NET LEASE AGREEMENT
THIS NET LEASE AGREEMENT, made and entered effective as of
this 4th day of February, 2004, by and between AEI Income &
Growth Fund 25 LLC , whose managing member is AEI Fund
Management XXI, Inc., and AEI Accredited Investor Fund
2002Limited Partnership, whose corporate general partner is
AEI Fund Management XVIII, Inc., as tenants in common ("Fund
25", "Fund 2002, or together, " Lessor"), whose address is
0000 Xxxxx Xxxxx Xxxxx, 00 Xxxx Xxxxxxx Xxxxxx, Xx. Xxxx,
Xxxxxxxxx 00000 ("Lessor")(fax #000 000 0000), and SWH
Corporation, 00000 X 00xx Xxxxxx, Xxxxx 000, Xxxxxx, XX
00000 ("Lessee") (fax#000 000 0000).
WITNESSETH:
WHEREAS, Lessor is the fee owner of a certain parcel of
real property and improvements located at Kansas City,
Missouri, and legally described in Exhibit "A", which is
attached hereto and incorporated herein by reference; and
WHEREAS, in connection with Lessee's intended
construction of the Building, Lessee and Lessor have entered
into that certain Development Financing and Leasing
Commitment dated September 30, 2003 (the "Commitment"), and
that certain Development Financing Agreement, of even date
herewith (the "Development Financing Agreement"); and
WHEREAS, Lessee as owner contracted for the
construction of 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 as and when constructed) (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 Lessor and Lessee
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 the effective date first listed above,
("Occupancy Date"), plus the period from the Occupancy Date
until the final disbursement of Development Financing
Proceeds under the Development Financing Agreement.
(B) The first "Lease Year" of the Term shall be for a
period of twelve (l2) consecutive calendar months from the
Occupancy Date, plus the period from the Occupancy Date
until the final disbursement of Development Financing
Proceeds under the Development Financing Agreement. 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 and the period from the Occupancy Date until the
final disbursement of Development Financing Proceeds under
the Development Financing Agreement. 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
extend, 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 agrees to construct the Building in
accordance with the Development Financing Agreement.
(B) Lessee warrants that when constructed, the Building
and all other improvements to the land will 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
incurred by Lessee, in the past, present or future, with
respect to the Building, 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 period from the
Occupancy Date until the final disbursement of Development
Financing Proceeds under the Development Financing
Agreement: Lessee shall pay to Lessor an annual rent ("Base
Rent") of $78,000, which amount shall be payable in advance
on the first day of each month in equal monthly
installments, subject to deferral as contemplated by Article
XV of the Development Financing Agreement. If the first day
of the Lease Term is not the first day of a calendar month,
then the monthly Base Rent payable for that partial month
shall be a prorated portion of the equal monthly installment
of Base Rent. Annual Base Rent for the balance of the first
five Lease Years after the period from the Occupancy Date
until the final disbursement of Development Financing
Proceeds under the Development Financing Agreement shall be
set forth in an amendment to this Net Lease Agreement as
contemplated by the Development Financing Agreement.
(B) Rent Increases
Annual Base Rent payable beginning with the start of
the sixth Lease Year and the beginning of each fifth Lease
Year (e.g. the eleventh, sixteenth, etc.) thereafter shall
increase by an amount equal to two times (2x) the CPI-U
Percentage Increase (as defined below), capped at ten
percent (10%) of the Base Rent payable for the immediately
prior Lease Year. Such increased Base Rent shall be payable
in advance of the first day of each month in equal monthly
installments.
"CPI-U" shall mean the Consumer Price Index for All
Urban Consumers, (all items), published by the United States
Department of Labor, Bureau of Labor Statistics (BLS) (1982-
84 equal 100), U.S. Cities Average, or, in the event said
index ceases to be published, by any successor index
recommended as a substitute therefor by the United States
Government or a comparable, nonpartisan substitute
reasonably designated by Lessor. If the BLS changes the
base reference period for the CPI-U from 1982-84=100, the
CPI-U Percentage Increase shall be determined with the use
of such conversion formula or table as may be published by
the BLS.
The term "CPI-U Percentage Increase" shall mean the
percentage increase in the CPI-U determined by reference to
the increase, if any, in the latest monthly CPI-U issued
prior to the first day of the Lease Year for which Base Rent
is being increased, over the CPI-U issued sixty (60) months
prior (e.g., the March CPI-U for the year 2014 over the
March CPI-U for the year 2009.) Said month's CPI-U shall be
used even though that CPI-U will not be for the month in
which the renewal term commences.
(C) Overdue Payments.
Lessee shall pay interest on all overdue payments of
Rent or other monetary amounts due hereunder at the rate of
ten percent (10%) per annum or the highest rate allowed by
law, whichever is less, accruing beginning five days after
written notice to Lessee that Rent or other monetary amounts
properly due and payable were not paid.
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 (excluding the cost of footings and
foundation). 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 Missouri and liquor is sold
on the Premises, with initial limits of at least $2,000,000
per occurrence/$5,000,000 general aggregate, or such
additional amounts as Lessor shall reasonably require from
time to time, upon Lessor's good faith determination that
the present insurance coverage is inadequate, such amounts
to be consistent with requirements of other lessor's in
similar circumstances.
(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 five (5) days
from receiving written notice, pay Lessor the amount of the
premiums due or paid, together with interest thereon at the
lesser of 10% 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 Lessee, and Lessor,
Lessor's corporate general partner and Xxxxxx X. Xxxxxxx, as
the individual general partner, of Lessor, 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 certificates of such 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. Lessee shall deliver to Lessor a copy of any such
policy upon Lessor's written request, which request provides
the reason therefore such as the occurrence of a casualty at
the Premises. Lessee agrees that it will not settle any
property insurance claims affecting the Leased Premises in
excess of $200,000 without Lessor's prior written consent,
such consent not to be unreasonably withheld or delayed.
Lessor shall consent, where Lessor's consent is required
hereunder, 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, if such damage, injury, or
loss of life occurs during the term of this Lease, except to
the extent such damage, injury, or loss of life results
from the intentional misconduct or the gross negligence of
Lessor, its employees, agents, or contractors and Lessee
agrees to save Lessor harmless from, and indemnify Lessor
against, any and all injury, loss, or damage, of whatever
nature, and whenever occurring, 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, except to the extent such
fire or other casualty shall be brought about by the
intentional misconduct or gross negligence of Lessor, its
employees, agents, or contractors.
(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 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 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 or earlier termination 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 or upon the Rents payable hereunder (expressly
excluding general income taxes, franchise taxes, inheritance
taxes and estate taxes imposed upon Lessor). 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 Rent tax (expressly excluding
general income taxes, franchise taxes, inheritance taxes and
estate taxes imposed upon Lessor) 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
(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 each
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 either (i) pay (under protest) such tax or
assessments for public improvements or benefits, or other
governmental imposition, duties and charges aforementioned,
or (ii) post with Lessor alternative security reasonably
satisfactory to Lessor, not to exceed 150% of the amount
contested and the potential penalties and interest thereon.
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 expenses of
Lessor, if any, in such proceeding, Lessee shall be entitled
to receive and retain the same, 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.
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 (except by devise or bequest upon the
death of a shareholder, but in such event, such
recipient shall be bound by the provisions of
this Article);
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. an agreement by any other Person, directly or
indirectly, to assume Lessee's obligations
under this Lease shall be deemed an assignment;
2. 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;
3. each material modification, amendment or
extension of any sublease to which Lessor has
previously consented shall be deemed a new
sublease; and
Lessee agrees to furnish to Lessor upon 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 copies of any such proposed agreement and
of all ancillary agreements with the proposed assignee or
sublessee, as applicable. If Lessor in its sole but
reasonable discretion (except as otherwise specifically
limited herein in paragraphs (E) and (F) below) shall not
have consented to a proposed sublease or assignment, and
Lessee shall attempt to effect such transfer without
Lessor's consent or in spite of Lessor's decision to not
consent to such transfer, subject to paragraph 17A(2),
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 or
proposed assignment of this Lease, impose such
conditions upon Lessor's consent as Lessor
shall determine in its sole but reasonable
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; provided however, if Lessor shall
chose to terminate this Lease and then lease the Leased
Premises to Lessee's proposed assignee or sublessee, Lessee
shall be released from liability under this Lease to the
extent of, and following the effectiveness of, such new
lease or sublease .
(E) Notwithstanding the provisions of this Article 7
above, or any other provisions of this Lease to the contrary,
Lessee shall have the right to assign this Lease, or sublet
the Leased Premises or any portion thereof, without the
consent of, but with prior written notice to Lessor, (a) to
any corporation with which Lessee may merge or consolidate
(b) to any entity which is a parent or subsidiary of, or
affiliate under common control, with Lessee, (c) in
connection with the sale of a majority of Lessee's
restaurants in Missouri to a major national or regional
restaurant operator meeting the criteria set forth in
Section 7.F, or (d) to a corporation the stock of which is
registered for public sale with the United States Securities
Exchange Commission and whose assets include at least five
restaurants, provided, that said assignee assumes in full
the obligations of Lessee under this Lease and Lessee
remains primarily liable under this Lease. Lessee may also
sublease the Leased Premises, without Lessor's consent, but
with contemporaneous written notice to Lessor accompanied by
a copy of such sublease, to a bonafide franchisee of Lessee,
In addition, notwithstanding the provisions of
this Article 7 above or any other provisions of
this Lease to the contrary, the following transfers
or issuances of shares of capital stock of Lessee
shall not constitute an assignment of this Lease or
require the consent of Lessor under this Article 7:
(i) the issuance and sale of shares of capital
stock of Lessee in connection with a public
offering of such stock (provided such issuance and
sale does not involve the issuance, sale, or
transfer of a majority of the voting stock of
Lessee); (ii) the transfer of outstanding shares to
an entity which is a parent, or a subsidiary of or
affiliate under common control with, Lessee,
provided such entity is or becomes a guarantor of
this Lease; (iii) the acquisition by the present
shareholders of additional shares of capital stock
from each other, from other shareholders, or as a
result of new issuances of capital stock of Lessee;
or (iv) the transfer of shares of capital stock to
family trusts, family partnerships, or similar
vehicles set up for either of their benefit or for
the benefit of any family member, or the transfer
by them of shares of capital stock to any
corporation, partnership, limited liability
company, or other entity.
(F) Notwithstanding any provision of this Article 7
to the contrary, Lessor agrees to consent to any
proposed assignment or sublease requiring the
Lessor's prior written consent, where each of the
following criteria is reasonable satisfied:
1. the transferee has not less than five
(5) other operating "Strong Regional" or
"Nationally Known Brand Name Chain Restaurants"
(as defined below), each producing annual sales
above $2.1 million for the preceding three
years;
2. the transferee has "Net Worth"
of not less than one million dollars
($1,000,000);
3. the transferee has not less
than five (5) years experience in Strong
Regional or Nationally Known Brand Name Chain
Restaurant operations. The term "Strong
Regional or Nationally Known Brand Name Chain
Restaurants" shall mean a chain of a minimum of
50 restaurants with common set standards for (i)
building design and appearance, (ii) building
maintenance and repairs (ii) operational
procedures, and (iv) store marketing. Such
chain shall derive a majority of its revenue
from the operations of full service, casual
dining restaurants; and
4. Lessee is not in default of
this Lease beyond any applicable cure period.
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 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, upon not less than
ten (10) days' prior written notice to Lessee (except in the
event of a bona fide emergency where waste may occur on the
Premises), 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 upon demand. Notwithstanding the
foregoing, if following Lessee's receipt of such notice from
Lessor, Lessee commences such repair and is diligently
proceeding to complete such repair, Lessor may not make or
complete such repair. 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
beyond the period allowed herein for cure following delivery
of notice to Lessee, Lessee shall have the right to make non-
structural alterations and improvements to the Leased
Premises without the consent of Lessor if such repairs and
improvements do not exceed One Hundred Fifty Thousand
Dollars ($150,000.00) in any twelve month period, provided
such alterations or improvements do not affect the
structural integrity of the Leased Premises. Any structural
alterations or improvements in excess of One Hundred Fifty
Thousand Dollars ($150,000.00) in any twelve month period 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 permanent additions to the Leased
Premises shall be made in accordance with all applicable
laws and shall remain for the benefit of Lessor. 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 necessary repairs,
improvements, alterations or additions, or Lessee's failure
to make necessary repairs, except to the extent arising out
of the negligence or intentional misconduct of Lessor, its
employees, agents and contractors.
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
that affect the use of the improvements. Lessee will comply
with all easements, restrictions, and covenants of record
against or affecting the Leased Premises.
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, such form to be
consistent with other such forms used by commercial
mortgagees in the industry and which impose no additional
obligations on Lessee, other than a requirement for
additional notices. 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, such form to be
consistent with other such forms used by commercial
mortgagees in the industry and which impose no additional
obligations on Lessee, other than a requirement for
additional notices.
(B) Lessee covenants and agrees to execute and deliver,
within fifteen (15) days following Lessor's written request,
such further commercially reasonable 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, provided such mortgagee shall execute its
standard form, commercially reasonable subordination,
attornment and non-disturbance agreement, such form to be
consistent with other such forms used by commercial
mortgagees in the industry and which impose no additional
obligations on Lessee, other than a requirement for
additional notices.
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
transferred to such public authority under threat of such
power, 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 contractor or architect
selected by Lessee and approved by Lessor, for the purposes
for which the Leased Premises were leased, then Lessee shall
have the right to terminate this Lease on thirty (30) days
notice to the Lessor 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 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 render the remainder thereof
materially unusable for the purposes for which the Leased
Premises were leased, in the opinion of a licensed third
party contractor or architect selected by Lessee and
approved by Lessor, then Lessee shall, with the use of all
of the condemnation proceeds (to be made available by
Lessor, immediately if such proceeds are less than $150,000,
or if in excess of $150,000, under a commercially reasonable
construction draw procedure in payment of invoices for work
performed submitted by Lessee or its contractors) 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. Provided, however, Lessee may
elect to replace the Leased Premises with a different
restaurant concept, subject to Lessor's prior written
approval, which approval shall not be unreasonably withheld
or delayed, and further that Lessee shall not be required
(unless Lessee so elects) to repair or restore the Leased
Premises if the Term or any Renewal Term shall expire within
two years of such partial taking. Lessee shall notify
Lessor of Lessee's election to not so restore or repair the
Leased Premises after such a partial taking within 60 days
after service on Lessee of the eminent domain proceeding for
such taking. If Lessee elects to not make such repair or
restoration, this Lease shall terminate upon Lessor's
receipt of Lessee's notice of termination. Otherwise, if
Lessee so elects or is required to repair or restore the
Leased Premises, 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. Except as
provided in Section 12C, any condemnation proceeds remaining
after the completion of the repair or restoration of the
Leased Premises shall be paid to Lessor. 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 (or Lessor if the
award to Lessor expressly covers any of the following items
and Lessee shall be precluded from prosecuting its claim
directly against the condemning authority) in such
proceedings for: Loss of business; interruption of
business; moving expenses; 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, except to the extent the award thereto expressly
covers Lessee's award for: Loss of business; interruption of
business; moving expenses; damage to or loss of value or
cost of removal of inventory, trade fixtures, furniture, and
other personal property belonging to Lessee.
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 an uncured default by Lessee after the
expiration of applicable notice and cure periods, or at any
time within thirty (30) 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 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 judgments of every kind and character,
including injury to or death of any person or persons, or
trespass, or damage to, or loss or destruction of, any
property, whether real or personal, to the extent resulting
from the gross negligence or willful misconduct of Lessor or
Lessor's employees, agents, contractors, or representatives
while upon or about the Leased Premises.
ARTICLE 14. USE AND CONTINUOUS OPERATION
After the Occupancy Date, Lessee expressly agrees and
warrants that the Leased Premises will be used exclusively
as a Mimi's Cafe (or any other trade name Lessee may use in
the state of Missouri) or, after obtaining Lessor's prior
written consent, such consent not to be unreasonably
withheld or delayed, other casual dining sit-down
restaurant. Lessee agrees: To open for business within
fourteen (14) days after Lessee's receipt of a certificate
of occupancy for, and all other governmental permits
necessary for operation of, the Premises, to operate all of
the Leased Premises during the Term for not less than one
year, unless prevented from doing so by causes beyond
Lessee's control, subject to closure for reasonable times
for remodeling or restoration. Commencing one year after
Lessee initially opens its restaurant on the Premises,
Lessee may cease operating its business upon at least thirty
(30) days written notice to Lessor. Lessee shall continue
to perform all of its other obligations under this Lease
during the term hereof.
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 subject to Force Majeure
(defined in Article 28(K) below) 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), then
with the Lessor's prior written consent (if the repairs will
exceed the amounts set forth in Article 8(B)), 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. 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. Provided, however, Lessee may elect to replace
the Leased Premises with a different restaurant concept
subject to Lessor's prior written approval, which approval
shall not be unreasonably withheld or delayed. If the
insurance proceeds are less than One Hundred Fifty Thousand
Dollars ($150,000), they shall be paid to Lessee for such
repair and restoration. If the insurance proceeds are
greater than or equal to One Hundred Fifty Thousand Dollars
($150,000), 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 Twenty-Five Percent (25%) of the original
cost to Lessor to acquire its interest in the Leased
Premises from Lessee, 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 and reimbursement to
Lessee as provided in the proceeding paragraph shall be paid
to Lessor.
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 Lessor's reasonable satisfaction, the
availability of such funds necessary to complete
construction. 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
Lessee's reasonable opinion) being closed for more than
sixty (60) days (which duration of closure may be
established by Lessee by the affidavit of an independent
third party contractor as to the estimated time of repair)
during the last two years 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
and deductible in the amount estimated to restore or rebuild
the Leased Premises.
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
within five days after delivery to Lessee of
written notice to cure such failure to pay the
Rent or any other monetary obligation herein
reserved. Interest and late charges for
failure to pay Rent when due shall accrue if
Lessee shall fail to make payment within five
days after notice to Lessee that Rent has not
been paid. Lessee shall be granted five days
after written notice to cure such failure to
pay the Rent or any other 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
Thirty (30) 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 Thirty (30) days, if Lessee is
diligently pursuing a course of conduct that is
capable of curing such default, but in any
event such longer time shall not exceed 210
days (subject to Force Majeure) after written
notice from Lessor of the default hereunder.
3. The abandonment of the Leased Premises by
Lessee for thirty (30) consecutive days, 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.
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 19D.
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, 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 otherwise
without a breach of the peace, without being liable for any
damages therefore except for damages resulting from Lessor's
negligence or willful misconduct. Notwithstanding anything
above to the contrary, if Lessee is still in possession of
the Leased Premises, Lessor agrees to use such legal
proceedings (summary or otherwise) prescribed by law to
regain possession of the Leased Premises.
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 such Term or 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 Renew 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 from such reletting
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 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.
Notwithstanding anything in this Lease to the contrary,
Lessor may not recover damages from Lessee pursuant to this
Section 19(D) in the event that the Lease is terminated
pursuant to an exercise by Lessor of its rights or remedies
under Article XIV of the Development Financing Agreement.
(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 that 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.
(F) Notwithstanding anything contained in this Lease,
neither Lessor, nor its successors or assigns, upon exercise
of any remedy or otherwise, shall have or be construed to
have any grant, license or right to operate a "Mimi's" or
"Mimi's Cafe" restaurant on the Leased Premises or to use
any of Lessee's trademarks, tradenames, service marks or
proprietary rights, items or materials
ARTICLE 20. PERSONALTY, FIXTURES AND EQUIPMENT
(A) All permanent 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,
air conditioning systems, 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.
(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 2l. 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 twenty
(20) 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 twenty (20) day period,
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. Subject to the provisions of Article 34 below,
this Lease contains the entire agreement between the parties
with respect to the Leased Premises, 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 as long as Lessee is not in default (beyond the
applicable cure period) 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. 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 fifteen (l5) 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 one
hundred twenty (120) days after the end of Lessee's fiscal
year, furnish Lessor with Lessee's financial statements (in
SEC Form 10-K, if available). The financial statements
shall be prepared in conformity with generally accepted
accounting principles (GAAP) and shall be certified as true
and correct by the chief financial officer or other
authorized officer of Lessee. Lessee shall provide Lessor
with annual income and expense statements for the Leased
Premises within 90 days after the end of each Lease Year.
The financial statements for the Leased Premises 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 or other authorized officer of
Lessee.
ARTICLE 27. OPTION TO RENEW
If this Lease is not previously canceled or terminated
and if Lessee is not then in default beyond the period
allowed herein for cure following notice to Lessee, then
Lessee shall have the option to renew this Lease upon the
same conditions and covenants contained in this Lease for
Three (3) consecutive periods of Five (5) years each
(singularly "Renewal Term"). Rent during the Lease Years of
any Renewal Term shall increase as set forth in Article 4
hereof, as if the Renewal term were a continuation of the
Lease without interruption.
The first Renewal Term will commence on the day
following the date the original Term expires and successive
Renewal Terms will commence on the day following the last
day of the then expiring Renewal Term. Lessee must give two
hundred forty (240) 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 28. MISCELLANEOUS PROVISIONS
(A) All notices, consents, approvals, or other instruments
required or permitted to be given by either party
pursuant to this Lease shall be in writing and given by
(i) hand delivery, (ii) express overnight delivery
service or (iii) certified or registered mail, return
receipt requested, and shall be deemed to have been
delivered upon (a) receipt, if hand delivered, (b) the
next business day, if delivered by express overnight
delivery service, or (c) the third business day
following the day of deposit of such notice with the
United State Postal Service, if sent by certified or
registered mail, return receipt requested.Notices shall
be provided to the parties and addresses specified on
the first page hereof and, if to Lessee, with a copy of
such notice simultaneously delivered to SWH Corporation,
00000 X. 00xx Xxxxxx, Xxxxx Xxxx. Xxxxx 000, Xxxxxx,
Xxxxxxxxxx 00000, Attn: Xxxxx X. Xxxxx, Esq..
(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 where the Leased Premises
are situate.
(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 increased 150% of the
amount due on the last month prior to such expiration.
(G) 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.
(H) Lessee agrees to cooperate with Lessor to allow Lessor
to obtain and use at Lessor's expense promotional
photographs of the exterior of the Leased Premises.
(I) Anything in this Lease to the contrary
notwithstanding, the time within which either party
hereto shall be obligated to perform any obligation
(other than any obligation to pay any sum of money,
timely payment of which shall not be excused by the
provisions of this paragraph) shall be extended for
such additional period as may be reasonable under the
circumstances (but in no event to exceed 240 days)
upon the happening and continuance of any event
("Force Majeure") beyond the reasonable control of
such performing party, which Force Majeure prevents
such performing party otherwise to perform such
obligation in a timely manner, including but not
limited to any strike, lockout, civil commotion,
warlike operations, invasion, rebellion, hostilities,
sabotage, governmental regulations or controls,
impracticability of obtaining any materials or labor
(except due to the payment of monies), shortage or
unavailability of a source of energy or utility
service, Act of God, casualty, adverse weather
conditions, and the default of such party to whom such
performance is owed.
ARTICLE 29. 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 30. HAZARDOUS MATERIALS INDEMNITY
Lessee covenants, represents and warrants to Lessor, its
successors and assigns, (i) that (except for items normally
used by Lessee in the course of restaurant operations and in
such case, such items as are used and stored in accordance
with applicable law or regulation) 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 to the best of Lessee's actual knowledge, and except as
disclosed to Lessor in writing prior to the date hereof,
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
to Lessee's actual knowledge 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 to the
best of Lessee's actual knowledge the Leased Premises is not
listed in the United States Environmental Protection
Agency's National Priorities List of Hazardous Waste Sites
nor any other public 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 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
(b) 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 reasonable 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 ten percent
(10%) per annum 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 to the extent the liability results from
activities of Lessor or any agent, employee, or contractor
of Lessor.
ARTICLE 31. ESCROWS
Upon the occurrence of a third default in any twelve
month period by Lessee, if any, upon written demand by
Lessor, 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. If
Lessee is depositing into such escrow as a result of its
third default in any given twelve month period, and Lessee
shall not commit a default for a period of 24 months from
the commencement of such escrowing, such escrow shall be
discontinued unless renewed according to the terms hereof
for the occurrence of a third default in any twelve month
period.
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 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 32. NET LEASE
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.
ARTICLE 33. RIGHT OF FIRST REFUSAL
Lessor, for itself, its successors and assigns, hereby
gives and grants to Lessee a right of first refusal (the
"Right of First Refusal") to purchase the Leased Premises,
subject to the following terms and conditions:
(A) Duration of Right of First Refusal. The Right of
First Refusal 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 Right of First Refusal. If
Lessor ("Selling Lessor") shall desire to sell all or any
portion of its interest in the Leased Premises (subject to
the terms of this Lease), Selling Lessor shall give Lessee
written notice of Selling Lessor's intention to sell Selling
Lessor's interest (partial or whole) in the Leased Premises.
Such notice ("Lessor's Notice") shall give Selling Lessor's
name and address and state a price at which Selling Lessor
intends to sell and will sell a specified portion or all of
its interest in the fee simple to the Leased Premises. If
Lessee shall fail to exercise its Right of First Refusal as
set forth herein, the terms of Article 33(E) shall apply.
For twenty (20) business days following the giving of such
notice, Lessee shall have the option to elect in a written
notice to Selling Lessor to agree to purchase such portion
of the fee interest of the Selling Lessor as set forth in
Lessor's Notice at the price in cash stated in the Lessor's
Notice. A written notice in substantially the following
form, addressed to Selling Lessor and signed by Lessee and
given, in accordance with the provisions of Article 28(A)
hereof, within the period for exercising the Right of First
Refusal, submitted with a bank cashier's check or money
order payable to the order of Selling Lessor in the amount
of $5,000.00 (the "Xxxxxxx Money") shall be an effective
exercise of Lessee's Right of First Refusal, to wit:
(date)
"We hereby exercise the Right of First Refusal to purchase
such portion of the fee interest of the Selling Lessor (as
set forth in Lessor's Notice) in the property commonly known
as Mimi's Cafe, Kansas City, Missouri, 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 Right of First Refusal Exercised.
Upon Lessee's exercise of the Right of First Refusal in
accordance with the provisions of subparagraph (B) hereof,
Selling Lessor shall be obligated to sell and convey by
recordable general warranty deed, good and indefeasible
title to its interest in the Leased Premises (or such
portion thereof as set forth in Lessor's Notice) subject
only to the matters affecting title which were of record at
the time Selling 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 such Lessor's interest upon the
following terms and conditions:
(i) Price. The price "Purchase Price" at which
Selling 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 days within
which Lessee may exercise its Right of First
Refusal, 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, Selling Lessor shall
obtain a commitment for an ALTA 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
Selling 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 Selling
Lessor vested with good title to that portion of
the Leased Premises being sold, subject only to
the matters affecting title which were of record
at the time Selling Lessor came into title to the
Leased Premises and those matters which Lessee
created, suffered or permitted to accrue during
the term hereof. If Lessee shall make objection
to the marketability of title, Selling Lessor
shall have no obligation to make title marketable,
but may withdraw Lessor's Notice.
(iv) Prorations. Selling 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. Otherwise, Lessee shall not
receive a credit against the Purchase Price for
Rent paid hereunder.
(v) Escrow Closing. At the election of Selling
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
Lease. 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
Selling 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 33(C),
Selling Lessor shall have the right to annul the
provisions of this paragraph 33 by giving Lessee
notice of such election, provided that Selling
Lessor has first notified Lessee of such default
and Lessee has failed to cure the same within ten
(10) days after such notice. Upon Selling
Lessor's notice of annulment in accordance
herewith, the Xxxxxxx Money shall be forfeited and
paid to Selling Lessor as liquidated damages,
which shall be Selling Lessor's sole and exclusive
remedy. If Selling Lessor defaults under the
provisions of this subparagraph 33(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 Selling 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 Right of First Refusal on Lease. If the
Right of First Refusal is exercised by Lessee and is
exercisable in Lessor's Notice as to the entire fee simple,
this Lease shall continue in full force and effect until the
Closing hereinabove specified. If the Right of First
Refusal is exercised only as to all of an undivided portion
of the fee simple to the Leased Premises, the Lease shall
remain in full force and effect without merger or
termination of this Lease because of such purchase and
Lessee shall continue to hold a Right of First Refusal as to
such unsold portion(s) of Selling Lessor's interest in the
Demised Premises that Selling Lessor thereafter desires to
sell. If Selling Lessor withdraws the Lessor's Notice
pursuant to subparagraph 33(C)(iii), Lessee shall continue
to hold a Right of First Refusal as to such unsold
portion(s) of Selling Lessor's interest in the Demised
Premises that Selling Lessor thereafter desires to sell.
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 33 are annulled by Selling
Lessor, in accordance with subparagraph 33(C)(vi), by reason
of a default by Lessee, this Lease shall continue but
without the provisions of this paragraph 33 being a part
hereof.
(E) If Lessee fails to exercise its Right of First
Refusal, Selling Lessor shall be free to sell all or any
portion of its interest in the Leased Premises, provided
that the Selling Lessor giving such Lessor's Notice shall
sell its interest (or a portion thereof) for a price equal
to or greater than the price (or the pro-rata portion
thereof if a portion of the Selling Lessor's interest in the
Leased Premises is sold) 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 successors and assigns.
ARTICLE 34. DEVELOPMENT FINANCING AGREEMENT
The parties hereto hereby acknowledge that the terms hereof
are subject to and shall in the event of conflicts be
controlled by the Development Financing Agreement until such
Development Financing Agreement is terminated in accordance
with its terms.
ARTICLE 35. MANDATORY OBLIGATION TO PURCHASE
Notwithstanding anything to the contrary set forth
anywhere in this Lease, in the event Zona Xxxx Development
LLC ("Developer"), or any of Developer's successors or
assigns, invokes the right of Developer set forth in Section
8(a) of that certain Covenants, Conditions and Restrictions
Agreement Zona Xxxx Town Center Mimi's Cafe Parcel ("CCR's")
to repurchase the Leased Premises, Lessee shall perform all
obligations of the owner under Section 8(a) of such CCR's,
which obligations derive from Developer's invocation of such
right to repurchase, except only the obligation to execute,
acknowledge and deliver the instrument pursuant to which the
Leased Premises shall be conveyed from Lessor to Developer
at the closing of such repurchase, which execution,
acknowledgement, and delivery shall be performed by Lessor
in a timely manner and at Lessee's expense), and Lessee
shall bear all costs, including Lessor's reasonable
attorneys fees, necessary to fulfill such obligations of
Lessor to convey the Leased Premises to Developer. The
closing date of such repurchase by Developer shall be known
as the "Repurchase Date". At least one (1) day prior to the
Repurchase Date, in addition to any other amounts or
documents that Lessee shall deliver to escrow in accordance
with the terms of such Section 8(a) of such CCR's, Lessee
shall deposit for the benefit of Lessor and for disbursement
to Lessor on the Repurchase Date, an amount equal to the
difference between the Repurchase Price (as such term is
defined in the CCR's) and the price paid by Lessor (or any
future fee owner of the Leased Premises not affiliated with
Lessor) to acquire the Leased Premises, plus the total
amount of Lessor's costs incurred pursuant to the provisions
of this Article 35. Lessee acknowledges that the intent of
this Article 35 is to enable Lessor to comply with the terms
of the CCR's at no expense to Lessor, against which expense
Lessee hereby agrees to indemnify Lessor.
ARTICLE 36. LESSEE'S RIGHT TO ENFORCE BENEFICIAL COVENANTS
Notwithstanding anything to the contrary set forth
anywhere in this Lease, Lessor hereby grants to Lessee the
right to enforce, either in Lessor's name, in Lessee's name,
or both, any covenant, condition, restriction, easement,
equitable servitude, or any other agreement running to the
benefit of Lessor, Lessee or the Leased Premises
("Benefits"), which Benefits arise pursuant to the
provisions of that certain Declaration of Covenants,
Restrictions and Easements for the Zona Xxxx Gateway
District ("Declaration"), the CCR's defined in Article 35
above, and any and all Benefits superior thereto; provided
(i) such Declaration or CCR's provides Lessor the right to
permit its lessee to enforce such Declaration or CCR's, (ii)
Lessee shall invoke and pursue such enforcement at no cost
to Lessor, and Lessor shall reasonably accommodate Lessee in
Lessee's enforcement efforts, and (iii) Lessor, at Lessor's
option, may join in any such enforcement by Lessee. Nothing
herein shall be deemed to preempt Lessor from enforcing any
Benefits independent of Lessee.
IN WITNESS WHEREOF, Lessor and Lessee have respectively
signed and sealed this Lease as of the day and year first
above written.
LESSEE: SWH CORPORATION
By:/s/ Xxxxxx X Xxxxxxxxxx
Xxxxxx X Xxxxxxxxxx [Print Name of Signatory]
Its: Treasurer
LESSOR:
AEI ACCREDITED INVESTOR FUND 2002 LIMITED
PARTNERSHIP
By: AEI Fund Management XVIII, Inc.
By: /s/ Xxxxxx X Xxxxxxx
Xxxxxx X. Xxxxxxx, President
AEI INCOME & GROWTH FUND 25 LLC
By: AEI Fund Management XXI, Inc.
By: /s/ Xxxxxx X Xxxxxxx
Xxxxxx X. Xxxxxxx, President
EXHIBIT "A"
Xxx 0, Xxxxx 0, XXXX XXXX 0XX XXXX, a subdivision of land in
Kansas City, Plattee County, Missouri, according to the
recorded plat thereof.
