there are no recorded or visible right of ways or easements
on said described Parcel, except as shown on said survey;
that there are no party walls or visible encroachments on
said described Parcel by buildings, structures or other
improvements situated on adjoining property, except as shown
on said plat or survey; and that the described Parcel has
direct access to a publicly dedicated right-of-way at the
location shown on said plat or survey.
By: _________________________
Dated: _______________________
2. If the street address of the Parcel is available, it should
be noted on the survey.
3. The survey boundary should be drawn to a convenient scale,
with that scale clearly indicated. If feasible, a graphic
scale should be indicated. When practical, the plat or map
of survey should be oriented so that North is at the top of
the drawing. Supplementary or exaggerated scale diagrams
should be presented accurately on the plat or map and drawn
to scale. No plat or map drawing less than the minimum size
of 8-1/2" by 11" will be acceptable.
4. The plat or map of survey should meet with the minimum
Standard Detail Requirements for Land Title Surveys as
adopted by the American Title Association and American
Congress on Surveying and Mapping.
5. The character and location of all buildings upon the Parcel
must be shown and their location given with reference to
boundaries. Proper street numbers should be shown where
available. Physical evidence of easements and/or servitudes
of all kinds, including but not limited to those created by
roads, rights of way, water courses, drains, telephone,
telegraph or electric lines, water, sewer, oil or gas
pipelines, etc., on or across the surveyed Parcel and on
adjoining properties if they appear to affect the enjoyment
of the surveyed Parcel should be located and noted. If the
surveyor has knowledge of any such easements and/or
servitudes, not physically evidenced at the time the present
survey is made, such physical non-evidence should be noted.
All recorded easements, rights of way and other record
matters affecting the Parcel should be located and
identified by recording date. Surface indications, if any,
of underground easements and/or servitudes should also be
shown. If there are no buildings erected on the Parcel
being surveyed, the plat or map of survey should bear the
statement "No Buildings". Curb cuts and adjoining streets
should be shown.
6. Joint or common driveways and alleys must be indicated.
Independent driveways along the boundary must be shown
together with the width thereof. Encroaching driveways,
strips, ribbons, aprons, etc., should be noted. Rights of
access to public highways should be shown. The right-of-way
line of any public street must be shown in relationship to
the Parcel surveyed and the street must be labeled "Publicly
Dedicated" or "Private Thoroughfare" as the case may be.
7. As a minimum requirement, at least two (2) sets of prints of
the plat or map of survey should be furnished to AEI and one
(1) set to the title company.
8. The survey should certify as to the total square footage of
the area surveyed and as to the square footage at the
exterior walls of any improvements on the Parcel. The
survey should note the absence of, or indicate the existence
of, any building restriction or setback lines. Paved areas
should be shown and the survey should designate the area for
parking and its dimensions. If completed, the survey should
indicate the actual number of parking spaces and, if
possible, the actual parking spaces should be outlined on
the survey.
9. Flood Zone designation to be included.
EXHIBIT "C"
LEASE AND LEASE GUARANTY
STANDARD GROUND LEASE
BY AND BETWEEN
OCB REALTY CO., as Tenant,
AND
ALPHA GROUP, L.L.C., as Landlord
Covering land at the
WAL-MART/SAM'S CLUB SHOPPING CENTER
(Shopping Center/Location)
in Northlake, Illinois
(City, State)
TABLE OF CONTENTS
SECTION 1. PREMISES
SECTION 2. TERM; COMMENCEMENT DATE
2.1 Original Lease Term
2.2 Notice of Tender; Target and Drop Dead Dates
2.3 Options to Extend
SECTION 3. LEASE YEAR
SECTION 4. LANDLORD'S WORK
SECTION 5. TENANT'S WORK
SECTION 6. RENT
6.1 Minimum Rent
6.2 Percentage Rent
6.3 Timing and Payment of Percentage Rent; Gross Sale
Reports
6.4 Additional Rent
6.5 Proration
6.6 Adjustments and Reimbursements
SECTION 7. TAXES
7.1 Real Property Taxes
7.2 Payment in Installments
7.3 Right To Contest
7.4 Personal Property Taxes
7.5 Limitation on Tax Increases
SECTION 8. COMMON AREAS, FACILITIES AND SERVICES; OPERATING
EXPENSES
8.1 Initial Improvement of Parking and Other Areas
8.2 Inclusion of Any Common Areas
8.3 Preservation of Parking
8.4 Definition of "Operating Expenses"
8.5 Payment of Tenant's Share of Operating Expenses
8.6 Limitations on Tenant's Share of Operating Expense
8.7 Tenant's Right To Assume Duties
8.8 Tenant's Examination or Audit of Charges
SECTION 9. UTILITIES
SECTION 10.ADVERTISING; PROMOTION; HANDBILLS
SECTION 11.USE OF THE PREMISES; TENANT'S LIMITED EXCLUSIVITY
COMMITMENT
11.1 Tenant's Permitted Use
11.2 Appurtenant Rights
11.3 No Exclusive; Unapproved Uses
SECTION 12.MAINTENANCE AND REPAIR OF
PREMISES; ALTERATIONS AND SIGNS
12.1 Repairs and Maintenance
12.2 Alterations
12.3 Signs
SECTION ▇▇.▇▇▇▇▇▇▇▇▇; RESTORATION OF DAMAGE
13.1 Tenant's Insurance
13.2 Landlord's Insurance
13.3 General Insurance Requirements
13.4 Restoration of Damage to the Building
13.5 Waiver of Claims and Subrogation
SECTION 14.INDEMNIFICATION BY PARTIES
14.1 Indemnification by Tenant
14.2 Indemnification by Landlord
SECTION 15.ESTOPPEL, SUBORDINATION, NONDISTURBANCE AND
ATTORNMENT
15.1 Estoppel Certificates
15.2 Subordination, Nondisturbance and Attornment
SECTION 16.ASSIGNMENT AND SUBLETTING
16.1 Restrictions on Transfer
16.2 Reason for Any Disapproval Given
16.3 Consent Generally
16.4 Sublease to Operating Company
SECTION 17.CONDEMNATION
17.1 Substantial Taking
17.2 Partial Taking
17.3 Arbitration Procedure
17.4 Transfer in Lieu of Condemnation
SECTION 18.DEFAULT
18.1 Tenant's Default
18.2 Landlord's Default
SECTION 19.WARRANTY OF QUIET ENJOYMENT; SURRENDER OF PREMISES;
HOLDOVER TENANCY
19.1 Warranty of Quiet Enjoyment
19.2 Ownership of Building; Surrender of Premises by
Tenant
19.3 Holding Over
SECTION 20.GENERAL PROVISIONS
20.1 Successors
20.2 Rules and Regulations
20.3 Extensions or Forbearances by Parties
20.4 Sale by Landlord
20.5 Notice
20.6 Cotenancy
20.7 Investment Tax Credit
20.8 Entire Agreement
20.9 Interpretation and Use of Pronouns
20.10 Caption and Section Numbers
20.11 "Force Majeure" Delays
20.12 Waiver
20.13 Joint Obligation
20.14 Time of the Essence
20.15 Accord and Satisfaction
20.16 Due Date
20.17 Late Charge
20.18 Cumulative Remedies
20.19 Applicable Law and Construction
20.20 Decision Making by Parties
20.21 Attorneys' Fees
20.22 Use Permitted
20.23 Leasehold and Equipment Financing
20.24 Authority
20.25 Financial or Sales Information
20.26 Reasonable Efforts to Mitigate
20.27 Trash Dumpster
20.28 Indemnification
20.29 Disclaimers
20.30 Effective Date of Lease
20.31 Broker's Commission
20.32 Recording
20.33 Authorship
20.35 Third Parties
20.35 Temporary Space
20.36 Limitations on Landlord's Liability
SECTION 21.HAZARDOUS SUBSTANCES
21.1 Representations by Landlord
21.2 Indemnity by Landlord
21.3 Indemnity by Tenant
21.4 Survival of Obligations
21.5 Definitions of "Hazardous Substances" and Related
Terms
Exhibits and Attachments
EXHIBIT A-1 Legal Description of the Premises
EXHIBIT A-2 Drawing or Plan of Shopping Center
EXHIBIT B Site Plan
EXHIBIT C Landlord's Work and Tenant's Work
EXHIBIT D Rules and Regulations (if any) [NONE]
EXHIBIT E Memorandum of Ground Lease
EXHIBIT F Non-Disclosure Agreement
EXHIBIT G Subordination, Non-Disturbance and Attornment
Agreement [with Landlord's Lender or Lessor]
EXHIBIT H Agreement by Landlord (Leasehold Financing Without
Subordination) [with Tenant's Lender]
EXHIBIT I Storefront Elevation and Pre-Approved Pylon Sign
Location
SCHEDULE #1 Standard Landlord Supplied Site
Specifications [Intentionally Deleted]
SCHEDULE #2 Standard Exclusions from Gross Sales
SCHEDULE #3 Standard Exclusions from Common Area Expenses
[Intentionally Deleted]
GUARANTY (If Applicable)
STANDARD GROUND LEASE
This Standard Ground Lease ("Lease") is made and entered
into this ____ day of February, 1998, by and between ALPHA GROUP,
L.L.C., a _______________ limited liability company, and its
successors and assigns (as referenced below), with principal
offices at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ("LANDLORD"), and OCB REALTY CO., a Minnesota corporation,
with principal offices at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇ ("TENANT").
W I T N E S S E T H:
1. PREMISES. Landlord leases to Tenant, and Tenant leases
from Landlord, certain land ("PREMISES"), consisting of
approximately 43,189 square feet of gross land area, the legal
description of which is (or will be) attached hereto as EXHIBIT
A-1. The Premises is part of a shopping center development known
as the Wal-Mart/Sam's Club Shopping Center ("SHOPPING CENTER"),
as shown on EXHIBIT A-2 attached hereto, located at North Avenue
and Railroad Avenue in Northlake, ▇▇▇▇ County, Illinois , on
which Tenant intends to build a building (the "BUILDING")
containing approximately Nine Thousand One Hundred and Eight-
three (9,183) square feet of gross leasable area, the location of
which will be as approximately shown on the site plan attached
hereto as EXHIBIT B.
For purposes of this Lease, (i) "LEASABLE AREA" of land
shall be the gross land area that can be developed and used for
building, parking, landscaping, sidewalks or other commercial
development use, (ii) "LEASABLE AREA" of buildings shall be
computed by measuring from the outside face of corridor walls to
the outside face of exterior walls and from the center line to
center line of demising walls, with no deduction or exclusion in
the computation of leasable area by reason of interior partitions
or other interior construction or equipment, and (iii) the "GROSS
LEASABLE AREA OF THE SHOPPING CENTER" shall be the sum of the
leasable areas of all leasable or occupiable portions of
improvements within the Shopping Center (and with respect to any
undeveloped pads, shall include the maximum building area
permitted on the pad under applicable law and recorded covenants,
conditions and restrictions).
2. TERM; COMMENCEMENT DATE.
2.1 ORIGINAL LEASE TERM. Unless further extended as
provided herein, the term of this Lease ("LEASE TERM" or "TERM")
shall be twenty (20) full Lease Years and any Partial Lease Year
(as defined below), commencing with the Commencement Date (as
defined below). The "COMMENCEMENT DATE" will be the date on
which each of the following has occurred: (i) Landlord has
acquired fee title to the Premises, has all necessary
governmental approvals and Wal-Mart Approvals (as defined below)
for the creation of the Premises as a separate legal lot capable
of commercial development for the purposes set forth in this
Lease (BUT WITHOUT any need for Landlord to pursue or obtain the
building permit and other approvals required for Tenant's
specific plans for development of the Premises), and has
tendered possession of the Premises to Tenant; and (ii) if there
is a lender/mortgagee which has a lien that may be superior in
priority to the interest of Tenant under this Lease, Landlord
shall have provided Tenant with an executed non-disturbance
agreement from the lienholder under any and all mortgages, deeds
of trust and superior lien interests, on terms and conditions
reasonably satisfactory to Tenant and such secured party. The
parties anticipate that the Commencement Date will be on or about
April 1, 1998.
2.2 NOTICE OF TENDER; TARGET AND DROP DEAD DATES. Landlord
shall give Tenant written notice of its intent to tender
possession of the Premises to Tenant, not less than seven (7)
days prior to such tender of possession ("NOTICE OF TENDER").
Tenant will not be required to accept tender of possession before
the Commencement Date or April 1, 1998, whichever is later
(sometimes referred to below as the "TARGET DATE"); PROVIDED,
however, that (i) Tenant may, but will not be required to, accept
tender of possession prior to the Target Date; and (ii) if for
any reason such Notice of Tender is not given by the forty-fifth
(45th) day after the Target Date (the "DROP DEAD DATE"), Tenant
may elect to terminate this Lease without further liability to
Landlord, upon written notice to Landlord at any time thereafter.
In the event Landlord diligently pursues satisfaction of the
requirements for tender of possession as stated in Section 2.1
but cannot reasonably satisfy such requirements (in its sole but
reasonable discretion) by the Drop Dead Date, any termination of
this Lease by Landlord or Tenant will cause each party to be
released from any further obligation or liability to the other
hereunder; provided, that if the agreement between Landlord and
Sam's for the purchase of the Premises by Landlord is assignable
or Sam's is otherwise willing to consent to an assignment to
Tenant, Tenant may elect to require that Landlord's purchase
agreement with Sam's be assigned to Tenant if Tenant is willing
to continue to pursue this project notwithstanding such Drop Dead
Date, so long as Tenant reimburses Landlord for any ▇▇▇▇▇▇▇ money
or deposit under such agreement that by its terms may be credited
against the purchase price of the Premises and Sam's releases
Landlord from any further liability under such purchase
agreement.
2.3 OPTIONS TO EXTEND. Tenant shall have four (4)
successive options (the "EXTENSION OPTION(S)") to renew and
extend the Term for additional consecutive periods of five (5)
years each (each, an "EXTENDED TERM"). The Extension Options
shall be exercised by Tenant giving Landlord written notice
thereof at least six (6) months prior to the end of the initial
Term or previous Extended Term, as the case may be; PROVIDED,
that Tenant's Extension Option(s) will not in any event expire
from failure to exercise the same if Landlord does not give or
has not given an "Exercise Deadline Notice" (as defined below).
An "EXERCISE DEADLINE NOTICE" is a written notice given to Tenant
at any time within the last year of the Lease Term stating as
follows: "Pursuant to your Lease at Northlake, Illinois, you as
Tenant have until [state deadline date
that is 6 months before end of the current term] or until ten
(10) business days after receipt of this letter, whichever is
later, to exercise your option to extend the Lease Term for an
additional 5 year term and FAILURE TO DO SO WILL RESULT IN THE
LOSS OF YOUR EXTENSION OPTION(S) IN THE LEASE. NOTICE OF
EXERCISE OF SUCH OPTIONS MAY BE GIVEN BY YOU AT ANY TIME AFTER
YOUR RECEIPT OF THIS NOTICE, BUT MUST BE DELIVERED TO US BY SUCH
DEADLINE DATE TO OUR ADDRESS FOR NOTICES UNDER THIS LEASE, WHICH
IS AS FOLLOWS: [state then
current address for notices]." During the Extended Term(s),
except as expressly provided in this Lease, all terms and
conditions of this Lease shall remain unamended and in full force
and effect.
3. LEASE YEAR. As used in this Lease, the "LEASE YEAR" means
that portion of the Term consisting of the period from January 1
through December 31. Any portion of the Term which is less than
a Lease Year shall be a "PARTIAL LEASE YEAR." The portion of the
Term commencing on the Commencement Date and ending on the
following December 31 shall be the "FIRST PARTIAL LEASE YEAR."
4. LANDLORD'S WORK. Landlord warrants that the Premises, at
the time of tender of possession, will be delivered in its
present condition. Except as so provided and except for
Landlord's obligation to pursue and obtain the necessary
governmental approvals for creation and commercial use of the
Premises as described in Section 2.1, there is NO "Landlord's
Work." After execution of this Lease, Landlord will diligently
pursue such matters, keep Tenant informed about the status
thereof, and promptly advise Tenant of any anticipated delay or
problem in satisfying the requirements under Section 2.1 by the
Target Date, in accordance with the provisions of this Lease.
5. TENANT'S WORK. Upon Landlord's tender of possession of the
Premises consistent with Sections 2.1 and 2.2 above and Tenant's
receipt of Landlord's approval of Plans and of necessary
governmental permits and approvals, as referenced in the attached
EXHIBIT C, Tenant, at its sole cost and expense, will promptly
commence construction of its building and related improvements
("BUILDING") and installation of fixtures, equipment and other
items of "Tenant's Work" as identified on the attached EXHIBIT C
("TENANT'S WORK"), and shall diligently pursue such work to
completion. So long as Non-Disclosure Agreements are executed as
provided in section 4 of the attached EXHIBIT C (in the form
attached as EXHIBIT F), Tenant shall submit to Landlord, for
review and approval by Landlord and Sam's West, Inc. ("SAM'S")
(and, if required by the WalMart Agreements, Wal-Mart), Tenant's
drawings showing the Building and site improvements to be
constructed by Tenant, including the site plan, grading plan,
landscaping plan, floor plan, parking plan and necessary
elevations, before submitting the same to the City of Northlake
(the "CITY") for permits. Tenant will also provide to Landlord a
good faith estimate of the total costs of construction of the
Building (excluding furniture, fixtures and equipment ("FF&E")
which Tenant is entitled to remove at the end of the Lease term).
The Building, site improvements and other items of Tenant's Work
will be constructed by Tenant at its sole expense (subject only
to the provisions of the attached EXHIBIT C concerning the
Construction Allowance).
Upon Tenant's or its employees, agents or contractors
entering the Premises prior to the Commencement Date for any
purpose (including without limitation, the performance of
Tenant's Work), all covenants and conditions of this Lease shall
apply to the parties as if the Term had begun at such time, with
the exception of provisions as to Minimum Rent, Percentage Rent,
Additional Rent and any other charges payable by Tenant, which
shall go into effect as of the Commencement Date, even if
Tenant's Work is not completed; PROVIDED, however, the
Commencement Date for the Term and for rental obligations shall
be delayed by one (1) day for each day, if any, that Tenant is
delayed in the performance or completion of Tenant's Work by the
actions or inactions of Landlord.
6. RENT.
6.1 MINIMUM RENT. From and after the Rent Commencement
Date (as defined below), and continuing throughout the Term,
except as otherwise set forth herein, Tenant agrees to pay to
Landlord, without demand, a guaranteed rental ("MINIMUM RENT")
equal to the following amounts per annum:
First Partial Lease Year and Lease Years 1 through 5 $ 130,000
Lease Years 6 through 10 $ 143,000
Lease Years 11 through 15 $ 157,300
Lease Years 16 through 20 $ 173,030
First Extended Term (Lease Years 21 through 25) $ 190,333
Second Extended Term (Lease Years 26 through 30) $ 209,366
Third Extended Term (Lease Years 31 through 35) $ 230,303
Fourth Extended Term (Lease Years 36 through 40) $ 253,333
The "RENT COMMENCEMENT DATE" will be: (i) the day Tenant
opens the Premises for business, or (ii) September 28, 1998,
whichever comes first. Promptly following the Commencement Date,
Landlord and Tenant shall enter into and record a memorandum of
this Lease as set forth in Section 20.32 of this Lease. Tenant
will notify Landlord as soon as reasonably practicable prior to
the Commencement Date as to Tenant's estimated date for opening
for business at the Premises, and will promptly notify Landlord
as to the actual opening date for business at the Premises, when
it occurs.
The Minimum Rent shall be payable in equal monthly
installments of one-twelfth of the annual Minimum Rent, on or
before the first day of each month in advance to Landlord at
Landlord's address as specified above, or at such other place as
Landlord may from time to time designate in writing, without
deductions or setoff whatsoever, except as provided in this
Lease. For Partial Lease Years or partial lease months, Minimum
Rent shall be prorated as provided in Section 6.5 of this Lease.
Minimum Rent shall be adjusted based on the actual leasable area
of the Premises, with any such change being effective the first
day of the first calendar month following the date of such
change; PROVIDED, however, in no event shall the total Minimum
Rent for any period of the Term be more than the amounts set
forth above, respectively.
6.2 PERCENTAGE RENT. In addition to the Minimum Rent
provided for in Section 6.1 of this Lease, Tenant agrees to pay
percentage rent ("PERCENTAGE RENT") to Landlord in an amount
equal to two percent (2%) of Gross Sales (as defined below) for a
particular Lease Year in excess of the following amount (also
referred to as a "BREAKPOINT") for the Lease Year in the
following time periods:
First Partial Lease Year and Lease Years 1 through 5 $ 3,200,000
Lease Years 6 through 10 $ 3,400,000
Lease Years 11 through 15 $ 3,600,000
Lease Years 16 through 20 $ 3,800,000
First Extended Term (Lease Years 21 through 25) $ 4,000,000
Second Extended Term (Lease Years 26 through 30) $ 4,200,000
Third Extended Term (Lease Years 31 through 35) $ 4,400,000
Fourth Extended Term (Lease Years 36 through 40) $ 4,600,000
For Partial Lease Years or partial lease months, the
calculation of Percentage Rent and the applicable Breakpoint
shall be prorated as provided in Section 6.5 of this Lease. As
used in this Lease, the term "GROSS SALES" means the gross amount
received by Tenant from all orders placed and filled, and all
sales and services made or rendered, in or from the Premises,
whether for cash or credit. There shall be excluded from Gross
Sales the items described on the attached SCHEDULE #2.
6.3 TIMING AND PAYMENT OF PERCENTAGE RENT; GROSS SALES
REPORTS. Percentage Rent shall be due and payable annually
within forty-five (45) days after the end of the applicable Lease
Year. Concurrently with the payment of Percentage Rent, Tenant
shall deliver a report of its Gross Sales for the applicable
Lease Year. Such report shall be certified by an authorized
employee of Tenant and kept in accordance with Tenant's usual
accounting practices. If Landlord requires an audit or
examination of Tenant's records of Gross Sales pertaining to the
Premises, Tenant will make available to Landlord, at Tenant's
corporate or principal accounting office, all of Tenant's books
and records necessary to accomplish the audit. Landlord's right
to audit or examine such records shall be limited to the current
Lease Year and the immediately preceding Lease Year, and such
right may be exercised by Landlord only one (1) time in any
consecutive twelve (12) month period.
6.4 ADDITIONAL RENT. Tenant shall pay to Landlord, as
additional rent ("ADDITIONAL RENT"), during the Term and any
extensions thereof, its allocated share of Taxes (as provided in
Article 7 below) and Tenant's Proportionate Share of Shopping
Center Expense (as defined below). Tenant shall pay all sums
required to be paid as Additional Rent directly to Landlord at
the place where the Minimum Rent is payable, without deduction or
setoff except as provided in this Lease.
As used in this Lease, "TENANT'S PROPORTIONATE SHARE" means
the allocated share of any expenses which, under the terms of the
Wal-Mart Agreements (as defined below) or any other encumbrance
on the Premises approved by Tenant, are allocated to the
Premises.
6.5 PRORATION. Whenever this Lease provides that payments
of Minimum Rent, Percentage Rent or Additional Rent, or any
limitation thereon are to be prorated (the "PRORATED SUM"), for a
Partial Lease Year, the Prorated Sum shall be prorated at a rate
of one-twelfth of the yearly sum scheduled for that Partial Lease
Year for each month, and for a partial lease month the Prorated
Sum shall be prorated at a rate of one-thirtieth of the monthly
Prorated Sum, for each day, and shall be payable, in advance, on
the first day of the partial lease month.
6.6 ADJUSTMENTS AND REIMBURSEMENTS. Any adjustment to a
required monthly installment of Additional Rent shall be made
after thirty (30) days' advance notice stating the amount of the
adjustment, how it was calculated and allocated, and such other
information about the costs incurred by Landlord as Tenant may
reasonably require. No adjustment will be made retroactively for
any period or expense more than eighteen (18) months prior to the
date of the adjustment. Landlord will promptly respond to
reasonable requests for reasonable back-up documentation
concerning adjustments and reimbursements required hereunder.
7. TAXES.
7.1 REAL PROPERTY TAXES. During the Term (including any
Extended Terms), Tenant will pay or cause to be paid, prior to
delinquency, its allocated share (as set forth in this Section
7.1) of real property taxes and assessments ("TAXES") levied or
assessed against the Premises, the Building and all improvements
on the Premises. Taxes will be prorated between the parties for
any partial year at the commencement and expiration or other
termination of this Lease. The Premises are (or will be placed
into) a separate tax lot, and Tenant will pay the taxes
attributable to such tax lot as its allocated share.
If the Premises at any time is not a separate tax lot, then
Tenant will be responsible for paying to its allocated share of
Taxes levied or assessed against the tax lot that includes the
Premises, based on the assessed values of land and improvements
shown in the tax statement for the tax lot that includes the
Premises. Tenant's allocated share of Taxes pertaining to the
land will be based on the area of the Premises compared to the
entire area covered by the tax statement, and Tenant's allocated
share of Taxes pertaining to improvements will be based on the
assessed value of Tenant's improvements on the Premises compared
to the assessed value of all improvements covered by the tax
statement. Tenant will pay its allocated share of Taxes within
thirty (30) days after the date such Taxes are due to the taxing
authority so long as Tenant has received Landlord's notice of the
amount due from Tenant, including a copy of the tax statement and
a written summary of how Tenant's allocated share was computed.
If assessed values for land and/or improvements are not available
from the county assessor's office, then Tenant's allocated share
of Taxes will be determined in the same manner as Tenant's
Proportionate Share pursuant to Section 6.4.
7.2 PAYMENT IN INSTALLMENTS. If the Taxes (including any
special assessments or local improvement district assessments)
are payable in installments, only installments coming due during
the Term (including any Extended Terms) will be the
responsibility of Tenant under this Lease. If either party's
consent is required to cause the bonding of any assessment or to
contest any taxes, the party will not unreasonably withhold or
delay its consent upon request. Landlord warrants and represents
to Tenant that, to the best of Landlord's knowledge, neither the
Shopping Center nor the Premises are presently subject to any
assessments, and to the best of Landlord's knowledge, there are
no assessments presently contemplated to come into effect against
the Shopping Center or the Premises during the Term of this
Lease.
7.3 RIGHT TO CONTEST. Tenant will be permitted to contest
any levy of Taxes or any lien or other charge on the Premises
claimed or asserted by any party other than Landlord, if a good
faith dispute exists as to the amount or the obligation to pay.
If the Premises are subjected to a lien as a result of
nonpayment, Tenant shall provide to Landlord, upon its demand,
such security or assurances reasonably acceptable to Landlord
that Tenant can and will satisfy the lien before enforcement
against the Premises.
7.4 PERSONAL PROPERTY TAXES. Tenant shall pay, before
delinquency, all personal property taxes assessed against its
leasehold improvements, FF&E, inventory and other personal
property on the Premises.
7.5 LIMITATION ON TAX INCREASES. [This Section has been
intentionally deleted by the parties.]
8. COMMON AREAS, FACILITIES AND SERVICES; OPERATING EXPENSES.
8.1 INITIAL IMPROVEMENT OF PARKING AND OTHER AREAS.
Landlord's responsibility with respect to the Premises will be to
deliver the Premises as described in Sections 2.1 and 4, and will
not include the need to do any improvements within the Premises
or Shopping Center. Tenant will be responsible for improvement
of parking and improvements within the Premises, including
paving, curbs, sidewalks, lights, landscaping, pedestrian and
parking areas, and related land and site improvements, in
accordance with the requirements of this Lease and the attached
EXHIBITS B AND C.
8.2 INCLUSION OF ANY COMMON AREAS. Pursuant to the WalMart
Agreements (as referenced below), Tenant and its agents,
employees, customers and invitees shall have the reasonable
nonexclusive right, in common with others within the Shopping
Center, to use such landscape areas, sidewalks, accessways,
roadways, and other common areas and facilities as may from time
to time exist and be generally available to all occupants of the
Shopping Center (the "COMMON AREAS") (subject to Tenant's right
of exclusive use of the loading docks, entry and circulation
space and any parking within the Premises). The parties
recognize that Landlord is acquiring and will hold only the
Premises and does not intend to acquire or own other portions of
the Shopping Center, which are leased or owned by Wal-Mart and
Sam's, and that Landlord's (and Tenant's) rights to use any
Common Areas are subject to the terms of, and as set forth in,
the WalMart Agreements. Landlord agrees that it will: (i) not
take any action to amend, waive or impair (or fail to take any
action reasonably required to preserve) Tenant's rights of use
under the WalMart Agreements, (ii) to the extent of Landlord's
rights (if any) under the WalMart Agreements to require the same,
will require that any work being done on the Common Areas will be
performed in a good and workmanlike manner designed to minimize
any interference with the enjoyment and use of the Common Areas;
and (iii) to the extent of Landlord's rights (if any) under the
WalMart Agreements to grant or deny consent to the same, will not
consent to any such action to be undertaken if it would impair
access to the Premises from North Avenue, Railroad
Avenue and Lake Street, or the visibility of the Premises or its
signs from North Avenue, Railroad Avenue and Lake Street, or make
the Premises less attractive or interfere in any way with
Tenant's business in the Premises, cause additional structures to
be constructed on top of the Premises, cause the relocation of
the Premises or its access, or reduce, interfere, change the use
of, or build or construct any improvements (temporary or
permanent) upon the Premises or within the fifteen (15) spaces on
the Wal-Mart Property that Tenant is entitled to use for parking
pursuant to the WalMart Agreements, or reduce the parking ratio
of the Shopping Center below the current parking ratio.
Notwithstanding the foregoing, Landlord will NOT be
responsible for enforcing the WalMart Agreements and may satisfy
its obligations under the foregoing sentence by doing the
following: (i) if any matter under the WalMart Agreement requires
Landlord's consent or approval or other action or WalMart of
Sam's otherwise request such consent, approval or action,
Landlord will promptly forward to Tenant the information in
Landlord's possession showing the matter requiring such consent,
approval or other action; (ii) if Tenant approves or disapproves
the matter or otherwise notifies Landlord in writing after
receipt of such matter as to the action that Tenant wants
Landlord (or the third party requesting such consent, approval or
other action) to take, Landlord will promptly forward a copy of
Tenant's letter or notice to the third party and state that such
letter states Landlord's response to the matter; and (iii) in
furtherance of the foregoing, Landlord hereby grants to Tenant a
power of attorney, coupled with an interest, to deliver notices
in response to requests for consent or approval or other action,
in Landlord's name, place and stead but solely at Tenant's (NOT
Landlord's) expense, which will be binding on Landlord as to
matters that concern (or are restricted under) the WalMart
Agreements or any matter restricted under this Section 8.2;
PROVIDED, that (a) Landlord's reasonable approval will be
required, and Tenant agrees that it will not utilize such power
of attorney, during any period in which Tenant is in default
under this Lease (after expiration of applicable notice and/or
grace periods); (b) Tenant will promptly forward a copy to
Landlord of any such notice or other action under which Tenant
uses such power of attorney; and (c) Tenant will obtain
Landlord's approval of any Material Financial Obligation (as
defined below) that might be binding on the Premises.
Landlord will NOT in any event be required to approve, nor
will Tenant use its power of attorney to agree to, any work or
financial obligation exceeding six (6) months' Minimum Rent under
this Lease (a "MATERIAL FINANCIAL OBLIGATION") which would, if
not paid by Tenant, constitute a lien against the Premises that
would be binding on the Premises notwithstanding any expiration
or other termination of this Lease, and is not payable by Tenant
in a single assessment or over a period not exceeding twelve (12)
months.
Subject to Tenant's ability to obtain governmental permits
and approvals and subject to any required consents from Wal-Mart
and Sam's, Landlord approves the conceptual drawings or
preliminary site plan attached hereto as EXHIBIT B, including the
buildable areas, parking lot layouts, receiving areas and parking
ratios presently existing within the Shopping Center.
8.3 PRESERVATION OF PARKING. Pursuant to the WalMart
Agreements, Tenant will have the exclusive right of use of all
parking developed within the Premises, and will have the right of
use (on a "first come, first served" basis) of fifteen parking
spaces within the WalMart Property.
8.4 DEFINITION OF "OPERATING EXPENSES." The term
"OPERATING EXPENSES" as used herein shall mean costs and expenses
in operating, cleaning, equipping, protecting, lighting, heating,
air conditioning, insuring, repairing and maintaining the Common
Areas of the Shopping Center, if any, to the extent allocable to
the Premises pursuant to the WalMart Agreements or any other
encumbrance on the Premises approved by Tenant.
8.5 PAYMENT OF TENANT'S SHARE OF OPERATING EXPENSES.
Tenant agrees to pay, as Additional Rent subject to Sections 8.6
and 8.7 below, the Operating Expenses allocable to the Premises
during the Term and any extension thereof ("TENANT'S SHOPPING
CENTER EXPENSE"). Landlord will promptly deliver to Tenant all
budgets, invoices and other communications of any kind concerning
any Operating Expenses, or at Tenant's option, will require third
parties to deliver such budgets, invoices and other
communications directly to Tenant.
8.6 LIMITATIONS ON TENANT'S SHARE OF OPERATING EXPENSE.
[This Section has been intentionally deleted by the parties.]
8.7 TENANT'S RIGHT TO ASSUME DUTIES. [This Section has been
intentionally deleted by the parties.]
8.8 TENANT'S EXAMINATION OR AUDIT OF CHARGES. No payment
by Tenant with respect to Taxes or Tenant's Shopping Center
Expense shall derogate Tenant's rights to request documentation
and to examine or audit the books and records of Landlord, if
any, kept in connection with the Taxes and Operating Expenses.
Landlord agrees to make such books and records available to
Tenant. If any such examination or audit shows that Taxes paid
to Landlord or Tenant's Shopping Center Expense has been
overstated by more than three percent (3%), Landlord shall
immediately pay to Tenant the reasonable cost of such examination
or audit, and in any event shall remit the total amount of such
overstatement.
9. UTILITIES. All utilities (including, without limitation,
gas, water, telephone, and electricity) shall be separately
metered to the Premises. Tenant shall pay all utility charges
for utilities to the Premises from and after the Commencement
Date.
10. ADVERTISING; PROMOTION; HANDBILLS. Nothing in this Lease
shall require Tenant to: (i) participate in any joint
advertising or promotional event; (ii) become a member of any
merchants association or promotion fund concerning the Shopping
Center; or (iii) contribute any funds whatsoever to any such
merchant's association or promotional fund.
11. USE OF THE PREMISES; TENANT'S LIMITED EXCLUSIVITY
COMMITMENT.
11.1 TENANT'S PERMITTED USE. The Premises shall be used as
a restaurant, which may, at the option of Tenant and subject to
applicable laws and governmental regulation, serve alcohol.
Tenant shall conduct its business at the Premises under the trade
name "Old Country Buffet," "HomeTown Buffet" or any other name
used by Tenant for its restaurants; except in instances of a
permitted assignment or sublease, or upon the written consent of
Landlord, which consent shall not be unreasonably withheld or
unduly delayed. Landlord represents and warrants that, to the
best of Landlord's information and knowledge, Tenant's use of the
Premises in no way conflicts with the uses of, or agreements
with, other tenants/occupants in the Shopping Center. Tenant
will not, however, use, or permit the use of, the Premises for a
tavern or bar (defined as any establishment that derives more
than fifty percent (50%) of its gross revenue in any year from
the sale of alcoholic beverages), dance hall, adult book store,
movie theater, bowling alley, discount rack shoe store,
automotive maintenance facility engaged in quick lube/oil
changes, or any other business whose principal revenues (i.e.,
more than 50% of gross revenues in any year) are from the sale of
alcoholic beverages, amusement or non-restaurant related
entertainment (PROVIDED, that this restriction will not be deemed
applicable to a sit-down restaurant where alcoholic beverages and
entertainment are secondary to the primary restaurant operation,
such as "TGI Friday's" or "Damon's - The Place for Ribs" and
similar operations).
11.2 APPURTENANT RIGHTS. Subject to any limitations in or
the provisions of the WalMart Agreements or any other encumbrance
on the Premises approved by Tenant, if applicable to Tenant's
rights of use, the parties agree that Tenant's rights of use
under this Lease, which are appurtenant to Tenant's leasehold
estate and included in this Lease, include, without limitation,
the following: (i) full and unimpaired access to the Premises,
which rights of access are at the two (2) points shown (or to be
shown) on the Site Plan attached as Exhibit B and are directly
onto publicly dedicated streets which have been accepted for
maintenance by the City/County/State; (ii) the rights of
exclusive use of any parking spaces within Tenant's Premises for
Tenant's customers, invitees and employees; (iii) the rights of
exclusive use of the loading docks, entry, and circulation space
within Tenant's Premises for Tenant's use; (iv) the rights of
access to light and air and nonexclusive rights to use all public
and private utility lines serving the Premises; and (v) the
rights of nonexclusive use of any Common Areas in the Shopping
Center.
11.3 No Exclusivity; Unapproved Uses. Landlord does not
own any other portion of the Shopping Center and does not promise
or commit that there will not be other uses in the Shopping
Center that may compete with Tenant's business. In the event
that Landlord acquired other portions of the Shopping Center (in
addition to the Premises) or at any point any other party
requests Landlord's consent or approval for the operation within
the Shopping Center of another buffet-style restaurant, or a
cafeteria or cafeteria-style restaurant or a family-style
restaurant, or so-called "home-meal replacement" business (such
as by way of example and not in limitation, the type of food
operation operated by Boston Chicken, Inc./Boston Market, Cracker
Barrel Corner Market, Eatzi's, and/or ▇▇▇▇▇ ▇▇▇▇▇▇ Roasters), or
the operation of a salad bar(s) or buffet(s) at other facilities
within the Shopping Center whose primary marketing orientation is
not that of a buffet-style, cafeteria or cafeteria-style
restaurant, or (with respect to any portion of the Shopping
Center within 400 feet of the front entrance of the Premises) as
a child-oriented play/amusement center (such as, by way of
example and not in limitation, the type of centers presently
operated by Discovery Zone, Leaps & Bounds or Fandangles), or an
establishment serving alcohol, a theater, or a health club (the
"UNAPPROVED USES"), Landlord will not consent to or approve any
such Unapproved Use and grants a power of attorney to Tenant, on
the same basis and subject to the same conditions as stated in
Section 8.2, to consent or deny consent or approval or take other
actions, at Tenant's expense, in response to any requested action
of Landlord from third parties with respect to any such
Unapproved Use.
12. MAINTENANCE AND REPAIR OF PREMISES; ALTERATIONS AND SIGNS.
12.1 REPAIRS AND MAINTENANCE. Tenant shall keep (or cause
to be kept) the Premises and the Building and all improvements
within the Premises at all times in a neat, clean, and sanitary
condition, reasonably keep (or cause to be kept) the glass of all
windows and doors clean and presentable, and reasonably keep (or
cause to be kept) such Building in a good state of repair.
Tenant will reasonably maintain and repair the walls, roof and
other structural components and building systems of the Building
and will be responsible for repair and maintenance of the
interior portion of the Building and all painting, exposed
electrical, plumbing and other utility systems, doors, glass and
all of Tenant's personal property. Tenant shall reasonably keep
(or cause to be kept) the outside doors and their closure
apparatus and mechanisms in good condition, replace all cracked
or broken glass, and reasonably protect the sprinkler system and
all pipes and drains so that they will not freeze or become
clogged. Tenant shall also reasonably maintain, operate and
repair the utility systems within the Building, including the
cost of connection to the utility distribution systems. Tenant
will keep its entrances to the Building free from snow and ice.
12.2 ALTERATIONS. Tenant may install signs, machinery and
personal property and make such alterations and improvements to
the Building (after its construction) as Tenant may deem
advisable; PROVIDED, that Tenant will obtain Landlord's
reasonable approval of any major structural alteration that would
diminish the value or utility of the Premises or conflict with,
or require approval under, the WalMart Agreements. Structural
additions and structural improvements (excluding Tenant's own
FF&E, signs and other personal property) shall at once become a
part of the realty and upon expiration or termination of this
Lease shall belong to Landlord and shall be surrendered with the
Premises, EXCEPT as otherwise approved in writing by Landlord.
All alterations and improvements shall be made in a good and
workmanlike manner and in compliance with applicable laws and
ordinances, including the limitations imposed by local building
laws and governmental requirements.
12.3 SIGNS. Tenant may, in its discretion and subject to
applicable laws and ordinances and subject to the need to obtain
approval from Sam's, install and maintain its standard sign on
the architecturally prominent
front sign band and side of the Premises with individually
illuminated letters of at least forty-eight (48") inches in
height (excluding ascending and descending character elements).
Tenant is not being granted, by this Lease, any right to place
signage on the Shopping Center pylon sign (which belongs solely
to Wal-Mart). Tenant shall have the right to apply to the City
for Tenant's own pylon sign, to be located in a location approved
by Wal-Mart pursuant to the WalMart Agreements; the parties
anticipate that such pylon sign will be in the location and be as
described in the drawings attached as EXHIBIT I, but any change
in such location or such sign that is approved both by the City
and by Wal-Mart will not require further approval from Landlord.
Subject to City approval, Tenant may hang professionally prepared
"coming soon" and "now open" banners on the front and side of the
Building within sixty (60) days before and after its opening for
business and/or erect a temporary street monument within the
Premises. Subject to the need to obtain City approval and Sam's
approval (and/or Wal-Mart approval, if required under the Wal-
Mart Agreements), Tenant will be allowed maximum signage
permitted by applicable law
13. INSURANCE; RESTORATION OF DAMAGE.
13.1 TENANT'S INSURANCE. Tenant agrees to purchase, in
advance, and to carry in full force and effect during the Term of
this Lease and any extension thereof, at its sole expense, the
following insurance:
(i) Property insurance against loss by fire
and other hazards covered by the so-called
"all-risk" or "special form" policy, on a
replacement cost basis and in an amount sufficient
to avoid application of any co-insurance clause,
covering the Building.
(ii) Commercial general liability insurance
(on an Insurance Services Office form or
equivalent) covering all acts of Tenant, its
employees, agents, representatives and guests on
or about the Premises, in a combined single limit
amount of not less than Three Million and No/100
Dollars ($3,000,000.00), which policy shall
include, but not be limited to, coverage for
Bodily Injury, Property Damage, Personal Liability
and Contractual Liability (applying to this
Lease).
(iii) Such property insurance on Tenant's
own FF&E, inventory and other personal property of
Tenant as Tenant determines to be appropriate.
(iv) In the event Tenant serves alcohol
on the Premises, so-called "dramshop" insurance
in an amount consistent with industry standards.
Tenant may self insure with respect to plate glass. Where
applicable, Tenant may maintain reasonable deductibles on the
insurance required by this Section 13.1. All of Tenant's
insurance required to be furnished pursuant to Section 13.1(ii)
shall name Landlord as an additional insured to the extent of
Tenant's indemnification obligations set forth in Section 14.1.
So long as Tenant (and/or the Guarantor, Buffets, Inc., which
may be providing the insurance coverages required under this
Lease for the benefit of Landlord and Tenant) maintains a net
worth of at least $100,000,000, Tenant will not be required to
name Landlord as an additional insured on Tenant's
property/casualty insurance covering the Building (PROVIDED, that
the property/casualty policy permits Tenant to waive subrogation,
as provided by this Lease), nor will Tenant be required to name
Landlord as loss payee on Tenant's property/casualty insurance
covering the Building. If at any time such net worth if less
than $100,000,000 or the policy does not permit Tenant to waive
subrogation, then Tenant shall name Landlord as an additional
insured on such property/casualty insurance covering the
Building. If at any time such net worth is less than
$100,000,000, then the loss payee on such property/casualty
coverage on the Building will be "Landlord and Tenant, as their
respective interests may appear." Tenant's property/casualty
coverage on the Building will cover the entire Building and be
maintained by Tenant throughout the Lease term, for the benefit
of both Landlord's and Tenant's interests therein. Tenant's
coverages will be primary (and any coverage maintained by
Landlord will be secondary and solely for Landlord's benefit, if
Landlord elects to maintain any coverages). All of Tenant's
insurance shall provide for thirty (30) days written notice to
Landlord prior to cancellation or non-renewal. Certificates of
all such insurance shall be delivered to Landlord at least thirty
(30) days prior to the termination date of any existing policy
and upon written request by Landlord. If Tenant fails to comply
with the requests of this Section 13, Landlord
may, but shall not be obligated to, obtain such insurance and
keep the same in effect and Tenant shall pay Landlord the premium
therefor upon demand until such time that Tenant conforms with
its insurance requirements set forth above.
13.2 LANDLORD'S INSURANCE. [This Section has been
intentionally deleted. There is no insurance required to be
maintained by Landlord.]
13.3 GENERAL INSURANCE REQUIREMENTS. If any insurance
required hereunder ceases to be available, or is available on
terms so unacceptable that prudent landlords or tenants, as the
case may be, generally do not carry such insurance, then in lieu
of such insurance the pertinent party may carry the most
comparable insurance which is available and generally carried by
prudent parties. All policies of insurance required under this
Article 13 may be in the form of blanket or umbrella policies.
Further, all insurance required hereunder shall be issued by
financially responsible insurers. An insurer with a current A.M.
Best Company rating of at least A:VII shall be conclusively
deemed to be acceptable.
13.4 RESTORATION OF DAMAGE TO THE BUILDING. Subject to the
provisions of the following paragraph, in the event of any
casualty to the Building on the Premises, Tenant shall use the
insurance proceeds to alter, repair, demolish, construct new
improvements on, restore or replace the damaged or destroyed
Building, as Tenant may elect in its discretion. Costs of
restoration will not exceed the net insurance proceeds available.
The Minimum Rent shall not be abated. If fire or other casualty
during the last three (3) years of the Term or during any
Extended Term causes damage to the Building in an amount
exceeding twenty percent (20%) of its full construction-
replacement cost, Tenant may elect to terminate this Lease by
giving written notice of such termination to Landlord within
sixty (60) days following the date of damage, in which case any
insurance proceeds (plus any deductible or self-insured amount)
shall be paid to Landlord.
The proceeds of Tenant's property/casualty insurance on the
Building and improvements which by the terms of this Lease would
revert to Landlord on expiration or other termination of this
Lease (excluding Tenant's FF&E and other items that Tenant is
permitted to remove pursuant to this Lease) that are payable on
account of the casualty (plus the amount of any deductible or
self-insured retention level, which will be paid by Tenant) will
be the "Restoration Fund." Reconstruction may include
reconstruction of the improvements and/or demolition, alteration
and construction by Tenant of additional improvements and other
alterations of the Premises, to be approved by Landlord pursuant
to this Lease, to the extent appropriate to permit continuation
of Tenant's business operation on the Premises. The Restoration
Fund will be made available to pay the costs of such. So long as
Tenant is not then in default under this Lease, Tenant will not
be required to obtain Landlord's approval as to Tenant's
settlement with its insurer of the casualty claim, but Tenant
will keep Landlord informed as to the status of settlement of the
claim for any casualty to the Building and/or improvements.
HOWEVER, IF THE COST OF RESTORATION OF THE CASUALTY WOULD EXCEED
FIVE PERCENT (5%) OF THE THEN REPLACEMENT COST OF THE BUILDING,
then Tenant agrees that the entire Restoration Fund will treated
as escrowed funds and shall be deposited at a neutral depository
account at a financial institution selected by Tenant and
reasonably acceptable to Landlord (the "DEPOSITORY ACCOUNT").
Draws from the Depository Account may be made only with the
reasonable written consent of Landlord and shall be handled in
the same manner as construction draws on a construction loan.
Tenant will submit plans, obtain Landlord approvals of the work,
and otherwise comply with all provisions of this Lease in
connection with the performance of the restoration work. Draws
from the Depository Account will be subject to a 10 percent
holdback until completion of the work.
Tenant will not be required to incur costs for the
restoration in excess of the Restoration Fund proceeds, but will
cause the Building and improvements, to the extent feasible, to
be restored: (i) to a complete architectural unit, (ii) in
condition appropriate to permit continuation of business
operation, and (iii) substantially the same value and utility as
immediately before the casualty, to the extent feasible (taking
into consideration, among other matters, the amount of the
Restoration Fund).
13.5 WAIVER OF CLAIMS AND SUBROGATION. Notwithstanding any
other provision in this Lease to the contrary, to the extent
possible without invalidating or decreasing the coverage under
their respective insurance policies, Landlord and Tenant hereby
release one another from any and all liability or responsibility
(to the other or anyone claiming through or under them by way of
subrogation or otherwise) for any loss or damage to the extent
covered by the policies of insurance required to be maintained
hereunder or under any other policies of insurance actually
maintained by the party (whichever is applicable), even if such
loss or damage has been caused by the fault
or negligence of the other party, or anyone for whom such party
may be responsible, which loss or damage: (i) is caused by a
peril required by this Lease to be covered by the insurance of
the party incurring the loss; or (ii) if insured for a greater
amount than required, to the extent of the recovery under any
property insurance policy covering the party incurring the loss.
Each party, to the extent applicable, shall apply to their
insurers to obtain such waivers, to the extent necessary, and
each party shall obtain any special endorsements, if required by
their insurer to evidence compliance with the aforementioned
waiver.
14. INDEMNIFICATION BY PARTIES.
14.1 INDEMNIFICATION BY TENANT. Tenant hereby agrees to
protect, defend, indemnify and hold Landlord harmless against any
and all claims, actions, damages, liability, causes of action,
judgments, liens, costs and expenses in connection with injury or
loss of life to person, or damage to property, arising out of the
use, occupancy or operation of Tenant's business in the Premises
or the condition of the Premises or any breach or default by
Tenant in the performance of any term of this Lease on Tenant's
part to be performed or any inaction or action of Tenant, its
agents, concessionaires, contractors, employees or licensees in
or about the Premises. In the event Landlord shall be made a
party to any litigation or proceeding commenced by or against
Tenant (except with respect to suits or litigation commenced by
Tenant against Landlord as a result of a breach of this Lease by
Landlord), then Tenant shall protect and hold Landlord harmless
and shall pay all costs and expenses and reasonable attorneys'
fees incurred or paid by Landlord in connection with such
litigation or proceeding and shall satisfy any judgment or fines
that may be entered against Landlord in such litigation or
proceeding.
14.2 INDEMNIFICATION BY LANDLORD. Subject to the
limitations stated below, Landlord hereby agrees to protect,
defend, indemnify and hold Tenant harmless against any and all
claims, actions, damages, liability, causes of action, judgments,
liens, costs and expenses in connection with injury or loss of
life to person, or damage to property, arising out of the use,
occupancy or operation of the Landlord's business in or about the
Premises or the condition of the Premises or any breach or
default by Landlord in the performance of any term of this Lease
on Landlord's part to be performed or any inaction or action of
Landlord, its agents, concessionaires, contractors, employees or
licensees in or about the Premises. In the event Tenant shall be
made a party to any litigation or proceeding commenced by or
against Landlord (except with respect to suits or litigation
commenced by Landlord against Tenant as a result of a breach of
this Lease by Tenant), then Landlord shall protect and hold
Tenant harmless and shall pay all costs and expenses and
reasonable attorneys' fees incurred or paid by Tenant in
connection with such litigation or proceeding and shall satisfy
any judgment or fines that may be entered against Tenant in such
litigation or proceeding.
Landlord shall NOT be liable for any loss or damage to
persons or property resulting from fire, explosion, falling
plaster, steam, gas, electricity, water or rain which may leak
from any part of the Building or from the pipes, appliances or
plumbing works therein or from the roof, street or subsurface or
from any other place resulting from dampness or any other cause
whatsoever, unless caused by or due to the negligence of
Landlord, its agents, servants or employees.
15. ESTOPPEL, SUBORDINATION, NONDISTURBANCE AND ATTORNMENT.
15.1 ESTOPPEL CERTIFICATES. Upon twenty (20) days' prior
notice of the request, either party will execute, acknowledge and
deliver to the other party a certificate stating: (a) that this
Lease is unmodified, amended and/or supplemented and in full
force and effect (or, if there have been modifications, that this
Lease is in full force and effect as modified, and setting forth
such modifications), (b) the dates to which rent and other sums
payable hereunder have been paid, and (c) either that to the
knowledge of the party no default exists under this Lease or
specifying each such default that exists under this Lease or
specifying each such default of which the party has knowledge.
Any such certificate may be relied upon as to the facts stated
therein by any actual or prospective mortgagee or purchaser of
the Premises from Landlord or any actual or prospective sublessee
or assignee of Tenant's interest in this Lease in connection with
one of the transactions permitted or approved under Article 16.
A party shall not be obligated to update any certificate once
delivered (other than in response to a request of execution of a
new estoppel certificate).
15.2 SUBORDINATION, NONDISTURBANCE AND ATTORNMENT. Provided
that Tenant's use and occupancy of the Premises shall not be
disturbed and all of Tenant's other rights under this Lease are
fully recognized (unless Tenant's right of possession under this
Lease shall have been terminated in accordance with the
provisions of this Lease), Tenant agrees that, upon request of
the Landlord, Tenant will in writing subordinate its rights
hereunder to the lien of any mortgage or deed of trust to any
bank, insurance company or other institutional lender, now or
hereafter in force against the Premises or Shopping Center, and
to all advances made or hereafter to be made upon the security
thereto; PROVIDED, that Tenant's subordination shall apply to the
extent that the party who receives the benefit of the
subordination (the "LENDER") enters into or approves a written
agreement stating that Tenant's right to quiet possession
pursuant to this Lease shall not be disturbed by such party so
long as Tenant pays the rent and observes and performs all of the
provisions of this Lease and that the lender will be bound by the
leasehold mortgagee protection described in Section 20.23 below.
In the event any proceedings are brought for foreclosure, or
in the event of the exercise of the power of sale under any
mortgage or deed of trust or other lien made by Landlord covering
the Premises, Tenant shall attorn to the Lender or other
purchaser upon any such foreclosure or sale and recognize such
Lender or other purchaser as the Landlord under this Lease.
At the time Landlord acquires the fee title to the Premises,
Landlord will cause any Lender that may provide financing to
Landlord for such acquisition to record its lien interest subject
to and after recordation of the memorandum of lease evidencing
this Lease, so that this Lease will not be subject to termination
in the event of foreclosure or a deed-in-lieu of foreclosure
under Lender's loan instruments. If required by the Lender,
Tenant will enter into a subordination, non-disturbance and
attornment agreement with the Lender (an "SNDA"). As between
Landlord and Tenant, the parties approve the form of SNDA
attached as Exhibit G; however, if the Lender requires that the
SNDA be on Lender's form, Tenant will not unreasonably withhold
approval of any commercially reasonable SNDA form of the Lender,
so long as it is with an institutional lender and the SNDA form
of such Lender does not materially modify or impair the rights
and entitlements under this Lease, change Tenant's rights to
rebuild and to continue this Lease following condemnation or
casualty, or otherwise materially and detrimentally alter the
approved format of the SNDA as attached hereto. Landlord will
use reasonable efforts to obtain the Lender's approval of the
attached SNDA. Landlord shall similarly provide Tenant with
executed SNDA's from any and all future mortgagees, holders of
deeds of trust, and any other parties holding an interest in the
Premises, no later than the date said parties obtain such an
interest. Tenant may waive these conditions precedent upon
written notice to Landlord, although no other action by Tenant
short of such notice shall be deemed an implied waiver of
Tenant's privileges hereunder.
16. ASSIGNMENT AND SUBLETTING.
16.1 RESTRICTIONS ON TRANSFER. Except as otherwise provided
below, Tenant shall not assign or in any manner transfer this
Lease or any estate or interest therein or sublease the Premises
without Landlord's prior written consent, which consent shall not
be unreasonably withheld or delayed so long as the following
conditions are satisfied: (i) Tenant affirms to Landlord in
writing Tenant's liability under this Lease and acknowledges that
it is not being released from liability hereunder (unless the
express terms of Section 16.3 below are satisfied for such
release), and (ii) Tenant provides to Landlord a written
confirmation that Tenant is not aware of any defaults or events
of default outstanding in the performance by Landlord of the
terms of this Lease and/or any other known outstanding offsets,
setoffs, abatements of rent, or defenses by Tenant to the
enforcement of this Lease or payment of rent under this Lease, to
which Tenant may be entitled under any terms of this Lease, OTHER
THAN as may be stated in Tenant's written confirmation. Any
assignment or other transfer without such consent shall, at the
option of Landlord, constitute a default under this Lease.
Notwithstanding anything contained herein to the contrary,
Tenant may, without the necessity of the consent of Landlord or
the need to provide the affirmation and confirmation referenced
above as a condition to any of the following events, at any time
assign, sublease or otherwise transfer this Lease or any portion
thereof to: any parent, subsidiary or affiliate corporation or
entity; any corporation resulting from the consolidation or
merger of Tenant into or with any other entity; any person, firm,
entity or corporation acquiring a majority of Tenant's issued and
outstanding capital stock or all or substantially all of Tenant's
physical assets; or any person, firm, entity or corporation
acquiring at least ten (10) of Tenant's restaurants nationally
(hereinafter, a "PERMITTED TRANSFER"). Such transactions will be
treated as Permitted Transfers for which Landlord's consent is
not required; PROVIDED, however, promptly following any such
assignment, Tenant shall notify Landlord in writing of the
assignment, including a description of the transaction and the
identity of the assignee. Notwithstanding the foregoing, no
provision of this Lease will be construed to require Tenant to
obtain Landlord's consent for any financing of or on Tenant's
leasehold estate or FF&E or require consent for (or to notify
Landlord with respect to) any transfer of Tenant's stock. As
used herein, the expression "AFFILIATE CORPORATION OR ENTITY"
means a person or business entity, corporate or otherwise, that
directly or indirectly through one or more intermediaries,
controls or is controlled by or is under control with Tenant.
The word "CONTROL" means the right and power, direct or indirect,
to direct or cause the direction of the management and policies
of a person or business entity, corporation or otherwise. No
Permitted Transfer will constitute a release of liability.
16.2 REASON FOR ANY DISAPPROVAL GIVEN. If Tenant follows
the procedures in Section 16.1 for seeking Landlord's consent and
Landlord does not approve the request, Landlord will give Tenant
a written statement specifying the particular reasons why the
proposed transfer and transferee were not reasonably acceptable
to Landlord and any steps required to be taken by Tenant (if
applicable) to obtain Landlord's consent, and at least thirty
(30) days for Tenant to comply with such requirements or take
other appropriate action with respect to Landlord's refusal to
grant consent.
16.3 CONSENT GENERALLY. The giving of consent in one
instance shall not preclude the need for Tenant to obtain
Landlord's consent to further transfers. No changes in the rent
or economic terms of this Lease will be required of Tenant as a
condition of Landlord's consent. In the event that Tenant, with
or without the previous consent of Landlord, does assign or in
any manner transfer this Lease or any estate or interest therein
or sublease the Premises, Tenant shall not be released from any
of its obligations under this Lease. Landlord's consent to any
of the foregoing shall not release or waive the prohibition
against them thereafter or constitute a consent to any other
assignment, transfer or sublease.
16.4 SUBLEASE TO OPERATING COMPANY. Landlord and Tenant
hereby acknowledge and agree that effective on the Commencement
Date (or at any time thereafter), Tenant may sublease the entire
Premises to, at Tenant's election, OCB Restaurant Co., HomeTown
Buffet, Inc., or Buffets, Inc., all of which are affiliated
corporations of Tenant.
17. CONDEMNATION.
17.1 SUBSTANTIAL TAKING. If the entire Premises is
condemned, or if such a substantial portion of the Premises,
means of access or adjacent roadway is taken which renders the
Premises reasonably unusable for Tenant's business operations,
then this Lease shall terminate as of the date upon which
possession is taken by the condemning authority. The net
condemnation proceeds shall be divided between Landlord and
Tenant in proportion to the value of their respective interests
in the Premises and Building immediately prior to the termination
of this Lease. The "value" of Landlord's interest in the
Premises and Building, for purposes of this Lease, will include,
for this purpose, the value of Landlord's percentage interest in
the Building acquired pursuant to the terms of Section 19.2, and
the value of Landlord's reversionary interest in the Building.
Landlord shall have the right to offset any amounts in default
that Tenant owes Landlord pursuant to this Lease against any
proceeds payable to Tenant under this paragraph. The "value" of
Tenant's interest in the Premises and Building, for purposes of
this Lease, will include, for this purpose, the value of Tenant's
percentage interest in the Building pursuant to the terms of
Section 19.2. Tenant will also be entitled to receive and retain
any separate award attributable to the taking of Tenant's FF&E,
moving expenses, severance damages, and any other award that may
be separately available from the condemning authority and that
does not diminish the award for the Building.
17.2 PARTIAL TAKING. In the event of a partial taking by
condemnation of the Premises, means of access or roadway as
described above, and Section 17.1 does not apply, the net
condemnation proceeds shall be made available to Tenant to make
necessary repairs and alterations to the Premises and Building
(as appropriate) so as to permit Tenant to continue its
operations and to restore the Premises and Building or other
property not so taken. Minimum Rent shall be abated during the
period of restoration to the extent the Premises and Building are
not reasonably usable for Tenant's use; provided, that the period
of abatement shall not exceed twelve (12) months. Costs of
restoration will not exceed the net condemnation proceeds
available. Any net condemnation proceeds from the taking which
are not used to repair, alter and restore the Premises and
Building shall belong to Landlord (the "RETAINED AWARD"). After
restoration, the Minimum Rent shall be reduced for the remainder
of the Term by an amount determined by multiplying the Minimum
Rent by a fraction, the numerator of which is the amount of the
Retained Award so paid to Landlord and the denominator of which
is $ [the agreed value and purchase price for the Premises
that Landlord is paying to acquire it, prior to the commencement
of this Lease].
17.3 ARBITRATION PROCEDURE. If the parties cannot agree
upon the adjustment to Minimum Rent pursuant to Section 17.2,
either party may request that the fair market rental values be
determined by arbitration. The arbitration will be by three
arbitrators, with the arbitrators' fee divided equally between
the parties. Landlord and Tenant will each select as arbitrator
an independent Realtor-appraiser having knowledge with respect to
commercial shopping center real estate values and practices in
the geographic area in which the Shopping Center is situated, and
the two arbitrators shall select a third arbitrator having the
above qualifications. The arbitrators will be instructed to
determine the fair market rental value of the Premises before and
after the condemnation. The arbitration shall be conducted
according to the procedures of the arbitration statutes of the
State in which the Shopping Center is located, and the award
shall have the effect provided therein.
17.4 TRANSFER IN LIEU OF CONDEMNATION. Sale of property to
a purchaser with the power of eminent domain in the face of a
threat or the probability of the exercise of the power shall be
treated as a taking by condemnation.
18. DEFAULT.
18.1 TENANT'S DEFAULT. If Tenant defaults in the payment of
Minimum Rent, Percentage Rent or any Additional Rent or other
charge payable by Tenant and Tenant does not cure such default
within fifteen (15) days after written notice thereof shall have
been given to Tenant (provided, that if Landlord has already
given two (2) such notices within the twelve (12) month period
immediately prior to the event of default, then for the remainder
of the 12-month period, only five (5) days notice will be
required); or if Tenant defaults in the prompt and full
performance of any other provision of this Lease and Tenant does
not cure the default within thirty (30) days after written notice
is given to Tenant (or such longer period as may be necessary to
cure such default so long as Tenant begins correction of the
default within the thirty (30) day period and thereafter proceeds
with reasonable diligence and in good faith to effect the remedy
as soon as practicable); then Tenant shall be in default under
this Lease.
Upon such default, Landlord may elect, upon at least ten
(10) days prior written notice of its intention to do so, if the
default is not cured within such ten (10) day period, to
terminate this Lease or, without terminating this Lease, to
terminate Tenant's right to possession of the Premises. In
addition to any other rights and remedies Landlord may have by
law or otherwise (other than related to any right of acceleration
of rent, which Landlord specifically waives), Landlord shall have
the right of re-entry and may remove all persons and property
from the Premises. Landlord's entry upon and taking possession
of the Premises shall not in any way terminate this Lease or
release the Tenant in whole or in part from Tenant's obligation
to pay the Minimum Rent and Additional Rent hereunder for the
then current Term or discharge Tenant from any loss or damage
sustained by Landlord on account of Tenant's breach of the Lease,
unless Landlord elects in writing to terminate the Lease.
Upon Landlord's re-entering the Premises, Landlord shall use
reasonable efforts to relet all or any part of the Premises for
such term or terms and at such rental or rentals as Landlord, in
the exercise of Landlord's reasonable discretion, may deem
advisable. Upon such reletting, all rent and other sums received
by Landlord from such reletting shall be applied first to the
payment of any indebtedness other than rent due hereunder from
Tenant to Landlord; second to the payment of any costs and
expenses of such reletting, including reasonable brokerage fees
and attorneys' fees and the reasonable costs of alterations and
repairs undertaken for such reletting; third to the payment of
rent and other charges due and unpaid hereunder and the residue,
if any, shall be held by Landlord and applied in the payment of
future amounts that become due and payable hereunder. If such
rentals and other sums received from such reletting during any
month be less than that to be paid during such month by Tenant
hereunder, Tenant shall pay such deficiency immediately to
Landlord. Notwithstanding any such reletting without
termination, Landlord may at any time hereafter elect to
terminate this Lease for such previous breach.
Tenant shall pay all damages Landlord may incur by reason of
Tenant's default, including (without limitation) reasonable costs
and attorneys' fees.
Landlord may, but shall not be obligated to, cure at any
time upon reasonable notice to Tenant (but not less than thirty
(30) days unless an emergency), any default by Tenant under this
Lease and whenever Landlord so elects, all costs and expenses
incurred by Landlord in curing the default, together with
interest thereon at the annual rate of two percent (2%) over the
rate then announced by Chase Manhattan Bank as its base or prime
rate from the date of such payment by Landlord shall be payable
as Additional Rent to the Landlord and the Landlord shall have in
the event of the nonpayment thereof the same rights as in the
case of default by Tenant in the payment of rent. If it shall be
unlawful to charge Tenant the aforesaid interest rate, then in
such event the interest rate shall be the highest rate per annum
allowed by law.
No consent or waiver, express or implied by Landlord to any
breach of any term of this Lease on the part of the Tenant shall
be construed as a consent or waiver of any other breach of the
same or any term, unless in writing signed by Landlord.
18.2 LANDLORD'S DEFAULT. In the event Landlord fails to
perform its responsibilities pursuant to this Lease, Tenant's
notice as to Landlord's nonperformance will be sent
simultaneously to Landlord and any mortgagee of Landlord which
has requested such notice, provided such mortgagee has first
provided Tenant with a non-disturbance agreement consistent with
Section 15.2. Landlord will be in default under this Lease if
Landlord fails to cause such responsibilities to be fully
performed within thirty (30) days (48 hours in the event of an
emergency) after written notice by Tenant to Landlord specifying
the nature of the default with reasonable particularity. If a
non-emergency default is of such a nature that it cannot be
remedied fully within the thirty (30) day period, this
requirement shall be satisfied if Landlord begins correction of
the default within the thirty (30) day period and thereafter
proceeds with reasonable diligence and in good faith to effect
the remedy as soon as practicable. Tenant shall not have the
right to terminate this Lease as a result of Landlord's default.
In the event of such default, Tenant shall have all remedies
available under law for breach of contract, including (without
limitation) the right of specific performance. In addition,
Tenant may elect in its discretion to perform the required action
or take corrective action reasonably required to cure the default
if it pertains to the Premises, in which event Landlord shall
reimburse Tenant for the reasonable out-of-pocket costs of such
action, together with reasonable and necessary costs and
disbursements and interest, on the same basis as described in
Section 18.1, and such amounts may be deducted from the rent
thereafter to become due under this Lease, after at least twenty
(20) days' written notice to Landlord (and its mortgagee) as to
the costs so incurred.
Any mortgagee of Landlord which has notified Tenant of its
address in the manner provided for notices in this Lease will
have the right to cure Landlord's defaults under this Section.
The cure period will commence on notice to such mortgagee of the
default and extend for a period ending twenty (20) days after the
end of the time period for Landlord to cure a default. In this
connection, any representative of the mortgagee or beneficiary
shall have the right to enter upon the Premises for the purpose
of curing Landlord's default.
19. WARRANTY OF QUIET ENJOYMENT; SURRENDER OF PREMISES; HOLDOVER
TENANCY.
19.1 WARRANTY OF QUIET ENJOYMENT. Upon payment by the
Tenant of the rents herein provided and upon the observance and
performance of all other covenants, terms and conditions on
Tenant's part to be observed and performed, Tenant shall quietly
enjoy the Premises without hindrance or interruption by Landlord
or anyone claiming by, through or under Landlord. Landlord
represents and warrants that, on the Commencement Date, each of
the following will be true: (i) Landlord shall have good and
marketable fee title to the Premises, subject to matters of
record; (ii) the Premises shall not subject to the lien of any
deed of trust, mortgage or other similar encumbering instrument,
except for any that are recorded after (and are subject to) this
Lease (or memorandum thereof); (iii) Landlord has the full and
unencumbered power, right and authority to make this Lease for
the Term hereof; and (iv) subject to matters of record, Landlord
will put Tenant into complete and exclusive possession of the
Premises free from all orders, restrictions, covenants,
agreements, leases, easements, laws, codes, ordinances,
regulations or decrees which would, in any way, prevent or
inhibit the use of the Premises by Tenant as provided in this
Lease, prevent or restrict the use of the access roads and
passageways of the Shopping Center by Tenant, its agents,
employees or invitees, or limit ingress and egress to and from
North Avenue, Railroad Avenue and Lake Street, other than the
WalMart Agreements and any other encumbrances on the Premises
approved by Tenant, and (v) the Premises will, at the time of
Notice of Tender by Landlord, have all necessary governmental
approvals to be a separate legal lot.
19.2 OWNERSHIP OF BUILDING; SURRENDER OF PREMISES BY TENANT.
The parties intend and agree that the Construction Allowance
being provided by Landlord pursuant to the attached Exhibit C
(the "CONSTRUCTION ALLOWANCE") is being advanced solely to pay
for part of the construction costs of improvements that will be
deemed realty under Illinois law and be owned by Landlord. In
furtherance thereof, Landlord will be deemed to be an owner of an
undivided interest in the Building that is proportionate to its
proportionate share of the total construction costs of the
initial construction of the Building, which shall be and remain
realty and part of the Premises that Landlord owns and leases to
Tenant pursuant to this Lease. Notwithstanding such part
ownership, Tenant (and not Landlord) will be solely responsible
throughout the Term of this Lease for maintaining the Building,
maintaining insurance thereon and paying the costs and expenses
attributable to the Building.
Upon completion of construction, Tenant will provide to
Landlord a certified statement of the total construction costs
for the Building, and a calculation that shows Landlord's
proportionate share of such total construction costs and
Landlord's proportionate interest in the Building for purposes of
this Lease. If desired by Landlord or any accountant to either
party, Tenant and Landlord will execute a ▇▇▇▇ of sale or other
instrument reasonably required to confirm the parties' respective
interest in the Building. Upon request, Tenant will provide or
make available to Landlord, for its examination, such back-up
information on construction costs as Landlord may reasonably
require to verify Tenant's statements and calculations. The
"BUILDING" for these purposes will not include any of Tenant's
identification signage, FF&E and personal property that Tenant
may be entitled to remove on the expiration or earlier
termination of this Lease (which will be owned solely by Tenant
and removed by it upon such expiration or termination).
Subject to the provisions set forth in this paragraph, upon
expiration or termination of this Lease, Landlord shall, at no
charge to Landlord, become the owner of and have Tenant's
reversionary interest in the Building and all improvements of
Tenant which have become part of the real property. Tenant shall
surrender the Premises to Landlord in good repair, operating
condition, working order and appearance, subject to reasonable
wear and tear and (to the extent provided herein for termination
after casualty) damage by fire and other casualty. Depreciation
and wear from ordinary use need not be restored, but all repairs
for which Tenant is responsible will be completed to the latest
practical date prior to such surrender. If this Lease is
terminated in connection with a casualty, Tenant will assign to
Landlord the entire insurance proceeds pertaining to the Building
and improvements that revert to Landlord. Tenant shall promptly
remove all of its own identification signage, inventory, FF&E and
other personal property that remain the property of Tenant, and
will restore any physical damage caused by such removal. Any such
property of Tenant not so removed shall be deemed abandoned by
Tenant and shall become the property of the Landlord.
19.3 HOLDING OVER. In the event Tenant remains in
possession of the Premises or any part thereof after termination
of this Lease in accordance with Section 19.2, by lapse of time
or otherwise, Tenant shall be deemed to be occupying the Premises
as a tenant on a month-to-month basis at a monthly rent fixed for
the holdover period at the last monthly installment of Minimum
Rent payable during the Term of this Lease or any extension
thereof, and Tenant will also be responsible for paying any
applicable Percentage Rent and Additional Rent. All other
conditions, provisions and obligations of this Lease shall remain
the same and in full force and effect.
20. GENERAL PROVISIONS.
20.1 SUCCESSORS. All rights and liabilities herein given to
or imposed upon the respective parties hereto shall extend to and
bind their respective heirs, executors, administrators,
successors, assigns and sublessees. Tenant acknowledges that it
has been advised that Landlord intends to create a limited
partnership or other entity to hold title to the Premises and
this Lease, and this Lease is freely transferable by Landlord to
any entity that Landlord may form to acquire the Premises.
20.2 RULES AND REGULATIONS. Tenant will comply with the
terms of the WalMart Agreements during the term of this Lease.
Landlord will not have the right to adopt rules and regulations
that would be binding on Tenant, other than its execution of the
WalMart Agreements.
20.3 EXTENSIONS OR FORBEARANCES BY PARTIES. No extension of
time, forbearance, neglect or waiver on the part of Landlord or
Tenant, as the case may be, with respect to any one or more of
the covenants, terms or conditions of this Lease shall be
construed as a waiver of any of the other covenants, terms or
conditions of this Lease or as an estoppel against Landlord or
Tenant, as the case may be, nor shall any extension of time,
forbearance, or waiver on the part of Landlord or Tenant, as the
case may be, in any one or more instance or particulars be
construed to be a waiver or estoppel in respect to any other
instance or particular covered by this Lease.
20.4 SALE BY LANDLORD. In the event of any transfer(s) of
Landlord's interest in the Premises, Landlord shall automatically
be relieved of any and all obligations and liabilities on the
part of Landlord occurring from and after the date of such
transfer, so long as Landlord provides Tenant written notice of
such transfer(s), and Landlord's purchaser or grantee expressly
assumes, in writing, all obligations and liabilities of Landlord
from and after the date of such transfer; provided, however,
Landlord shall continue to remain fully liable for all liability
accrued prior to the date of such sale(s) or transfer(s).
Landlord agrees to provide Tenant with written notice of any such
transfer(s) no later than the effective date thereof.
20.5 NOTICE. All notices and demands which may or are
required to be given by either party to the other hereunder shall
be in writing and delivered in person or sent by United States
certified or registered mail, postage prepaid, or by reputable
nationally recognized overnight delivery service. Notices and
demands to Tenant shall be addressed to it at its corporate
offices, at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ 55344-
7229, Attn: Real Estate Officer, with a copy to ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: General
Counsel. Tenant may change such addresses for notice purposes at
any time by written notice to Landlord. Notices and demands to
the Landlord shall be addressed to it at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as
Landlord may from time to time designate in a written notice to
Tenant. Any such notice if mailed as provided herein shall be
deemed to have been rendered or given on the second business day
after its deposit, postage prepaid, in the U.S. Mail or with the
overnight delivery service. Notwithstanding any of the
foregoing, either party hereto may give the other party facsimile
and telephone notices as to emergency repairs.
20.6 COTENANCY. [This Section has been intentionally deleted
by the parties.]
20.7 INVESTMENT TAX CREDIT. Tenant shall be entitled to any
investment tax credits under federal, state or local law with
respect to its interest in the Building (but not Landlord's
interest therein) and any item of Tenant's Work.
20.8 ENTIRE AGREEMENT. This Lease and the exhibits,
schedules and riders, if any, attached hereto set forth all of
the covenants, promises, agreements, conditions and
understandings between Landlord and Tenant concerning the
Premises, and there are no other covenants, promises, agreements,
conditions, warranties, representations or understandings, either
oral or written, between them other than as set forth herein. No
alteration, amendment, change or addition to this Lease shall be
binding upon Landlord or Tenant unless reduced to writing and in
a lease supplement that is executed by each party.
20.9 INTERPRETATION AND USE OF PRONOUNS. Whenever herein
the singular number is used, the same shall include the plural
and the masculine gender shall include the feminine and the
neuter genders. Nothing contained herein shall be deemed or
construed by the parties hereto or any third party to create a
relationship between the parties other than the relationship of
Landlord and Tenant.
20.10 CAPTION AND SECTION NUMBERS. The captions and
section numbers appearing in this Lease are inserted only as a
matter of convenience and in no way define, limit, construe or
describe the scope or intent of such sections of this Lease nor
in any way affect this Lease.
20.11 "FORCE MAJEURE" DELAYS. In the event that either
party hereto shall be delayed, or hindered in, or prevented from
the performance of any act required hereunder by reason of acts
of God, strikes, lockouts, labor troubles, inability to procure
materials, failure of power, restrictive governmental laws or
regulations, riots, insurrection, war, acts (or failure to act)
of government (provided timely application and diligent
prosecution for such governmental action, if required was
undertaken by the delayed party) or other reason of like nature
not the fault of, or within the control of, the party delayed in
performing work or doing acts required under the terms of this
Lease (collectively referred to as "FORCE MAJEURE" delays), then
performance of such work or act shall be excused for the period
of the delay and the period for the performance of any such work
or act shall be extended for a period equivalent to the period of
such delay. This provision shall not operate to excuse Tenant
from prompt payment of Minimum Rent, Percentage Rent or
Additional Rent or any other payments required by the terms of
this Lease, unless the Commencement Date or periods permitting
Tenant to abatement of rent are postponed or extended by such
delays.
20.12 WAIVER. The waiver of any term, covenant or
condition herein contained shall not be deemed to be a waiver of
such term, covenant or condition on any subsequent breach of the
same or any other term, covenant or condition herein contained.
The subsequent acceptance of rent hereunder by Landlord shall not
be deemed to be a waiver of any preceding default by Tenant of
any term, covenant or condition of this Lease, other than the
failure of the Tenant to pay the particular rental so accepted,
regardless of Landlord's knowledge of such preceding default at
the time of the acceptance of such rent.
20.13 JOINT OBLIGATION. If there is hereafter more than
one party liable as Tenant, the obligations hereunder imposed
shall be joint and several.
20.14 TIME OF THE ESSENCE. Time is of the essence of
this Lease and each and all of its provisions in which
performance is a factor.
20.15 ACCORD AND SATISFACTION. No payment by Tenant or
receipt by Landlord of a lesser amount than the monthly Minimum
Rent and Additional Rent and annual Percentage Rent herein
stipulated shall be deemed to be other than on account and no
endorsement or statement on any check or any letter accompanying
any check or payment of any rent or charge shall be deemed an
accord and satisfaction, and Landlord shall accept such check or
payment without prejudice to Landlord's rights to recover the
balance of such rent or charge or pursue any other remedy
provided in this Lease.
20.16 DUE DATE. If the due date by which any amount
payable by one party hereto to the other is not specifically
stated herein, the amount shall be due and payable within thirty
(30) days following request therefor or, if necessary, the
rendering by the requesting party to the other party of the
statement therefor.
20.17 LATE CHARGE. If Tenant shall fail to pay, within
five (5) days after receipt of written notice of nonpayment, any
Minimum Rent, Percentage Rent or any Additional Rent due under
this Lease, then Tenant shall pay to Landlord as a late charge
and in consideration of the additional costs incurred by Landlord
and the additional record keeping required to be performed by
Landlord, the sum One Hundred and No/100 Dollars ($100.00),
although such late charge shall not be payable by Tenant in the
first two (2) instances of late payment in any one (1) calendar
year.
20.18 CUMULATIVE REMEDIES. No remedy or election
hereunder shall be deemed exclusive but shall, whenever possible,
be cumulative with all other remedies at law or in equity, except
to the extent specifically waived or modified by this Lease.
20.19 APPLICABLE LAW AND CONSTRUCTION. This Lease shall
be governed by and construed in accordance with the laws of the
State of Illinois. If any provision of this Lease or the
application thereof to any person or circumstances shall to any
extent be invalid or unenforceable, the remainder of this Lease
shall not be affected thereby and each provision of the Lease
shall be valid and enforceable to the fullest extent permitted by
law.
20.20 DECISION MAKING BY PARTIES. Wherever a party's
consent, approval, decision or determination is required under
this Lease, such consent or approval shall be given or decision
or determination shall be made promptly, in writing and in a
commercially reasonable manner. No change in rent, the rights of
the parties or the economic terms of this Lease shall be required
as a condition to granting of consent. Any denial of consent
will include in reasonable detail the reason for denial or aspect
of the request that was not acceptable.
20.21 ATTORNEYS' FEES. In the event of any action or
proceeding by either party against the other under this Lease,
the prevailing party shall be entitled to recover for the fees of
its attorneys in such action or proceeding, including costs of
appeal, if any, in such amount as the court may adjudge
reasonable as attorneys' fees.
20.22 USE PERMITTED; WALMART AGREEMENTS. Landlord
represents and warrants that, to the best of Landlord's
knowledge, Tenant's use of the Premises pursuant to this Lease
does not violate the WalMart Agreements or any other recorded
covenants, conditions and restrictions ("CCR's"), if any, of the
Shopping Center, any Construction Operation and Reciprocal
Easement Agreement ("CORE"), or other leases or agreements which
are binding on Landlord or the Shopping Center. To the extent
required, Landlord will obtain, and provide to Tenant prior to
the Commencement Date, a written acknowledgment, consent or
approval by Wal-Mart and Sam's of this Lease to confirm that no
further consent of approval by either of them is required for
Tenant's use and development of the Premises pursuant to this
Lease. Tenant's rights of use under the CCR's and CORE are for
non-exclusive rights of use.
Tenant's obligations under this Lease are conditioned upon
and subject to its review and approval, and the recordation of,
agreements with Sam's and WalMart (the "WALMART AGREEMENTS")
establishing, for the Term of this Lease (as it may be extended
pursuant to this Lease) easements and rights of use of the
fifteen (15) parking spaces on the adjoining WalMart property and
Tenant's right of use of accessways, any common utility lines
required to service the Premises, and any other common areas
within the adjoining Sam's and WalMart properties. This
condition must be satisfied prior, or as soon as possible after,
execution of this Lease and prior to the date on which Tenant is
required to commence any construction or other work. Once the
WalMart Agreements are approved, Landlord and Tenant will co-
operate on the timing of recordation of the WalMart Agreements
with recordation of the memorandum of lease or short-form lease
evidencing this Lease, so that Tenant will be able to obtain
title insurance that insures both its leasehold estate under this
Lease and its appurtenant easement right under the WalMart
Agreements.
20.23 LEASEHOLD AND EQUIPMENT FINANCING.
Notwithstanding any provision of this Lease, Tenant will have the
right to mortgage, pledge or otherwise encumber Tenant's
leasehold estate under this Lease and its interest in the
Premises ("LEASEHOLD FINANCING"). Such Leasehold Financing shall
be and at all times remain subject and subordinate to this Lease.
Landlord shall enter into a leasehold mortgagee protection
agreement (substantially in the form attached as EXHIBIT H,
subject to such changes as Landlord and Tenant's lender may
reasonably approve) with Tenant's lender upon Tenant's request
(the "LEASEHOLD FINANCING AGREEMENT"). Tenant shall reimburse
Landlord for its reasonable costs (up to $800), in reviewing and
approving the Leasehold Financing Agreement subsequently required
or related documentation. No change in the rent or other
economic terms of this Lease shall be required of Tenant as a
condition to Landlord's consent. Landlord hereby disclaims and
irrevocably and unconditionally waives any statutory or common
law lien on the any property of Tenant that Tenant is entitled to
remove on expiration or termination of this Lease. Time periods
that are provided in such Leasehold Financing Agreement are
solely for the benefit of Tenant's lender and will not restrict
any right or remedy that Landlord may have against Tenant under
this Lease for recovery of damages, late charges and other
remedies for default under this Lease.
Notwithstanding any other provision of this Lease, Tenant
will have the right to lease or mortgage, pledge and encumber its
trade fixtures, equipment and personal property (for this
purpose, collectively, the "EQUIPMENT") from time to time (the
"EQUIPMENT FINANCING") with a leasing company or through an
institutional lender (collectively, an "EQUIPMENT LENDER").
Landlord further agrees that the Equipment shall remain personal
property, notwithstanding the manner or mode of the attachment to
the Premises. Landlord recognizes and acknowledges that any
claims that Equipment Lender now has or may hereafter have
against the Equipment by virtue of the equipment lease or
financing documents, are superior to any lien or claim of any
nature which Landlord now has or may hereafter have to the
Equipment by statute, agreement or otherwise. In the event of
default by Tenant in the payment of any amount to the Equipment
Lender, or in the performance of any of the other terms and
conditions of the equipment lease or financing documents, or
extensions or renewals thereof, the Equipment Lender or its
assigns may remove such Equipment or any part thereof from the
Premises. Landlord will make no claim whatsoever to any
Equipment covered by any equipment lease or financing documents.
The Equipment Lender may, without affecting the validity of this
waiver, extend the terms of payment of any rental or other sum or
the performance of any of the other terms or conditions of the
equipment lease or financing documents, without the consent of
Landlord and without giving notice to Landlord. This waiver
shall inure to the benefit of the successors and assigns of the
Equipment Lender and shall be binding upon the heirs, personal
representatives, successors and assigns of Landlord. Landlord
will execute, not later than ten (10) days after receipt of a
written request, any consent, easement, Landlord's waiver of lien
rights, acknowledgment, estoppel certificate or other document
required by the Equipment Lender in order to carry out the intent
of this paragraph (the "EQUIPMENT DOCUMENTS"). If Landlord fails
to do so in such ten (10) day period, Tenant is hereby designated
as attorney-in-fact for Landlord, coupled with an interest, to
execute and deliver the Equipment Documents on behalf of
Landlord.
20.24 AUTHORITY. Each individual executing this Lease
on behalf of their respective party represents and warrants that
he/she is duly authorized to execute and deliver this Lease on
behalf of such party, and that this Lease is binding upon such
party.
20.25 FINANCIAL OR SALES INFORMATION. Any financial
statements required to be supplied herein and all gross sales
reports related to the Premises shall be held in confidence by
the party receiving the same and will be utilized solely for
purposes of this Lease, but may be provided in confidence by
Landlord to any potential (or actual) mortgagee of the Shopping
Center, to Landlord's attorneys, accountants and professional
advisers, and to any potential (or actual) purchaser of the
Shopping Center.
20.26 REASONABLE EFFORTS TO MITIGATE. In the event of
default by Tenant under this Lease, Landlord will use
commercially reasonable efforts to mitigate its damages;
PROVIDED, however, to the extent permitted under Illinois law,
Tenant (i) waives any right under such state's law to require
Landlord to expend its own funds to cure an event of default by
Tenant or to mitigate damages, and (ii) agrees that it would not
be unreasonable for Landlord to decline to expend its own funds
(versus utilizing rent thereafter under this Lease or from third
parties, in the event Landlord repossesses the Premises) in order
to mitigate its damages.
20.27 TRASH DUMPSTER. Tenant will be permitted to
maintain a trash dumpster (20 x 16) outside of the Premises for
Tenant's own use, at a location selected by Tenant [if not
otherwise shown in green on EXHIBIT B]. Tenant may change the
location of the dumpster, in Tenant's discretion, within the
Premises, subject to any need to obtain the City's approvals, or
WalMart's or Sam's consent if restricted under the WalMart
Agreements.
20.28 INDEMNIFICATION. The provisions of this Lease
concerning indemnification are subject to the following
conditions: (i) the party seeking indemnification (the
"INDEMNIFIED PARTY") will promptly notify the indemnifying party
(the "INDEMNITOR") in writing as soon as the Indemnified Party
becomes aware of the injury, action, event, claim or demand
giving rise to the obligation to indemnify; (ii) the Indemnified
Party will take no steps (such as admission of liability) which
will operate to bar Indemnitor from obtaining any protection
afforded by any policies of insurance it may hold or which
operate to prejudice the defense in any such legal proceedings or
otherwise prevent Indemnitor from protecting itself against such
claim, action, demand, or legal proceeding. Indemnitor shall
have the sole and exclusive right to conduct the response to or
defense of any such claim, action, demand, or legal proceeding;
and (iii) the parties will reasonably cooperate (at Indemnitor's
expense) in responding to any claim, action, demand or legal
proceeding covered by the Indemnity.
20.29 DISCLAIMERS. No provision of the Lease will be
construed as a limitation on Tenant's right to conduct business
in other locations. There is no express or implied radius
restriction or covenant of operation.
20.30 EFFECTIVE DATE OF LEASE. The submission of this
Lease for examination does not constitute a reservation of or
option for the Premises, and this Lease shall become effective as
a lease only upon execution and delivery by Landlord and Tenant.
20.31 BROKER'S COMMISSION. Each of the parties
represents and warrants that there are no claims for brokerage
commissions or finders fees in connection with the execution of
this Lease with the exception of Colliers ▇▇▇▇▇▇ International,
whose commission shall be paid by Landlord, and each of Landlord
and Tenant indemnify the other against and hold it harmless from
all liabilities arising from any such claim made through the
indemnifying party.
20.32 RECORDING. Tenant shall not record this Lease
without the prior written consent of Landlord; PROVIDED, however,
upon the occurrence of the Commencement Date, or at the request
of either Landlord or Tenant (return delivery within thirty (30)
days after request), the parties shall join in the execution of
and record a memorandum or so-called short form of this Lease, in
the form attached hereto as EXHIBIT E. All costs incurred in
connection with recording the short form lease shall be shared
equally by Landlord and Tenant.
20.33 AUTHORSHIP. This Agreement is a jointly
negotiated work product and authorship shall not be ascribed to
any particular party.
20.34 THIRD-PARTIES. Nothing in this Lease, expressed
or implied, is intended to confer on any person, other than the
parties or their respective heirs, executors, administrators,
successors, assigns and sublessees, any rights or remedies by
reason of this Lease and in no event shall any third-party be
deemed a third-party beneficiary hereunder.
20.35 TEMPORARY SPACE. [This Section has been
intentionally deleted by the parties.]
20.36 LIMITATIONS ON LANDLORD'S LIABILITY. If Landlord
is in default hereunder, and as a consequence Tenant recovers a
money judgment against Landlord, such judgment shall be a lien
and charge only against Landlord's interest in the Premises, its
interest in the Building and this Lease, and may be satisfied
only out of the rent and other consideration payable to Landlord
under this Lease, the proceeds of sale received on execution of
the judgment and levy against the right, title, and interest of
Landlord in the Premises, Building and this Lease, and out of
rent or other income from such real property thereafter
receivable by Landlord therefrom or out of the consideration
received by Landlord from the sale or other disposition of all or
any part of Landlord's right, title, and interest in the
Premises, Building and this Lease, and not from any other assets,
real property or other property of Landlord or its partners.
Neither Landlord, nor any agent, partner, or employee of Landlord
shall be personally liable for any portion of such a judgment.
This Section 20.36 will not restrict any claim or
judgment Tenant may obtain in connection with any injury, damage
or claim arising from the gross negligence or intentional
misconduct of Landlord, its agents, partners or employees of
Landlord or any independent contractor of Landlord.
21. HAZARDOUS SUBSTANCES.
21.1 REPRESENTATIONS BY LANDLORD. Landlord represents and
warrants that the following are true as of the date of this Lease
and will be true as of the Commencement Date: (i) there has been
no release, disposal or storage of Hazardous Substances on the
Premises to the knowledge of Landlord (as "knowledge" is defined
and limited on the attached Exhibit C); (ii) the Premises have
not been to Landlord's knowledge (as "knowledge" is defined and
limited on the attached EXHIBIT C) and are not presently used for
the storage, manufacture, disposal, handling, transportation or
use of any Hazardous Substances; (iii) there are no past or
present investigations, administrative proceedings, notices of
violation or other civil or criminal action threatened or pending
known to Landlord (as "knowledge" is defined and limited on the
attached EXHIBIT C) alleging noncompliance with or violation of
any statutes, regulations or ordinances relating to any
environmental permits, release or discharge of any Hazardous
Substances, and Landlord has complied with all applicable
governmental regulations including (but not limited to) obtaining
all necessary licenses, completing in a timely fashion all
necessary reporting and filing requirements, and satisfying
financial responsibility and related obligations with respect
thereto, all to the extent applicable; (iv) Landlord has not, nor
to the knowledge of Landlord (as "knowledge" is defined and
limited on the attached EXHIBIT C) has any prior tenant or any
other third party, violated any statute, regulation or ordinance
relating to any environmental permit or the release of any
Hazardous Substances; (v) to the best of Landlord's knowledge (as
"knowledge" is defined and limited on the attached EXHIBIT C),
there are not now, and have never been any aboveground or
underground storage tanks located on or under the Shopping
Center; (vi) [this subsection has been intentionally deleted];
and (vii) upon Landlord's tender of possession of the Premises to
Tenant, the Premises shall be free from all Hazardous
Substances, to the knowledge of Landlord (as "knowledge" is
defined and limited on the attached EXHIBIT C).
21.2 INDEMNITY BY LANDLORD. Landlord further warrants and
covenants that it will not in the future, install, use, generate
or dispose of or grant consent or permission (to the extent of
Landlord's right to do so, if any) for any other occupant of the
Shopping Center or any third party to install, use, generate or
dispose of on or about the Shopping Center any Hazardous
Substances, except for immaterial quantities of Hazardous
Substances customarily used in the construction, maintenance or
operation of like properties which have been and should be used
in accordance with applicable laws, statutes, regulations and
ordinances then in effect. Landlord hereby agrees to protect,
defend, indemnify and hold Tenant harmless from and against all
claims, liabilities, penalties, costs, fines, damages and
expenses, including, but not limited to, costs and expenses which
Tenant is obligated to incur to correct or remedy the situation,
the costs of defending civil enforcement actions, the costs of
participating in regulatory proceedings, or any other civil or
administrative action, including without limitation, attorneys'
and expert fees and disbursements, directly or indirectly
incurred by Tenant arising out of the inaccuracy of any
representation, covenant, or warranty by Landlord in this
Article 21 or the presence of Hazardous Substances on, in or
under the Premises as of the date of Landlord's tender of
possession of the Premises to Tenant. Landlord may satisfy its
obligations under this paragraph either by taking action to clean
up any Hazardous Substances for which Landlord may be
responsible, or by diligently taking commercial reasonable
actions to enforce any right or action to require that third
parties clean up any Hazardous Substances.
21.3 INDEMNITY BY TENANT. Tenant warrants and covenants
that it shall not install, use, generate, store or dispose of, in
or about the Premises or the Shopping Center any Hazardous
Substances, except for immaterial quantities of Hazardous
Substances customarily used in the construction, maintenance or
operation of restaurants all of which shall be used in accordance
with applicable laws, statutes, regulations and ordinances then
in effect. Tenant hereby agrees to protect, defend, indemnify
and hold Landlord harmless from and against any claims,
liabilities, penalties, fines, costs, damages and expenses,
including but not limited to, costs and expenses which Landlord
is obligated to incur to correct or remedy the situation, the
costs of defending civil enforcement actions, the costs of
participating in regulatory proceedings, or any other civil or
administrative action, including without limitation, attorneys'
and expert fees and disbursements, arising out of Tenant's
installation, use, generation, storage or disposal of any
Hazardous Substances in or about the Premises or the Shopping
Center. Tenant may satisfy its obligations under this paragraph
either by taking action to clean up any Hazardous Substances for
which Tenant may be responsible, or by diligently taking
commercial reasonable actions to enforce any right or action to
require that third parties clean up any Hazardous Substances.
21.4 SURVIVAL OF OBLIGATIONS. The representations,
warranties and indemnifications set forth in this Article 21
shall survive the expiration or earlier termination of this
Lease.
21.5 DEFINITIONS OF "HAZARDOUS SUBSTANCES" AND RELATED
TERMS. The term "HAZARDOUS SUBSTANCES" shall mean:
(a) polychlorinated biphenyls ("PCBs") or "PCB items" (as defined
in 40 C.F.R. Sec. 761.3) or any equipment which contains PCB's;
(b) any asbestos or asbestos-containing materials; (c) stored,
leaked or spilled petroleum products; or (d) any other chemical,
material or substance (i) which is regulated as a "toxic
substance" (as defined by the Toxic Substance Control Act, 15
U.S.C. Sec. 2601 et seq., as amended), (ii) which is a "hazardous
waste" (as defined by the Resource Conservation and Recovery Act,
42 U.S.C. Sec. 6901 et seq., as amended), (iii) which is a
"hazardous substance" (as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), 42 U.S.C. Sec. 9601 et seq., as amended), or (iv)
exposure to which is prohibited, limited or regulated by any
federal, state, county, regional, local or other governmental
statute, regulation, ordinance or authority of which, even if not
so regulated, may or could pose a hazard to the health and safety
of the occupants of or invitees to the Premises, or the owners,
tenants or occupants of the Shopping Center or the property
adjacent to the Shopping Center.
IN WITNESS WHEREOF, Landlord and Tenant have signed and
sealed this Ground Lease as of the day, month and year first
above written.
LANDLORD:
ALPHA GROUP, L.L.C.,
a limited liability company
By
Witness
Print
Its
TENANT:
OCB REALTY CO.,
a Minnesota corporation
/s/ ▇▇▇▇▇ ▇▇▇▇▇ By /s/ ▇▇▇ ▇ ▇▇▇▇▇▇
Witness Print ▇▇▇ ▇. ▇▇▇▇▇▇
Its Chief Executive Officer
EXHIBIT A-1
LEGAL DESCRIPTION OF THE PREMISES
See attached (or to be mutually approved and attached).
ALPHA GROUP PROPERTY
Part of the Northeast Quarter of Section 6, Township 39 North,
Range 12 East of Third Principal Meridian, In ▇▇▇▇ County,
Illinois, described as follows:
Commencing at the Southeast corner of Lot 7 in Block 9 as
designated upon the Plat of The H.O. Stone Northlake Addition
being a subdivision of part of the Northeast Quarter of said
Section 5, the Plat of which subdivision is recorded as Doc. No.
14036603 in the Recorder's Office of ▇▇▇▇ County, Illinois;
thence North 61 egrees 02 minutes 56 seconds West along the South
line of said Block 9, a distance of 298.67 feet to the Southwest
corner of Lot 18 in Block 9 of said subdivision; thence North 0
degrees 00 minutes 41 seconds East, a distance of 32.74 feet;
thence North 45 degrees 00 minutes 00 seconds East, a distance of
21.88 feet to the Point of Beginning; thence North 89 degrees 59
minutes 19 seconds West, a distance of 5572 feet; thence North 50
degrees 32 minutes 46 seconds West, a distance of 35.35 feet;
thence North 61 degrees 36 minutes 58 seconds West, a distance of
50.12 feet; thence North 0 degress 00 minutes 47 seconds East, a
distance of 106.45 feet; thence North 80 degrees 55 minutes 14
seconds West, a distance off 13.15 feet; thence North 0 degrees
00 minutes 00 seconds East, a distance of 33.41 feet; thence
South 89 degrees 51 minutes 03 seconds East, a distance of 231.58
feet; thence South 31 degrees 21 minutes 45 seconds East, a
distance of 48.81 feet; thence South 0 degrees 00 minutes 00
seconds East, a distance of 143.92 feet; thence North 89 degrees
59 minutes 19 seconds West, a distance of 116.,82 feet to the
Point of Beginning containing 43,417 square feet (0.9967 acres)
more or less, all being situated in ▇▇▇▇ County, Illinois.
EXHIBIT A-2
[DRAWING OR PLAN OF THE SHOPPING CENTER]
See attached (or to be mutually approved and attached).
EXHIBIT B
[DRAWING OR PLAN OF THE SHOPPING CENTER]
SITE PLAN
Identify:
Premises (Crosshatched) [Section 1]
Shopping Center (Red) [Section 1]
Protected Parking Area [Section 8.3]
Tenant's Dumpster Area (Green) [Section 20.27]
Employee Parking Area* (Orange) [Section 8.3]
*[if any]
EXHIBIT C
LANDLORD'S WORK AND TENANT'S WORK
1. CONTINGENCY; CONDITION AND TITLE TO PREMISES. This Lease is
subject to: (i) Tenant's reasonable determination that the
Premises does not contain any hazardous substances or hazardous
materials listed by the U.S. Environmental Protection Agency or
by the State in which the Premises is located under applicable
environmental laws and regulations ("HAZARDOUS SUBSTANCES"), and
(ii) the parties' ability to obtain the permit(s) required for
constructing Landlord's Work and Tenant's Work as referenced in
this Exhibit (as to Landlord, such "permits" will mean the
creation of the Premises as a separate legal lot capable of
commercial development, with zoning that will permit Tenant's
intended use, and any approvals needed of Sam's and WalMart to
this Lease and the intended development of the Premises).
The only "Landlord's Work" is to perform its delivery
obligations as set forth in Section 4 of the Lease, and does not
involve any work on or to the Premises.
Promptly after execution of this Lease, Landlord will
provide to Tenant the following (except as otherwise waived in
writing by Tenant): (i) a current TITLE INSURANCE
COMMITMENT/REPORT acceptable to Tenant from a reputable national
title insurance company selected by Tenant ("TITLE COMPANY"),
showing a good and merchantable leasehold estate in the leased
Premises vested in Tenant (or that Title Company is committed to
issue such a policy, upon recordation of the memorandum of lease)
and showing Landlord as the fee owner of the Shopping Center,
together with copies of all easements, covenants, restrictions,
agreements or other documents which affect the leased Premises
and Shopping Center; (ii) an ALTA/ACSM SURVEY OF THE PREMISES
(or, at Landlord's option, an ALTA/ACSM survey of the Shopping
Center that shows the boundaries and location of the Premises) by
a licensed surveyor or civil engineer licensed in the state in
which the Shopping Center is located, in form reasonably
acceptable to, and certified to, Tenant and in sufficient detail
to provide the basis for an ALTA policy of title insurance
without boundary, encroachment or survey exceptions and showing
the location of all utilities; and (iii) such SOIL TESTS,
GEOTECHNICAL STUDIES, ENVIRONMENTAL TESTS OR AUDITS AND OTHER
REPORTS OR STUDIES ON THE PHYSICAL CONDITION OF THE PREMISES OR
SHOPPING CENTER AS ARE IN LANDLORD'S POSSESSION.
Tenant will have thirty (30) days after mutual execution of
this Lease to perform such investigations concerning Hazardous
Substances within the Premises or such "Level One" environmental
assessments as Tenant may desire, and may terminate this Lease by
written notice to Landlord within forty-five (45) days after
mutual execution of this Lease if Tenant is not reasonably
satisfied with the results thereof. If not so terminated within
such time period, the contingency in subparagraph (i) above shall
conclusively be deemed waived.
Tenant shall have twenty (20) days after receipt of the
survey, preliminary title report and copies of all title
exceptions within which to notify Landlord in writing of Tenant's
disapproval of any exceptions shown in the title report, other
than an exception for current property taxes. Tenant shall have
twenty (20) days after receipt of the soils tests and
environmental audit within which to notify Landlord in writing of
Tenant's disapproval of any aspect of the tests or audit or their
results. In the event of such disapproval, Landlord shall have
thirty (30) days after receipt of Tenant's notice to eliminate
any disapproved title exception or to correct any disapproved
aspect of the tests or audit (or to satisfy Tenant that the
disapproved title exception or the soil or environmental
condition to which Tenant objected will be corrected by Landlord
within a time period approved by Tenant in writing, but not in
any event later than the date Landlord delivers possession of the
leased Premises to Tenant). If Landlord is unable or unwilling
to eliminate a disapproved title exception or disapproved aspect
of the soil tests or environmental audit, either party may elect
to rescind this Lease by notice to the other party. In such
event, all obligations of the parties under this Lease shall
thereafter cease, unless Tenant notifies Landlord (within ten
(10) days after Tenant's receipt of any such rescission notice
from Landlord) that Tenant elects to waive its prior disapproval.
As to the permits and approvals referenced in subparagraph
(ii) above, the respective parties will diligently pursue
obtaining required permit(s) in accordance with the terms of this
Lease, will keep each other informed of the status of such
matters and will notify the other party at such times as the
party obtains (or is denied) such permit(s). Notwithstanding the
nature of the delaying cause (including "force majeure" delays),
in the event that such permit(s) have not been obtained not later
than the Drop Dead Date provided in Section 2.2 of the Lease,
then either party may elect to cancel this Lease upon written
notice to the other, in which event Tenant will be refunded any
rent payment or deposit made in connection with the execution of
this Lease and both parties will have no further obligation to
the other pursuant to this Lease. If at any time prior to such
date Tenant determines that the condition relating to such
permit(s) or approvals cannot be satisfied after diligent effort,
Tenant shall give Landlord not less than 15 days' notice of
termination of this Lease, specifying in reasonable detail the
condition(s) that cannot be satisfied. Tenant will turn over to
Landlord the written work product in its possession concerning
the Premises as Landlord may reasonably require, including
applications for governmental approvals and related data.
If this Lease is not terminated, then upon the Commencement
Date, Landlord will cause Title Company to issue to Tenant a
leasehold policy of the title insurance in ALTA extended coverage
form and in the amount of at least One Million Five Hundred
Thousand Dollars ($1,500,000). Such policy will not include
exceptions for any taxes or assessments levied, assessed or
imposed for any period prior to the Commencement Date, or for the
rights of any party in possession, other than Tenant and other
than easements of record which have been approved in writing by
Tenant as provided above.
2. ZONING AND RELATED MATTERS. Landlord represents and
warrants that, as of the date hereof and as of the date on which
Landlord delivers possession of the Premises to Tenant, the
following will be true and correct: (i) no portion of the
Premises is classified with any governmental or other authority
as a wetland or environmentally restricted area Substances, to
the knowledge of Landlord (as "knowledge" is defined and limited
below); (ii) the Premises is not identified as having any
archeological or historic significance, to the knowledge of
Landlord (as "knowledge" is defined and limited below); (iii) the
Premises is not located in a flood hazard area as set forth in
the Federal Emergency Management Agency Flood Insurance Rate Map
or Flood Hazard Boundary Map or other hazard area, to the
knowledge of Landlord (as "knowledge" is defined and limited
below); (iv) TO THE LANDLORD'S KNOWLEDGE (as defined and limited
below), the Premises is free from poorly or improperly filled
ground or other geological or engineering conditions known to
Landlord that may preclude or significantly interfere with the
development and use of the Premises for a restaurant; and
(v) the Premises presently has (EXCEPT as otherwise noted on any
addendum to this Lease) the necessary state, county, municipal
and other governmental authorities' permits (EXCEPT building
permits), final zoning (without further appeal rights), and other
land use approvals and curb cuts for traffic access and all
utility, sewer, storm sewer and other public utility lines within
the Premises or on its boundary lines, sufficient to allow its
construction and development as contemplated, to the knowledge of
Landlord (as "knowledge" is defined and limited below).
As used in this Exhibit, the terms "KNOWN" and "KNOWLEDGE"
mean actual (not constructive) knowledge by the employees and
officers of Landlord that have been involved in the negotiation
of this Lease or who are regularly engaged in the management of
Landlord's real estate operations that include the Shopping
Center. Landlord will NOT be liable to Tenant on the
representations and warranties under this paragraph unless
Landlord had actual knowledge of the condition or event which
made the representation or warranty false as of the date this
Lease is executed and Landlord failed to disclose to Tenant the
fact known to Landlord which made the representation or warranty
false.
3. LANDLORD'S WORK. [This Section has been intentionally
deleted by the parties.]
4. TENANT'S PLANS. Prior to commencement of construction of
Tenant's Work, Tenant will prepare and deliver to Landlord, for
its review and approval, one (1) set of fully dimensioned scale
working drawings of the proposed Building, prepared by a
licensed architect, including types of materials and colors,
interior partitions, ceiling plan, roof plan, if applicable,
plumbing fixtures, and electrical plans prepared by a licensed
electrical engineer setting forth all electric requirements of
Tenant (collectively referred to as "Plans"). Landlord shall
have fifteen (15) days after receipt of the Plans to provide its
comments. If Landlord has not notified Tenant in writing of its
approval or disapproval within the time periods stated above, the
Plans shall be conclusively deemed approved by Landlord. If
Landlord disapproves such Plans, Tenant shall promptly revise and
resubmit such Plans to Landlord, correcting or altering such
disapproved items. If at any time that Tenant is required to
approve Landlord's plans but does not respond within the
specified time period, such plans shall also be conclusively
deemed to be approved. Upon mutual approval of the Plans, Tenant
shall submit the Plans to the City/County for governmental
approval.
Notwithstanding the foregoing, Landlord acknowledges and
approves an architecturally prominent storefront of the Premises
which shall generally conform to the elevation plan attached
hereto as EXHIBIT I. Tenant shall not be required to submit
Plans to Landlord until such time as Landlord has executed a Non-
Disclosure Agreement in favor of Tenant in the form attached
hereto as EXHIBIT F. Prior to Landlord providing a copy of such
Plans to Sam's or Wal-Mart, Landlord will obtain execution by
them of a Non-Disclosure Agreement in the same form.
5. TENANT'S WORK. Tenant will perform all work required to
construct the Building and restaurant within the Premises
(pursuant to plans and specifications to be approved by Landlord
pursuant to this Lease), after Landlord delivers the Premises to
Tenant. Tenant will obtain any permits required for such work,
will diligently pursue it to completion in a good and workmanlike
manner, and will promptly notify Landlord as to any problem in
construction schedule. All of Tenant's Work shall conform to
the approved Plans, and any material changes thereto will be
approved in writing by Landlord. When Tenant's Work is
completed, the parties will conduct a walkthrough of the Premises
to confirm that the Premises is in the condition required by this
Lease or to identify "punch list" items to be corrected by
Tenant.
6. TENANT'S SIGN SPECIFICATIONS. Tenant will have the right to
install signs on the Premises and on any pylon sign of Tenant's
within the Premises with Tenant's identification signage.
7. CONSTRUCTION ALLOWANCE. As a contribution to Tenant's Work,
Landlord shall pay to Tenant a construction allowance (the
"CONSTRUCTION ALLOWANCE") of SIX HUNDRED THOUSAND and No/100
Dollars ($600,000.00). An interim payment of ZERO and No/100
Dollars ($0) shall be paid on Tenant's completion of one-third of
Tenant's Work. An additional interim payment of ZERO and No/100
Dollars ($0) shall be paid upon Tenant's completion of two-thirds
of Tenant's Work. The final remaining payment of SIX HUNDRED
THOUSAND and No/100 Dollars ($ 600,000.00) shall be paid upon
completion of Tenant's Work. Landlord shall pay such
installments to Tenant within fifteen (15) days after Tenant's
written request therefor and delivery to Landlord of a true copy
of the certificate of occupancy for the Premises (which
requirement, if the governing jurisdiction issues temporary
certificates of occupancy in connection with the initial opening
for business of the Premises, will be satisfied by Tenant's
delivery of such temporary certificate of occupancy (subject to
the qualification stated below) to Landlord, but Tenant will
thereafter continue to pursue, obtain and provide to Landlord a
copy of the final certificate of occupancy, when available). If
Tenant delivers a temporary certificate of occupancy to Landlord
and it has so many "punch list" items needed for completion and
issuance of a final certificate of occupancy such that the "punch
list" items cannot reasonably be completed within one hundred and
twenty (120) days from the date of delivery of the temporary
certificate of occupancy to Landlord, then Landlord will have the
right to withhold from disbursement to Tenant such portion of the
Construction Allowance as may be reasonably necessary to provide
security for completion of all "punch list" items, in an amount
equal to 115 percent (115%) of the estimated cost to finish all
"punch list" items.
Upon the prior written request of Landlord, Tenant
shall provide Landlord partial mechanics' lien waivers for all
Major Contractors (as defined below) for interim allowance
payments and full mechanics' lien waivers for all Major
Contractors for the final allowance payment (or will provide the
affidavit and indemnity, as provided in Section 8 below).
Failure by the Landlord to pay any installment of the
allowance when due shall constitute a default of Landlord under
this Lease. In addition to any remedies available to Tenant
under this Agreement or at law or equity as a result of
Landlord's default, Tenant may: (a) charge Landlord interest on
the overdue amount from the date such installment is due on all
delinquent installments at the lesser of (i) the highest rate
allowed by law or (ii) a rate of two percent (2%) over the rate
then announced by Chase Manhattan Bank as its base or prime rate
per annum; and (b) set off any delinquency and applicable
interest against one hundred percent (100%) of the Minimum Rent,
Percentage Rent and/or Additional Rent payments first coming due
under this Lease until such delinquency is fully repaid.
8. LIEN CLAIMS; RIGHT TO CONTEST; AFFIDAVIT AND INDEMNITY. In
the event a lien is filed against the Premises or Shopping Center
by reason of Tenant's Work or any alteration, addition or repair
to the Premises made by or at the order of Tenant, Tenant shall
be allowed to contest such lien; provided, however, Tenant shall
cause such lien to be bonded within thirty (30) days after such
lien is filed and Tenant hereby agrees to hold Landlord harmless
from and against any and all claims and demands by contractors or
other third parties against the Premises or Shopping Center
relating to or arising out of such work, alteration, addition or
repair.
Whenever Tenant is required to supply Landlord with lien
waivers, Tenant may satisfy such requirements by providing
Landlord with an affidavit and indemnity by Tenant that all
persons engaged in, or providing materials in connection with,
Tenant's Work have been paid, and indemnifying Landlord with
respect to any person who may subsequently claim or file a lien
is filed against the Premises or Shopping Center by reason of
Tenant's Work or any alteration, addition or repair to the
Premises made by or at the order of Tenant (the "AFFIDAVIT AND
INDEMNITY"). Tenant's obligations under such Affidavit and
Indemnity will be guaranteed by Buffets, Inc. (the "GUARANTOR").
9. CERTAIN CONSTRUCTION-RELATED PROVISIONS. So long as Tenant
(including, for this purpose, the net worth of Guarantor) has a
net worth of $50,000,000 or greater, the following will apply:
(a) RIGHT TO CONSTRUCTION MANAGE; BONDING AND SURETY
OBLIGATIONS OF TENANT. Notwithstanding the foregoing and other
provisions of this Lease and attached exhibits, Tenant may
construction manage the work and need not employ a general
contractor, and there will be no bonding requirements imposed by
this Lease on work to be performed by Landlord or Tenant.
However, for purposes of this Lease, as to any unbonded work by
Tenant, Tenant will be the surety to Landlord with respect to the
work and cause it to be promptly performed and completed, lien-
free and in a good and workmanlike manner.
(b) DOCUMENTATION CONCERNING CONTRACTOR AND SUBCONTRACTORS.
References in this Lease to documentation required of Tenant with
respect to contractors and subcontractors and suppliers will mean
Tenant's general contractor, if there is one, and Major
Contractors. As used in this Lease, a "MAJOR CONTRACTOR" is a
contractor or supplier having a statutory right to claim a
construction, mechanic's or materialman's lien under State law
whose contract equals or exceeds fifteen percent (15%) of the
total construction budget for Tenant's Work.
(c) TIME PERIODS FOR TENANT'S WORK. Notwithstanding any
provision of this Lease concerning any time period for Tenant to
commence or complete Tenant's Work (including, without
limitation, any provision concerning commencement of rental
obligations that is related to the time period for the completion
of Tenant's Work), any such time period(s) will be extended by
any "force majeure" events or by any delays by Landlord in
providing any approvals required hereunder (it being understood
that Tenant may, but is not required to, accept and rely on any
"deemed approved" provisions of this Lease for any failure by
Landlord to respond within a stated time period, and/or Tenant
may at its option require written confirmation of such approval,
and delays by Landlord in providing such written confirmation of
approval will extend Tenant's time periods for Tenant's Work and
commencement of rent).
EXHIBIT D
RULES AND REGULATIONS
(None - NOT APPLICABLE)
EXHIBIT E
MEMORANDUM OF GROUND LEASE
THIS MEMORANDUM OF GROUND LEASE, is made and entered into as
of this ______ day of ____________________, 19__, by and between
ALPHA GROUP, L.L.C.,a ____________________ limited liability
company ("Landlord"), and OCB Realty Co., a Minnesota corporation
("Tenant").
RECITALS
WHEREAS, Landlord and Tenant entered into that certain
ground lease dated ____________________ (the "Lease"), relating
to certain leased land (the "Premises") which are a part of the
shopping center development commonly known as ___________________
(the "Shopping Center"), situated on certain real property in the
City of _______________, _____________ County, _____________,
which Shopping Center is legally described on Exhibit A attached
hereto; and
WHEREAS, Tenant has subleased the Premises to OCB Restaurant
Co.; and
WHEREAS, Landlord and Tenant now wish to memorialize of
record the existence of the Lease and certain specific terms of
the same.
NOW THEREFORE, in consideration of the Lease and other good
and valuable consideration, Landlord and Tenant agree as follows:
1. Landlord and Tenant are parties to the Lease to demise
and let the Premises, upon the terms and conditions more
particularly set forth in the Lease.
2. The term of the Lease shall be for an initial term of
twenty (20) full Lease Years and any Partial Lease Year (as such
terms are defined in the Lease), commencing on
_______________________, 1998 (the "Commencement Date"), and
expiring on December 31, 2018.
3. Subject to the terms and conditions more particularly
set forth in the Lease, Tenant has the option to extend the term
of the Lease for four (4) additional periods of five (5) years
each, such periods to commence at the expiration of the initial
term or preceding extended term of the Lease, as the case may be.
4. Reference is made to the Lease for a full statement of
the terms and conditions of the Lease, all of which are hereby
incorporated by reference.
5. Nothing in this Memorandum of Ground Lease shall be
construed to amend, modify, change, alter, amplify, interpret or
supersede any of the terms and provisions of the Lease, which
shall in all things control.
IN WITNESS WHEREOF, Landlord and Tenant have caused this
Memorandum of Ground Lease to be executed as of the day and year
first above written.
Witness: LANDLORD:
ALPHA GROUP, L.L.C.,
a limited liability company
Print
By:
Print:
Its:
Witness: TENANT:
OCB REALTY CO.,
Print a Minnesota corporation
By:
Print:
Its:
STATE OF _________________ )
)ss.
COUNTY OF _______________ )
The foregoing instrument was acknowledged before me this
____ day of ___________________, 199_, by
_______________________, the ______________________ of
_______________________________, a __________________________, on
behalf of the ____________________.
(seal)
Notary Public
STATE OF MINNESOTA )
) ss.
COUNTY OF __________ )
The foregoing instrument was acknowledged before me this
____ day of ____________________, 199_, by
________________________, the ______________________ of OCB
Realty Co., a Minnesota corporation, on behalf of the
corporation.
(seal)
Notary Public
EXHIBIT F
NON-DISCLOSURE AGREEMENT
THIS NON-DISCLOSURE AGREEMENT is made and entered into this
____ day of __________, 19__ by and between OCB Realty Co., a
Minnesota corporation (the "Tenant"), and ALPHA GROUP, L.L.C., a
____________________ limited liability company (the "Landlord").
WHEREAS, the purpose of this Agreement is to set forth terms
and conditions under which the Tenant may disclose to Landlord
certain information that is confidential and proprietary to the
Tenant for the purpose of furthering the business relationship
between the Tenant and the Landlord.
NOW THEREFORE, the Tenant and the Landlord hereby agree as
follows:
I. CONFIDENTIAL INFORMATION. "Confidential Information"
of the Tenant means any information which is not made generally
available to others by the Tenant. Confidential Information may
be oral or written, or recorded on electronic or other storage
media. Confidential Information may include (but is not limited
to) sales and profitability information, methods, processes,
procedures, techniques, recipes, formulas, floorplans, designs,
drawings, blueprints, computer programs, know-how,
specifications, new product and service ideas, product
development plans, marketing plans, strategies, and identities of
other suppliers, vendors or contractors with which the Tenant
deals. However, Confidential Information shall not include
information which the Landlord can demonstrate by means of prior
written records or other clear and convincing circumstances
(a) was or becomes generally available to the public other than
as a result of a disclosure by Landlord or by its directors,
officers, or lenders (collectively, the "Landlord
Representatives"), or (b) was or becomes known to the Landlord on
a nonconfidential basis from a source other than the Tenant,
provided that such source (and if applicable, its sources) is not
bound by a confidentiality agreement with the Tenant.
II. CONFIDENTIALITY. EXCEPT as otherwise provided below,
Landlord agrees, at all times during and after the existence of
the commercial relationship between the Tenant and the Landlord,
to protect and hold the Confidential Information strictly secret
and confidential, to use such Confidential Information only for
the purpose(s) for which it is disclosed, and not to directly or
indirectly disclose, publish, reproduce or use (or cause or
permit the disclosure, publication, reproduction or use of) such
Confidential Information for any other purpose. The Landlord
will disclose the Confidential Information only to such of the
Landlord's Representatives as need to know such Confidential
Information for the Landlord to carry out the activities and
purposes for which it was disclosed by the Tenant.
III. RETURN OF CONFIDENTIAL INFORMATION. At such time as
the Landlord no longer needs to retain such Confidential
Information to carry out the purposes and activities for which it
was disclosed, the Landlord will promptly return to the Tenant or
destroy all tangible material containing or reflecting such
Confidential Information and will not retain any copies,
extracts, summaries or other reproductions in whole or in part of
such tangible material, and such return/destruction shall be
certified in writing to the Tenant.
IV. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon the parties, the Representatives of the Landlord,
and each party's and Representative's respective heirs,
successors and assigns. The Landlord shall take reasonable
precautions to ensure that its Representatives comply with the
provisions of this Agreement, and shall indemnify and hold
harmless the Tenant against any breaches hereof by its
Representatives. The Landlord agrees to identify, upon request,
all persons to whom any Confidential Information may have been
disclosed.
V. SEVERABILITY; REMEDIES. If any provision or
application of this Agreement is held unlawful or unenforceable
in any respect, such illegality or unenforceability shall not
affect other provisions or applications which can be given
effect, and this Agreement shall be construed as if the unlawful
or unenforceable provision or application had not been contained
herein. The Landlord acknowledges that the Tenant may not have
an adequate remedy at law in the event of any unauthorized use or
disclosure of Confidential Information by the Landlord or its
Representatives, and that the Tenant shall therefore be entitled,
in addition to any other remedies that may be available, to
injunctive and/or other equitable relief to prevent or remedy any
such unauthorized use or disclosure.
VI. GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with the laws of the State of Minnesota.
VII. EXCEPTIONS TO CONFIDENTIALITY. The foregoing will
not restrict the following: (i) Landlord may submit information
it obtains in connection with this Lease that may fit the
definition of Confidential Information IN CONFIDENCE (but
Landlord will not be liable for any breach of confidentiality by
the recipient, so long as Landlord labels the information
presented or otherwise notifies the recipient that such
information is Confidential) to any of Landlord's institutional
lenders that may be financing Landlord's interest in the Premises
or to any potential or actual mortgagee or purchaser of
Landlord's interest, or to employees, directors, officers and
partners of Landlord, or to Landlord's accountants, legal counsel
and professional advisors; (ii) such Confidential Information may
be disclosed or submitted to the court or decision-making body as
may be required in connection with any litigation, arbitration or
other proceeding between the parties; and/or (iii) such
Confidential Information may be disclosed or submitted as may be
legally required by the Securities and Exchange Commission or any
governmental or court order or law or regulation.
Notwithstanding the foregoing, if Landlord receives any third
party request for any Confidential Information that may be in
Landlord's possession, Landlord will promptly notify Tenant of
the request and reasonably cooperate (at no out-of-pocket expense
to Landlord) on any action by Tenant to preserve its
confidentiality (e.g., and not in limitation, returning such
Confidential Information to Tenant so it is no longer in
Landlord's possession).
IN WITNESS WHEREOF, the undersigned have hereunto set their
hands as of the day and year first above written.
LANDLORD:
ALPHA GROUP, L.L.C.,
a limited liability company
By
Witness Print
Its
TENANT:
OCB REALTY CO.,
a Minnesota corporation
By
Witness Print ▇▇▇ ▇. ▇▇▇▇▇▇
Its Chief Executive Officer
EXHIBIT G
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
(the "Agreement"), dated this ___ day of ______________, 19___,
by and among OCB Realty Co., a Minnesota corporation ("Tenant"),
ALPHA GROUP, L.L.C., a limited liability company ("Landlord"),
and ____________________________________________, a
_____________________________ ("Lender").
RECITALS
WHEREAS, Lender is the current holder of a [mortgage/deed of
trust] made by Landlord in Lender's favor dated ______________,
19___, and filed in the Office of ________________________
County, as ______________________ (the "[Mortgage/Deed of
Trust]"); and
WHEREAS, the [Mortgage/Deed of Trust] relates to that
certain shopping center development owned by Landlord, located in
_____________________________, commonly known as
_____________________________, and legally described on Exhibit A
attached hereto (the "Shopping Center"); and
WHEREAS, Tenant is the tenant, and Landlord is the landlord,
under that certain Lease dated __________ (the "Lease"), relating
to a certain portion of the Shopping Center more particularly
described in the Lease (the "Premises"); and
WHEREAS, Lender, Landlord and Tenant have requested of and
granted to each other the agreements hereinafter stated and
desire to evidence said agreements in writing.
NOW, THEREFORE, For good and valuable consideration paid by
each to the other, the receipt and sufficiency of which is hereby
acknowledged, Landlord, Tenant and Lender hereby agree as
follows:
1. Subordination. Except as otherwise provided herein,
the Lease is now and shall at all times continue to be, subject
and subordinate in each and every respect to the lien of and
security interest created by the [Mortgage/Deed of Trust], and to
any and all renewals, extensions, modifications, substitutions or
replacements thereof, subject to the terms and conditions of this
Agreement.
2. Nondisturbance. So long as Tenant is not in default,
beyond any applicable cure periods provided in the Lease, in the
payment of the rental reserved in the Lease, or in the observance
or performance of any of the other terms, covenants or conditions
contained in the Lease or in this Agreement on Tenant's part to
be observed and performed:
(a) Tenant's possession of the Premises and Tenant's
rights and privileges under the Lease shall not be terminated,
canceled or in any way disturbed, diminished or interfered with
by the Lender during the term of this Lease and any extension or
renewal thereof, whether or not the [Mortgage/Deed of Trust] is
in default and whether or not Lender acquires Landlord's interest
in the Lease by foreclosure or deed in lieu of foreclosure, or
otherwise.
(b) Lender will not join Tenant as a party defendant
in any action or proceeding for the purpose of terminating
Tenant's interest and estate under the Lease as a result of any
default under the [Mortgage/Deed of Trust]; PROVIDED, however,
Lender may join Tenant in a foreclosure action if such joinder is
necessary for the purpose of foreclosing the [Mortgage/Deed of
Trust] against Landlord, but then only for such purpose and not
for the purpose of terminating the Lease.
(c) If Lender has control of any funds or allowances
owed Tenant by Landlord, Lender shall release the funds or
allowances pursuant to the terms of the Lease.
3. Attornment. If the interests of Landlord shall be
transferred to and owned by Lender by reason of foreclosure or
other proceedings brought by it in lieu of or pursuant to a
foreclosure, or by any other manner, and Lender succeeds to the
interest of the Landlord under the Lease, Tenant shall be bound
to Lender under all of the terms, covenants, and conditions of
the Lease for the balance of the term thereof remaining and any
extensions or renewals thereof which may be effected in
accordance with any option therefor in the Lease, with the same
force and effect as if Lender were the landlord under the Lease,
and Tenant does hereby attorn to Lender as its landlord, said
attornment to be effective and self-operative immediately upon
Lender succeeding to the interest of Landlord under the Lease
without the execution of any further instruments on the part of
any of the parties hereto; provided, however, that Tenant shall
be under no obligation to pay rent to Lender until Tenant
receives written notice from Lender that it has succeeded to the
interest of the Landlord under the Lease. The parties hereto
agree that the respective rights and obligations of Tenant and
Lender upon such attornment, to the extent of the then remaining
balance of the term of the Lease and any such extensions and
renewals, shall be and are the same as now set forth therein; it
being the intention of the parties for this purpose to
incorporate the Lease in this Agreement by reference with the
same force and effect as if set forth at length in this
Agreement.
4. Representations and Warranties of Landlord. Landlord
represents and warrants to Tenant that the [Mortgage/Deed of
Trust] is the only encumbrance on the Shopping Center or on the
Premises and that the interest of Tenant under the Lease is not
subordinate to any other lien or interest.
5. Rental Payment. Landlord and Lender agree that upon
receipt of written notice from Lender that Lender has succeeded
to the interest of Landlord under the Lease, that Tenant may pay
all rental and other charges reserved under the Lease directly to
Lender. Landlord and Lender further agree that any such payments
shall be credited by both Lender and Landlord against Tenant's
rental and other obligations under the Lease, regardless of
whether Lender had the right to make such demand and regardless
of any contrary demands which may be made by Landlord.
6. Successors and Assigns; Binding Effect. This Agreement
shall be binding upon Landlord, its successors and assigns, shall
be binding upon and inure to the benefit of Tenant, its
successors, assigns and sublessees and shall be binding upon and
inure to the benefit of Lender, its successors and assigns who
acquired title thereto from or through Lender.
7. Entire Agreement. This Agreement contains the whole
agreement between the parties hereto as to the [Mortgage/Deed of
Trust] and the priority thereof, herein described, and there are
no agreements, written or oral, outside or separate from this
Agreement, and all prior negotiations, if any, are merged into
this Agreement.
8. Relationship Between Parties. The subordination of the
Lease to the [Mortgage/Deed of Trust] will not be construed to
give Lender, or its successors and assigns, any interest in
casualty insurance maintained by Tenant or proceeds to which
Tenant is entitled under the Lease, nor will it be construed to
modify any of the provisions of the Lease or of the parties'
obligations under the Lease.
9. Notices. Any notices required or permitted hereunder
may be given in the manner provided in Section 30.5 of the Lease.
Tenant's addresses for notice purposes are as set forth in
Section 30.5 of the Lease. Lender's address for notice purposes
is as set forth below. All notices shall be effective upon the
delivery or attempted delivery to the party's address for notice
purposes (subject to any change in such address for notices that
a party may make by written notice to the other).
10. Governing Law. This Agreement will be governed and
construed in accordance with the laws of the State of Illinois.
IN WITNESS WHEREOF, the parties have causes this Agreement
to be duly executed as of the date first shown above.
Tenant: OCB REALTY CO.
By:
Its:
Landlord: ALPHA GROUP, L.L.C.
By:
Its:
Lender:
By:
Its:
Address for notice purposes:
STATE OF MINNESOTA )
)ss.
COUNTY OF ____________ )
The foregoing instrument was acknowledged before me
this ____ day of_________________, 19___, by
__________________________________, the ____________________ of
OCB Realty Co., a Minnesota corporation, on behalf of the
corporation.
Notary Public
STATE OF _____________ )
)ss.
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me
this ____ day of_________________, 19___, by
______________________________, the ________________ of
_____________________________, a _______________ corporation, on
behalf of the corporation.
Notary Public
STATE OF _____________ )
)ss.
COUNTY OF ___________ )
The foregoing instrument was acknowledged before me
this ____ day of_________________, 19___, by
______________________________, the ________________ of
_____________________________, a _______________ corporation, on
behalf of the corporation.
Notary Public
EXHIBIT H
AGREEMENT BY LANDLORD
(Leasehold Financing Without Subordination)
The undersigned is the holder of the interest of the
landlord, ALPHA GROUP, L.L.C. ("Landlord") in and to that certain
Ground Lease dated __________________, 19__ (the "Lease")
covering certain property in __________________ [city],
____________________ [state], as more particularly described in
the attached Exhibit A (the "Property"), the tenant's interest in
which is held by OCB REALTY CO. [or corporate affiliate]
("Tenant"), and BUFFETS, INC., a Minnesota corporation
("Guarantor"). Tenant has requested Landlord's consent to this
Agreement by Landlord (the "Agreement") in connection with
financing that may be obtained during the term of the Lease.
Landlord has requested that Guarantor sign this Agreement by
Landlord (the "Agreement"), to confirm and agree to the terms
thereof that relate to Tenant's and Guarantor's obligations.
Landlord hereby consents to the pledge and assignment by
Tenant of Tenant's right, title and interest in and to the Lease,
Tenant's leasehold estate and Tenant's interest in any subleases
affecting the Property, or any portion thereof, to
________________________________ and its successors and assigns
and any lender advancing financing to refinance its loan
(collectively, the "Lender"), and all additional, replacement,
refinancing, consolidation, or substitution leasehold mortgages,
trust deeds, security assignments, pledges, and similar security
instruments hereafter given by Tenant thereon (the "Loan
Instruments") in favor of the Lender.
Until Landlord receives written notice from Lender that the
Loan Instruments have been released by Lender and terminated,
Landlord agrees that:
1. Notices of Default. In the event of any default under
the Lease, Landlord will deliver a copy of the notice of default
to Lender at its address for notices (as designated to Landlord
by written notice), and Landlord hereby agrees not to take any
action to dispossess Tenant or to enforce any claim with respect
thereto without giving Lender prior written notice thereof, which
will be transmitted to Lender simultaneously with the giving of
such notice to Tenant, and the right for Lender to cure such
default within a period of twenty (20) days after the running of
any notice or grace period permitted to Tenant in the Lease.
Landlord shall accept such performance by or at the instigation
of Lender as if the same had been done by Tenant. No event of
default shall be deemed to exist under the Lease with respect to
the payment of rentals or other charges, the performance of work
required to be performed, or of acts to be done, or of conditions
to be remedied, if Lender corrects or commences correction of the
default within the required time period and thereafter pursues
such correction to completion. Any failure by Landlord to give
such notice to Lender will not "toll" the time periods under the
Lease for default with respect to the exercise of any right or
remedy Landlord may have against Tenant (subject only to the
limitation in paragraph 3 below).
2. Lender's Rights. In the event of default by Tenant
under the Lease or under the Loan Instruments with Lender, Lender
may exercise such rights as Lender may have against Tenant,
including the right to take possession of the Property and
exercise Tenant's rights under the Lease, foreclose Tenant's
interest in the Lease as permitted by law, and reassign, sell,
and/or sublet Tenant's interest in the Lease (but any such
reassignment or sale by Lender will be subject to written
approval by Landlord of the transferee, to the extent required
under the Lease, which approval shall not be unreasonably
withheld or delayed). Landlord's consent will not be required in
connection with the assignment of the Lease and any conveyance of
the Property to Lender. If Lender or such purchaser acquires the
Property and subsequently proposes to transfer it to third
parties, Landlord will reasonably approve and consent to an
assignment of the Lease to third parties which have the
capability of performing or causing to be performed the Tenant's
obligation under the Lease, provided that the transferee assumes
the Lease.
3. No Termination Without Lender's Right To Foreclose.
Notwithstanding any other provision of the Lease, upon the
occurrence of any event of default under the Lease, Landlord
shall take no action to terminate the Lease (if permitted in the
Lease) without first giving to Lender written notice of
Landlord's election to take such actions, and a reasonable time
thereafter within which either (i) to obtain possession of the
Property (including possession by a receiver) or (ii) to
institute foreclosure proceedings or otherwise acquire Tenant's
interest under this Lease with diligence. Upon obtaining
possession or acquiring Tenant's interest under the Lease, Lender
shall be required promptly to cure all defaults then reasonably
curable by Lender and to continue to pay or perform such
obligations of Tenant under the Lease so long as the Lender
continues such possession. Lender may elect to return possession
of the Premises to Tenant or discontinue any foreclosure
proceedings then in progress at any time. No provision of the
Lease or this Agreement shall be interpreted as an obligation on
the part of Lender to commence or continue any action to obtain
possession of the Property or acquire Tenant's interest under the
Lease.
The provisions of this Agreement concerning notice to Lender
will not limit the right of Landlord to pursue, nor require
Landlord to wait or delay until the expiration of any applicable
notice and/or grace period required under this Agreement as to
Lender, any and all rights and remedies that Landlord may have
against Tenant under the Lease, including (without limitation)
the assessment of late charges or interest, the collection of
damages, the enforcement of the Lease and other rights and
remedies permitted in the Lease (excepting, only, that Landlord
will not terminate the Lease or take action to dispossess Tenant
from the Premises unless and until any notice and/or grace
periods required by the Lease and any required to be given to
Lender under this Agreement have both expired).
4. Notice of Outstanding Defaults. In the event Landlord
dispossesses Tenant or exercises any right contained in the Lease
to terminate the Lease prior to the expiration of the term
(except as a result of condemnation), Landlord shall serve upon
Lender written notice that such actions have been taken
completed, together with a statement of all events of default
under the Lease then known to Landlord. Lender shall have the
option to obtain a new lease (as provided in paragraph 7 below)
upon the written request of Lender given within thirty (30) days
after service of such notice of termination by Landlord.
Notwithstanding the execution of such new Lease, Tenant shall not
be released and will remain liable for its obligations under the
Lease.
5. No Liability. Neither this Agreement, the Loan
Instruments, any assignment of lease to Lender as security, nor
any action taken under any such instruments shall be construed as
giving rise to any duty, responsibility, or liability on the part
of Lender to Landlord, until such time as Lender commences
foreclosure upon or otherwise acquires Tenant's interest under
the Lease.
6. No Cancellation. There shall be no cancellation,
surrender or material modification (by way of example, any
modification of rent or other payment obligations or of the term
of the Lease) of the Lease by joint action of Landlord and Tenant
without the prior written consent of Lender, which will not be
unreasonably withheld with respect to proposed modifications to
the Lease.
7. New Lease. Upon the acquisition by Lender of Tenant's
leasehold interest, foreclosure on such interest or termination
of Tenant's interest under the Lease for any reason (except as a
result of condemnation), Lender shall have the option to obtain a
new lease on written request to Landlord within thirty (30) days
after the completion of the acquisition or foreclosure or notice
of termination to Lender. Such new lease shall be effective as
of the date of termination of the Lease, and shall be for the
remainder of the term of the Lease and identical to the Lease,
except for the name of the tenant. Such new lease shall require
the tenant to perform any unfulfilled obligations of Tenant under
the Lease which are then reasonably curable.
No such new lease between Landlord and Lender will waive or
affect the rights and remedies that Landlord has against Tenant
and Guarantor, as guarantor of Tenant, for Tenant's default or
release such parties from liability for damages and other amounts
that may be payable under the Lease and applicable law for
Tenant's default (but the rent received or receivable from the
new lease will be applied or off-set, as provided under
applicable law, against such damages).
8. Right to Tenant's Interest in Deposits. Effective upon
the commencement of the term of any new lease executed pursuant
to paragraph 7, any and all moneys deposited with Landlord which
Tenant would have been entitled to use but for the termination of
the Lease may be used by the tenant under such new lease for the
purposes of and in accordance with the provisions of such new
lease.
9. Right to Tenant's Interest in Proceeds. Any proceeds
from insurance policies or proceeds arising from a condemnation
to which Tenant is entitled are to be held by Lender and applied
pursuant to the provisions of the Loan Instruments and the Lease.
Lender may reserve its rights to apply to the Loan Instruments
all, or any part, of such proceeds to which Tenant may be
entitled to retain pursuant to the Lease and which the Lease does
not require to be used for the repair or reconstruction of the
Property.
10. Proceedings. Lender shall be given notice of any
arbitrations by the parties to the Lease and will have the right
to intervene in and be a party to such proceedings. Lender will
receive in any event a copy of any award or decision made in the
proceeding.
11. Release of Liability. If Lender acquires title to
Tenant's leasehold interest or otherwise forecloses on such
interest, or obtains a new lease from Landlord as described in
paragraph 7, and the leasehold interest is assigned to a
transferee in accordance with the requirements of paragraph 2,
Lender shall be automatically released from all liability for the
performance or observance of the terms of the Lease effective on
the date of such assignment, so long as the transferee assumes
the Lease and all curable defaults as of such date are cured and
so long as Landlord has given written approval of the credit
worthiness of the transferee. Landlord's written approval shall
not be unreasonably withheld.
This paragraph 11 will not affect or release Tenant or
Guarantor, as guarantor of Tenant, from their respective
obligations under the Lease and guaranty of the Lease.
Furthermore, provisions for release of Lender on assignment will
not be available to the transferee (other than Lender), after any
assignment to a transferee other than Lender pursuant to and in
accordance with paragraph 2.
12. Insolvency Defaults. The Lease will not be terminated
for any bankruptcy or insolvency default (or similar default
which Lender cannot reasonably "cure"), so long as Lender
commences appropriate legal action (within the time period
specified in paragraph 3 above) to acquire Tenant's leasehold
interest for such default and thereafter pursues the action
diligently to completion and pays and performs the obligations of
Tenant as described in Paragraph 3 above.
13. Successors and Assigns. This Agreement is for the
benefit of the parties hereto, and their respective successors
and assigns.
14. Cooperation by Parties. Landlord will cooperate with
Tenant in executing an agreement substantially in accordance with
this Agreement and naming the specific Lender(s), if required by
the Lender(s), and executing any estoppel certificate,
acknowledgment or similar document reasonably required by Tenant
and the Lender(s) in connection with any leasehold financing.
Landlord agrees to execute, acknowledge (if appropriate), and
deliver any agreements clarifying or modifying the Lease and
reasonably required by Tenant and the Lender(s), provided that
any such modification shall not in any way cause any material
diminishment of Tenant's obligations or Landlord's rights and
remedies pursuant to the Lease.
15. No Default. Landlord acknowledges that, to the best of
its knowledge, the Lease described above is presently in full
force and effect, the Lease has not been modified or amended
(except as shown on the attachments thereto and by this
Agreement), and Landlord has no actual knowledge of any default
or event of default by Tenant thereunder as of the date of this
Agreement.
16. Attorneys' Fees. In the event of litigation between
the parties to enforce or interpret the terms of this Agreement,
the prevailing party shall, in addition to any other relief, be
entitled to recover from the losing party reasonably attorneys'
fees and costs incurred at trial, upon any appeal and on any
petition for review.
17. Complete Agreement. This Agreement sets forth the
complete understanding of the parties with respect to this
transaction, may be amended only in writing signed by the party
against whom it is sought to be enforced, and without limiting
the generality of the foregoing, shall not be deemed modified by
any course of dealing.
18. Notices. Any notice to be given under this Agreement
shall be in writing and shall be effective when either delivered
in person or deposited as registered or certified mail, postage
prepaid, return receipt requested, directed to the other party at
its address for notices stated below, or such other address as a
party may designate by written notice to the other. Any notice
sent by registered or certified mail will be deemed received on
the actual date of delivery of the notice to the address of the
party, and not to the named individual or party, as evidenced by
the registered or certified mail return receipt.
19. No Release of Tenant. It is specifically understood
and agreed that the giving of this consent to said assignments
shall not release or relieve Tenant from any of its respective
obligations under the Lease.
DATED this _____ day of _______________, 19___.
LANDLORD: ALPHA GROUP, L.L.C.
By:
By:
TENANT: OCB REALTY CO.
By:
GUARANTOR: BUFFETS, INC., a Minnesota corporation
By
Print: ▇▇▇ ▇. ▇▇▇▇▇▇
Its: Chief Executive Officer
LENDER: [Lender's Name]
By:
STATE OF _______ )
) ss.
County of _________ )
On this _____ day of _______________, 19__, before me,
the undersigned, a Notary Public in and for said State,
personally appeared _______________ and ________________
personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person(s) who executed the
within instrument, and acknowledged to me that such person(s)
executed the same.
WITNESS my hand and official seal.
Notary Public for
My commission expires:
Residing at:
STATE OF _______ )
) ss.
County of _________ )
On this _____ day of _______________, 19__, before me,
the undersigned, a Notary Public in and for said State,
personally appeared __________________, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the
person(s) who executed the within instrument as the
____________________________ of __________________________, a
corporation, the corporation therein named, and acknowledged to
me that such corporation executed the same.
WITNESS my hand and official seal.
Notary Public for
My commission expires:
Residing at:
STATE OF _______ )
) ss.
County of _________ )
On this _____ day of _______________, 19__, before me,
the undersigned, a Notary Public in and for said State,
personally appeared __________________, personally known to me
(or proved to me on the basis of satisfactory evidence) to be the
person(s) who executed the within instrument as the
____________________________ of OCB REALTY CO., the corporation
therein named, and acknowledged to me that such corporation
executed the same.
WITNESS my hand and official seal.
Notary Public for
My commission expires:
Residing at:
EXHIBIT I
STOREFRONT ELEVATION
and PRE-APPROVED PYLON SIGN LOCATION
[graphic showing sign and store front elevation]
SCHEDULE #1
STANDARD LANDLORD SUPPLIED SITE SPECIFICATIONS
[THIS EXHIBIT HAS BEEN INTENTIONALLY DELETED BY THE PARTIES]
SCHEDULE #2
STANDARD EXCLUSIONS FROM GROSS SALES
Gross Sales shall not include:
(a) Receipts from vending machines, coin-operated amusement
devices and pay telephones.
(b) Receipts from the sale of gift certificates until such are
redeemed at the Premises.
(c) Any sale to, or the value of any meals consumed by,
employees of Tenant which are provided as a benefit of
employment, not to exceed three percent (3%) of Gross Sales.
(d) The value of any complimentary meals provided as a customer
service or as part of Tenant's community marketing efforts,
not to exceed two percent (2%) of Gross Sales.
(e) Any refund which is made to any customer.
(f) Any sales tax or other payment required by governmental law
or regulation.
(g) Receipts from catering or from orders placed at the
Premises, but filled elsewhere.
(h) Bad debts and "non-sufficient funds" checks.
(i) Sales of furniture or equipment not in the ordinary course
of business.
(j) Any charge paid by Tenant as a finance charge for credit
card services.
(k) Insurance recoveries or other proceeds not directly related
to sales or services from the Premises.
SCHEDULE #3
STANDARD EXCLUSIONS FROM COMMON AREA EXPENSES
[THIS EXHIBIT HAS BEEN INTENTIONALLY DELETED BY THE PARTIES]
GUARANTY
On this __ day of February, 1998, the undersigned, BUFFETS,
INC., a Minnesota corporation ("Guarantor"), in consideration of,
and in order to induce the execution and delivery by ALPHA GROUP,
L.L.C., a limited liability company ("Landlord"), to OCB Realty
Co., a Minnesota corporation ("OCB"), of that certain lease dated
February __, 1998, by and between Landlord, as landlord, and OCB,
as tenant, a copy of which is attached to this Guaranty (the
"Lease"), does hereby unconditionally guarantee (i) the payment,
when due, of all amounts of rent or other payments which may become
due and payable by OCB pursuant to the terms and conditions of the
Lease, and (ii) the performance of all other monetary obligations
of OCB thereunder. Guarantor's obligations under this Guaranty
shall extend through the entire term of the Lease and any renewal
or extension of the Lease.
Guarantor hereby waives notice to Guarantor of (i) acceptance
of this Guaranty, (ii) any action taken or omitted by Landlord in
reliance on this Guaranty, and (iii) any default by OCB with
respect to any term or condition of the Lease (but without
affecting any provision of the Lease concerning notice and/or grace
periods under the Lease and notices required to be given to
Tenant).
Guarantor agrees that, without its consent, the Lease may be
modified, amended, and supplemented in any manner, including, but
not limited to, a renewal or extension of the term of the Lease,
and agrees that no such amendment, modification, supplement,
renewal or extension shall release, affect or impair Guarantor's
liability under this Guaranty. However, Guarantor shall be
released of its obligations hereunder on and after the date that
OCB's obligations under the Lease terminate, including as the
result of a permitted assignment under the Lease wherein OCB is
released from further performance.
Guarantor agrees that its liability under this Guaranty shall
not be affected, reduced or impaired by reason of the failure of
Landlord to pursue or enforce against OCB any right or remedy
available to Landlord, and Guarantor hereby waives all right to
require Landlord to pursue, enforce or resort to any or all such
rights or remedies of Landlord.
Guarantor acknowledges and agrees that Guarantor's
obligations to Landlord under this Guaranty are direct and
unconditional obligations of Guarantor and are separate and
distinct from OCB's obligations to Landlord under the Lease.
The occurrence of any of the following events shall not have
any effect whatsoever on any of Guarantor's obligations to
Landlord hereunder, each of which obligations shall continue
in full force or effect as though such event had not
occurred: (a) the commencement by OCB of a voluntary case
under the federal bankruptcy laws, as now constituted or
hereafter amended or replaced, or any other applicable
federal or state bankruptcy, insolvency or other similar law
(collectively, the "Bankruptcy Laws"), (b) the consent by
OCB to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian,
sequestrator or similar official of OCB or of any
substantial part of its property, (c) any assignment by OCB
for the benefit of creditors, (d) the failure of OCB
generally to pay its debts as such debts become due, or (e)
the entry of a decree or order for relief by a court having
jurisdiction in respect of OCB in any involuntary case under
the Bankruptcy Laws, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar
official) of OCB or of any substantial part of its property,
or ordering the winding-up or liquidation of any of its
affairs and the continuance of any such decree or order
unstated and in effect for a period of sixty (60)
consecutive days. The liability of Guarantor under this
Guaranty is not and shall not be affected or impaired by any
payment made to Landlord under or related to the Lease for
which Landlord is required to reimburse OCB pursuant to any
court order or in settlement of any dispute, controversy or
litigation in any bankruptcy, reorganization, arrangement,
moratorium or other federal or state debtor relief
proceeding.
BUFFETS, INC., a Minnesota
corporation
By:
Print: ▇▇▇ ▇. ▇▇▇▇▇▇
Its: Chief Executive Officer
AFFIDAVIT AND INDEMNITY AGREEMENT
(Post-Construction)
The undersigned OCB REALTY CO., a Minnesota
corporation ("Tenant") is leasing certain property (the
"Premises") from ALPHA GROUP, L.L.C., a limited
liability company (the "Landlord") at
Northlake, Illinois
pursuant to a Ground Lease Agreement dated
, 1998 (the "Lease").
Tenant hereby affirms, certifies and confirms to
Landlord that the work on the Premises as described in the
plans and specifications for Tenant's Work (as referenced
and defined in the Lease) is 100% completed.
Pursuant to the terms of the Lease, Tenant hereby
represents, warrants and covenants with Landlord that all
persons engaged in or providing materials in connection with
Tenant's Work have been paid, and Tenant does hereby agree
to defend, indemnify, and hold Landlord, and its employees,
agents and representatives harmless from any claim, loss, or
liability (including reasonable attorneys' fees incurred)
arising out of or in connection with any person subsequently
claiming or filing a lien with respect thereto. In
addition, Tenant covenants and agrees with Landlord that
Tenant will be the surety to Landlord with respect to the
payment of the costs of Tenant's Work and satisfaction of
any rights to lien the Premises, on the same basis as if
Tenant's Work were covered by payment and performance bonds.
By execution hereof, the undersigned Tenant hereby
agrees that this Affidavit and Indemnity Agreement (the
"Agreement") will be deemed part of the "Lease," and any
breach of the obligations of Tenant which are covered by
this Agreement shall be a breach of Tenant's obligations
under the Lease. Performance of this Agreement and payment
of obligations of Tenant hereunder is hereby guaranteed by
the undersigned Guarantor.
In the event of any litigation concerning this
Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees and court costs, at trial, upon
appeal and any petition for review.
This Agreement will be governed and construed in
accordance with the laws of the state in which the Premises
is located.
IN WITNESS WHEREOF, the undersigned have caused
this Agreement to be duly executed and delivered as of
, 199__.
TENANT: OCB REALTY CO.,
a Minnesota corporation
By
Witness Print ▇▇▇ ▇. ▇▇▇▇▇▇
Its Chief Executive Officer
GUARANTOR: BUFFETS, INC., a Minnesota
corporation
By
Witness Print: ▇▇▇ ▇. ▇▇▇▇▇▇
Its: Chief Executive Officer