NET LEASE AGREEMENT
THIS LEASE, made and entered into effective as of this
17th day of December, 1998, by and between NET LEASE INCOME
& GROWTH FUND 84-A LIMITED PARTNERSHIP ("Fund 84-A"), a
Minnesota limited partnership whose corporate general
partner is Net Lease Management 84-A, Inc., a Minnesota
corporation, and AEI REAL ESTATE FUND 85-A LIMITED
PARTNERSHIP ("Fund 85-A"), a Minnesota limited partnership
whose corporate general partner is Net Lease Management 85-
A, Inc., a Minnesota corporation, both of whose address is
1300 Minnesota World Trade Center, 00 Xxxx Xxxxxxx Xxxxxx,
Xx. Xxxx, Xxxxxxxxx 00000 ("Lessor"), and RTM Mid-America,
Inc., an Indiana corporation, whose address is 0000 Xxxxxxxx
Xxxx, Xxxxxxx, Xxxxxxx 00000 ("Lessee");
WITNESSETH:
WHEREAS, Lessor is the fee owner of a certain parcel of
real property and improvements located at Hudsonville,
Michigan, 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 shall commence on December
17th, 1998 ("Occupancy Date"), and shall include the period
from the Occupancy Date until the date of the First Lease
Amendment contemplated under the Development Financing
Agreement between Lessor and Lessee of even date herewith as
further set forth in Article 35 hereof. Thereafter, the
Lease shall continue for a period of Twenty consecutive
Lease Years, as hereinafter defined.
(B) If the date the First Lease Amendment is executed shall
not be the first day of a calendar month, the first full
"Lease Year" shall be the period from the date the First
Lease Amendment is fully executed to the end of the calendar
month in which the First Lease Amendment is fully executed,
plus the following twelve (l2) calendar months. Each Lease
Year after the first Lease Year shall be each successive
period of twelve (l2) calendar months thereafter.
(C) The parties agree that upon the request of either
party, a short form or memorandum of this Lease (prepared
and recorded at the expense of the requesting party) will be
executed for recording purposes. That short form or
memorandum of this Lease will be amended as of the date of
the First Lease Amendment to set forth the termination dates
of the Term and optional Renewal Terms, as defined in
Article 28 hereof, and the existence of any option to
purchase or right of first refusal, and that said option or
right of first refusal 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 will
be constructed on the Leased Premises, and all other
improvements to the land, including the parking lot,
approaches, and service areas, will be constructed in all
material respects by Lessee substantially in accordance with
the plot, plans, and specifications heretofore submitted to
Lessor.
(B) Lessee warrants that the Building and all other
improvements to the land contemplated shall 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, and builder's risk insurance (naming Lessor, Lessee,
and contractor as co-insured), for improvements made by or
at the direction of 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 Leased Premises are
in the condition described under this Lease.
ARTICLE 4. RENT PAYMENTS
(A) Annual Rent Payable from the Occupancy Date until
execution of the First Lease Amendment (wherein the Lease
shall be amended as contemplated under the Development
Financing Agreement as defined in Article 35 hereof): Rent
until and including April 15th, 1999 (unless this provision
shall be superceded by the First Lease Amendment) shall
accrue in the amount of $2,344.58 per month (prorata for the
period of April 1st through April 15th) and be payable in
advance on the first day of the month in equal monthly
installments of $1,406.75 to Fund 85-A, and shall be payable
in advance on the first day of each month in equal monthly
installments of $937.83 to Fund 84-A. If the first day of
the Lease 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.
After and including April 16th, 1999,(unless this provision
shall be superceded by the First Lease Amendment) through
the date of the First Lease Amendment, Rent shall accrue in
the amount of $1,861.88 per month (prorata for the period of
April 16th through April 30th) and be payable in advance on
the first day of the month in equal monthly installments of
$1,117.13 to Fund 85-A, and shall be payable in advance on
the first day of each month in equal monthly installments of
$744.75 to Fund 84-A.
(B) Rent for the first six months of the first full
Lease Year after the execution of the First Lease Amendment
(which includes any stub period from the end of the calendar
month in which the First Lease Amendment is executed) shall
be Six and One-Half Percent and in the next six months of
the first full Lease Year, Rent shall increase to Nine
Percent of the Total Project Cost, as defined in the
Development Financing Agreement of even date herewith
between Lessor and Lessee to be set forth pursuant to the
First Lease Amendment, and shall remain at such level until
the beginning of the Third Lease Year.
(C) Annual Rent Payable beginning with the Third and
subsequent Lease Years:
The annual Base Rent due and payable shall increase in
each of the Lease Years beginning with the Third Lease Year
by an amount equal to One and One-Eighth Percent (1.125%) of
the Base Rent payable for the prior Lease Year. Such
increased Base Rent shall be payable in advance of the first
day of each month in equal monthly installments.
(D) Overdue Payments.
Lessee shall pay interest on all overdue payments of Rent or
other monetary amounts due hereunder at lesser of the rate
of fifteen percent (15%) per annum or the highest rate
allowed by law accruing after the expiration of any
applicable cure period.
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 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,
with such commercially reasonable deductibles as Lessor may
reasonably require from time to time. 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. Business Interruption
Insurance endorsement (for a period covering at least three
months of interruption) 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 Leased Premises, 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
with limits in amounts acceptable to Lessor.
(C) N/A
(D) 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, following five (5) business days written
notice to Lessee of Lessor's intent to do so (unless
insurance then in place would during such period, or already
has, lapsed, in which case no notice need be given) and
Lessee may obtain such insurance during said five day period
and not then be in default hereunder. If Lessor shall obtain
such insurance, Lessee will then, within five (5) business
days from receiving written notice, either provide proof
that such coverages are in full force and effect or pay
Lessor the amount of the premiums due or paid, together with
interest thereon at the lesser of 15% 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.
(E) All policies of insurance provided for or
contemplated by this Article can be under Lessee's blanket
insurance coverage and shall cover Lessor(s), Net Lease
Management 84-A, Inc., Net Lease Management 85-A, Inc., and
Xxxxxx X. Xxxxxxx, as the general partners of Lessor, as
additional insured and loss payee, as their respective
interests (as landlord and lessee, respectively) may appear,
and Lessee as insured. The policies shall provide that the
policies cannot be canceled, terminated, changed, or
modified without thirty (30) days written notice to the
insured and additional insured 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 certificates of
insurance 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
agrees that it will not settle any property insurance claims
affecting the Leased Premises (exclusive of any claims by
Lessee for damages to Personalty or Lessee's loss or
interruption of business) in excess of $50,000 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 Leased Premises. Any
insurance proceeds for the Personalty or Trade Fixtures of
Lessee or its equipment lessors or lenders shall be paid to
the Lessee and shall not be considered part of the insurance
for the building and improvements to the Leased Premises.
(F) 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 gross
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, except if 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 negligence
or willful misconduct of Lessor and Lessee, they shall be
liable therefor in accordance with their respective degrees
of fault.
(G) 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.
(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. 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. In no event shall
Lessee be liable for any payment required of Lessor to
qualify to do business in the state where the Leased
Premises are situate.
(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 (or through the expiration
of the term hereof, if longer) 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 (presumed to be
paid in arrears for purposes of such proration).
(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
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, 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.
(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 on Rent by the then current sales tax
law, where the Leased Premises are located. 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 any sales tax payable to the State
in which the property is situated for Rent received by
Lessor hereunder ("Deposit"). From time to time out of such
Deposit Lessor will pay the sales tax to the State in which
the property is situated 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 be entitled upon
written request to copies of sales tax returns of Lessor
showing such tax was paid.
ARTICLE 7.PROHIBITION ON ASSIGNMENTS AND SUBLETTING; TAKE-
BACK
RIGHTS
(A) Lessee, without the consent of Lessor, but after
prior written notice to Lessor, and at any time during the
term of this Lease, or any renewal or extension hereof,
shall have the right to assign this Lease, or its rights
hereunder, and/or to sublet all or any part of the Leased
Premises to RTM, Inc, or any RTM subsidiary or affiliate or
any other licensed and approved Arby's or Arby's\Mrs.
Winner's (dual concept) operator, or Xxx'x Famous Recipe
operator. Lessee and Guarantor(s), if any, will remain
liable for Rent, performance of the terms, covenants, and
conditions of Lessee hereunder, and shall sign a consent and
estoppel evidencing their continued liability in form and
substance satisfactory to Lessor, concurrent with the
effective date of any such assignment or sublet. Any other
assignment or sublease to an entity other than those set
forth in the preceding sentence shall require the prior
written consent of Lessor, which consent is conditioned upon
Lessee and any guarantor signing a consent and estoppel
evidencing their continued liability in form and substance
satisfactory to Lessor, concurrent with the effective date
of any such assignment or sublet, and Lessor's approval,
which approval shall not be unreasonably withheld or
delayed.
(B) Except as otherwise expressly provided in this
Article, Lessee shall not, without obtaining the prior
written consent of Lessor, which consent shall not be
unreasonably withheld or delayed, 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
0.xxxxxxxx, pledge or otherwise encumber this Lease, or the
Leased Premises.
(C) 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 modification, amendment or extension or any sublease
to which Lessor has previously consented shall be deemed a
new sublease; and
4.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 satisfactory to Lessor.
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.
(D) Except as set forth in subparagraph (A) above, 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.
(E) If Lessee shall fail to comply with the terms of
subparagraph (A) or (B) above, 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.
(F) If Lessor exercises any of its options under
Article 7(E) above, 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.
(G) Notwithstanding anything above to the contrary,
the Lessee's interest herein shall not be assignable in any
manner in accordance with the terms hereof unless and until
the termination of the Development Financing Agreement as
set forth in Article 35 hereof.
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: 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, after receipt of
five (5 ) days prior written notice (except in cases of
emergency to prevent waste or preserve the safety and
integrity of the Leased Premises, in which case no notice
need be given), 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 receipt of written 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 Fifty Thousand Dollars ($50,000.00), provided such
repairs or improvements do not affect the structural
integrity of the Leased Premises. Any repairs or
improvements in excess of Fifty Thousand Dollars
($50,000.00) 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. The term
"Trade Fixtures" shall not include oven hoods, Walk-in
coolers or freezers, or the Leased Premises exterior
lighting, which shall be owned by Lessor and leased from
Lessor by Lessee according to the terms hereof, but the term
shall otherwise mean all other Trade Fixtures, equipment,
supplies, books, records, or other personalty, including but
not limited to those items set forth on Exhibit C attached
hereto (hereinafter referred to as "Trade Fixtures" or
"Personalty") placed on the Leased Premises by Lessee.
Lessor shall execute any instrument that any lien holder or
party with a security interest in Lessee's Trade Fixtures
may request acknowledging that (a) the Lessee has a right to
install such Personalty on the Leased Premises; (b) the lien
holder or secured party may maintain an interest in the
Personalty superior to any interest in the same by Lessor;
and (c) such lien holder or secured party shall have the
right to remove any and all such Personalty in the event of
a default in any instrument establishing such lien or
security interest, subject to 10 days advance notice to
Lessor and making reasonable repairs to the Leased Premises
for any injury caused to the Leased Premises caused by the
removal of the Personalty, except diminution in value caused
by the absence of the Personalty, nor shall the lien holder
or secured party have to replace the Personalty. 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
or required for operation of the Leased Premises in
accordance with Article 14 hereof.
ARTICLE l0. 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 ll. 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 Leased 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, however, that such mortgagee shall
execute an appropriate subordination, attornment and non-
disturbance agreement respecting Lessee's rights to
possession under this Lease if Lessee shall not be in
default hereunder.
(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,
provided such mortgagee shall execute its standard form,
commercially reasonable subordination, attornment and non-
disturbance agreement.
ARTICLE l2. 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. Any
such termination of this Lease shall not preclude or
restrict Lessee's rights to any claim or award for claims it
may have as set forth in Article 12, paragraph (C) below.
If any part of the Leased Premises shall be so taken as to
render the remainder thereof materially unusable 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 interfere with the business of
Lessee, then Lessee shall, at Lessor's cost and expense (and
Lessor hereby covenants to make condemnation proceeds
available to Lessee consistent with the terms hereof),
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..
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 (expressly
excluding any Lessee's Award as hereinafter defined) 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 Leased 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 and or destruction of its business; damage to or
loss of value or cost of removal of inventory, Trade
Fixtures, furniture, Personalty, and other personal property
belonging to Lessee (any and all such award collectively
referred to supra and hereinafter as "Lessee's Award");
provided, however, that no such claim shall diminish or
otherwise adversely affect Lessor's award or the award of
any fee mortgagee. Lessor and Lessee agree to cooperate to
maximize the amount of any such claim or award and agree to
minimize the interference with the other party's prosecution
of its claims.
ARTICLE l3. RIGHT TO INSPECT
Lessor reserves the right to enter the Leased Premises
on a non emergency basis and to inspect and examine the
Leased Premises after reasonable 48 hours written notice to
Lessee at any time during business hours. and Lessee agrees
to allow Lessor free access to the Leased Premises to show
the Leased Premises upon an uncured event of default by
Lessee. 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 and to show the Leased Premises after
reasonable 48 hours written notice to Lessee at any time
during non peak business hours, and Lessor agrees to cause
minimal disruption to Lessee's business during such showings
of the Leased Premises.
ARTICLE l4. EXCLUSIVE USE
(A) After the Occupancy Date, Lessee expressly agrees
and warrants that the Leased Premises will be used
exclusively as a restaurant and other ancillary uses.
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 conduct its business in a first class and
reputable manner consistent with its operation of other
restaurants in the same market area. If Lessee closes the
Leased Premises and it remains closed for ninety days,
Lessor may terminate this Lease and release Lessee and
Guarantor of all liability. However, so long as the Lessor
does not terminate the Lease, Lessee must continue to pay
rent and perform all covenants under the Lease.
ARTICLE l5. DESTRUCTION OF PREMISES
(A) If, during the term of this Lease, the Leased
Premises are totally or partially destroyed by fire or the
elements, so as to render the Leased Premises wholly unfit
for occupancy, or make it impossible to conduct the business
of Lessee thereon, and if in the opinion of a third party
arbitrator reasonably acceptable to Lessee and Lessor the
Leased Premises cannot be repaired within one hundred eighty
(l80) days from the date of the damage, then Lessor or
Lessee in the last two years of the Lease Term shall have
the right to terminate this Lease from the date of such
damage or destruction by giving Lessee written notice.
Lessor's option to so terminate shall not apply if Lessee,
within 30 days after receipt of the notice of termination,
exercises any remaining Option to Renew the Lease Term.
Upon the giving of such termination notice by Lessor, if
Lessee shall not so extend the term hereof, Lessee shall
immediately surrender the Leased Premises and all interest
therein to Lessor, and in case of any such termination,
Lessor may re-enter and repossess the Leased Premises and
may dispossess all parties then in possession thereof.
Otherwise, the Leased Premises shall be repaired, restored,
and rebuilt by Lessee out of any insurance proceeds
received, within one hundred eighty (180) days from the date
of destruction. The insurance proceeds designated for
building and improvements or the items of personalty owned
by the Lessor and leased to Lessee hereunder under shall be
used to reimburse Lessee for the cost of rebuilding or
restoration of the Leased Premises and replacement of such
personalty leased to Lessee from Lessor. Insurance proceeds
designated for the loss or damage of Lessee's Personalty or
Trade Fixtures shall not belong to the Lessor. Rents
payable by Lessee shall not be abated during the period of
repair and restoration. Except as otherwise provided
herein, Lessee shall be required to repair, rebuild and
restore the Leased Premises, but Lessor shall only be
obligated to contribute the net proceeds of monies received
from insurance policy or policies covering such loss or
damages. Lessee shall repair the Leased Premises with all
reasonable speed. 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.
Notwithstanding anything above to the contrary, except in
the last year of the Lease Term as aforesaid, whether in the
event of a partial or total destruction of the Leased
Premises, Lessor shall make insurance proceeds available to
Lessee to rebuild the Leased Premises, provided Lessee
shall, either through Business Interruption Insurance or
otherwise, continue to pay Rent during the period of repair
and restoration, and Lessee and any guarantor confirm in
writing their continued liability for the obligations of
Lessee hereunder.
(B) If the damage does not render the Leased Premises
unfit for occupancy, then Lessor and Lessee agree that the
damage shall be repaired by Lessee as soon as practicable
out of insurance proceeds when received. All Rents payable
by Lessee shall not be abated during the period of
restoration and repair. All repairs shall be paid for by
Lessor out of any insurance proceeds received, but if the
insurance proceeds are insufficient to rebuild or repair the
Leased Premises according to the original plans and
specifications, whether repair or restoration is commenced
pursuant to Article 15(A) or (B) hereof, then Lessee agrees
to pay all additional amounts that are required to rebuild
the building in accordance with the original plans and
specifications. 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. All improvements or betterments placed by Lessee
on the demised Leased Premises shall, however, in any event,
be repaired and replaced by Lessee at its own expense and
not at the expense of Lessor. The purpose of this Article
is to require Lessee to carry insurance coverage on the
Leased Premises sufficient to rebuild the improvements in
the event of damage or destruction. Lessor shall be under
no obligation to make insurance proceeds available during
the last year of the Lease Term, and this Lease shall
terminate upon notice of Lessor's intent to not make
insurance proceeds available, unless Lessee shall, within 30
days of notice of Lessor's intent not to make insurance
proceeds available in the last year of the Lease Term,
exercise any remaining Option to Renew the Lease Term.
ARTICLE l6. 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 and which failure continues for a period of
five business days after Lessee has received written notice
of said failure. Interest and late charges for failure to
pay Rent when due shall accrue from the date after the
expiration of the five day cure period.
2.Failure to do, observe, keep and perform any of the
terms, covenants, conditions, agreements and provisions in
this Lease to be done, observed, kept and performed by
Lessee and which failure continues for a period of thirty
(30) days after Lessee has received said notice of failure,
or if such default is incapable of cure within 30 days
(except for the payment of monies, which shall not excuse
failure to cure within the 30 day period), and Lessee is
diligently pursuing a course of conduct reasonably designed
to cure the default, then Lessee shall have up to 120 days
after receipt of said notice to cure said default.
3.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 upon a
specified date not less than thirty (30) days after the date
of serving such notice of termination, and 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, preserving unto Lessor the benefit
of its bargained-for rental payments. Lessor shall
undertake reasonable efforts to mitigate Lessee's damages,
but the parties agree that Lessor shall be under no
obligation to expend its own funds for refurbishing or
remodeling in connection with any attempts to relet the
Leased Premises.
ARTICLE 18. LESSOR'S RIGHT OF RE-ENTRY
In the event that this Lease shall be terminated as
hereinbefore provided, or if possession of the Leased
Premises shall be obtained by Lessor by summary proceedings
or otherwise, or in the event of an uncured default
hereunder by Lessee, or in the event that the Leased
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 Leased 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.
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 (but shall be under not obligation to do so),
without terminating the contractual obligation of Lessee to
pay Rent under this Lease, terminate Lessee's rights to
possession, 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.
(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 continuing contractual
obligation to pay rent under this Lease 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 breach.
(D) If Lessee, after the expiration of any applicable
notice and cure period, is in default under a monetary
obligation under this Lease, then and only then may Lessor,
in addition to any other remedies Lessor may have with this
Article 19, 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.
(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, and air
conditioning systems shall be the property of Lessor. All
Trade Fixtures and Personalty (as defined in Article 8(B)
above) owned by Lessee shall remain the property of Lessee,
including but not limited to those items set forth on
Exhibit C attached hereto.
(B) Lessee shall furnish and pay for any and all
Personalty, except for such items, if any, described in
Article 8(B) above, as owned by Lessor. Lessor acknowledges
that it does not have a lien on all Lessee's equipment,
furniture, Trade Fixtures, furnishings, and agrees to sign
an equipment lien waiver subject to the rights of any bona-
fide third party security interest in such property in a
form substantially similar to Exhibit D attached hereto or
its commercially reasonable equivalent. Provided Lessee is
not in default hereunder, Lessor will agree that its
interest, if any, 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 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 Leased
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 after receipt of written 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 to Lessor its financial statements including a
profit and loss statement and a store level operating profit
and loss statement for the Leased Premises. Lessee shall
furnish to the Lessor throughout the term of the Lease,
including any option periods, its balance sheet upon the
reasonable request of Lessor but in no event not more than
twice during any Lease Year. Lessee shall within forty-five
(45) days after the end of each fiscal quarter and within
one hundred twenty (120) days after the end of Lessee's
fiscal year, furnish financial statements including a
balance sheet, profit and loss statement, statement of
changes in financial conditions and all other related
schedules of the Guarantor. All financial statements shall
be prepared in accordance with generally accepted accounting
principles consistently applied from period to period.
Financial statements submitted by Lessee, on behalf of
Lessee, shall be certified to be true and correct and
complete by Lessee or Lessee's Treasurer, or other
appropriate officer, and if audited by an independent
certified public accountant. Financial statements submitted
by Lessee on behalf of Guarantor shall be certified to be
true and correct and complete by Guarantor or guarantor's
Treasurer, or other appropriate officer, and if audited by
an independent certified public accountant.
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 is not in uncured default under any 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 Renewal Term shall be as
set forth in Article 4 hereof. Lessee must give one hundred
eighty (l80) 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 nationally
recognized overnight mail. Notice shall be deemed received
upon actual signed receipt or rejection of the said notice.
(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 in which the Leased Premises are
located.
(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
Leased 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 Leased 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 200% from 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 the expiration of any applicable cure period 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 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 a private 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.
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 to the best of Lessee's knowledge, the Leased
Premises by any governmental authority which in any way
pertain to Hazardous Materials (iii) that to the best of
Lessee's 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 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 on the Leased Premises, if
such liability shall arise during Lessee's occupancy of the
Leased Premises or as a result of a release of Hazardous
Materials on the Leased Premises during Lessee's occupancy
of the Leased Premises. Lessor agrees to assign to Lessor
and to subrogate Lessor's claims against any and all third
parties for damages, costs, expenses, or liability incurred
by Lessor for which Lessee is required to indemnify Lessor.
Lessee's liability hereunder shall expire five years after
the termination of this Lease.
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 highest rate of
interest allowed by law and shall become immediately due and
payable in full on demand of Lessor, its successors and
assigns.
ARTICLE 32. ESCROWS
Upon written request of Lessor, after two or more
occurrences during any Lease Year, of a monetary or other
material event of default, cured or uncured, 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
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
"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
to a bona fide third party purchaser. 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 to a bona
fide third party purchaser. If Lessee shall fail to
exercise its Right of First Refusal 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 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 29(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 Arby's, Hudsonville, Michigan, pursuant to the Right of
First Refusal contained in that certain Net Lease Agreement
between us pertaining to said Leased 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 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. Such title commitment shall
be conclusive evidence of good title. 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 of intent to market the Leased
Premises.
(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 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 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 34(C), Selling Lessor shall
have the right to annul the provisions of this paragraph 34
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 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 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 herein above 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. 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 Selling
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 Right of First
Refusal, Selling Lessor shall be free to sell all or any
portion of its interest in the Leased Premises to bona fide
third party purchasers for six months following the
expiration of the twenty days within which Lessee may
exercise its Right of First Refusal, 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.
Nothing herein shall give Lessee the right of first refusal
over transfers between affiliates of Lessor at Lessor's
cost.
ARTICLE 35. 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 that certain Development Financing Agreement
of even date herewith, until such Agreement is terminated in
accordance with its terms.
ARTICLE 36. COUNTERPART EXECUTION
This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and
all of which shall constitute one and the same instrument
IN WITNESS WHEREOF, Lessor and Lessee have respectively
signed and sealed this Lease as of the day and year first
above written.
LESSEE: RTM MID-AMERICA, INC.
By: /s/ Xxxxxx X Xxxxxxx
Its: Senior Vice President
By: /s/ Xxxxxx X Xxxxxxxxx
Its: V.P. Asst. Secretary
STATE OF GEORGIA}
}
COUNTY OF XXXXXX}
I, the undersigned authority, a Notary Public in and
for said County in said State, hereby certify that Xxxxxx X
Xxxxxxx and Xxxxxx X Xxxxxxxxx, whose name as Senior V.P.
and Asst. Secretary, respectively, of RTM MID-AMERICA, Inc.,
are signed to the foregoing instrument, and who are known to
me, acknowledged before me on this day that being informed
of the contents of said instrument, they as such officers
and with full authority executed the same voluntarily for
and as the Sr. V.P. and Asst. Secretary of said corporation.
Given under my hand and official seal this 23rd day of
November, 1998.
/S/ Xxxxx X XxXxxxxx
Notary Public
My Commission expires:
[notary seal]
LESSOR: NET LEASE INCOME & GROWTH FUND 84-A
LIMITED PARTNERSHIP, a Minnesota limited partnership
By: NET LEASE MANAGEMENT 84-A, INC., a Minnesota
corporation
By: /s/ Xxxxxx X Xxxxxxx
Xxxxxx X. Xxxxxxx, President
STATE OF MINNESOTA}
}
COUNTY OF XXXXXX}
I, the undersigned authority, a Notary Public in and
for said County in said State, hereby certify that Xxxxxx X.
Xxxxxxx, whose name as President of Net Lease Management 84-
A, Inc., as corporate general partner of Net Lease Income &
Growth Fund 84-A Limited Partnership is signed to the
foregoing instrument, and who is known to me, acknowledged
before me on this day that being informed of the contents of
said instrument, he as such officer and with full authority
executed the same voluntarily for and as the President of
Net Lease Management 84-A, Inc., for and as the corporate
general partner of Net Lease Income & Growth Fund 84-A
Limited Partnership.
Given under my hand and official seal this 17 day of
December, 1998.
/S/ Xxx XxXxxx
Notary Public
[notary seal] My Commission expires:1-31-00
LESSOR: AEI REAL ESTATE FUND 85-A LIMITED
PARTNERSHIP, a Minnesota limited partnership
By: NET LEASE MANAGEMENT 85-A, INC., a Minnesota
corporation
By: /s/ Xxxxxx X Xxxxxxx
Xxxxxx X. Xxxxxxx, President
STATE OF MINNESOTA}
}
COUNTY OF XXXXXX}
I, the undersigned authority, a Notary Public in and
for said County in said State, hereby certify that Xxxxxx X.
Xxxxxxx, whose name as President of Net Lease Management 85-
A, Inc., as corporate general partner of AEI Real Estate
Fund 85-A Limited Partnership is signed to the foregoing
instrument, and who is known to me, acknowledged before me
on this day that being informed of the contents of said
instrument, he as such officer and with full authority
executed the same voluntarily for and as the President of
Net Lease Management 85-A, Inc., for and as the corporate
general partner of AEI Real Estate Fund 85-A Limited
Partnership.
Given under my hand and official seal this 17 day of
December, 1998.
/S/ Xxx X XxXxxx
Notary Public
[notary seal]
My Commission expires:1-31-00
EXHIBIT A
Hudsonville, Michigan
Part of the Northeast fractional 1/4 of Xxxxxxx 0, Xxxx 0
Xxxxx, Xxxxx 00 Xxxx, Xxxx of Hudsonville, Michigan,
described as:
COMMENCING at the Northeast corner of said Section, thence
south 02 degrees 21 minutes 30 seconds West 995.20 feet
along the East line of said Section; thence North 89
degrees 26 minutes 38 seconds West 33.02 feet; thence South
02 degrees 21 minutes 30 seconds West 28.51 feet; thence
North 87 degrees 28 minutes 30 seconds West 17.00 feet to
the PLACE OF BEGINNING; thence South 02 degrees 21 minutes
30 seconds West 147.02 feet along the West right-of-way line
of 32nd Avenue; thence North 89 degrees 26 minutes 38
seconds West 250.00 feet; thence North 02 degrees 21 minutes
30 seconds East 175.00 feet; thence South 89 degrees 26
minutes 28 seconds East 250.00 feet; thence south 02 degrees
21 minutes 30 seconds West 27.908 feet to the PLACE OF
BEGINNING.
SUBJECT TO AND TOGETHER WITH an easement for ingress and
egress over part of the Northeast fractional 1/4, Xxxxxxx 0,
Xxxx 0 Xxxxx, Xxxxx 00 Xxxx, Xxxx of Hudsonville, Ottawa
County, Michigan, described as:
COMMENCING at the Northeast corner of said Section, thence
South 02 degrees 21 minutes 30 seconds West 1170.20 feet
along the East line of said Section; thence North 89 degrees
26 minutes 38 seconds West 93.88 feet to the POINT OF
BEGINNING; thence South 00 degrees, 33 minutes 22 seconds
West 10.52 feet; thence South 88 degrees 27 minutes 06
seconds East 43.52 feet; thence South 02 degrees 21 minutes
30 seconds West 26.00 feet along the West Right-of Way line
of 32nd Avenue; thence North 88 degrees 27 minutes 06
seconds West 42.86 feet; thence South 02 degrees 21 minutes
20 seconds West 136.00 feet; thence North 87 degrees 38
minutes 05 seconds West 76.54 feet; thence south 47 degrees
38 minutes 40 seconds West 14.21 feet; thence south 02
degrees 55 minutes 25 seconds West 20.20 feet; thence North
89 degrees 26 minutes 38 seconds West 16.01 feet along the
North Right-of-Way line of Highland Drive; thence North 02
degrees 55 minutes 25 seconds East 30.70 feet; thence North
87 degrees 38 minutes 05 seconds West 9.00 feet; thence
south 47 degrees 38 minutes 40 seconds West 7.11 feet;
thence South 02 degrees 55 minutes 25 seconds East 55.65
feet; thence South 87 degrees 38 minutes 05 seconds East
106.31 feet; thence North 02 degrees 21 minutes 20 seconds
East 116.81 feet; thence North 00 degrees 33 minutes 22
seconds East 30.90 feet; thence South 89 degrees 26 minutes
38 seconds East 26.00 feet to the POINT OF BEGINNING.
SUBJECT TO AND TOGETHER WITH an easement over part of the
Northeast fractional 1/4 of Xxxxxxx 0, xxxx 0 Xxxxx, Xxxxx
00 Xxxx, Xxxx of Hudsonville, Ottawa County, Michigan,
described as: COMMENCING at the Northeast corner of said
Section; thence South 02 degrees 21 minutes 30 seconds West
929.17 feet along the East line of said Section; thence
North 89 degrees 26 minutes 38 seconds West 50.03 feet to
the POINT OF BEGINNING; thence North 89 degrees 26 minutes
38 seconds West 115.00 feet; thence South 02 degrees 21
minutes 30 seconds East 66.03 feet; thence South 89 degrees
26 minutes 38 seconds East 115.00 feet; thence North 02
degrees 21 minutes 30 seconds East 66.03 feet to the POINT
OF BEGINNING.
