(0000 XXXX XXXXX XXXXXX, XXXXXXXX, XXXX LOCATION)
LEASE AGREEMENT
BY
WEST BROAD DEVELOPMENT, LLC
("LESSOR")
AND
TUMBLEWEED, LLC
("LESSEE")
August 28, 1997
SUMMARY OF SELECTED LEASE PROVISIONS
(3780 WEST BROAD STREET, COLUMBUS, OHIO)
IMPORTANT NOTICE
This Summary is for convenience and reference only. It is merely a summary
and, therefore, is incomplete. Furthermore, this Summary is subject to the
provisions of the Lease in its entirety. In the event of any conflict between
the provisions of this Summary and any of the provisions of the Lease, the
Lease provisions shall govern.
LESSOR . . . . . . . . . . . . . West Broad Development, LLC
LESSEE . . . . . . . . . . . . . Tumbleweed, LLC
LEASED PREMISES. . . . . . . . . Approximately 0.517 acre located as an
outparcel at 0000 Xxxx Xxxxx Xxxxxx,
Xxxxxxxx, Xxxx (SEE EXHIBIT A for detailed
description)
INITIAL TERM . . . . . . . . . . 20 Years From Full Base Rent Commencement
Date
RENEWAL TERMS. . . . . . . . . . Two (2) Five Year Renewal Terms
BASE RENT BEFORE FULL BASE
RENT COMMENCEMENT DATE . . . . . Amount equal to interest on the Total Lessor
Investment during such period at a rate equal
to the Agreed Rental Factor
BASE RENT AFTER THE FULL BASE
RENT COMMENCEMENT DATE . . . . . Initial Term: $10,000 per month ($120,000
annualized) Renewal Terms: $10,000 per month
($120,000 annualized) PLUS CPI Increase
(Based on increase in CPI for last year of
preceding Initial Term or Renewal Term OVER
CPI for first year of preceding Initial Term
or Renewal Term)
PERCENTAGE RENT. . . . . . . . . 5% of Restaurant's Gross Sales (over Base
Rent, payable within 60 days after the end of
each year)
INSURANCE. . . . . . . . . . . . To be provided by Lessee
UTILITIES. . . . . . . . . . . . To be provided by Lessee
REAL PROPERTY TAXES. . . . . . . To be paid by Lessee
MAINTENANCE. . . . . . . . . . . To be provided by Lessee
LESSEE'S OBLIGATION TO BUILD . . Lessee to renovate restaurant per agreed
specifications and directions at a reimbursed
cost by Lessor not to exceed $1,000,000 LESS
Direct Lessor Expenditures
_______________________________________________________________________________
Summary of Selected Provisions - Page i
LEASE AGREEMENT
(0000 XXXX XXXXX XXXXXX, XXXXXXXX, XXXX LOCATION)
TABLE OF CONTENTS
1 GRANT OF LEASED PREMISES; ACQUISITION CONTINGENCY. . . . . . . . . . . . .1
1.1 PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 ACQUISITION CONTINGENCY. . . . . . . . . . . . . . . . . . . . . . 1
2 TERM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 COMMENCEMENT AND EXPIRATION OF TERM. . . . . . . . . . . . . . . . 2
(a) INITIAL TERM . . . . . . . . . . . . . . . . . . . . . . . . . . 2
(b) RENEWAL TERMS. . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 HOLDING OVER . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3 RENT; SECURITY DEPOSIT. . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.1 Base Rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
(a) DETERMINATION OF BASE RENT . . . . . . . . . . . . . . . . . . . 3
(b) TOTAL LESSOR INVESTMENT. . . . . . . . . . . . . . . . . . . . . 3
(c) AGREED RENTAL FACTOR . . . . . . . . . . . . . . . . . . . . . . 4
(d) PAYMENT OF THE BASE RENT . . . . . . . . . . . . . . . . . . . . 4
(e) CPI INCREASE . . . . . . . . . . . . . . . . . . . . . . . . . . 5
(f) STATED PORTION OF THE BASE RENT. . . . . . . . . . . . . . . . . 5
(g) CPI INDEX. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.2 PERCENTAGE RENT. . . . . . . . . . . . . . . . . . . . . . . . . . 5
(a) DETERMINATION OF PERCENTAGE RENT . . . . . . . . . . . . . . . . 5
(b) DEFINITION OF GROSS SALES. . . . . . . . . . . . . . . . . . . . 6
(c) REPORTS OF SALES . . . . . . . . . . . . . . . . . . . . . . . . 6
(d) RECORD OF SALES; INSPECTIONS AND AUDITS. . . . . . . . . . . . . 7
(e) PAYMENT OF PERCENTAGE RENT . . . . . . . . . . . . . . . . . . . 7
(f) RETAIL RESTRICTION LIMIT/FAILURE TO OPERATE. . . . . . . . . . . 7
3.3 ADDITIONAL RENT. . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.4 DELINQUENT RENT; LATE CHARGE . . . . . . . . . . . . . . . . . . . 8
3.5 SECURITY DEPOSIT . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.6 SURVIVAL OF OBLIGATION TO PAY RENT . . . . . . . . . . . . . . . . 8
4 USE OF THE LEASED PREMISES; QUIET ENJOYMENT . . . . . . . . . . . . . . . 9
4.1 GENERAL PURPOSES . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2 COMPLIANCE WITH LAWS . . . . . . . . . . . . . . . . . . . . . . . 9
4.3 HAZARDS AND WASTE. . . . . . . . . . . . . . . . . . . . . . . . . 9
4.4 GENERAL REPRESENTATIONS AND WARRANTIES OF LESSOR; QUIET ENJOYMENT. 9
(a) POWER AND AUTHORITY. . . . . . . . . . . . . . . . . . . . . . . 9
_______________________________________________________________________________
Table of Contents - Page ii
LEASE AGREEMENT
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TABLE OF CONTENTS
(b) LIENS AND ENCUMBRANCES . . . . . . . . . . . . . . . . . . . . . 9
(c) QUIET ENJOYMENT. . . . . . . . . . . . . . . . . . . . . . . . . 10
(d) TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5 INSURANCE; INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . 10
5.1 FIRE AND HAZARD INSURANCE. . . . . . . . . . . . . . . . . . . . . 10
5.2 LIABILITY INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . 10
5.3 WORKERS' COMPENSATION AND UNEMPLOYMENT CONTRIBUTIONS . . . . . . . 11
5.4 OTHER INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.5 CERTIFICATES OF INSURANCE. . . . . . . . . . . . . . . . . . . . . 11
5.6 WAIVER OF SUBROGATION. . . . . . . . . . . . . . . . . . . . . . . 11
5.7 INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . 12
6 RECONSTRUCTION AND EMINENT DOMAIN . . . . . . . . . . . . . . . . . . . . 12
6.1 CASUALTY, DESTRUCTION OR DAMAGE TO THE LEASED PREMISES . . . . . . 12
(a) GENERAL OBLIGATION TO REPAIR; CERTAIN RIGHTS OF LESSEE TO
TERMINATE LEASE. . . . . . . . . . . . . . . . . . . . . . . . . 12
(b) DAMAGE AND REPAIR. . . . . . . . . . . . . . . . . . . . . . . . 13
(c) SPECIFICATIONS AND APPROVALS . . . . . . . . . . . . . . . . . . 13
(d) INSURANCE PROCEEDS ESCROW. . . . . . . . . . . . . . . . . . . . 14
(e) MORTGAGES. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(f) CONTINUATION OF LEASE. . . . . . . . . . . . . . . . . . . . . . 14
(g) NO REDUCTION OF RENT . . . . . . . . . . . . . . . . . . . . . . 14
(h) LESSEE'S CONTINUING OBLIGATION TO INSURE . . . . . . . . . . . . 15
6.2 EMINENT DOMAIN . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(a) TERMINATION OF LEASE AS TO PORTION OF LEASED PREMISES TAKEN. . . 15
(b) TAKING OF LESS THAN A SUBSTANTIAL PORTION OF THE LEASED PREMISES 15
(c) TAKING OF A SUBSTANTIAL PORTION OF THE LEASED PREMISES . . . . . 15
(d) SUBSTANTIAL PORTION. . . . . . . . . . . . . . . . . . . . . . . 15
(e) CONTESTING TAKING; ALLOCATION OF PROCEEDS. . . . . . . . . . . . 16
7 UTILITIES; MAINTENANCE, ALTERATIONS AND REPAIRS; CONSTRUCTION OF
SPECIFIED BUILDING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.1 UTILITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.2 MAINTENANCE AND REPAIRS. . . . . . . . . . . . . . . . . . . . . . 16
(a) LESSEE'S GENERAL OBLIGATION TO MAINTAIN. . . . . . . . . . . . . 16
(b) SPECIFIC MAINTENANCE OBLIGATIONS OF LESSEE . . . . . . . . . . . 17
(c) WAIVER OF LESSOR LIABILITY . . . . . . . . . . . . . . . . . . . 17
7.3 ALTERATIONS BY LESSEE. . . . . . . . . . . . . . . . . . . . . . . 17
(a) NONSTRUCTURAL INTERIOR ALTERATIONS . . . . . . . . . . . . . . . 17
(b) STRUCTURAL ALTERATIONS . . . . . . . . . . . . . . . . . . . . . 17
_______________________________________________________________________________
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LEASE AGREEMENT
(0000 XXXX XXXXX XXXXXX, XXXXXXXX, XXXX LOCATION)
TABLE OF CONTENTS
(c) ALTERATIONS BECOME PART OF LEASED PREMISES . . . . . . . . . . . 18
7.4 MECHANICS OR MATERIALMEN'S LIENS . . . . . . . . . . . . . . . . . 18
7.5 SIGNS AND OTHER TRADE FIXTURES . . . . . . . . . . . . . . . . . . 18
7.6 LESSOR'S RIGHT OF ENTRY. . . . . . . . . . . . . . . . . . . . . . 18
7.7 CONSTRUCTION OF SPECIFIED BUILDING.. . . . . . . . . . . . . . . . 19
(a) LESSEE'S OBLIGATION TO CONSTRUCT SPECIFIED BUILDING. . . . . . . 19
(b) COMMENCEMENT AND COMPLETION OF CONSTRUCTION. . . . . . . . . . . 19
(c) LESSEE'S EQUIPMENT AND TRADE FIXTURES. . . . . . . . . . . . . . 20
(d) LESSEE'S PAYMENT OF EXCESS CONSTRUCTION COSTS WITHOUT
REIMBURSEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . 20
(e) WAIVER OF LESSOR LIABILITY WITH RESPECT TO CONSTRUCTION. . . . . 20
8 TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
8.1 ADDITIONAL RENT FOR REAL PROPERTY TAXES. . . . . . . . . . . . . . 21
(a) LESSEE OBLIGATION TO PAY REAL PROPERTY TAXES . . . . . . . . . . 21
(b) NOTICE AND PAYMENT . . . . . . . . . . . . . . . . . . . . . . . 21
8.2 PERSONAL PROPERTY TAXES. . . . . . . . . . . . . . . . . . . . . . 21
8.3 INCOME AND OTHER TAXES . . . . . . . . . . . . . . . . . . . . . . 21
9 ESTOPPEL CERTIFICATES; SUBORDINATION; ATTORNMENT. . . . . . . . . . . . . 22
9.1 ESTOPPEL CERTIFICATE . . . . . . . . . . . . . . . . . . . . . . . 22
(a) LESSEE'S OBLIGATION TO EXECUTE ESTOPPEL CERTIFICATE WHEN
REQUESTED. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
(b) FAILURE OF LESSEE TO DELIVER ESTOPPEL CERTIFICATE. . . . . . . . 22
(c) LESSEE OBLIGATION TO FURNISH FINANCIAL AND TAX INFORMATION TO
LENDERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.2 MORTGAGE SUBORDINATION . . . . . . . . . . . . . . . . . . . . . . 23
9.3 NONDISTURBANCE AGREEMENTS. . . . . . . . . . . . . . . . . . . . . 23
9.4 DEFAULT OF LESSOR UNDER MORTGAGES. . . . . . . . . . . . . . . . . 23
9.5 LESSEE'S NOTICE TO MORTGAGEES OF LESSOR'S DEFAULTS UNDER THIS
LEASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10 DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
10.1 DEFAULT BY LESSEE; REMEDIES . . . . . . . . . . . . . . . . . . . 24
(a) MATERIAL DEFAULT AND BREACH BY LESSEE. . . . . . . . . . . . . . 24
(b) LESSOR'S REMEDIES UPON DEFAULT BY LESSEE . . . . . . . . . . . . 25
10.2 DEFAULT BY LESSOR . . . . . . . . . . . . . . . . . . . . . . . . 27
(a) MATERIAL DEFAULT AND BREACH BY LESSOR. . . . . . . . . . . . . . 27
(b) LESSEE'S REMEDIES UPON DEFAULT BY LESSOR . . . . . . . . . . . . 27
10.3 REMEDIES CUMULATIVE . . . . . . . . . . . . . . . . . . . . . . . 28
10.4 ATTORNEY FEES AND COSTS . . . . . . . . . . . . . . . . . . . . . 28
10.5 FORCE MAJEURE . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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Table of Contents - Page iv
LEASE AGREEMENT
(0000 XXXX XXXXX XXXXXX, XXXXXXXX, XXXX LOCATION)
TABLE OF CONTENTS
10.6 WAIVER OF CERTAIN DEFENSES. . . . . . . . . . . . . . . . . . . . 29
11 RIGHT OF FIRST REFUSAL . . . . . . . . . . . . . . . . . . . . . . . . . 29
11.1 EXERCISE OF RIGHT OF FIRST REFUSAL. . . . . . . . . . . . . . . . 29
11.2 FAILURE TO EXERCISE RIGHT OF FIRST REFUSAL. . . . . . . . . . . . 29
11.3 TRANSFER OF EQUITY INTERESTS IN LESSOR. . . . . . . . . . . . . . 29
11.4 TRANSFERS TO RELATED PARTIES EXCLUDED . . . . . . . . . . . . . . 30
12 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
12.1 ASSIGNMENT OR SUBLETTING. . . . . . . . . . . . . . . . . . . . . 30
12.2 SUCCESSOR LESSOR'S LIABILITY. . . . . . . . . . . . . . . . . . . 31
12.3 RELATIONSHIP OF THE PARTIES . . . . . . . . . . . . . . . . . . . 31
12.4 ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . 31
12.5 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
(a) DELIVERY OF NOTICE . . . . . . . . . . . . . . . . . . . . . . . 31
(b) EFFECTIVE DATE OF NOTICE; RESPONSE PERIOD. . . . . . . . . . . . 32
12.6 NO WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
12.7 SEVERABILITY AND INVALIDITY . . . . . . . . . . . . . . . . . . . 33
12.8 CAPTIONS, HEADINGS AND SUMMARY. . . . . . . . . . . . . . . . . . 33
12.9 SUCCESSORS AND PERMITTED ASSIGNS. . . . . . . . . . . . . . . . . 33
12.10 GENDER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
12.11 RECORDING. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
12.12 GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . 34
12.13 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . 34
12.14 FURTHER ASSURANCES . . . . . . . . . . . . . . . . . . . . . . . 34
12.15 TRIPLE NET LEASE . . . . . . . . . . . . . . . . . . . . . . . . 34
_______________________________________________________________________________
Table of Contents - Page v
LEASE AGREEMENT
(0000 XXXX XXXXX, XXXXXXXX XXXX LOCATION)
INDEX OF DEFINED TERMS
--A--
ADDITIONAL RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
AGREED RENTAL FACTOR. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ANNUAL GROSS SALES STATEMENT. . . . . . . . . . . . . . . . . . . . . . . 6
--B--
BANK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
BASE RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
--C--
CPI INCREASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
CPI INDEX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
--D--
DIRECT LESSOR EXPENDITURES. . . . . . . . . . . . . . . . . . . . . . . . 4
--F--
FULL BASE RENT COMMENCEMENT DATE. . . . . . . . . . . . . . . . . . . . . 3
--G--
GROSS SALES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
--I--
INITIAL TERM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
--L--
LATE NOTICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
LEASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
LEASED PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
LESSEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
LESSEE'S WORK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
LESSOR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 29
LESSOR REIMBURSEMENT EXPENDITURES . . . . . . . . . . . . . . . . . . . . 4
--M--
MORTGAGE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
MORTGAGEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
MORTGAGES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
--P--
PERCENTAGE RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
PLANS AND SPECIFICATIONS. . . . . . . . . . . . . . . . . . . . . . . . . 18
PRIME RATE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
PROJECT ARCHITECT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
--R--
REAL ESTATE SALES CONTRACT. . . . . . . . . . . . . . . . . . . . . . . . 1
REAL PROPERTY TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
RELATED PARTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
RENEWAL TERM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
RENEWAL TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
RESTAURANT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
--S--
SPECIFIED BUILDING. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
STATED PORTION OF THE BASE RENT . . . . . . . . . . . . . . . . . . . . . 5
SUBSTANTIAL PORTION . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
--T--
TOTAL LESSOR INVESTMENT . . . . . . . . . . . . . . . . . . . . . . . . . 3
TRADE FIXTURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
______________________________________________________________________________
Index of Defined Terms - Page 6
LEASE AGREEMENT
THIS LEASE AGREEMENT ("LEASE") is made and entered into as of the ___
day of __________________, 1997, BY AND BETWEEN (i) WEST BROAD DEVELOPMENT, a
Kentucky limited liability company (the "LESSOR"), AND (ii) TUMBLEWEED, LLC,
a Kentucky limited liability company (the "LESSEE").
WITNESSETH:
IN CONSIDERATION OF the mutual covenants and agreements herein
contained, the parties agree as follows:
ARTICLE
1
GRANT OF LEASED PREMISES; ACQUISITION CONTINGENCY
________________________________________
1.1 PREMISES
Lessor hereby leases to Lessee, and Lessee hereby leases from
Lessor, for the term, at the rental and upon all of the conditions set forth
herein, that certain real property, consisting of approximately 0.517 ACRES,
generally referred to as an outparcel located at 0000 XXXX XXXXX XXXXXX,
XXXXXXXX, XXXX, and more particularly described on EXHIBIT A attached hereto,
and all improvements thereon and fixtures and appurtenances thereto,
INCLUDING, BUT NOT LIMITED TO, any fixtures, buildings, or other improvements
or alterations constructed, added, or made by Lessor or Lessee during the
Term (as hereinafter defined) in accordance with the provisions of this Lease
and all of Lessor's easements and appurtenances in, over, and upon adjoining
and adjacent public and private land, xxxxxxxx, xxxxx, xxxxxxx, xxxxx and
other areas reasonably required for ingress and egress and for the
installation, maintenance, operation and service of utilities (the "LEASED
PREMISES").
1.2 ACQUISITION CONTINGENCY
Notwithstanding any other provision of this Lease which might be
construed to the contrary, this Lease is contingent upon the acquisition of
the Leased Premises by Lessor pursuant to that certain REAL ESTATE SALES
CONTRACT dated MARCH 10, 1997, between Lessor, as the assignee of the
purchaser thereunder, and MID-AMERICA RESTAURANT VENTURES, INC., as seller
thereunder (the "REAL ESTATE SALES CONTRACT"). Lessee acknowledges receipt of
a true and complete copy of the Real Estate Sales Contract. If such
acquisition of the Leased Premises by Lessor does not occur, then this Lease
shall be null and void and neither party shall have any obligation of
performance to the other party under this Lease.
_______________________________________________________________________________
Text of Agreement - Page 1
ARTICLE
2
TERM
________________________________________
2.1 COMMENCEMENT AND EXPIRATION OF TERM.
(a) INITIAL TERM
The Initial Term of this Lease shall commence as of the Full
Base Rent Commencement Date (as hereinafter defined) and shall end on the LAST
DAY OF THE 240TH CALENDAR MONTH following the Full Base Rent Commencement Date,
unless sooner terminated in accordance with the terms and conditions set forth
herein (the "INITIAL TERM").
(b) RENEWAL TERMS
The term of this Lease shall be automatically renewed for two
successive additional periods of 60 MONTHS each (collectively, the "RENEWAL
TERMS" and each individually, a "RENEWAL TERM") upon the expiration of each of
the Initial Term and the first Renewal Term (the Initial Term and all Renewal
Terms are collectively referred to as the "TERM") unless, at least 180 DAYS
prior to the expiration of the Initial Term or the first Renewal Term, Lessee
gives written notice to Lessor that the Term will end at the expiration of such
period. This Lease shall not be renewable at the end of the second Renewal Term
unless amended in writing to provide for such renewal. the renewal of this Lease
shall not be deemed to correct or obviate the need to correct any default
hereunder, and such renewal shall not affect in any way the right of either
party under this Lease to exercise any of such party's rights or remedies in the
event of a default by the other party either before or after the effective date
of such renewal.
2.2 HOLDING OVER
In the absence of a written agreement to the contrary or written
renewal of this Lease, if Lessee remains in possession of the Leased Premises
after the expiration of the Term or the sooner termination of this Lease,
Lessee, at the option of Lessor, shall be deemed to be occupying the Leased
Premises as a tenant from month-to-month, subject to all of the conditions,
provisions and obligations of this Lease insofar as the same are applicable to a
month-to-month tenancy, and either party may terminate such month-to-month
tenancy on 30 DAYS' notice to the other.
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ARTICLE
3
RENT; SECURITY DEPOSIT
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3.1 BASE RENT
(a) DETERMINATION OF BASE RENT
Lessee shall pay Lessor a minimum guaranteed rental (the "BASE
RENT") with respect to each month during the Term determined in accordance with
the following schedule (PROVIDED, HOWEVER, that the Base Rent for any partial
month during the Term shall be prorated in accordance with the ratio of the
number of days of such month within the Term to the total number of days of such
month):
PERIOD BASE RENT
During the Term, but Amount equal to interest on the Total Lessor
before Full Base Rent Investment (as hereinafter defined) during such
Commencement Date(2) period at a rate equal to the Agreed Rental Factor
(as hereinafter defined)
During the Initial Term, $10,000 per month (1)
but after Full Base Rent
Commencement Date(2)
During the Renewal Terms $10,000 per month (1) plus CPI Increase (as
hereinafter defined)
(1) Adjusted to 12% of Total Lessor Investment (as hereinafter defined)
if Total Lessor Investment is less than $1,000,000.00.
(2) The FULL BASE RENT COMMENCEMENT DATE shall mean THE EARLIER TO
OCCUR OF (i) the date Lessee first derives revenues from the sale
of food and beverages in the ordinary course of its Restaurant
business upon the Leased Premises OR (ii) 180 days after Lessee
first commences LESSEE'S WORK (defined below).
(b) TOTAL LESSOR INVESTMENT
For all purposes of this Lease, the term "TOTAL LESSOR
INVESTMENT" as of any date shall mean THE SUM OF (i) the amounts paid by
LESSOR through such date in connection with the purchase and acquisition of
the Leased Premises, INCLUDING, BUT NOT LIMITED TO, "soft costs" such as
legal fees, title, environmental assessment, and survey expenses, real estate
agent and broker commissions, permit and license fees, engineering fees, and
architectural fees, and the costs of Lessor's demolishing and hauling away
the front porch patio area if the
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Text of Agreement - Page 3
restrictions prohibiting such area are not removed prior to construction of
the Specified Building (the "DIRECT LESSOR EXPENDITURES"), it being agreed by
lessor and lessee that the amount of such Direct Lessor Expenditures
(EXCLUSIVE of the acquisition purchase price paid by Lessor to the seller of
the Leased Premises) shall conclusively be $65,000.00 in the aggregate, (ii)
the amounts paid by Lessor to Lessee as reimbursement for Lessee's Work with
respect to the Specified Building as hereinafter provided (the "LESSOR
REIMBURSEMENT EXPENDITURES," AND (iii) any amounts treated as part of the
Total Lessor Investment pursuant to the provisions of Section 7.7(b) hereof.
Notwithstanding any other provision of this Lease which might be construed to
the contrary, it is the parties' intention and agreement that the Total
Lessor Investment, in the aggregate, will not exceed the sum of $1,000,000.00
at any time, and at no time shall Lessor have any obligation to pay any
amount to Lessee as a Lessor Reimbursement Expenditure to the extent that
such payment would cause the Total Lessor Investment as of such time to
exceed the sum of $1,000,000.00.
(c) AGREED RENTAL FACTOR
For all purposes of this Lease, the term "AGREED RENTAL
FACTOR" to be applied with respect to any funds constituting a part of the Total
Lessor Investment during any period shall mean a rate equal to THE GREATER OF
(i) the interest rate per annum paid by Lessor to a bank or other commercial
lending institution with respect to such funds, if and to the extent such funds
have been borrowed by Lessor, PLUS 1% PER ANNUM, OR (ii) the interest rate per
annum most recently designated by BANK OF LOUISVILLE AND TRUST COMPANY,
Louisville, Kentucky (the "BANK"), as its "Prime Rate" in effect during such
period, as the same may be changed from time to time by the Bank during such
period (the "PRIME RATE"), PLUS 1% PER ANNUM.
(d) PAYMENT OF THE BASE RENT
Before the Full Base Rent Commencement Date, the Base Rent
shall be due and payable on a monthly basis, within FIVE (5) DAYS following
demand by Lessor setting forth the amount thereof based on the outstanding
balance of the Total Lessor Investment during the immediately preceding calendar
month and the applicable Agreed Rental Factor with respect thereto. After the
Full Base Rent Commencement Date, the Base Rent shall be due and payable in
advance on the 1st day of such month, without prior demand therefor. Unless
otherwise directed by Lessor in writing, Lessee shall pay the Base Rent due and
payable at any time to Lessor at the address for Lessor which is then applicable
as to notices under the provisions of Section 12.5 below.
(e) CPI INCREASE
For all purposes of this Agreement, the term "CPI INCREASE"
with respect to each Renewal Period shall mean an amount WHICH BEARS THE SAME
RATIO TO
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the Stated Portion of the Base Rent (as hereinafter defined) with respect to
such Renewal Period AS the CPI Index (as hereinafter defined) for the last
year of the Initial Term or Renewal Term, as the case may be, immediately
preceding such Renewal Term BEARS TO the CPI Index for the first year of such
Initial Term or Renewal Term, as the case may be, preceding such Renewal Term.
(f) STATED PORTION OF THE BASE RENT
For all purposes of this Agreement, the term "STATED PORTION
OF THE BASE RENT" with respect to the Base Rent for any Renewal Period shall
mean the portion of such Base Rent determined without regard to any CPI Increase
(I.E., the fixed dollar amount of the Base Rent as set forth in the schedule set
forth above with respect to such Renewal Period).
(g) CPI INDEX
For all purposes of this Agreement, the term "CPI INDEX" for
any year shall mean the simple average CONSUMER PRICE INDEX FOR ALL ITEMS AND
MAJOR GROUP FIGURES FOR ALL URBAN CONSUMERS, as published by the Bureau of Labor
Statistics, U.S. Department of Labor, with respect to such year. Accordingly,
(i) if such consumer price index is published monthly, the CPI Index will be the
simple average of the 12 indices so published, (ii) if such consumer price index
is published quarterly, the CPI Index will be the simple average of the 4
indices so published, AND (iii) if such consumer price index is published only
annually, the CPI Index will be the index so published. If there is no such
consumer price index published with respect to any year, then its successor (or
if no such successor exists, the most comparable index thereto) shall be used
and applied on a reasonably consistent and equitable basis.
3.2 PERCENTAGE RENT
(a) DETERMINATION OF PERCENTAGE RENT
In addition to the Base Rent, Lessee shall pay to Lessor, as a
percentage rental (the "PERCENTAGE RENT") with respect to each year (or partial
year) during the Term of this Lease, an amount equal to 5% of Lessee's Gross
Sales during such year ONLY to the extent such Percentage Rent exceeds the
Stated Base Rent applicable for such calendar year.
(b) DEFINITION OF GROSS SALES
The term "GROSS SALES" with respect to any year (or partial
year) during the Term shall mean the aggregate gross sales price of all food,
beverages, merchandise, vending machine sales, and any other items sold, and all
charges for services performed by Lessor or by any tenants, licensees, or
concessionaires of
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Lessor, in, from, or with respect to the Leased Premises, whether for cash,
on credit, or otherwise, EXCLUDING, HOWEVER, (i) any rental tax, sales tax,
gross receipts tax, or similar tax by whatever name called, the amount of
which is determined by the amount of sales made, and which Lessee may be
required to collect and account for to any governmental agency, (ii) any
transfers of food or beverages made by Lessee from the Leased Premises to any
other stores, warehouses, or commissaries of Lessee or its affiliated
companies or franchisees without xxxx-up or xxxxx profit, (iii) any credits
or refunds made to customers as a courtesy or for food, beverages, or other
merchandise or items returned, exchanged or deemed unsatisfactory, (iv) any
returns of food, beverages, or other merchandise or items to suppliers or
manufacturers, (v) the net amount of any discounts allowed to customers,
including discounts resulting from the issuance to customers of trading
stamps, receipts or coupons for food or beverages, AND (vi) any amounts
received by Lessee from the sale of Lessee's Trade Fixtures or other items
not held by Lessee for sale in the ordinary course of business.
(c) REPORTS OF SALES
At the time that the Percentage Rent is due and payable with
respect to each year (or partial year) during the Term, Lessee shall submit to
Lessor a written statement of the Gross Sales of Lessee with respect to such
year (or partial year), certified by an officer of Lessee (the "ANNUAL GROSS
SALES STATEMENT"), and, if requested by Lessor, such Annual Gross Sales
Statement shall be accompanied by copies of the sales tax returns filed by
Lessor with the Kentucky Revenue Cabinet with respect to the Gross Sales of
Lessee in, from, or with respect to the Leased Premises during such year (or
partial year); PROVIDED, HOWEVER, that if any such sales tax return is not
required to have been filed, and, in fact, has not been filed, at or before the
time that the Annual Gross Sales Statement is due to be delivered to Lessor
under this Lease, then such sales tax return shall be submitted to Lessor within
10 DAYS after it is filed. In addition, if requested by Lessor, Lessee shall,
within 20 DAYS following the end of each calendar month during the Term, furnish
to Lessor a monthly statement of the Gross Sales of Lessee during such calendar
month. Each Annual Gross Sales Statement and monthly statement of Gross Sales
shall be treated as confidential by Lessor.
(d) RECORD OF SALES; INSPECTIONS AND AUDITS
Lessee shall prepare and keep, at its principal place of
business, for a period of not less than THREE (3) YEARS, adequate books and
records (conforming to generally accepted accounting principles, consistently
applied) showing its Gross Sales for each calendar month throughout the Term.
Upon at least 10 DAYS' prior notice to Lessee, Lessor or Lessor's representative
may inspect and audit the records of the Lessee's Gross Sales during regular
business hours; PROVIDED, HOWEVER, that such inspection is commenced within
THREE (3) YEARS after the date that Lessor receives statements of Lessee's Gross
Sales and is limited to the period covered by such
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Text of Agreement - Page 6
statements. If such audit by Lessor discloses a deficiency in the Gross Sales
for such period, then Lessee shall promptly pay to Lessor (i) the amount of
such deficiency AND (ii) if the deficiency is EQUAL TO OR GREATER THAN 5% of
the amount of Gross Sales with respect to which Lessee paid Lessor Percentage
Rent, the reasonable cost of such audit. If the statements furnished by
Lessee during any two out of three consecutive Lease Years understate
Lessee's Gross Sales by 5% OR MORE in each of such two years, then Lessor
may, at Lessor's sole option and not in derogation, reduction or elimination
of any other rights or remedies of Lessor, terminate this Lease by notice to
Lessee, PROVIDED, HOWEVER, Lessor shall not have the right to so terminate if
the understatement was due to inadvertence or clerical error of which Lessee
had no knowledge.
(e) PAYMENT OF PERCENTAGE RENT
The Percentage Rent with respect to each year (or partial
year) during the Term of this Lease shall be due and payable within 60 DAYS
after the end of such year (or partial year), without prior demand therefor.
Unless otherwise directed by Lessor in writing, Lessee shall pay the Percentage
Rent due and payable at any time to Lessor at the address for Lessor which is
then applicable as to notices under the provisions of Section 12.5 below.
(f) RETAIL RESTRICTION LIMIT/FAILURE TO OPERATE
The parties acknowledge that the realization of the benefits
of the Percentage Rent are dependent upon Lessee maximizing its gross sales and
that failure to operate, or self-competition, is inconsistent with the
generation of appropriate levels of Percentage Rent. The parties further
acknowledge that Base Rent was negotiated together with, and giving
consideration to, the Percentage Rent and that self-competition or failure to
operate by Lessee will deprive Lessor of a bargained-for consideration.
Accordingly, Lessee covenants and agrees that during the Term (i) Lessee will
not, directly or indirectly, engage in any business similar to, or in
competition with, the business operated on the Leased Premises within a radius
of TWO (2) MILES from the Leased Premises AND (ii) Lessee shall use its
reasonable best efforts to operate its Restaurant (as hereinafter defined) in
the Leased Premises with reasonable due diligence and efficiency so as to
maximize, to the extent reasonably and economically feasible, the Percentage
Rent which may be produced by such manner of operation. Subject to matters
beyond the reasonable control of Lessee, Lessee shall carry at all times in the
Leased Premises such inventories of food, liquor, and other goods as shall be
reasonably designed to maximize, to the extent reasonably and economically
feasible, the return to Lessor and Lessee. Lessee shall generally operate seven
days a week at such hours as are customary for similar restaurants in the
geographic area of the Leased Premises.
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3.3 ADDITIONAL RENT
Lessee shall pay, as additional rent, certain amounts with respect
to taxes, maintenance, and other factors as provided under other provisions of
this Lease (collectively, the "ADDITIONAL RENT"). For all purposes of this
Lease, the term "RENT" shall include all Base Rent, Percentage Rent and
Additional Rent.
3.4 DELINQUENT RENT; LATE CHARGE
Each unpaid installment of Rent or other amount required to be paid
by Lessee to Lessor under this Lease shall bear interest from 10 days after the
date on which such Rent or other amount is due and payable at the Prime Rate
plus 2% PER ANNUM. In addition, in the event that any Rent or any other payment
required to be made by Lessee under this Lease is not paid as and when due and
such failure continues for more than a period of 10 days thereafter (without
regard to any notices), Lessee shall pay to Lessee a late charge equal to THE
GREATER OF (i) 5% of the amount of such delinquent Rent or other payment, OR
(ii) an amount equal to any late charge incurred by Lessor on Lessor's first
mortgage loan cause by such delinquent payment by Lessee.
3.5 SECURITY DEPOSIT
There shall be no security deposit required under this Lease.
3.6 SURVIVAL OF OBLIGATION TO PAY RENT
Lessee's obligation to pay all Rent when due shall survive the
expiration or sooner termination of the Term.
ARTICLE
4
USE OF THE LEASED PREMISES; QUIET ENJOYMENT
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4.1 GENERAL PURPOSES
Lessee may use or permit the use of the Leased Premises for a
full-service TUMBLEWEED-Registered Trademark- restaurant ("RESTAURANT") and
such other activities as are incidental thereto, and may not use or permit
the use of the Leased Premises for any other use or purposes without the
prior written consent of Lessor, which approval shall not be unreasonably
withheld.
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4.2 COMPLIANCE WITH LAWS
Lessee shall not use the Leased Premises in violation of any
statute, law, ordinance, or governmental code, rule, or regulation now or
hereafter applicable to the Leased Premises, INCLUDING, BUT NOT LIMITED TO,
violation of any Federal, state or local environmental laws, any fire, health,
or safety codes, and any zoning rules and regulations.
4.3 HAZARDS AND WASTE
Lessee shall not create or permit any hazard, nuisance, menace, or
waste in, on or about the Leased Premises.
4.4 GENERAL REPRESENTATIONS AND WARRANTIES OF LESSOR; QUIET ENJOYMENT
Subject to acquisition of the Lease Premises by Lessor as provided
under Section 1.2 hereof, Lessor represents and warrants to Lessee that:
(a) POWER AND AUTHORITY
Lessor owns the Leased Premises in fee simple and has full
power and authority to execute and perform its obligations under this Lease.
(b) LIENS AND ENCUMBRANCES
During the Term, the Leased Premises shall be free and clear
of all liens and encumbrances superior to the leasehold interests of Lessee
under this Lease, EXCEPT (i) those liens and encumbrances of record as of the
date of execution of this Lease (or liens or encumbrances in substitution or
renewal thereof), (ii) those liens and encumbrances which may be placed on the
Leased Premises by or with the specific written consent of Lessor in connection
with any buildings or other improvements required to be built by Lessor or
Lessee under this Lease, (iii) those liens or encumbrances which may be placed
on the Leased Premises by or with the specific written consent of Lessor in
compliance with the provisions of Sections 9.2 and 9.3 hereof, (iv) existing
zoning ordinances which affect the Leased Premises or which may hereafter exist
during the Term, (v) easements for public utilities and easements of any public
highways, AND (vi) the lien of real estate ad valorem taxes not then due and
payable.
(c) QUIET ENJOYMENT
During the Term, PROVIDED, HOWEVER, that Lessee is not in
default under this Lease, Lessee shall peaceably hold and have quiet enjoyment
of the Leased Premises free from interference from anyone lawfully claiming any
interest in the Leased Premises (but subject to the terms and conditions of this
Lease).
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(d) TAXES
All taxes on the Leased Premises, EXCEPT current taxes not due
and payable, have been paid in full.
ARTICLE
5
INSURANCE; INDEMNIFICATION
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5.1 FIRE AND HAZARD INSURANCE
Lessee, at Lessee's expense, shall obtain and keep in force at all
times during the Term of this Lease one or more policies of insurance covering
loss or damage to the Leased Premises in the amount of the full replacement
value thereof. Such policies shall provide protection against all perils
included within the classifications of fire, extended coverage, vandalism,
malicious mischief and special extended perils (all risks) and shall name Lessor
as an additional insured. To the extent reasonably possible, Lessee shall
increase such insurance from time to time during the Term to include such
additional risks or greater coverage of the risks set forth above as may be
reasonably required by Lessor's lenders.
5.2 LIABILITY INSURANCE
Lessee, at Lessee's expense, shall obtain and keep in force at all
times during the Term of this Lease one or more insurance policies of
comprehensive public liability insurance insuring Lessor and Lessee against all
liability arising out of the ownership, use, occupancy, or maintenance of the
Leased Premises, with policy limits of no less than $5,000,000.00 with respect
to injuries to, or death of, any persons on the Leased Premises, or occurrences
of any property damage to third parties caused on the Leased Premises, whether
or not caused by any of Lessee's employees, agents, representatives, guests or
invitees.
5.3 WORKERS' COMPENSATION AND UNEMPLOYMENT CONTRIBUTIONS
If the nature of Lessee's operation is such as to place any or all
of its employees under the coverage of local workers' compensation or similar
statutes and/or unemployment compensation schedules, Lessee shall also keep in
force, at Lessee's expense, workers' compensation or similar insurance affording
statutory coverage and containing statutory limits, and shall make all
unemployment compensation contributions required by law.
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5.4 OTHER INSURANCE
Lessee shall be responsible for obtaining, at Lessee's expense,
business interruption insurance which will cover the payment of Rent and other
charges due hereunder for at least TWELVE (12) MONTHS and insurance on the
equipment, inventory, merchandise, supplies and other property of Lessee on or
about the Leased Premises in a commercially reasonable amount. Lessee, on its
behalf and on its insurers' behalf, hereby expressly waives any and all claims
against Lessor for loss or damage to Lessee's equipment, inventory, merchandise,
supplies and other property on or about the Leased Premises due to fire,
explosion, windstorm, or any other casualty, or due to any other cause
whatsoever, regardless whether Lessee or Lessor has procured insurance thereon
and regardless of the cause of such loss or damage, INCLUDING, BUT NOT LIMITED
TO, loss or damage resulting from the negligence of Lessor or Lessor's partners,
officers, managers, members, directors, employees, agents, or representatives.
5.5 CERTIFICATES OF INSURANCE
Lessee shall deliver to Lessor copies of the insurance policies
required under Sections 5.1 and 5.2 hereof or certificates evidencing the
existence and amounts of such insurance with loss payable clauses satisfactory
to Lessor. No such policy shall be cancelable or subject to reduction of
coverage or other modification EXCEPT after 10 DAYS' prior written notice to
Lessor. Lessor shall, within 10 DAYS prior to the expiration of any policy,
furnish Lessor with renewals or "binders" thereof, or Lessor may order such
insurance and charge the cost thereof to Lessee, which amount shall be payable
by Lessee to Lessor upon demand of Lessor or the applicable insurance company.
5.6 WAIVER OF SUBROGATION
Lessor and Lessee each hereby waives any and all rights of recovery
against the other, or against the partners, officers, managers, members,
directors, employees, agents and representatives of the other, for loss or
damage to such waiving party or its property or the property of others under its
control, to the extent such damage or destruction is insured against under any
insurance policies in force at the time of such loss or damage. The provisions
of this Section 5.6 shall be effective during the Term for so long as such
provisions do not prohibit securing insurance coverage from responsible
insurance companies by either party after a good faith effort. Lessor and Lessee
shall give notice to its insurance carrier(s) that the foregoing mutual waiver
of subrogation is contained in this Lease and attempt in good faith to cause its
insurance policies with respect to the Leased Premises, and the property
contained therein, to be endorsed to permit the foregoing waiver of subrogation.
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5.7 INDEMNIFICATION
Lessee shall indemnify Lessor and save and hold Lessor harmless
from and against any and all claims, actions, damages, liabilities, and expenses
in connection with loss of life, personal injury and/or damage to property
arising from, out of, or in connection with the occupancy or use by Lessee of
the Leased Premises or any part thereof; PROVIDED, HOWEVER, that this
indemnification by Lessee shall not extend to acts of negligence of Lessor, or
Lessor's officers, managers, members, directors, partners, employees, agents, or
representatives, or to events or accidents which occur as a result of Lessor's
failure to perform its obligations under this Lease. In the event Lessor shall,
without any fault on its part, be made a party to any litigation commenced by or
against Lessee, or against Lessor as a result of any action or inaction by
Lessee in connection with the Leased Premises, then Lessee shall protect and
hold Lessor harmless and shall pay all costs, expenses, and reasonable attorneys
fees incurred or paid by Lessor in connection with such litigation.
ARTICLE
6
RECONSTRUCTION AND EMINENT DOMAIN
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6.1 CASUALTY, DESTRUCTION OR DAMAGE TO THE LEASED PREMISES
(a) GENERAL OBLIGATION TO REPAIR; CERTAIN RIGHTS OF LESSEE TO
TERMINATE LEASE
Lessee shall use every reasonable precaution against fire and
shall, in the case of fire or other casualty, give immediate notice thereof to
Lessor. In case of fire or other casualty, Lessee shall, at its own expense and
subject to the other provisions of this Section 6.1, cause the damage to be
promptly repaired and the improvements reconstructed at the cost and expense of
Lessee; PROVIDED, HOWEVER, that Lessee shall be entitled to use for such purpose
the insurance proceeds, if any, available by reason of such loss; AND PROVIDED
FURTHER, HOWEVER, that notwithstanding the foregoing, if (i) the Leased Premises
are damaged so substantially by fire or other casualty as to make MORE THAN 50%
of the rentable square footage of the buildings constituting a part of the
Leased Premises untenantable AND (ii) such damage to the Leased Premises occurs
at a time when the remainder of the Term is 12 MONTHS OR LESS, then Lessee may,
at Lessee's option and upon at least 10 DAYS' prior written notice to Lessor,
terminate this Lease without penalty or liability; PROVIDED, HOWEVER, that in
the event of such termination by Lessee, Lessee shall, at its sole cost and
expense (i) remove all remains and debris so that the Leased Premises shall be
safe and sightly, (ii) grade and compact the Leased Premises so that surface
water drainage or other causes will not damage the Leased Premises or the
properties adjoining the Leased Premises, AND (iii) pay Lessor a lump sum
termination payment equal to the total of SIX (6) MONTHS of the Base Rent then
in effect. If Lessee shall not commence to remove
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such remains and debris, and grade and compact the Premises within 60 DAYS
from the date of any such damage or destruction, or, if thereafter Lessee
shall fail to diligently pursue the removal of such remain and debris, then
Lessor shall be entitled to receive the insurance proceeds otherwise payable
to, or held by, Lessee, to the extent necessary to remove all remains and
debris, and grade and compact the Leased Premises in the manner described
herein. Any insurance proceeds after (i) the removal of such remains and
debris, (ii) grading and compacting the Leased Premises, AND (iii) paying the
lump sum termination payment to Lessor, shall distributed to Lessee.
(b) DAMAGE AND REPAIR
Subject to and in accordance with the other provisions of this
Section 6.1, Lessee may, at Lessee's expense, either promptly repair, replace,
or rebuild such building or other improvement or delay the commencement of the
work until the proceeds of all insurance policies covering the casualty or
hazard (and any replacement funds therefor which Lessor is required to provide
under Section 6.1((e)) below) are made available to Lessee for such purpose.
Lessee shall continue the commenced work with reasonable diligence until its
completion.
(c) SPECIFICATIONS AND APPROVALS
Lessee shall make the repair, replacement, or rebuilding in
accordance with applicable plans and specifications (reflecting a structure
either substantially the same as that which existed prior to the fire or other
casualty (SUBJECT, HOWEVER, to changes required by then applicable laws or
governmental regulations) or with such differences as may be proposed by Lessee
and approved by Lessor, acting reasonably and in good faith). Such plans and
specifications shall first be submitted to and approved in writing by Lessor,
which approval shall not be unreasonably withheld or delayed. Before any work is
commenced, the plans and specifications shall be filed with and approved by all
applicable municipal or other governmental authorities, and, if so required by
the terms of Lessor's mortgage, Lessee shall attempt in good faith to obtain and
deliver to Lessor the written consent of any present mortgagee. Lessor shall
join in any application to the mortgagee for such consent and use all reasonable
efforts in attempting to obtain such consent. Before commencing the work, Lessee
shall procure at Lessee's expense, and deliver to Lessor, all policies of
insurance usually required in connection with such work.
(d) INSURANCE PROCEEDS ESCROW
For the purpose of paying the cost of repair, replacement, or
rebuilding, Lessee shall deposit the insurance proceeds in an escrow account
with such escrow agent as Lessor, acting reasonably and in good faith, may
designate, which escrow agent shall disburse such insurance proceeds during the
course of the work. If the proceeds are insufficient to pay the cost of the
work, Lessee shall pay the
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deficiency. If the proceeds exceed the cost of such work, Lessee shall retain
the excess.
(e) MORTGAGES
If the holder of any existing mortgages (the "MORTGAGEE")
elects to exercise the Mortgagee's right, if any, to apply any insurance
proceeds towards the reduction of the mortgage, Lessor shall make available to
Lessee, for the sole purpose of the repair, replacement, or rebuilding for which
Lessee is obligated, an amount equal to the total insurance proceeds retained by
such Mortgagee (PROVIDED, HOWEVER, if the amount necessary for such repair,
replacement, or rebuilding is less than the total amount of the insurance
proceeds retained by such Mortgagee, then any such excess shall be treated as a
prepayment of Rent or other payments thereafter becoming due from Lessee under
this Lease). If Lessor fails to make such funds available within a reasonable
time after final settlement of the loss with the insurers, Lessee may either
terminate this Lease or complete the repair, replacement, or rebuilding and
deduct the amount not reimbursed against the Rent or other payments thereafter
becoming due from Lessee under this Lease.
(f) CONTINUATION OF LEASE
EXCEPT as otherwise provided herein, this Lease shall not
terminate or be affected in any manner by reason of the damage or destruction,
by fire or other casualty, in whole or in part, of the Leased Premises or by
reason of the untenantability of the Leased Premises.
(g) NO REDUCTION OF RENT
Lessee is required to obtain and maintain in full force and
effect during the Term certain business interruption or other insurance.
Accordingly, if this Lease remains in effect following damage to the Leased
Premises by fire or other casualty, the Rent shall not be reduced or abated.
(h) LESSEE'S CONTINUING OBLIGATION TO INSURE
Any termination by the Lessee of the Lease under this Section
6.1 shall not relieve Lessee of any liabilities to Lessor regarding Lessee's
responsibility for having insured the Leased Premises for the benefit and
interest of Lessor as provided under this Lease.
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6.2 EMINENT DOMAIN
(a) TERMINATION OF LEASE AS TO PORTION OF LEASED PREMISES TAKEN
In the event that all or any portion of the Leased Premises is
taken under the power of eminent domain by any competent authority, this Lease
shall terminate as to the part so taken as of the date on which Lessee is
required to yield possession thereof to the taking authority.
(b) TAKING OF LESS THAN A SUBSTANTIAL PORTION OF THE LEASED
PREMISES
If the taking of a portion of the Leased Premises is not a
Substantial Portion, then Lessor shall make all repairs, alterations and
replacements as may be necessary in order to restore the portion of the Leased
Premises not taken to useful condition and the Rent shall be reduced on an
equitable basis to take into account the elimination of the portion of the
Leased Premises taken.
(c) TAKING OF A SUBSTANTIAL PORTION OF THE LEASED PREMISES
If the taking of a portion of the Leased Premises is a
Substantial Portion, then either Lessor or Lessee shall have the option to
terminate this Lease as of the date on which Lessee is required to yield
possession of the portion taken to the taking authority, which option shall be
exercised by Lessor or Lessee by written notice delivered to the other of them
on or prior to such date. Unless this Lease is so terminated, Lessor shall make
all repairs, alterations and replacements as may be necessary in order to
restore the portion of the Leased Premises not taken to as useful a condition as
is practicable and the Rent shall be reduced on an equitable basis to take into
account the elimination of the portion of the Leased Premises taken.
(d) SUBSTANTIAL PORTION
For all purposes of this Agreement, the term "SUBSTANTIAL
PORTION" means (i) any part of the building on the Leased Premises, (ii) 10% or
more of the parking spaces on the Leased Premises, (iii) 15% or more of the land
area demised as part of the Leased Premises, (iv) any property which affects the
direct access from the Leased Premises to any adjacent street or highway, AND
(IV) any portion of the land or improvements, the absence of which is reasonably
likely to have a substantial impact on the business of Lessee conducted in, or,
or from the Leased Premises.
(e) CONTESTING TAKING; ALLOCATION OF PROCEEDS
Only Lessor shall have the right to contest any proposed or
declared taking or condemnation of the fee of and leasehold in the Leased
Premises. All compensation awarded for taking of the fee of and the leasehold in
the Leased
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Text of Agreement - Page 15
Premises shall belong to and be the property of Lessor, and Lessee hereby
assigns to Lessor all of Lessee's rights, if any, to any such compensation,
EXCEPT any compensation for moving or relocation expenses payable to Lessee,
losses relating to Lessee's Trade Fixtures (as hereinafter defined), losses
relating to any permanent improvements to the Leased Premises made by Lessee
during the Term (based on the ratio that the fair market value of such
improvements made by Lessee during the Term bears to the fair market value of
all improvements to the Leased Premises for which an award is made), and
losses of profits to which Lessee would be entitled to recovery.
ARTICLE
7
UTILITIES; MAINTENANCE, ALTERATIONS AND REPAIRS; CONSTRUCTION OF SPECIFIED
BUILDING
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7.1 UTILITIES
Lessee shall timely pay for all heat, water, sewer service, gas,
electricity, telephone and other utilities and services used in or about the
Leased Premises, and all such utilities and services, as applicable, shall be
metered to the Leased Premises in Lessee's name.
7.2 MAINTENANCE AND REPAIRS
(a) LESSEE'S GENERAL OBLIGATION TO MAINTAIN
Lessee, at Lessee's expense, shall maintain the Leased
Premises and all additions thereto and improvements thereof in good repair and
condition throughout the Term and shall yield up the Leased Premises upon the
expiration or sooner termination of this Lease in broom clean condition and in
as good and tenantable condition as the Leased Premises were in at the beginning
of the Term or at the time later added to the Leased Premises, as the case may
be, normal wear and tear excepted.
(b) SPECIFIC MAINTENANCE OBLIGATIONS OF LESSEE
In furtherance of, and not by way of limitation of, Lessee's
obligations under Section 7.2(a) hereof, Lessee, at Lessee's expense, shall be
responsible for all repairs, replacements and maintenance required with respect
to the Leased Premises, INCLUDING, BUT NOT LIMITED TO, the repair and/or
replacement of (i) any burst, stopped or leaking water, gas, sewer or other
pipes or plumbing fixtures or equipment, (ii) any dysfunctional or
malfunctioning lighting, electrical, or heating, ventilation and air
conditioning components, circuits, facilities or systems, (iii) any fences,
parking areas, sidewalks, driveways, landscaping and signs, (iv) any sprinklers
or other fire or smoke alarm or control devices, AND (v) any foundations,
structural
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Text of Agreement - Page 16
components, exterior or interior walls and surfaces, roofs, gutters,
downspouts, ceilings, windows and doors.
(c) WAIVER OF LESSOR LIABILITY
Lessor shall not be responsible or liable to Lessee for any
loss or damage resulting from any cause whatsoever, INCLUDING, BUT NOT LIMITED
TO, any loss or damage from any burst, stopped or leaking water, gas, sewer or
other pipes or plumbing fixtures or equipment, or from any failure of or defect
in any lighting, electrical, or heating, ventilation and air conditioning
components, circuits, facilities or systems.
7.3 ALTERATIONS BY LESSEE
(a) NONSTRUCTURAL INTERIOR ALTERATIONS
Without any necessity of obtaining Lessor's consent, Lessee,
at Lessee's expense, may from time to time during the Term make any interior
alterations, additions, or improvements in and to the Leased Premises which
Lessee may deem advisable and which do not affect the structural components of
any building or other improvement. Any such interior alteration, addition, or
improvement shall be made in a first class workmanship manner and in accordance
with all valid requirements of municipal or other governmental authorities.
(b) STRUCTURAL ALTERATIONS
Lessee shall not make any structural additions or other
alterations to, nor remove or demolish, any building or other improvement
constituting a part of the Leased Premises without the prior written consent of
Lessor, which shall not be unreasonably withheld.
(c) ALTERATIONS BECOME PART OF LEASED PREMISES
Lessee agrees that any and all improvements or alterations to
the Leased Premises shall immediately become the property of the Lessor and
shall remain upon and as part of the Leased Premises.
7.4 MECHANICS OR MATERIALMEN'S LIENS
Unless Lessee shall contest the validity thereof as hereinafter
provided, Lessee shall not allow any mechanic's, materialman's, or other liens
to be filed against the Leased Premises or any part thereof as a result of any
act of omission by Lessee. Lessee may contest, by appropriate proceedings, the
amount, validity or application of any mechanic's, materialman's, or other lien
filed against the Leased Premises or any part thereof so long as (i) no part of
the Leased Premises would be subject to loss, sale or forfeiture before
determination of such contest, (ii) Lessor is not subject to any
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criminal penalty as a result of the failure to pay such lien, AND (iii)
Lessee conducts all such contests, at Lessee's expense, with due diligence
and in good faith.
7.5 SIGNS AND OTHER TRADE FIXTURES
Lessee may construct, build, or install on the Leased Premises any
and all racks, counters, tables, shelves, signage, and other trade fixtures and
equipment of every kind or nature which might be necessary or desirable to the
Lessee's use of the Leased Premises for permitted purposes (collectively, the
"TRADE FIXTURES"). All such Trade Fixtures shall at all times be and remain the
property of Lessee, and, so long as Lessee is not in default under this Lease,
Lessee shall have the right to remove all or any part of the Trade Fixtures from
the Leased Premises at any time during, or upon the expiration or sooner
termination of, the Term; PROVIDED, HOWEVER, that Lessee shall repair or
reimburse Lessor for the full costs of repairing any damage to the Leased
Premises resulting from the installation or removal of such Trade Fixtures. It
is specifically understood and agreed that all trademarks, trade names, service
marks, signs, and other marks of identification used by Lessee in Lessee's
business shall remain the exclusive property of Lessee at all times, and Lessor
shall have no right, title, or interest in or to any of such trademarks, trade
names, service marks, signs, or other marks of identification.
7.6 LESSOR'S RIGHT OF ENTRY
Lessor and Lessor's employees and agent shall have the right to
enter the Leased Premises from time to time during reasonable hours and upon
reasonable notice to Lessee (or at any time with or without notice in the event
of any emergency) in order to (i) examine the Leased Premises, (ii) make such
repairs and alterations as may be necessary for the safety and preservation of
the improvements on the Leased Premises (the cost of which repairs and
alterations shall be borne by Lessee), but without any obligations to make any
such repairs or alterations, OR (iii) exhibit the Leased Premises for sale or
lease and place one or more "For Sale or Rent" signs on the Leased Premises
during the 6 months immediately preceding the expiration of the Term, which
signs shall not be removed by Lessee.
7.7 CONSTRUCTION OF SPECIFIED BUILDING.
(a) LESSEE'S OBLIGATION TO CONSTRUCT SPECIFIED BUILDING.
Lessee covenants and agrees to proceed with due diligence, at
Lessee's expense, to perform Lessee's Work (as hereinafter defined) and renovate
the existing building on the Leased Premises and erect or cause to be erected on
the Leased Premises related improvements and site work (collectively, the
"SPECIFIED BUILDING"). The Specified Building shall be based on, and constructed
substantially in accordance with, the 5,400 SQUARE FOOT prototype Tumbleweed
restaurant plans and designs (the "PLANS AND SPECIFICATIONS") prepared by the
architectural firm of
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Text of Agreement - Page 18
WOLFGANG & DOERSCHLAG (the "PROJECT ARCHITECT"), SUBJECT, HOWEVER, to such
changes as may be required from time to time by reason of the specific site
location, the nature of the construction as a renovation of an existing
building on the Leased Premises, or in order to obtain building permits. All
design, architectural, engineering, excavation and construction work shall be
performed in a first class workmanship manner and in accordance with all
applicable building codes and other requirements of governmental authorities.
The work necessary to construct the specified building in accordance with the
plans and specifications is referred to herein as "LESSEE'S WORK". Unless and
until the Total Lessor Investment equals $1,000,000.00, Lessor shall
reimburse Lessee for Lessee's expenditures incurred in connection with the
Lessee's Work. Such reimbursement shall be made by Lessor within TEN (10)
DAYS after Lessee requests such reimbursement and submits to Lessor such
receipts, invoices, architect's certificates, contractor or subcontractor
lien waivers, and/or other documents as Lessor or any lender to Lessor may
reasonably require. Lessee's Work shall be deemed completed upon
certification by the Project Architect that Lessee's Work is substantially
complete and issuance of a certificate of occupancy for the Leased Premises.
Lessee shall indemnify Lessor and hold Lessor harmless from and against any
loss, claim, or expense, including damage to property, injuries to person, or
mechanics' or materialmen's liens arising out of the performance of Lessee's
Work by Lessee, its employees, agents, and contractors.
(b) COMMENCEMENT AND COMPLETION OF CONSTRUCTION.
Lessee agrees that the construction of the Specified Building
shall commence as soon as reasonably possible after acquisition of the Leased
Premises by Lessor in accordance with the provisions of Section 1.2 hereof, and
such construction shall be diligently pursued thereafter until completed. If the
Specified Building is not completed within SIX (6) MONTHS after commencement
(UNLESS such noncompletion is due to circumstances beyond the reasonable control
of Lessee), Lessor may, at Lessor's sole option, take over the completion of the
Specified Building and all sums expended for such purpose by Lessee shall
constitute a part of the Total Lessor Investment UNLESS AND UNTIL the payment of
any such amount would cause the Total Lessor Investment to exceed $1,000,000.00,
in which case any such excess amount paid by Lessor shall be immediately repaid
to Lessor by Lessee upon demand.
(c) LESSEE'S EQUIPMENT AND TRADE FIXTURES.
In addition to performing the scope of Lessee's Work, Lessee
shall be responsible for installing its equipment and Trade Fixtures, which
shall be completed as promptly as reasonably and feasibly possible following
completion of Lessee's Work.
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Text of Agreement - Page 19
(d) LESSEE'S PAYMENT OF EXCESS CONSTRUCTION COSTS WITHOUT
REIMBURSEMENT.
Lessor and Lessee agree that Lessor's obligation to reimburse
Lessee for the cost of the Lessee's Work shall cease at the time that the Total
Lessor Investment equals $1,000,000.00. In such event, Lessee shall be required
to complete Lessee's Work at Lessee's sole expense without reimbursement from
Lessor.
(e) WAIVER OF LESSOR LIABILITY WITH RESPECT TO CONSTRUCTION.
Nothing in this Lease shall be construed in any way as
constituting Lessor as the agent of the Lessee in designing, engineering or
constructing the Specified Building or any other improvements to the Leased
Premises. Lessee shall pay all of its contractors or subcontractors regarding
the scope of its improvements to the Leased Premises and shall remove, if
applicable, any mechanics' liens which may be filed against the Leased Premises
as a result of Lessee's non-payment of contract sums due to its contractors and
subcontractors. To the extent possible, all contractor's, subcontractor's,
manufacturer's, and vendor's warranties and guarantees, and any construction or
maintenance service contracts, IF ANY, with respect to any construction,
improvements, or repairs performed by or at the direction or request of Lessee
on or to the Leased Premises shall be issued in the name of, or otherwise be
available to, both Lessee and Lessor, as their interests may appear.
ARTICLE
8
TAXES
________________________________________
8.1 ADDITIONAL RENT FOR REAL PROPERTY TAXES
(a) LESSEE OBLIGATION TO PAY REAL PROPERTY TAXES
As Additional Rent hereunder, Lessee shall pay all Real
Property Taxes (as hereinafter defined) applicable to the Leased Premises during
the Term, commencing with those due and payable in calendar year 1997; PROVIDED,
HOWEVER, that the Real Property Taxes for any year which are payable by Lessee
shall be subject to a prorata adjustment based upon the number of days of said
year during which the Leased Premises are leased to Lessee. For all purposes of
this Lease, the term "REAL PROPERTY TAXES" shall include any form of assessment,
licensing, commercial rental tax, levy, penalty, ad valorem tax, or other tax
(other than income, inheritance and estate taxes) imposed upon Lessor with
respect to the Leased Premises, or otherwise against or with respect to the
Leased Premises, by any authority having the direct or indirect power to tax,
including any city, county, state or federal Government, and any school,
agricultural or other improvement district thereof.
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Text of Agreement - Page 20
(b) NOTICE AND PAYMENT
Following receipt by Lessor of the then current bills for Real
Property Taxes due and payable in 1997 or later years during the Term, Lessor
shall forward a copy thereof to Lessee. Within 30 DAYS after receipt of such
notice from Lessor, Lessee shall pay to Lessor any amount properly stated
therein to be due (SUBJECT, HOWEVER, to the prorata adjustment for any partial
year within the Term, as provided for under Section 8.1((a)) hereof).
8.2 PERSONAL PROPERTY TAXES.
Lessee shall pay, prior to delinquency, all taxes assessed against
or with respect to any Trade Fixtures, furnishings, equipment, or other personal
property contained in the Leased Premises. Any such taxes imposed upon or
otherwise payable by Lessor shall be treated and included as Real Property Taxes
which are subject to the provisions of Section 8.1 hereof.
8.3 INCOME AND OTHER TAXES
Nothing in this Lease shall be construed as requiring Lessee to pay
(i) any municipal, state or Federal income taxes assessed against Lessor,
(ii) any municipal, state, or Federal capital, levy, estate, succession,
inheritance, or transfer taxes of Lessor, OR (iii) any corporate franchise taxes
imposed upon any corporate owner of the fee of the Leased Premises.
ARTICLE
9
ESTOPPEL CERTIFICATES; SUBORDINATION; ATTORNMENT
________________________________________
9.1 ESTOPPEL CERTIFICATE
(a) LESSEE'S OBLIGATION TO EXECUTE ESTOPPEL CERTIFICATE WHEN
REQUESTED
From time to time, upon at least 10 DAYS' prior written notice
from Lessor, Lessee shall execute, acknowledge and deliver to Lessor, at no cost
to Lessor, a statement in writing (i) certifying that, as of the date of such
statement, this Lease is unmodified and in full force and effect (or, if
modified at such time, stating the nature of such modification and certifying
that this Lease, as so modified, is then in full force and effect),
(ii) certifying the date to which the Rent and other charges are then paid in
advance, if any, AND (iii) acknowledging that, as of the state of such
statement, there are not, to Lessee's knowledge, any uncured defaults on the
part of Lessor hereunder, or specifying such defaults if any are claimed. Any
such statement may be conclusively relied upon by any prospective purchaser or
encumbrancer of the Leased Premises.
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Text of Agreement - Page 21
(b) FAILURE OF LESSEE TO DELIVER ESTOPPEL CERTIFICATE
Lessee's failure to deliver such statement within the 10 DAY
period provided for under Section 9.1(a) above shall be conclusive upon Lessee
that, as of the end of such 10 DAY period (i) this Lease is in full force and
effect, without modification EXCEPT as may be represented by Lessor; (ii) there
are no uncured defaults on the part of Lessor hereunder; AND (iii) not more than
one month's rent has been paid in advance.
(c) LESSEE OBLIGATION TO FURNISH FINANCIAL AND TAX INFORMATION TO
LENDERS
If Lessor desires to finance or refinance the Leased Premises,
or any part thereof, Lessee hereby agrees to deliver to any lender designated by
Lessor such financial statements and tax returns as may be reasonably required
by such lender. All such financial statements and tax returns shall be received
by Lessor in confidence and shall be used only for the purpose herein set forth.
9.2 MORTGAGE SUBORDINATION
Subject to Lessor's compliance with the provisions of Section 9.3
hereof, Lessee agrees that this Lease shall at all times be subject and
subordinate to (i) all mortgages, liens, security interests, and other
encumbrances (hereinafter sometimes referred to collectively as "MORTGAGES" and
each individually as a "MORTGAGE") against the Leased Premises as of the date of
execution of this Lease, INCLUDING, BUT NOT LIMITED TO, the extent to which such
Mortgages secure current and future advances made under current debts and
obligations of Lessor, AND (ii) all Mortgages subsequently placed on the Leased
Premises by or with the consent of Lessor. Subject to Lessor's compliance with
the provisions of Section 9.3 hereof, Lessee agrees that, upon written demand by
Lessor and at no cost to Lessor, Lessee shall execute such documents as may be
required at any time and from time to time to effectuate and evidence such
subordinations.
9.3 NONDISTURBANCE AGREEMENTS
If, as of the date of execution of this Lease, there are any
Mortgages against the Leased Premises, or if Lessor shall subsequently encumber
or permit the encumbrance of the Leased Premises by any Mortgages, Lessor shall
have the mortgagee, lienholder or other secured party with respect to each
Mortgage execute a non-disturbance agreement providing that, so long as Lessee
is not in default under this Lease and continues to perform all of its
obligations under this Lease, (i) Lessee's tenancy shall not be disturbed,
(ii) this Lease shall not be affected by any default under such Mortgage, AND
(iii) in the event of any foreclosure or other enforcement of such
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Text of Agreement - Page 22
Mortgage, and notwithstanding any resulting transfer of Lessor's rights under
this Lease, the rights of Lessee under this Lease shall expressly survive and
this Lease shall in all respects continue in full force and effect.
9.4 DEFAULT OF LESSOR UNDER MORTGAGES
If Lessor defaults in making payments under any Mortgage, or if
Lessor is otherwise in default under any Mortgage, Lessee shall have the right
to pay any or all Rent thereafter becoming due under this Lease to the
mortgagee, lienholder, or secured party under such Mortgage instead of to
Lessor, and any payments so made shall, to the extent thereof, discharge the
obligation of Lessee hereunder respecting the payment of such Rent. Subject to
Lessor's compliance with the provisions of Section 9.3 hereof, Lessee shall
execute an acceptance of, and shall fully comply with the terms of, any
collateral or conditional assignment of rents executed by Lessor.
9.5 LESSEE'S NOTICE TO MORTGAGEES OF LESSOR'S DEFAULTS UNDER THIS LEASE
Lessee agrees that Lessee will give reasonably detailed notice to
any holder of a Mortgage with respect to the Leased Premises (PROVIDED, HOWEVER,
that Lessee has been notified in writing of the name and address of such
Mortgage holder) of any default of Lessor which would entitle Lessee to
terminate this Lease or reduce or xxxxx the Rent hereunder. Such Mortgage holder
shall have the right, but not the obligation, to cure such default within a
period of 30 DAYS after such notice (or within such longer period of time as may
reasonably be required to cure such default if such default cannot reasonably be
cured within said 30 DAY period), and Lessee shall not terminate this Lease or
reduce or xxxxx the Rent hereunder during such period.
ARTICLE
10
DEFAULT
________________________________________
10.1 DEFAULT BY LESSEE; REMEDIES
(a) MATERIAL DEFAULT AND BREACH BY LESSEE
The occurrence of any one or more of the following events
shall constitute a material default and breach of this Lease by Lessee:
(i) The vacating or abandonment of the Leased Premises by
Lessee for 60 DAYS out of any period of 120 CONSECUTIVE DAYS during
the Term.
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Text of Agreement - Page 23
(ii) The failure by Lessee to make any payment
of Rent or any other payment required to be made by
Lessee under this Lease as and when due and the
continuance of such failure for a period of 10 DAYS
after written notice thereof to Lessee (a "LATE
NOTICE"), Lessee hereby waiving any other statutory or
other notices of default for nonpayment of Rent;
PROVIDED, HOWEVER, that the failure by Lessee to make
any payment of Rent or any other payment required to be
made by Lessee under this Lease as and when due and the
continuance of such failure for a period of 10 DAYS
thereafter (without regard to any notices) shall
constitute a material default under this Lease if,
during the TWELVE (12) MONTH period ending with the
month in which such due date occurs, Lessor has given
more than TWO (2) Late Notices to Lessee.
(iii) The failure by Lessee to observe or
perform any of the covenants, conditions, or provisions
of this Lease to be observed or performed by Lessee,
other than those described in Section 10.1(a)(ii)
above, and the continuance of such failure for a period
of 30 DAYS after written notice thereof from Lessor to
Lessee; PROVIDED, HOWEVER, that if the nature of
Lessee's default is such that more than 30 DAYS is
reasonably required for its cure, then Lessee shall not
be deemed to be in default if Lessee commences such
cure within such 30 DAY period and thereafter
diligently pursues such cure to completion.
(iv) The making by Lessee of any general
assignment or general arrangement for the benefit of
creditors.
(v) The filing by or against Lessee of a
petition to have Lessee adjudged a bankrupt or a
petition for reorganization or arrangement under any
law relating to bankruptcy (unless, in the case of a
petition filed against Lessee, such action is dismissed
within 60 DAYS).
(vi) The appointment of a trustee or receiver
to take possession of all or substantially all of
Lessee's assets located at the Leased Premises or of
Lessee's interests under this Lease, unless possession
is restored to Lessee within 60 DAYS.
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Text of Agreement - Page 24
(vii) The attachment, execution, or other
judicial seizure of all or substantially all of
Lessee's assets located at the Leased Premises or of
Lessee's interests under this Lease, unless such
seizure is bonded or discharged within 60 DAYS.
(b) LESSOR'S REMEDIES UPON DEFAULT BY LESSEE
In the event of any material default or breach by Lessee, as
provided under Section 10.1((a)) above, Lessor may at any time thereafter, with
or without additional notice or demand and without limiting Lessor in the
exercise of any right or remedy which Lessor may have by reason of such default
or breach:
(i) Re-enter the Leased Premises and remove all persons
and property from the Leased Premises. In such event, such
property may be removed and stored in a public warehouse or
elsewhere at the cost, and for the account, of Lessee. Should
Lessor elect to re-enter, as provided in this Lease, or should
Lessor take possession pursuant to legal proceedings or pursuant
to any notice provided for by law, Lessor may either terminate
this Lease or Lessor may, from time to time, without terminating
this Lease, re-let the Leased Premises or any part thereof for
such term or terms (which may be for a term extending beyond the
term of this Lease) and at such rental or rentals and on such
other terms and conditions as Lessor, in Lessor's reasonable
discretion, may deem advisable with the right to make alterations
and repairs to the Leased Premises. On each re-letting, (A)
Lessee shall be immediately liable to pay to Lessor, in addition
to any indebtedness other than Rent due under this Lease, the
reasonable expenses of re-letting and of making such alterations
and repairs incurred by Lessor, and the amount, if any, by which
the Rent provided for under this Lease for the period of
re-letting (up to, but not beyond, the Term of this Lease)
exceeds the amount agreed to be paid as Rent for the Leased
Premises for the period of re-letting; OR (B) at the option of
Lessor, rents received by Lessor from re-letting shall be
applied, first, to the payment of any indebtedness, other than
Rent due under this Lease; second, to the payment of any
reasonable expenses of re-letting and making alterations and
repairs; and third, to the payment of Rent due and unpaid under
this Lease, with the residue, if any, being held by Lessor and
applied in payment of future Rent as it may become due and
payable under this
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Text of Agreement - Page 25
Lease. If Lessee has been credited with any rent to be received
by re-letting under option (A) above, and such rent was not
promptly paid to Lessor by the new tenant, or if the rentals
received from the re-letting under option (B) above during any
month is less than the Rent required to be paid during such month
under this Lease, then Lessee shall pay any deficiency to Lessor,
such deficiency to be calculated and paid monthly. No re-entry or
taking possession of the Leased Premises by Lessor shall be
construed as an election on the part of Lessor to terminate this
Lease unless written notice of such intention is given to Lessee
or unless the termination of this Lease is decreed by a court of
competent jurisdiction. In spite of any re-letting without
termination, Lessor may at any time thereafter elect to terminate
this Lease for such previous breach. Should Lessor at any time
terminate this Lease for any breach, in addition to any other
remedy it may have, Lessor may recover from Lessee all damages
incurred by reason of such breach, including the worth at the
time of termination of THE EXCESS, IF ANY, OF the amount of rent
and charges equivalent to rent reserved in this Lease OVER the
then reasonable rental value of the Leased Premises for the
remainder of the stated term, all of which amounts shall be
immediately due and payable from Lessee to Lessor.
(ii) Maintain Lessee's right to possession, in
which case this Lease shall continue in effect whether
or not Lessee shall have abandoned the Leased Premises.
In such event, Lessor shall be entitled to enforce all
of Lessor's rights and remedies under this Lease,
including the right to recover the Rent as it becomes
due hereunder.
(iii) Require specific performance by Lessee of
Lessee's obligations under this Lease.
(iv) Pursue any other remedy now or hereafter
available to Lessor under the laws or judicial
decisions of the Commonwealth of Kentucky.
10.2 DEFAULT BY LESSOR
(a) MATERIAL DEFAULT AND BREACH BY LESSOR
A material default and breach of this Lease by Lessor shall
occur upon the failure by Lessor to observe or perform any of the covenants,
conditions, or
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Text of Agreement - Page 26
provisions of this Lease to be observed or performed by Lessor and the
continuance of such failure for a period of 30 DAYS after written notice
thereof from Lessee to Lessor; PROVIDED, HOWEVER, that if the nature of
Lessor's default is such that more than 30 DAYS is reasonably required for
its cure, then Lessor shall not be deemed to be in default if Lessor
commences such cure within such 30 DAY period and thereafter diligently
pursues such cure to completion.
(b) LESSEE'S REMEDIES UPON DEFAULT BY LESSOR
In the event of any material default or breach by Lessor, as
provided under Section 10.2((a)), Lessee may at any time thereafter, with or
without additional notice or demand and without limiting Lessee in the exercise
of any right or remedy which Lessee may have by reason of such default or
breach:
(i) Remedy such breach or default and deduct from the Rent
then or thereafter due under this Lease the reasonable costs of
such remedy, including interest thereon at the Prime Rate plus 2%
per annum until recovered through such Rent offsets.
(ii) If Lessor is indebted to Lessee because of
a breach or default of this Lease at the expiration of
the Term, Lessee may, at its option, extend this Lease
on the same terms and conditions as provided herein
until such indebtedness is fully recovered by Lessee by
offsets against the Rent then or thereafter due under
this Lease.
(iii) Require specific performance by Lessor of
Lessor's obligations under this Lease.
(iv) Pursue any other remedy now or hereafter
available to Lessor under the laws or judicial
decisions of the Commonwealth of Kentucky.
10.3 REMEDIES CUMULATIVE
All rights and remedies of Lessor enumerated in Section 10.1((a))
hereof and all rights and remedies of Lessee enumerated in Section 10.2((a))
hereof shall be cumulative, and none shall exclude any other right or remedy
allowed by law or equity. Said rights and remedies may be exercised and enforced
concurrently or successively from time to time at Lessor's or Lessee's option,
respectively.
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10.4 ATTORNEY FEES AND COSTS
If any party shall default with respect to any of such party's
obligations under this Lease, such defaulting party shall pay all costs,
expenses, and reasonable attorneys' fees which are incurred or paid by the other
parties to this Lease in enforcing the covenants and agreements of the
defaulting party under this Lease.
10.5 FORCE MAJEURE
In the event that either Lessor or Lessee shall be delayed in,
hindered in, or prevented from the performance of any act required hereunder by
reason of any strikes, lock-outs, labor troubles, inability to procure
materials, failure of power, restrictive governmental laws or regulations,
riots, insurrection, war, or the act, failure to act, or default of the other
party, or for other reasons beyond such party's control, then such party's
performance of such act shall be excused during the period of the delay and the
period for the performance of any such act shall be extended for a period
equivalent to the period of such delay.
10.6 WAIVER OF CERTAIN DEFENSES
Should either Lessor or Lessee seek recourse to equity to enforce
any of its rights under this Lease by specific performance, injunction, or other
equitable relief, the other party agrees to, and hereby does waive any
defense(s), which it might otherwise have that there is any adequate remedy at
law.
ARTICLE
11
RIGHT OF FIRST REFUSAL
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11.1 EXERCISE OF RIGHT OF FIRST REFUSAL
During the Term, if (i) Lessor shall receive a bona fide offer to
purchase or otherwise acquire all or any part of the Leased Premises and Lessor
shall desire to accept such offer, OR (ii) Lessor shall make an offer to sell or
otherwise dispose of all or any part of the Leased Premises, then, EXCEPT as
otherwise provided under Section 11.4 below, Lessor shall grant Lessee the right
to purchase or acquire such interests in the Leased Premises at the price and on
the other terms and conditions of the offer so made. Lessor shall give written
notice to Lessee of any such offer, which notice shall attach a true and correct
copy of the offer, if in writing, or otherwise shall describe in detail all of
the terms and conditions of the offer. Lessee shall have a period of ten (10)
days after such notice is given within which to exercise Lessee's right of first
refusal under this Article 11 by giving written notice of such exercise to
Lessor. Notwithstanding anything herein which might be construed to the
contrary, the closing of Lessee's
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acquisition of all or any portion of the Leased Premises pursuant to this
Article 11 shall occur no sooner than 30 days after Lessee's exercise of
Lessee's right of first refusal.
11.2 FAILURE TO EXERCISE RIGHT OF FIRST REFUSAL
If Lessee shall fail or neglect to timely exercise Lessee's right
of first refusal after receipt of the notice from Lessor provided for under
Section 11.1, then Lessee's right of first refusal as to the offer set forth in
such notice from Lessor shall expire and Lessor may sell or otherwise dispose of
the Leased Premises to the person who made such offer upon the terms and
conditions thereof (all as described in Lessor's notice to Lessee). Any such
sale or other disposition shall be subject to all of the terms, conditions, and
covenants of this Lease and any present or future leases of the Leased Premises
(including the right of first refusal rights provided for under this Article 11
as to any subsequent offers).
11.3 TRANSFER OF EQUITY INTERESTS IN LESSOR
If Lessor is a corporation, joint venture, partnership, or limited
liability company, the transfer of any or all of the equity interests in such
entity to unrelated parties for good and valuable consideration shall be subject
to right of first refusal rights in favor of Lessee under terms and conditions
substantially similar to those set forth in the other provisions of this Article
11; PROVIDED, HOWEVER, that if, at such time, Lessor is an electing S
corporation under the Internal Revenue Code of 1986, as amended, or under any
similar subsequent tax law, and such election would be terminated by reason of
Lessee's exercise of its right of first refusal rights under this Article 11,
then Lessee may designate one or more persons who would not cause such election
to be terminated and who shall then have the right to exercise Lessee's right of
first refusal rights on their own behalf.
11.4 TRANSFERS TO RELATED PARTIES EXCLUDED
Notwithstanding any other provision of this Article 11 which might
be construed to the contrary, Lessee shall be given notice of any proposed
transfer, for nominal or no consideration, of all or any part of the Leased
Premises or of the equity interests described in Section 11.3 to any Related
Party with respect to Lessor, BUT Lessee shall have no right of first refusal
rights with respect to such proposed transfers. For all purposes of this Lease,
the term "RELATED PARTY" with respect to Lessor shall mean (i) any entity
controlling, controlled by, or under common control with Lessor, (ii) any owner
of the equity interests in Lessor, if Lessor is an entity, (iii) any individual
related by blood or marriage to Lessor, if Lessor is an individual, or to the
owners of the equity interests in Lessor, if Lessor is an entity, AND (iv) any
entity the equity interests of which, or the beneficial interests in which, are
owned by any of the individuals or entities described in the foregoing clauses
of this sentence.
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ARTICLE
12
MISCELLANEOUS
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12.1 ASSIGNMENT OR SUBLETTING
Lessee shall not assign this Lease in whole or in part or sublease
all or any portion of the Leased Premises without the prior written consent of
Lessor, which consent shall not be unreasonably withheld; PROVIDED, HOWEVER,
that, notwithstanding the foregoing, Lessee may assign this Lease in whole or in
part or sublease all or any portion of the Leased Premises without the prior
written consent of Lessor to any entity controlling, controlled by, or under
common control with, Lessee. Unless otherwise agreed to by Lessor, in the event
of any assignment or sublease of this Lease by Lessee permitted under this
Section 12.1, Lessee shall remain fully liable to Lessor in connection with this
Lease and with respect to the Leased Premises. Lessor may freely assign any or
all of its rights and obligations under this Lease.
12.2 SUCCESSOR LESSOR'S LIABILITY
The term "Lessor" as used herein at any time shall mean only the
owner or owners at such time of the fee title to the Leased Premises and, in the
event of any transfer of such title, Lessor herein named (and in case of any
subsequent transfers, then the transferor) shall be relieved from and after the
date of such transfer of all liability with respect to Lessor's obligations
under this Lease thereafter to be performed; PROVIDED, HOWEVER, that any funds
in the hands of Lessor or the then transferor at the time of such transfer, in
which Lessee has an interest, shall be delivered to the transferee. The
obligations contained in this Lease to be performed by Lessor shall, subject as
aforesaid, be binding on Lessor's successors and assigns only during their
respective periods of ownership.
12.3 RELATIONSHIP OF THE PARTIES
Nothing contained in this Lease shall be deemed or construed by the
parties hereto, or by any third party, as creating the relationship of principal
and agent, partnership, or joint venture between or among any of the parties.
12.4 ENTIRE AGREEMENT
It is expressly understood and agreed by and among the parties
hereto that this Lease sets forth all the promises, agreements, conditions and
understandings between Lessor and Lessee relative to the Leased Premises and
that there are no other promises, agreements, conditions or understandings,
either oral or written, among them other than as are herein set forth. It is
further understood and agreed that no
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subsequent alteration, amendment, change or addition to this Lease shall be
binding upon Lessor or Lessee unless reduced to writing and signed by them,
and by direct reference therein made a part hereof.
12.5 NOTICES
(a) DELIVERY OF NOTICE
All notices, demands, requests, consents, approvals, offers,
counteroffers or other communications required or permitted under this Lease
shall be in writing AND (i) delivered by personal delivery to such intended
recipient, which personal delivery shall be evidenced by a written receipt
therefor signed by such recipient, (ii) sent by United States certified,
registered or express mail, return receipt requested, postage prepaid, or by
reputable express delivery service (such as Federal Express, UPS, Airborne,
Purolator, or DHL), fees prepaid, addressed to the intended recipient thereof,
at the address listed for such party below, or at such other address as such
party shall furnish in writing to the other parties to this Lease, OR
(iii) transmitted by fax to such intended recipient at the fax number listed for
such party below (or such other fax number as such party shall furnish in
writing to the other parties to this Lease), receipt of which transmission shall
be confirmed by such recipient.
TO LESSOR: WEST BROAD DEVELOPMENT, LLC
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
ATTENTION: Xxxxxxx X. Xxxxxx, Member
Fax: (000) 000-0000
WITH COPY TO: XXXX XXXXX XXXXXX & XXXXXX, P.S.C.
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
ATTENTION: Xxxxx X. Xxxx
Fax: (000) 000-0000
TO LESSEE: TUMBLEWEED, LLC
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
ATTENTION: Xxxx X. Xxxxxxx, Xx. & Xxxxx X. Xxxxxxxxx,
Managers
Fax: (000) 000-0000
(b) EFFECTIVE DATE OF NOTICE; RESPONSE PERIOD
All such notices, demands, requests, consents, approvals,
offers, counteroffers or other communications shall be effective upon being
personally
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delivered and properly receipted, TWO (2) DAYS after being properly addressed
and deposited in the United States mail or with a reputable express delivery
service or upon being transmitted by fax and properly receipted, as set forth
above. However, the time period in which a response to any such notice,
request, demand, consent, approval, offer, counteroffer or other
communication must be given shall commence to run from the date of receipt of
personal delivery, the date on the return receipt or express delivery
receipt, or the date of confirmation of receipt of the fax, as the case may
be, of the notice, request, demand, consent, approval, offer, counteroffer or
other communication by the addressee thereof; PROVIDED, HOWEVER, that if any
party rejects delivery of any such notice, request, demand, consent,
approval, offer, counteroffer or other communication properly sent by mail or
express delivery service, or fails or neglects to accept delivery after TWO
(2) ATTEMPTS to so deliver by postal or express delivery authorities, as the
case may be, the time period for a response shall commence TWO (2) DAYS
following the proper mailing or depositing with the express delivery service,
as the case may be, of such notice, request, demand, consent, approval,
offer, counteroffer or other communication.
12.6 NO WAIVER
No waiver by any party of any provisions of this Lease, nor any
default by any party, shall affect the rights of the waiving or nondefaulting
party or parties thereafter to enforce such provision or to exercise any right
or remedy in the event of any other default, whether similar or dissimilar. No
waiver shall be binding unless executed in writing by the party making the
waiver, nor shall any waiver constitute a continuing waiver.
12.7 SEVERABILITY AND INVALIDITY
The invalidity or unenforceability of any provision hereof shall
not affect or impair any other provisions hereof; PROVIDED, HOWEVER, should any
provision hereof providing for the payment of any rents, compensation or
reimbursement to Lessor be invalid or unenforceable, Lessor may, at its sole
option, terminate this Lease at any time giving Lessee 10 days' prior written
notice of such election to terminate.
12.8 CAPTIONS, HEADINGS AND SUMMARY
The captions and headings throughout this Lease and the Summary at
the beginning of this Lease are for convenience and reference only and the words
contained in such captions, headings and Summary shall in no way be held or
deemed to define, limit, describe, explain, modify, amplify or add to the
interpretation, construction or meaning of any provision or the scope or intent
of this Lease, nor in any way affect this Lease.
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12.9 SUCCESSORS AND PERMITTED ASSIGNS
Subject to the provisions of Section 12.2 hereof, the terms,
covenants and conditions of this Lease shall inure to the benefit of, and shall
be binding upon, the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns.
12.10 GENDER
The use of any gender in this Lease shall include all other
genders, the singular shall include the plural, and the plural shall include the
singular, as the context may require.
12.11 RECORDING
No party to this Lease shall record this Lease without the other
parties' prior written consent, but each party shall, upon request of any other
party, execute, acknowledge and deliver to such other party a "short form"
memorandum of this Lease for recording purposes.
12.12 GOVERNING LAW
This Lease shall be construed and interpreted in accordance with
the laws of the Commonwealth of Kentucky without regard to any conflict of laws
provisions.
12.13 COUNTERPARTS
This Lease may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one and
the same instrument.
12.14 FURTHER ASSURANCES
From time to time, at any party's request and without further
consideration, each party shall execute and deliver such further instruments,
and take such other actions as the requesting party may reasonably request, in
order to more effectively implement the transactions contemplated herein.
12.15 TRIPLE NET LEASE
It is the intention of the parties that this Lease constitute a
"Triple Net" or "Net-Net-Net" lease. Accordingly, whether or not specifically
mentioned in this Lease, during the Term, Lessee shall be obligated to make,
either directly or by payment of Additional Rent or other amounts to Lessor with
respect to real estate taxes or other such items, all maintenance, repair,
replacement, real estate taxes, assessments,
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insurance premiums, and other payments connected with or arising out of
Lessee's use or occupation of the Leased Premises and customarily paid by the
lessee under a "Triple Net" or "Net-Net-Net" lease.
IN WITNESS WHEREOF, the parties hereto have set their hands as of
the day and year first hereinabove written.
LESSOR:
WEST BROAD DEVELOPMENT, LLC
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
XXXXXXX X. XXXXXX, MEMBER
LESSEE:
TUMBLEWEED, LLC
By: /s/ Xxxx X. Xxxxxxx, Xx.
--------------------------------------
XXXX X. XXXXXXX, XX., MANAGER
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------------
XXXXX X. XXXXXXXXX, MANAGER
EXHIBIT A: LEGAL DESCRIPTION OF LEASED PREMISES
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EXHIBIT A
LEGAL DESCRIPTION OF LEASED PREMISES
______________________________________________________________________________
Exhibit A
