Exhibit 10.328
ESCROW AGREEMENT
(BEST BUY, MARSHALLS AND BED BATH & BEYOND
2004 REAL ESTATE TAX PAYMENTS)
This ESCROW AGREEMENT (this "Agreement") is made and entered into as of the
24th day of August, 2004, by and among JACKSON PROPERTY ASSOCIATES, GP, a
Georgia general partnership (hereinafter referred to as "Seller"), INLAND
WESTERN XXXXXXX COLUMNS, L.L.C., a Delaware limited liability company
(hereinafter referred to as "Buyer"), and FIRST AMERICAN TITLE INSURANCE COMPANY
(hereinafter referred to as "Escrow Agent") having as its address attention:
Xxxx Xxx Xxxxxxx, 00 X. XxXxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000.
WITNESSETH:
WHEREAS, Buyer and Seller entered into that certain letter agreement having
a date of June 22, 2004, as amended August 2, 2004 (the "Contract"), in which
Seller agreed to sell and Buyer agreed to purchase that certain real property
known as Phases I and III of The Columns located in Jackson, Tennessee (the
"Property"); and
WHEREAS, Best Buy Stores, L.P.'s ("Best Buy") lease for a portion of the
Property provides that Best Buy pays its prorata share of 2004 taxes the later
of (i) ten days prior to the due date and (ii) thirty days after billing from
landlord; and
WHEREAS, Best Buy's estimated prorata share of 2004 city and county taxes
is $27,627.69 ($42,846.33 times 100% divided by 366 days per year times 236
days) (the "Best Buy Tax Proration"); and
WHEREAS, Marshalls of MA, Inc.'s ("Marshalls") lease for a portion of the
Property provides that Marshalls pays its prorata share of 2004 taxes the later
of (i) thirty days after Marshalls' receipt of the tax xxxx and (ii) fifteen
days before the taxes are due; and
WHEREAS, Marshalls' estimated prorata share of 2004 city and county taxes
is $24,364.25 ($133,058.01 divided by 98,600 times 28,000 divided by 366 days
per year times 236 days) (the "Marshalls Tax Proration"); and
WHEREAS, Bed Bath & Beyond Inc.'s ("Bed Bath") lease for a portion of the
Property provides that Bed Bath pays its prorata share of 2004 taxes thirty days
after Bed Bath's receipt of the tax xxxx but no earlier than twenty days prior
to the date the taxes will be delinquent; and
WHEREAS, Bed Bath's estimated prorata share of 2004 city and county taxes
is $17,403.04 ($133,058.01 divided by 98,600 times 20,000 divided by 366 days
per year times 236 days) (the "Bed Bath Tax Proration"); and
WHEREAS, Seller has agreed to deposit into escrow the sum of Sixty-Nine
Thousand Three Hundred Ninety-Four and 98/100 Dollars ($69,394.98) (the "Escrow
Deposit"), which
sum represents the Best Buy, Marshalls and Bed Bath Tax Prorations
(collectively, the "Tax Prorations"); and
WHEREAS, Buyer and Seller have agreed that the Escrow Deposit is sufficient
security to account the Tax Prorations not yet due and payable from and not yet
collected from the Tenants; and
WHEREAS, Escrow Agent is willing to accept the Escrow Deposit and hold and
disburse same in accordance with the terms and conditions set forth below.
NOW, THEREFORE, for and in consideration of the Property, the covenants and
agreements hereinafter made, and for Ten Dollars ($10.00) in hand paid to Escrow
Agent, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. At Closing, Seller shall deposit with Escrow Agent, and Escrow Agent
hereby acknowledges receipt of the sum of Sixty-Nine Thousand Three Hundred
Ninety-Four and 98/100 Dollars ($69,394.98) as the total Escrow Deposit. Escrow
Agent hereby agrees to deposit the Escrow Deposit into an interest bearing
account with a bank, savings and loan institution, money market account, or
other depository reasonably satisfactory to Buyer, Seller and Escrow Agent with
interest accruing for the benefit of Seller. The federal taxpayer identification
of Seller is 00-0000000.
2. Seller agrees that it shall be responsible for collecting 2004 taxes
from the Tenants pursuant to their respective leases. Within ten (10) days of
receipt of payment by the Tenants, or any of them, for any Tax Prorations, Buyer
shall provide notice to Seller, and the parties shall jointly instruct Escrow
Agent to pay such amount from the Escrow Deposit to Seller.
3. In the event that any of the Tenants fails or refuses to pay its
respective Tax Proration accrued through August 24, 2004, pursuant to said
Tenant's respective lease, then Buyer and Seller shall jointly direct Escrow
Agent to pay to Buyer from the Escrow Deposit an amount equal to the respective
Tenant's Tax Proration. Notwithstanding the foregoing, in no event shall Buyer
be paid more than the Best Buy Tax Proration for any unpaid 2004 tax by Best
Buy; more than the Marshalls Tax Proration for any unpaid 2004 tax by Marshalls;
nor more than the Bed Bath Tax Proration for any unpaid 2004 tax by Bed Bath.
Nothing contained herein shall preclude Seller from seeking to recover from the
Tenants, or any of them, any disbursements made to Buyer pursuant to this
paragraph.
4. Subject to the terms and conditions of this Agreement, Escrow Agent
shall retain the Escrow Deposit in the account until the later of (i) the date
on which the Tenants pay their share of 2004 taxes through August 24, 2004 or
(ii) March 31, 2005 (city taxes will be delinquent after December 31, 2004 and
county taxes will be delinquent after March 1, 2005).
5. In the event either party objects to the disbursement of the Escrow
Deposit as provided above, the Escrow Agent shall have the right, at its option,
either (a) to hold the Escrow Deposit in escrow pending resolution of such
objection by mutual agreement of the parties or by
2
judicial resolution of same or (b) to disburse the Escrow Deposit into the
Registry of the court having jurisdiction over such objection. After any
disbursement of the Escrow Deposit under the terms of this Escrow Agreement,
Escrow Agent's duties and obligations hereunder shall cease. In the event of any
dispute regarding disbursement of the Escrow Deposit, the party ultimately
receiving the Escrow Deposit after resolution of such dispute shall be entitled
to receive from the other party all the prevailing party's costs and expenses
incurred in connection with the resolution of such dispute including, without
limitation, all court costs and reasonable attorney's fees.
6. The reasonable costs of administration of this Escrow Agreement by
Escrow Agent shall be paid by Seller. This Escrow Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective heirs,
principals, successors and assigns and shall be governed and construed in
accordance with the laws of the State of Illinois. No modification, amendment or
waiver of the terms hereof shall be valid or effective unless in writing and
signed by all of the parties hereto. This Escrow Agreement may be executed in
multiple counterpart originals, each of which shall be deemed to be and shall
constitute an original. If there is any conflict between the terms of this
Escrow Agreement and the terms of the Contract, the terms of this Escrow
Agreement shall control in all events.
7. NOTICES. All notices, requests, consents and other communications
hereunder shall be sent to each of the following parties and be in writing and
shall be personally delivered, sent by Federal Express or other overnight or
same day courier service providing a return receipt, (and shall be effective
when received, when refused or when the same cannot be delivered, as evidenced
on the return receipt) to the following addresses:
If to Seller: c/o GBT Realty Corporation
000 Xxxxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Fax No.: (000) 000-0000
With a copy to: Hartman, Simons, Spielman, Simons, Xxxxxxxx & Xxxx, LLP
0000 Xxxxxx Xxxxx Xxxx, X.X.
Xxxxxx Ferry Landing
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx, Esq.
If to Buyer: Inland Western Xxxxxxx Columns, LLC
0000 Xxxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Fax No.: (000) 000-0000
3
If to Escrow Agent: First American Title Insurance Company
National Commercial Services
00 X. XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxx Xxxxxxx
Telephone: (000) 000-0000
Fax No.: (000) 000-0000
8. COUNTERPARTS. This Escrow Agreement may be executed in counterparts
and shall constitute an agreement binding on all parties notwithstanding that
all parties are not signatories of the original or the same counterpart.
Furthermore, the signatures from one counterpart may be attached to another to
constitute a fully executed original. The Escrow Agreement, may be executed by
facsimile.
9. TIME OF THE ESSENCE. Time shall be of the essence in the performance
by the parties hereto of their respective agreements and obligations hereunder.
10. MODIFICATION. This Agreement shall not be modified or amended except
by a written instrument executed by or on behalf of each of the parties to this
Agreement.
11. NO ASSIGNMENT. The rights and obligations hereunder shall inure to the
benefit of Buyer and Seller. This Agreement may not be assigned by either party.
12. SEVERABILITY. In the event any provisions or portions of this
Agreement are held by any court of competent jurisdiction to be invalid or
unenforceable, such holding shall not affect the remainder hereof and the
remaining provisions hereof shall continue in full force and effect to the same
extent as would have been the case had such invalid or unenforceable provision
or portion never been a part hereof.
IN WITNESS WHEREOF, each of the parties hereto has caused this Escrow
Agreement to be signed and delivered as of the day and year first above written.
SELLER:
JACKSON PROPERTY ASSOCIATES, GP
a Georgia general partnership
By: Jackson Management Associates, LLC,
a Georgia limited liability company, its General Partner
By: /s/ [ILLEGIBLE]
---------------------------
Name: [ILLEGIBLE]
-------------------------
Title: [ILLEGIBLE]
------------------------
[Signatures Continued on Following Page]
4
[Signatures Continued from Preceding Page]
BUYER:
INLAND WESTERN XXXXXXX COLUMNS, L.L.C.,
a Delaware limited liability company
By: Inland Western Retail Real Estate Trust, Inc.,
a Maryland corporation
By: /s/ Xxx Xxxxxxx
----------------------
Name: Xxx Xxxxxxx
---------------------
As Its: AUTHORIZED AGENT
-------------------
[Signatures Continued on Following Page]
5
[Signatures Continued from Preceding Page]
ESCROW AGENT:
FIRST AMERICAN TITLE INSURANCE COMPANY
----------------------------------------
Xxxx Xxx Xxxxxxx
6
Jackson Property Associates GP
Invoice Pro Rations
MONTHLY EXPENSE: JACKSON: INLAND: COMMENTS:
------------------------------------------------------------------------------------------------------------------------------------
Xxxxx Commercial Maintenance Inc. - August xxxx paid by Jackson Property
Sweeping Lawn Mani 2,200.00 1,632.25 567.74 Associates
ADS Security - 06/01/04 through 08/31/04 & August & September xxxx paid by Jackson
09/01/04 through 09/30/04 210.00 - 254.19 Property Associates
Xxxxx Insurance, Inc - Best Buy 08/23/04 - Paid by Jackson Property Associates -
09/22/05 - - 7,333.00 Prepaid Best Buy Insurance
Xxxxx Insurance, Inc - Umbrella Insurance Paid by Jackson Property Associates -
08/23/04 - 09/22/05 - - 2,000.00 Prepaid Umbrellas Insurance
-------------
TO BE REIMBURSED BY INLAND: 10,164.94
=============
CITY OF XXXXXXX - DEPARTMENTS & SERVICES
Mayor/Council Department E-Government Meetings & Events Business About Jackson
[LOGO] [LOGO] REVENUE OFFICE
2001 TAX RATES:
Revenue Office Topics...
Sales Tax 9.75% (6% state, 3.75% local)*
City Property Tax Rate $2.22 per $100 assessed value
County Property Tax Rate $2.46 per $100 assessed value
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HOME * Note: the City receives only 0.72% of the local portion.
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Jackson
FROM
ASSESSOR OF PROPERTY ASSESSMENT PRESORT
MADISON COUNTY CHANGE FIRST-CLASS MAIL
000 X XXXXXXXXX XXX 0 NOTICE U.S. POSTAGE PAID
XXXXXXX XX 00000 JACKSON TN
72 PERMIT NO. 9
MAP AND PARCEL
DIST. MAP NO. GP CTL MAP PARCEL S. INT. CITY
05 055 055 00825 000 359
PROPERTY ADDRESS YOUR APPRAISED VALUE FOR
XXXX DR 1081 Phase I PROPERTY TAX PURPOSES HAS
CHANGED. IF YOU WISH TO DISCUSS
SUBDIVISION NAME THIS NEW VALUE, YOU MAY CONTACT
RUSHMEADE COMMERCIAL THE ASSESSOR'S OFFICE. SEE
REVERSE SIDE FOR INFORMATION
ABOUT APPEALING YOUR ASSESSMENT.
BLOCK LOT NO. DEED ACRES CALC. ACRES
0009 0901 11.47
APPRAISAL AS MADISON COUNTY
OF JANUARY 1, 2004 TENNESSEE JACKSON PROPERTY ASSOC GP
APPRAISED 000 XXXXXX XXXX XX # 110
VALUE $7,107,800 XXXXXXXXX XX 00000
ASSESSED VALUE
AT 40% $2,843,120
COMMERCIAL
PREVIOUS ASSESSMENT & CLASS
SEE REVERSE SIDE
County = $2,843,120 DIVIDED BY 100 x $2.46 = $69,940.75
City = $2,843,120 DIVIDED BY 100 x $222 = $63,111.26
FROM
ASSESSOR OF PROPERTY ASSESSMENT PRESORT
MADISON COUNTY CHANGE FIRST-CLASS MAIL
000 X XXXXXXXXX XXX 0 NOTICE U.S. POSTAGE PAID
XXXXXXX XX 00000 JACKSON TN
71 PERMIT NO. 9
MAP AND PARCEL
DIST. MAP NO. GP CTL MAP PARCEL S. INT. CITY
05 055 055 00823 000 359
PROPERTY ADDRESS YOUR APPRAISED VALUE FOR
XXXX DR 1170 Best Buy PROPERTY TAX PURPOSES HAS
CHANGED. IF YOU WISH TO DISCUSS
SUBDIVISION NAME THIS NEW VALUE, YOU MAY CONTACT
RUSHMEADE COMMERCIAL THE ASSESSOR'S OFFICE. SEE
REVERSE SIDE FOR INFORMATION
ABOUT APPEALING YOUR ASSESSMENT.
BLOCK LOT NO. DEED ACRES CALC. ACRES
0010 1003 3.43
APPRAISAL AS MADISON COUNTY
OF JANUARY 1, 2004 TENNESSEE JACKSON PROPERTY ASSOC GP
APPRAISED 000 XXXXXX XXXX XX # 110
VALUE $2,288,800 XXXXXXXXX XX 00000
ASSESSED VALUE
AT 40% $915,520
COMMERCIAL
PREVIOUS ASSESSMENT & CLASS
SEE REVERSE SIDE
County = $915,520 DIVIDED BY 100 x $2.46 = $22,521.79
City = $915,520 DIVIDED BY 100 x $2.22 = $20,324.54
$42,846.33
therefrom, but with all the other rights and obligations attendant thereto, and
under the same terms and conditions of this Lease, notwithstanding any
amendments hereto which may have been made to effectuate an assignment to or
accommodate the defaulting assignee.
25. REAL ESTATE TAXES.
If the Premises are separately assessed, Tenant shall pay all real estate taxes
and all installments of assessments (collectively, the "Taxes") payable with
respect to the Premises during the Lease Term promptly as the same shall become
due and before interest or penalty accrues thereon, and provide evidence to
Landlord of timely payment. Such payment shall be proportionately adjusted
during the first and the last years of the term hereof. Tenant shall not be
chargeable with nor be obligated to pay (a) any tax of any other kind whatsoever
which may be imposed on Landlord, the rents payable hereunder, or the Premises,
or (b) any interest or penalties payable as a result of Landlord's failure to
pay any Taxes or assessments prior to delinquency, except the Taxes mentioned in
this Article 25 if they are separately billed to Tenant, or (c) any tax
attributable to an increase in valuation of the Shopping Center, or any part
thereof, resulting from the sale or financing of the Shopping Center or any part
thereof.
If the Premises are not already separately assessed, Landlord shall upon the
execution of this Lease cause the Premises to be separately assessed by the
applicable taxing authorities. If Landlord is unable to cause the Premises to be
separately assessed by the applicable taxing authorities, Tenant shall pay to
Landlord Tenant's proportionate share of the Taxes payable with respect to the
Shopping Center during the Lease Term. Tenant's proportionate share shall be
equal to a fraction, the numerator of which is the number of leasable square
feet in the Premises and the denominator of which is the greater of (i) 30,000
square feet as shown on EXHIBIT B, or (ii) the number of leasable square feet in
all buildings (including mezzanines and basement areas, and areas outside of
each building if used for outdoor sales, storage or similar use by any tenant(s)
of the Shopping Center) of the Shopping Center (and any other buildings included
within the tax parcel).
Landlord shall submit a xxxx to Tenant together with photostatic copies of
all notices regarding the Taxes, including, but not limited to, any
assessments, changes of assessments, tax rates, changes of taxes, and tax
bills (the "Tax Xxxx"). The Tax Xxxx shall be submitted to Tenant at least
ten (10) days before the last date when Tenant must make appeals or take
other appropriate legal action in connection with such Taxes on the Premises.
Tenant shall pay the Tax Xxxx to Landlord on or before the later of (i) ten
(10) days prior to the due date of the Taxes and (ii) thirty (30) days
after billing from Landlord. Tenant shall pay only its proportionate share of
Taxes payable with respect to the Shopping Center land until such time as the
improvements comprising the Premises are separately assessed, and Tenant
shall not pay any Taxes against the buildings comprising the Shopping Center
until such time. Tenant shall under no circumstances be liable for increases
in real estate taxes due to expansion of or improvements to any adjacent
shopping center or other adjacent property or for any Taxes assessed but not
payable after the termination of this Lease. Landlord shall furnish Tenant
with proof of payment of the Taxes within thirty (30) days of Tenant's
payment.
Best Buy
21
Tenant shall have the right to contest, in good faith, the validity or the
amount of any Taxes levied against the Premises or the Shopping Center, whether
the Premises are separately assessed or not, by such appellate or other
proceedings as may be appropriate in the jurisdiction and may defer payment of
such obligations, pay same under protest or take such other steps as Tenant may
deem appropriate. Landlord shall cooperate, at Tenant's expense, with the
institution and in prosecution of any such proceedings and will execute and will
provide any documents reasonably required therefor. The expense of such
proceedings shall be borne by Tenant and any refunds or rebates secured shall
belong to Tenant. In the event Landlord contests the validity or the amount of
any Taxes levied against the Premises or the Shopping Center and if any refunds
or rebates are secured by Landlord as a result of such proceedings, Landlord
shall proportionately pass-through to Tenant the amount of any such refunds or
rebates, after costs. Further, if Landlord contracts with any outside
consultants or for such services for purposes of seeking any refunds or rebates
of the Taxes, such contracts will be written on a contingency basis not to
exceed, without Tenant's prior consent, one-third (1/3) of the savings.
Notwithstanding anything to the contrary contained herein, the definition of
Taxes shall not include, and Tenant shall have no obligation to pay, any
assessments levied, pending or assessed prior to the Commencement Date or which
relate to special assessments for work performed prior to the Commencement Date.
Landlord or Tenant shall have the right to contest or seek a reduction in Taxes.
In the event of any action to xxxxx or reduce rents, any rebates, refunds or
abatements of Taxes, less reasonable out-of-pocket costs paid to independent
third parties to obtain the same, shall be refunded to Tenant on a pro-rata
basis to the extent previously paid by Tenant within thirty (30) days of receipt
by Landlord.
Tenant shall at all times be solely responsible for and shall pay before
delinquency all municipal, county, state or federal taxes assessed or levied
against any leasehold interest hereunder or any personal property of any kind
owned, installed or used by Tenant. If at any time during the term of this
Lease, a tax or excise on rents or other tax, however described, is levied or
assessed against Landlord on account of or measured by, in whole or in part, the
rent expressly reserved hereunder (excluding any income, corporate franchise,
corporate, estate, inheritance, succession, capital stock, corporate loan,
corporate bonus, transfer or profit tax of Landlord) as a substitute, in whole
or in part, for taxes assessed or imposed on land and buildings, such tax or
excise on rents or other tax shall be included as a part of the real property
taxes covered hereby, but only to the extent of the amount thereof which is
lawfully assessed or imposed as a direct result of Landlord's ownership of this
Lease or of the rentals accruing under this Lease. If any real property tax or
assessment levied against the land, buildings or improvements covered hereby or
the rents reserved therefrom shall be evidenced by improvement or other bonds or
in other form which may be paid in installments, Landlord shall, if permitted,
elect such installment payment plan and only the amount paid in any Lease Year
shall be included in the taxes for that Lease Year for purposes of this Article.
26. RIGHT OF PROTEST.
As long as Tenant provides reasonably adequate protection of Landlord's interest
in the real property on which the Premises is constructed in the form of bonds
or other similar security to remove liens from Landlord's real property, Tenant
may contest any mechanics' or other liens
22
5.2 All minimum rent shall be payable in monthly installments of
one-twelfth (1/12) the annual rate thereof then in effect, in advance, upon the
first (1st) day of each calendar month included within the term of this lease.
All rent and other payments to be made by Tenant to Landlord shall be made
payable to Landlord and sent to Landlord at the place to which notices to
Landlord are required to be sent, unless Landlord shall direct otherwise by
notice to Tenant. Rent for any fraction of a month at the commencement or
expiration of the term, or in which the rate thereof changes pursuant hereto,
shall be prorated on a per diem basis.
TAXES
6.1 Tenant shall pay to Landlord the amount of the real estate taxes
allocable to the Demised Premises (determined as below provided) for each tax
year included within the term of this lease; for the first and last tax years
included in part within the term of this lease, Tenant shall pay to Landlord
a pro rata share of such taxes for such tax years, based upon the portions of
such tax years included within the term of this lease. The amount of real
estate taxes allocable to the Demised Premises shall be equal to the total
real estate taxes upon the Shopping Center times a fraction whose numerator
is the ground floor area in the Demised Premises and whose denominator is the
total gross leaseable area in all buildings within the Shopping Center (such
fraction is hereinafter referred to as "Tenant's Fraction"). Landlord
warrants and represents that as of the date of this lease, the total gross
leaseable area in all buildings within the Shopping Center is approximately
one hundred thousand () square feet. Tenant's Fraction shall be adjusted in
the event of any increase or decrease in the total gross leasable area in all
buildings within the Shopping Center or the ground floor area of the Demised
Premises. Notwithstanding the foregoing, if the Demised Premises, or a
portion of the Shopping Center including the Demised Premises, is separately
assessed, and if the real estate taxes on such separately assessed parcel
multiplied by Tenant's Portion (hereinafter defined) is less than the amount
determined in the preceding sentence, the amount determined by this sentence
shall be the real estate taxes allocable to the Demised Premises. Tenant's
Portion is a fraction whose numerator is the ground floor area in the Demised
Premises and whose denominator is, the total gross leaseable area in all
buildings within such separately assessed parcel. If after the assessment
date for the tax year in which the Commencement Date occurs, any new
construction shall occur within the Shopping Center, then, to carry out the
intent of the parties, an appropriate adjustment shall be made in the amount
payable by Tenant under this Article VI with respect to any increase in the
real estate taxes upon the Shopping Center attributable thereto provided that
a supplemental tax xxxx from the taxing authority has been issued after the
assessment date and a copy thereof delivered to Tenant. The expression "real
estate taxes" used herein shall include all ad valorem taxes and general or
betterments assessments imposed or assessed upon or against the real estate
constituting the Shopping Center by any public authority having jurisdiction
except only that (A) if Landlord shall, at any time, have had the right to
elect to pay any such assessment in installments the real estate taxes for
any tax year shall include only the lowest such installments of such
assessment as Landlord shall have had the election to have allocable to said
tax year, together with any interest thereon accrued by law as the result of
the exercise, in fact, of Landlord's elections to pay in installments, and
(B) if for any tax year included within the term of this lease an assessment
is assessed on the Shopping Center for an improvement (such as a street or
sewer) made prior to the time the Demised Premises opened for business or in
connection with the construction of premises in the Shopping Center, such
assessment shall not be included in the real estate taxes upon the Shopping
Center for such tax year, and (C) if an assessment is assessed on the
Shopping Center for an off site improvement, such assessment shall not be
included in the real estate taxes upon the Shopping Center. In addition, real
estate taxes shall not include any income, excess profits, estate,
inheritance, succession, transfer, franchise, capital, personal property or
other tax or assessment upon Landlord or upon the rentals payable under this
lease, all of which shall be the obligation of Landlord. If the real estate
taxes of the Demised Premises for any year which commences after the
Commencement Date shall be increased on account of a re-valuation of the
Demised Premises because of any "change in ownership," Tenant shall not pay
or be charged with any increase in the real estate taxes attributable to or
arising from such change and not as the result of a normal re-assessment,
Tenant shall not pay or be charged with any increase in the real estate taxes
attributable to or arising from such change until the next normal
re-assessment (i.e., where the assessed value at that point is equal to what
it would have been in the absence of such transfer or change in ownership).
The provisions of the immediately preceding sentence shall not be applicable
to the first such change in
Marshalls
28,000 DIVIDED BY 128,600 = 21.77%
7
ownership during the term hereof or thereafter to the first such change in
ownership in any successive five year period during the term of this lease.
6.2 If there shall be more than one taxing authority, the real estate taxes
for any period shall be the sum of the real estate taxes for such period
attributable to each taxing authority. If the number of square feet of floor
area of any building shall change during any tax year, the condition existing
upon the day as of which the real estate taxes are assessed for such tax year
shall control. The real estate taxes for any tax year shall mean such amounts as
shall be finally determined to be the real estate taxes assessed and payable for
such tax year less any abatements, refunds or rebates made thereof. For the
purpose of determining payments due from Tenant to Landlord in accordance with
the provisions of this Article VI, (A) the real estate taxes for any tax year
shall be deemed to be the real estate taxes assessed and payable for such tax
year until such time as the same may be reduced by abatement, refund or rebate
and (B) if any abatement, refund or rebate shall be made for such tax year, the
real estate taxes for such tax year shall be deemed to be the real estate taxes
as so reduced plus the expenses of obtaining the reduction (excluding any
"administration fee" or similar charge which does not reflect actual
out-of-pocket expenses incurred in obtaining such reduction), with an
appropriate adjustment to be made in the amount payable from or paid by Tenant
to Landlord an account of real estate taxes.
6.3 Landlord shall submit to Tenant copies of real estate tax bills for
each tax year at least twenty (20) days prior to the expiration of the period by
which such taxes may be contested. Tenant shall have such rights to contest the
validity or amount of any real estate taxes as permitted to Landlord or Tenant
by law, either in its own name or in the name of Landlord. Landlord shall
cooperate, at no cost to Landlord, with Tenant in any such contest and, in
connection therewith, shall make available to Tenant such information in its
files as Tenant may reasonably request. If any abatement, refund or rebate shall
be obtained, the expenses of obtaining the same shall be a first charge thereon.
Landlord agrees to provide Tenant with notice prior to instituting any contest
with respect to the Shopping Center.
6.4 Landlord shall submit to Tenant copies of the paid real estate tax
bills for each tax year. Landlord shall xxxx Tenant for any amount that may
be payable by Tenant pursuant to the provisions of this Article VI. Such xxxx
shall be accompanied by (a) copies of all notices concerning assessments,
changes of assessment and tax rates and (b) a computation of the amount
payable together with supporting documentation reasonably satisfactory to
Tenant relating to Landlord's calculation of Tenant's Portion or Tenant's
Fraction (as defined above) (including the then current total gross leaseable
area in all buildings within the Shopping Center and a breakdown of the
leaseable area occupied by each tenant and a current site plan of the Shopping
Center). The amount payable by Tenant hereunder for any tax year shall be
payable on the later of (a) thirty (30) days following Tenant's receipt of
the tax xxxx and supporting documentation therefor (but if Tenant shall not
have received a xxxx therefor and the supporting documentation referred to
above at least thirty (30) days prior to such time for payment, Tenant shall
not be required to make payment until thirty (30) days after the receipt of
such documentation), and (b) fifteen (15) days prior to the date the taxes
are payable to the taxing authority. (If real estate taxes are payable to any
taxing authority for any tax year in installments, the amount payable by
Tenant hereunder shall be payable in similar installments. If real estate
taxes are payable to different taxing authorities for any tax year at
different times, an appropriate apportionment shall be made of the amount
payable by Tenant for such tax year and the apportioned amounts shall be
payable at such times.) Landlord agrees that real estate taxes upon the
Shopping Center shall be paid by Landlord prior to the last day that the same
may be paid without penalty or interest, or if a discount shall be available
for early payment, prior to the last day that such discount shall be
available.
6.5 Landlord agrees that neither the Shopping Center nor the construction
therefor nor any expansion thereof, shall be financed by or subject to, any
so-called "Tax Increment Financing" or similar financing which results in the
real estate taxes upon the Shopping Center being increased above the amount of
real estate taxes which would have been due with respect to the Shopping Center
if such financing had not been obtained.
ARTICLE VII
8
hereof, neither Fixed Rent nor Tenant's Pro Rata Share shall be increased by
reason thereof. Landlord and Tenant shall each promptly execute and deliver to
the other an amendment memorializing any change to the Fixed Rent. Tenant's Pro
Rata Share, or any other applicable provisions of this Lease, made pursuant to
this Section 3.4. Any dispute between the parties with respect to the Floor Area
of the Premises, the square footage of said non-selling space or the Floor Area
of the Shopping Center shall be resolved by arbitration in accordance with the
provisions of Section 16.3 below.
ARTICLE 4
FIXED RENT, TAXES; DETERMINATION AND PAYMENT
Section 4.1 FIXED RENT. Commencing on the Rent Commencement Date and
continuing throughout the Term. Tenant shall pay to Landlord the Fixed Rent, in
equal successive monthly installments, in advance, on the first day of each and
every calendar month throughout the Term, except that Fixed Rent payable for any
partial calendar month during the Term shall be prorated based on a 365-day
year. Fixed Rent shall be paid without abatement, deduction or set-off, except
to the extent otherwise expressly provided herein.
Section 4.2 PAYMENT OF RENT. All Rent shall be mailed or otherwise
delivered to Landlord's Mailing Address above or, upon at least thirty (30)
days' prior notice to Tenant, to such other address as Landlord may from time to
time designate. Landlord acknowledges and agrees that for administrative
purposes, Tenant has designated BBBY Management Corporation, a New York
corporation (the "PAYING AGENT"), to make all Rent payments due to Landlord
under this Lease. Said designation (which may be revoked by Tenant at any time)
is not intended as, and shall not constitute, an assignment of any rights or
obligations of Tenant to the Paying Agent, and Tenant shall remain primarily
liable for payment of Rent under this Lease. All payments of Rent received by
Landlord from the Paying Agent shall be credited to Tenant as if such payments
of Rent had been made by Tenant directly to Landlord.
Section 4.3 REAL ESTATE AND OTHER TAXES.
4.3.1 Landlord shall pay on or before the due dates thereof all
"Taxes" (defined in Subsection 4.3.3 below) other than personal property taxes
levied against tenants. Throughout the Term, Landlord shall cause the Shopping
Center to be maintained entirely within tax parcels and lots that exclude any
property not a part of the Shopping Center.
4.3.2 (a) Tenant shall pay to Landlord Tenant's Pro Rata Share of
the Taxes which accrue during the Term, subject to the provisions of this
Section 4.3. Any Taxes for a real estate fiscal tax year, only a part of which
is included within the Term, shall be adjusted between Landlord and Tenant on
the basis of a 365-day year as of the Rent Commencement Date or the date on
which the Term expires or earlier terminates, as the case may be, for the
purpose of computing Tenant's Pro Rata Share of Taxes. If, by law, any Taxes
may, at the option of the taxpayer, be paid in installments (whether or not
interest shall accrue on the unpaid balance thereof), Landlord shall exercise
such option so as to maximize the number of installments, and Landlord shall pay
the same as they come due and before any fine, penalty, interest or cost may be
added thereto for nonpayment thereof. This provision shall survive the
expiration or sooner termination of this Lease.
(b) Landlord shall submit to Tenant a copy of the xxxx for
Taxes issued by the applicable taxing authority, a computation of Tenant's Pro
Rata Share of such Taxes and proof of the payment of Taxes for the previous
payment period, as well as copies of all notices concerning assessments, tax
rates, and changes thereto. Tenant shall pay Landlord in the amount required
by this Subsection 4.3.2 within thirty (30) days after receipt of such xxxx
(but in no event earlier than the twentieth (20th) day prior to the date on
which such Taxes would become delinquent).
4.3.3 As used herein, "Taxes" shall mean all general, AD VALOREM
real estate taxes, and assessments for betterments and improvements that are
leveled or assessed by any lawful authority on the Shopping Center (general or
special), including any substitution therefor in whole or in part, due to a
future change in the method of taxation. Taxes shall be reduced by any deferral,
abatement, or other tax-lowering adjustment received by Landlord from the taxing
authorities. For purposes of computing Tenant's Pro Rata Share of Taxes, Taxes
shall not include any: (1) income, excise, profits, estate, inheritance,
succession, gift, transfer, franchise, capital, or other tax or assessment upon
Landlord or upon the rentals payable under this Lease; (2) taxes on rents (other
than to the extent that such taxes are customarily paid by retail tenants in the
state in which the Shopping Center is located), gross receipts or revenues of
Landlord from the Premises; (3) fine, penalty, cost or interest for any tax or
assessment, or part thereof, which Landlord or its lender failed to timely pay
(except it same are caused by an Event of Default); (4) assessment for a public
improvement arising from the initial construction or
Bed Bath
20,000 DIVIDED BY 128,600 = 15.55%
12
expansion of the Shopping Center or the Premises (it being agreed that all
assessments imposed during the Term which are permitted to be included within
Taxes hereunder shall, for the purposes of computing Tenant's Pro Rata Share
thereof, be deemed to have been paid in the maximum number of installments
permitted by the applicable taxing authority); (5) Taxes resulting directly from
an increase in the assessment caused by a sale or ground lease of all or any
portion of the Shopping Center to an Affiliate of Landlord or more than once
every five (5) years; or (6) fees imposed upon Landlord in connection with
Landlord's development of the Shopping Center (Including, without limitation,
trip generation fees). All Taxes payable by Tenant pursuant to this Section 4.3
shall be determined as if the Shopping Center was the only property owned by
Landlord. Landlord represents to Tenant that, as of the Effective Date and, to
the best of Landlord's knowledge, as of the anticipated Delivery Date, no
portion of the Shopping Center is or will be (i) subject to or the beneficiary
of an abatement of Taxes, (ii) subject to any special assessments or similar
charges, or (iii) are included in any special improvement district(s) which
would result in higher sales taxes or other similar impositions than would exist
in the absence of such district(s).
4.3.4 At Tenant's request, Landlord shall contest the amount or
validity of any assessed valuation or Taxes, failing which, Tenant shall have
the right to contest the assessed valuation or Taxes by appropriate proceedings
conducted in good faith, whereupon Landlord shall cooperate with Tenant,
execute any and all documents reasonably required in connection therewith and,
if required by any governmental authority having jurisdiction, join with Tenant
in the prosecution thereof. If, as a result of any contest or otherwise, any
rebate or refund of Taxes is received, Tenant shall be entitled to Tenant's Pro
Rata Share thereof (after reasonable and customary expenses incurred by Landlord
and/or Tenant in connection with such contest are paid to the party which
incurred such expense).
ARTICLE 5
COMMON AREAS, THEIR USE AND CHARGES
Section 5.1 COMMON AREAS: MAINTENANCE.
5.1.1 MAINTENANCE OF COMMON AREAS. Landlord shall operate,
maintain, repair and replace the Common Areas as required by this Lease and
otherwise to the standard by which Common Areas of first-class shopping
centers in the state in which the Shopping Center is located are operated,
maintained, repaired and replaced, INCLUDING, WITHOUT LIMITATION, snow, ice,
rubbish and debris removal (including installation and maintenance of sidewalk
refuse containers), landscaping (including, without limitation, the trimming and
pruning of trees to avoid interference with the use or visibility of canopies or
signs on the exterior of the Premises, subject to Legal Requirements), adequate
lighting, insurance, supervision, use, parking lot paving and striping,
drainage, security (as reasonably required), and control of all Common Areas,
and Landlord shall comply with all applicable Legal Requirements.
5.1.2 TENANT'S PRO RATA SHARE OF COMMON AREAS CHARGES.
(a) During the Term, Tenant shall pay to Landlord Tenant's
Pro Rata Share of the reasonable costs (hereinafter referred to as the "COMMON
AREAS CHARGES") Incurred by Landlord to operate, maintain, insure and repair the
Common Areas. Landlord shall be permitted to include in Common Area Charges (in
lieu of any cost(s) or expense(s) relating to the administration and management
of the Common Areas) for each calendar year an administrative fee (the
"ADMINISTRATIVE FEE") equal to five percent (5%) of the Common Areas Charges for
the calendar year in question, but excluding from the computation of such
Administrative Fee the cost of any replacement or improvement of a capital
nature (if such capital item is a permissible Common Areas Charge hereunder),
the cost of electricity and other utilities and "Landlord's Insurance Costs"
(defined in Section 10.3.3 below). Tenant's Pro Rata Share of Common Areas
Charges shall be paid in equal monthly installments on the first day of each
calendar month, in advance, during each calendar year based on Landlord's
reasonable budget.
(b) Within ninety (90) days after the end of each calendar
year, Landlord shall provide to Tenant a statement, in reasonable detail, of
Common Areas Charges for such year, which statement shall be prepared in
accordance with generally accepted accounting principles consistently applied
(the "CAC RECONCILIATION STATEMENT"). The CAC Reconciliation Statement shall be
certified by Landlord as being accurate and shall be accompanied by a
calculation of Tenant's Pro Rata Share of Common Areas Charges, and payment to
Tenant in the amount of any overpayment made by Tenant during the preceding
calendar year. If Tenant's Pro Rata Share of the actual Common Areas Charges for
a calendar year shall exceed the aggregate monthly installments paid by Tenant
during said calendar year, Tenant shall pay to Landlord the deficiency within
thirty (30) days after receipt of such notice. Upon Tenant's request, Landlord
shall promptly deliver to Tenant copies of relevant backup materials (including,
but not limited to, contracts, correspondence and paid invoices) reasonably
13
MONTHLY PAYMENTS OF
TENANT SQUARE FEET MONTHLY RENT CAM / TAX / INS
Best Buy 30,000 $40,000 -o- / -o- / -o-
Marshalls 28,000 $18,107.23 $1,75O flat number
Bed Bath and Beyond 20,000 $16,250 $1,666.67 flat number
Books-A-Million 12,500 $11,197.92 1,562.50 /1,291.67 / 270.83
Dress Barn 7,762 $8,556.25 776.20 / 646.83 / 194.05
Rack Room Shoes 6,000 $7,125 600 / 500 / 150
Don Panchos Restaurant 4,000 $5,000 4OO / 333.33 / 1OO
Xxxxx Fargo 2,400 $3,100 240 / 200 / 60
Spoil Me Rotten 2,000 $2,583.33 200 / 166.67 /50
Quiznos 1,600 $2,400 160 /133.33 / 40
Oreck Vacuums 1,600 $2,066.67 160 /133.33 / 40
Grass Monkey 1,600 $2,000 160 /133.33 / 40
rue21 5,000 $5,000 400 / 333.33 / 100
