Exhibit
10.41


 


SECOND
AMENDMENT TO LEASE


[CarrAmerica
Realty, L.P./Musician’s Friend, Inc.]


 


THIS AMENDMENT (this “Amendment”) is entered into as of the 15th
day of April, 2003, between CARRAMERICA REALTY, L.P., a Delaware limited
partnership (“Landlord”), whose address is 1850 K Street, N.W., Suite
500, Washington, D.C. 20006, and MUSICIAN’S FRIEND, INC., a Delaware
corporation (“Tenant”), whose address is 180 West Election Road, Suite
100, Draper, Utah 84020.


 


FOR THE SUM OF TEN DOLLARS ($10.00) and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, Landlord
and Tenant agree as follows:


 


1.                                       Definitions.  As used in this Amendment, each of the
following terms shall have the meaning indicated:


 


1.1.                              “Lease”
means the Lease, dated August 25, 1998, entered into between Landlord and
Tenant, as previously amended by the letter agreement, dated October 18, 2000.


 


1.2.                              “New
Premises” means the new premises described in Paragraph 4 of this
Amendment.


 


1.3.                              “Old
Premises” means the premises covered by the Lease prior to this Amendment.


 


1.4.                              “Relocation
Date” means, unless otherwise agreed in writing by Landlord and Tenant, the
later of (a) September 26, 2003, or (b) the date that is ten (10) calendar days
after Landlord gives Tenant written notice that the improvements to be made by
Landlord pursuant to Paragraph 6 of this Amendment are completed in a
good and workmanlike manner, provided that all of the building systems serving
the New Premises (such as rest rooms, HVAC systems, lighting, elevators, if
any, doors, locks and other similar components) are in good working condition,
and the New Premises are otherwise substantially in compliance with the terms
and conditions of the Lease (as amended by this Amendment).


 


2.                                       Purpose.  Landlord and Tenant desire to amend the
Lease as set forth in this Amendment.


 


3.                                       Various
Definitions.  As of the Relocation
Date, the following terms shall have the indicated meanings for all purposes of
the Lease: “Project” means the building (the “Building”) known as
“Building #15, Wasatch Corporate Center” and the land (the “Land”)
located at 180 West Election Road.


 

















 


4.                                       Schedule.  As of the Relocation Date, Items 2, 3, 4,
10 and 12 of the Schedule set forth at the outset of the Lease are deleted
in their entirety and are replaced, respectively, with the following new Items
2, 3, 4, 10 and 12:


 


2.                                       Premises:  Suite 100 consisting of approximately 25,530
rentable square feet located on the first floor of the Building, as depicted on
the attached Appendix A.


 


3.                                       Rentable
Square Feet  of the Premises:  Approximately 25,530 rentable square feet.


 


4.                                       Tenant’s
Proportionate Share:  49.9315%
(based upon a total of approximately 51,130 rentable square feet in the
Building).


 


10.                                 Termination
Date:  December 31, 2008.


 


12.                                 Base
Rent:


 


	
  Period

  	
   

  	
  Annual

  Base Rent

  	
   

  	
  Monthly

  Base Rent

  	
   

  	
  Base Rent

  Per RSF

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Relocation
  Date to 12-31-03

  	
   

  	
  $

  	
  302,460.00

  	
   

  	
  $

  	
  25,205.00

  	
   

  	
  N/A

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1-1-04 to 12-31-04

  	
   

  	
  $

  	
  244,156.56

  	
   

  	
  $

  	
  20,346.38

  	
   

  	
  $

  	
  9.56

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1-1-05 to 12-31-05

  	
   

  	
  $

  	
  253,602.60

  	
   

  	
  $

  	
  21,133.55

  	
   

  	
  $

  	
  9.93

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1-1-06 to 12-31-06

  	
   

  	
  $

  	
  263,304.00

  	
   

  	
  $

  	
  21,942.00

  	
   

  	
  $

  	
  10.31

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1-1-07 to 12-31-07

  	
   

  	
  $

  	
  273,516.00

  	
   

  	
  $

  	
  22,793.00

  	
   

  	
  $

  	
  10.71

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1-1-08 to 12-31-08

  	
   

  	
  $

  	
  284,238.60

  	
   

  	
  $

  	
  23,686.55

  	
   

  	
  $

  	
  11.13

  	
   

  



 


5.                                       Moving
Allowance.  Landlord shall pay the
reasonable cost of moving Tenant’s existing cubicles from the Old Premises to
the New Premises, and the reasonable cost of providing electrical connections
to such cubicles.  In addition, Landlord
shall reimburse Tenant up to $15,000 for costs necessary (as per the bid from
Aspect) for moving Tenant’s telephone switch to the New Premises.


 


6.                                       Tenant
Improvements.  Landlord shall
remodel the New Premises in accordance with the space plan attached as Appendix
B.  Included in the remodeling will be
the costs necessary for telephone and data cabling (estimated at $54,000 to
$57,000).


 


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7.                                       Relocation
Date.  Provided that this Amendment
is executed and the space plan for the New Premises is agreed on prior to May
1, 2003, if the Relocation Date has not occurred on or before September 26,
2003, the Base Rent payable by Tenant under the Lease (without reference to
this Amendment) shall abate one day for each day between September 26, 2003 and
the day on which the Relocation Date actually occurs for up to thirty (30) days
of abatement of Base Rent (or until October 26, 2003).  If the Relocation Date has not occurred on
or before October 26, 2003, no further abatement of Base Rent shall occur and,
unless Landlord and Tenant otherwise agree in writing, this Amendment shall
automatically terminate and cease to be of any further force or effect.


 


8.                                       Surrender.  Within ten (10) calendar days after the
Relocation Date, Tenant shall surrender the Old Premises in accordance with
Section 14 and any other applicable provisions of the Lease.


 


9.                                       Generator.  If Tenant elects to install an emergency
generator for the New Premises, Landlord will contribute $75,000 toward the
cost and installation of the generator, which shall be purchased and installed
by Tenant.  The location and size of the
generator, together with its method of installation and screening, must be
approved in writing by Landlord in advance. 
At the expiration of the Term or sooner termination of the Lease, Tenant
shall leave the generator (in good working condition and repair) in the New
Premises and the generator, with its associated infrastructure and wiring,
shall automatically become the sole property of Landlord, free and clear of any
claims of Tenant or any other person. 
During the Term, Tenant, at its sole cost and expense, shall be solely
responsible for all maintenance, repairs, replacements, risk of loss and other
costs, expenses, fees and charges related to the generator, and Landlord shall
have absolutely no responsibility or liability therefor.


 


10.                                 Extension
Option.  Subject to Subsection B
below, Tenant may at its option extend the Term for one (1) period of two (2)
years (the “Renewal Term”).  The
Renewal Term shall be upon the same terms contained in the Lease (as amended by
this Amendment) excluding the provisions of Appendix C of the Lease and except
for the payment of Base Rent during the Renewal Term; and any reference in the
Lease to the “Term” of the Lease shall be deemed to include the Renewal Term
and apply thereto, unless it is expressly provided otherwise.  Tenant shall have no additional extension
options.


 


A.                                   The
Base Rent during the Renewal Term shall be the greater of (i) the Base Rent
applicable to the last day of the final Lease Year prior to the Renewal Term,
or (ii) 100% of the Market Rate (defined hereinafter) for such space for a term
commencing on the first day of the Renewal Term.  “Market Rate” shall mean the then prevailing market rate
for a comparable term commencing on the first day of the Renewal Term for
tenants of comparable size and creditworthiness for comparable space in the
Building and other first class office buildings in the vicinity of the
Building.


 


B.                                     To
exercise its option, Tenant must deliver a binding notice to Landlord prior to
January 1, 2008.  Thereafter, the Market
Rate for the Renewal Term shall be calculated


 


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pursuant to
Subsection C below and Landlord shall inform Tenant of the Market Rate.  Such calculations shall be final and shall
not be recalculated at the actual commencement of the Renewal Term.  If Tenant fails to timely give its notice of
exercise, Tenant will be deemed to have waived its option to extend.


 


C.                                     Market
Rate shall be determined as follows:


 


(i)                                     If
Tenant provides Landlord with its binding notice of exercise pursuant to
Subsection B above, then prior to February 1, 2008 Landlord shall calculate and
inform Tenant of the Market Rate.  If
Tenant rejects the Market Rate as calculated by Landlord, Tenant shall inform
Landlord of its rejection within ten (10) days after Tenant’s receipt of
Landlord’s calculation, and Landlord and Tenant shall commence negotiations to
agree upon the Market Rate.  If Tenant
fails to timely reject Landlord’s calculation of the Market Rate it will be
deemed to have accepted such calculation. 
If Landlord and Tenant are unable to reach agreement within twenty-one
(21) days after Landlord’s receipt of Tenant’s notice of rejection, then the
Market Rate shall be determined in accordance with (ii) below.


 


(ii)                                  If
Landlord and Tenant are unable to reach agreement on the Market Rate within
said twenty-one (21) day period, then within seven (7) days, Landlord and Tenant
shall each simultaneously submit to the other in a sealed envelope their good
faith estimate of the Market Rate.  If
the higher of such estimates is not more than one hundred five percent (105%)
of the lower, then the Market Rate shall be the average of the two.  Otherwise, the dispute shall be resolved by
arbitration in accordance with (iii) and (iv) below.


 


(iii)                               Within
seven (7) days after the exchange of estimates, the parties shall select as an
arbitrator an independent MAI appraiser with at least five (5) years of
experience in appraising office space in the metropolitan area in which the
Project is located (a “Qualified Appraiser”).  If the parties cannot agree on a Qualified Appraiser, then within
a second period of seven (7) days, each shall select a Qualified Appraiser and
within ten (10) days thereafter the two appointed Qualified Appraisers shall
select a third Qualified Appraiser and the third Qualified Appraiser shall be
the sole arbitrator.  If one party shall
fail to select a Qualified Appraiser within the second seven (7) day period,
then the Qualified Appraiser chosen by the other party shall be the sole
arbitrator.


 


(iv)                              Within
twenty-one (21) days after submission of the matter to the arbitrator, the
arbitrator shall determine the Market Rate by choosing whichever of the
estimates submitted by Landlord and Tenant the arbitrator judges to be more
accurate.  The arbitrator shall notify
Landlord and Tenant of its decision, which shall be final and binding.  If the arbitrator believes that expert
advice would materially assist him, the arbitrator may retain one or more
qualified persons to provide expert advice. 
The fees of the arbitrator and the expenses of the arbitration
proceeding, including the fees of any expert witnesses retained by the
arbitrator, shall be paid by the party whose estimate is not selected.  Each party shall pay the fees of its
respective counsel and the fees of any witness called by that party.


 


4

















 


D.                                    Tenant’s
option to extend the Lease is subject to the conditions that:  (i) on the date that Tenant delivers its
binding notice exercising an option to extend, Tenant is not in default under
the Lease after the expiration of any applicable notice and cure periods, and
(ii) Tenant shall not have assigned the Lease, or sublet any portion of the New
Premises under a sublease which is effective at any time during the final
twelve (12) months of the five-year Term.


 


11.                                 Right
of First Offer.  Subject to
Subsection B below, and subject to any expansion or renewal options of any
current tenant in the Building (a “Prior Tenant”), or the right of
Landlord to extend the lease of any Prior Tenant, Landlord hereby grants to
Tenant for the Term a right of first offer for any space that becomes available
in the Building during the Term (collectively, the “ROFO Space”), to be
exercised in accordance with Subsection A below.


 


A.                                   If
any ROFO Space becomes available for lease to anyone other than a Prior Tenant,
Landlord shall so notify Tenant (“Landlord’s ROFO Notice”) identifying
the available ROFO Space (the “Subject ROFO Space”).  Landlord’s ROFO Notice may be given up to
sixteen (16) months in advance of such availability and shall contain the terms
upon which Landlord intends to offer the Subject ROFO Space for lease to the
market.  Tenant shall notify Landlord
within ten (10) days of receipt of Landlord’s ROFO Notice whether it desires to
lease the Subject ROFO Space on the terms set forth in Landlord’s ROFO
Notice.  If Tenant does not notify
Landlord within said 10-day period that it will lease the Subject ROFO Space,
Tenant shall be deemed to have refused the Subject ROFO Space.  After any refusal, Tenant shall have no
further right of first offer for such Subject ROFO Space and Landlord shall be
free to lease such space to any party for any term and upon any terms it
desires.  If Tenant exercises its right
of first offer with respect to the Subject ROFO Space, such space shall be
added to the New Premises for all purposes of the Lease for the remaining Term
of the Lease (but in no event less than three (3) years) on the terms specified
in Landlord’s ROFO Notice, and (b) the terms of the Lease to the extent that
they do not conflict with the terms specified in Landlord’s ROFO Notice.


 


B.                                     Tenant’s
right of first offer is subject to the conditions that:  (i) on the date that Tenant delivers its
notice exercising its right of first offer, Tenant is not in default under the
Lease after the expiration of any applicable notice and cure periods, and (ii)
Tenant shall not have assigned the Lease, or sublet any portion of the New
Premises under a sublease which is in effect at any time during the period
commencing with Tenant’s delivery of its notice and ending on the date the ROFO
Space is added to the New Premises.


 


C.                                     Promptly
after Tenant’s exercise of its right of first offer, Landlord shall execute and
deliver to Tenant an amendment to the Lease to reflect changes in the New
Premises, Base Rent, Tenant’s Proportionate Share and any other appropriate
terms changed by the addition of the ROFO Space.  Within 15 days thereafter, Tenant shall execute and return the
amendment.


 


12.                                 Notices.  The notice addresses for Landlord set forth
in Section 23 of the Lease are revised to read as follows:


 


5

















 


	
   

  	
  CarrAmerica
  Realty, L.P.

  	
   

  
	
   

  	
  7600 East
  Orchard Road

  	
   

  
	
   

  	
  Suite 370
  South

  	
   

  
	
   

  	
  Greenwood
  Village, Colorado 80111

  	
   

  
	
   

  	
  Attn:  Market Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  with a copy
  to:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CarrAmerica
  Realty Corporation

  	
   

  
	
   

  	
  1850 K
  Street, N.W., Suite 500

  	
   

  
	
   

  	
  Washington,
  D.C. 20006

  	
   

  
	
   

  	
  Attn:  Lease Administration

  	
   

  



 


13.                                 Appendix
A.  Appendix A attached to the Lease
is replaced with the attached Appendix A.


 


14.                                 Condition
of New Premises.  Landlord
represents and warrants to Tenant that, to Landlord’s current, actual
knowledge, (a) the existing plumbing, electrical, HVAC system, exterior walls,
foundation, roof and load-bearing walls of the New Premises are in good working
order, and (b) the structural integrity of the New Premises is free from any
patent or latent defects.


 


15.                                 General
Provisions.  In the event of any
conflict between the provisions of the Lease and the provisions of this
Amendment, the provisions of this Amendment shall control.  As modified by this Amendment, the Lease and
all of Tenant’s obligations under the Lease are ratified and affirmed in their
entirety.  This Amendment shall inure to
the benefit of, and be binding on, Landlord and Tenant and their respective
successors and assigns.  This Amendment
shall be governed by, and construed and interpreted in accordance with, the
laws (excluding the choice of laws rules) of the State of Utah.  This Amendment may be executed in any number
of duplicate originals or counterparts, each of which when so executed shall
constitute in the aggregate but one and the same document.  Each individual executing this Amendment
represents and warrants that such individual has been duly authorized to
execute and deliver this Amendment in the capacity and for the entity set forth
where such individual signs.


 


6

















 


LANDLORD AND TENANT have executed this Amendment on the respective
dates set forth below, to be effective as of the date first set forth above.


 


 


	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  CARRAMERICA REALTY, L.P.,

  
	
   

  	
  a Delaware limited partnership,

  by its general partner:

  
	
   

  	
   

  
	
   

  	
  CARRAMERICA REALTY GP HOLDINGS, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/
  Illegible

  
	
   

  	
   

  
	
   

  	
  Its

  	
   Managing Director

  
	
   

  	
   

  
	
   

  	
  Date

  	
   5/1/03

  
	
   

  	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  MUSICIAN’S FRIEND, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   /s/
  Robert Eastman

  
	
   

  	
   

  
	
   

  	
  Print or Type Name of Signatory:

  
	
   

  	
   

  
	
   

  	
  Robert Eastman

  
	
   

  	
   

  
	
   

  	
  Its

  	
   CEO

  
	
   

  	
   

  
	
   

  	
  Date

  	
   4/23/03

  
						



 


7

















 


APPENDIX A


 


to


 


SECOND
AMENDMENT TO LEASE


 


NEW PREMISES


 


The New Premises referred to in the foregoing instrument are shown on
the attachment.


 


8

















 


APPENDIX B


 


to


 


SECOND
AMENDMENT TO LEASE


 


SPACE PLAN


 


The space plan referred to in the foregoing instrument is attached.


 


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