LEASE AGREEMENT
THIS LEASE AGREEMENT ("Lease") is made and entered into
effective as of the 25th day of September, 1999 by and
between AEI NET LEASE INCOME & GROWTH FUND XIX LIMITED
PARTNERSHIP ("AEI Fund XIX"), a Minnesota limited
partnership, and AEI INCOME & GROWTH FUND XXII LIMITED
PARTNERSHIP ("AEI Fund XXII"), both of whose principal
business address is 1300 Minnesota World Trade Center, 00
Xxxx Xxxxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx 00000 (together,
"Lessor"), and XXXXX XXXXXXXXX PIE SHOPS, INC., a California
corporation ("Lessee"), whose principal business address is
0000 Xxxx & Xxxxxxx Xxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxxxx
00000.
WITNESSETH
WHEREAS, Lessor is the fee owner of a certain parcel of
real property and improvements located at Henderson, Nevada
and legally described in Exhibit "A," which is attached
hereto and incorporated herein by reference; and
WHEREAS, Lessee desires to lease said real property and
building and improvements thereon (hereinafter referred to
as the "Leased Premises") from Lessor upon the terms and
conditions hereinafter provided;
NOW, THEREFORE, in consideration of the Rents, terms,
covenants, conditions, and agreements hereinafter described
to be paid, kept, and performed by Lessee, Lessor does
hereby grant, demise, lease, and let unto Lessee, and Lessee
does hereby take and hire from Lessor and does hereby
covenant, promise, and agree as follows:
ARTICLE 1. LEASED PREMISES
Lessor hereby leases to Lessee, and Lessee leases and
takes from Lessor, the Leased Premises subject to the
conditions of this Lease.
ARTICLE 2. TERM
A. The term of this Lease ("Term") shall be fifteen (15)
consecutive "Lease Years", as hereinafter defined,
commencing on the effective date hereof ("Commencement
Date").
B. The first "Lease Year" of the Term shall be for a
period of twelve (l2) consecutive calendar months from the
Commencement Date. If the Commencement Date shall be other
than the first day of a calendar month, the first "Lease
Year" shall be the period from the Commencement Date to the
end of the calendar month of the Commencement Date, plus the
following twelve (l2) calendar months. Each Lease Year after
the first Lease Year shall be a successive period of twelve
(l2) calendar months.
C. The parties agree that upon the request of either
party, a short form or memorandum of this Lease will be
executed for recording purposes which 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 the right of first refusal, and that said
right shall terminate when this Lease is terminated,
whichever occurs first.
ARTICLE 3. IMPROVEMENTS
A. Lessee warrants and agrees that the Building has been
constructed on the Leased Premises, and all other
improvements to the land, including the parking lot,
approaches, and service areas, have been constructed in all
material respects by Lessee substantially in accordance with
the plot, plans, and specifications provided to Lessor.
B. Lessee represents that Lessee has received no notice
from a governmental agency of applicable jurisdiction that
the Building or other improvements to the land is in
violation of an applicable law, ordinance or regulation.
Lessee understands, and agrees, that if the Building
contains any existing violations of applicable law,
ordinance or regulation, it shall be Lessee's obligation to
remedy the same all at Lessee's cost and expense.
C. Lessee agrees to pay, if not already paid in full, for
all architectural fees and actual construction costs
incurred by Lessee to construct 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 for improvements made by, or at the direction
of, Lessee.
D. On the Commencement Date, Lessee shall be deemed to
have accepted Leased Premises and acknowledged that the
premises are in the condition described under this Lease.
ARTICLE 4. RENT PAYMENTS
A. Lessee shall pay as fixed rental ("Base Rent") for the
Leased Premises during the first five years of Term hereof
the sum of $161,500 per year, in equal monthly installments
("Monthly Rent") of $6,325.42 to AEI Fund XIX, and of
$7,132.91 to AEI Fund XXII.
In the sixth and eleventh Lease Years, the Base Rent due and
payable shall increase by an amount equal to five percent
(5.0%) of the Base Rent payable for the immediately prior
Lease Year. For each Renewal Term Lessee shall pay Base
Rent, in monthly installments of Monthly Rent, in the
amounts as follows:
PERIOD BASE RENT
YEARS 16 THROUGH 20: 115% of the Base Rent payable in the
first full Lease Year. years one
through five.
YEARS 21 THROUGH 25: 120% of the Base Rent payable in the
first full Lease Year.
YEARS 26 THROUGH 30: 125% of the Base Rent payable in the
first full Lease Year.
The Monthly Rent shall be paid in advance to Lessor (or
its designees) on the first day of each month in equal
monthly installments, any partial month to be prorated based
upon a thirty (30) day month. Monthly Rent shall commence on
the Commencement Date.
B. 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 commencing seven (7) days after
Lessee's receipt of Lessor's written notice stating such
Rent or other monetary amounts are past due.
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
all risk, 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 commercially reasonable deductibles,
which deductibles shall, in any event, be not more than
$100,000. Additionally, replacement cost 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 90 days) shall 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 the Leased Premises, including "Dram
Shop" or liquor liability insurance, if the same shall be or
become available in the State where the Leased Premises are
located, with initial limits of at least $2,000,000 per
occurrence with $3,000,000 general aggregate (inclusive of
umbrella coverage).
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, following seven (7) business days written
notice to Lessee of Lessor's intent to do so (unless
insurance then in place would lapse during such period, or
already has lapsed, in which case no notice need be given)
and Lessee may obtain such insurance during said seven (7)
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, pay Lessor
the amount of the premiums due or paid, together with
interest thereon at 10% per annum which amount shall be
considered Rent payable by Lessee in addition to the Rent
defined at Article 4 hereof.
D. All policies of insurance provided for or contemplated
by this Article can be under Lessee's blanket insurance
coverage and shall name Lessor, Lessor's corporate general
partners, and Xxxxxx X. Xxxxxxx, any mortgagee, and Lessee
as additional insured and loss payee as their respective
interests (as landlord and lessee, respectively) 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 be in place on or before the Commencement
Date and contain endorsements by the respective insurance
companies waiving all rights of subrogation, if any, against
Lessor. The coverages required in this Section may be
subject to Lessee's customary deductible or retention, but
not to exceed $100,000. 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 maintain legible copies of any and
all policies and endorsements required herein, to be made
available for Lessor's review and photocopy upon Lessor's
reasonable request from time to time. On the Commencement
Date and 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 reflecting the above terms of the Policies
(including endorsements).
Lessee agrees that it will not settle any property
insurance claims affecting the Leased Premises in excess of
$250,000 without Lessor's prior written consent, such
consent not to be unreasonably withheld or delayed.
Notwithstanding the foregoing, Lessor shall consent to any
settlement of an insurance claim wherein Lessee shall
confirm in writing with evidence reasonably satisfactory to
Lessor that Lessee has sufficient funds available to
complete the rebuilding of the Premises.
E. Lessee shall defend, indemnify, and hold Lessor
harmless against any and all claims, damages, and lawsuits
arising after the Commencement 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, 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, to any person or property caused
by, or resulting from any act, omission, or negligence of
Lessee or any employee or agent of Lessee. In addition,
Lessee hereby releases Lessor from any and all liability for
any loss or damage caused by fire or any of the extended
coverage casualties, unless such fire or other casualty
shall be brought about by the intentional misconduct or
negligence of Lessor, its employees, agents or contractors.
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.
X. Xxxxxx 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 Commencement Date of this
Lease for the period prior to the expiration of the term
hereof, or any Renewal Term, if exercised.
B. Lessee shall pay all real estate taxes, assessments for
public improvements or benefits, and, except as otherwise
provided below, other governmental impositions, duties, and
charges of every kind and nature whatsoever which shall or
may, during the term of this Lease, be charged, laid,
levied, assessed, or imposed upon, or become a lien or liens
upon the Leased Premises or any part thereof. Such payments
shall be considered as Rent paid by Lessee in addition to
the Rent defined at Article 4 hereof. Nothing herein shall
be deemed or construed to require Lessee to pay or discharge
any tax which may be levied by any governmental authority
upon the income, profits, or business of Lessor, including
rent due Lessor hereunder, or any personal property taxes,
franchise, inheritance or estate bases, or taxes upon
inheritance or right of succession which may be levied
against any estate or interest of Lessor.
C. All real estate taxes, assessments for public
improvements or benefits, water rates and charges, sewer
rents, and other governmental impositions, duties, and
charges which shall become payable for the first and last
tax years of the term hereof shall be apportioned pro rata
between Lessor and Lessee in accordance with the respective
number of months during which each party shall be in
possession of the Leased Premises (or through the expiration
of the term hereof, if longer) in said respective tax years.
Lessee shall pay within 60 days of the expiration of the
term hereof Lessor's reasonable estimate of Lessee's pro-
rata share of real estate taxes for the last tax year of the
term hereof, based upon the last available tax xxxx. Lessor
shall give Lessee notice of such estimated pro-rata real
estate taxes no later than 75 days from the end of the term
hereof. Upon receipt of the actual statement of real estate
taxes for such prorated period, Lessor shall either refund
to Lessee any over payment of the pro-rata Lessee
obligation, or shall assess and Lessee shall pay promptly
upon notice any remaining portion of the Lessee's pro-rata
obligation for such real estate taxes.
D. Lessee shall have the right to contest or review by
legal proceedings or in such other manner as may be legal
(which, if instituted, shall be conducted solely at Lessee's
own expense) any tax, assessment for public improvements or
benefits, or other governmental imposition aforementioned,
upon condition that, before instituting such proceeding
Lessee shall pay (under protest) such tax or assessments for
public improvements or benefits, or other governmental
imposition, duties and charges aforementioned, unless such
payment would act as a bar to such contest or interfere
materially with the prosecution thereof and in such event
Lessee shall post with Lessor alternative security
reasonably satisfactory to Lessor. 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 refund, subject, however, to
apportionment as provided during the first and last years of
the term of this Lease.
X. Xxxxxx, 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 recover
the amount of such expenses from any refund, but not more
than the refund, payable by the governmental authority with
respect thereto.
X. Xxxxxx shall not be required to join in any proceeding
referred to in this Article, unless in Lessee's reasonable
opinion, the provisions of any law, rule, or regulation at
the time in effect shall require that such a proceeding be
brought by and/or in the name of Lessor, in which event
Lessor shall upon written request, join in such proceedings
or permit the same to be brought in its name, all at no cost
or expense to Lessor.
G. Within thirty (30) days after Lessor notifies Lessee in
writing that Lessor has paid such amount, Lessee shall also
pay to Lessor, as additional Rent, the amount of any sales
tax or excise tax, on Rents imposed by the State where the
Leased Premises are located.
ARTICLE 7. PROHIBITION ON ASSIGNMENTS AND SUBLETTING
A. Except as otherwise expressly provided in this Article,
Lessee shall not, without obtaining the prior written
consent of Lessor, in each instance:
1. assign or otherwise transfer this Lease, or any
part of Lessee's right, title or interest therein;
2. sublet all or any part of the Leased Premises or
allow all or any part of the Leased Premises to be used or
occupied by any other Persons (herein defined as a Party
other than Lessee, be it a corporation, a partnership, an
individual or other entity); or
3. mortgage, pledge or otherwise encumber this Lease,
or the Leased Premises.
B. For the purposes of this Article:
The transfer of voting control of any class of capital
stock of any corporate Lessee or sublessee, or the transfer
voting control of the total interest in any other person
which is a Lessee or sublessee, however accomplished,
whether in a single transaction or in a series of related or
unrelated transactions, shall be deemed an assignment of
this Lease, or of such sublease, as the case may be;
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
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 reasonably
satisfactory to Lessor.
Lessee agrees to furnish to Lessor within ten (10)
business days following demand at any time such information
and assurances as Lessor may reasonably request that neither
Lessee, nor, to Lessee's knowledge, any previously permitted
sublessee or assignee, has violated the provisions of this
Article.
C. If Lessee agrees to assign this Lease or to sublet all
or any portion of the Leased Premises, Lessee shall, prior
to the effective date thereof (the "Effective Date"),
deliver to Lessor executed counterparts of any such
agreement with the proposed assignee or sublessee, as
applicable.
Lessor agrees that its consent to any other proposed
assignment or sublet shall not be unreasonably withheld or
delayed, provided Lessor is given prior written notice of
such sublease or assignment, accompanied by a copy of such
sublease or assignment, and the consent of Lessee (such
consent to be in form and substance satisfactory to Lessor)
to such assignment or sublet, affirming its continued
liability hereunder.
D. Notwithstanding anything in this Lease to the contrary,
Lessee shall have the right to assign this Lease, or sublet
the Premises or any portion thereof, without the consent of
Lessor:
1. to any corporation with which Lessee may merge or
consolidate, which acquires all or substantially all of the
shares of stock or assets of Lessee or which is a parent or
subsidiary of Lessee, or which is the successor corporation
in the event of a corporate reorganization, or
2. to any person, entity, partnership, or corporation
which acquires a majority of Lessee's restaurants, or a
majority of Lessee's restaurants in the state in which the
Premises are located, or
3. to a franchisee of Lessee.
Any such assignment or sublease shall not relieve
Lessee or any guarantor of liability under this Lease unless
expressly approved in writing by Lessor.
ARTICLE 8. REPAIRS AND MAINTENANCE
A. Lessee covenants and agrees to keep and maintain in
good order, condition and repair the interior and exterior
of the Leased Premises during the term of the Lease, or any
renewal terms, and further agrees that Lessor shall be under
no obligation to make any repairs or perform any maintenance
to the Leased Premises. Lessee covenants and agrees that it
shall be responsible for all repairs, alterations,
replacements, or maintenance of, including but without
limitation to or of: the interior and exterior portions of
all doors; door checks and operators; windows; plate glass;
plumbing; water and sewage facilities; fixtures; electrical
equipment; interior walls; ceilings; signs; roof; structure;
interior building appliances and similar equipment; heating
and air conditioning equipment and any equipment owned by
Lessor and leased to Lessee hereunder, as itemized on
Exhibit B attached hereto and incorporated herein by
reference and, further, agrees to replace any of such
Lessor's equipment as 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), within the Leased Premises and other similar
items.
B. If Lessee refuses or neglects to commence or complete
repairs promptly and adequately, after prior written notice
as required under Article 16(B) (except in cases of
emergency to prevent waste or preserve the safety 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 seven (7) business days following demand. It
is understood that Lessee shall pay all expenses and
maintenance and repair during the term of this Lease. If
Lessee is not then in default of this lease beyond the
applicable cure period following notice from Lessor, Lessee
shall have the right to make repairs and improvements to the
Leased Premises without the prior written consent of Lessor
if such repairs and improvements (1) are nonstructural and
do not exceed $150,000 in cost or (2) affect the structural
integrity of the Leased Premises but do not exceed One
Hundred Thousand Dollars ($100,000.00) in cost. Lessor's
consent to all other repairs or improvements shall not be
unreasonably withheld or delayed. All alterations and
additions to the Leased Premises shall be made in accordance
with all applicable laws and shall remain for the benefit of
Lessor, except for Lessee's moveable trade fixtures. In the
event of making such alterations as herein provided, Lessee
further agrees to indemnify and save harmless Lessor from
all expense, liens, claims or damages to either persons or
property or the Leased Premises which may arise out of or
result from the undertaking or making of said repairs,
improvements, alterations or additions, or Lessee's failure
to make said repairs, improvements, alterations or
additions.
ARTICLE 9. COMPLIANCE WITH LAWS AND REGULATIONS
Lessee will comply with all statutes, ordinances,
rules, orders, regulations and requirements of all federal,
state, city and local governments, and with all rules,
orders and regulations of the applicable Board of Fire
Underwriters which affect the use of the improvements.
Lessee will comply with all easements, restrictions, and
covenants of record against or burdening 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 a
commercially reasonable subordination, attornment and non-
disturbance agreement with Lessee. 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 a commercially reasonable
subordination, attornment and non-disturbance agreement. In
the event that the mortgagee, beneficiary, or any other
person, acquires title to the Premises pursuant to the
exercise of any remedy provided for in the mortgage or deed
of trust, this Lease shall not be terminated or affected by
said foreclosure or sale, or any such proceeding, and the
mortgagee or beneficiary shall agree that any sale of the
Premises pursuant to the exercise of any rights and remedies
under the mortgage, deed of trust or otherwise, shall be
made subject to this Lease and the rights of the Lessee
hereunder. Lessee agrees to attorn to the mortgagee,
beneficiary or such other person as its new lessor, and the
Lease shall continue in full force and effect as a direct
Lease between Lessee and mortgagee, beneficiary or such
other person, upon all the terms, covenants, and agreements
set forth in this Lease.
B. Lessee covenants and agrees to execute and deliver,
upon demand, such further 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 a
commercially reasonable subordination, attornment and non-
disturbance agreement with Lessee.
ARTICLE l2. CONDEMNATION OR EMINENT DOMAIN
A. If the whole of the Leased Premises are taken by any
public authority, ("Condemnor") under the power of eminent
domain, or by private purchase in lieu thereof
("Condemnation"), then this Lease shall automatically
terminate upon the date possession is surrendered, and Rent
shall be paid up to that day.
Lessee shall have the right to elect to terminate the Lease
if a Condemnor by Condemnation acquires any of the
following:
any material portion of the restaurant building,
in excess of fifteen percent (15%) of the parking
spaces within the Leased Premises, or
3. Any taking which would prohibit or materially
interfere with Lessee's using the Leased Premises
as a restaurant.
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 of the Leased Premises was
surrendered.
C. If any part of the building or more than 15% of the
parking spaces within the Leased Premises shall be so taken
but Lessee does not elect to terminate this Lease, then
Lessee shall, with the use of the condemnation proceeds
which Lessor shall make available to Lessee, but otherwise
at Lessee's own cost and expense, restore the remaining
portion of the Leased Premises to the extent necessary to
render it reasonably suitable for the purposes for which it
was leased. Lessee shall make all repairs to the building in
which the Leased Premises is located to the extent necessary
to constitute the building a complete architectural unit.
Provided, further, the cost thereof to Lessor shall not
exceed the proceeds of the 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.
D. All compensation for real property 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 in such proceedings for
loss of business or goodwill, 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 Lessor's award.
E. If the Premises becomes subject to Condemnation for a
period of less than one (1) year, then this shall constitute
a temporary Condemnation, during which time all the
provisions of this Lease shall remain in full force and
effect. Lessee shall be entitled to compensation from the
Condemnor if allowable or against the total award for the
taking of a construction easement, for interruption of
Lessee's business and such other relief as provided by law
as a result of any such temporary Condemnation.
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, after
reasonable notice to Lessee, to show the Premises. At any
time within ninety (90) days of the expiration or
termination of the Lease, Lessee agrees to allow Lessor to
then place "For Sale" or "For Rent" signs on the Leased
Premises. Lessor and Lessor's representatives shall at all
times while upon or about the Leased Premises observe and
comply with Lessee's reasonable health and safety rules,
regulations, policies and procedures. Lessor agrees to
indemnify and hold Lessee, its successors, assigns, agents
and employees from and against any liability, claims,
demands, cause of action, suits and other litigation or
judgments of every kind and character, including injury to
or death of any person or persons, or trespass to, or damage
to, or loss or destruction of, any property, whether real or
personal, to the extent resulting from the gross negligence
or willful misconduct or Lessor or Lessor's representatives
while upon or about the Leased Premises.
ARTICLE 14. USE
From and after the Commencement Date, the Leased
Premises may be used as a restaurant. In any other case,
after obtaining Lessor's prior written consent, such consent
not to be unreasonably withheld or delayed, Lessee may
conduct any lawful business from the Leased Premises. Lessee
acknowledges and agrees that any other use without the prior
written consent of Lessor will constitute a default under
and a violation and breach of this Lease.
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, then, except as provided in Section 15.B, within a
reasonable time (but in no event longer than one hundred
eighty (180) days, (subject to events beyond Lessee's
control as provided in Article 36) 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.
The insurance proceeds (exclusive of Lessee's
deductible) shall be used to reimburse Lessee for the cost
of rebuilding or restoration of the Leased Premises. Risk
that the insurance company shall be insolvent or shall
refuse to make insurance proceeds available shall be with
Lessee. The Leased Premises shall be so restored or rebuilt
so as to be of at least equal size, value and substantially
the same character as prior to such damage or destruction.
If the insurance proceeds (exclusive of Lessee's
deductible) are equal to, or 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.
Reimbursements shall be made to Lessee upon delivery to
Escrowee of certificates or affidavits from Lessee's general
contractor showing amounts paid for reconstruction of the
improvements. If the proceeds held by Escrowee, when added
to Lessee's deductible, are not sufficient to pay the total
cost of restoration, then Lessee shall pay the difference
between such amounts and such total restoration cost.
Any sums, including interest, not disbursed by the
Escrowee after restoration of the improvements has been
completed, shall be paid to Lessee within ten (10) days
after delivery to Escrowee of Lessee's written request
therefore.
Both parties shall promptly execute all reasonable
documents and perform all acts reasonably required by the
Escrowee to allow it to perform its obligations under this
paragraph.
If during the last two (2) years of the remaining term
of this Lease or any of the option terms of this Lease, if
any further options to renew remain, the Leased Premises are
damaged or destroyed to the extent of fifty (50%) percent of
its replacement cost, or damaged or destroyed such that
Lessee cannot carry on business as a casual dining
restaurant without being closed for more than ninety (90)
days, then Lessee may elect, within 30 days of such damage,
to 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. If Lessee does not elect to exercise such option
to renew this Lease, or if no option to renew remains, then
this Lease shall terminate on the earlier of Lessor's
receipt of the insurance proceeds payable for the damaged
improvements, and the amount of the applicable deductible or
the expiration of the term of this Lease.
ARTICLE 16. ACTS OF DEFAULT
Each of the following shall be deemed a default by
Lessee and a breach of this Lease:
A. Failure to pay the Rent or any monetary obligation
herein reserved, within five (5) business days after receipt
of written notice from Lessor to cure the failure to pay the
Rent or any monetary obligation herein reserved.
B. 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 within thirty (30) days after written notice
from Lessor specifying such default, or within 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 capable of curing
such default, but in any event such cure period shall not
exceed 180 days after written notice from Lessor of the
default hereunder.
C. The abandonment by Lessee of the Leased Premises 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, unless the petition for bankruptcy is dismissed
within sixty (60) days after filing, or the appointment of a
temporary receiver which is not vacated or set aside within
sixty (60) days from the date of such appointment; provided,
however, that the foregoing shall not constitute events of
default so long as Lessee continues to otherwise satisfy its
obligations (including but not limited to the payment of
Rent) hereunder.
ARTICLE 17. TERMINATION FOR DEFAULT
In the event Lessee fails to cure a default within the
time allowed in Section 16 after written notice from Lessor,
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 all future rents for the
remainder of the then present term as set forth in, and to
the extent of, Article 19, notwithstanding any earlier
termination of the Lease hereunder (except where Lessee has
exercised a right to terminate where granted herein),
preserving unto Lessor the benefit of its bargained-for
rental payments.
ARTICLE 18. LESSOR'S RIGHT OF RE-ENTRY
In the event that this Lease shall be terminated as
hereinbefore provided, or by summary proceedings or
otherwise, or in the event of an uncured default hereunder
by Lessee, or in the event that the premises or any part
thereof, shall be abandoned by Lessee and Rent shall not be
paid or other obligations (including but not limited to
repair and maintenance obligations) of Lessee hereunder
shall not be met, then Lessor or its agents, servants or
representatives, may immediately or at any time thereafter,
re-enter and resume possession of the premises or any part
thereof, and remove all persons and property therefrom,
either by summary dispossess proceedings or by a suitable
action or proceeding at law, or otherwise but without breach
of the peace, without being liable for any damages therefor,
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,
Lessor shall undertake commercially reasonable efforts to
mitigate Lessee's continuing liability hereunder as such
efforts may be prescribed by law or statute (which shall
include listing the Leased Premises with a licensed
commercial real estate broker and securing the property
against waste, but shall not otherwise include the
expenditure of Lessor's funds, unless the same cannot be
waived between the parties hereto as herein provided and the
same shall be required by law or statute), and in addition,
Lessor may either (i) terminate this Lease or (ii) it may
from time to time, without terminating this Lease and the
contractual obligation of Lessee to pay Rent under this
Lease, make such alterations and repairs as may be necessary
to relet the Leased Premises or any part thereof for the
remainder of the original Term or any exercised Renewal
Terms, at such Rent or Rents, and upon such other terms and
conditions as Lessor may reasonably 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 under any recorded
memorandum of Lease, including termination of the Right to
Market under Article 34 of this Lease.
B. Upon each such reletting, without termination of the
contractual obligation of Lessee to pay Rent under this
Lease, all Rents received by Lessor shall be applied as
follows:
1. First, to the payment of any indebtedness other
than Rent due hereunder from Lessee to Lessor;
2. Second, to the payment of any costs and expenses
of such reletting, including brokerage fees and attorney's
fees and of costs of such alterations and repairs;
3. Third, to the payment of Rent and other monetary
obligations due and unpaid hereunder;
4. Finally, the residue, if any, shall be held by
Lessor and applied in payment of future Rent as the same may
become due and payable hereunder.
If such Rents received from such reletting during any
month are less than that to be paid during that month by
Lessee hereunder, Lessee shall pay any such deficiency to
Lessor. Such deficiency shall be calculated and paid
monthly. No such re-entry or taking possession of such
Leased Premises by Lessor shall be construed as an election
on its part to terminate Lessee's contractual obligations
under this Lease respecting the payment of rent and
obligations for the costs of repair and maintenance unless a
written notice of such intention be given to Lessee.
C. Notwithstanding any such reletting without termination,
Lessor may at any time thereafter elect to terminate this
Lease for any uncured breach.
D. In addition to any other remedies Lessor may have under
this Article 19, Lessor may recover from Lessee all damages
it may actually incur by reason of any uncured breach,
including: the cost of recovering and reletting the Leased
Premises; reasonable attorney's fees; and, if Landlord
terminates the Lease 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), (the Lessee bearing the burden of proof
to demonstrate the amount of rental loss for the same
period, that through reasonable efforts to mitigate damages,
could have been avoided) 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 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 permanent building fixtures in or on the Leased
Premises paid for by Lessor including, but not limited to,
heating system, electrical wiring, lighting system,
ventilating system, plumbing system, and air conditioning
system, shall be the property of Lessor. All other movable
fixtures, trade fixtures, equipment and all other 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, movable fixtures, 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 which is owned by Lessee,
after written notice to Lessor given at least ten (10)
business days prior to any proposed removal, may be removed
from the Leased Premises by Lessee regardless of whether or
not such property is attached to the Leased Premises so as
to constitute a "fixture" within the meaning of the law;
however, all damages and repairs to the Leased Premises
which may be caused by the removal of such property shall be
paid for by Lessee.
ARTICLE 21. LIENS
Lessee shall not do or cause anything to be done
whereby the Leased Premises may be encumbered by any
mechanic's or other liens. Whenever and as often as any
mechanic's or other lien is filed against said Leased
Premises purporting to be for labor or materials furnished
or to be furnished to Lessee, Lessee shall remove the lien
of record by payment or by bonding with a surety company
authorized to do business in the state in which the property
is located, within forty-five (45) days from the date of the
filing of said mechanic's or other lien and delivery of
notice thereof to Lessee. Should Lessee fail to take the
foregoing steps within said forty-five (45) day period (or
in any event, prior to the expiration of the time within
which Lessee may bond over such lien to remove it as a lien
upon the Leased Premises), Lessor shall have the right,
among other things, to pay said lien without inquiring into
the validity thereof, and Lessee shall forthwith reimburse
Lessor for the total expense incurred by it in discharging
said lien as additional Rent hereunder.
ARTICLE 22. NO WAIVER BY LESSOR EXCEPT IN WRITING
No agreement to accept a surrender of the Leased
Premises or termination of this Lease shall be valid unless
in writing signed by Lessor. The delivery of keys to any
employee of Lessor or Lessor's agents shall not operate as a
termination of the Lease or a surrender of the premises. The
failure of Lessor to seek redress for violation of any rule
or regulation, shall not prevent a subsequent act, which
would have originally constituted a violation, from having
all the force and effect of an original violation. Neither
payment by Lessee or receipt by Lessor of a lesser amount
than the Rent herein stipulated shall be deemed to be other
than on account of the earliest stipulated Rent. Nor shall
any endorsement or statement on any check nor any letter
accompanying any check or payment as Rent be deemed an
accord and satisfaction. Lessor may accept such check or
payment without prejudice to Lessor's right to recover the
balance of such Rent or pursue any other remedy provided in
this Lease. This Lease contains the entire agreement between
the parties, and any executory agreement hereafter made
shall be ineffective to change it, modify it or discharge
it, in whole or in part, unless such executory agreement is
in writing and signed by the party against whom enforcement
of the change, modification or discharge is sought.
ARTICLE 23. QUIET ENJOYMENT
Lessor covenants that Lessee, upon paying the Rent set
forth in Article 4 and all other sums herein reserved as
Rent and upon the due performance of all the terms,
covenants, conditions and agreements herein contained on
Lessee's part to be kept and performed, shall have, hold and
enjoy the Leased Premises free from molestation, eviction,
or disturbance by Lessor, or by any other person or persons
lawfully claiming the same, and that Lessor has good right
to make this Lease for the full term granted, including
renewal periods.
ARTICLE 24. 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 by civil
action 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 (10) business 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, or sooner if available, furnish its financial
statements to Lessor. Lessee's financial statements shall
include, at a minimum, a reviewed balance sheet and
statement of operations, and do not need to be prepared by
an independent certified public accountant, but shall be
prepared in conformity with generally accepted accounting
principles (hereafter "GAAP") and be represented and
warranted in writing as true and correct by the chief
financial officer or other authorized officer of Lessee.
Additionally, during the term of the Lease, upon Lessor's
written request Lessee will within furnish Lessor with
Lessee's financial statements and operating statements of
the Leased Premises the last ended fiscal quarter. Said
quarterly statements do not need to be prepared by an
independent certified public accountant, but shall be
represented and warranted in writing as true and correct by
the chief financial officer or other authorized officer of
Lessee. The financial statements shall conform to GAAP, and
include, at a minimum, a balance sheet and statement of
operations.
ARTICLE 27. OPTION TO RENEW
If this Lease is not previously canceled or terminated
and if Lessee and is not then in default beyond the
applicable cure period following Landlord's notice of
default, 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"). Annual Base Rent
during each Renewal Term shall be as set forth in Section
4.A.
The first Renewal Term will commence on the day
following the date the original Term expires and successive
Renewal Terms would commence on the day following the last
day of the then expiring Renewal Term. Except as otherwise
provided in Article 15 hereof, Lessee must give ninety (90)
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 written notices shall be given to Lessor or Lessee
by certified mail or nationally recognized overnight 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.
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 situated.
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 after the expiration of this Lease and without the
execution of a new lease and without Lessor's written
permission, Lessee shall be deemed to be occupying the
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
One Hundred Fifty percent (150%) 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 within seven (7) business days
after notice from Landlord that such payment is past due,
Lessor shall have the right to charge Lessee a late charge
of $500 for any amount of Rent installment that remains
unpaid after the second such occurrence in any 12 month
period.
H. All proceeds from any conveyance of a permanent
easement shall belong solely to Lessor.
I. For the purpose of this Lease, the term "Rent" shall be
defined as Rent under Article 4, and any other monetary
amounts required by this Lease to be paid by Lessee.
J. Lessee agrees to cooperate with Lessor to allow Lessor
to obtain and use at Lessor's expense promotional
photographs of the Leased Premises.
ARTICLE 30. REMEDIES
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. Notwithstanding the
foregoing, Lessor hereby waives any statutory or common law
landlord's lien on Lessee's personal property.
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) to
the best of Lessee's knowledge that there have been no
investigations or reports involving Lessee, or the Leased
Premises by any governmental authority which in any way
pertain to Hazardous Materials in or at the Leased Premises
(iii) to the best of Lessee's knowledge that the operation
of the Leased Premises has not violated and is not currently
violating any federal, state or local law, regulation,
ordinance or requirement governing Hazardous Materials; (iv)
to the best of Lessee's knowledge 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 do 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
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
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 the lesser of 10% or the highest rate of
interest allowed by law and shall become immediately due and
payable in full on demand of Lessor, its successors and
assigns.
ARTICLE 32. ESCROWS
Upon a third monetary default for non-payment of taxes
by Lessee which remains uncured after the expiration of any
applicable notice and cure period, 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 ("Charges") due on the Leased
Premises. From time to time out of such deposits Lessor
will, upon the presentation to Lessor by Lessee of the bills
therefor, pay the Charges or at Lessee's option, will upon
presentation of receipted bills therefor, reimburse Lessee
for such payments made by Lessee. In the event the deposits
on hand shall not be sufficient to pay all of the estimated
Charges when the same shall become due from time to time or
the prior payments shall be less than the currently
estimated monthly amounts, then Lessee shall pay to Lessor
on demand any amount necessary to make up the deficiency.
The excess of any such deposits shall be credited to
subsequent payments to be made for such items. If a default
or an event of default shall occur under the terms of this
Lease, Lessor may, at its option, without being required so
to do, apply any Deposit on hand to cure the default, in
such order and manner as Lessor may elect.
ARTICLE 33. NET LEASE
Notwithstanding anything contained herein to the
contrary it is the intent of the parties hereto that this
Lease shall be a net lease and that the Rent defined
pursuant to Article 4 should be a net Rent paid to Lessor.
ARTICLE 34. RIGHT TO MARKET
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 34(E) shall apply.
For twenty (20) business days following the giving of such
notice, Lessee shall have the option to purchase for cash
such portion of the fee interest of the Selling Lessor at
the price 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 $20,000 (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 Xxxxx Xxxxxxxxx'x Henderson, Nevada,
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 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 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 this
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. If such Closing fails to
occur for any reason, 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 for nine
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.
ARTICLE 35. 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.
ARTICLE 36 FORCE MAJEURE
In the event that either party hereto shall be delayed
or hindered in or prevented from the performance of any act
required hereunder by reason of strikes, lock-outs, labor
troubles, inability to procure materials, failure of power,
restrictive governmental laws or regulations, riots,
insurrection, war, military or usurped power, sabotage,
terrorism, unusually severe weather, acts of God, fire or
other casualty or other reason (but excluding financial
inability) of a like nature beyond the reasonable control of
the party delayed in performing work or doing acts required
under the terms of this Lease, then performance of such act
shall be excused for the period of the delay, and the period
for the performance of any such act shall be extended for a
period equivalent to the period of the delay.
IN WITNESS WHEREOF, Lessor and Lessee have respectively
signed and sealed this Lease as of the day and year first
above written.
LESSEE:
XXXXX XXXXXXXXX PIE SHOPS, INC.
a California corporation
By: /s/ Xxxxxxx Xxxxxxxx
Its: Vice President/CFO
By: Xxxxxxx Xxxxxx
Its:Secretary
LESSOR:
AEI NET LEASE INCOME & GROWTH FUND XIX
LIMITED PARTNERSHIP
By: AEI Fund Management XIX , Inc.
By: /s/ Xxxxxx X Xxxxxxx
Xxxxxx X. Xxxxxxx, President
AEI INCOME & GROWTH FUND XXII LIMITED
PARTNERSHIP
By: AEI Fund Management XXI , Inc.
By: /s/ Xxxxxx X Xxxxxxx
Xxxxxx X. Xxxxxxx, President
EXHIBIT "A"
Legal Description
(Henderson, Nevada)
Being a division of Lot One (1) as shown upon the FINAL MAP
OF GALLERIA COMMONS (a commercial subdivision) as depicted
in Book 79, Page 48 of Plats, Official Records, Xxxxx
County, Nevada, also being a portion of the West Half (W
1/2) of the Southwest Quarter (SW 1/4) of Section 3,
Township 22 South, Range 62 East, M.D.M., City of Xxxxxxxxx,
Xxxxx County, Nevada, more particularly described as
follows:
Commencing at the West Quarter Corner (W 1/4 Cor.) of said
Section 3, said corner being common to Sections 3 and 4;
Thence South 00 14' 06" West along the West line of said
Section 3, a distance of 808.13 feet;
Thence North 88 55' 32" East, a distance of 50.01 feet to a
point on the Easterly right of way line of Xxxxxxxxx Street;
Thence South 00 14' 06" West a long said Easterly right of
way line, a distance of 585.62 feet;
Thence South 89 45' 54" East, a distance of 20.00 feet to
the Point of Beginning;
Thence North 88 51' 28 East, a distance of 147.22 feet;
Thence South 01 05' 43" East, a distance of 108.33 feet;
Thence South 88 51' 28" West, a distance of 2.92 feet;
Thence South 00 36' 35" East, a distance of 179.31 feet;
Thence South 89 56' 32" West, a distance of 149.41 feet;
Thence North 00 14' 06" East, a distance of 284.89 feet tot
he POINT OF BEGINNING.
