LEASE
BETWEEN
AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP
and
AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP
as Landlord,
and B.T. WOODLIPP, INC.
as Tenant
Dated as of September 21, 2006
(Johnstown, Pennsylvania)
TABLE OF CONTENTS
Page
1. BASIC PROVISIONS 1
2. LEASING AGREEMENT; TERM 2
3. RENT 3
4. TAXES 5
5. ENVIRONMENTAL MATTERS 6
6. COMPLIANCE WITH REQUIREMENTS 8
7. COVENANT AGAINST LIENS 9
8. USE AND ENJOYMENT 9
9. TENANT'S PROPERTY; LIEN WAIVER 12
10. ALTERATIONS; MAINTENANCE AND REPAIR 13
11. CONDEMNATION AND CASUALTY DAMAGE 14
12. INSURANCE 17
13. ASSIGNMENT AND SUBLETTING 19
14. INDEMNIFICATION 21
15. DEFAULT; REMEDIES 23
16. SURRENDER OF PREMISES 27
17. SUBORDINATION AND ATTORNMENT 28
18. ESTOPPEL CERTIFICATES 29
19. NOTICES 30
20. LEASEHOLD FINANCING 30
21. RIGHT OF FIRST REFUSAL 31
22. [INTENTIONALLY OMITTED] 32
23. GUARANTY 32
24. MISCELLANEOUS 33
LEASE
THIS LEASE ("Lease") dated September 21, 2006 ("Effective
Date"), is made and entered into by and between AEI INCOME &
GROWTH FUND XXI LIMITED PARTNERSHIP, a Minnesota limited
partnership, and AEI INCOME & GROWTH FUND XXII LIMITED
PARTNERSHIP, a Minnesota limited partnership (collectively, the
"Landlord"), and B.T. WOODLIPP, INC., a Pennsylvania corporation
("Tenant").
1. BASIC PROVISIONS
1.1 PREMISES ADDRESS: 000 Xxxxxxxx Xxxxx.
Xxxxxxxxx, XX 00000
1.2 LANDLORD NAME AND ADDRESS: AEI INCOME & GROWTH FUND XXI.
LIMITED PARTNERSHIP and AEI
INCOME & GROWTH FUND XXII LIMITED
PARTNERSHIP
0000 Xxxxx Xxxxx Xxxxx
00 Xxxxxxx Xxxxxx Xxxx
Xx. Xxxx, Xxxxxxxxx 00000
1.3 TENANT NAME AND ADDRESS: B.T. WOODLIPP, INC.
0000 Xxx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Attn: Chief Financial Officer
1.4 LEASE DATE: September 21, 2006
1.5 TERM: Twenty (20) Lease Years
1.6 OPTIONS TO EXTEND: One (1) period of five (5) Lease
Years and one (1) period of four
(4) Lease Years and eleven (11)
months
1.7 EXHIBITS: Exhibit A - Land Legal Description
Exhibit B - Landlord Agreement
Exhibit C - Memorandum of Lease
Exhibit D - Guaranty of Lease
Exhibit E - Subordination,
Non-Disturbance and
Attornment Agreement
1
2. LEASING AGREEMENT; TERM
2.1. LEASING AGREEMENT. Landlord leases to Tenant and Tenant
leases from Landlord upon and subject to the terms and conditions
set forth in this Lease certain real estate consisting of
approximately 3.1 acres of land, as legally described in attached
Exhibit A, together with all easements, rights and appurtenances
thereto, including, but not limited to all of Landlord's rights,
if any, to use any common areas, parking, access drives and
sidewalks in any center of which the real estate may be a part
(the "LAND"). The Land is commonly known as 000 Xxxxxxxx Xxxxx,
Xxxxxxxxx, ("Xxxx"), Xxxxxxx Xxxxxx, Xxxxxxxxxxxx. The Land,
together with the restaurant and other related improvements now or
hereafter thereon ("IMPROVEMENTS"), are referred to in this Lease
as the "PREMISES." The Premises are leased subject to all
restrictions, covenants, encumbrances and other matters of record
on the date of this Lease.
2.2. TERM. The term of this Lease ("Term") shall commence
("COMMENCEMENT DATE") on the Effective Date and, unless extended
or earlier terminated as provided herein, shall expire
("EXPIRATION DATE") at midnight on the last day of the twentieth
(20th) "Lease Year" thereafter. "LEASE YEAR" shall mean and refer
to that period of twelve (12) full consecutive calendar months
beginning with the first full calendar month of the Term and each
subsequent period of twelve (12) consecutive calendar months
during the Term, provided that if the Term commences on other than
the first day of a calendar month, then the initial fractional
month of the Term plus the next succeeding twelve (12) full
calendar months shall constitute the first Lease Year of the Term
and provided, further, that if this Lease is terminated prior to
the Expiration Date, the last Lease Year may contain less than
twelve (12) full calendar months.
2.3. EXTENSION OF THE TERM. Provided that this Lease is in
full force and effect and no Event of Default has occurred and is
continuing, Tenant shall have the option to extend the Term for up
to one (1) period of five (5) Lease Years and one (1) additional
period of four (4) Lease Years and eleven (11) months each upon
all of the provisions of this Lease, which extension options shall
automatically be deemed exercised two hundred seventy (270) days
prior to the then current Expiration Date without the requirement
for any further notice; provided, however, that Tenant shall have
the right to terminate this Lease (and void any such automatic
extension and all remaining extension options) effective as of any
then current Expiration Date by giving written notice thereof to
Landlord not less than two hundred seventy (270) days before such
then current Expiration Date; and provided, further, that this
Lease shall not be automatically extended (and Tenant shall be
deemed to have given written notice of non-renewal) if on the date
which is two hundred seventy (270) days prior to the then current
Expiration Date an Event of Default has occurred and is
continuing, and in such event this Lease shall terminate on the
then current Expiration Date. If and each time this Lease is so
extended, the word "TERM" shall be deemed to include the five (5)
year extension period with respect to which the option has been
exercised and the term "EXPIRATION DATE" shall mean the last day
of such five (5) year extension period.
2.4. PREMISES LEASED "AS-IS". LANDLORD HEREBY LEASES AND WILL
LEASE AND TENANT TAKES AND WILL TAKE THE PREMISES "AS IS," AND
TENANT ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING AS LANDLORD
HEREUNDER OR IN ANY OTHER CAPACITY) HAS NOT MADE AND WILL NOT
MAKE, NOR SHALL LANDLORD BE DEEMED TO HAVE MADE, ANY WARRANTY OR
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REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE
PREMISES, INCLUDING WITHOUT LIMITATION ANY WARRANTY OR
REPRESENTATION AS TO ITS FITNESS FOR USE, PURPOSE, DESIGN OR
CONDITION FOR ANY PARTICULAR USE OR PURPOSE, AS TO THE QUALITY OF
THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, OR AS TO
VALUE, COMPLIANCE WITH SPECIFICATIONS, LOCATION, USE, CONDITION,
MERCHANTABILITY, QUALITY, DESCRIPTION, DURABILITY OR OPERATION ,
IT BEING AGREED THAT ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY
TENANT. TENANT ACKNOWLEDGES THAT THE PREMISES ARE OF ITS SELECTION
AND TO ITS SPECIFICATIONS, AND THAT THE PREMISES HAVE BEEN
INSPECTED BY TENANT AND ARE SATISFACTORY TO IT. IN THE EVENT OF
ANY DEFECT OR DEFICIENCY IN ANY OF THE PREMISES OF ANY NATURE,
WHETHER PATENT OR LATENT, LANDLORD SHALL NOT HAVE ANY
RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO OR FOR ANY
INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT
LIMITATION, STRICT LIABILITY IN TORT). THE PROVISIONS OF THIS
SECTION 2.4 HAVE BEEN NEGOTIATED, AND THE FOREGOING PROVISIONS ARE
INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES
BY LANDLORD, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE
PREMISES, ARISING PURSUANT TO STATUTE, JUDICIAL DECISION, THE
UNIFORM COMMERCIAL CODE OR ANY OTHER LAW, RULE, REGULATION OR
ORDER NOW OR HEREAFTER IN EFFECT OR OTHERWISE.
Tenant acknowledges and agrees that Tenant has examined the
title to the Premises prior to the execution and delivery of this
Lease and has found such title to be satisfactory for the purposes
contemplated by this Lease.
2.5. TRUE LEASE. Landlord and Tenant intend for this Lease to
be a true lease and not a transaction creating a financing
arrangement. Each party shall take all reasonable steps to reflect
the transaction represented hereby in all applicable books,
records and reports (including, without limitation, income tax
filings) in a manner consistent with "true lease" treatment rather
than "financing" treatment.
2.6. NON-TERMINABLE. Except as and to the extent expressly
set forth in Section 2.3 (with respect to non-renewal of this
Lease) and in Article-11 of this Lease, Tenant shall have no right
to terminate this Lease. Tenant shall remain obligated under this
Lease in accordance with its terms and shall not take any action
to terminate, rescind or avoid this Lease, notwithstanding any
bankruptcy, insolvency, reorganization, liquidation, dissolution
or other proceeding affecting Landlord or any action with respect
to this Lease which may be taken by any trustee, receiver or
liquidator or by any court.
3. RENT
3.1. BASE RENT. Tenant shall pay to Landlord as annual base
rent ("BASE RENT") the amount set forth in column (b) below for
the corresponding Lease Years set forth in column (a) below:
(a) LEASE YEAR (b) ANNUAL BASE RENT (c) MONTHLY BASE RENT
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1-5 $195,710.00 $16,309.17
6-10 $210,388.25 $17,532.35
11-15 $226,167.37 $18,847.28
16-20 $243,129.92 $20,260.83
21-25* $261,364.67 $21,780.39
26-end** $280,967.02 $23,413.92
[an asterisk (*) indicates an extension period; the number of
asterisks corresponds to the Respective extension period.]
Base Rent shall be paid to Landlord in monthly installments
("MONTHLY BASE RENT") in the respective amounts set forth in
column (c) above in advance on the first day of each month for
which the same is due during the Term. Rent for any partial month
shall be prorated on a per diem basis.
3.2. PAYMENT. All charges and costs payable by Tenant to
Landlord or any other third party pursuant to this Lease in
addition to Base Rent shall be considered "ADDITIONAL RENT". Base
Rent and Additional Rent are sometimes referred to collectively as
"RENT." Except as otherwise specifically provided in this Lease,
all Rent shall be paid by Tenant to Landlord without notice,
demand, offset, abatement, reduction or deduction by check payable
to Landlord and sent to Landlord at the address indicated in
Section 1.2 or to such other person, entity or place as Landlord
may from time to time designate by notice to Tenant. If required
by Landlord, Tenant shall make payments of Monthly Base Rent to
Landlord by wire transfer in immediately available federal funds
to such account in such bank as Landlord may designate from time
to time upon not less than thirty (30) days' notice to Tenant,
which account shall be the same account to which Tenant and/or
Tenant's affiliates who lease other properties from Landlord named
herein (or its affiliates) wire transfer payments of Monthly Base
Rent for at least nine (9) other properties. Monthly Base Rent for
the period from and including the Commencement Date through and
including the last day of the first full calendar month of the
Term shall be paid in advance on the Commencement Date.
3.3. LATE PAYMENTS. If Tenant shall fail to make payment of
any installment of Base Rent or any Additional Rent payable to
Landlord (rather than to a third party) within ten (10) days after
the date when each such payment is due, Tenant shall pay to
Landlord interest at a rate equal to the Default Rate (as
hereinafter defined) on the amount unpaid computed from the date
such payment of Base Rent or Additional Rent was due to and
including the date of payment thereof (but only with respect to
amounts payable directly to Landlord or that are not otherwise
subject to an interest or similar charge that will be treated as
Base Rent or Additional Rent hereunder). Further, if any
installment of Monthly Base Rent is not paid within fifteen (15)
days after the date the same is due, Tenant shall pay to Landlord,
on demand, as Additional Rent, a late charge (the "LATE CHARGE")
equal to four percent (4%) of such overdue installment of Monthly
Base Rent.
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3.4. NET LEASE. This is a net lease and Base Rent, Additional
Rent and, except as otherwise expressly set forth herein, all
other sums payable hereunder by Tenant shall be paid without
defense (other than defense of prior payment), notice, demand,
setoff, counterclaim, recoupment, abatement, suspension,
deferment, diminution, deduction or reduction. During the Term of
this Lease, Tenant shall be obligated to pay and shall be liable
for all costs and expenses associated with or arising from the
use, operation, maintenance, repair or improvements of the
Premises (regardless of whether such costs and expenses are
charged or imposed against Landlord or Tenant).
4. TAXES
4.1. As used in this Lease, the term "PREMISES TAXES" shall
mean all real estate, personal property, ad valorem and other
taxes and assessments, general and special, and all other
governmental charges levied, assessed or imposed on or with
respect to the Premises or which arise from the ownership,
leasing, use, occupancy or possession of all or any portion of the
Premises. Without limitation of the foregoing, it is hereby
specifically agreed that "Premises Taxes" include all taxes and
other governmental charges assessed or levied (i) on or with
respect to any Base Rent or Additional Rent payable under this
Lease, (ii) with respect to any period prior to or during the
Term, and (iii) any interest, penalties, fines and other amounts
charged for late payment or non-payment of any Premises Taxes.
Notwithstanding the foregoing, Premises Taxes shall not include
(A) any taxes or assessments imposed on or with respect to
Tenant's Property (as defined in Section 9.1), (B) any income,
franchise or other taxes measured by Landlord's income or profit
from the Premises on a net basis, other than any sales, use, rent,
occupancy or similar taxes on or with respect to Base Rent or
Additional Rent, or (C) any gifts, estate or other transfer taxes
imposed on Landlord.
4.2. PAYMENT.
(a) Tenant shall pay Premises Taxes to the appropriate
governmental authority before delinquency and before any interest,
penalties or fines may be charged with respect thereto and shall
deliver a copy of all paid tax bills to Landlord promptly upon
request.
(b) If any Premises Taxes relate to a fiscal period which is
partly within and partly outside of the period for which Tenant is
responsible, the amount thereof shall be prorated so that Tenant
will be responsible for that portion which relates to the period
prior to and after the Commencement Date and through the
Expiration Date and Landlord will be responsible for the portion
after the Expiration Date.
(c) Any refunds (including any accrued interest) of Premises
Taxes applicable to the period prior to and during the Term shall
be the property of Tenant and to the extent received by Landlord
shall be paid over to Tenant promptly after receipt thereof. Any
refund of Premises Taxes shall be deemed a reduction of Additional
Rent hereunder.
4.3. CONTEST. Subject to the provisions hereof, Tenant, at
its own expense, may contest Premises Taxes in any manner
permitted by law, in Tenant's name, and, whenever necessary, in
Landlord's name and Landlord will cooperate at Tenant's sole cost
and expense
5
with Tenant and execute any documents reasonably required for such
purpose. Any such contest shall be conducted by Tenant in good
faith and at its sole cost and expense, by appropriate proceedings
which shall operate during the pendency thereof to prevent (i) the
collection of, or other realization upon, the Premises Taxes so
contested, (ii) the sale, forfeiture or loss of the Premises, any
Base Rent or any Additional Rent to satisfy the same, (iii) any
interference with the use or occupancy of any of the Premises, and
(iv) any interference with the payment of any Base Rent or the
portion of any Additional Rent that does not represent the
Premises Taxes being contested under this Section 4.3. In no event
shall Tenant pursue any contest with respect to any Premises Taxes
in any manner that exposes Landlord to (a) criminal liability,
penalty or sanction, (b) any civil liability, penalty or sanction
for which Tenant has not made provisions reasonably acceptable to
Landlord, or (c) defeasance of its interest the Premises. Tenant
agrees that each such contest shall be diligently prosecuted to a
final conclusion. Tenant shall pay and save Landlord harmless from
and against any and all losses, judgments, decrees and costs
(including, without limitation, attorneys' fees and expenses) in
connection with any such contest and shall, promptly after the
final determination of such contest, fully pay and discharge the
amounts which shall be levied, assessed, charged or imposed or be
determined to be payable therein or in connection therewith,
together with all penalties, fines, interest, costs and expenses
thereof or in connection therewith.
5. ENVIRONMENTAL MATTERS
5.1. DEFINITIONS. For purposes of this Lease the following
terms shall have the following meanings:
(a) "ENVIRONMENTAL LAWS" - all present and future laws, statutes,
rules, regulations, orders and other requirements of any federal,
state, local or other governmental authority relating to the
environment, environmental protection or regulation, the emission,
disposal or discharge or the actual or threatened release into the
environment of pollutants or contaminants or to any Hazardous
Substance or HS Activity. Without limitation of the foregoing,
Environmental Laws include each of the following, as enacted as of
the date hereof or as hereafter amended: the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. 9601, et seq.; the Resource Conversation and Recovery Act
of 1976, 42 U.S.C. 6901, et seq.; the Toxic Substance Control
Act, 15 U.S.C. 2601, et seq.; the Water Pollution Control Act
(also knows as the Clean Water Act), 33 U.S.C. 1251, et seq.;
the Clean Air Act, 42 U.S.C. 7401, et seq.; and the Hazardous
Materials Transportation Act, 49 U.S.C. 5101, et seq., and any
similar state laws.
(b) "HAZARDOUS SUBSTANCE" - any substance defined or classified
in any Environmental Laws as a toxic or hazardous chemical, waste,
material or substance, or as a pollutant or contaminant
(including, without limitation, petroleum or any by-product or
fractions thereof, lead, asbestos and asbestos containing
materials, polychlorinated byphenyls and radioactive or explosive
materials); and any substance which if present requires
investigation or remediation under any Environmental Law or
results in liability thereunder for exposure thereto or discharge
thereof.
6
(c) "HS ACTIVITY" - the generation, manufacture,
handling, transportation, usage, treatment, release,
discharge, removal, storage or disposal of any Hazardous
Substance.
5.2. TENANT OBLIGATIONS.
(a) On or after the Commencement Date, Tenant (i) shall not
conduct or knowingly permit any HS Activity in, on or from the
Premises or knowingly allow any Hazardous Substances on the
Premises, in each case, in violation of any Environmental Laws,
and (ii) shall comply or cause compliance with all Enviromnental
Laws applicable to Tenant's use or occupancy of the Premises,
and shall cause the Premises to comply with all Environmental
Laws; in each case specifically including, but not limited to,
any condition existing on the Commencement Date, except to the
extent such violation results from, or compliance is required as
a result of, any act of Landlord or any act or omission of any
other person other than Tenant and its members, managers,
affiliates, officers, directors, employees, contractors,
representatives, agents, assignees or subtenants (collectively,
"TENANT'S PARTIES") (the obligations of Tenant under the
preceding clauses (i) and (ii) are called "Tenant's Compliance
Obligation"). Tenant shall promptly give notice to Landlord if
Tenant becomes aware of any action, claim, suit or proceeding
relating to a violation or alleged violation of any
Environmental Laws filed or threatened against Tenant or the
Premises. If, at any time during the Term, Hazardous Substances
shall exist in or on the Premises to which Tenant's Compliance
Obligation applies, then Tenant shall, or shall cause
responsible third parties to, promptly commence and diligently
implement all investigation, site monitoring, containment,
cleanup, removal, restoration or other remedial work of any kind
or nature (collectively, "REMEDIAL WORK") to the extent required
by Environmental Laws, and in compliance with all Environmental
Laws, all at Tenant's sole cost and expense.
(b) Tenant agrees to indemnify, defend and hold harmless
Landlord, any Landlord Lender and their respective managers,
partners, members, officers, directors, shareholders, employees
and agents ("LANDLORD INDEMNITEES") from and against any and all
claims, demands, actions, liabilities, damages, assessments,
losses, fines, penalties, costs and expenses, including
remediation, clean-up and detoxification costs and reasonable
attorneys' fees, arising from or related to any breach or
violation by Tenant of its obligations set forth in Section
5.2(a). The provisions of Section 5.2 shall survive the
expiration or termination of this Lease.
(c) Upon Landlord's request, at any time after the occurrence
and during the continuance of an Event of Default or at such
other time as Landlord has reasonable grounds to believe that
Tenant is in violation of Tenant's Compliance Obligation, Tenant
shall cause an inspection or audit of the Premises by an
environmental engineer or other appropriate consultant
reasonably approved by Landlord to determine the presence or
absence of Hazardous Substances on the Premises. If Tenant fails
to effectuate the commencement of such inspection or audit
within thirty (30) days after such request or fails to deliver a
written report of such inspection or audit to Landlord within
sixty (60) days after such request, Landlord may order the same,
and Tenant hereby grants to Landlord and its respective
employees, contractors and agents access to the Premises
7
upon prior reasonable notice to undertake such inspection or
audit, provided that such inspection or audit does not
interfere with the conduct of Tenant's business on the
Premises, Landlord provides Tenant certificates of insurance
naming Tenant as an additional insured and containing such
types of insurance and limits as Tenant reasonably requires,
Landlord promptly repairs any damage caused by such testing
and restores the Premises to the condition in which it
existed immediately prior to such damage at Landlord's sole
cost and expense, and Landlord shall indemnify Tenant if and
to the extent required under Section 14.2 hereof for all
loss, cost, damage, liens, claims, liabilities or expenses
(including, but not limited to, reasonable attorneys' fees,
court costs and disbursements) incurred by Tenant arising
from or by reason of such inspection or audit. The cost of
such inspection or audit shall be paid (i) by Tenant if such
inspection or audit shall confirm a violation of Tenant's
Compliance Obligation or (ii) by Landlord if such inspection
or audit does not confirm a violation of Tenant's Compliance
Obligation.
(d) Landlord and Tenant expressly agree that,
notwithstanding anything to the contrary set forth in this
Lease (including, but not limited to, the provisions of
Section 14.1 hereof), except in the case of Tenant's
obligations expressly set forth under Sections 5.2(a), (b)
and (c) hereof, Tenant shall have no obligation under this
Lease (i) to defend, indemnify or hold harmless Landlord or
Landlord Indemnitees with respect to any Hazardous Substance,
Environmental Laws or HS Activity, (ii) to engage any
environmental engineer or appropriate consultant with respect
to any Hazardous Substance, Environmental Laws or HS
Activity, (iii) to conduct any audit or inspection of the
Premises with respect to any Hazardous Substance,
Environmental Laws or HS Activity, (iv) to comply or cause
compliance with any Environmental Laws, or (v) to perform or
cause performance of any Remedial Work with respect to any
Hazardous Substance, Environmental Laws or HS Activity.
5.3. LANDLORD OBLIGATIONS. On or after the Commencement Date,
Landlord shall not conduct any HS Activity on, about or from the
Premises. Landlord shall promptly give notice to Tenant if
Landlord becomes aware of any action, claim, suit or proceeding
relating to a violation or alleged violation of any Environmental
Laws filed or threatened against Landlord or the Premises or if
Landlord has received notice or has actual knowledge of any HS
Activity on the Premises caused by a person other than Tenant or
any Tenant Party.
6. COMPLIANCE WITH REQUIREMENTS
6.1. COMPLIANCE WITH LAW. During the Term, Tenant shall
comply, and shall cause the Premises to comply, in all material
respects with and shall correct any violation of any laws,
statutes, ordinances and other legal and insurance requirements,
whether now or hereafter in force, applicable to the Premises or
Tenant's use or occupancy of the Premises, including without
limitation, the Occupational Safety and Health Act, as amended
("OSHA"), the Americans with Disabilities Act of 1990, as amended
("ADA"), and, subject to Section 5.2, all Environmental Laws.
Tenant shall procure, maintain and comply, and shall cause the
Premises to comply, with any and all permits, approvals, licenses
and other governmental authorizations required for the lawful use,
operation, maintenance and any "Alteration" (hereinafter defined)
of the Premises.
8
6.2. COMPLIANCE WITH PERMITTED ENCUMBRANCES. Tenant agrees
that with respect to all easements, conditions, covenants,
restrictions, encumbrances or agreements now affecting the
Premises or which are hereafter created by or consented to by
Tenant (collectively, the "PERMITTED ENCUMBRANCES"), Tenant shall
observe, perform and comply with, and cause the Premises to comply
with, and carry out and perform all of the obligations therein
which are to be observed and performed by the owner or any
occupant of the Premises thereunder, and shall pay all
assessments, fees, costs and expenses required to be paid by the
owner or any occupant of the Premises thereunder.
7. COVENANT AGAINST LIENS
7.1. LIENS. Tenant shall not cause, suffer or permit any
mechanic's, materialmen's judgment or other lien ("LIEN") to be
filed against the Premises (other than any Lien arising due to any
act or omission of Landlord or its agents); provided that nothing
herein shall be deemed to limit the rights of Tenant Lender under
Section 20.2 hereof. If any Lien shall be filed against all or any
portion of the Premises (other than any Lien arising due to any
act or omission of Landlord or its agents), (i) Tenant shall give
notice thereof to Landlord within ten (10) business days after the
date on which Tenant first becomes aware of the filing of any such
Lien, and (ii) within forty-five (45) days after first becoming
aware of such filing, (but in any event before any enforcement
action to foreclose is taken with respect to such Lien), Tenant,
at its sole cost and expense, shall cause the Lien to be
discharged of record or bonded over by any statutory bonding
procedure sufficient to prevent foreclosure or other enforcement
of such Lien, and shall deliver notice thereof to Landlord,
failing which Landlord shall have the right, but shall not be
obligated, to discharge the Lien without investigating the
validity or amount thereof. Tenant shall reimburse Landlord on
demand for any reasonable amounts so paid or incurred by Landlord,
including reasonable expenses and attorneys' fees incurred in
connection therewith.
Notice is hereby given that Landlord shall not be liable for
any labor, services or materials furnished or to be furnished to
Tenant, or to anyone holding any of the Premises through or under
Tenant, and that no mechanic's, materialman's or other Liens for
any such labor, services or materials shall attach to or affect
the interest of Landlord in and to any of the Premises.
8. USE AND ENJOYMENT
8.1. USE.
(a) Unless otherwise approved in writing by Landlord,
during the Term the Premises shall be used only for the
operation of an Applebee's Restaurant, including without
limitation, ancillary carry-out food service and the sale of
beer, wine and other alcoholic beverages, or, if a change in
use is requested by Franchisor, any other restaurant which
may be affiliated with or franchised by Franchisor. The
Premises shall be attractive in appearance and Tenant shall
conduct its business in a lawful and reputable manner. Tenant
shall not commit waste on the Premises and shall not occupy
or use the Premises or permit the same to be used or occupied
for any purpose or in any manner that violates any applicable
legal or govermnental requirement.
9
(b) Tenant shall continuously operate a business pursuant to
Section 8.1(a) from the Premises during the Term of this Lease;
provided, however, that Tenant may temporarily cease its
operations at the Premises for (i) restoration, alteration and
repair obligations pursuant to the terms of its Franchise
Agreement; (ii) the performance of Alterations permitted under
this Lease; or (iii) as a result of any emergency, casualty or
event of force majeure.
(c) All garbage, trash and refuse generated from the operation of
the business conducted on the Premises shall be placed in
appropriate garbage receptacles and, at Tenant's sole cost and
expense, removed from the Premises with sufficient frequency so as
to avoid any accumulation thereof outside of such receptacles.
8.2. EXTERIOR SIGNS, AWNINGS AND CANOPIES. Tenant, at its
sole cost and expense, may at any time and from time to time
during the Term install, alter, and/or replace any and all
exterior signs, awnings and/or canopies as Tenant may determine,
so long as they are in compliance with all applicable laws and all
Permitted Encumbrances. Tenant, at its sole cost and expense,
shall obtain all necessary permits for all signs, awnings and
canopies on the Premises and shall maintain the same in good
condition and repair.
8.3. UTILITIES. Tenant shall arrange and contract, in its
name, for and pay when due all charges for water, gas,
electricity, cable TV, telephone, trash removal, scavenger service
and other utility services used or consumed on the Premises by
Tenant or its agents during the Term, all of which shall be
separately metered and billed to Tenant.
8.4. QUIET ENJOYMENT. Landlord covenants with Tenant that
Tenant, upon paying Rent to Landlord and performing Tenant's other
covenants in this Lease, shall and may peaceably and quietly have,
hold, occupy, possess and enjoy the Premises during the Term
without any interference from Landlord or anyone claiming by,
through or under Landlord.
8.5. SIGNAGE RIGHTS, PARKING, ACCESS, EASEMENTS. Landlord
covenants with Tenant that Landlord shall not engage in any
action, or grant any rights which affect parking at the Premises,
access to the Premises, means of ingress and egress to and from
the Premises, visibility to or from the Premises, Tenant's signage
at the Premises or rights to the roof of the Premises, any
telecommunications equipment or utilities which service the
Premises, Tenant's air rights and any other rights to which Tenant
may be entitled pursuant to any easement agreements or similar
agreements affecting the Premises without Tenant's prior written
consent, which may be granted or withheld in Tenant's sole
discretion but shall not be unreasonably withheld if such action
will not materially adversely affect the conduct of Tenant's
business at the Premises. Landlord agrees to deliver to Tenant
copies of any notices Landlord receives with respect to the
aforementioned rights. Landlord agrees that so long as no Event of
Default shall have occurred and be continuing, upon request by
Tenant (and only after all documentation reasonably required to
consummate the relevant transaction shall have been provided to
Landlord), Landlord shall (i) enter into, modify or grant such
easements, covenants, waivers, approvals or restrictions for
utilities, parking or other matters as Tenant may desire for the
operation of the Premises (including, without limitation,
consenting to site and common area changes affecting access,
parking, tenant mix and the like and approving uses or users of
the other properties in the vicinity of the Premises which Tenant
reasonably believes will have a positive impact on its business at
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the Premises) (collectively, "EASEMENTS"), or (ii) dedicate or
transfer, minor non-essential unimproved portions of the Premises
for road, highway or other public purposes to the extent such
dedications or transfers are consistent with commercially
reasonable development or operation of the Premises or, in
Tenant's reasonable judgment, will have a positive impact on its
business at the Premises (the "DEDICATIONS"); provided, that
Landlord shall be obligated to take such action only if (A) any
such Easements or Dedications do not adversely affect the value of
the Premises (other than to a de minimis extent), do not
unreasonably render the use of the Premises dependent upon any
other property or unreasonably condition the use of the Premises
upon the use of any other property, and do not adversely affect
(other than to a de minimis extent) the use, or visibility of, or
access to, the Premises, (B) Tenant advises Landlord of the amount
of the consideration, if any, being paid for such Easements or
Dedications and that Tenant considers such consideration, if any,
to be fair under the circumstance and that such consideration, if
any, shall be paid to Landlord, (C) Tenant acknowledges in writing
that for so long as this Lease is in effect, Tenant will perform
all obligations, if any, of Landlord under the applicable
instrument and Tenant will remain obligated under this Lease and
AAG (if the Guaranty is then in effect) acknowledges in writing
that AAG will remain obligated under the Guaranty, in each case in
accordance with their respective terms, and (D) Tenant pays all
out-of-pocket costs and expenses incurred by Landlord in
connection with said Easements or Dedications including, without
limitation reasonable attorneys' fees. Subject to the foregoing
clauses (A) through (D), Landlord shall cooperate with Tenant's
efforts to enter into any Dedications or Easements.
If Tenant shall submit a request to Landlord for Landlord's
cooperation in connection with any such Easement or Dedication
which requires Landlord's approval or execution of any document,
Landlord shall (x) approve such Easement or Dedication, and
execute and deliver to Tenant all documents required in connection
therewith, within ten (10) days of receiving Tenant's request for
approval, or (y) disapprove Tenant's request in a written notice
with a detailed explanation of its objections delivered to Tenant
within ten (10) days of receiving Tenant's request for approval.
If Landlord fails to respond within such ten (10) day period,
Tenant's request with respect to such Easement or Dedication shall
be deemed to be approved by Landlord hereunder and Tenant is
hereby authorized and empowered to execute and deliver on behalf
of Landlord, as Landlord's attorney-in-fact, all instruments and
documents required in connection therewith.
If Landlord timely disapproves of a Tenant request under this
Section 8.5, then Tenant may elect, by delivering written notice
to Landlord, to resolve the matter by expedited arbitration in
accordance with this paragraph. Landlord and Tenant shall mutually
select a single arbitrator within ten (10) days after delivery of
Tenant's notice of arbitration hereunder. If the parties cannot
agree upon an arbitrator within such period, then either party may
request that a qualified arbitrator be appointed by the office of
the American Arbitration Association located nearest to the
Premises. Following selection or appointment, the arbitrator shall
meet jointly with representatives of Landlord and Tenant within
twenty (20) days to consider the parties' positions on the
disputed issue and the arbitrator shall render a written decision
within two (2) business days following such meeting. The decision
of the arbitrator shall be final, binding on the parties and
nonappealable. The arbitration shall otherwise be conducted in
accordance with the American Arbitration Association's rules for
expedited dispute resolution in effect at the time. The non-
prevailing party in any such arbitration shall pay the
arbitrator's fee and expenses.
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8.6. WARRANTIES, GUARANTIES AND INDEMNITIES. Landlord assigns
to Tenant, without recourse or warranty whatsoever, all
warranties, guaranties and indemnities, express or implied, and
similar rights which Landlord may have against any manufacturer,
seller (other than the Seller under the Purchase and Sale
Agreement from whom Landlord acquired the Premises), engineer,
contractor or builder with respect to the Premises, including, but
not limited to, any rights and remedies existing under contract or
pursuant to the Uniform Commercial Code (collectively, the
"guaranties"). Such assignment shall remain in effect during the
Term. Landlord hereby agrees to execute and deliver at Tenant's
expense such further documents, including powers of attorney
(which shall contain indemnity agreements from Tenant to Landlord
which shall be in form reasonably satisfactory to Landlord), as
Tenant may reasonably request in order that Tenant may have the
full benefit of the assignment of guaranties effected or intended
to be effected by this Section 8.6. Upon the occurrence of a
termination of this Lease, the guaranties shall automatically
revert to Landlord.
9. TENANT'S PROPERTY; LIEN WAIVER
9.1. TENANT'S PROPERTY. Landlord agrees that all (i)
fixtures, furniture, furnishings, equipment (other than floor and
wall coverings, fixtures which are "built-ins" or constitute an
integral part of the Building, the walk-in cooler, heat, air
conditioning and ventilation systems, electrical, mechanical and
plumbing systems, all of which are owned by and are the property
of Landlord), Kitchen Equipment (as hereinafter defined),
inventory, merchandise, goods, chattels, trade fixtures, signage,
appliances display cases, supplies, tools, machinery, security
systems, computer software or other personal property of Tenant
(including, without limitation, trade fixtures in, on, around or
affixed to the Premises), (ii) fixtures, furniture, furnishings,
equipment, supplies, tools, machinery, security systems, computer
software, signage and other personal property (including, without
limitation, trade fixtures in, on, around or affixed to the
Premises) which display the name, trade name, trademark, service
xxxx, logo, insignia, slogan, emblem or symbol of Xxxxxxxx'x
International Inc.'s ("Franchisor") or of Tenant ("Distinctive
Property"), and (iii) all licenses, permits, approvals and
authorizations, if any, which are required in connection with the
operation of Tenant's business, including, without limitation, all
liquor licenses, at any time located on the Premises
(collectively, "Tenant's Property"), shall be and at all times
remain the property of Tenant regardless of whether the same (x)
is affixed to the Improvements on the Land or the manner in which
the same is affixed (unless permanently affixed) or (y) may now or
hereafter be regarded as a fixture or as property of Landlord by
operation of law or otherwise, unless, however, such fixtures and
equipment cannot be removed without substantial damage to any
Improvements which cannot be easily repaired. As used herein the
term "Kitchen Equipment" shall include, without limitation,
kitchen fixtures (except for sanitary plumbing fixtures),
counters, stainless steel equipment, ranges, ovens, display cases
and refrigeration equipment (excluding the walk-in cooler). Tenant
shall have the right at any time and from time to time during the
Term and, subject to the provisions of Section 16.2 below, within
fifteen (15) days after the end of the Term to remove any Tenant's
Property from the Premises.
9.2. WAIVER OF LANDLORD'S LIEN. Tenant contemplates financing
from time to time some or all of Tenant's Property with a lender
or vendor ("TE Lender") who will require a security interest
therein (those items of Tenant's Property which are subject to
such security interest being referred to collectively as "Financed
Personalty"). Landlord hereby disclaims
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and waives any and all liens or right which Landlord may have to
claim a lien against the Tenant's Property for nonpayment of Rent
or otherwise and agrees to execute and deliver promptly upon
request a waiver with respect thereto.
10. ALTERATIONS; MAINTENANCE AND REPAIR
10.1. ALTERATIONS.
(a) ALTERATIONS. For purposes of this Lease, any
physical improvement, addition, enhancement or change with
respect to all or any portion of the Premises is referred to
as an "ALTERATION." Tenant or Franchisor shall have the right
at any time and from time to time during the Term to make or
cause to be made any Alteration in or to the Premises (i)
without Landlord's consent, if such Alteration consists of
the demolition of the Building and reconstruction of a new
prototypical building so long as: (A) the new building is
constructed in compliance with applicable codes and Permitted
Exceptions, (B) Tenant continues to pay Rent, (C)
construction is completed within nine (9) months following
demolition of the Building, subject to extension for force
majeure events, (D) Landlord has approved in advance the
construction budget (which shall include a contingency) for
the new building, such approval not to be unreasonably
withheld, delayed or conditioned, and (E) either (y) in the
case where the Guaranty is in full force and effect prior to
demolition Tenant has provided Landlord with a commercially
reasonable completion bond for the project or such other
assurance of performance as Landlord may reasonably accept,
or (z) prior to demolition the Tenant deposits with Landlord
cash (the "Deposit") sufficient to construct the building and
improvement pursuant to the approved budget, with the Deposit
being disbursed pursuant to the Landlord's then current
construction disbursement procedures; (ii) without Landlord's
consent, if such Alteration is performed in order to comply
with any of Tenant's agreements with Franchisor and such
Alteration does not adversely affect any structural component
of the Building, and (iii) in the case of any Alteration
other than those permitted under clause (ii) above, with
Landlord's prior consent, which consent shall not be
unreasonably withheld provided that such Alteration does not
(A) diminish the value of the Premises (including, by way of
example only, but without limitation, by diminishing the
utility of the Improvements for use as a restaurant or
diminishing the useful life of the Improvements, except to a
de minimis extent, or (B) adversely affect any structural
component of the Building. Every Alteration shall be made in
accordance with all applicable laws, legal requirements and
the Permitted Encumbrances. If Tenant shall submit a request
to Landlord for Landlord's approval of an Alteration which
requires Landlord's approval, Landlord shall (x) approve such
Alteration proposed by Tenant within twenty-one (21) days of
receiving Tenant's proposal and request for approval or (y)
disapprove Tenant's proposal in writing with a detailed
explanation of its objections within twenty-one (21) days of
receiving Tenant's proposal and request for approval. If
Tenant submits a proposal to Landlord and Landlord
disapproves such proposal within the twenty-one (21) day time
period, Tenant may submit another proposal with modifications
thereto made in response to Landlord's objections and
Landlord shall so approve or disapprove same within seven (7)
days after submission of such modified proposal. If Landlord
does not approve or disapprove any proposal or modified
proposal in writing with a detailed explanation of its
objections within the applicable seven (7) or twenty-one (21)
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day period, Tenant may submit to Landlord a reminder notice,
which shall state that Landlord's failure to disapprove the
applicable proposal within seven (7) days after receipt of
such reminder notice shall be deemed to constitute Landlord's
approval thereof. If Landlord does not disapprove such
proposal or modified proposal in writing with a detailed
explanation of Landlord's objections to Tenant's
modifications within seven (7) days after receipt of Tenant's
reminder notice, Landlord shall be deemed to have approved
the Alterations proposed by Tenant.
(b) In connection with any Alteration: (i) the
Alterations to be made will be constructed using materials of
a quality and workmanship at least as good as the original
work; (ii) all such Alterations shall be performed in a good
and workmanlike manner, and shall be performed diligently in
a commercially reasonable time period subject to force
majeure in compliance with all laws, legal requirements and
the terms of all Permitted Encumbrances; (iii) all work done
in connection with any such Alteration shall comply in all
material respects with all requirements of any insurance
policies in effect with respect to the Premises (the
"Insurance Requirements"); (iv) Tenant shall pay when due all
costs and expenses of any such Alteration, and shall
discharge all liens filed against any of the Premises arising
out of the same; (v) Tenant shall procure and pay for all
permits and licenses required in connection with any such
Alteration; (vi) all such Alterations shall be the property
of Landlord and shall be subject to this Lease (except for
any Alteration which constitutes Tenant's Property); and
(vii) all Alterations shall be made under the supervision of
an architect or engineer selected by Tenant and in accordance
with plans and specifications which shall be submitted to
Landlord prior to the commencement of the Alterations;
provided, however, Landlord shall have no right to approve
such architect, engineer, plans or specifications, except as
expressly set forth in Section 10.1(a).
10.2. MAINTENANCE AND REPAIR. During the Term, Tenant at its
sole cost and expense, agrees to make all necessary repairs and
replacements to the Improvements as often as required to keep and
maintain the Premises in good and safe condition and repair.
Notwithstanding any provision to the contrary, Tenant's
obligations under this Section shall not include making any repair
or improvement necessitated by the act of Landlord, its agents,
employees or servants. If Tenant shall default in its obligations
under this Section 10.2, Landlord may, after thirty (30) days
written notice to Tenant and failure by Tenant to perform any
necessary repairs and replacements to the Improvements within such
thirty (30) day period, enter the Premises to commence such
repairs or replacement. All reasonable sums incurred by Landlord
in connection with any such repair or replacement shall constitute
Additional Rent payable by Tenant under this Lease and shall be
paid by Tenant to Landlord within ten (10) days of Tenant's
receipt of a detailed invoice for such charges.
11. CONDEMNATION AND CASUALTY DAMAGE
11.1. SUBSTANTIAL TAKING. If all or substantially all of the
Premises is taken or appropriated for any public or quasi-public
use or purpose by any lawful power or authority by the exercise of
the right of eminent domain or by virtue of condemnation or other
similar proceedings, including a deed given in lieu thereof
("Taking"), other than a temporary Taking for a period of one (1)
year or less, this Lease shall terminate as of the date possession
is required
14
by the condemning authority and Rent and all other charges and
costs payable hereunder shall be adjusted and paid to the
effective date of termination.
11.2. OTHER TAKING.
(a) If there shall be a Taking, other than a temporary Taking for
a period of one (1) year or less, of (i) a portion of the
Building, (ii) twenty percent (20%) or more of the parking area of
the Premises, or (iii) any material part of a driveway or roadway
necessary for access to the Premises, and in Tenant's reasonable
judgment such Taking under clauses (i), (ii) or (iii), would
render the Premises (or the remainder thereof) unsuitable for the
conduct of Tenant's business, Tenant shall have the right to
terminate this Lease as of the date possession is required by the
condemning authority by giving notice to that effect to Landlord
within sixty (60) days after notice to Tenant of the date such
possession is required. In such event, Rent and all other charges
and costs payable hereunder shall be adjusted and paid to the
effective date of termination.
(b) If only a portion of the Premises is subject to a Taking and
Tenant is not entitled to or shall not exercise its right to
terminate this Lease pursuant to Section 11.2(a), this Lease shall
continue in full force and effect, and there shall be no abatement
or reduction of Rent payable hereunder. Tenant shall make any and
all repairs and restorations to the remainder of the Premises to
the extent necessary to render the same a complete architectural
unit suitable for Tenant's use.
11.3. COMPENSATION. (a) In the event that all or any portion
of the Premises is subject to a Taking, Landlord and Tenant shall
cooperate to maximize the amount of the recovery from the
condemning authority. If the recovery from the condemning
authority is paid into a common fund or paid only to Landlord,
such recovery shall be allocated as follows and in the following
priority: (i) so long as no Event of Default shall have occurred
and be continuing, to Tenant for the cost of any repairs required
pursuant to Section 11.2(b), subject, however, to the provisions
of Section 11.3(b) hereof; (ii) to Landlord, that portion
allocable to Land which is taken; (iii) to Landlord, that portion
allocable to Improvements which are taken; (iv) to Tenant, that
portion allocable to Tenant's Property or Tenant's relocation and
moving expenses; and (v) to Landlord, the balance. Notwithstanding
the foregoing, all proceeds from a temporary Taking shall be (A)
paid to Tenant if this Lease is not terminated and (B) equitably
allocated between Landlord and Tenant as of the date of
termination if this Lease is terminated. The provisions of this
Section shall survive any termination of this Lease pursuant to
Sections 11.1 or 11.2(a).
(b) If the proceeds from a Taking, and the estimated
costs of repairs to be performed by Tenant pursuant to
Section 11.2(b), exceeds One Hundred Twenty-five Thousand
Dollars ($125,000.00), then such proceeds shall be held by
Landlord or Landlord's Lender, and Landlord shall cause the
proceeds to be paid out from time to time to Tenant as the
work progresses, subject to each of the following conditions:
(i) Each request for payment shall be made on not
less than ten (10) business days' prior notice to
Landlord, and shall be accompanied by an officer's
certificate stating (A) that no Event of Default exists
under this Lease and (B) that the sum requested is
validly required to reimburse Tenant for payments by
Tenant
15
to complete the repair work, or is validly due to the
contractor, subcontractors, materialmen, laborers,
engineers, architects or other persons rendering
services or materials for the work (giving a brief
description of such services and materials). At the time
of disbursement, no Event of Default shall have occurred
and be continuing.
(ii) Each request for payment shall be accompanied by waivers of
lien reasonably satisfactory to Landlord covering that part of
the work for which payment or reimbursement has been made as of
the date shown on the current request.
(iii) Landlord shall release to Tenant the amount requested
by Tenant, subject to the amount retained by Landlord in
accordance with subsection (iv) below, within ten (10) business
days of Tenant's satisfaction of the items set forth in
subsection (i) and (ii) above. Disbursements shall be made not
more frequently than once every thirty (30) days.
(iv) Except and to the extent that Tenant is already retaining a
like amount from its contractors, Landlord (or Landlord Lender)
may retain ten percent (10%) of the proceeds as retainage until
the repairs and restoration are substantially complete.
(v) Proceeds held by Landlord in accordance with this Section
shall be held in an interest bearing account and any interest
earned on the proceeds shall be a part of the proceeds, and
shall be disbursed in accordance with this Lease. Landlord shall
take any interest earned into account for purposes of
determining its federal income tax liability, if any, and shall
pay any income taxes thereon.
11.4. CASUALTY DAMAGE.
(a) If the Improvements or any portion thereof are
damaged or destroyed by fire or other casualty ("Casualty"),
and this Lease is not terminated pursuant to Section 11.4(b)
below, Tenant shall, promptly and diligently repair such
damage and restore the Improvements as nearly as possible to
the condition which existed prior to the occurrence of such
Casualty or to any comparable or improved condition
consistent with Tenant's or Franchisor's then-current store
design and this Lease shall remain in full force and effect
and Tenant shall continue to pay Rent. Tenant promptly shall
commence and diligently pursue to completion the repair,
restoration and replacement of the damaged or destroyed
Improvements, due allowance being made for time needed to
obtain permits, adjust insurance and for delay on account of
events of force majeure. Such repair, restoration and
replacement shall be performed in accordance with all
applicable laws, legal requirements and Permitted
Encumbrances. Tenant shall be responsible for the repair or
replacement of any Tenant's Property damaged by such
Casualty. As used in this Lease the word "destroyed" shall
mean completely destroyed above the foundation, or so
substantially damaged as to require demolition to the
foundation, or such other severity of damage as may be
established or imposed by
16
applicable governmental law or ordinance which, if suffered,
would constitute total destruction or require demolition
before repair or reconstruction may commence.
(b) If the Improvements or any portion thereof is damaged or
destroyed (i) during the last two (2) Lease Years of the Term (or
the Term as then extended) to the extent of twenty-five percent
(25%) or more of the replacement value thereof (exclusive of the
foundation) immediately prior to such Casualty; or (ii) by a cause
or peril which is not covered by the property insurance required
to be carried pursuant to Section 12.1(b) (excluding any cause or
peril arising from any act of Tenant or any of its members,
managers, officers, directors, employees, contractors, agents,
representatives, subtenants or assignees) or other insurance which
is then customarily being carried by a commercially reasonable
prudent operator of a facility similar to the Premises; then
Tenant shall have the right to terminate this Lease by giving
notice to that effect ("Termination Notice") to Landlord within
one hundred twenty (120) days after the occurrence of the
Casualty, in which event termination shall be effective as of the
date of such Casualty if the Building is destroyed and otherwise
as of the date Tenant vacates the Premises following such
Casualty.
(c) If this Lease is terminated pursuant to this Section 11.4,
Rent and all other charges and costs payable hereunder shall be
adjusted and paid to the effective date of termination, and all
proceeds of any insurance with respect to the Premises (exclusive
of Tenant's Property, which shall be paid to Tenant) shall be paid
to Landlord.
12. INSURANCE
12.1. BY TENANT. Tenant, at its sole cost and expense, shall
obtain and maintain (or cause to be obtained and maintained, as
the case may be) the following insurance during the Term:
(a) Commercial general public liability insurance with limits of
not less than Five Million and No/100 Dollars ($5,000,000.00) per
occurrence.
(b) All-risk property insurance covering all Improvements
constituting part of the Premises, including the Building, all
Alterations and other improvements (excluding Tenant's Property),
in an amount not less than one hundred percent (100%) of the
replacement cost thereof, including (i) ordinance or law coverage
including any amounts necessary to replace the undamaged portion
of the Building, to cover cost increases arising from changes in
building codes or other ordinances or laws and to cover costs of
debris removal, and (ii) boiler and machinery coverage;
(c) Property insurance covering Tenant's Property in such amounts
as Tenant deems necessary or desirable;
(d) A liquor liability policy with limits of not less than Five
Million and No/100 Dollars ($5,000,000.00) per occurrence and Five
Million and No/100 Dollars ($5,000,000.00) in the aggregate;
17
(e) Workers' compensation and employer's liability insurance as
required by applicable law;
(f) Insurance against loss or damage from explosion of any steam
or pressure boilers or similar apparatus located in or about the
Improvements in an amount not less than the actual replacement
cost of the Improvements and equipment located within the
Improvements;
(g) If any portion of the improvements is located in an area
designated by the Federal Emergency Management Association as
having special flood and mud slide hazards, flood insurance in the
maximum available amount; and
(h) Loss of rent insurance in amounts sufficient to compensate
Landlord for all Base Rent, Additional Rent and other amounts
payable hereunder for a period of not less than twelve (12)
months, the amount of such coverage to be adjusted annually to
reflect the Base Rent, Additional Rent and other amounts payable
during the succeeding twelve (12) month period.
12.2. GENERAL REQUIREMENTS. All insurance (and renewals
thereof) required by this Article shall be issued by responsible
insurance carriers authorized to do business in the State in which
the Premises is located and having a claims paying ability rating
of not less than "A-" by Standard & Poor's Rating Services, a
division of The XxXxxx-Xxxx Companies, Inc. Each policy (and any
renewal thereof) shall expressly provide that it shall not be
cancelled or changed without at least thirty (30) days' prior
written notice to all parties insured or named therein. The
insurance described in Sections 12.1(a) and (d) shall include
Landlord and Landlord's Lender, if any, as additional insureds.
The insurance provided under Sections 12.1(b), (f) and (g) shall
name Landlord each Landlord Lender as a loss payee with respect to
any losses, and any proceeds paid to Landlord thereunder shall be
held and disbursed by Landlord on the same terms as those set
forth in Section 11.3 (except that proceeds from losses of less
than One Hundred Twenty-five Thousand Dollars ($125,000) shall be
paid to Tenant; provided that no Event of Default has occurred and
is continuing). In the event of any Tenant financing, the interest
of Landlord and Landlord's Lender, if any, under the property
insurance described in Sections 12.1(b), (f) and (g) shall be
senior to the interest of any Tenant Lender. All of the insurance
required by this Article shall be primary and noncontributing with
any insurance which may be carried by the Landlord, shall afford
coverage for all claims based on any act, omission, event or
condition which occurs or arises during the policy period, and may
be obtained by endorsement on blanket policy(ies) of insurance
carried and maintained by Tenant. Upon issuance and each renewal
thereof, Tenant shall deliver to Landlord a certificate thereof
and reasonable evidence of paid premium, failing which Landlord
shall have the right from time to time after no less than ten (10)
days' notice (except that if any insurance required under Section
12.1 has lapsed, no prior notice shall be necessary) to effect
such insurance for no more than one (1) year and all premiums paid
by Landlord shall be reimbursed by Tenant upon written demand. The
amount of insurance coverage required in Sections 12.1(a) and (d)
above each shall be subject to increase from time to time (but not
more frequently than once every five (5) years) and upon not less
than ninety (90) days prior notice therefor from Landlord to
Tenant; provided that (y) such additional coverage is comparable
and not more than that commonly carried by owners of similar
properties in the metropolitan vicinity of the Premises, and (z)
such
18
additional coverage is available at commercially reasonable rates.
Landlord shall have no interest in any insurance proceeds Tenant
receives for Tenant's Property and Landlord shall sign all
documents which are necessary or appropriate in connection with
the settlement of any claim or loss by Tenant with respect to
Tenant's Property.
12.3. MUTUAL WAIVER OF SUBROGATION. Tenant agrees to have all
policies of fire and extended coverage insurance now or hereafter
carried by it with respect to the Improvements endorsed with a
clause substantially as follows: "This insurance shall not be
invalidated should the insured waive in writing prior to a loss
any or all rights of recovery against any party for loss occurring
to the property described herein." The obligation to obtain such
an endorsement shall be subject to the availability thereof at
commercially reasonable rates. Landlord and Tenant hereby waive
all claims for recovery from each other for any loss or damage to
it or any of its property insured under valid and collectible
insurance policies to the extent of the proceeds collected under
such insurance policies.
13. ASSIGNMENT AND SUBLETTING
13.1. CONSENT REQUIRED. Except as provided in Section 13.2
below and Tenant financing pursuant to Article 20 below, Tenant
shall not sell, encumber, assign or transfer this Lease or any
interest herein, nor sublet all or any part of the Premises
without the prior written consent of Landlord which shall not be
unreasonably withheld, conditioned or delayed so long as such
proposed assignee or subtenant is a capable operator of a
restaurant facility and has a financial condition and
creditworthiness sufficient to meet the financial obligations of
Tenant under this Lease. With respect to an assignment or
subletting for which Landlord's consent is required, the following
provisions shall apply:
(i) there shall be submitted to Landlord current financial
information and information regarding the business reputation and
experience regarding the proposed assignee/sublessee;
(ii) the business reputation and experience of the proposed
assignee or sublessee (or the principals or owners thereof) shall
meet or exceed generally acceptable commercial standards for like
properties;
(iii) in the case of an assignment, the proposed assignee
shall agree in writing to assume and abide by all terms and
provisions of this Lease from and after the date of such
assignment; and
(iv) no Event of Default shall have occurred and be continuing.
Landlord agrees to respond within twenty (20) days after
receipt of Tenant's written request for Landlord's consent
(together with the information specified above and other
information reasonably requested by Landlord) to a proposed
assignment or sublet and submission of the financial information
and business qualifications of the proposed assignee/sublessee
pursuant to clauses (i) and (ii) above. Any disapproval shall be
explained in writing. If Landlord fails to respond or explain its
disapproval by the expiration of said twenty (20) day period,
Tenant may give to Landlord a reminder notice stating that
Landlord's failure to respond within ten (10) days after receipt
of such reminder notice shall be deemed to constitute
19
Landlord's approval of the transaction in question, and if
Landlord shall fail to respond or explain its disapproval within
ten (10) days after receipt of such reminder notice, the
transaction which is the subject of Tenant's notice to Landlord
shall be deemed approved. Consent by Landlord to any assignment or
subletting shall not waive the necessity for consent to any
subsequent assignment or subletting for which Landlord's consent
is required by this Section.
13.2. PERMITTED TRANSFER. Tenant shall have the right,
without any cost, fee or payment to Landlord (other than as set
forth in Section 13.4 below), to sublet any portion of the
Premises, or to transfer and assign Tenant's right, title and
interest in this Lease, without Landlord's prior written consent,
to the following persons and entities in the following events
(each, a "Permitted Transfer"): (i) to Franchisor or Franchisor's
affiliate; (ii) to another licensed franchisee of Franchisor;
(iii) to a parent, subsidiary, affiliate or division of Tenant,
Apple American Group LLC ("AAG") or their respective investors;
(iv) to any entity that acquires, by merger, consolidation or
otherwise, all or substantially all of the ownership interests in
and control of, Tenant or AAG (provided that no Event of Default
shall have occurred and be continuing) or of Franchisor; or (v) to
any entity that acquires all or substantially all of Tenant's
assets (excluding the Distinctive Property) or AAG's assets
(provided that no Event of Default shall have occurred and be
continuing). A direct or indirect transfer of all or any interest
in AAG shall not be deemed a sale, encumbrance, assignment or
transfer of this Lease or any interest herein. A direct or
indirect transfer by AAG of all or any interest in Tenant shall
not be deemed a sale, encumbrance, assignment or transfer of this
Lease or any interest therein; provided, that the transferee is a
party to whom, if the lessee's interest in this Lease were
transferred to such party, such transfer would constitute a
Permitted Transfer. For purposes of this Section 13.2, references
to Tenant, Franchisor and AAG shall be deemed to include their
respective successors and assigns.
13.3. GENERAL PROVISIONS. In the case of any sublease or
assignment of this Lease, Tenant shall submit an executed copy of
the sublease or assignment instrument to Landlord. Notwithstanding
anything to the contrary which may be provided in this Lease, (a)
the Tenant making any assignment or sublease shall not be released
from any liability under this Lease as a result of any assignment
or sublease made pursuant to Section 13.1, and (b) the Tenant
assigning all of its right, title and interest under this Lease
(and any predecessor Tenant that has not theretofore been
released) shall be released from all future liability under this
Lease in connection with any assignment of all of such assigning
Tenant's right, title and interest in this Lease described in
subsections (i), (ii), (iv) and (v) of Section 13.2, provided that
(i) the assignee of an assignment or transfer described in
subsections (i), (ii), and (v) of Section 13.2 assumes all
obligations under this Lease pursuant to an assignment and
assumption agreement in the form attached as Schedule 1 to the
Guaranty attached as Exhibit D hereto, and (ii) if the Tenant
making the assignment is not the originally named Tenant
hereunder, such assigning Tenant (and any predecessor Tenant that
has not theretofore been released) shall not be released in the
case of an assignment or transfer of such assigning Tenant's
right, title and interest in this Lease to (X) any entity that
acquires, by merger, consolidation or otherwise, all or
substantially all of the ownership interests in and control of,
such assigning Tenant pursuant to subsection (iv) of Section 13.2
above other than with respect to Franchisor or Franchisor's
affiliate, or (Y) any entity that acquires all or substantially
all of such assigning Tenant's assets pursuant to subsection (v)
of Section 13.2 above, unless the assignee or transferor will
directly or indirectly hold, after giving effect to such
assignment or transfer, all or substantially all of the assets of
the
20
originally named Tenant hereunder. Landlord shall not be entitled
to any consideration in connection with any assignment or sublet.
Unless expressly released pursuant to the provisions of this
Section 13.3, a Tenant which assigns, subleases or otherwise
transfers its interest in this Lease or the Premises shall remain
fully liable for all of the obligations, duties and liabilities of
the Tenant under this Lease following any such assignment,
sublease or other transfer.
13.4. COSTS AND FEES. Tenant shall not be obligated to
reimburse Landlord for any cost, fee or payment incurred by
Landlord or Landlord's Lender in connection with any requests for
approval of an assignment of this Lease or any sublease of the
Premises other than reasonable costs and expenses incurred by
Landlord and Landlord Lender (including, without limitation,
reasonable attorneys' fees and disbursements); provided, however,
that if the assigning Tenant is Franchisor, a Franchisor affiliate
or an authorized franchisee of Franchisor (other than the
originally named Tenant hereunder), no such cost, fee or payment
shall be due or payable by such entity.
14. INDEMNIFICATION
14.1. INDEMNIFICATION OF LANDLORD.
(i) TENANT AGREES TO DEFEND, PAY, PROTECT,
INDEMNIFY, SAVE AND HOLD HARMLESS LANDLORD AND
LANDLORD'S INDEMNITEES (AS DEFINED IN SECTION 5.2(B)
ABOVE) FROM AND AGAINST ANY AND ALL LIABILITIES, LOSSES,
DAMAGES, PENALTIES, COSTS, EXPENSES (INCLUDING, WITHOUT
LIMITATION, REASONABLE ATTORNEYS' FEES AND
DISBURSEMENTS), CAUSES OF ACTION, SUITS, CLAIMS, DEMANDS
OR JUDGMENTS OF ANY NATURE WHATSOEVER, HOWSOEVER CAUSED,
ARISING OR ALLEGED TO ARISE FROM THE PREMISES OR THE
USE, NON-USE, OCCUPANCY, CONDITION, CONSTRUCTION,
MAINTENANCE, REPAIR OR REBUILDING OF THE PREMISES, ANY
BREACH OF THIS LEASE ON THE PART OF TENANT OR LANDLORD'S
ENFORCEMENT OF THE PROVISIONS OF THIS LEASE, AND ANY
INJURY TO OR DEATH OF ANY PERSON OR PERSONS OR ANY LOSS
OF OR DAMAGE TO ANY PROPERTY, REAL OR PERSONAL, IN ANY
MANNER ARISING THEREFROM, CONNECTED THEREWITH OR
OCCURRING THEREON, AND ANY CLAIMS, DEMANDS, CAUSES OF
ACTION, SUITS OR JUDGMENTS BY THIRD PARTIES RESULTING
FROM VIOLATIONS OR ALLEGED VIOLATIONS BY TENANT OR ANY
SUBTENANT OF ANY PROVISION OF THIS LEASE, ANY LEGAL
REQUIREMENT, ANY OTHER LEASE OR AGREEMENT RELATING TO
THE PREMISES, OR ANY OTHER CONTRACT OR AGREEMENT TO
WHICH TENANT OR ANY SUBTENANT IS A PARTY, WHETHER OR NOT
LANDLORD OR LANDLORD'S LENDER HAS OR SHOULD HAVE
KNOWLEDGE OR NOTICE OF THE DEFECT OR CONDITIONS, IF ANY,
CAUSING OR CONTRIBUTING TO SAID INJURY, DEATH, LOSS,
DAMAGE, LIABILITY, PENALTY, COST, EXPENSE, CAUSE OF
ACTION, SUIT, DEMAND, JUDGMENT OR OTHER CLAIM; EXCEPT TO
THE EXTENT THAT ANY
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SUCH LIABILITY, LOSS, DAMAGE, PENALTY, COST, EXPENSE,
CAUSE OF ACTION, SUIT, CLAIM, DEMAND OR JUDGMENT IS THE
RESULT OF THE WILLFUL MISCONDUCT OR NEGLIGENCE OF
LANDLORD OR ANY LANDLORD INDEMNITEE. IN CASE ANY ACTION
OR PROCEEDING IS BROUGHT AGAINST LANDLORD OR ANY
LANDLORD'S INDEMNITEE BY REASON OF ANY SUCH CLAIM
AGAINST WHICH TENANT HAS AGREED TO DEFEND, PAY, PROTECT,
INDEMNIFY, SAVE AND HOLD HARMLESS PURSUANT TO THE
PRECEDING SENTENCE, TENANT COVENANTS UPON NOTICE FROM
LANDLORD OR ANY LANDLORD'S INDEMNITEE TO RESIST SUCH
ACTION OR PROCEEDING AND DEFEND LANDLORD AND LANDLORD'S
INDEMNITEE IN SUCH ACTION OR PROCEEDING, WITH THE
EXPENSES OF SUCH DEFENSE PAID BY TENANT, AND LANDLORD
WILL COOPERATE AND ASSIST IN THE DEFENSE OF SUCH ACTION
OR PROCEEDING IF REASONABLY REQUESTED SO TO DO BY
TENANT.
(ii) The obligations of Tenant under this Section
14.1 shall survive the termination or expiration of this
Lease.
14.2. INDEMNIFICATION OF TENANT.
(i) LANDLORD AGREES TO DEFEND, PAY, PROTECT,
INDEMNIFY, SAVE AND HOLD HARMLESS TENANT, ANY TENANT
LENDER, AND THEIR RESPECTIVE MEMBERS AND ITS AND THEIR
RESPECTIVE MEMBERS, MANAGERS, OFFICERS, EMPLOYEES,
DIRECTORS, SHAREHOLDERS AND AGENTS ("TENANT
INDEMNITEES") FROM AND AGAINST ANY AND ALL LIABILITIES,
LOSSES, DAMAGES, PENALTIES, COSTS, EXPENSES (INCLUDING,
WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES AND
DISBURSEMENTS), CAUSES OF ACTION, SUITS, CLAIMS, DEMANDS
OR JUDGMENTS OF ANY NATURE WHATSOEVER, HOWSOEVER CAUSED,
ARISING OR ALLEGED TO ARISE FROM ANY BREACH OF THIS
LEASE ON THE PART OF THE LANDLORD OR TENANT'S
ENFORCEMENT OF THE PROVISIONS OF THIS LEASE, AND ANY
INJURY TO OR DEATH OF ANY PERSON OR PERSONS OR ANY LOSS
OF OR DAMAGE TO ANY PROPERTY, REAL OR PERSONAL, IN ANY
MANNER ARISING FROM OR CONNECTED WITH LANDLORD'S BREACH
OF THIS LEASE OR TENANT'S ENFORCEMENT OF THE PROVISIONS
OF THIS LEASE OR OCCURRING ON THE PREMISES TO THE EXTENT
CAUSED BY THE WILLFUL MISCONDUCT OR NEGLIGENCE OF
LANDLORD OR ANY LANDLORD INDEMNITEE. IN CASE ANY ACTION
OR PROCEEDING IS BROUGHT AGAINST TENANT OR TENANT'S
INDEMNITEE BY REASON OF ANY SUCH CLAIM AGAINST WHICH
LANDLORD HAS AGREED TO DEFEND, PAY, PROTECT, INDEMNIFY,
SAVE AND HOLD HARMLESS PURSUANT TO THE PRECEDING
SENTENCE, LANDLORD COVENANTS UPON NOTICE FROM TENANT OR
TENANT'S INDEMNITEE TO RESIST SUCH ACTION
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OR PROCEEDING AND DEFEND TENANT AND TENANT'S INDEMNITEE
IN SUCH ACTION OR PROCEEDING, WITH THE EXPENSES OF SUCH
DEFENSE PAID BY LANDLORD, AND TENANT WILL COOPERATE AND
ASSIST IN THE DEFENSE OF SUCH ACTION OR PROCEEDING IF
REASONABLY REQUESTED SO TO DO BY LANDLORD.
(ii)The obligations of Landlord under this Section
14.2 shall survive the termination or expiration of this
Lease.
15. DEFAULT; REMEDIES
15.1. DEFAULT BY TENANT. Each of the following shall
constitute an Event of Default (herein so called) by Tenant under
this Lease:
(i) Tenant fails to pay any installment of Base Rent in full
under this Lease within five (5) days after notice from Landlord
that such payment was not received when due;
(ii) Tenant fails to pay any installment of Additional Rent in
full under this Lease within ten (10) days after notice from
Landlord that such payment was not received when due;
(iii) Tenant fails to observe or perform any other provision
of this Lease required to be observed or performed by Tenant and
does not cure such failure within thirty (30) days after notice
thereof from Landlord; provided, that if such default is not
capable of being cured within thirty (30) days and Tenant promptly
commences such cure, said thirty (30) day period shall be extended
so long as Tenant diligently and continuously pursues such cure;
(iv) Tenant or any guarantor of Tenant's obligations under this
Lease (a "Guarantor") makes a general assignment for the benefit
of creditors;
(v) A receiver or trustee of Tenant or any Guarantor or any of
their respective assets is appointed by entry of an order by a
court of competent jurisdiction and the same is not vacated,
discharged or dismissed within sixty (60) days thereafter;
(vi) A petition for relief is filed by Tenant or any Guarantor
under any bankruptcy or insolvency law seeking a plan of
reorganization or arrangement under any law relating to
bankruptcy, or any such petition is filed against Tenant or any
Guarantor and same is not dismissed, discharged or vacated within
sixty (60) days thereafter;
(vii) The interest of Tenant in the Premises is sold under
execution or other legal process;
(viii) Tenant fails to maintain any insurance required under
Section 12.1 of this Lease within five (5) days after notice from
Landlord of such failure; or
23
(ix) Tenant assigns this Lease or subleases any
portion of the Premises in violation of Section 13 of
this Lease.
15.2. LANDLORD'S REMEDIES.
(a) Upon the occurrence of an Event of Default under
Section 15.1, Landlord shall have the following rights and
remedies, subject to the rights of Franchisor or Tenant
Lender under the provisions of Section 15.3 and Section 20.2:
(i) To terminate this Lease and Tenant's right of possession of
the Premises by giving notice of such election to Tenant, in
which event (A) Tenant shall immediately surrender possession
thereof to Landlord, failing which Landlord may re-enter and
take possession of the Premises and expel or remove Tenant and
any other occupant(s) thereof in accordance with applicable law
("Reentry"), and (B) Tenant shall have no further claim thereon
or hereunder;
(ii) To terminate Tenant's right of possession of the Premises
without terminating this Lease by giving notice of such election
to Tenant, in which event (A) Tenant shall immediately surrender
possession thereof to Landlord, failing which Landlord may
exercise the right of Reentry, and (B) Landlord shall have the
right to occupy the Premises for and on account of Tenant and to
collect any unpaid rentals and other charges which have or may
thereafter become due and payable;
(iii) To exercise the rights described in clause (ii) above
and thereafter elect to terminate this Lease and all of Tenant's
rights in or to the Premises by giving notice of such election
to Tenant; or
(iv) To exercise any other right or remedy now or hereafter
existing by law or in equity.
(b) If Landlord reenters the Premises under clause
(a)(ii) above, such reentry or any action, in unlawful
detainer or otherwise, to obtain possession of the Premises
shall not be deemed to be an election by Landlord to
terminate this Lease, or Tenant's liability to pay rent or
other charges thereafter accruing, or Tenant's liability for
damages under any provisions hereof, unless Landlord elects
to terminate this Lease by written notice to that effect
given to Tenant. Tenant covenants that the service by
Landlord of any notice pursuant to the unlawful detainer
statutes of the State in which the Premises is located and
the surrender of possession pursuant to such notice shall not
be deemed to be a termination of this Lease, unless Landlord
elects to the contrary by written notice to that effect given
to Tenant at the time of or after the service of any such
statutory notice. If Landlord reenters or takes possession of
the Premises as aforesaid, Landlord shall have the right,
subject to the provisions of this Lease, including without
limitation, the provisions of Section 16.2, to remove
therefrom all or any part of the personal property located
therein and may dispose of or place the same in storage at a
public warehouse at the expense and risk of Tenant; provided,
however, that Landlord shall not be obligated to remove
and/or dispose of any such personal property.
24
(c) If Landlord elects to reenter the Premises under clause
(a)(ii) above and takes possession of the Premises, Landlord
may, but except to the extent required by applicable law or
court order, shall not be obligated to, relet the Premises for a
term, rate and upon such other provisions as Landlord deems
appropriate. If Landlord so reenters and takes possession of the
Premises, Landlord may decorate, repair and alter the Premises
to the extent Landlord deems appropriate for purposes of such
reletting. If Landlord is unable to so relet the Premises, then
Tenant shall pay to Landlord monthly on the first day of each
month during the period that Tenant's right to possession is
terminated, a sum equal to the Rent due under this Lease for
that month. If the Premises are relet, Landlord shall apply the
rents therefrom first to payment of Landlord's expenses incurred
by reason of Tenant's default, second, to payment of Landlord's
expenses of reletting, including without limitation, brokerage
fees and reasonable attorneys' fees, and third, to payment of
Rent due from Tenant under this Lease. All sums expended and
concessions granted to any new tenant shall be amortized on a
straight -line basis over the term of the new lease and Tenant's
liability therefor shall be limited to that portion attributable
to the unexpired term of this Lease. If the sums received from
such reletting are insufficient to satisfy the payment of Rent
due from Tenant under this Lease for any month, Tenant shall
remain liable for the deficiency. If the sums received from such
reletting exceed the Rent otherwise due from Tenant for any
month, Tenant shall have no rights thereto except that such
excess amounts shall be applied against Rent subsequently due
under this Lease. No such reletting by Landlord shall be
considered to be (A) for Landlord's own account unless and until
Landlord notifies Tenant that this Lease has been terminated,
and (B) an acceptance of Tenant's surrender of the Premises
unless and until Landlord so notifies Tenant.
(d) In the event of any termination of this Lease or
repossession of any of the Premises after the occurrence of an
Event of Default, Tenant shall pay to Landlord Base Rent,
Additional Rent and all other sums required to be paid by Tenant
to and including the date of such termination or repossession
and, thereafter, Tenant shall, until the end of what would have
been the Term in the absence of such termination or
repossession, and whether or not any of the Premises shall have
been relet, be liable to Landlord for and shall pay to Landlord
as liquidated and agreed current damages: (i) Base Rent,
Additional Rent and all other sums which would be payable under
this Lease by Tenant in the absence of such termination or
repossession, less (ii) the net proceeds, if any, of any
reletting pursuant to Section 15.2(c), after deducting from such
proceeds all of Landlord's reasonable expenses in connection
with such reletting (including without limitation, all
reasonable repossession costs, brokerage commissions, legal
expenses, attorneys' fees, costs of Alteration and expenses of
preparation for reletting). Tenant hereby agrees to be and
remain liable for all sums aforesaid and Landlord may recover
such damages from Tenant and institute and maintain successive
actions or legal proceedings against Tenant for the recovery of
such damages. Nothing herein contained shall be deemed to
require Landlord to wait to begin such action or other legal
proceedings until the date when the Term would have expired had
there been no such Event of Default.
(e) At any time after such termination of this Lease pursuant
to Section 15.2(a)(i) or pursuant to law, whether or not
Landlord shall have recovered any
25
amounts under Section 15.2(c) or 15.2(d), Landlord, at its
option, shall be entitled to recover from Tenant and Tenant
shall pay to Landlord, on demand, as and for liquidated and
agreed final damages for Tenant's default, (i) the amount by
which the Base Rent and all Additional Rent reserved
hereunder for the unexpired portion of the Term demised
herein as if the Lease had not expired or been terminated
exceeds the then fair and reasonable rental value of the
Premises for the same period, discounted to present worth at
the prime rate (as defined in Section 24.6), minus any such
monthly deficiencies previously recovered from Tenant for
such unexpired portion of the Term demised herein under
Section 15.2(c), plus (ii) all reasonable legal fees and
other costs and expenses incurred by Landlord as a result of
Tenant's default under this Lease and the exercise of any
rights and remedies hereunder.
(f) If any statute or rule of law governing a proceeding
in which such liquidated final damages provided for in Section
15.2(e) are to be proved shall validly limit the amount thereof
to an amount less than the amount above agreed upon, Landlord
shall be entitled to the maximum amount allowable under such
statute or rule of law.
(g) Mention in this Lease of any particular remedy shall not
preclude Landlord from any other remedy at law or in equity. No
right or remedy conferred upon or reserved to Landlord in this
Lease is intended to be exclusive of any other right or remedy;
and each and every right and remedy shall be cumulative and in
addition to any other right or remedy contained in this Lease.
No delay or failure by Landlord or Tenant to enforce its rights
under this Lease shall be construed as a waiver, modification or
relinquishment thereof. Tenant waives any rights of redemption
granted by any laws if Tenant is evicted or dispossessed, or if
Landlord obtains possession of the Premises by reason of the
violation by Tenant of any of the terms of this Lease.
15.3. FRANCHISOR RIGHTS.
(a) Landlord agrees to send a copy of any notice of default
required or permitted to be given to Tenant under this Lease
simultaneously to Franchisor at the last address for Franchisor
furnished to Landlord by Franchisor in writing; provided, that
the failure to send such notice shall not limit Tenant's default
or Landlord's remedies with respect thereto, or make Landlord
liable for any damages. If Franchisor has received timely notice
of such default, (provided, that the failure to send such notice
shall not limit Tenant's default or Landlord's remedies with
respect thereto or impose any liability upon Landlord therefor),
Landlord agrees and consents to the curing of any default of
Tenant hereunder by Franchisor, provided that such cure is made
by Franchisor within the time set forth in Section 15.1 for
Tenant's cure (provided, that Franchisor shall have an
additional fifteen (15) days to cure a default under Sections
15.1(i) and (ii), so long as Franchisor notifies Landlord within
the cure periods set forth in such Sections that Franchisor will
cure such defaults). If Franchisor elects to cure any Tenant
default hereunder, Franchisor shall give notice to that effect
to Landlord and Tenant simultaneously with such cure.
(b) Notwithstanding anything to the contrary stated herein, if
an Event of Default has occurred (including the expiration of
any applicable cure period), Landlord
26
agrees to give notice thereof to Franchisor ("Termination
Notice") and Landlord will not terminate the Lease (as
permitted hereunder) on account of such Event of Default for
a period of thirty (30) days, during which time Franchisor
shall have the right to lease the Premises upon the same
terms and conditions as this Lease, such election to be made
by notice to that effect ("Franchisor Notice") from
Franchisor to Landlord prior to the end of said 30-day
period. If Franchisor exercises such right by giving the
Franchisor Notice to Landlord by the time and in the manner
set forth in the immediately preceding sentence, then (i)
Franchisor and Landlord shall promptly execute and deliver a
written instrument to that effect; (ii) Franchisor shall
become the tenant under this Lease with all of the rights and
obligations of tenant commencing upon, first accruing and
effective only from and after the date of the Franchisor
Notice; provided, that Tenant shall not dispute such action
by Franchisor and shall acknowledge its approval of such
action by Franchisor; (iii) Franchisor shall have no
liability, responsibility or obligation to pay or otherwise
cure any default of Tenant existing prior the effective date
of exercise by Franchisor of its rights in this subsection;
provided, that if Franchisor has received notice from
Landlord of any Event of Default of Tenant under Sections
15.1(i) or (ii), Franchisor shall pay any Rent due and
payable by Tenant accruing after the date Franchisor receives
notice of any such Event of Default; and (iv) nothing
contained herein shall restrict, limit, terminate, waive or
otherwise affect Landlord's rights against Tenant or any
guarantor on account of Tenant's default. If Franchisor fails
to exercise such right on or before the expiration of said
thirty (30) day period, Landlord may pursue any rights and
remedies that it may have against Tenant on account of
Tenant's Event of Default hereunder. Nothing contained in
this Section shall be deemed to obligate Franchisor to assume
this Lease, to become the tenant hereunder or to take
possession of the Premises.
(c) In the event that Franchisor becomes the tenant
under this Lease pursuant to the provisions of subsection (b)
or an assignment under Section 13.2 above, Franchisor shall
have the right at any time thereafter upon prior notice to,
but without the prior consent of Landlord, to assign this
Lease and all of its right, title and interest as Tenant
hereunder to an authorized franchisee of Franchisor. In the
event of such an assignment, Franchisor shall be released
from all liabilities and obligations of Tenant first accruing
from and after the effective date of said assignment provided
that such assignee franchisee assumes in writing the
obligations of Tenant under this Lease and a copy thereof is
furnished to Landlord.
16. SURRENDER OF PREMISES
16.1. CONDITION. Upon the expiration or earlier termination
of this Lease or the termination of Tenant's right of possession
of the Premises only, Tenant shall surrender the Premises to
Landlord in a clean, safe, good and tenantable condition, free of
debris and with all "grease traps" and similar devices cleaned and
in good working condition, ordinary wear and tear and, if this
Lease is terminated pursuant to Section 11.4(b), damage by
Casualty excepted. All building apparatus and equipment (other
than Tenant's Property) then located on the Premises and all
Alterations and other improvements to the Premises made during the
Term, whether by Tenant or others, shall remain on the Premises
and shall be considered part of the Premises. Tenant shall deliver
all keys therefor to Landlord at the place then fixed for the
27
payment of Rent and shall make known to Landlord the combination
for all locks on safes, cabinets and vaults in the Premises.
16.2. REMOVAL OF TENANT'S PROPERTY. Upon the expiration or
earlier termination of this Lease or the termination of Tenant's
right of possession of the Premises only, Tenant shall have the
right, at its sole cost and expense, for a period of fifteen (15)
days thereafter to remove Tenant's Property, Distinctive Property
and the Financed Personalty, respectively, from the Premises,
provided that Tenant shall pay to Landlord Rent due under Article
3 hereof for the actual number of days which elapse during such
fifteen (15) day period until the Tenant's Property, Distinctive
Property and the Financed Personalty, as applicable, are removed
from the Premises. If and to the extent that Tenant fails to
remove any of such property by the expiration of said fifteen (15)
day period, Landlord agrees that Tenant Lender, TE Lender and
Franchisor each shall have the right for a period of forty (45)
days thereafter to remove the same from the Premises, provided,
that Tenant shall pay to Landlord Rent due hereunder for the
actual number of days which elapse until Tenant Lender, TE Lender
or Franchisor remove the same from the Premises during such forty
five (45) day period. If and to the extent that any such property
remains on the Premises on the sixtieth (60th) day after such
termination, the same shall be deemed abandoned, and at Landlord's
option shall become the property of Landlord and may be sold or
disposed of as Landlord may determine; provided, however, that
Landlord shall not use, suffer or permit the use of any
Distinctive Property unless the attributes or features thereof
associated with Tenant or Franchisor are removed or obliterated.
Any and all damage to the Building caused by or resulting from the
removal of Tenant's Property, Distinctive Property or Financed
Personalty shall promptly be repaired at no cost or expense to
Landlord and Tenant shall be liable for such cost and expense
unless such repairs are made by Tenant, Franchisor or TE Lender,
as the case may be.
17. SUBORDINATION AND ATTORNMENT
17.1. SUBORDINATION. This Lease and the rights of Tenant
hereunder are expressly subject and subordinate to the lien of any
mortgage or deed of trust constituting a lien on Landlord's fee
interest in the Premises ("Landlord Mortgage") and any renewals,
extensions, modifications, consolidations and replacements
thereof, which now or hereafter affect all or any portion of the
Premises (except to the extent that any such instrument expressly
provides that this Lease is superior to it); provided that the
holder of the Landlord Mortgage ("Landlord Lender") agrees in
writing not to disturb Tenant, Tenant's right to possession and
use of the Premises and Tenant's rights under this Lease so long
as there shall be no Event of Default on behalf of Tenant
hereunder. Tenant agrees to execute and deliver to Landlord and
any Landlord Lender at any time and from time to time all such
documents reasonably requested by Landlord or Landlord's Lender,
which are reasonably acceptable to Tenant and Tenant's Lender, to
confirm or effect such subordination including, without
limitation, an SNDA substantially in the form attached as Exhibit
E, together with such changes as Lender may reasonably require;
provided that such Landlord Lender agrees to recognize this Lease
and the rights of Tenant set forth herein for so long as there
shall be no Event of Default on behalf of Tenant hereunder.
Notwithstanding any foreclosure or sale under any Landlord
Mortgage (or transfer by deed in lieu thereof), this Lease shall
remain in full force and effect in accordance with its terms.
Landlord and any Landlord Lender shall execute within ten (10)
days after request any documentation reasonably required by any TE
Lender or Tenant Lender, which are reasonably acceptable to
Landlord and any
28
Landlord Lender, to confirm the priority of such lender's
interests. Notwithstanding the provisions of this Section 17.1,
the holder of any Landlord Mortgage to which this Lease is subject
and subordinate shall have the right, at its sole option, at any
time, to subordinate and subject the Landlord Mortgage, in whole
or in part, to this Lease by recording a unilateral declaration to
such effect. Tenant hereby agrees that any Landlord Lender shall
not be bound to the terms of any material modification or
amendment of this Lease entered into after the date of such
Landlord Mortgage, unless such Landlord Lender has consented to
such material modification or amendment. Tenant hereby agrees that
after the date of such Landlord Mortgage, Tenant shall not pay to
Landlord any installment of Base Rent more than one (1) month in
advance of the due date thereof, unless Landlord Lender shall
consent to such prepayment.
17.2. ATTORNMENT. In the event of the foreclosure of any
Landlord Mortgage by voluntary agreement or otherwise, or the
commencement of any judicial action seeking such foreclosure,
Tenant will become the tenant of and attorn to and recognize such
Landlord Lender or purchaser in foreclosure as Tenant's landlord
under this Lease without change in the provisions of this Lease.
Upon request by such successor in interest, Tenant will execute
and deliver an instrument confirming such attornment, which will
recognize this Lease and the rights of Tenant set forth herein and
shall provide that such successor in interest will not disturb
Tenant in its use of the Premises in accordance with this Lease
unless there is an Event of Default continuing hereunder and such
successor in interest would be entitled to exercise such remedy
under Section 15.2 hereof.
18. ESTOPPEL CERTIFICATES
18.1. ESTOPPEL CERTIFICATES. Within fifteen (15) days after
written request from Landlord or Tenant to the other, such other
party shall execute and deliver an estoppel certificate signed by
an officer of such party and certifying: the Commencement Date and
expiration date of the Term; the date to which Rent has been paid;
the amount of Rent then being paid; that this Lease is in full
force and effect and has not been modified, amended or assigned
(or, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and
effect); that to such party's knowledge there are no defaults by
the other party under this Lease, nor to such party's knowledge
any existing condition upon which the giving of notice or lapse of
time or both would constitute a default (or, if such exist,
stating the nature thereof); that such party has received no
notice from any insurance company of any defects or inadequacies
of the Premises; that such party has no options or rights other
than as set forth in this Lease; and such other factual matters as
the requesting party may reasonably request. Failure to deliver
such statement within said fifteen (15) day period shall be
conclusive upon the party to whom the request was directed that
this Lease is in full force and effect, without modification
except as may be represented by the requesting party in the draft
estoppel presented, that to such party's knowledge there are no
uncured defaults in the requesting party's performance, and that
all other statements required to be made in the estoppel letter
are conclusively made.
29
19. NOTICES
19.1. NOTICES. All notices required or permitted to be given
under this Lease shall be in writing and shall be deemed given on
the date when personally delivered or, if earlier, the next
business day if sent by recognized overnight air courier, or two
(2) business days (or, if earlier, when actually received) after
being deposited in the United States Mail, postage prepaid,
properly addressed, certified mail, return receipt requested, as
follows:
TO LANDLORD: At the address set forth in Section 1.2,
With a copy to: Winthrop &
Weinstine P.A. 000
Xxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxx,
Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
And a copy to:
AEI Fund Management,
Inc. Attn: Lease
Management Dept. 0000
Xxxxx Xxxxx Xxxxx
00 Xxxxxxx Xxxxxx
Xxxx
Xx. Xxxx, XX 00000
TO TENANT At the address set forth
in Section 1.3, Attention:
Chief Financial Officer
With a copy to: Xxxxx X. Xxxxxxxx, Esq.
000 Xxxxx Xxxxxxxx Xxxxxx,
Xxxxx 000 Xxxxxxx,
Xxxxxxxx 00000
TO FRANCHISOR: Xxxxxxxx'x International, Inc.
International, Inc. 0000
Xxxx 000xx Xxxxxx, Xxxxx
000 Xxxxxxxx Xxxx,
Xxxxxx 00000 Attention:
General Counsel
Each entity or person entitled to receive notice or a copy thereof
pursuant to this Lease ("Addressee") at any time and from time to
time may change its address for notice purposes by giving notice
of such change to all other Addressees in any manner specified
above at least fifteen (15) days before such change of address is
to become effective.
20. LEASEHOLD FINANCING
20.1. LEASEHOLD FINANCING. Tenant shall have the right at any
time and from time to time during the Term with notice to, but
without the consent or approval of Landlord, to grant a mortgage
or other security interest ("Leasehold Mortgage") in Tenant's
interest in this Lease (the leasehold estate created hereby), and
all of Tenant's Property, all upon the condition that all rights
acquired under any such Leasehold Mortgage shall be subject to
each and all of the covenants, conditions, terms and restrictions
set forth in this Lease. Tenant Lender's foreclosure
30
on the Leasehold Mortgage shall not terminate this Lease or affect
any of the covenants, conditions, terms and restrictions set forth
in this Lease as obligations of Tenant.
20.2. TENANT LENDER. If Landlord is provided written notice
of a Leasehold Mortgage and the name and address for notice of the
holder of a Leasehold Mortgage (the "Tenant Lender"), then the
rights of such Tenant Lender shall include the following, which
shall be binding on Landlord (and any Landlord Lender). Upon
recordation of the Leasehold Mortgage and for so long thereafter
as the Leasehold Mortgage remains unsatisfied: (i) Landlord agrees
to deliver a copy of any notice of default given to Tenant under
this Lease simultaneously to Tenant Lender at its last address
furnished to Landlord in writing; provided, that the failure to
send such notice shall not limit Tenant's default or Landlord's
remedies against Tenant with respect thereto (other than such
remedies as would prevent the exercise of Tenant Lender's rights
under this Section 20.2), or impose any liability upon Landlord
for any damages therefrom; (ii) Landlord agrees that Tenant Lender
shall have the right, but shall not be obligated, to cure any
default of Tenant hereunder, provided that such cure is made by
Tenant Lender within the time provided to Tenant pursuant to
Section 15.1 (provided, that such Tenant Lender shall have an
additional fifteen (15) days to cure a default under Sections
15.1(i) and 15.1(ii), so long as Tenant Lender notifies Landlord
within the cure periods set forth in such Sections that it will
cure such defaults); (iii) if Tenant Lender elects to cure any
default of Tenant hereunder, (A) Tenant Lender shall give notice
to that effect to Landlord and Tenant simultaneously with such
cure, and (B) Landlord consents to and shall accept such cure with
the same force and effect as if made by Tenant; (iv) Landlord and
Tenant each agree not to cancel or surrender this Lease (other
than due to a default by a party which was not cured within the
applicable cure period after notice was given to Tenant and Tenant
Lender) or amend the provisions of this Lease without the prior
written consent of Tenant Lender, which consent shall not be
unreasonably withheld or delayed; and (v) if Landlord terminates
the Lease due to an Event of Default which Tenant Lender is unable
to cure (e.g., Tenant bankruptcy), and Tenant Lender elects by
written notice to Landlord within forty-five (45) days thereafter
to continue this Lease, Landlord agrees to enter into a new lease
with Tenant Lender on the same terms and conditions as set forth
in this Lease for the balance of the original Term, including any
remaining extension options, provided, that the Tenant Lender
shall pay to Landlord at the time of the execution and delivery of
the new lease all sums which would at the time of the execution
and delivery of the new lease be due pursuant to this Lease but
for such termination, and shall agree in writing to cure and shall
cure all other defaults of Tenant capable of being cured by Tenant
Lender then existing under this Lease within a reasonable period
of time after entering into such new Lease. Landlord agrees
promptly to execute and deliver such documents as Tenant Lender
reasonably may request which are reasonably acceptable to Landlord
and any Landlord Lender to evidence the provisions of this Section
20.2, including the Landlord Agreement in the form attached hereto
as Exhibit B.
21. RIGHT OF FIRST REFUSAL
21.1. RIGHT OF FIRST REFUSAL TO PURCHASE.
(a) If at any time after the first anniversary of the
Commencement Date Landlord shall receive a bona fide written
offer to purchase the Premises from a third party which is
not affiliated with Landlord, which offer Landlord is willing
to accept
31
("Outside Contract"), Landlord shall give written notice
("Sale Notice") thereof, together with a copy of such Outside
Contract, to Tenant. Tenant shall have a right of first
refusal ("Refusal Right") to purchase the Premises that is
the subject of the Outside Contract in accordance with the
terms and provisions thereof. If Tenant desires to exercise
the Refusal Right, Tenant shall deliver written notice to
that effect to Landlord within twenty (20) days after receipt
of the Sale Notice ("Refusal Period"). If Tenant exercises
the Refusal Right by the time and in the manner set forth in
this subsection, Landlord and Tenant shall promptly execute a
contract which includes the same material terms and
conditions as the Outside Contract ("Sale Contract") and
Tenant shall deposit when due any xxxxxxx money deposit
required thereunder. If Tenant does not execute a Sale
Contract within fifteen (15) days after Tenant's receipt of
such Sale Contract from Landlord, signed on behalf of
Landlord, or if Tenant defaults in its obligations under such
Sale Contract, then Landlord shall be free to consummate the
sale pursuant to the Outside Contract (or another contract on
substantially similar terms and conditions).
(b) If Tenant does not exercise the Refusal Right by the time and
in the manner set forth in subsection (a) above, then (i) the
Refusal Right shall remain in full force and effect, but not with
respect to the proposed sale pursuant to the Outside Contract, and
(ii) Landlord shall be free to consummate the sale pursuant to the
Outside Contract. If within one hundred eighty (180) days after
the expiration of the Refusal Period Landlord does not consummate
the sale pursuant to the Outside Contract, the Refusal Right shall
again be applicable, and Landlord shall not thereafter sell the
Premises pursuant to the Outside Contract without first offering
Tenant the Refusal Right pursuant to this Section 21.1.
(c) The rights granted to Tenant under this Section 21 shall not
survive the expiration or termination of this Lease.
(d) The provisions of this Section 21 shall not apply and Tenant
shall not have any Refusal Right (i) with respect to the sale,
conveyance, assignment or other transfer (A) to any person
controlling, controlled by, or under common control with Landlord
or any of its direct or indirect owners, (B) by gift, descent or
devise, or (C) to any sale (or conveyance in lieu thereof) by
foreclosure or enforcement of a lien or security interest, or (ii)
at any time that an Event of Default has occurred and is
continuing. Any conveyance of the Premises to Tenant pursuant to
this Section 21 shall be "as-is" with respect to the physical
condition of the Premises.
22. [INTENTIONALLY OMITTED]
23. GUARANTY
23.1. Simultaneously with the execution of this Lease, Tenant
shall cause to be delivered to Landlord a guaranty in the form
attached hereto as Exhibit D (the "Guaranty"), pursuant to which
AAG shall guaranty Tenant's obligations hereunder.
32
24. MISCELLANEOUS
24.1. LANDLORD'S INTERESTS.
(a) The term "Landlord" as used herein shall mean only the owner
or owners, at the time in question, of the fee title to the
Premises. In the event of an assignment or transfer of this Lease
by Landlord for other than security purposes, Landlord shall cause
its assignee or transferee to assume the provisions of this Lease
and Landlord shall deliver notice of such assignment or transfer
and a copy of the effective instrument of transfer to Tenant.
Tenant shall be entitled to continue to pay rent and give all
notices to Landlord until Tenant has received the foregoing from
Landlord. From and after a sale of the Premises, Landlord shall be
released from all liability toward Tenant arising from this Lease
because of any act, occurrence or omission of Landlord's
successors occurring after the transfer of Landlord's interest in
this Lease, provided Landlord's purchaser or assignee expressly
assumes Landlord's duties and covenants under this Lease. Nothing
herein shall be deemed to relieve Landlord of any liability for
its acts, omissions or obligations occurring or accruing up to and
including the date of such transfer.
(b) Anything contained herein to the contrary notwithstanding,
any claim based on or in respect of any liability of Landlord
under this Lease shall be enforced only against Landlord's
interest in the Premises and shall not be enforced against
Landlord individually or personally.
(c) Landlord shall have the right to sell, assign or transfer its
interest in the Premises without any prior notice to or consent of
Tenant, subject to compliance with the provisions of Section 21 of
this Lease, if applicable.
24.2. SEVERABILITY. If any provision of this Lease or the
application thereof to any person or circumstance shall be invalid
or unenforceable under applicable law, such event shall not
affect, impair or render invalid or unenforceable the remainder or
any other provision of this Lease, nor shall it affect the
application of any provision of this Lease to other persons or
circumstances.
24.3. ENTIRE AGREEMENT. This Lease and the Exhibits attached
hereto set forth the entire agreement between Landlord and Tenant
concerning the Premises and there is no other agreement, oral or
written, between them other than this Lease. This Lease supersedes
and revokes all previous negotiations, arrangements, letters of
intent, offers to lease, lease proposals and information conveyed,
whether orally or in writing, between the parties or their
respective representatives.
24.4. TIME. Time is of the essence of this Lease and the
performance of all obligations under this Lease.
24.5. BINDING EFFECT. This Lease shall be binding upon and
inure to the benefit of Landlord, Tenant and their respective
successors and assigns.
33
24.6. DEFAULT RATE. All amounts owing to one party from the
other party under this Lease for which a date of payment is not
expressly fixed shall be paid within ten (10) days after the date
the party to whom such amount is payable delivers to the other
party appropriate statements of account. As used in this Lease,
the words "Default Rate" shall mean interest at the rate of four
percent (4%) per annum in excess of the "prime rate" from time to
time announced in The Wall Street Journal or if such publication
ceases to publish a prime rate then as announced by a comparable
publication. The Default Rate of interest shall be computed from
the date on which any payment is due from either party to the
other through and including the date paid.
24.7. FORCE MAJEURE. Neither Landlord nor Tenant shall be
considered in default of any of the terms, covenants and
conditions of this Lease on its part to be performed, if it fails
to timely perform same and such failure is due in whole or in part
to any strike, lockout, labor trouble (whether legal or illegal),
civil disorder, restrictive governmental laws and regulations,
riots, insurrections, war, accidents, casualties, acts of God,
acts caused directly or indirectly by the other party hereto (or
such party's agent, employees or invitees) or any other cause
beyond its control. A party shall be entitled to an extension of
time equal to one (1) day for each day of delay due to force
majeure. The foregoing shall not apply to, excuse or be invoked to
justify any delay in the payment of Rent or any other sum of money
due from one party payable to the other party.
24.8. NO WAIVER. No provision of this Lease shall be deemed
to have been waived by either party unless such waiver is in
writing signed by such party.
24.9. CAPTIONS. The captions and headings in this Lease are
inserted only as a matter of convenience and do not define, limit,
expand or describe the scope or intent of such provisions.
24.10. SURVIVAL. The following obligations of Landlord and
Tenant shall survive the expiration or earlier termination of this
Lease: (a) any obligation permitted in this Lease to be performed
after the end of the Term; (b) any obligation not reasonably
susceptible of performance prior to the end of the Term; and (c)
any other obligation expressly stated to survive termination.
24.11. APPLICABLE LAW. This Lease and the rights and
obligations of Landlord and Tenant hereunder shall be governed by
and construed in accordance with the laws and judicial decisions
in effect in the State in which the Premises are located.
24.12. AMENDMENT. No amendment to the provisions of this
Lease shall be effective or enforceable unless made in writing and
signed by Landlord and Tenant.
24.13. APPROVALS; CONSENTS. Every approval and consent
provided for in this Lease shall be made in writing.
24.14. RIGHTS AND REMEDIES. All rights and remedies granted
or referred to in this Lease shall be distinct, separate and
cumulative and none shall exclude any other right or remedy of
either party set forth in this Lease or available at law or in
equity.
34
24.15. HOLDOVER. If Tenant retains possession of the Premises
after the expiration of the Term without the express written
consent of Landlord, the monthly Base Rent payable by Tenant for
each month of the period of such holding over shall be an amount
equal to one hundred twenty-five percent (125%) of the monthly
Base Rent in effect immediately preceding such holdover period;
provided, however, that no payment of such increased monthly Rent
by Tenant shall be deemed to extend or renew the Term. In the
event that Landlord gives written consent to Tenant to remain in
occupancy beyond the expiration of the Term, such occupancy shall
be construed to be a renewal of this Lease for a month-to-month
tenancy upon all of the terms and conditions set forth in this
Lease, except that, unless otherwise provided in Landlord's
consent, monthly Base Rent payable by Tenant for any such period
of holdover tenancy shall be at the rate equal to one hundred
percent (100%) of the monthly Base Rent in effect immediately
preceding such holdover period.
24.16. MEMORANDUM. Landlord and Tenant agree to complete,
execute, deliver and record in the county in which the Premises
are located a short form memorandum of this Lease substantially in
the form and substance attached hereto as Exhibit C
("Memorandum"). Tenant shall pay all fees, taxes, costs and
expenses to record the Memorandum.
24.17. NO THIRD-PARTY RIGHTS. The terms and provisions of
this Lease shall not be deemed to confer any rights upon, nor
obligate Landlord or Tenant to, any person or entity other than
the parties hereto, except for any Landlord Lender, Tenant Lender,
TE Lender and Franchisor if and to the extent specifically
provided herein.
24.18. LANDLORD AND FRANCHISOR ACCESS. Upon not less than
twenty-four (24) hours' prior notice (except in the case of an
emergency), Landlord may enter upon the Premises during Tenant's
non-peak business hours for purposes of inspection and showing the
Premises to prospective purchasers or lenders. When entering the
Premises, Landlord, its agents, employees and/or contractors (a)
shall identify themselves to Tenant's personnel immediately upon
entering the Premises, and (b) shall not, in any way, materially
or unreasonably affect, interrupt or interfere with Tenant's use,
business or operations on the Premises or obstruct the visibility
of or access to the Premises. Landlord and Tenant (i) acknowledge
that Franchisor, its personnel and agents have the right to enter
upon the Premises for certain purposes under the Franchise
Agreement, and (ii) agree not to interfere with or prevent such
entry by Franchisor, its personnel and agents.
24.19. DUE AUTHORITY.
(a) Landlord represents and warrants to Tenant as follows: (i)
that Landlord is a corporation created, validly existing and in
good standing under Minnesota law; (ii) that Landlord has full
right, power and authority to enter into and to perform its
obligations under this Lease and that no consent or approval of
any third parties is necessary in order to do so or that all such
consents and approvals have been obtained; and (iii) that this
Lease, when signed by Landlord, is a legal, valid and binding
obligation of Landlord enforceable in accordance with its terms.
(b) Tenant represents and warrants to Landlord as follows: (i)
that Tenant is a limited liability company created, validly
existing and in good standing under Delaware
35
law; (ii) that Tenant has full right, power and authority to
enter into and to perform its obligations under this Lease
and that, except as otherwise specifically provided herein,
no consent or approval of any third parties is necessary in
order to do so; and (iii) that this Lease, when signed by
Tenant, is a legal, valid and binding obligation of Tenant
enforceable in accordance with its terms.
24.20. RELATIONSHIP OF PARTIES. Nothing contained in this
Lease shall be deemed to constitute a partnership or joint venture
between Landlord and Tenant. The relationship of Landlord and
Tenant shall only be deemed to be one of landlord and tenant.
24.21. PREPARATION AND SIGNING OF LEASE. This Lease has been
negotiated and reviewed by Landlord, Tenant and their respective
attorneys and/or professional advisors, all of whom intend and
believe this Lease to be the product of all of their joint
efforts, that it contains the entire agreement between Landlord
and Tenant and as such should not and shall not be interpreted or
construed in favor of or against either Landlord or Tenant merely
because of the efforts of one party or the other in preparing this
Lease. The submission of this Lease for review or execution does
not constitute a reservation of or option for the rights conferred
herein. This Lease shall become effective only if and when
executed and delivered by both Landlord and Tenant.
24.22. BROKER. Landlord and Tenant each warrant and represent
to the other that it has not dealt with any real estate broker,
salesperson or finder in connection with this Lease. Landlord and
Tenant each agree to indemnify, defend and hold the other party
harmless from and against any and all liabilities and claims for
commissions and fees arising out of a breach of its representation
and warranty set forth herein.
24.23. SEPARABILITY. Each and every covenant and agreement of
Tenant contained in this Lease is, and shall be construed to be, a
separate and independent covenant and agreement, and the breach of
any covenant or agreement by Landlord shall not discharge or
relieve Tenant from its obligation to perform the same.
24.24. MULTIPLE COUNTERPARTS. To facilitate execution, this
Lease may be executed in as many counterparts as may be convenient
or required. It shall not be necessary that the signature or
acknowledgment of, or on behalf of, each party, or that the
signature of all persons required to bind any party, or the
acknowledgment of such party, appear on each counterpart. All
counterparts shall collectively constitute a single instrument. It
shall not be necessary in making proof of this Lease to produce or
account for more than a single counterpart containing the
respective signatures of, or on behalf of, and the respective
acknowledgments of, each of the parties hereto. Any signature or
acknowledgment page to any counterpart may be detached from such
counterpart without impairing the legal effect of the signatures
or acknowledgments thereon and thereafter attached to another
counterpart identical thereto except having attached to it
additional signature or acknowledgment pages.
24.25. BUSINESS DAYS. All references to "business days"
contained herein are references to normal working business days,
i.e., Monday through Friday of each calendar week, exclusive of
federal and national bank holidays. In the event that any event
hereunder is to occur, or a time
36
period is to expire, on a date which is not a business day, such
event shall occur or such time period shall expire on the next
succeeding business day.
24.26. INTERPRETATION. When the context in which words are
used in this Lease indicates that such is the intent, words in the
singular number shall include the plural and vice versa, and words
in the masculine gender shall include the feminine and neuter
genders and vice versa. Further, references to "person" or
"persons" in this Lease shall mean and include any natural person
and any corporation, partnership, joint venture, limited liability
company, trust or other entity whatsoever. As used herein, the
term "including" shall mean "including, but not limited to".
24.27. NO MERGER OF TITLE. There shall be no merger of this
Lease nor of the leasehold estate created by this Lease with the
fee estate in or ownership of any of the Premises by reason of the
fact that the same person, corporation, firm or other entity may
acquire or hold or own, directly or indirectly, (a) this Lease or
the leasehold estate created by this Lease or any interest in this
Lease or in such leasehold estate and (b) the fee estate or
ownership of any of the Premises or any interest in such fee
estate or ownership. No such merger shall occur unless and until
all persons, corporations, firms and other entities having any
interest in (i) this Lease or the leasehold estate created by this
Lease and (ii) the fee estate in or ownership of the Premises or
any part thereof sought to be merged shall join in a written
instrument effecting such merger and shall duly record the same.
24.28. FINANCIAL REPORTING. During the Term of this Lease,
Tenant will deliver or cause to be delivered to Landlord the
following financial information at the following times, all of
which shall be reasonably true and correct:
(a) During any twelve (12) month period and at Landlord's request
but in no event more that two (2) times per year, unless such
request is required in order for Landlord to obtain financing and
in such event, when reasonably necessary, within thirty (30) days
of said request, the most recent quarterly and year-to-date
consolidated balance sheets and income and cash flow statements
for the Tenant and for AAG and the accompanying unit level profit
and loss statements for each Premises for that period; and
(b) Within one hundred and twenty (120) days after the end of
each fiscal year of Tenant and AAG, annual consolidated balance
sheets and income and cash flow statements for the Tenant and for
AAG for the immediately preceding fiscal year, all in reasonable
detail and prepared in accordance with generally accepted
accounting principles, consistently applied, including unit level
profit and loss statements for that period for the Premises.
The annual financial statements which are to be
delivered as provided above shall have been prepared and
certified by an independent certified public accountant. All
other financial statements to be delivered pursuant to this
Section 24.28 shall be un-audited and certified to Landlord
to be reasonably true and correct by the Tenant's controller
or other officer. Landlord shall have the right, upon
reasonable advance notice, to meet with appropriate officers
of Tenant and AAG to discuss their respective affairs and
finances and the financial information delivered pursuant
hereto.
37
24.29. MULTIPLE PERSONS OR ENTITIES. In the event that either
party shall consist of more than one person or entity, (i) the
obligations of such multiple persons or entities shall be joint
and several, and (ii) the first notice with respect to a
particular matter received by the other party from any one of the
multiple persons or entities shall be final and binding on both
parties, unless the party with multiple persons or entities
previously has designated one among them as the representative of
all, in which event only a notice from such representative shall
be final and binding on both parties.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
38
IN WITNESS WHEREOF, Landlord and Tenant have executed this
Lease as of the day and year first above written.
LANDLORD: AEI INCOME & GROWTH FUND XXI LIMITED PARTNERSHIP,
a Minnesota limited partnership
By: AEI FUND MANAGEMENT XXI, INC.,
a Minnesota corporation, its General Partner
By: /s/ Xxxxxx X Xxxxxxx
Name: Xxxxxx X Xxxxxxx
Its: President
AEI INCOME & GROWTH FUND XXII LIMITED
PARTNERSHIP, a Minnesota limited partnership
By: AEI FUND MANAGEMENT XXI, INC.,
a Minnesota corporation, its General Partner
By: /s/ Xxxxxx X Xxxxxxx
Name: Xxxxxx X Xxxxxxx
Its: President
TENANT: B.T. WOODLIPP, INC.,
a Pennsyl nia corporation
By: /s/ Xxxxx X Xxxxxxx
Xxxxx X Xxxxxxx
Executive Vice President
39
STATE OF MINNESOTA )
) SS.
COUNTY OF HENNEPIN )
On this day of September, 2006, before me, the undersigned, a
Notary Public in and for said State, personally Xxxxxx X. Xxxxxxx,
personally known to me to be the person who executed the within
instrument as the President of AEI Fund Management XXI, Inc., a
Minnesota corporation, the general partner of AEI Income & Growth
Fund XXI Limited Partnership, a Minnesota limited partnership, on
behalf of said corporation.
[Notary seal] /s/ Xxxxxxxx X Xxxxxxxxx
Notary Public
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
On this day of September, 2006, before me, the undersigned, a
Notary Public in and for said State, personally Xxxxxx X. Xxxxxxx,
personally known to me to be the person who executed the within
instrument as the President of AEI Fund Management XXI, Inc., a
Minnesota corporation, the general partner of AEI Income & Growth
Fund XXII Limited Partnership, a Minnesota limited partnership, on
behalf of said corporation.
[Notary seal] /s/ Xxxxxxxx X Xxxxxxxxx
Notary Public
40
STATE OF ILLINOIS
) SS.
COUNTY OF XXXX
I Xxxxxxx Xxxx , a Notary Public in and for said County, in
the State aforesaid, DO HEREBY CERTIFY, that XXXXX X. XXXXXXX,
personally known to me to be the Executive Vice President of B.T.
WOODLIPP, INC., a Pennsylvania corporation ("Company"), and
personally known to me to be the same person whose name is
subscribed to the foregoing instrument as such Executive Vice
President, appeared before me this day in person and acknowledged
that he signed and delivered the said instrument as his own free
and voluntary act, and as the free and voluntary act and deed of
said Company, for the uses and purposes therein set forth.
GIVEN under my hand and Notarial Seal this 21st day of
September, 2006.
[Notary Seal] /s/ Xxxxxxx Xxxx
Notary Public
41
EXHIBIT A
Land Legal Description
All that certain parcel of land situate in the Township of
Richland, County of Cambria, Commonwealth of Pennsylvania, being
Parcel F-14 in the Plan of Minor Subdivision of Remaining Tract F
for Johnstown Zamias Limited Partnership as recorded in the
Recorder's Office of Cambria County, Pennsylvania, in Plan Book
Volume 7, Page 375, being bounded and described as follows:
Beginning at a concrete monument at a corner common to Parcel F-13
and being on the Western legal right-of-way line of Xxxxxxxx Xxxx
000; thence along said legal right-of-way line the following:
South 31 14' 57" West, a distance of 180.00 feet to a concrete
monument; South 58 45' 03 " East, a distance of 13.00 feet to a
concrete monument; South 31 14' 57" West, a distance of 199.40
feet to a concrete monument; and Southwest along a curve to the
right having a radius of 1,482.39 feet, a central angle of 01 28'
53" and an arc length of 38.33 feet to a concrete monument at a
corner common to Tract G; thence along the lines of Tract G the
following: North 35 15' 03" West, a distance of 112.86 feet to a
concrete monument; North 03 15' 03" West, a distance of 228.00
feet to a concrete monument; South 86 44' 57" West, a distance of
175.00 feet to a concrete monument; North 03 15' 03" West, a
distance of 88.00 feet to a concrete monument; thence North 20
14' 57" East, a distance of 32.00 feet to a concrete monument; and
North 58 45' 03" West, a distance of 100.08 feet to a concrete
monument on the legal right-of-way for limited access line for
Route 219; thence along the legal right-of-way for limited access
line, North 42 35' 42" East, a distance of 183.59 feet to an iron
pin at a corner common to Parcel F-13; thence along the line of
Parcel F-13, South 58 45' 03" East, a distance of 483.29 feet to
the point of beginning.
Being further Identified as Parcel No. 50-4-191.
Together with the right, title and interest in the land described
in Declaration of Easements made by Johnstown Zamias Limited
Partnership, dated June 17, 1991 and recorded in Deed Book Volume
1252, page 672; as amended by Amended and Restated Declaration of
Easements, dated August 7, 1992 and recorded in Deed Book Volume
1270, page 303; and Map recorded in Map Book Volume 8, page 107.
PARCEL NO.: 50-4-191
PROPERTY ADDRESS: 000 Xxxxxxxx
Xxxxx
Xxxxxxxxx, XX
00000
42
