Attached files
ASSIGNMENT AND ASSUMPTION OF LEASE
THIS ASSIGNMENT AND ASSUMPTION OF LEASE (this "Assignment") is made and
entered into effective as of the 21st day of November, 2008 (the "Effective
Date"), by and between Brad and Dad LLC ("Assignor"), and AEI INCOME &
GROWTH FUND XXI Limited Partnership (as to an undivided 63% interest)
and AEI INCOME & GROWTH FUND 27 LLC (as to an undivided 37% interest)
( "Assignee").
RECITALS:
A. Assignor and Assignee are parties to that certain Development Financing
and Leasing Commitment dated effective as of November 21, 2008, as it may
have been amended (the "Agreement"), pursuant to which Assignee is acquiring
from Assignor the real property and improvements, located on property more
particularly described on EXHIBIT A attached hereto and incorporated herein
by this reference (also referred to herein as the "Leased Premises").
B. Pursuant to the terms of the Agreement, Assignor desires to sell, assign,
convey, transfer and set over to Assignee and Assignee desires to assume all
of Assignor's interest in that certain Lease Agreement dated September 11,
2008 (the "Lease"), by and between Assignor and Tractor Supply Company
(the "Tenant"), including all rents prepaid for any period subsequent to
the date of this Assignment, subject to the terms and conditions set forth
below.
C. Assignor is the Landlord under the Lease with full right and title to
assign the Lease and the Rent to Assignee as provided herein. The Lease is
valid, in full force and effect and has not been modified or amended. So far
as is known to Assignor, there is no default by Tenant under the Lease and
no Rent has been waived, anticipated, discounted, compromised or released.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties, Assignor and
Assignee hereby agree as follows:
1 Assignor hereby irrevocably and unconditionally sells, assigns, conveys,
transfers and sets over unto Assignee, its heirs, successors and assigns as
of the date hereof (the "Effective Date"), all of Assignor's right, title and
interest in, to and under: (i) the Lease, together with any and all guaranties
thereof, if any, and (ii) any and all rents prepaid as of the Effective Date,
held by Assignor in connection with the Lease (the "Rent").
2. On or after the Assignee's Assumption Date (defined below), Assignee
hereby assumes and shall be liable for any and all liabilities, claims,
obligations, losses and expenses, including reasonable attorneys' fees arising
in connection with the Lease which are actually incurred, and which arise by
virtue of acts or omissions occurring thereunder, or as a result of Assignee's
failure to fulfill the landlord's duties and obligations accruing under the
Lease on or after the date of the Tenant Acceptance Notice setting forth the
Rent Commencement Date (as such terms are defined in the Lease) ("Assignee's
Assumption Date"). Assignor shall indemnify and hold Assignee harmless from
any and all liabilities, claims, obligations, losses and expenses, including
reasonable attorneys' fees arising in connection with the Lease which are
actually incurred, and which arise by virtue of acts or omissions occurring
thereunder, or as a result of Assignor's failure to fulfill the landlord's
duties and obligations accruing under the Lease prior to the Assignee's
Assumption Date.
Notwithstanding the foregoing, with respect to Tenant claims regarding
construction and warranty of the Improvements on the Leased Premises or
construction defects therein, Assignor shall indemnify and hold Assignee
harmless from any and all liabilities, claims, obligations, losses and
expenses, including reasonable attorneys' fees arising in connection with
the Lease which are actually incurred, and which arise by virtue of acts or
omissions occurring thereunder, or as a result of Assignor's failure to
fulfill the landlord's duties and obligations accruing under the Lease with
respect to such construction matters or allegations of construction defect,
for a period ending the later of 12 months from the Assignee's Assumption
Date (notwithstanding if the remedy of such matters shall take beyond the
aforementioned date, which remedy the undersigned agrees to undertake until
completion). In any event, Assignor's liability to Assignee hereunder for
defects or installations resulting from deliberate or other deviations from
the Tenant approved plans and specifications shall not be less than the legal
limit of liability under the law of the jurisdiction where the Leased Premises
are located.
Except as otherwise set forth above, Assignee shall indemnify and hold
Assignor harmless from any and all liabilities, claims, obligations, loss
and expenses, including reasonable attorneys fees, arising in connection
with the Lease which are actually incurred, and which arise by virtue of acts
or omissions occurring thereunder, or as a result of Assignee's failure to
fulfill the landlord's duties and obligations accruing under the Lease on
or after the Assignee's Assumption Date. Assignee shall be entitled to
receive all income arising from the Lease from and after said Effective Date
hereof. Assignor shall be entitled to receive all income accruing from the
Lease prior to the Effective Date hereof.
3. Assignor shall direct the tenant and any successor tenant under the Lease
to pay to Assignee the Rent and all other monetary obligations due or to
become due under the Lease for the period beginning on the Effective Date.
4. This Assignment shall be governed by and construed in accordance with the
laws of the state in which the Property is located.
5. All rights and obligations of Assignee and Assignor hereunder shall be
binding upon and inure to the benefit of Assignor, Assignee and the heirs,
successors and assigns of each such party.
6. This Assignment may be executed in any number of counterparts, each of
which shall be effective only upon delivery and thereafter shall be deemed an
original, and all of which shall be taken to be one and the same instrument,
for the same effect as if all parties hereto had signed the same signature
page. Any signature page of this Assignment may be detached from any
counterpart of this Assignment without impairing the legal effect of any
signatures thereon and may be attached to another counterpart of this
Agreement identical in form hereto but having attached to it one or more
additional signature pages.
7. Whenever the context so requires in this Assignment, all words used in the
singular shall be construed to have been used in the plural (and vice versa),
each gender shall be construed to include any other genders, and the word
"person" shall be construed to include a natural person, a corporation, a
firm, a partnership, a joint venture, a trust, an estate or any other entity.
IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment
and Assumption of Lease as of the day and year first above written.
ASSIGNOR:
Brad and Dad LLC, an Iowa limited liability company
By: /s/ BRAD BRODY
ACKNOWLEMENT
STATE OF IOWA )
)SS.
COUNTY OF Polk )
BEFORE ME, the undersigned Notary Public, duly commissioned and qualified
within and for the State and County aforesaid,
Personally came and appeared, Brad Brody that he is the Managing Member
of Brad and Dad LLC, and that in such capacity and on behalf of and in the
name of such li1nit d liability company, on November 20th 2008, he signed
and executed the above and foregoing instrument, and said appearer
acknowledged said instrument to be his free act and deed, for the purposes
and considerations therein expressed.
IN WITNESS WHEREOF, this instrument is executed in the presence of the
undersigned witnesses and me, a Notary Public, on this 20th day of
November, 2008.
/s/REBECCA J HENDERSON
Notary Public
[notary stamp]
ASSIGNEE:
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP, a Minnesota
limited partnership
By: AEIFund Management XXI, Inc., its corporate general partner
By: /s/ ROBERT P JOHNSON Dated: November 21, 2008
Robert P Johnson, President
AEI INCOME & GROWTH FUND 27 LLC
By: AEI Fund Management XXI, Inc., its managing member
By: /s/ ROBERT P JOHNSON Dated: November 21, 2008
Robert P Johnson, President
ACKNOWLEDGEMENT
STATE OF MINNESOTA )
)SS.
COUNTY OF RAMSEY )
BEFORE ME, the undersigned Notary Public, duly commissioned and qualified
within and for the State and County aforesaid, Personally came and appeared,
Robert P. Johnson, that he is the President of AEI Fund Management XXI, Inc.,
managing member of AEI Income & Growth Fund 27 LLC, and that as such officer
and on behalf of and in the name of such corporation, on November 21 , 2008,
he signed and executed the above and foregoing instrument, and said appearer
acknowledged said instrument to be the free act and deed of said corporation,
for the purposes and considerations therein expressed.
IN WITNESS WHEREOF, this instrument is executed in the presence of the
undersigned witnesses and me, a Notary Public, on this 21st day of November,
2008.
/s/ JOSANN MARIE JOHNSON
Notary Public
[notary stamp]
STATE OF MINNESOTA )
)SS.
COUNTY OF RAMSEY )
BEFORE ME, the undersigned Notary Public, duly commissioned and
qualified within and for the State and County aforesaid,
Personally came and appeared, Robert P. Johnson, that he is the
President of AEI Fund Management XXI, Inc., corporate general partner of
AEI Income & Growth Fund XXI Limited Partnership, and that as such officer
and on behalf of and in the name of such corporation, on November 21, 2008,
he signed and executed the above and foregoing instrument, and said appearer
acknowledged said instrument to be the free act and deed of said corporation,
for the purposes and considerations therein expressed.
IN WITNESS WHEREOF, this instrument is executed in the presence of the
undersigned witnesses and me, a Notary Public, on this 21st day of November,
2008.
/s/ JOSANN MARIE JOHNSON
Notary Public
[notary stamp]
EXHIBIT A TO ASSIGNMENT AND ASSUMPTION OF LEASE
DESCRIPTION OF PROPERTY
Lot 3-A, Mall Drive Subdivision, City of Rapid City, Pennington County,
South Dakota
LEASE
BETWEEN
BRAD AND DAD, LLC,
AN IOWA LIMITED LIABILITY COMPANY,
AS LANDLORD
AND
TRACTOR SUPPLY
COMPANY, A DELAWARE CORPORATION,
AS TENANT
DATED AS OF SEPTEMBER , 2008
Brody Form FS-NC 10.15.2006 Rapid City,SD
Revised 9.7.07 v.2
TABLE OF CONTENTS
PAGE
1. DEMISED PREMISES 1
2. CONSTRUCTION OF IMPROVEMENTS BY LANDLORD 1
3. CONSTRUCTION PLANS 1
4. PROGRESS REPORTS 2
5. TIME FOR COMMENCEMENT AND COMPLETION 3
6. LIQUIDATED DAMAGES 3
7. IMPROVEMENTS SUBSTITUTIONS 3
8. ZONING AND PERMITS 3
9. CONSTRUCTION INDEMNIFICATION 4
10. INSPECTION OF WORK 4
11. TENANT'S STORAGE OF MATERIALS OR INSTALLATION OF EQUIPMENT 4
12. CHANGES IN THE WORK 4
13. WORKMANSHIP OF IMPROVEMENTS/ WARRANT( 5
14. PERMITS, CERTIFICATES AND APPROVALS 5
15. ACCEPTANCE 5
16. TERM AND RENT 6
17. EXCLUSIVE USE COVENANT 7
18. LANDLORD'S REPAIRS AND MAINTENANCE 8
19. TENANT'S REPAIRS AND MAINTENANCE 8
20. INSURANCE 9
21. WAIVER OF CLAIMS 10
22. INDEMNIFICATION 10
23. ENTRANCES 11
24. UTILITIES 11
25. TAXES AND ASSESSMENTS 11
26. PERMITTED CONTESTS 11
27. ASSIGNMENT AND SUBLETTING 12
28. SIGNS 12
29. CONDITION OF PREMISES; COMPLIANCE WITH LAWS 12
30. ENVIRONMENTAL CONDITIONS. 13
31. SATELLITE SYSTEM 14
32. DAMAGE TO DEMISED PREMISES 14
33. ALTERATIONS 15
34. MECHANICS LIENS 15
35. CONDEMNATION 15
36. TENANT'S DEFAULT 15
37. LANDLORD'S DEFAULT 15
38. USE AND QUIET POSSESSION 16
39. TENANT'S BUSINESS OPERATION 16
40. RIGHT OF FIRST REFUSAL 16
41. SURRENDER OF DEMISED PREMISES 17
42. RIGHT TO AUDIT 17
43. LANDLORD'S CONSENTS AND APPROVALS 17
44. ATTORNEYS' FEES 17
45. MEMORANDUM OF LEASE 17
46. NO WAIVER 18
47. TRUE LEASE 18
48. PUBLIC RELEASES 18
49. CONFIDENTIALITY 18
50. INCENTIVES 18
51. HOLD OVER 18
52. NOTICES 19
53. CONDITION OF TITLE; ENCUMBRANCES 19
54. LANDLORD'S PAYMENT OBLIGATIONS 20
55. ESTOPPEL CERTIFICATES 20
56. SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT 20
57. TENANT PROPERTY 20
58. INVALIDITY OF CERTAIN PROVISIONS 20
59. FORCE MAJEURE 20
60. GOVERNING LAW; SUBMISSION TO VENUE AND JURISDICTION 20
61. ENTIRE AGREEMENT 21
62. BINDING EFFECT 21
63. TIME IS OF THE ESSENCE 21
64. LEASE INTERPRETATION 21
65. COMPUTATION OF DAYS 21
66. PROTECTIVE COVENANTS 21
INDEX OF DEFINED TERMS PAGE
Acceptance Date 6
Acquisition Notice 16
Actual Cost 5
Assessment 13
Building 1
Closeout Binder 5
Complete 3
Completion Date 3
Condemnation Proceedings 15
Construction Commencement Date 3
Demised Premises 1
Effective Date 1
Environmental Condition 14
Environmental Laws 14
Extension Term 6
Fenced Outdoor Display Area 1
Final Plat 19
Fixed Completion Date 3
GAAP 10
Governmental Approved Plans 2
Hazardous Materials 14
Hazardous Substances 14
Improvements 1
Initial Term 6
Land 1
Landlord 1
Landlord indemnitees 10
Landlord's Obligations 20
Landlord's Proposed Plans 1
Laws 12
Lease Year 6
Liquidated Damages 3
Offer 16
Permanent Sidewalk Display Area 1
Permanent Trailer And Equipment Display Area 1
Permitted Encumbrances 19
Preliminary Plans 1
Prohibited Uses 16
Rent Commencement Date 6
Restricted Products 7
Restricted Property 7
Right of First Refusal 16
Satellite Equipment 14
SNDA 19
Taxes 11
Tenant 1
Tenant Acceptance Notice 6
Tenant Environmental indemnification Items 14
Tenant Final Approved Plans 2
Tenant Indemnitees 4
Tenant Initial Approved Plans 1
Tenant Property 20
Tenant's Standard Signs 12
Term, .. 6
Title Report 19
DOCUMENTS INCORPORATED BY REFERENCE
PAGE
Preliminary Plans 1
Tenant Final Approved Plans 2
EXHIBITS
Exhibit "A" Legal Description of the Demised Premises
Exhibit "B" Preliminary Site Plan
Exhibit "C" ALTA Survey
Exhibit "D" Construction Warranty
Exhibit "E" Tenant's Standard Signs
Exhibit "F" Permitted Encumbrances
Exhibit "G" Subordination, Non-Disturbance and Attornment Agreement
SCHEDULES
Schedule I Tenant Initial Approved Plans Certificate
Schedule II Tenant Final Approved Plans Certificate
LEASE
THIS LEASE is entered into as of September 11th 2008 (the
"Effective Date"), by and between Brad and Dad, LLC, an Iowa
limited liability company, 2501 Westown Parkway, Suite 1203, West
Des Moines, Iowa 50266, as landlord ("Landlord"), and Tractor
Supply Company, a Delaware corporation, 200 Powell Place,
Brentwood, Tennessee 37027, as tenant ("Tenant").
1. DEMISED PREMISES. Landlord represents and warrants that
it owns or shall own by the Construction Commencement Date lawful
fee simple title to those certain premises located in the City of
Rapid City, County of Pennington, State of South Dakota, and more
particularly described in the legal description attached hereto
and made a part hereof as Exhibit "A" (the "Land"), and as shown
on the ALTA survey prepared on behalf of Landlord by Arleth &
Associates and dated September 8, 2008 which is attached hereto
and made a part hereof as Exhibit "C". In the event Landlord does
not acquire lawful fee simple title to the Land by the
Construction Commencement Date and provide Tenant with a copy of
Landlord's recorded deed for the Land, Tenant shall have the
right, within sixty (60) days thereafter to terminate this Lease
without liability or obligation to Landlord. Landlord hereby
leases the Land and Improvements to be constructed on the Land
for Tenant (collectively, the "Demised Premises"), to Tenant on
the following terms and conditions.
2. CONSTRUCTION OF IMPROVEMENTS BY LANDLORD. Landlord covenants
that it shall furnish and complete, at its sole cost and expense,
all of the materials, labor, equipment, tools and supervision,
and shall do everything necessary to complete the work as shown
on the Tenant Final Approved Plans, which work shall include
construction of a building of approximately 19,097 square feet
(the "Building"), curb cuts, paved parking, ingress and egress
drive lanes, loading docks, delivery areas, a fenced outdoor
display area of approximately 20,000 square feet (the "Fenced
Outdoor Display Area"), sidewalks, "Permanent Sidewalk Display
Area", "Permanent Trailer And Equipment Display Area", utilities,
and make all other improvements to be located and as shown on the
Preliminary Site Plan attached hereto and made a part hereof as
Exhibit "B", subject to approval by Tenant ("Improvements"). By
the Acceptance Date, all of the Improvements shall have been
completed in accordance with Tenant Final Approved Plans and be
in good working order and functioning as intended. Landlord
agrees to install Tenant-provided items shown on the Tenant Final
Approved Plans without additional cost to Tenant.
3. CONSTRUCTION PLANS. A. Tenant Initial Approved Plans.
Tenant has provided Landlord with Tenant's Prototype G plans,
drawings and specifications, dated Q4-2007 and prepared by Oxford
Architecture (collectively, the "Preliminary Plans"). Landlord
acknowledges and confirms receipt of the Preliminary Plans. The
Preliminary Plans are incorporated herein by reference as though
set out in full. Within thirty (30) days hereof, Landlord shall
furnish Tenant or Tenant's designee, at Landlord's sole cost and
expense, a revised site plan, including topographical data for
the site, a preliminary landscaping plan, and a complete set of
design drawings and specifications, which conform Tenant's
Preliminary Plans for the Improvements to the Demised Premises
("Landlord's Proposed Plans").
Tenant shall have thirty (30) days from receipt of the
Landlord's Proposed Plans to approve or disapprove such plans in
writing. Tenant's approval may include modifications to the
Landlord's Proposed Plans. Tenant's approval of Landlord's
Proposed Plans means only that the Landlord's Proposed Plans meet
the requirements of Tenant, and do not indicate, and should not
be construed by Landlord as indicating, required governmental
approvals or legal compliance, which are at the cost and
obligation of Landlord. The plans (including, but not limited to,
the preliminary landscaping plan) as initially approved by
Tenant, if at all, shall be referred to as the "Tenant Initial
Approved Plans". Upon Tenant's approval of Tenant Initial
Approved Plans, Tenant shall complete and execute Schedule I,
attached hereto, which shall identify the Tenant Initial Approved
Plans with specificity.
If Tenant disapproves Landlord's Proposed Plans, Tenant
shall notify Landlord in writing the reasons for Tenant's
disapproval. Landlord, at its sole cost and expense, and within
thirty (30) days from receipt of Tenant's disapproval of such
plans, shall revise the Landlord's Proposed Plans to satisfy
Tenant's objections, in which case the revised plans shall be the
Tenant Initial Approved Plans. In the event plans cannot be
prepared which meet Tenant's requirements (including, but not
limited to, landscaping plans), Landlord shall notify Tenant in
writing and Tenant shall have thirty (30) days from the receipt
of Landlord's notice to either modify its requirements or
terminate this Lease, in which case neither party shall have
further liability or obligation to the other.
Landlord shall bear the cost of any changes to
Landlord's Proposed Plans required by Tenant and caused by
Landlord's deviation from the Preliminary Plans, by compliance
with applicable law or required by a governmental agency. Tenant
shall bear the cost of any changes to Landlord's Proposed Plans
required by Tenant and caused by a change in Tenant's
requirements, as set forth in the Lease or in Tenant's
Preliminary Plans. All change orders shall be processed as set
out in Section 12 of this Lease.
Tenant's failure to approve or disapprove Landlord's
Proposed Plans within thirty (30) days of receipt shall not mean
that Tenant approves or disapproves such plans, and Landlord
agrees not to construe Tenant's failure to approve in such
fashion. Tenant's period of time to approve or disapprove
Landlord's plans shall be reasonably extended upon request by
Tenant.
B. GOVERNMENTAL APPROVED PLANS. Landlord shall present
the Tenant Initial Approved Plans, for approval, to all
governmental agencies having jurisdiction over the Improvements
and whose approval is required. The plans (including, but not
limited to,the landscaping plans) as approved and stamped by such
governmental agencies shall be referred to as the "GOVERNMENTAL
APPROVED PLANS". Landlord agrees to indemnify and hold Tenant
harmless from and against any and all claims, expenses
(including, but not limited to, attorneys' fees), costs,
liabilities, causes of action or judgments which may arise or
come about by Landlord's failure to obtain any governmental
approvals for the Governmental Approved Plans that were required.
C. TENANT FINAL APPROVED PLANS. Landlord shall promptly
deliver to Tenant the Governmental Approved Plans accompanied by
evidence of Government's approval. If the Tenant Initial Approved
Plans were approved by all required governmental agencies Without
Change Or Revision (so that the Tenant Initial Approved Plans and
the Governmental Approved Plans are the same), Tenant shall
accept the plans as the "TENANT FINAL APPROVED PLANS". In such
case, Tenant shall give Landlord written notice of its acceptance
of the Governmental Approved Plans within thirty (30) days of
receipt of the Governmental Approved Plans from Landlord. If any
change or revision was made between the Tenant Initial Approved
Plans and the Governmental Approved Plans, Tenant shall have
thirty (30) days in which to notify Landlord, in writing, that
it: (i) accepts the Governmental Approved Plans as presented in
which case this Lease shall continue, and the Governmental
Approved Plans shall be deemed the Tenant Final Approved Plans;
or, (ii) reject the Governmental Approved Plans. If Tenant
rejects the Governmental Approved Plans, Tenant shall identify
the reasons for Tenant's rejection and Landlord shall, for a
period not to exceed one hundred twenty (120) days from the date
of Tenant's rejection notice, diligently pursue modifications to
satisfy both the requirements of the governmental agencies and
Tenant. If during such 120-day period, plans cannot be prepared
which meet the requirements of Tenant and the governmental
agencies, Landlord shall notify Tenant in writing and Tenant
shall have thirty (30) days from the receipt of Landlord's notice
to either modify its requirements or terminate this Lease, in
which case neither party shall have further liability or
obligation to the other. Upon Tenant's approval of Tenant Final
Approved Plans, Tenant shall complete and execute, Schedule II,
attached hereto, which shall identify the Tenant Final Approved
Plans with specificity. The Tenant Final Approved Plans are
incorporated herein by reference as though set out in full.
4. PROGRESS REPORTS. Landlord shall provide Tenant a weekly
progress report no later than noon Central Time each Monday
during the construction period. The progress reports shall be
delivered to Tenant electronically via e-mail, and shall be in
form and substance acceptable to Tenant. The progress reports
shall include digital photographs of the construction referenced
in the report, and shall describe, among other things,
construction for the week, a comparison for such construction to
the construction schedule, and a complete explanation of any
variances from the construction schedule.
5. TIME FOR COMMENCEMENT AND COMPLETION. A. Commencement.
Landlord's work on the Improvements shall commence no later than
October 15, 2008, (the "Construction Commencement Date"). If
Landlord has not commenced construction within thirty (30) days
from the Construction Commencement Date and diligently proceeded
with construction, Tenant may at any time within thirty (30) days
thereafter and in its sole discretion, and as its sole remedy,
terminate this Lease without liability or obligation to Landlord.
Commencement of construction shall be deemed to have occurred
when Landlord makes its first physical alteration to the site and
continues from that point in time to pursue meaningful progress
on the construction of the Improvements. Landlord shall be in
default if Landlord commences construction without Tenant Final
Approved Plans.
B. COMPLETION. Landlord shall, no fewer than sixty-
three (63) days prior to the Improvements being Complete (as such
term is defined below), provide Tenant written notice
establishing the completion date (the "Completion Date"). In no
event, shall the Completion Date be later than May 31, 2009 (the
"Fixed Completion Date"). Landlord's covenant to complete the
Improvements by the Completion Date and in accordance with the
Tenant Final Approved Plans includes a covenant to complete the
Improvements in accordance with the "Time and Action Calendar'
appearing on the cover page of Tenant Final Approved Plans, if
Landlord fails to Complete the Improvements by the Completion
Date, Tenant shall be entitled to Liquidated Damages as its sole
remedy pursuant to Section 6, below. In the event Landlord fails
to complete the Improvements by the Fixed Completion Date, Tenant
shall have the right, in its sole discretion, to terminate this
Lease in which event Tenant shall have no further obligation to
Landlord under this Lease, and, if Tenant so elects to terminate
the Lease, such Lease termination will be Tenant's sole remedy
and Tenant shall not be entitled to Liquidated Damages. The
Improvements shall be deemed complete when the Tenant can occupy
the Demised Premises and utilize the Improvements for Tenant's
intended use, subject only to the completion of minor punch-list
items which can be corrected or completed without interference
with the Tenant's use or occupancy of the Demised Premises or the
Improvements (as determined by Tenant) and all approvals and
authorizations necessary for the Tenant to occupy and use the
Demised Premises and Improvements, including but not limited to a
temporary or final certificate of occupancy or the equivalent
thereof, have been issued by all applicable governmental
authorities ("Complete").
6. LIQUIDATED DAMAGES. Time is of the essence in completing
the Improvements as Tenant will rely on the Completion Date, in
expending funds and scheduling the opening of its business and
will suffer financial loss if the Improvements are not completed
by the Completion Date, Landlord (and its sureties), shall be
liable for and shall pay to Tenant an amount equal to two times
the pro rata daily rental rate for the Initial Term as fixed,
agreed, reasonable and liquidated damages, and not as a penalty,
for each day of delay beginning the next day following the
Completion Date (the "Liquidated Damages"). Landlord and Tenant
stipulate and agree that the amount of the Liquidated Damages
represents Landlord's and Tenant's reasonable best estimate of
the actual damages to be incurred by Tenant as a result of any
delay in the completion of the Improvements after the Completion
Date, the actual damages incurred by Tenant as a result of any
such delay being difficult, if not impossible, to accurately
calculate. Landlord shall pay the Liquidated Damages to Tenant
within seven (7) days from the date of Tenant's demand therefore.
In the event Landlord does not make payment as set out above,
Landlord expressly authorizes Tenant to offset against rent
payments the amount of the Liquidated Damages until accounted for
in full.
7. IMPROVEMENTS SUBSTITUTIONS. Any substitutions or
variations from the Tenant Final Approved Plans must be approved
in writing by Tenant. Requests for approval of any substitute must
be submitted in writing to Tenant together with all necessary
supporting data, promptly and prior to installation of a
substitute material. Tenant shall be the sole judge of the
suitability, acceptability and equality of the substitute
material and may accept or reject the same.
8. ZONING AND PERMITS. Landlord shall (i) secure and pay for
zoning changes required for Tenant's use of the Demised Premises
and shall furnish to Tenant, without demand, within thirty (30)
days of the Effective Date a zoning letter, issued by the
governmental agency having jurisdiction over zoning matters,
stating the zone designation of the Demised Premises as shown on
the Site Plan, and that such designation is the correct designation
for Tenant's use of the Demised Premises; (ii) secure and pay
for all permits required for construction of the Improvements and
Tenant's use of the Demised Premises, except Tenant's sign permit,
as set out in Section 28 of this Lease; (iii) secure and pay for
all certificates of inspection and of occupancy which shall be
delivered to Tenant no later than the Completion Date; and (iv)
pay for all fees in connection with construction of the
Improvements. Landlord shall post all bonds, secure and pay for
all permits, and pay all fees for work on or in connection with
public property. In the event Landlord does not provide Tenant
with the required zoning letter within the time period provided
herein, Tenant shall have the right to terminate this Lease
within thirty (30) days thereafter without obligation or
liability to Landlord.
Landlord represents and warrants to Tenant that upon
Acceptance Date, Tenant shall have the lawful right to use the
Demised Premises for Tenant's intended purpose as a Tractor
Supply retail facility, including, but not limited to, the Fenced
Outdoor Display Area, loading docks, Permanent Sidewalk Display
Areas, and Permanent Trailer and Equipment Display Areas as shown
on the Tenant Final Approved Plans.
9. CONSTRUCTION INDEMNIFICATION. In addition to Landlord's
indemnification in Subsection 22 B, Landlord shall protect,
indemnify and save harmless Tenant, its affiliates, and each of
their respective officers, directors, partners, employees,
representatives, agents, and assignees (individually and
collectively, the "Tenant Indemnitees") from and against any and
all claims, demands, actions, causes of action, suits, judgments,
liability, expenses (including attorneys' fees, experts' fees,
court costs, and other proceeding costs), and damages arising or
growing out of any act, failure to act, or omission on the part
of Landlord or those acting on behalf of Landlord in any manner
arising out of or connected with the construction of the
Improvements during the period of construction.
Landlord's indemnification of the Tenant Indemnitees is
one of first defense and payment, not of reimbursement or surety.
Landlord's indemnification of the Tenant Indemnitees shall in no
way be limited by or to Landlord's insurance.
10. INSPECTION OF WORK. Tenant shall at all times have access
to and the right to inspect construction of the Improvements and
the elements thereof, wherever and by whomever same take place.
Landlord shall engage a reputable third party testing company to
perform construction material testing of concrete, soil, soil
compaction, steel and pavement constituting a part of the
Improvements. Landlord shall prepare, or cause to be prepared,
written summaries of results in connection with all such testing
and shall distribute such summaries to Tenant and Landlord's
general contractor.
11. TENANT'S STORAGE OF MATERIALS OR INSTALLATION OF EQUIPMENT.
Tenant shall have the right, at its own risk, to store materials
or install fixtures or equipment in any or all Improvement
buildings before acceptance of the Improvements without implying
thereby any acceptance of the Improvements. Landlord agrees to
use commercially reasonable efforts to avoid damage to Tenant's
property.
12. CHANGES IN THE WORK. Tenant may, at any time before the
Completion Date, order additions to, deletions from, or
alterations in the Improvements. All terms and conditions of the
Tenant Final Approved Plans shall become a part of each change
order, and each change order shall be incorporated by reference
into the Tenant Final Approved Plans as though set out in full.
Before any change is made or work done, Tenant or its
agent shall specify the change in detail and in writing. Promptly
after receipt of the specifications, the Landlord shall submit to
Tenant a detailed change order showing the cost of the proposed
change in the work, or the credit to be allowed and the extension
of time, if any, necessary for the change. The Tenant shall
promptly notify the Landlord whether the change order is
acceptable and, if it is, Tenant shall, in writing, authorize the
change to be made or work to be done. Only change orders approved
by Tenant in writing shall be binding on Tenant and become part
of this Lease.
The cost or savings of change orders shall be equal to
the Actual Cost (as such term is defined below) to the Landlord
of the work added or deleted, as applicable. As used herein,
"Actual Cost" shall mean the cost of direct labor, materials,
equipment, and supervision. Within thirty (30) days of the
Completion Date, Landlord shall deliver to Tenant a detailed
accounting of all change orders showing the Actual Cost of each
change order. If the change orders cumulatively resulted in net
additional costs for the Improvements, Landlord shall include an
invoice and supporting documentation therefore, and Tenant shall
pay such invoice within thirty (30) days of receipt. If the
change orders cumulatively resulted in a net cost savings for the
Improvements, Landlord's payment therefore shall accompany the
accounting.
13. WORKMANSHIP OF IMPROVEMENTS/ WARRANTY. All materials and
equipment items shall be new and of the quality specified in the
Tenant Final Approved Plans. The Improvements shall be
constructed in a good and workmanlike manner and shall comply in
all respects with the Tenant Final Approved Plans, all lawful
requirements applicable to the Demised Premises and the Permitted
Encumbrances.
Landlord shall furnish to Tenant, without demand, no
later than sixty (60) days after the Completion Date: a list of
all subcontractors used by the general contractor and their
contact information; final unconditional lien waivers from the
general contractor and all subcontractors, sub-subcontractors and
materialmen; and, a written warranty from Landlord's general
contractor for the benefit of Tenant of all work done to
construct the Improvements for a period of one (1) year
commencing on the Acceptance Date or as otherwise provided for
longer periods of time. The warranty shall be in the form of
Exhibit "D", attached hereto and made a part hereof. The Landlord
shall also furnish to Tenant no later than sixty (60) days after
the Completion Date two (2) bound sets ("Closeout Binder") of all
manufacturers' warranties, manuals, instruction books, and
contract information for all equipment, appliances, and fixtures
specified or required and installed as a part of this project,
and assign to Tenant all warranties for equipment, appliances and
fixtures for which Tenant is responsible as provided in Section
19 of this Lease. Landlord shall cause its contract with its
general contractor to contain a provision that specifically
grants Tenant the right, in addition to Landlord, to enforce the
obligations of the general contractor under its contract with
Landlord.
Landlord covenants that the manufacturer's warranty for
the roof, including materials and labor, shall be for a period of
at least fifteen (15) years from the Acceptance Date. Landlord
further covenants that the manufacturer's warranty for the HVAC
compressors and heat exchangers shall be for a period of at least
five (5) years from the Acceptance Date.
Landlord shall remedy, at its sole cost and expense,
any defects due to faulty materials or workmanship and pay for
any damage to other work resulting from such defects and/or the
remedying thereof, which shall appear within the warranty period.
Neither the foregoing nor any other provision in this Lease, nor
the time limit of any warranty, shall limit the Landlord's
liability for defects or installations resulting from deliberate
or other deviations from the plans and specifications to less
than the legal limit of liability under the law of the
jurisdiction where the Demised Premises are located. Tenant shall
give Landlord notice of observed defects with reasonable
promptness. Should the Landlord fail to replace or remedy the
defective work within thirty (30) days following notice from
Tenant, Tenant shall have the right to make such corrections and
Landlord expressly authorizes Tenant to offset the cost thereof
against future rent payments.
14. PERMITS, CERTIFICATES AND APPROVALS. Landlord shall
obtain, at its sole cost and expense, and deliver to Tenant by the
Completion Date a temporary certificate of occupancy or its
equivalent and all other permits or approvals required by law for
the occupancy of the Demised Premises.
15. ACCEPTANCE. Tenant shall have accepted the Demised
Premises upon (i) Tenant's exclusive possession of the Demised
Premises, and (ii) Improvements by Landlord being Complete
(excluding punch list items), which shall be determined by Tenant
in Tenant's reasonable discretion; provided, however, should the
Completion Date fall between September 15 and December 31, Tenant
shall not be obligated to accept the Demised Premises until the
succeeding January 1 (the "Acceptance Date"). Tenant shall
provide Landlord with written notice ("Tenant Acceptance
Notice"), confirming the Acceptance Date, which shall be given
within ten (10) business days of Tenant's exclusive possession of
the Demised Premises. The rent provided in this Lease shall
commence on that date which is thirty-nine (39) days from the
Acceptance Date as confirmed in the Tenant Acceptance Notice (the
"Rent Commencement Date").
The Tenant Acceptance Notice shall confirm: (i) the
Acceptance Date; (ii) the Rent Commencement Date; (iii)
Liquidated Damages due from Landlord, if any; (iv) anticipated
offsets against rent payments claimed by Tenant, if any; and (v)
whether Tenant will self-insure pursuant to Subsection 20 B.
Tenant, by delivering the Tenant Acceptance Notice, does not
represent and warrant that the Improvements have been completed
in accordance with the Tenant Final Approved Plans and Tenant
expressly reserves its right to make demands of or claims against
Landlord for repairs and/or replacements as provided in this
Lease.
16. TERM AND RENT.
A. Term. The initial term of this Lease shall be for a
period of fifteen (15) Lease Years commencing on the Rent
Commencement Date(the "Initial Term") unless sooner terminated as
provided or permitted herein. Provided Tenant shall not be in
default hereunder, Tenant shall be entitled to extend the term of
this Lease for four (4) successive periods of five (5) Lease Years
each (each an "Extension Term"), upon the same terms and
conditions as herein set forth, except as to number of renewals
and rent. The Initial Term together with any Extension Term,
properly noticed, shall be referred to as the "Term". Tenant may
only extend this Lease by giving Landlord written notice as
provided herein not less than ninety (90) days prior to the
expiration of the Initial Term, or of any Extension Term, as
applicable. In the event Tenant does not give notice exercising
its right to extend this Lease, Tenant waives its right to all
subsequent Extension Terms.
B. Rent. The rental during the Term shall be as set out
below. For purposes of this Section, the term "Lease Year" shall
mean each 12-month period of the Term commencing on the Rent
Commencement Date and every anniversary thereof, provided that if
the Rent Commencement Date is on a date other than the first (11
day of the month, the first Lease Year shall be extended by the
number of clays from the Rent Commencement Date until the first
(1st) day of the next succeeding month.
PERIOD MONTHLY RENT ANNUAL RENT
Lease Years 1 through 5 $18,750.00 $225,000.00
Lease Years 6 through 10 $19,687.50 $236,250.00
Lease Years 11 through 15 $20,671.92 $248,063.00
Lease Years 16 through 20 $21,705.50 $260,466.00
(First Extension Term)
Lease Years 21 through 25 $22,790.75 $273,489.00
(Second Extension Term)
Lease Years 26 through 30 $23,930.25 $287,163.00
(Third Extension Term)
Lease Years 31 through 35 $25,126.83 $301,522.00
(Fourth Extension Term)
Commencing on the Rent Commencement Date, Tenant shall
pay its rent monthly in advance on or before the first day of
each month without offset or demand, except as otherwise provided
herein. All rent provided for in this Lease shall be pro rated
for any partial month at the beginning or end of the Term.
Tenant's pro rata rent obligation shall be in the ratio of the
number of days in the partial month for which Tenant has a rent
obligation divided by the number of days in the month and
multiplied by the applicable monthly rent as set out above.
C. Rent Payment. Tenant shall make rent checks payable
to Brad and Dad, LLC, Tax ID # 26-0299829, and mail them to the
following address: 2501 Westown Parkway, Suite 1203, West Des
Moines, IA 50266, or such other location as may be designated by
Landlord in writing from time to time in accordance with Section
52 of this Lease. Tenant shall not be obligated to make payment
to any person or entity not identified in this Subsection C with
out written instruction of Landlord and the party identified in
this Subsection C, if different than Landlord.
D. Electronic Fund Transfer. In the event that Landlord's
financial institution accepts the electronic transfer of funds,
Tenant may make payments of rent and any other sums which may
come due hereunder by electronic fund transfer. Landlord shall
complete all applications and do all other things as may be
reasonably required to authorize such electronic fund transfers.
17. EXCLUSIVE USE COVENANT. Landlord covenants and agrees
not to sell, lease, rent, occupy or allow to be occupied, or
otherwise transfer or convey all or any portion of the Restricted
Property, as such term is defined below, for the purpose of
selling or offering for sale those items which support a
farm/ranch/rural/do-it-yourself lifestyle including: (a) tractor
and equipment repair and maintenance supplies; (b) farm fencing;
(c) livestock gates; (d) livestock feeding systems; (e) animal
feed and health/maintenance products for pets or livestock
(including but not limited to: dog, cat, bird, horse, cattle,
goat, pig, fowl, rabbits, equine and livestock); (f) western wear
and boots; (g) outdoor work wear (similar to and specifically
including Carhartt products) and boots; (h) horse and rider tack
and equipment; (i) bird feed, housing and related products; (j)
lawn and garden equipment (including but not limited to,
push/riding mowers, mow-n-vacs, garden carts, snow blowers,
chippers and shredders, wheel barrows, and log splitters); (k)
hardware; (I) power tools; (m) welders and welding supplies; (n)
open and closed trailers; (o) 3-point equipment; and, (p) truck
and trailer accessories (including truck tool boxes, and trailer
hitches and connections) (the "Restricted Products"). Nothing
contained in this Lease shall prevent any tenant on the
Restricted Property from selling Restricted Products as an
incidental part of its other and principal business so long as
the total number of square feet devoted by such tenant to the
display for sale of Restricted Products does not exceed five
percent (5%) of the total number of square feet of space used for
merchandise display by such tenant (including one-half (1/2) of
the aisle space adjacent to any display area). Further, this
covenant shall not apply to any business operated by Tenant, or
any affiliate of Tenant. "Restricted Property" shall mean any
property within ten (10) miles of the Demised Premises that is
owned, controlled or developed by Landlord (or any entity in
which Landlord, or an equity holder of Landlord, holds an equity
or management interest) for commercial purposes.
Landlord acknowledges that in the event of any breach
of this Section 17, remedies at law would be inadequate.
Therefore, and in that event, Tenant shall be entitled to (i)
continue this Lease on the same terms and conditions that existed
immediately before the violation, except that Tenant's rent shall
be reduced by one-half (1/2) from the commencement of the
violation until such violation has ceased, and Landlord expressly
authorizes such rent reduction without further action by the
parties; (ii) cancel this Lease without further obligation or
liability to Landlord; (iii) relief by injunction; and (iv)
remedies at law, or otherwise, as Tenant may elect in its sole
discretion. Tenant's rights and remedies set forth in this
Section 17 may be exercised in any order and in any combination
whatsoever. No right or remedy herein conferred upon or reserved
to Tenant is intended to be exclusive of any other right or
remedy, and each and every right and remedy shall be cumulative
and in addition to any other right or remedy given hereunder or
now or hereafter existing at law or in equity.
18. LANDLORD'S REPAIRS AND MAINTENANCE. Commencing on the
Acceptance Date and during the Term, Landlord shall maintain the
Improvements, at its sole cost and expense, in good condition and
shall perform all necessary maintenance, repair, and replacement:
(a) to the structure and exterior of the Building, to the
extent not the responsibility of Tenant under Section 19,
including but not limited to:
(i) the roof, drains, gutters and downspouts such that the
Building remains weather-tight and storm water is directed away
from the foundation;
(ii) the foundation, sub-floors, walls;
(b) to all outdoor elements of the Demised Premises, to the
extent not the responsibility of Tenant under Section 19,
including, but not limited to:
(I) the integrity of the structure and surface of all
paved areas including sealing and striping (except for
the Fenced Outdoor Display Area) such that there are no
pot holes or other conditions that may compromise its
utility and safety;
(ii) the base of the Tenant's free standing pylon and/or
monument sign(s) and the electrical lines servicing
same;
(iii) all exterior utility lines and pipes to the point of
entry to the Building;
(iv.) all other structural portions of the Demised
Premises;
(c) required under Landlord's one-year warranty obligation
under this Lease;
(d) covered, or required to be covered, by Landlord's insurance
obligations under this Lease; and,
(e) necessitated due to the negligence or intentional
misconduct of Landlord and/or its agents, including items
which would be Tenant's responsibility under Section 19 but
for such negligence or intentional misconduct, or due to
Landlord's failure to observe or perform any of its
covenants or obligations under this Lease.
Landlord has the right and responsibility to enter the
Demised Premises periodically, at any reasonable time during
Tenant's normal business hours and upon reasonable advance notice
to Tenant, to inspect the condition of the Demised Premises and
to perform any maintenance, repairs or replacements required to
be performed by Landlord hereunder. Any maintenance, repairs, or
replacements by Landlord shall be performed so as to cause the
least interference possible with Tenant's business operation. if
Tenant shall become aware of any maintenance, repair or
replacement that may be necessary and which is Landlord's
obligation hereunder, Tenant shall notify Landlord in writing.
Landlord shall complete any such maintenance, repair or
replacement within fifteen days of the date of Tenant's notice to
Landlord (or sooner in the event of an emergency); provided,
however, if any required repair, restoration or replacement
cannot be reasonably accomplished within such fifteen (15) day
period, then Landlord shall commence same within such fifteen
(15) day period and diligently pursue same to completion, but in
no event shall such completion extend beyond sixty (60) days from
Tenant's notice.
19. TENANT'S REPAIRS AND MAINTENANCE. Commencing on the
Acceptance Date and during the Term, but subject to Landlord's
one-year warranty, Tenant shall be responsible, at its sole cost
and expense (except as may be caused by a casualty or event
covered by insurance carried, or required to be carried, by
Landlord under this Lease) to perform periodic maintenance and
repair to a reasonable standard consistent with a typical Tractor
Supply store, which shall include:
(a) repairing and replacing glass, windows and doors;
(b) maintaining the interior of the Building, excluding
Landlord's obligations under Section 18;
(c) replacing lamps and re-painting light poles in the parking
lot and exterior of the Building;
(d) clearing snow and ice from the parking lot, sidewalks and
drive lanes;
(e) landscape maintenance and repair (including irrigation
systems, however, specifically excluding replacement of the
irrigation system except for replacement of sprinkler heads
damaged by Tenant's negligence);
(f) maintaining and repairing (i) the pavement (including
resurfacing, if necessary) and (ii) the fence in the Fenced
Outdoor Display Area;
(g) painting of the exterior of the Building, if required in
Tenant's reasonable discretion;
(h) maintaining, repairing and replacing the HVAC, electrical
and plumbing equipment and systems in the Building, provided
Tenant shall have no such obligation during the last three (3)
years of the Term;
(i) maintaining, repairing and replacing Tenant's building
sign(s) and the pole, lamps, box and sign face(s) of Tenant's
pylon sign; and,
(j) repairs or replacements necessitated due to the negligence
or intentional misconduct of Tenant and/or its agents, including
items which would be Landlord's responsibility under Section 18
but for such negligence or intentional misconduct, or due to
Tenant's failure to observe or perform any of its covenants or
obligations under this Lease.
20. INSURANCE. A, Landlord's Insurance
(i) Commercial General Liability Insurance. Landlord shall carry
and maintain, at its sole cost and expense, commercial general
liability insurance on an occurrence form, including contractual
liability, personal and bodily injury, and properly damage
insurance, on the Demised Premises, with a combined single limit
in an amount sufficient to protect Landlord and Tenant, but in no
event will such insurance be in an amount less than a combined
single limit of $2,000,000 per occurrence and an aggregate limit
of $5,000,000. Tenant shall be named as an additional insured
under Landlord's insurance subject to the provisions of this
Lease. Landlord shall provide Tenant with a certificate of
insurance evidencing such coverage prior to the Construction
Commencement Date and as a condition precedent to Tenant's
obligation to commence rent payments, and thereafter, no less
than thirty (30) days prior to each policy's expiration.
Landlord's insurance shall contain a clause stating that there
shall be no reduction, cancellation, or non-renewal of coverage
without giving Tenant thirty (30) days prior written notice. Such
insurance shall also be endorsed to provide that the insurance
shall be primary to and not contributory to any similar insurance
carried by Tenant and which relate to Landlord's negligence
and/or obligations hereunder, and shall contain a severability of
interest clause. All Landlord insurers shall have an A.M. Best
rating of at least A- VIII.
(ii) Property Insurance. Landlord shall carry at its sole cost
and expense property insurance insuring the Building and
Improvements, including any structural alterations (including any
equipment installed by Tenant and affixed to the Building) made
by Tenant pursuant to Section 33 for perils covered by the causes
of loss - special form (all risk) including building ordinance
coverage, and in addition, if applicable flood (for zones A and V
only), and boiler and machinery coverage(s). Such insurance shall
be written on a replacement cost basis with an agreed value
equal to the full insurable replacement value of the
foregoing. All such policies shall name Landlord and Tenant
as loss payees, as their interests may appear. Landlord
shall provide Tenant with a certificate of insurance
evidencing such coverage prior to the Acceptance Date and as
a condition precedent to Tenant's obligation to commence
rent payments, and thereafter, no less than thirty (30) days
prior to each policy's expiration.
B. Tenant's Insurance. At all times Tenant occupies the Demised
Premises, Tenant shall, at its sole cost and expense, and subject
to the terms of this Lease, carry and maintain commercial general
liability insurance, including contractual liability, personal
and bodily injury, and property damage insurance, on the Demised
Premises, with a combined single limit of not less than
$2,000,000 per occurrence and an aggregate of $5,000,000.
Landlord shall be named as an additional insured under Tenant's
insurance, subject to the provisions of this Lease. Such
insurance shall also be endorsed to provide that the insurance
shall be primary to and not contributory to any similar insurance
carried by Landlord and which relate to Tenant's negligence
and/or obligations hereunder, and shall contain a severability of
interest clause. Upon seven (7) days prior written request from
Landlord, Tenant shall provide Landlord with a certificate of
insurance as evidence of such coverage. Tenant may provide the
insurance herein required in any blanket policy or policies which
it carries. All Tenant insurers shall have an A.M. Best rating of
at least A- VIII. Provided Tenant maintains a consolidated
tangible net worth of at least $100,000,000 determined in
accordance with generally accepted accounting principles
("GAAP"), Tenant may self-insure its required insurance. Tenant
shall name as an additional insured and provide proof of
insurance to Landlord's mortgagee only upon receipt of written
notice, provided in accordance with Section 52, of mortgagee's
name and address.
C. Mutual Waiver of Subrogation. Each party to the extent
possible shall obtain, for each policy of property insurance,
provisions permitting waiver of any claim against the other party
for loss or damage within the scope of the insurance.
21. WAIVER OF CLAIMS. A. Landlord's Waiver. Landlord and all
parties claiming under Landlord waive, release and discharge
Tenant from all rights of recovery, causes of action, claims and
liabilities arising from or caused by or resulting from fire or
other casualty or hazard to the extent covered by insurance or
could be covered by a "special form-all risk" policy available on
the Demised Premises, and waive any right of subrogation which
might otherwise exist in or accrue to any person on account
thereof. The foregoing waiver shall apply regardless of the cause
or origin of the claim, including but not limited to, the
negligence of Tenant or Tenant's agents, officers, employees or
contractors.
B. Tenant's Waiver. Tenant and all parties claiming under
Tenant waive, release and discharge Landlord from all rights of
recovery, causes of action, claims and liabilities arising from
or caused by or resulting from fire or other casualty or hazard
to the extent covered by insurance or which could be covered by
insurance available for Tenant Properly, and waive any right of
subrogation which might otherwise exist in or accrue to any
person on account thereof. The foregoing waiver shall apply
regardless of the cause or origin of the claim, including but not
limited to, the negligence of Landlord or Landlord's agents,
officers, employees or contractors.
22. INDEMNIFICATION. A. Tenant Indemnification. Subject to
Subsection 21 A, Tenant shall defend, indemnify and save harmless
Landlord and its directors, officers, partners, employees and
agents ("Landlord Indemnitees") from all claims, costs, damages,
judgments, expenses, fines, liabilities and losses (including
reasonable attorneys' fees, paralegal fees, expert witness fees,
consultant fees, and other costs of defense) arising from or as a
result of (i) any accident, injury, including death, loss or
damage of any kind whatsoever caused to any person or to the
property of any person as shall occur on the Demised Premises
commencing on the Acceptance Date and during the Term caused by
the negligence or misconduct of Tenant, its agents, employees or
contractors, or (ii) Tenant's failure to perform its obligations
under this Lease. The indemnities provided herein are ones of
first defense and payment, not of reimbursement or surety and
shall in no way be limited by or to the amount of insurance
carried, or required to be carried, by the Tenant. The obligations
of this Subsection 22 A shall survive expiration or termination of
this Lease.
B. Landlord Indemnification. Subject to Subsection 21
B, Landlord shall defend, indemnify and save harmless Tenant
Indemnitees from all claims, costs, damages, judgments, expenses,
fines, liabilities and losses (including reasonable attorneys'
fees, paralegal fees, expert witness fees, consultant fees, and
other costs of defense) arising from or as a result of (1) any
accident, injury, including death, loss or damage of any kind
whatsoever caused to any person or to the property of any person
as shall occur on the Demised Premises commencing on the
Acceptance Date and during the Term caused by the negligence or
misconduct of Landlord, its agents, employees or contractors, or
(ii) Landlord's failure to perform its obligations under this
Lease. The indemnities provided herein are ones of first defense
and payment, not of reimbursement or surety and shall in no way
be limited by or to the amount of insurance carried, or required
to be carried, by the Landlord. The obligations of this
Subsection 22 B shall survive expiration or termination of this
Lease.
23. ENTRANCES. Tenant shall have unrestricted use and access
to all entrances, loading docks, passways, and delivery lanes to the
Demised Premises and easements adjacent thereto. Landlord shall
not permit or allow any changes to easements, the entrances,
passways, curb cuts and delivery lanes on or benefiting the
Demised Premises without the prior written consent of Tenant.
24. UTILITIES. Tenant shall have the right to select its utility
service providers, and shall pay for all utilities used by it in
the Demised Premises during the Term of this Lease. Landlord
shall provide any easements or licenses required by any utility
providers for which Tenant seeks services for the operation of
its business, including internet or telecommunication services,
within fifteen (15) days after Tenant's request.
25. TAXES AND ASSESSMENTS. Tenant shall pay or discharge all
real estate, ad valorem and special assessments (collectively the
"Taxes") lawfully imposed against the Demised Premises when due,
subject to Section 26 of this Lease. Tenant shall have no
obligation to pay, or liability for, any franchise, corporate,
estate, inheritance, succession, transfer, net income, AMT, or
excess profits taxes or other similar taxes, whether currently
existing or imposed during the Term of this Lease. Tenant agrees
to furnish to Landlord within thirty (30) days after written
request therefor evidence of payment of all Taxes. In the event
that any Taxes become due and payable during the Term and may
legally be paid in installments, Tenant may pay the Taxes in
installments. In such event, Tenant shall be liable only for
those installments which become due and payable during the Term.
Taxes shall be prorated at the beginning and the end of the Term.
Any rollback taxes that may be or become due as the result of any
assessment based on a change in land use shall be Landlord's
obligation.
26. PERMITTED CONTESTS. Landlord agrees that Tenant shall
not be required to (i) pay any real estate or ad valorem taxes
and assessments; (ii) comply with any statute, law, rule, order,
regulation or ordinance; (iii) discharge or remove any lien,
encumbrance or charge; (iv) obtain any waivers or settlements or
make any changes to take any action with respect to any
encroachment, hindrance, obstruction, violation or impairment so
long as Tenant shall contest, in good faith and at its expense,
the existence, the amount or the validity thereof, the amount of
the damages caused thereby, the extent of its liability therefor,
or the legal compliance obligation, by appropriate proceedings
during the pendency of which there is prevented (A) the
collection of, or other realization upon, the tax, assessment,
levy, fee, rent or charge or lien, encumbrance or charge so
contested; (B) the sale, forfeiture or loss of the Demised
Premises, or any part thereof; (C) any interference with the use
or occupancy of the Demised Premises or any part thereof; and (D)
any interference with the payment of rent, or any portion
thereof. While any such proceedings are pending, Landlord shall
not have the right to pay, remove or cause to be discharged the
tax, assessment, levy, fee, lien, encumbrance or charge thereby
being contested. Tenant further agrees that each such contest
shall be promptly prosecuted to a final conclusion. Tenant shall
pay, indemnify and save Landlord harmless against, any and all
losses, judgments, decrees and costs (including reasonable
attorneys' fees and costs) in connection with any such contest
and shall, promptly after the final settlement, compromise or
determination of such contest, fully pay and discharge the
amounts which shall be levied, assessed, charged or imposed or
be determined to be payable therein or in connection therewith,
together with all penalties, fines, interest, costs and expenses
thereof or in connection therewith, and perform all acts, the
performance of which shall be ordered or decreed as a result
thereof. Nothing contained in this Section shall be construed to
require Tenant to pay or discharge any lien, encumbrance or
other charge created by any act or failure to act of Landlord
or the payment of which by Tenant is not otherwise required to
make under this Lease.
27. ASSIGNMENT AND SUBLETTING. Tenant may sublet or assign the
Demised Premises at any time when the use by the subtenant or
assignee shall not be in violation of any Permitted Encumbrance.
Tenant shall notify Landlord with the name of the subtenant or
assignee within fifteen (15) days of any subletting or
assignment. Following any subletting or assignment the Tenant
shall not be relieved from any of the terms and conditions of
this Lease, and shall remain primarily liable. After such
subletting or assignment, the word Tenant as used herein shall
include any such subtenant or assignee.
28. SIGNS. Landlord hereby approves Tenant's standard signs
consisting of a store front sign over the primary entrance to
store and a free standing pylon sign, as described and depicted
in Exhibit "E" ("Tenant's Standard Signs"). Landlord and Tenant
agree that Tenant's Standard Signs shall be limited in size only
by Tenant's discretion and applicable Laws, which may include any
lawful variance granted. If Tenant chooses to seek a variance,
Landlord agrees to cooperate with Tenant in securing such
variance(s), including but not limited to signing any application
and/or appearing at any hearing or before any board or commission
as may be required. Landlord further agrees that Tenant shall
have the right, commencing on the Acceptance Date and during the
Term, to install such other signs, in a size and location to be
determined by Tenant, so long as such additional signs are in
accordance with applicable Laws. Tenant shall be responsible to
obtain, at solely its cost and expense, any permit required for
the installation of Tenant's signs.
29. CONDITION OF PREMISES; COMPLIANCE WITH LAWS.
A. Tenant's Compliance. Tenant shall comply in all material
respects with all Laws, as such term is defined below, (i)
regarding the physical conditions of the Demised Premises, but
only to the extent the Laws pertain to the particular manner in
which Tenant uses the Demised Premises; or (ii) that do not
relate to the physical condition of the Demised Premises but
related to the lawful use of the Demised Premises and with which
only the occupant can comply, such as laws governing maximum
occupancy, workplace smoking, and illegal business operations;
the obligation to comply in every other case is expressly assumed
by Landlord. Notwithstanding anything to the contrary set forth
in this Lease, Tenant shall not be required to construct or pay
the cost of complying with any requirements resulting from
encumbrances to Landlord's title, underwriters' requirements or
Laws requiring construction of improvements in the Demised
Premises which are properly capitalized under general accounting
principles, unless such compliance is necessitated solely because
of Tenant's particular use of the Demised Premises.
The term "Laws" shall mean all lows, statutes, governmental
ordinances, rules and regulations and orders with respect to the
use and occupancy of the Demised Premises of any municipal,
county, state, federal, or other government agency or authority
have jurisdiction over the parties to this Lease or the Demised
Premises, or both, in effect either at the Effective Date of this
Lease or any time during the Term.
B. Landlord's Compliance. Landlord represents and warrants that
as of the Acceptance Date, the Demised Premises shall conform to
all requirements of encumbrances to Landlord's title, all
underwriters' requirements, and all Laws applicable thereto,
including but not limited to compliance with the applicable
provisions of the Americans with Disabilities Act of 1990 ("ADA")
(Pub. L 101-36), and the ADA Accessibility Guidelines for
Buildings and Facilities as issued and amended by the U.S.
Architectural and Transportation Barriers Compliance Board (56
F.R. 35455 et. seq.). Except as is specifically Tenant's
responsibility under Subsection 29 A, Landlord shall comply in
all material respects with all Laws, regarding the physical
conditions of the Demised Premises.
12
30. ENVIRONMENTAL CONDITIONS.
A. Landlord's Obligations.
(i) All Appropriate Inquiry. Landlord, at its sole cost and
expense, shall provide Tenant, within thirty (30) days after the
Effective Date, a Phase I Environmental Site Assessment prepared
in accordance with ASTM Standards E-1527-05 or equivalent due
diligence requirement of either the state or federal law (the
"Assessment"). The Assessment shall contain a review of the chain
of title from the earlier of (a) the date the Land was first
developed or (b) forty (40) years. The Assessment shall also
contain an express provision that the Assessment is made in favor
of Tenant and that Tenant may rely on the Assessment to the same
extent as the Landlord. In the event the Assessment identifies
recognized environmental conditions, business environmental
risks, or de minimis conditions (as those terms are defined in
the ASTM standard), Tenant may either require Landlord to resolve
the identified issues to Tenant's reasonable satisfaction, or
terminate this Lease within sixty (60) days thereafter without
obligation or liability to Landlord.
(ii) Fair Market Value. Landlord represents and warrants to
Tenant that Landlord either acquired title or will acquire title
to the Land for fair market value, or if Landlord acquired title
or will acquire title to the Land for less than fair market
value, the reduction in consideration was not due to an
environmental impairment to value of the Land.
B. Landlord's Representations and Warranties. Landlord
represents and warrants that to the best of Landlord's knowledge,
any use, storage, treatment, disposal, handling or transportation
of Hazardous Materials (as defined below) which has occurred upon
the Demised Premises prior to the Acceptance Date has been in
compliance with all applicable federal, state and local laws,
regulations and ordinances now in effect. Landlord additionally
represents and warrants that to the best of Landlord's knowledge
no release, leak, discharge, spill, disposal or emission of
Hazardous Materials has occurred upon or under the Demised
Premises. Landlord covenants that the Demised Premises will be
free of Hazardous Materials as of the Acceptance Date.
C. Landlord's Indemnification. In addition to any other
rights and remedies that Tenant may have at law or in equity and
notwithstanding the limitation of Landlord's representations and
warranties in Subsection 30 B, Landlord shall, at its sole cost
and expense, to indemnify, defend and hold Tenant Indemnitees
harmless against and from any and oil liens, damages, losses,
liabilities, obligations, settlement payments, penalties,
assessments, citations, directives, claims, litigation, demands,
defenses, judgments, suits, proceedings (administrative or
otherwise), costs, disbursements or expenses of any kind or of
any nature whatsoever (including, without limitation, reasonable
attorneys' fees, consultants', and experts' fees and expenses and
disbursements incurred in investigating, defending against,
settling or prosecuting any claim, litigation or proceeding)
which may at any time be imposed upon, incurred by or asserted or
awarded against any of the Tenant Indemnitees and arising
directly or indirectly under or on account of any Environmental
Condition (as such term is defined below) of the Demised
Premises, regardless of whether such Environmental Condition was
disclosed in the Assessment or whether such Environmental
Condition arose prior or subsequent to the execution of this
Lease; provided however, that Landlord shall have no obligation
to indemnify Tenant Indemnitees for any Tenant Environmental
Indemnification Items (as defined below). Landlord's obligations
under this Subsection 30 C shall survive expiration or
termination of this Lease.
D. Tenant's Obligation. Tenant covenants that it shall
comply in all material respects with Environmental Laws in the
operation of its business. Further, from and after the Acceptance
Date, Tenant shall indemnify and hold Landlord Indemnitees
harmless from and against all claims, damages, losses, costs,
expenses, actions and liabilities arising out of the treatment,
storage, disposal or the arranging therefor of Hazardous
Materials or Hazardous Substances generated or used by Tenant on
the Demised Premises in violation of Environmental Laws,
including, without limitation, claims or natural resource damage,
personal injury, property damage or response or remedial costs
("Tenant Environmental Indemnification Items"). Tenant's obligation
under this Subsection 30 D shall survive expiration or termination
of this Lease.
E. Definitions. For purposes of this Lease, the following
defined terms shall apply:
(i) "Environmental Laws" shall mean any federal, state or local
law, statute, regulation, rule or ordinance or any judicial or
administrative decree or decision, whether now existing or
hereafter enacted, promulgated or issued, with respect to air,
water or soil including without limitation Hazardous Materials,
Hazardous Substances, drinking water, groundwater, wetlands,
landfills, open dumps, storage tanks, underground storage tanks,
solid waste, waste water, storm water runoff, air emissions or
wells.
(ii) "Hazardous Materials" and "Hazardous Substances" shall mean
each and every element, compound, chemical mixture, contaminant,
pollutant, material, waste or other substance which is defined,
determined or identified as hazardous, toxic or presenting a risk
to human health or the environment under any Environmental Laws,
including but not limited to petroleum or petroleum products and
by-products, asbestos-containing materials, and PCBs.
(iii) "Environmental Condition" shall mean the presence in,
on or under the Demised Premises of any Hazardous Materials or
Hazardous Substances, whether or not in violation of
Environmental Laws.
31. SATELLITE SYSTEM. Tenant may install at or on the Building a
satellite communications antenna and related equipment
(collectively, "Satellite Equipment"), which shall become part of
Tenant Property. If Tenant shall install such Satellite
Equipment, Tenant shall do so at its own cost and expense, in
accordance with Laws, and shall be responsible for the
maintenance and repair thereof. Tenant agrees that its equipment
shall not penetrate the roof during installation or subsequent
equipment maintenance. Landlord shall cooperate and take all
reasonable steps necessary for the timely approval of Tenant's
Satellite Equipment installation plan.
32. DAMAGE TO DEMISED PREMISES. If all or any portion of the
Demised Premises shall be condemned by lawful authority as unsafe
or unfit for use, or if they become partially or wholly destroyed
or damaged by fire or other casualty such as to render them
untenantable, Tenant shall promptly notify Landlord. Landlord
shall apply all insurance proceeds and other funds as necessary
to rebuild, replace and repair, at Landlord's sole cost and
expense, all damage or destruction to the Demised Premises in
good faith, and with promptness and diligence. Landlord shall act
to restore the Demised Premises to the same condition, as nearly
as possible, as existed prior to such casualty. During any such
reconstruction period the Lease shall be continued but the rent
shall be abated during the period of time while the Demised
Premises cannot be occupied. Tenant's rent obligation shall
resume (i) sixty (60) days after Landlord completes all repairs
and exclusive possession of the Demised Premises is delivered to
Tenant or (ii) the date on which Tenant reopens its business to
the public, whichever first occurs.
Regardless of circumstances, Landlord shall complete all such
work within one hundred eighty (180) days of the casualty. If
Landlord fails or if, within thirty (30) days after the casualty
Tenant forms the good faith belief that Landlord will be unable
to complete its work and redeliver exclusive possession of the
Demised Premises to Tenant in the required condition within such
one hundred eighty (180) day period, Tenant may terminate this
Lease without further liability or obligation to Landlord. Should
the Demised Premises be damaged but remain tenantable, Landlord
shall immediately repair the damage, and there shall be an
equitable abatement of rent during the period of repair or
restoration. If casualty occurs during the last twelve months of
the Initial Term or any Extension Term, Landlord may elect to
terminate the Lease upon thirty (30) days written notice to
Tenant; provided, however, if Tenant elects, by providing written
notice to Landlord within such thirty (30) day period, to extend
the Term pursuant to the terms of this Lease, Landlord shall be
required to complete the repairs as provided in this Section 32.
33. ALTERATIONS. Tenant agrees not to make any structural
alterations or additions to the Demised Premises without first
obtaining the Landlord's written consent, which consent shall not
be unreasonably withheld. Tenant may however, make non-structural
alterations to the Demised Premises, which shall include the
right to install Tenant's shelving and displays.
34. MECHANICS LIENS. Neither Landlord nor Tenant shall
allow any mechanics liens filed against the Demised Premises
arising from work performed, or materials supplied to the Demised
Premises by either party or their respective agents, employees,
contractors, subcontractors or materialmen. In the event a
mechanic's lien is filed, Landlord shall, within the statutory
time frame (and Tenant shall within thirty days after receipt of
Landlord's notice of the existence of a mechanic's lien caused by
Tenant or Tenant's agent) discharge or, where allowed by law,
bond over such lien.
35. CONDEMNATION.
A. Complete Taking. In the event the entire Demised Premises
are taken in Condemnation Proceedings, Tenant may terminate this
Lease upon written notice without further liability to Landlord
and Landlord shall refund any unearned rent to Tenant.
B. Partial Taking. In the event any part of the Demised
Premises, including all or part of rights-of-way adjoining or
approaches to the Demised Premises, are taken in Condemnation
Proceedings so that in the reasonable business judgment of Tenant
the Demised Premises remaining would be unsatisfactory for
Tenant's business operation, Tenant may terminate this Lease upon
written notice without further liability to Landlord. Should
Tenant elect to retain that portion of the Demised Premises not
taken, Landlord shall promptly and with due diligence restore the
remaining Demised Premises to as close to their condition as
existed prior to the taking as is feasible. During the period
commencing on the date Tenant relinquishes possession and ending
upon Landlord's restoration, and during the remainder of the Term
following Landlord's restoration, rent shall be reduced for each
period accordingly, in proportion to (i) the amount of Land and
building area lost, or (ii) if Tenant shall elect, in proportion
to the effect of the loss of such area on Tenant's business.
C. Condemnation Proceedings and Compensation. For
purposes of this Lease, the term "Condemnation Proceedings"
shall mean a governmental taking of all or any part of the
Demised Premises, and shall include conveyances and grants made
in anticipation of or in lieu of Condemnation Proceedings. Tenant
may participate in any proceeding pertaining to condemnation of
the Demised Premises whether or not Tenant elects to terminate
this Lease. Landlord and Tenant shall each be entitled to
compensation for their respective interests even if a single
award for all damages is given by the condemning authority.
36. TENANT'S DEFAULT. If Tenant defaults in the performance
of any obligation under this Lease, Landlord shall give notice to
Tenant specifying the nature of the default. (i) Non-Monetary
Defaults. If Tenant does not, within thirty (30) days after
receipt of the notice, cure the default, or, if the default is of
a nature that it cannot reasonably be cured within a period of
thirty (30) days, and Tenant does not commence the cure within
the thirty (30) day period and proceed thereafter with reasonable
diligence and in good faith to cure the default, then after the
expiration of the thirty (30) day period Landlord shall have the
right to pursue its legal and equitable remedies. (ii) Monetary
Defaults. If Tenant does not, within fifteen (15) days after
receipt of the notice, cure a default in the payment of rent or
other charges properly due to Landlord, then after the expiration
of the fifteen (15) day period Landlord shall give a second
notice to Tenant, and if Tenant does not, within five (5) days
after receipt of the second notice, cure the default, then after
the expiration of the second five (5) day period Landlord shall
have the right to pursue its legal and equitable remedies.
37. LANDLORDS DEFAULT. If Landlord defaults in the
performance of any obligation under this Lease, Tenant shall give
notice to Landlord specifying the nature of the default. If
Landlord's default shall continue for more than thirty (30) days
after receipt of the notice, Tenant may (i) pursue its legal and
equitable remedies, and/or (ii) cure the default (without notice
if in Tenant's reasonable judgment an emergency shall exist), and
Landlord shall pay to Tenant upon demand the cost thereof within
ten (10) days. If Landlord does not make such payments to Tenant
within ten (10) days, Tenant may offset the amount due from
Landlord against any payments for rent or other payments due
Landlord, if any. Any such offset shall not constitute a default
by Tenant unless Tenant shall fail to pay the amount of such
offset to Landlord within thirty (30) days after a final
adjudication by a court of competent jurisdiction that such
amount is owing to Landlord. Except when in Tenant's reasonable
judgment an emergency shall exist, Tenant shall not commence to
cure any default of a nature that could not reasonably be cured
within a period of thirty (30) days, provided Landlord shall have
commenced to cure the default within the cure period and so long
as Landlord proceeds with reasonable diligence and in good faith
to cure the default.
38. USE AND QUIET POSSESSION. A. Use. Except with respect
to the Prohibited Uses (hereinafter defined) and to the extent
prohibited by the Permitted Encumbrances, Tenant may use the
Demised Premises for any lawful purpose. The "Prohibited Uses"
shall mean use of any part of the Demised Premises for (i)
livestock slaughter or feeding, (ii) fireworks or explosives
storage, distribution or manufacture, (iii) any use which would
require a license from the Nuclear Regulatory Commission, (iv)
biological or hazardous waste incineration, (v) scrap material
accumulation, storage or sales, (vi) smelting, (vii) a rendering
plant, (viii) the principal use being the manufacture,
distribution, storage, treatment, incineration or disposal of
chemicals, petroleum products, solvents, hazardous waste or other
Hazardous Materials, (ix) a cement or asphalt plant, (x) a
crematorium, (xi) a dry cleaning plant or central laundry
facility or (xii) the manufacture, storage, distribution,
production, sale of or any use involving pornographic materials
or items, or (xiii) any establishment featuring nude, topless or
partially-clad dancing.
B. QUIET POSSESSION. Subject to the Permitted Encumbrances,
Landlord covenants that it will put Tenant into complete and
exclusive possession of the Demised Premises, free from all
orders, restrictions and notices of any public or quasi-public
authority, and that if Tenant shall pay the rental and perform
all the covenants and provisions of this Lease to be performed by
Tenant, the Tenant shall, commencing on the Acceptance Date and
during the Term, freely, peaceably and quietly occupy and enjoy
the full possession of the Demised Premises, and the tenements
and appurtenances thereto belonging, and the rights and
privileges granted without hindrance. In addition, Landlord
agrees to indemnify, defend, and hold Tenant harmless from any
and all claims seeking to prevent Tenant from quiet and complete
possession of the Demised Premises. If at any time after the
Effective Date the title of the Landlord shall fail, then Tenant
shall, in addition to all remedies available at law or in equity,
have the right on Landlord's behalf and at Landlord's expense to
correct any default and offset such amount against rent, or
terminate this Lease.
39. TENANT'S BUSINESS OPERATION. Landlord and Tenant agree that
nothing in this Lease shall be construed to imply that Tenant is
required to conduct its business in any particular manner or for
any specified number of hours per day or week, or to limit the
number of hours per day or week that Tenant may operate in the
Demised Premises, or as creating an implied or expressed
obligation upon Tenant to continuously occupy or operate a
business in the Demised Premises.
40. RIGHT OF FIRST REFUSAL. Landlord hereby grants to Tenant the
right to purchase all or any portion of the Demised Premises as
follows (the "Right of First Refusal"): If Landlord should at any
time after the Effective Date receive a bona fide offer to
purchase all or any portion of the Demised Premises (the "Offer")
from a third party and Landlord desires to accept such offer,
Landlord shall deliver to Tenant a written notice (the
"Acquisition Notice") together with a copy of such Offer.
Notwithstanding anything to the contrary contained in this
Section, Tenant hereby waives its Right of First Refusal to the
purchase of the Demised Premises by AEI Fund Management, Inc., or
its affiliates, only if such purchase is made within thirty (30)
days following the Effective Date.
Tenant shall have thirty (30) days from receipt of the
Acquisition Notice to exercise Right of First Refusal by
delivering written notice of such exercise to Landlord. Delivery
of such written notice shall obligate Tenant to purchase the
Demised Premises on the date which is the later of (i) sixty (60)
days after receipt of the Acquisition Notice and (ii) the date
required under the Offer, which purchase shall be subject to the
same terms and conditions set forth in the Offer. If Tenant elects
(or is required under the Offer) to purchase the Demised Premises
subject to the lien of a deed of trust or mortgage, Tenant shall
be obligated to comply with the provisions of the deed of trust
or mortgage. In the event Tenant elects to not exercise its Right
of First Refusal or fails to deliver notice within the thirty
(30) day period, Tenant shall be deemed to have waived its Right
of First Refusal as to the transaction described in the Offer,
but not further or otherwise. Landlord may thereupon proceed to
sell the Demised Premises on the terms and conditions and to the
party specified in the Offer, and in the event the Demised
Premises are sold pursuant to the Offer, the Right of First
Refusal shall be applicable to any future sales and binding upon
all future purchasers, and this Lease and the Right of First
Refusal shall remain in full force and effect. Minor
modifications may be made in the Offer without the necessity of
resubmitting the offer to Tenant, provided that the purchase
price is not reduced, the payment terms are not changed, the
proposed buyer is the same and provided that the closing date is
not extended for a period in excess of one hundred eighty (180)
days. Notwithstanding anything in the forgoing to the contrary,
in the event Tenant exercises its Right of First Refusal, the
deed from Landlord to Tenant shall contain a provision sufficient
to defeat any Doctrine of Merger with respect Landlord's (i) use
limitation and restrictions benefiting Tenant under the Lease,
(ii) representations and warranties, (iii) indemnification
obligations, and (iv) construction obligations, under the Lease,
it being understood and agreed that items (i) - (iv) are intended
to survive any such sale or delivery of deed and remain
enforceable obligations of Tenant, fully binding upon Landlord.
41. SURRENDER OF DEMISED PREMISES. Upon the expiration of this
Lease and all renewal periods, Tenant shall peaceably surrender
the Demised Premises to Landlord in the same condition in which
they were received from Landlord at the commencement of this
Lease, except: (i) as altered as permitted or required by this
Lease; (ii) for repairs, replacements and maintenance required to
be performed by Landlord; (iii) for items covered by Landlord's
insurance; and (iv) except for ordinary wear and tear. This
Section shall not apply to cancellation or termination of this
Lease pursuant to Section 32, DAMAGE TO DEMISED PREMISES, or
pursuant to Section 35, CONDEMNATION, pursuant to which Tenant
shall have no obligation or liability to Landlord. Tenant shall
remove its property from the Demised Premises within a reasonable
time after the Lease expiration (not to exceed thirty (30) days),
without additional rent obligation.
42. RIGHT TO AUDIT. Landlord and Tenant agree to keep their
financial records related to this Lease in accordance with GAAP
on a consistently applied basis. Within one (1) year of the
issuance of any statement under this Lease, the parties or their
authorized representatives may, at any reasonable time, upon
seven (7) days prior written notice to the other, have the right
to audit the other party's business records relating to any
statement issued by one party to the other for the period covered
by the statement. In the event the audit discloses an
underpayment or over-billing of more than two percent (2%), the
party conducting the audit shall be reimbursed for the cost of
the audit by the audited party. In addition, the amount of
underpayment or over-billing disclosed by an audit shall be paid
by the audited party to the auditing party regardless of amount.
43. LANDLORD'S CONSENTS AND APPROVALS. Whenever it is stated
in this Lease that Landlord's consent or approval is required,
Landlord agrees that such consent or approval will not be
unreasonably withheld, conditioned or delayed. If, in any
instance, Landlord refuses to grant its consent or approval,
Landlord agrees to simultaneously give Tenant written notice of
the reason(s) for such refusal. If Landlord's consent or approval
is not given or refused within ten (10) days after Tenant's
written request therefore, such consent or approval shall be
deemed automatically granted.
44. ATTORNEYS' FEES. If either party commences an action against
the other party arising out of or in connection with this Lease,
the prevailing party shall be entitled to have and recover from
the losing party reasonable attorneys' fees and costs of suit,
including, but not limited to, fees and costs of appeal.
45. MEMORANDUM OF LEASE. Except in the States of Hawaii and
Maryland, Landlord shall record the Memorandum of Lease executed
contemporaneously with this Lease upon the earlier of the
following to occur: (i) date of Landlord's acquiring title to the
Shopping Center, or (ii) such date as is necessary to preserve
the priority of Tenant's leasehold interest in the Demised
Premises over any mechanic's or materialman's lien. The
Memorandum of Lease shall disclose the description of the Demised
Premises, the Initial Term, the Prohibited Uses, the number of
Extension Terms, the hold over provision, Tenant's Right of First
Refusal, and the Exclusive Use Covenant.
46. NO WAIVER. The failure of the Landlord or Tenant to insist
upon the strict performance of any provision of this Lease, or
the failure of Landlord or Tenant to exercise any right, option
or remedy contained in this Lease shall not be construed as a
waiver for the future of any such provision, right, option, or
remedy, or as a waiver of any subsequent breach. No provision of
this Lease shall be deemed to have been waived unless such waiver
shall be in writing signed by the party to be charged.
47. TRUE LEASE. This Lease is intended as, and shall constitute,
an agreement of lease, and nothing herein shall be construed as
conveying to the Tenant any right, title or interest in or to the
Demised Premises nor to any remainder or reversionary estates in
the Demised Premises held by any person, except, in each
instance, as a Tenant. Under no circumstances shall this Lease be
regarded as an assignment of all of Landlord's interests in and
to the Demised Premises. Instead Landlord and Tenant shall have
the relationship between them of Landlord and Tenant, pursuant to
the provisions of this Lease.
48. PUBLIC RELEASES. Landlord and Tenant agree that no press
release or other public disclosure shall be made by either of
them or any of their respective agents concerning this
transaction without the prior written consent of the other.
Tenant agrees that a "tombstone" type advertisement may be placed
by Landlord upon execution of this Lease, provided, however, that
Landlord agrees to obtain approval from Tenant with respect to
the contents thereof prior to placing such advertisement.
49. CONFIDENTIALITY. Landlord and Tenant covenant and agree to
hold in confidence ALL terms and conditions of this Lease not
made a matter of public record by virtue of a recorded Memorandum
of Lease as provided for in Section 45 of this Lease unless the
party desiring to disclose the confidential information requests
the consent of the non-disclosing party; provided, however, such
written request shall contain the information to be disclosed and
each party to whom disclosure is sought. Written consent of the
non-disclosing party shall be narrowly construed to apply only to
those matters and those persons set forth in the disclosing
party's written request. It is expressly agreed that
confidentiality is of the utmost importance to Tenant's ongoing
business and in the event Landlord makes a disclosure in breach
of this provision Tenant shall have standing to enforce this
covenant at law or in equity. This covenant shall be governed by
the laws of the State of Tennessee without regard to its conflict
of laws or any other provision for conflict of laws.
Notwithstanding anything contained herein to the contrary,
Landlord may disclose the terms and conditions of this lease to
those parties necessary to obtain financing in connection with
the Demised Premises or Landlord's construction obligations
hereunder (e.g. appraiser, lender, accountant, attorney) and
potential buyers of the Demised Premises; provided, however,
Landlord shall be responsible for obtaining adequate assurances
from such parties that the terms and provisions hereof will be
held in confidence as Landlord shall continue to be liable
hereunder for any disclosure not in compliance with this Section.
50. INCENTIVES. Landlord hereby waives and disclaims for itself
and all third parties claiming through it, any and all rights and
interest to any incentives, tax abatements or inducements or the
like made or offered (either in the past or in the future) to
Tenant by any state or local government agency, development
authority, or otherwise in connection with the Demised Premises.
Landlord agrees to execute, acknowledge and deliver to Tenant,
upon no less than ten (10) days' prior request by Tenant, all
documents necessary in a form reasonably satisfactory to Tenant,
waiving and disclaiming Landlord's interest in any such
incentives, tax abatements, inducements or the like.
51. HOLD OVER. Any holding over by Tenant beyond the Initial
Term of this Lease or any Extension Term thereof shall be on the
same terms and conditions as contained herein, except for rent
which shall be at the rate of one hundred forty-five percent
(145%) of the last monthly rent specified in this
Lease, and shall be a month-to-month tenancy terminable by either
party upon thirty (30) days prior written notice to the other
party.
52. NOTICES. All notices required under this Lease shall be
given and deemed to have been properly served if delivered in
writing personally, by certified mail, by a nationally recognized
overnight courier providing signed proof of delivery, or via
facsimile with proof of transmission to:
Landlord at:
Brad and Dad, LLC
Attention: Brad Brody
2501 Westown Parkway,
Suite 1203 West Des
Moines, Iowa 50266
Facsimile: 515.457.9444
Telephone: 515.457.9333
To Tenant at:
Lease Administration
Department Tractor
Supply Company
200 Powell Place
Brentwood, TN 37027
Facsimile: (615) 440-4132
Telephone: (615) 440-4000
or such other place or places as either of them may designate in
writing to the other from time to time in accordance with the
provisions of this Section. Date of service of a notice served by
mail shall be the date on which such notice is received by the
addressee. Date of service by any other method shall be the date
of receipt.
53. CONDITION OF TITLE; ENCUMBRANCES. Contemporaneous with
the execution of this Lease, Landlord has provided Tenant with the
Chicago Title Insurance Company File No. P-127017 with an
effective date of August 4, 2008, together with copies of all
exception documents (the "Title Report") for the Demised
Premises. Tenant hereby agrees to take subject to those matters
identified on Exhibit "F" (the "Permitted Encumbrances"), which
shall neither obligate Tenant to nor excuse Landlord from
performing Landlord's obligations under the Permitted
Encumbrances as owner of the Demised Premises.
In the event the Title Report shows an existing mortgage
or deed of trust which will not be released upon Landlord's
acquisition of the Land, Landlord shall furnish Tenant with a
Subordination Non-Disturbance and Attornment Agreement ("SNDA")
from the holder of the mortgage or deed of trust, in a form
consistent with that attached hereto as Exhibit "G", within
thirty (30) days of the Effective Date. If Landlord does not
furnish such SNDA to Tenant within the required time period,
Tenant shall have the right to terminate this Lease within sixty
(60) days thereafter without obligation or liability to Landlord.
Landlord shall not permit or grant any easements,
declarations of covenants, reciprocal easements, mechanics'
liens, liens, or any other encumbrances, other than identified as
Permitted Encumbrances, to be placed of record against the
Demised Premises without the prior written consent of Tenant.
This obligation of Landlord shall not be applicable to Landlord's
first mortgage financing for the Demised Premises subject to the
provisions of this Section.
Landlord and Tenant agree that Landlord expects to file
a final plat (the "Final Plat") of the Land, which plat has not
yet been prepared as of the Effective Date. Landlord shall obtain
Tenant's approval of such Final Plat prior to its recordation.
The Final Plat shall be incorporated into this Lease as a
Permitted Encumbrance upon the execution and recordation thereof
in the Office of the Register of Deeds, Pennington County, South
Dakota.
54. LANDLORD'S PAYMENT OBLIGATIONS. Landlord agrees to pay all
costs, charges, assessments and obligations which are its legal
responsibility and which are related to the Demised Premises
(collectively, "Landlord's Obligations"). In the event Landlord
does not timely pay or satisfy any costs, charges, assessments
and obligations related to the Demised Premises, Tenant, without
liability or forfeiture of the Term, may make any such payments
on behalf of Landlord and offset the cost thereof against future
rent payable and/or any other monies properly due to Landlord
hereunder.
55. ESTOPPEL CERTIFICATES. Upon the reasonable request of either
party, Landlord and Tenant agree to execute and deliver to the
other within ten (10) business days after receipt of the request,
a written instrument, (a) certifying that this Lease has not been
modified and is in full force and effect or, if there has been a
modification of this Lease, that this Lease is in full force and
effect as modified, stating such modifications; (b) stating that
the fixed monthly rent has not been paid more than thirty (30)
days in advance, or if so, the date to which it has been paid;
(c) stating whether or not, to the knowledge of the party
executing the instrument, the other party hereto is in default
and, if the party is in default, stating the nature of the
default; and (d) stating the date of this Lease.
56. SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT. Tenant agrees
that this Lease shall, at Landlord's request, be subject and
subordinate to any first mortgage or deed of trust hereafter
placed upon the Demised Premises upon the condition that the
mortgagee or holder of a deed of trust provides Tenant with a
SNDA in the form attached hereto and made a part hereof as
Exhibit "G".
57. TENANT PROPERTY. All Tenant's personal property, furniture,
furnishings, signs, equipment, machinery, Satellite Equipment,
trade fixtures and trade uses ("Tenant Property") located at the
Demised Premises shall remain the property of Tenant and may be
removed from the Demised Premises at any time. Landlord shall
have no lien or other interest whatsoever in any Tenant Property
and within ten (10) days following Tenant's request, Landlord
shall execute documents in reasonable form to evidence Landlord's
waiver of any right, title, lien, or interest in Tenant Property
located in the Demised Premises.
58. INVALIDITY OF CERTAIN PROVISIONS. If any provisions of this
Lease shall be invalid or unenforceable, the remainder of the
provisions of this Lease shall not be affected and every other
provision of this Lease shall be enforceable to the fullest
extent permitted by law.
59. FORCE MAJEURE. If either party shall be prevented or delayed
from punctually performing any obligation or satisfying any
condition under this Lease by: (a) any strike, lockout, or labor
dispute not caused by the negligence of the non-performing party
or breach of a labor contract by the nonperforming party; (b) the
inability to obtain labor or materials not resulting in any way
from the negligence or any act or omission of the non-performing
party; (c) an Act of God; (d) governmental restrictions,
regulations or controls not existing as of the date of this
Lease; (e), enemy or hostile governmental action; (f) civil
commotion, insurrection, sabotage, fire or other casualty not
resulting from the non-performing party's negligence or other
actions; or (g) any other condition beyond the reasonable control
of the responsible party, then the time to perform the obligation
or satisfy the condition shall be extended for a period of time
equal in length to the length of the event.
60. GOVERNING LAW; SUBMISSION TO VENUE AND JURISDICTION. Except
as provided in Section 49, this Lease shall be governed by and
construed in accordance with the laws of the state in which the
Demised Premises are located, without giving effect to its
conflict of laws principles or rules. Landlord and Tenant hereby
consent to the exercise of personal jurisdiction over them by any
court of competent jurisdiction within the locus of the Demised
Premises in connection with any action brought for the
enforcement of rights or remedies under this Lease and waive all
defenses of lack of personal jurisdiction and forum non
conveniens,
61. ENTIRE AGREEMENT. This instrument its attachments, any duly
executed amendments, the documents incorporated into the Lease by
reference, and any written agreements which are duly executed
pursuant to the terms and provisions of this Lease, if any,
contain the entire agreement between the parties and there are no
covenants, express or implied, except as contained herein. No
statement, promise or inducement made by either party or agent of
either party that is not contained in this written agreement
shall be valid or binding. No waiver of any condition or covenant
of this Lease by either party shall be deemed to imply or
constitute a further waiver of the same or any other condition or
covenant of the Lease.
62. BINDING EFFECT. This Lease, as of the Effective Date, shall
bind and inure to the benefit of the parties hereto, their heirs,
successors, executors, administrators, and assigns.
63. TIME IS OF THE ESSENCE. it is expressly agreed that time
shall be of the essence of this Lease.
64. LEASE INTERPRETATION. This Lease has been submitted to the
scrutiny of all parties hereto and their counsel, if desired, and
shall be given a fair and reasonable interpretation in accordance
with the words hereof, without consideration or weight being
given to its having been drafted by any party hereto or its
counsel. All captions and headings are for convenience of
reference only and in no way shall be used to interpret or modify
the provisions set forth in this Lease.
65. COMPUTATION OF DAYS. When referred to in this Lease, days
shall mean calendar days unless otherwise provided. In computing
any period of time prescribed or allowed by this Lease, the date
of the act, event or default after which the designated period of
time begins to run shall not be included. The last day of the
period so computed shall be included; however, if the last day is
a Saturday, Sunday, or federally adopted legal holiday, the last
day of the period shall be the next day that is not one of the
aforementioned days.
66. PROTECTIVE COVENANTS. Landlord and Tenant acknowledge the
existence of the Protective Covenants dated December 28, 2004,
filed February 2, 2005 and recorded in Book 141 of Misc. Records
on Page 3743 in the Office of the Register of Deeds, Pennington
County, South Dakota, as amended by the Amendment to Protective
Covenants dated July 30, 2008. Landlord shall cause the Amendment
to Protective Covenants to be recorded in the Office of the
Register of Deeds, Pennington County, South Dakota, and shall
provide a copy of the recorded instrument to Tenant within thirty
(30) days after the Effective Date. In the event that Landlord
fails to cause the Amendment to Protective Covenants to be
recorded in the public records, and to provide a copy to Tenant
within the time period provided herein, then Tenant may terminate
this Lease upon written notice without any further obligation to
Landlord.
[Signatures appear on following pages.]
IN WITNESS WHEREOF, the parties have executed this Lease in
multiple counterparts, each of which shall be an original
document, as of the day and year first above written.
WITNESSES FOR LANDLORD: LANDLORD:
BRAD AND DAD, LLC,
An Iowa limited liability company
BY: /s/ BRADLEY M BRODY
Print Name:
ITS: Bradley M Brody
Managing Member
Print Name:
STATE OF Iowa )
)
COUNTY OF Polk )
Before me, a Notary Public in and for said State and County,
duly commissioned and qualified, personally appeared Bradley M Brody, with
whom I am personally acquainted, and who, upon oath, acknowledged himself to
be the Managing Member of Brad and Dad, LLC, an Iowa limited liability
company, and that he executed the foregoing instrument for the purposes
therein contained, by signing the name of the limited liability company
by himself as Managing Member.
In Witness Whereof, I hereunto set my hand and official seal
this 11th day of September, 2008.
/s/REBECCA J HENDERSON
NOTARY PUBLIC
[notary seal]
WITNESSES FOR TENANT: TENANT:
TRACTOR SUPPLY COMPANY,
a Delaware corporation
/s/AMANDA A SHELTON
Amanda Allen Shelton
/s/ CAROLYN CARLYLE BY: /s/ CLAY TETEN
Carolyn Carlyle Clay Teten, Vice-President, Real Estate
STATE OF TENNESSEE )
)
COUNTY OF WILLIAMSON )
Before me, a Notary Public in and for said State and County, duly
commissioned and qualified, personally appeared Clay Teter, with whom I am
personally acquainted, and who, upon oath, ackowledged himself to be the
Vice President - Real Estate of Tractor Supply Company, a Delaware
corporation, and that he executed the foregoing instrument for the
purposes therein contained, by signing the name of the corporation by himself
as Vice President - Real Estate.
In Witness Whereof, I hereunto set my hand and official seal this
26th day of August 2008.
/s/ANGELA KELLY
NOTARY PUBLIC: Angela Kelly
My commission Expires: March 7, 2011
[notary seal]
EXHIBIT "A"
LEGAL DESCRIPTION
LOT THREE (3) OF MALL DRIVE SUBDIVISION, CITY OF RAPID CITY, AS SHOWN BY THE
PLAT RECORDED IN BOOK 35 OF PLATS ON PAGE 60 IN THE OFFICE OF THE REGISTER
OF DEEDS, PENNINGTON COUNTY, SOUTH DAKOTA.
AND
LOT 1-B OF 1-90 HEARTLAND BUSINESS PARK CITY OF RAPID CITY, AS SHOWN BY THE
PLAT RECORDED IN BOOK 35 OF PLATS ON PAGE 60 IN THE OFFICE OF THE REGISTER
OF DEEDS, PENNINGTON COUNTY, SOUTH DAKOTA
