NET LEASE AGREEMENT
THIS LEASE, made and entered into effective as of the 21st
day of December, 1995, by and between AEI REAL ESTATE FUND 85-A
LIMITED PARTNERSHIP, a Minnesota limited partnership whose
corporate general partner is AEI Fund Management 85-A, Inc., a
Minnesota corporation, whose address is 1300 Minnesota World
Trade Center, 00 Xxxx Xxxxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000
("Lessor"), and RENAISSANT DEVELOPMENT CORPORATION, a Texas
corporation, whose address is 0000 Xxxxx 00xx Xxxxxx, XxXxxxx,
Xxxxx 00000 ("Lessee");
WITNESSETH:
WHEREAS, Lessor is the fee owner of a certain parcel of real
property and improvements located at West Tyler & Xxxxxxxx,
Harlingen, Texas and legally described in Exhibit "A", which is
attached hereto and incorporated herein by reference; and
WHEREAS, Lessee constructed the building and improvements
(together the "Building") on the real property described in
Exhibit "A", which Building is described in the plans and
specifications heretofore submitted to Lessor; and
WHEREAS, Lessee desires to lease said real property and
Building (said real property and Building hereinafter referred to
as the "Leased Premises"), from Lessor upon the terms and
conditions hereinafter provided;
NOW, THEREFORE, in consideration of the Rents, terms,
covenants, conditions, and agreements hereinafter described to be
paid, kept, and performed by Lessee, Lessor does hereby grant,
demise, lease, and let unto Lessee, and Lessee does hereby take
and hire from Lessor and does hereby covenant, promise, and agree
as follows:
ARTICLE 1. LEASED PREMISES
Lessor hereby leases to Lessee, and Lessee leases and takes
from Lessor, the Leased Premises subject to the conditions of
this Lease.
ARTICLE 2. TERM
(A) The term of this Lease ("Term") shall be Twenty (20)
consecutive "Lease Years", as hereinafter defined, commencing on
December 21, 1995 ("Occupancy Date").
(B) The first "Lease Year" of the Term shall be for a period
of twelve (l2) consecutive calendar months from the Occupancy
Date. If the Occupancy Date shall be other than the first day of
a calendar month, the first "Lease Year" shall be the period from
the Occupancy Date to the end of the calendar month of the
Occupancy Date, plus the following twelve (l2) calendar months.
Each Lease Year after the first Lease Year shall be a successive
period of twelve (l2) calendar months.
(C) The parties agree that once the Occupancy Date has been
established, upon the request of either party, a short form or
memorandum of this Lease will be executed for recording purposes.
That short form or memorandum of this Lease will set forth the
actual occupancy and termination dates of the Term and optional
Renewal Terms, as defined in Article 28 hereof, and the existence
of any option to purchase, and that said option shall terminate
when the Lessee shall lose right to possession or this Lease is
terminated, whichever occurs first.
ARTICLE 3. CONSTRUCTION OF IMPROVEMENTS
(A) Lessee warrants and agrees that the Building has been
constructed on the Leased Premises, and all other improvements to
the land, including the parking lot, approaches, and service
areas, have been constructed in all material respects by Lessee
substantially in accordance with the plat, plans, and
specifications heretofore submitted to Lessor.
(B) Lessee warrants that to the best of its knowledge and
belief after due inquiry as of the date hereof, the Building and
all other improvements to the land do comply with the laws,
ordinances, rules, and regulations of all state and local
governments.
(C) Lessee agrees to pay, if not already paid in full, for
all architectural fees and actual construction costs relating to
the Building and other related improvements on the Leased
Premises, in the past, present or future, which shall include,
but not be limited to, plans and specifications, general
construction, carpentry, electrical, plumbing, heating,
ventilating, air conditioning, decorating, equipment
installation, outside lighting, curbing, landscaping,
blacktopping, electrical sign hookup, conduit and wiring from
building, fencing, and parking curbs, builder's risk insurance
(naming Lessor, Lessee, and contractor as co-insured), and all
construction bonds for improvements made by or at the direction
of Lessee, to the extent incurred or authorized by Lessee.
(D) Opening for business in the Leased Premises by Lessee
shall constitute an acceptance of the Leased Premises and an
acknowledgment by Lessee that the premises are in the condition
described under this Lease.
ARTICLE 4. RENT PAYMENTS
(A) Annual Rent Payable for the first,
second, and third Lease Years: Lessee shall pay to
Lessor an annual Base Rent of $156,400.00 ("Base Rent")
which amount shall be payable in advance on the first
day of each month in equal monthly installments of
$13,033.33. If the first day of the Term is not the
first day of a calendar month, then the monthly Rent
payable for that partial month shall be a prorated
portion of the equal monthly installment of Base Rent.
(B) Annual Rent Payable for the fourth,
seventh, tenth, thirteenth, sixteenth, nineteenth, and
if renewed according to the terms hereof, the twenty-
second, twenty-fifth, and twenty-eighth Lease Year:
1. For the fourth and each third
Lease Year thereafter, the annual Base Rent due and
payable shall increase by an amount equal to Eight
Percent (8%) of the Base Rent payable for the
immediately prior Lease Year. Such increased Base
Rent shall be paid until adjusted as provided
herein. Such increased Base Rent shall be payable
in advance of the first day of each month in equal
monthly installments.
(C) Overdue Payments.
Lessee shall pay interest on all overdue payments of Rent or
other monetary amounts due hereunder at the rate of eighteen
percent (18%) per annum or the highest rate allowed by law,
whichever is less, accruing from the date such Rent or other
monetary amounts were properly due and payable.
ARTICLE 5. INSURANCE AND INDEMNITY
(A) Lessee shall, throughout the Term or Renewal Terms, if
any, of this Lease, at its own cost and expense, procure and
maintain insurance which covers the Leased Premises and
improvements against fire, wind, and storm damage (including
flood insurance if the Leased Premises is in a federally
designated flood prone area) and such other risks (including
earthquake insurance, if the Leased Premises is located in a
federally designated earthquake zone or in an ISO high risk
earthquake zone) as may be included in the broadest form of
extended coverage insurance as may, from time to time, be
available in amounts sufficient to prevent Lessor or Lessee from
becoming a co-insurer within the terms of the applicable
policies. In any event, the insurance shall not be less than one
hundred percent (100%) of the then insurable value. Additionally,
replacement cost endorsements, inflation guard endorsements,
vandalism endorsement, malicious mischief endorsement, waiver of
subrogation endorsement, waiver of co-insurance or agreed amount
endorsement (if available), and Building Ordinance Compliance
endorsement and Rent loss endorsements (for a period of one year)
must be obtained.
(B) Lessee agrees to place and maintain throughout the Term
or Renewal Terms, if any, of this Lease, at Lessee's own expense,
public liability insurance with respect to Lessee's use and
occupancy of said premises, including "Dram Shop" or liquor
liability insurance, if the same shall be or become available in
the State of Texas, with initial limits of at least $1,000,000
per occurrence/$3,000,000 general aggregate, or such additional
amounts as Lessor shall reasonably require from time to time.
(C) Lessee agrees to notify Lessor in writing if Lessee is
unable to procure all or some part of the aforesaid insurance.
In the event Lessee fails to provide all insurance required under
this Lease, Lessor shall have the right, but not the obligation,
to procure such insurance on Lessee's behalf. Lessee will then,
within three (3) days from receiving written notice, pay Lessor
the amount of the premiums due or paid, together with interest
thereon at the lesser of 18% per annum or the highest rate
allowable by law, which amount shall be considered Rent payable
by Lessee in addition to the Rent defined at Article 4 hereof.
(D) All policies of insurance provided for or contemplated by
this Article can be under Lessee's blanket insurance coverage and
shall name Lessor, AEI Fund Management 85-A, Inc., a Minnesota
corporation and Xxxxxx X. Xxxxxxx, as the general partners of
Lessor, and Lessee as additional named insured, as their
respective interests may appear, and shall provide that the
policies cannot be canceled, terminated, changed, or modified
without thirty (30) days written notice to the parties. In
addition, all of such policies shall contain endorsements by the
respective insurance companies waiving all rights of subrogation,
if any, against Lessor. All insurance companies providing
coverages must be rated "A" or better by Best's Key Rating Guide
(the most current edition), or similar quality under a successor
guide if Best's Key Rating shall cease to be published. Lessee
shall provide Lessor with legible copies of any and all policies
on or before the Occupancy Date. No less than fifteen (15)
business days prior to expiration of such policies, Lessee shall
provide Lessor with legible copies of any and all renewal
Certificates of Insurance, if the terms of the Policies have not
changed, and copies of such policies if the same have changed.
Lessee agrees that it will not settle any property insurance
claims affecting the Leased Premises in excess of $25,000 without
Lessor's prior written consent, such consent not to be
unreasonably withheld or delayed. Lessor shall consent to any
settlement of an insurance claim wherein Lessee shall confirm in
writing with evidence reasonably satisfactory to Lessor that
Lessee has sufficient funds available to complete the rebuilding
of the Premises.
(E) Lessee shall defend, indemnify, and hold Lessor harmless
against any and all claims, damages, and lawsuits arising after
the Occupancy Date of this Lease and any orders, decrees or
judgments which may be entered therein, brought for damages or
alleged damages resulting from any injury to person or property
or from loss of life sustained in or about the Leased Premises,
unless such damage or injury results from the intentional
misconduct or the negligence of Lessor and Lessee agrees to save
Lessor harmless from, and indemnify Lessor against, any and all
injury, loss, or damage, of whatever nature, to any person or
property caused by, or resulting from any act, omission, or
negligence of Lessee or any employee or agent of Lessee. In
addition, Lessee hereby releases Lessor from any and all
liability for any loss or damage caused by fire or any of the
extended coverage casualties, unless such fire or other casualty
shall be brought about by the intentional misconduct or gross
negligence of Lessor. In the event of any loss, damage, or
injury caused by the joint gross negligence or willful misconduct
of Lessor and Lessee, they shall be liable therefor in accordance
with their respective degrees of fault.
(F) Lessor hereby waives any and all rights that it may have
to recover from Lessee damages for any loss occurring to the
Leased Premises by reason of any act or omission of Lessee;
provided, however, that this waiver is limited to those losses
for which Lessor is compensated by its insurers, if the insurance
required by this Lease is maintained.
Lessee hereby waives any and all right that it may have to
recover from Lessor damages for any loss occurring to the Leased
Premises by reason of any act or omission of Lessor; provided,
however, that this waiver is limited to those losses for which
Lessee is, or should be if the insurance required herein is
maintained, compensated by its insurers.
ARTICLE 6. TAXES, ASSESSMENTS AND UTILITIES
(A) Lessee shall be liable and agrees to pay the charges for
all public utility services rendered or furnished to the Leased
Premises, including heat, water, gas, electricity, sewer, sewage
treatment facilities and the like, all personal property taxes,
real estate taxes, special assessments, and municipal or
government charges, general, ordinary and extraordinary, of every
kind and nature whatsoever, which may be levied, imposed, or
assessed against the Leased Premises, or upon any improvements
thereon, at any time after the Occupancy Date of this Lease and
prior to the expiration of the term hereof, or any Renewal Term,
if exercised.
(B) Lessee shall pay all real estate taxes, assessments for
public improvements or benefits, and other governmental
impositions, duties, and charges of every kind and nature
whatsoever which shall or may, during the term of this Lease, be
charged, laid, levied, assessed, or imposed upon, or become a
lien or liens upon the Leased Premises or any part thereof. Such
payments shall be considered as Rent paid by Lessee in addition
to the Rent defined at Article 4 hereof. If due to a change in
the method of taxation, a franchise tax, Rent tax, or income or
profit tax shall be levied against Lessor in substitution for or
in lieu of any tax which would otherwise constitute a real estate
tax, such tax shall be deemed a real estate tax for the purposes
herein and shall be paid by Lessee; otherwise Lessee shall not be
liable for any such tax levied against Lessor.
(C) All real estate taxes, assessments for public
improvements or benefits, water rates and charges, sewer rents,
and other governmental impositions, duties, and charges which
shall become payable for the first and last tax years of the term
hereof shall be apportioned pro rata between Lessor and Lessee in
accordance with the respective number of months during which each
party shall be in possession of the Leased Premises in said
respective tax years. For the purposes of this provision, all
personal property taxes, real estate taxes and special
assessments shall be deemed to have been assessed in the year
that the first payment or any installment thereof is due.
(D) Lessee shall have the right to contest or review by legal
proceedings or in such other manner as may be legal (which, if
instituted, shall be conducted solely at Lessee's own expense)
any tax, assessment for public improvements or benefits, or other
governmental imposition aforementioned, upon condition that,
before instituting such proceeding Lessee shall pay (under
protest) such tax or assessments for public improvements or
benefits, or other governmental imposition, duties and charges
aforementioned, unless such payment would act as a bar to such
contest or interfere materially with the prosecution thereof and
in such event Lessee shall post with Lessor alternative security
reasonably satisfactory to Lessor. All such proceedings shall be
begun as soon as reasonably possible after the imposition or
assessment of any contested items and shall be prosecuted to
final adjudication with reasonable dispatch. In the event of any
reduction, cancellation, or discharge, Lessee shall pay the
amount that shall be finally levied or assessed against the
Leased Premises or adjudicated to be due and payable, and, if
there shall be any refund payable by the governmental authority
with respect thereto, if Lessee has paid the expense of Lessor in
such proceedings, Lessee shall be entitled to receive and retain
the refund, subject, however, to apportionment as provided during
the first and last years of the term of this Lease.
(E) Lessor, within sixty (60) days after notice to Lessee if
Lessee fails to commence such proceedings, may, but shall not be
obligated to, contest or review by legal proceedings, or in such
other manner as may be legal, and at Lessor's own expense, any
tax, assessments for public improvements and benefits, or other
governmental imposition aforementioned, which shall not be
contested or reviewed, as aforesaid, by Lessee, and unless Lessee
shall promptly join with Lessor in such contest or review, Lessor
shall be entitled to receive and retain any refund payable by the
governmental authority with respect thereto.
(F) Lessor shall not be required to join in any proceeding
referred to in this Article, unless in Lessee's reasonable
opinion, the provisions of any law, rule, or regulation at the
time in effect shall require that such a proceeding be brought by
and/or in the name of Lessor, in which event Lessor shall upon
written request, join in such proceedings or permit the same to
be brought in its name, all at no cost or expense to Lessor.
(G) Within thirty (30) days after Lessor notifies Lessee in
writing that Lessor has paid such amount, Lessee shall also pay
to Lessor, as additional Rent, the amount of any sales tax
imposed by a governmental authority on Rent payable hereunder.
At Lessor's option, Lessee shall deposit with Lessor on the first
day of each and every month during the term hereof, an amount
equal to one-twelfth (1/12) of the amount of such sales tax
payable annually, as reasonably estimated by Lessor ("Deposit").
From time to time out of such Deposit Lessor will pay the sales
tax to the appropriate governmental entity as required by law.
In the event the Deposit on hand shall not be sufficient to pay
said tax when the same shall become due from time to time, or the
prior payments shall be less than the current estimated monthly
amounts, then Lessee shall pay to Lessor on demand any amount
necessary to make up the deficiency. The excess of any such
Deposit shall be credited to subsequent payments to be made for
such items. If a default or an event of default shall occur
under the terms of this Lease, Lessor may, at its option, without
being required so to do, apply any Deposit on hand to cure such
default, in such order and manner as Lessor may elect. Lessee
shall also pay to Lessor, as additional Rent, the amount of any
sales, use, or other tax imposed on or measured by any Rent paid
hereunder. Such sales, use, or other tax shall be paid by Lessee
to Lessor at the same time as payment of any installment of Base
Rent is made.
ARTICLE 7. PROHIBITION ON ASSIGNMENTS AND SUBLETTING; TAKE-BACK
RIGHTS
(A) Except as otherwise expressly provided in this Article,
Lessee shall not, without obtaining the prior written consent of
Lessor, in each instance:
1. assign or otherwise transfer
this Lease, or any part of Lessee's right, title or
interest therein;
2. sublet all or any part of the
Leased Premises or allow all or any part of the
Leased Premises to be used or occupied by any other
Persons (herein defined as a Party other than
Lessee, be it a corporation, a partnership, an
individual or other entity); or
3. mortgage, pledge or otherwise
encumber this Lease, or the Leased Premises.
(B) For the purposes of this Article:
1. the transfer of voting control
of any class of capital stock of any corporate
Lessee or sublessee, or the transfer voting control
of the total interest in any other person which is a
Lessee or sublessee, however accomplished, whether
in a single transaction or in a series of related or
unrelated transactions, shall be deemed an
assignment of this Lease, or of such sublease, as
the case may be;
2. an agreement by any other
Person, directly or indirectly, to assume Lessee's
obligations under this Lease shall be deemed an
assignment;
3. any Person to whom Lessee's
interest under this Lease passes by operation of
law, or otherwise, shall be bound by the provisions
of this Article;
4. each material modification,
amendment or extension or any sublease to which
Lessor has previously consented shall be deemed a
new sublease; and
5. Lessee shall present the signed
consent to such assignment and/or subletting from
any guarantors of this Lease, such consent to be in
form and substance reasonably satisfactory to
Lessor.
Lessee agrees to furnish to Lessor within five (5) business
days following demand at any time such information and assurances
as Lessor may reasonably request that neither Lessee, nor any
previously permitted sublessee, has violated the provisions of
this Article.
(C) If Lessee agrees to assign this Lease or to sublet all or
any portion of the Leased Premises, Lessee shall, prior to the
effective date thereof (the "Effective Date"), deliver to Lessor
executed counterparts of any such agreement and of all ancillary
agreements with the proposed assignee or sublessee, as
applicable. If Lessor in its sole discretion (except as
otherwise specifically limited herein) shall not consent to a
proposed sublease or assignment, Lessor shall then have all of
the following rights, any of which Lessor may exercise by written
notice to Lessee given within thirty (30) days after Lessor
receives the aforementioned documents:
1. with respect to a proposed
assignment of this Lease, the right to terminate
this Lease on the Effective Date as if it were the
Expiration Date of this Lease;
2. with respect to a proposed
subletting of the entire Leased Premises, the right
to terminate this Lease on the Effective Date as if
it were the Expiration Date; or
3. with respect to a proposed
subletting of less than the entire Leased Premises,
the right to terminate this Lease as to the portion
of the Leased Premises affected by such subletting
on the Effective Date, as if it were the Expiration
Date, in which case Lessee shall promptly execute
and deliver to Lessor an appropriate modification of
this Lease in form satisfactory to Lessor in all
respects.
4. with respect to a proposed
subletting or proposed assignment of this Lease,
impose such conditions upon Lessor's consent as
Lessor shall determine in its sole discretion.
(D) If Lessor exercises any of its options under Article 7(C)
above, (and if Lessor shall impose conditions upon its consent
and Lessee shall fail to meet any conditions Lessor may impose
upon its consent), Lessor may then lease the Leased Premises or
any portion thereof to Lessee's proposed assignee or sublessee,
as the case may be, without liability whatsoever to Lessee.
(E) Notwithstanding anything above to the contrary, Lessor
agrees to consent to any assignment or sublease all or any
portion of the Lessee's interests herein, provided Lessor is
given prior written notice of such sublease or assignment,
accompanied by a copy of such sublease or assignment, and the
consents of Lessee (and Lessee shall use reasonable efforts to
obtain the consents of the Guarantors) affirming their continued
liability hereunder (or under their guaranty, respectively).
(F) Upon an assignment of Lessee's interest herein, Lessee
and any guarantor prior to such assignment will be released from
liability under the Lease hereunder and under the respective
guaranty, accruing prior to the date of Lessor's approval, if and
when the following conditions are satisfied:
1. The assignment of Lessee's interest must be to an entity
or entity and Persons offering their personal guaranties (in form
and substance substantially identical to those executed by the
original Guarantors) of Lessee's obligations ("Assignee"), which
Assignee has a Net Worth and Net Cash Flow at least equal to that
of Lessee and the present Guarantors of the Lease cumulatively,
as of the time of such assignment or as of the date this Lease is
effective, such date of equivalency to be determined by Lessor in
its sole discretion.
For purposes of the foregoing, Net Worth shall be defined as:
Net Worth = Total Assets - Total Liabilities;
and Net Cash Flow shall be defined as:
Net Cash Flow = Net Income (after corporate
administrative and management expenses) + depreciation
expenses + amortization expenses. Net Income shall be
after taxes, if any.
Evidence of Net Worth and Net Cash Flow shall be provided only
via complete audited financial statements by an independent
accounting firm acceptable to Lessor; and
2. In Lessor's sole but reasonable opinion, taking into
consideration such factors as years of restaurant managerial and
operational experience, business reputation, and other factors
reasonably related to the ability of the Assignee to operate the
Leased Premises, such Assignee is equivalent to Lessee as
determined either as of the time this Lease is effective or the
date of the assignment of Lessee's interest, such date of
equivalency to be determined by Lessor in its sole discretion.
(Paragraphs 1 and 2 above collectively called hereinafter the
"Equivalency Test").
If the Assignee does not meet the Equivalency Test at the time
of the assignment of the Lessee's interest in the Lease, but
shall meet it anytime thereafter and sustain it for two
consecutive fiscal years, as evidenced by two consecutive years
audited financial statements, Lessee and the present Guarantors
(guarantors prior to such assignment) will be released from
liability accruing prior to the date of Lessor's approval, after
review and approval by Lessor, such approval and review not to be
unreasonably withheld or delayed, of the evidence of satisfaction
of such conditions.
(G) Upon receipt by Lessor of written notice of an assignment
of the Lessee's interest in the Lease to Xxxxxxxx'x
International, Inc. (or its successor in interest), Lessee and
Guarantors may be released from liability under this Lease and
their respective Guarantys, provided Xxxxxxxx'x International,
Inc. (or its successor in interest's) Net Worth is no less than
$50,000,000 as evidenced on its most recent annual report or
audited financial statements.
ARTICLE 8. REPAIRS AND MAINTENANCE
(A) Lessee covenants and agrees to keep and maintain in good
order, condition and repair the interior and exterior of the
Leased Premises during the term of the Lease, or any renewal
terms, and further agrees that Lessor shall be under no
obligation to make any repairs or perform any maintenance to the
Leased Premises. Lessee covenants and agrees that it shall be
responsible for all repairs, alterations, replacements, or
maintenance of, including but without limitation to or of: The
interior and exterior portions of all doors; door checks and
operators; windows; plate glass; plumbing; water and sewage
facilities; fixtures; electrical equipment; interior walls;
ceilings; signs; roof; structure; interior building appliances
and similar equipment; heating and air conditioning equipment;
and any equipment owned by Lessor and leased to Lessee hereunder,
as itemized on Exhibit B attached hereto and incorporated herein
by reference; and further agrees to replace any of said equipment
when necessary. Lessee further agrees to be responsible for, at
its own expense, snow removal, lawn maintenance, landscaping,
maintenance of the parking lot (including parking lines, seal
coating, and blacktop surfacing), and other similar items.
(B) If Lessee refuses or neglects to commence or complete
repairs promptly and adequately, Lessor may cause such repairs to
be made, but shall not be required to do so, and Lessee shall pay
the cost thereof to Lessor within five (5) business days
following demand. It is understood that Lessee shall pay all
expenses and maintenance and repair during the term of this
Lease. If Lessee is not then in default hereunder, Lessee shall
have the right to make repairs and improvements to the Leased
Premises without the consent of Lessor if such repairs and
improvements do not exceed Twenty Five Thousand Dollars
($25,000.00), provided such repairs or improvements do not affect
the structural integrity of the Leased Premises. Any repairs or
improvements in excess of Twenty Five Thousand Dollars
($25,000.00) or affecting the structural integrity of the Leased
Premises may be done only with the prior written consent of
Lessor, such consent not to be unreasonably withheld or delayed.
All alterations and additions to the Leased Premises shall be
made in accordance with all applicable laws and shall remain for
the benefit of Lessor, except for Lessee's moveable trade
fixtures. In the event of making such alterations as herein
provided, Lessee further agrees to indemnify and save harmless
Lessor from all expense, liens, claims or damages to either
persons or property or the Leased Premises which may arise out of
or result from the undertaking or making of said repairs,
improvements, alterations or additions, or Lessee's failure to
make said repairs, improvements, alterations or additions.
ARTICLE 9. COMPLIANCE WITH LAWS AND REGULATIONS
Lessee will comply with all statutes, ordinances, rules,
orders, regulations and requirements of all federal, state, city
and local governments, and with all rules, orders and
regulations of the applicable Board of Fire Underwriters which
affect the use of the improvements. Lessee will comply with all
easements, restrictions, and covenants of record against or
affecting the Leased Premises and any franchise agreements
required for operation of the Leased Premises in accordance with
Article 14 hereof.
ARTICLE 10. SIGNS
Lessee shall have the right to install and maintain a sign or
signs advertising Lessee's business, provided that the signs
conform to law, and further provided that the sign or signs
conform specifically to the written requirements of the
appropriate governmental authorities.
ARTICLE 11. SUBORDINATION
(A) Lessor reserves the right and privilege to subject and
subordinate this Lease at all times to the lien of any mortgage
or mortgages now or hereafter placed upon Lessor's interest in
the Leased Premises and on the land and buildings of which said
premises are a part, or upon any buildings hereafter placed upon
the land of which the Leased Premises are a part, provided such
mortgagee shall execute its standard form, commercially
reasonable subordination, attornment and non-disturbance
agreement. Lessor also reserves the right and privilege to
subject and subordinate this Lease at all times to any and all
advances to be made under such mortgages, and all renewals,
modifications, extensions, consolidations, and replacements
thereof, provided such mortgagee shall execute its standard form,
commercially reasonable subordination, attornment and non-
disturbance agreement.
(B) Lessee covenants and agrees to execute and deliver, upon
demand, such further instrument or instruments subordinating this
Lease on the foregoing basis to the lien of any such mortgage or
mortgages as shall be desired by Lessor and any proposed
mortgagee or proposed mortgagees.
ARTICLE 12. CONDEMNATION OR EMINENT DOMAIN
(A) If the whole of the Leased Premises are taken by any
public authority under the power of eminent domain, or by private
purchase in lieu thereof, then this Lease shall automatically
terminate upon the date possession is surrendered, and Rent shall
be paid up to that day. If any part of the Leased Premises shall
be so taken as to render the remainder thereof materially
unusable in the opinion of a licensed third party architect
reasonably approved by Lessor, for the purposes for which the
Leased Premises were leased, then Lessor and Lessee shall each
have the right to terminate this Lease on thirty (30) days notice
to the other given within ninety (90) days after the date of such
taking. In the event that this Lease shall terminate or be
terminated, the Rent shall, if and as necessary, be paid up to
the day that possession was surrendered.
(B) If any part of the Leased Premises shall be so taken such
that it does not materially interfere with the business of
Lessee, then Lessee shall, with the use of the condemnation
proceeds to be made available by Lessor, but otherwise at
Lessee's own cost and expense, restore the remaining portion of
the Leased Premises to the extent necessary to render it
reasonably suitable for the purposes for which it was leased.
Lessee shall make all repairs to the building in which the Leased
Premises is located to the extent necessary to constitute the
building a complete architectural unit. Provided, however, that
such work shall not exceed the scope of the work required to be
done by Lessee in originally constructing such building unless
Lessee shall demonstrate to Lessor's reasonable satisfaction the
availability of funds to complete such work. Provided, further,
the cost thereof to Lessor shall not exceed the proceeds of its
condemnation award, all to be done without any adjustments in
Rent to be paid by Lessee. This lease shall be deemed amended to
reflect the taking in the legal description of the Leased
Premises.
(C) All compensation awarded or paid upon such total or
partial taking of the Leased Premises shall belong to and be the
property of Lessor without any participation by Lessee, whether
such damages shall be awarded as compensation for diminution in
value to the leasehold or to the fee of the premises herein
leased. Nothing contained herein shall be construed to preclude
Lessee from prosecuting any claim directly against the condemning
authority in such proceedings for: Loss of business; damage to
or loss of value or cost of removal of inventory, trade fixtures,
furniture, and other personal property belonging to Lessee;
provided, however, that no such claim shall diminish or otherwise
adversely affect Lessor's award or the award of any fee
mortgagee.
ARTICLE 13. RIGHT TO INSPECT
Lessor reserves the right to enter upon, inspect and examine
the Leased Premises at any time during business hours, after
reasonable notice to Lessee, and Lessee agrees to allow Lessor
free access to the Leased Premises to show the premises. Upon
default by Lessee or at any time within ninety (90) days of the
expiration or termination of the Lease, Lessee agrees to allow
Lessor to then place "For Sale" or "For Rent" signs on the Leased
Premises. Lessor and Lessor's representatives shall at all times
while upon or about the Leased Premises observe and comply with
Lessee's reasonable health and safety rules, regulations,
policies and procedures. Lessor agrees to indemnify and hold
Lessee, its successors, assigns, agents and employees from and
against any liability, claims, demands, cause of action, suits
and other litigation or judgements of every kind and character,
including injury to or death of any person or persons, or
trespass to, or damage to, or loss or destruction of, any
property, whether real or personal, to the extent resulting from
the negligence or willful misconduct or Lessor or Lessor's
representatives while upon or about the Leased Premises.
ARTICLE 14. EXCLUSIVE USE
(A) After the Occupancy Date, Lessee expressly agrees and
warrants that the Leased Premises will be used exclusively as an
Applebee's Restaurant or other casual dining sit-down restaurant,
unless such operation is no longer economically feasible. In
such case, after obtaining Lessor's prior written consent, such
consent not to be unreasonably withheld or delayed, Lessee may
conduct any lawful business from the Leased Premises. Lessee
acknowledges and agrees that any other use without the prior
written consent of Lessor will constitute a default under and a
violation and breach of this Lease. Lessee agrees: To open for
business on the first day in respect of which Rent is payable; to
operate all of the Leased Premises during the Term or Renewal
Terms during regular and customary hours for businesses similar
to the permitted exclusive use stated herein, unless prevented
from doing so by causes beyond Lessee's control; and to conduct
its business in a professional and reputable manner.
(B) If the Leased Premises are not operated as an Applebee's
Restaurant or other casual dining sit-down restaurant or other
permitted use hereunder, or remain closed for thirty (30)
consecutive days (unless such closure results from reasons beyond
Lessee's reasonable control) and in the event Lessee fails to pay
Rent when due or fulfill any other obligation hereunder, then
Lessee shall be in default hereunder and Lessor may, at its
option, cancel this Lease by giving written notice to Lessee or
exercise any other right or remedy that Lessor may have;
provided, however, that reasonable closings shall be permitted
for replacement of trade fixtures or during periods of repair
after destruction.
(C) In the event this Lease is terminated or canceled
pursuant to this Article, Lessee shall remain liable for the
payment of all Rents due to Lessor under this Lease for the full
remaining term in accordance with the applicable terms and
provisions of this Lease Agreement, offset by Rent generated
under a lease agreement with any new tenant. Provided, however,
that Lessor shall have no affirmative duty to mitigate Lessee's
liability hereunder.
ARTICLE 15. DESTRUCTION OF PREMISES
If, during the term of this Lease, the Leased Premises are
totally or partially destroyed by fire or other elements, within
a reasonable time (but in no event longer than one hundred eighty
(180) days and subject to the provisions herein below), Lessee
shall repair and restore the improvements so damaged or destroyed
as nearly as may be practical to their condition immediately
prior to such casualty. All rents payable by Lessee shall be
abated during the period of repair and restoration to the extent
that Lessor shall be compensated by the proceeds of the rent loss
insurance required to be maintained by Lessee hereunder.
Provided Lessee is not in default hereunder (and retains
according to the terms hereof the right to rebuild) with the
Lessor's prior written consent, which consent shall not be
unreasonably withheld or delayed, Lessee shall have the right to
promptly and in good xxxxx xxxxxx and adjust any claim under such
insurance policies with the insurance company or companies on the
amounts to be paid upon the loss. The insurance proceeds shall
be used to reimburse Lessee for the cost of rebuilding or
restoration of the Leased Premises. Risk that the insurance
company shall be insolvent or shall refuse to make insurance
proceeds available shall be with Lessee; if Lessor or Lessor's
lender shall refuse to make insurance proceeds (as such are
provided by the insurance company) available to be applied toward
the cost of rebuilding or repair, in such event, Lessee shall be
released from its obligations hereunder. The Leased Premises
shall be so restored or rebuilt so as to be of at least equal
value and substantially the same character as prior to such
damage or destruction. If the insurance proceeds are less than
Fifty Thousand Dollars ($50,000), they shall be paid to Lessee
for such repair and restoration. If the insurance proceeds are
greater than or equal to Fifty Thousand Dollars ($50,000), they
shall be deposited by Lessee and Lessor into a customary
construction escrow at a nationally recognized title insurance
company, or at Lessee's option, with Lessor ("Escrowee") and
shall be made available from time to time to Lessee for such
repair and restoration. Such proceeds shall be disbursed in
conformity with the terms and conditions of a commercially
reasonable construction loan agreement. Lessee shall, in either
instance, deliver to Lessor or Escrowee (as the case may be)
satisfactory evidence of the estimated cost of completion
together with such architect's certificates, waivers of lien,
contractor's sworn statements and other evidence of cost and of
payments as the Lessor or Escrowee may reasonably require and
approve. If the estimated cost of the work exceeds One Hundred
Thousand Dollars ($100,000), all plans and specifications for
such rebuilding or restoration shall be subject to the reasonable
approval of Lessor.
Any insurance proceeds remaining with Escrowee after the
completion of the repair or restoration shall be paid to Lessor
to reduce the sum of monies expended by Lessor to acquire from
Lessee its interest in the Leased Premises and rent hereunder
shall be reduced by 11.5% of such amount.
If the proceeds from the insurance are insufficient, after
review of the bids for completion of such improvements, or should
become insufficient during the course of construction, to pay for
the total cost of repair or restoration, Lessee shall, prior to
commencement of work, demonstrate to Escrowee and Lessor's
reasonable satisfaction, the availability of such funds necessary
to completion construction and Lessee shall deposit the same with
Escrowee for disbursement under the construction escrow
agreement.
Provided, further, that should the Leased Premises be damaged
or destroyed to the extent of fifty (50%) percent of its value or
such that Lessee cannot carry on business as a casual dining
restaurant without (in the opinion of a licensed third party
architect reasonably approved by Lessor) being closed for more
than sixty (60) days (which duration of closure may be
established by Lessee by the affidavit of the approved
independent third party architect as to the estimated time of
repair) during the last year of the remaining term of this Lease
or any of the option terms of this Lease, if any further options
to renew remain, Lessee may elect within 30 days of such damage,
to then exercise at least one (1) option to renew this Lease so
that the remaining term of the Lease is not less than five (5)
years in order to be entitled to such insurance proceeds for
restoration or rebuilding. Absent such election, this Lease
shall terminate upon Lessor's receipt of the insurance proceeds
equal to the estimated cost of such repair or restoration.
ARTICLE 16. ACTS OF DEFAULT
(A) Each of the following shall be deemed a default by Lessee
and a breach of this Lease:
1. Failure to pay the Rent or any
monetary obligation herein reserved, or any part
thereof when the same shall be due and payable.
Interest and late charges for failure to pay Rent
when due shall accrue from the first date such Rent
was due and payable; provided, however, Lessee shall
have five (5) days after written notice from Lessor
within which to cure the failure to pay the Rent or
any monetary obligation herein reserved.
2. Failure to do, observe, keep
and perform any of the other terms, covenants,
conditions, agreements and provisions in this Lease
to be done, observed, kept and performed by Lessee;
provided, however, that Lessee shall have twenty
(20) days after written notice from Lessor within
which to cure such default, or such longer time as
may be reasonably necessary if such default cannot
reasonably be cured within twenty (20) days, if
Lessee is diligently pursuing a course of conduct
that in Lessor's reasonable opinion is capable of
curing such default, but in any event such longer
time shall not exceed 120 days after written notice
from Lessor of the default hereunder.
3. The abandonment of the Leased
Premises by Lessee, the adjudication of Lessee as a
bankrupt, the making by Lessee of a general
assignment for the benefit of creditors, the taking
by Lessee of the benefit of any insolvency act or
law, the appointment of a permanent receiver or
trustee in bankruptcy for Lessee property, or the
appointment of a temporary receiver which is not
vacated or set aside within sixty (60) days from
the date of such appointment; provided, however,
that the foregoing shall not constitute events of
default so long as Lessee continues to otherwise
satisfy its obligations (including but not limited
to the payment of Rent) hereunder.
ARTICLE 17. TERMINATION FOR DEFAULT
In the event of any uncured default by Lessee and at any time
thereafter, Lessor may serve a written notice upon Lessee that
Lessor elects to terminate this Lease. This Lease shall then
terminate on the date so specified as if that date had been
originally fixed as the expiration date of the term herein
granted, provided, however, that Lessee shall have continuing
liability for future rents for the remainder of the original term
and any exercised renewal term as set forth in Article 19,
notwithstanding any earlier termination of the Lease hereunder
(except where Lessee has exercised a right to terminate where
granted herein), preserving unto Lessor the benefit of its
bargained-for rental payments.
ARTICLE 18. LESSOR'S RIGHT OF RE-ENTRY
In the event that this Lease shall be terminated as
hereinbefore provided, or by summary proceedings or otherwise, or
in the event of an uncured default hereunder by Lessee, or in the
event that the premises or any part thereof, shall be abandoned
by Lessee and Rent shall not be paid or other obligations
(including but not limited to repair and maintenance obligations)
of Lessee hereunder shall not be met, then Lessor or its agents,
servants or representatives, may immediately or at any time
thereafter, re-enter and resume possession of the premises or any
part thereof, and remove all persons and property therefrom,
either by summary dispossess proceedings or by a suitable action
or proceeding at law, or by force or otherwise without being
liable for any damages therefor, except for damages resulting
from Lessor's negligence or willful misconduct.
ARTICLE 19. LESSEE'S CONTINUING LIABILITY
(A) Should Lessor elect to re-enter as provided in this Lease
or should it take possession pursuant to legal proceedings or
pursuant to any notice provided for by law, it may either (i)
terminate this Lease or (ii) it may from time to time, without
terminating the contractual obligation of Lessee to pay Rent
under this Lease, make such alterations and repairs as may be
necessary to relet the Leased Premises or any part thereof for
the remainder of the original Term or any exercised Renewal
Terms, at such Rent or Rents, and upon such other terms and
conditions as Lessor in its sole discretion may deem advisable.
Termination of Lessee's right to possession by Court Order shall
be sufficient evidence of the termination of Lessee's possessory
rights under this Lease, and the filing of such an Order shall be
notice of the termination of Lessee's Option to Purchase as set
forth in any Memorandum of Lease of record.
(B) Upon each such reletting, without termination of the
contractual obligation of Lessee to pay Rent under this Lease,
all Rents received by Lessor shall be applied as follows:
1. First, to the payment of any
indebtedness other than Rent due hereunder from
Lessee to Lessor;
2. Second, to the payment of any
costs and expenses of such reletting, including
brokerage fees and attorney's fees and of costs of
such alterations and repairs;
3. Third, to the payment of Rent
and other monetary obligations due and unpaid
hereunder;
4. Finally, the residue, if any,
shall be held by Lessor and applied in payment of
future Rent as the same may become due and payable
hereunder.
If such Rents received from such reletting during any month are
less than that to be paid during that month by Lessee hereunder,
Lessee shall pay any such deficiency to Lessor. Such deficiency
shall be calculated and paid monthly. No such re-entry or taking
possession of such Leased Premises by Lessor shall be construed
as an election on its part to terminate Lessee's contractual
obligations under this Lease respecting the payment of rent and
obligations for the costs of repair and maintenance unless a
written notice of such intention be given to Lessee.
(C) Notwithstanding any such reletting without termination,
Lessor may at any time thereafter elect to terminate this Lease
for any uncured breach.
(D) In addition to any other remedies Lessor may have with
this Article 19, Lessor may recover from Lessee all damages it
may incur by reason of any uncured breach, including: The cost
of recovering and reletting the Leased Premises; reasonable
attorney's fees; and, the present value (discounted at a rate of
8% per annum) of the excess of the amount of Rent and charges
equivalent to Rent reserved in this Lease for the remainder of
the Term over the then reasonable Rent value of the Leased
Premises (or the actual Rents receivable by Lessor, if relet) for
the remainder of the Term, all of which amounts shall be
immediately due and payable from Lessee to Lessor in full. In
the event that the Rent obtained from such alternative or
substitute tenant is more than the Rent which Lessee is obligated
to pay under this Lease, then such excess shall be paid to Lessor
provided that Lessor shall credit such excess against the
outstanding obligations of Lessee due pursuant hereto, if any.
(E) It is the object and purpose of this Article 19 that
Lessor shall be kept whole and shall suffer no damage by way of
non-payment of Rent or by way of diminution in Rent. Lessee
waives and will waive all rights to trial by jury in any summary
proceedings or in any action brought to recover Rent herein which
may hereafter be instituted by Lessor against Lessee in respect
to the Leased Premises. Lessee hereby waives any rights of re-
entry it may have or any rights of redemption or rights to redeem
this Lease upon a termination of this Lease.
ARTICLE 20. PERSONALTY, FIXTURES AND EQUIPMENT
(A) All building fixtures, building machinery, and building
equipment used in connection with the operation of the Leased
Premises including, but not limited to, heating, electrical
wiring, lighting, ventilating, plumbing, walk-in
refrigerators/coolers, walk-in freezers, air conditioning
systems, and the equipment owned by Lessor and leased to Lessee
hereunder as specifically set forth on Exhibit B attached hereto
and incorporated herein by reference shall be the property of
Lessor. All trade fixtures and all other fixtures and articles
of personal property owned by Lessee shall remain the property of
Lessee.
(B) Lessee shall furnish and pay for any and all equipment,
furniture, trade fixtures, and signs, except for such items, if
any, described in Article 20(A) above, as owned by Lessor.
Provided Lessee is not in default hereunder, Lessor will agree
that its interest in the personal property of Lessee will be
subordinated to financing which may exist or which Lessee may
cause to exist in the future on that same personal property.
(C) At the end of the term of this Lease, the property
described at Article 20(B) above, after written notice to Lessor
given at least ten (10) days prior thereto, may be removed from
the Leased Premises by Lessee regardless of whether or not such
property is attached to the Leased Premises so as to constitute a
"fixture" within the meaning of the law; however, all damages and
repairs to the Leased Premises which may be caused by the removal
of such property shall be paid for by Lessee.
ARTICLE 21. LIENS
Lessee shall not do or cause anything to be done whereby the
Leased Premises may be encumbered by any mechanic's or other
liens. Whenever and as often as any mechanic's or other lien is
filed against said Leased Premises purporting to be for labor or
materials furnished or to be furnished to Lessee, Lessee shall
remove the lien of record by payment or by bonding with a surety
company authorized to do business in the state in which the
property is located, within forty-five (45) days from the date of
the filing of said mechanic's or other lien and delivery of
notice thereof to Lessee of Lessee's obligation under this Lease.
Should Lessee fail to take the foregoing steps within said forty-
five (45) day period (or in any event, prior to the expiration of
the time within which Lessee may bond over such lien to remove it
as a lien upon the Leased Premises), Lessor shall have the right,
among other things, to pay said lien without inquiring into the
validity thereof, and Lessee shall forthwith reimburse Lessor for
the total expense incurred by it in discharging said lien as
additional Rent hereunder.
ARTICLE 22. NO WAIVER BY LESSOR EXCEPT IN WRITING
No agreement to accept a surrender of the Leased Premises or
termination of this Lease shall be valid unless in writing signed
by Lessor. The delivery of keys to any employee of Lessor or
Lessor's agents shall not operate as a termination of the Lease
or a surrender of the premises. The failure of Lessor to seek
redress for violation of any rule or regulation, shall not
prevent a subsequent act, which would have originally constituted
a violation, from having all the force and effect of an original
violation. Neither payment by Lessee or receipt by Lessor of a
lesser amount than the Rent herein stipulated shall be deemed to
be other than on account of the earliest stipulated Rent. Nor
shall any endorsement or statement on any check nor any letter
accompanying any check or payment as Rent be deemed an accord and
satisfaction. Lessor may accept such check or payment without
prejudice to Lessor's right to recover the balance of such Rent
or pursue any other remedy provided in this Lease. This Lease
contains the entire agreement between the parties, and any
executory agreement hereafter made shall be ineffective to change
it, modify it or discharge it, in whole or in part, unless such
executory agreement is in writing and signed by the party against
whom enforcement of the change, modification or discharge is
sought.
ARTICLE 23. QUIET ENJOYMENT
Lessor covenants that Lessee, upon paying the Rent set forth
in Article 4 and all other sums herein reserved as Rent and upon
the due performance of all the terms, covenants, conditions and
agreements herein contained on Lessee's part to be kept and
performed, shall have, hold and enjoy the Leased Premises free
from molestation, eviction, or disturbance by Lessor, or by any
other person or persons lawfully claiming the same, and that
Lessor has good right to make this Lease for the full term
granted, including renewal periods.
ARTICLE 24. BREACH - PAYMENT OF COSTS AND ATTORNEYS' FEES
Each party agrees to pay and discharge all reasonable costs,
and actual attorneys' fees, including but not limited to
attorney's fees incurred at the trial level and in any appellate
or bankruptcy proceeding, and expenses that shall be incurred by
the prevailing party in enforcing the covenants, conditions and
terms of this Lease or defending against an alleged breach,
including the costs of reletting. Such costs, attorneys fees,
and expenses if incurred by Lessor shall be considered as Rent as
due and owing in addition to any Rent defined in Article 4
hereof.
ARTICLE 25. ESTOPPEL CERTIFICATES
Either party to this Lease will, at any time, upon not less
than ten (l0) days prior request by the other party, execute,
acknowledge and deliver to the requesting party a statement in
writing, executed by an executive officer of such party,
certifying that: (a) this Lease is unmodified (or if modified
then disclosure of such modification shall be made); (b) this
Lease is in full force and effect; (c) the date to which the Rent
and other charges have been paid; and (d) to the knowledge of the
signer of such certificate that the other party is not in default
in the performance of any covenant, agreement or condition
contained in this Lease, or if a default does exist, specifying
each such default of which the signer may have knowledge. It is
intended that any such statement delivered pursuant to this
Article may be relied upon by any prospective purchaser or
mortgagee of the Leased Premises or any assignee of such
mortgagee or a purchaser of the leasehold estate.
ARTICLE 26. FINANCIAL STATEMENTS
During the term of this Lease, Lessee will, within ninety (90)
days after the end of Lessee's fiscal year, furnish its financial
statements of the Lessee. The financial statements shall be
audited, at the Lessee's expense, by an independent certified
public accountant and shall be prepared in conformity with
generally accepted accounting principles. Additionally, during
the term of the Lease, Lessee will within thirty (30) days from
the end of each quarter of each fiscal year, furnish Lessor with
Lessee's financial statements and operating statements of the
Leased Premises for such quarter. Lessor shall have the right to
require such operating statements on a monthly basis. Said
quarterly (or monthly, if requested by Lessor) statements do not
need to be prepared by an independent certified public
accountant, but shall be certified as true and correct by the
chief financial officer of Lessee. The financial statements
shall include a balance sheet and related statements of income,
changes in cash funds, changes in capital, and related notes to
financial statements.
ARTICLE 27. MORTGAGE
Lessee does hereby agree to make reasonable modifications of
this Lease requested by any Mortgagee of record from time to time
provided such modifications are not substantial and do not
increase any of the Rents or substantially modify any of the
business elements of this Lease.
ARTICLE 28. OPTION TO RENEW
If this Lease is not previously canceled or terminated and if
Lessee has complied with and performed all of the covenants and
conditions in this Lease, then Lessee shall have the option to
renew this Lease upon the same conditions and covenants contained
in this Lease for Two (2) consecutive periods of Five (5) years
each (singularly "Renewal Term"). Rent during the Twenty-Second,
Twenty-Fifth, and Twenty-Eight Lease Year of the Renewal Term
shall increase by Eight Percent (8%) of the Rent payable for the
preceding Lease Year. Increased Base Rent shall be paid until
adjusted as provided herein.
The first Renewal Term will commence on the day following the
date the original Term expires and successive Renewal Terms would
commence on the day of following the last day of the then
expiring Renewal Term. Except as otherwise provided in Article
15 hereof, Lessee must give one hundred twenty (l20) days written
notice to Lessor of its intent to exercise this option prior to
the expiration of the original Term of this Lease or any Renewal
Term, as the case may be.
ARTICLE 29. MISCELLANEOUS PROVISIONS
(A) All written notices shall be given to Lessor by certified
mail. Notices to either party shall be addressed to the person
and address given on the first page hereof. Lessor and Lessee
may, from time to time, change these addresses by notifying each
other of this change in writing. Notices of overdue Rent may be
sent to Lessee by regular, special delivery, or nationally
recognized overnight mail.
(B) The terms, conditions and covenants contained in this
Lease and any riders and plans attached hereto shall bind and
inure to the benefit of Lessor and Lessee and their respective
successors, heirs, legal representatives, and assigns.
(C) This Lease shall be governed by and construed under the
laws of the State of Texas.
(D) In the event that any provision of this Lease shall be
held invalid or unenforceable, no other provisions of this Lease
shall be affected by such holding, and all of the remaining
provisions of this Lease shall continue in full force and effect
pursuant to the terms hereof.
(E) The Article captions are inserted only for convenience
and reference, and are not intended, in any way, to define,
limit, describe the scope, intent, and language of this Lease or
its provisions.
(F) In the event Lessee remains in possession of the premises
herein leased after the expiration of this Lease and without the
execution of a new lease, it shall be deemed to be occupying said
premises as a tenant from month-to-month, subject to all the
conditions, provisions, and obligations of this Lease insofar as
the same can be applicable to a month-to-month tenancy except
that the monthly installment of Rent shall be double the amount
due on the last month prior to such expiration.
(G) If any installment of Rent (whether lump sum, monthly
installments, or any other monetary amounts required by this
Lease to be paid by Lessee and deemed to constitute Rent
hereunder) shall not be paid when due, Lessor shall have the
right to charge Lessee a late charge of $250.00 per month for
unpaid Rent for each month that any amount of Rent installment
remains unpaid. Said late charge shall commence after such
installment is due and continue until said installment, interest
and all accrued late charges are paid in full.
(H) Any part of the Leased Premises may be conveyed by Lessor
for private or public non-exclusive easement purposes at any
time, provided such easement does not interfere with the business
of Lessee. In such event Lessor shall, at its own cost and
expense, restore the remaining portion of the Leased Premises to
the extent necessary to render it reasonably suitable for the
purposes for which it was leased, all to be done without
adjustments in Rent to be paid by Lessee. All proceeds from any
conveyance of an easement shall belong solely to Lessor.
(I) For the purpose of this Lease, the term "Rent" shall be
defined as Rent under Article 4, and any other monetary amounts
required by this Lease to be paid by Lessee.
(J) Lessee agrees to cooperate with Lessor to allow Lessor to
obtain and use at Lessor's expense promotional photographs of the
Leased Premises, to the extent permitted by Lessee's franchisor.
(K) Neither Lessor nor Lessee shall be responsible to the
other party for any delay, damage, or failure caused by or
occasioned by a Force Majeure Event; provided, however, that a
Force Majeure Event shall in no event excuse the Lessee from the
payment of Rent or any other payment of money by Lessee required
under this Lease. As used in this Lease, "Force Majeure Event"
includes: acts of God, action of the elements, warlike action,
insurrection, revolution, or civil strife, piracy, civil war or
hostile action, strikes, acts of public enemies, federal or state
laws, rules, and regulations of any governmental authorities
having jurisdiction in the Leased Premises, beyond the control of
either party. Force Majeure Event shall not include a delay,
damage, or failure the cure of which may be effected by the
expenditure of funds at then current market prices. Delays (in
no event to exceed 180 days) due to a Force Majeure Event shall
not be deemed to be a breach or failure to perform under this
Lease. Neither Lessor nor Lessee shall be required against its
will to adjust any labor or similar disputes except in accordance
with applicable law.
ARTICLE 30. REMEDIES
NON-EXCLUSIVITY. Notwithstanding anything contained herein it
is the intent of the parties that the rights and remedies
contained herein shall not be exclusive but rather shall be
cumulative along with all of the rights and remedies of the
parties which they may have at law or equity.
ARTICLE 31. HAZARDOUS MATERIALS INDEMNITY
Lessee covenants, represents and warrants to Lessor, its
successors and assigns, (i) that it has not used or permitted and
will not use or permit the Leased Premises to be used, whether
directly or through contractors, agents or tenants, and to the
best of Lessee's knowledge and except as disclosed to Lessor in
writing, the Leased Premises has not at any time been used for
the generating, transporting, treating, storage, manufacture,
emission of, or disposal of any dangerous, toxic or hazardous
pollutants, chemicals, wastes or substances as defined in the
Federal Comprehensive Environmental Response Compensation and
Liability Act of 1980 ("CERCLA"), the Federal Resource
Conservation and Recovery Act of 1976 ("RCRA"), or any other
federal, state or local environmental laws, statutes,
regulations, requirements and ordinances ("Hazardous Materials");
(ii) that there have been no investigations or reports involving
Lessee, or the Leased Premises by any governmental authority
which in any way pertain to Hazardous Materials (iii) that the
operation of the Leased Premises has not violated and is not
currently violating any federal, state or local law, regulation,
ordinance or requirement governing Hazardous Materials; (iv) that
the Leased Premises is not listed in the United States
Environmental Protection Agency's National Priorities List of
Hazardous Waste Sites nor any other list, schedule, log,
inventory or record of Hazardous Materials or hazardous waste
sites, whether maintained by the United States Government or any
state or local agency; and (v) that the Leased Premises will not
contain any formaldehyde, urea or asbestos, except as may have
been disclosed in writing to Lessor by Lessee at the time of
execution and delivery of this Lease. Lessee agrees to indemnify
and reimburse Lessor, its successors and assigns, for:
(a) any breach of these representations and warranties, and
(b) any loss, damage, expense or cost arising out of or
incurred by Lessor which is the result of a breach of,
misstatement of or misrepresentation of the above
covenants, representations and warranties, and
(c) any and all liability of any kind whatsoever which
Lessor may, for any cause and at any time, sustain or
incur by reason of Hazardous Materials discovered on the
Leased Premises during the term hereof or placed or
released on the Leased Premises by Lessee;
together with all attorneys' fees, costs and disbursements
incurred in connection with the defense of any action against
Lessor arising out of the above. These covenants,
representations and warranties shall be deemed continuing
covenants, representations and warranties for the benefit of
Lessor, and any successors and assigns of Lessor and shall
survive expiration or sooner termination of this Lease. The
amount of all such indemnified loss, damage, expense or cost,
shall bear interest thereon at the lesser of 18% per annum or the
highest rate of interest allowed by law and shall become
immediately due and payable in full on demand of Lessor, its
successors and assigns. Lessee shall not be responsible for any
liabilities under this Article if the liability results from
activities of Lessor or any agent, employee, or contractor of
Lessor.
ARTICLE 32. ESCROWS
Upon a default by Lessee or upon the request of Lessor's
Mortgagee, if any, Lessee shall deposit with Lessor on the first
day of each and every month, an amount equal to one-twelfth
(1/12th) of the estimated annual real estate taxes, assessments
and insurance ("Charges") due on the Leased Premises, or such
higher amounts reasonably determined by Lessor as necessary to
accumulate such amounts to enable Lessor to pay all charges due
and owing at least thirty (30) days prior to the date such
amounts are due and payable. From time to time out of such
deposits Lessor will, upon the presentation to Lessor by Lessee
of the bills therefor, pay the Charges or at Lessee's option,
will upon presentation of receipted bills therefor, reimburse
Lessee for such payments made by Lessee. In the event the
deposits on hand shall not be sufficient to pay all of the
estimated Charges when the same shall become due from time to
time or the prior payments shall be less than the currently
estimated monthly amounts, then Lessee shall pay to Lessor on
demand any amount necessary to make up the deficiency. The
excess of any such deposits shall be credited to subsequent
payments to be made for such items. If a default or an event of
default shall occur under the terms of this Lease, Lessor may, at
its option, without being required so to do, apply any Deposit on
hand to cure the default, in such order and manner as Lessor may
elect.
ARTICLE 33. NET LEASE
Notwithstanding anything contained herein to the contrary it
is the intent of the parties hereto that this Lease shall be a
net lease and that the Rent defined pursuant to Article 4 should
be a net Rent paid to Lessor. Any and all other expenses
including but not limited to, maintenance, repair, insurance,
taxes, and assessments, shall be paid by Lessee.
ARTICLE 34. RIGHT OF FIRST REFUSAL
Lessor, for itself, its successors and assigns, hereby gives
and grants to Lessee a right of first refusal (the "Option") to
purchase the Leased Premises, subject to the following terms and
conditions:
(A) Duration of Option. The Option and all rights and
privileges of Lessee hereunder shall be in force for the term of
this Lease until the expiration of Lessee's right to possession.
(B) Manner of Exercising Option. If Lessor shall desire to
sell the Leased Premises (subject to the terms of this Lease),
Lessor shall give Lessee written notice of Lessor's intention to
sell Lessor's interest in the Leased Premises. Such notice
("Lessor's Notice") shall state a price at which Lessor intends
to sell and will sell its interest to Lessee if this Option is
exercised, or to a third party if Lessee shall not exercise this
Option. If Lessee shall fail to exercise its Option as set forth
herein, the terms of Article 34 (E) shall apply. For twenty (20)
business days following the giving of such notice, Lessee shall
have the option to purchase the Lessor's interest at the price in
cash stated in the Lessor's Notice. A written notice in
substantially the following form, addressed to Lessor and signed
by Lessee and given, in accordance with the provisions of Article
29(A) hereof, within the period for exercising the Option,
submitted with a bank cashier's check or money order payable to
the order of Lessor in the amount of $5,000.00 (the "Xxxxxxx
Money") shall be an effective exercise of Lessee's Option, to
wit:
(date)
"We hereby exercise the Option to purchase the property commonly
known as Applebee's, Harlingen, Texas, pursuant to the Right of
First Refusal contained in that certain Net Lease Agreement
between us pertaining to said premises.
(C) Terms of Sale if Option Exercised. Upon Lessee's
exercise of the Option in accordance with the provisions of
subparagraph (B) hereof, Lessor shall be obligated to sell and
convey by recordable general warranty deed, good and indefeasible
title to the Leased Premises subject only to the matters
affecting title which were of record at the time Lessor came into
title to the Leased Premises and those matters which Lessee
created, suffered or permitted to accrue during the term hereof,
and Lessee shall be obligated to purchase the Premises upon the
following terms and conditions:
(i) Price. The price "Purchase Price" at which Lessor
shall sell and Lessee shall purchase the Leased Premises
shall be the price stated in Lessor's Notice.
(ii) Closing. Closing shall be sixty (60) days after the
expiration of the twenty business days within which
Lessee may exercise its Option, unless the parties
mutually agree otherwise. The Purchase Price less
credit for the Xxxxxxx Money and any other credits to
which Lessee is entitled hereunder shall be tendered in
cash or other certified funds by Lessee at Closing.
(iii) Evidence of Title. Not less than
ten (10) days prior to closing, Lessor shall obtain a
commitment for an ALTEX owner's policy of title
insurance dated within thirty (30) days of the closing
date, issued by a nationally recognized title insurance
company selected by Lessor (the "Title Company") in the
amount of the Purchase Price determined pursuant to
subparagraph (C)(i) above, naming Lessee as the proposed
insured, and covering the fee simple title to the Leased
Premises, and showing Lessor vested with good title to
the Leased Premises subject only to the matters
affecting title which were of record at the time Lessor
came into title to the Leased Premises and those matters
which Lessee created, suffered or permitted to accrue
during the term hereof. Such title commitment shall be
conclusive evidence of good title. If Lessee shall make
objection to the marketability of title, Lessor shall
have no obligation to make title marketable, but may
withdraw Lessor's notice of intent to market the
Premises.
(iv) Prorations. Lessor shall pay the cost of the
aforesaid title policy and any and all state and
municipal taxes imposed by law on the transfer of the
title to the Leased Premises, or the transaction
pursuant to which such transfer occurs. Water, sewer
and other utility charges, if any, which are not
metered, driveway permit charges, if any, general real
estate taxes, and other similar items, shall be adjusted
ratably as of the Closing, except to the extent
otherwise settled between the parties pursuant to other
provisions of this Lease. A prorated portion of the
Rent prepaid by Lessee for the month of closing shall be
credited toward the Purchase Price and Lessee shall be
given a credit for rent prepaid for any period after the
month in which the Closing occurs.
(v) Escrow Closing. At the election of Lessor or Lessee
upon notice to the other party not less than five (5)
days prior to the Closing, this sale shall be closed
through an escrow with the Title Company, in accordance
with the general provisions of the usual form of Deed
and Money Escrow Agreement then is use by said company,
with such special provisions inserted in the escrow
agreement as may be required to conform with this
agreement. Upon the creation of such an escrow,
anything herein to the contrary notwithstanding, paying
of the purchase price and delivery of the deed shall be
made through the escrow. The cost of the escrow shall
be divided equally between the Lessor and Lessee. If
for any reason other than Lessee's default, the
transaction fails to close, the Xxxxxxx Money shall be
returned to Lessee forthwith.
(vi) Remedies on Default. If Lessee defaults under the
provisions of this subparagraph 34(C), Lessor shall have
the right to annul the provisions of this paragraph 34
by giving Lessee notice of such election, provided that
Lessor has first notified Lessee of such default and
Lessee has failed to cure the same within ten (10) days
after such notice. Upon Lessor's notice of annulment in
accordance herewith, the Xxxxxxx Money shall be
forfeited and paid to Lessor as liquidated damages,
which shall be Lessor's sole and exclusive remedy. If
Lessor defaults under the provisions of this
subparagraph 34(C) and fails to cure such default within
ten (10) days after being notified of the same by
Lessee, then in such event, (i) the Xxxxxxx Money at
Lessee's election and immediately upon its demand shall
be returned to Lessee, which return shall not, however,
in any way release or absolve Lessor from its
obligations hereunder and (ii) Lessee shall be entitled
to all remedies (both legal and equitable) the law (both
statutory and decisional) of the state in which the
Leased Premises are situated provides without first
having to tender the balance of the purchase price as a
condition precedent thereof and without having to make
any election of such remedies.
(D) Effect of Option on Lease. If the Option is exercised,
this Lease shall continue in full force and effect until the
Closing hereinabove specified. If for any reason such Closing
fails to occur, this Lease shall continue in full force and
effect, except that if the provisions of this paragraph 34 are
annulled by Lessor, in accordance with subparagraph 34(C)(vi), by
reason of a default by Lessee, this Lease shall continue but
without the provisions of this paragraph 34 being a part hereof.
(E) If Lessee fails to exercise its Option, Lessor shall be
free to sell its interest in the Leased Premises for six months
following the expiration of the twenty business days within which
Lessee may exercise its Option, provided that Lessor shall sell
its interest for a price equal to or greater than the price set
forth in Lessor's Notice. This Right of First Refusal shall
survive any sale of the Leased Premises and shall apply to any
subsequent sale or potential sale by Lessor or its assigns.
ARTICLE 35. APPLEBEE'S FRANCHISE AGREEMENT
Lessor and Lessee expressly acknowledge the existence of a
Franchise Agreement between Lessee and Xxxxxxxx'x International,
Inc. ("Franchisor") for the Applebee's Restaurant located on the
Leased Premises. In the event of an uncured default under or
termination of the Franchise Agreement or this Lease, subject to
applicable law, Lessor hereby agrees to allow Franchisor, for a
period of thirty (30) days, to enter the Premises for the purpose
of removing any items, signs or equipment not owned by Lessor,
displaying Franchisor's trademarks, from the Leased Premises,
without damaging the Leased Premises (or in the case of
unavoidable damage, Franchisor shall restore the Leased Premises
to its prior undamaged condition at Franchisor's expense).
Furthermore, in the event of a termination of the Franchise
Agreement or this Lease, Lessor agrees to the assignment of the
Lease to Franchisor, at Franchisor's sole option, subject to
Franchisor's assumption of the duties and the unaccrued but not
the then existing debts and obligations of Lessee under this
Lease, provided said parties so agree to assume in writing within
thirty (30) days of written notice of termination.
IN WITNESS WHEREOF, Lessor and Lessee have respectively signed
and sealed this Lease as of the day and year first above written.
LESSEE: RENAISSANT DEVELOPMENT CORPORATION
By: /s/ A R Xxxxxxx
Its: President
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK - LESSOR'S SIGNATURE
ON FOLLOWING PAGE
LESSOR: AEI REAL ESTATE FUND 85-A LIMITED PARTNERSHIP,
a Minnesota limited partnership
By: AEI FUND MANAGEMENT 85-A, INC., a Minnesota corporation
By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx, President
EXHIBIT "A"
Xxx Xxx (0), Xxxxx Xxx (0), Xxxxxxxx'x Xx. 0 Xxxxxxxxxxx, Xxxx of
Harlingen, Cameron County, Texas, according to the Map recorded
in Cabinet 1, Slot 1381-A, Map Records of Cameron County, Texas.
EXHIBIT "B"
(1) One (1) Kolpak walk-in freezer, Serial Number 952230060P,
which includes a walk-in beer and wine cooler and conventional
walk-in cooler, including shelving and racks.
(2) One (1) Bar Top/Upper Cabinet manufactured by Food
Service Supplies, Inc. consisting of over bar structure with
glass rack, bar top, and service cabinet.
(3) One (1) Captive-Aire Exhaust Hood with pyrochem fire
system and fan package.
