NET LEASE AGREEMENT
THIS LEASE, made and entered effective as of this 10th day
of December, 2003, by and between AEI Income & Growth Fund 24 LLC
("Fund 24"), whose corporate managing member is AEI Fund
Management XXI, Inc. whose address is 1300 ▇▇▇▇▇ Fargo Place, ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Lessor"), and
Tia's Maryland, LLC, whose address is c/o Tia's Restaurants,
Inc., ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, President.
WITNESSETH:
WHEREAS, Lessor is the fee owner of a certain parcel of real
property and building and improvements (the "Building") located
at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, and legally
described in Exhibit "A", which is attached hereto and
incorporated herein by reference; and
WHEREAS, Lessee desires to lease said real property and
Building (said real property and Building hereinafter referred to
as the "Leased Premises"), from Lessor upon the terms and
conditions hereinafter provided;
NOW, THEREFORE, in consideration of the Rents, terms,
covenants, conditions, and agreements hereinafter described to be
paid, kept, and performed by Lessee, Lessor does hereby grant,
demise, lease, and let unto Lessee, and Lessee does hereby take
and hire from Lessor and does hereby covenant, promise, and agree
as follows:
ARTICLE 1 . LEASED PREMISES
Lessor hereby leases to Lessee, and Lessee leases and takes
from Lessor, the Leased Premises subject to the conditions of
this Lease.
ARTICLE 2 . TERM
(A) The term of this Lease ("Term") shall be Fifteen (15)
consecutive "Lease Years", as hereinafter defined, commencing on
the effective date first listed above, ("Occupancy Date").
(B) The first "Lease Year" of the Term shall be for a period of
twelve (l2) consecutive calendar months from the Occupancy Date.
If the Occupancy Date shall be other than the first day of a
calendar month, the first "Lease Year" shall be the period from
the Occupancy Date to the end of the calendar month of the
Occupancy Date, plus the following twelve (l2) calendar months.
Each Lease Year after the first Lease Year shall be a successive
period of twelve (l2) calendar months.
(C) The parties agree that once the Occupancy Date has been
established, upon the written request of Lessee, a short form or
memorandum of this Lease will be executed for recording purposes.
That short form or memorandum of this Lease will set forth the
actual occupancy and termination dates of the Term and optional
Renewal Terms, as defined in Article 28 hereof, and the existence
of any option to extend, and that said option shall terminate
when the Lessee shall lose right to possession or this Lease is
terminated, whichever occurs first. Lessor shall otherwise in no
event record this Lease or any memorandum summarizing any of the
terms or otherwise identifying this lease.
ARTICLE 3. CONSTRUCTION OF IMPROVEMENTS
(A) Lessee warrants that as of the date hereof, to its
knowledge, the Building and all other improvements to the land do
comply with the laws, ordinances, rules, and regulations of all
state and local governments.
(B) Operating the business in the Leased Premises by Lessee
shall constitute an acceptance of the Leased Premises and an
acknowledgment by Lessee that the Leased Premises are in the
condition described under this Lease.
ARTICLE 4 . RENT PAYMENTS
(A) Annual Rent Payable during the Lease Term and during any
Renewal Term shall be as set forth on Schedule A attached hereto.
(B) Overdue Payments.
Lessee shall pay interest on all overdue payments of
Rent or other monetary amounts due hereunder at the rate of
fourteen percent (14%) per annum or the highest rate allowed by
law, whichever is less, accruing beginning five days after
written notice to Lessee that Rent or other monetary amounts
properly due and payable were not paid.
ARTICLE 5 . INSURANCE AND INDEMNITY
(A) Lessee shall, throughout the Term or Renewal Terms, if any,
of this Lease, at its own cost and expense, procure and maintain
insurance which covers the Leased Premises and improvements
against fire, wind, and storm damage (including flood insurance
if the Leased Premises is in a federally designated flood prone
area) and such other risks (including earthquake insurance, if
the Leased Premises is located in a federally designated
earthquake zone or in an ISO high risk earthquake zone) as may be
included in the broadest form of extended coverage insurance as
may, from time to time, be available in amounts sufficient to
prevent Lessor or Lessee from becoming a co-insurer within the
terms of the applicable policies. In any event, the insurance
shall not be less than one hundred percent (100%) of the then
insurable value. Additionally, replacement cost endorsements,
inflation guard endorsements, vandalism endorsement, malicious
mischief endorsement, waiver of subrogation endorsement, waiver
of co-insurance or agreed amount endorsement (if available), and
Building Ordinance Compliance endorsement and Rent loss
endorsements (for a period of one year) must be obtained.
(B) Lessee agrees to place and maintain throughout the Term or
Renewal Terms, if any, of this Lease, at Lessee's own expense,
commercial general liability insurance with respect to Lessee's
use and occupancy of said Leased Premises, including "Dram Shop"
or liquor liability insurance, if the same shall be or become
available in the State of Maryland and liquor is sold on the
Leased Premises, with initial limits of at least $1,000,000 per
occurrence/$2,000,000 general aggregate, and umbrella insurance
of at least $2,000,000 per occurrence/$5,000,000 general
aggregate, or such additional amounts as Lessor shall reasonably
require from time to time, upon Lessor's good faith determination
that the present insurance coverage is inadequate, such amounts
to be consistent with requirements of other Lessor's in similar
circumstances.
(C) Lessee agrees to notify Lessor in writing if Lessee is
unable to procure all or some part of the aforesaid insurance.
In the event Lessee fails to provide all insurance required under
this Lease, Lessor shall have the right, but not the obligation,
to procure such insurance on Lessee's behalf. Lessee will then,
within five (5) days from receiving written notice, pay Lessor
the amount of the premiums due or paid, together with interest
accrued thereon at the lesser of eleven percent (11%) per annum
or the highest rate allowable by law, which amount shall be
considered Rent payable by Lessee in addition to the Rent defined
at Article 4 hereof.
(D) All policies of insurance provided for or contemplated by
this Article can be under Lessee's blanket insurance coverage and
shall name Lessor, Lessor's corporate managing member,
respectively, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as the individual managing
member, respectively, of Lessor, and Lessee as additional named
insured, as their respective interests may appear, and shall
provide that the policies cannot be canceled, terminated,
changed, or modified without thirty (30) days written notice to
the parties. In addition, all of such policies shall contain
endorsements by the respective insurance companies waiving all
rights of subrogation, if any, against Lessor. All insurance
companies providing coverages must be rated "A-" or better by
Best's Key Rating Guide (the most current edition), or similar
quality under a successor guide if Best's Key Rating shall cease
to be published. Lessee shall provide Lessor with legible copies
of any and all policies on or before the Occupancy Date. No less
than fifteen (15) business days prior to expiration of such
policies, Lessee shall provide Lessor with legible copies of any
and all renewal Certificates of Insurance, if the terms of the
Policies have not changed, and copies of such policies if the
same have changed. Lessee agrees that it will not settle any
property insurance claims affecting the Leased Premises in excess
of $100,000 without Lessor's prior written consent, such consent
not to be unreasonably withheld or delayed. Lessor shall
consent, where Lessor's consent is required hereunder, to any
settlement of an insurance claim wherein Lessee shall confirm in
writing with evidence reasonably satisfactory to Lessor that
Lessee has sufficient funds available to complete the rebuilding
of the Building and any damaged Improvements to the Leased
Premises.
(E) Lessee shall defend, indemnify, and hold Lessor harmless
against any and all claims, damages, and lawsuits arising after
the Occupancy Date of this Lease and any orders, decrees or
judgments which may be entered therein, brought for damages or
alleged damages resulting from any injury to person or property
or from loss of life sustained in or about the Leased Premises,
unless such damage or injury results from the intentional
misconduct or the gross negligence of Lessor and Lessee agrees to
save Lessor harmless from, and indemnify Lessor against, any and
all injury, loss, or damage, of whatever nature, to any person or
property caused by, or resulting from any act, omission, or gross
negligence of Lessee or any employee or agent of Lessee.
(F) Lessor shall defend, indemnify, and hold Lessee harmless
against any and all claims, damages, and lawsuits and any orders,
decrees or judgments which may be entered therein, brought for
damages or alleged damages resulting from any injury to person or
property or from loss of life sustained in or about the Leased
Premises, caused by the intentional misconduct or the gross
negligence of Lessor and Lessor agrees to save Lessee harmless
from, and indemnify Lessee against, any and all injury, loss, or
damage, of whatever nature, to any person or property caused by,
or resulting from any act, omission, or gross negligence of
Lessor or any employee or agent of Lessor.
(G) Lessor hereby waives any and all rights that it may have to
recover from Lessee damages for any loss occurring to the Leased
Premises by reason of any act or omission of Lessee; provided,
however, that this waiver is limited to those losses for which
Lessor is compensated by insurers, if the insurance required by
this Lease is maintained. Lessee hereby waives any and all right
that it may have to recover from Lessor damages for any loss
occurring to the Leased Premises by reason of any act or omission
of Lessor; provided, however, that this waiver is limited to
those losses for which Lessee is (or would be if the insurance
required herein is maintained) compensated by insurance.
ARTICLE 6 . TAXES, ASSESSMENTS AND UTILITIES
(A) Lessee shall be liable and agrees to pay the charges for all
public utility services rendered or furnished to the Leased
Premises, including heat, water, gas, electricity, sewer, sewage
treatment facilities and the like, all personal property taxes,
real estate taxes, special assessments, and municipal or
government charges, general, ordinary and extraordinary, of every
kind and nature whatsoever, which may be levied, imposed, or
assessed against the Leased Premises, or upon any improvements
thereon, at any time after the Occupancy Date of this Lease and
prior to the expiration of the term hereof, or any Renewal Term,
if exercised.
(B) Lessee shall pay all real estate taxes, assessments for
public improvements or benefits, and other governmental
impositions, duties, and charges of every kind and nature
whatsoever which shall, during the term of this Lease, be
charged, laid, levied, assessed, or imposed upon the Leased
Premises or any part thereof or upon the Rents payable hereunder
(expressly excluding general income taxes, inheritance taxes,
franchise and other corporate taxes and estate taxes imposed upon
Lessor) (collectively, "Taxes"), and Lessor agrees to promptly
forward to Lessee any and all notices that it receives regarding
such Taxes. Such payments shall be considered as Rent paid by
Lessee in addition to the Rent defined at Article 4 hereof. If
due to a change in the method of taxation, a Rent tax (expressly
excluding general income taxes, inheritance taxes, franchise and
other corporate taxes and estate taxes imposed upon Lessor) shall
be levied against Lessor in substitution for or in lieu of any
Tax which would otherwise constitute a real estate tax, such Tax
shall be deemed a real estate tax for the purposes herein and
shall be paid by Lessee
(C) All real estate taxes, assessments for public improvements
or benefits, water rates and charges, sewer rents, and other
governmental impositions, duties, and charges which shall become
payable for the first and last tax years of the term hereof shall
be apportioned pro rata between Lessor and Lessee in accordance
with the respective number of months during which each party
shall be in possession of the Leased Premises in said respective
tax years. For the purposes of this provision, all personal
property taxes, real estate taxes and special assessments shall
be deemed to have been assessed in the year that each payment or
any installment thereof is due.
(D) Lessor shall promptly (but in any event within sufficient
time to allow Lessee to review and, if it so desires, to contest
same) forward to Lessee, to the extent that Lessor has been
unable to cause the local taxing authorities to send such notices
directly to Lessee, notices of all taxes assessed on the Leased
Premises and the Building. Lessee shall have the exclusive right
during the term hereof, at its sole expense, to contest, protest,
appeal, or institute other proceedings to effect a reduction or
abatement of Taxes for any tax year that ends after the date of
this Lease. The protest, appeal, or other proceedings may be
conducted in the name of Lessor or Lessee, as Lessee may consider
appropriate. To this end, at Lessee's expense, Lessor shall
cooperate with Lessee and furnish appropriate documents and
information. Pending any such proceedings, Lessee shall give
Lessor such security as may be deemed reasonably satisfactory to
Lessor to insure payment of the Taxes and all interest and
penalties thereon. Any cash security provided by Lessee pursuant
to this Section shall earn interest for the benefit of Lessee at
the rate of interest earned in federally insured money market
accounts. If, at any time during the continuance of such
proceedings, the Leased Premises or any part thereof is, in the
reasonable judgment of Lessor, in danger of being forfeited or
lost, Lessor may use such security for the payment of such Taxes.
ARTICLE 7. PROHIBITION ON ASSIGNMENTS AND SUBLETTING; TAKE-
BACK RIGHTS
(A) Except as otherwise expressly provided in this Article,
Lessee shall not, without obtaining the prior written consent of
Lessor, which consent shall not be unreasonably withheld,
conditioned or delayed in each instance:
1. assign or otherwise transfer this Lease, or any part of
Lessee's right, title or interest therein (except by devise or
bequest upon the death of a shareholder, but in such event, such
recipient shall be bound by the provisions of this Article);
2. sublet all or any part of the Leased Premises or allow all
or any part of the Leased Premises to be used or occupied by any
other Persons (herein defined as a Party other than Lessee, be it
a corporation, a partnership, an individual or other entity); or
3. mortgage, pledge or otherwise encumber this Lease, or the
Leased Premises. Notwithstanding the foregoing or anything else
to the contrary contained in this Lease, Lessee may, without
obtaining Lessor's consent, encumber its interest as Lessee under
this Lease, as well as any or all of Lessee's Property as defined
in Section 20(A) below, as security for the benefit of any lender
of Lessee or Lessee's parent, subsidiaries or affiliates,
provided, however, that nothing herein shall require the Lessor
to subordinate its fee simple title to the Leased Premises to the
Lessee's mortgagee, nor grant any additional rights to such
mortgagee other than those contained in the Lease.
(B) For the purposes of this Article:
1. the transfer of voting control of any class of capital stock
of any corporate Lessee or sublessee, or the transfer voting
control of the total interest in any other person which is a
Lessee or sublessee, however accomplished, whether in a single
transaction or in a series of related or unrelated transactions,
shall be deemed an assignment of this Lease, or of such sublease,
as the case may be (provided, however, transfers by bequest or
devise due to the death of a shareholder shall not trigger the
application of these provisions, provided Lessor is given notice
of such transfer immediately after the disposition of the
decedent's estate);
2. an agreement by any other Person, directly or indirectly, to
assume Lessee's obligations under this Lease shall be deemed an
assignment;
3. any Person to whom Lessee's interest under this Lease passes
by operation of law, or otherwise, shall be bound by the
provisions of this Article;
4. each modification, amendment or extension or any sublease to
which Lessor has previously consented shall be deemed a new
sublease; and
5. Lessee shall present the signed consent to such assignment
and/or subletting from any guarantors of this Lease, such consent
to be in form and substance satisfactory to Lessor.
Lessee agrees to furnish to Lessor upon demand at any time
such information and assurances as Lessor may reasonably request
that neither Lessee, nor any previously permitted sublessee, has
violated the provisions of this Article.
(C) If Lessee agrees to assign this Lease or to sublet all or
any portion of the Leased Premises, Lessee shall, prior to the
effective date thereof (the "Effective Date"), deliver to Lessor
copies of any such proposed agreement and of all ancillary
agreements with the proposed assignee or sublessee, as
applicable. If Lessor shall not have consented to a proposed
sublease or assignment requiring Lessor's consent thereto, and
Lessee shall attempt to effect such transfer without Lessor's
consent or in spite of Lessor's decision to not consent to such
transfer, Lessor shall then have all of the following rights, any
of which Lessor may exercise by written notice to Lessee given
within thirty (30) days after Lessor receives the aforementioned
documents:
1. with respect to a proposed assignment of this Lease, the
right to terminate this Lease on the Effective Date as if it were
the Expiration Date of this Lease;
2. with respect to a proposed subletting of the entire Leased
Premises, the right to terminate this Lease on the Effective Date
as if it were the Expiration Date; or
3. with respect to a proposed subletting of less than the
entire Leased Premises, the right to terminate this Lease as to
the portion of the Leased Premises affected by such subletting on
the Effective Date, as if it were the Expiration Date, in which
case Lessee shall promptly execute and deliver to Lessor an
appropriate modification of this Lease in form satisfactory to
Lessor in all respects.
4. with respect to a proposed subletting or proposed assignment
of this Lease, impose such conditions upon Lessor's consent as
Lessor shall determine in its sole discretion.
(D) If Lessor exercises any of its options under Article 7(C)
above, (and if Lessor shall impose conditions upon its consent
and Lessee shall fail to meet any conditions Lessor may impose
upon its consent), Lessor may then lease the Leased Premises or
any portion thereof to Lessee's proposed assignee or sublessee,
as the case may be, without liability whatsoever to Lessee.
(E) Notwithstanding the provisions of this Article 7 above, or
any other provisions of this Lease to the contrary, Lessee shall
have the right to assign this Lease, or sublet the Leased
Premises or any portion thereof, without the consent of, but with
prior written notice to Lessor, (a) in connection with a merger,
consolidation, corporate reorganization (other than pursuant to
the bankruptcy laws), sale of corporate assets or sale or other
transfer of stock, or (b) to any subsidiary, affiliate or parent
entity of Lessee, provided, in each case, that said assignee
assumes, in full, the obligations of Lessee under this Lease and
Lessee and Guarantors remains primarily liable under this Lease.
In addition, notwithstanding the provisions of this Article 7
above or any other provisions of this Lease to the contrary, the
following transfers or issuances of shares of capital stock of
Lessee shall not constitute an assignment of this Lease or
require the consent of Lessor under this Article 7: (i) the
issuance and sale of shares of capital stock of Lessee in
connection with a public offering of such stock (provided such
issuance and sale does not involve the issuance, sale, or
transfer of a majority of the voting stock of Lessee); (ii) the
transfer of outstanding shares to a parent corporation which is a
parent on the date hereof or a subsidiary of Lessee, provided
such entity is or becomes a guarantor of this Lease.
ARTICLE 8. REPAIRS AND MAINTENANCE
(A) Lessee covenants and agrees to keep and maintain in good
order, condition and repair the interior and exterior of the
Leased Premises during the term of the Lease, or any renewal
terms, and further agrees that Lessor shall be under no
obligation to make any repairs or perform any maintenance to the
Leased Premises. Lessee covenants and agrees that it shall be
responsible for all repairs, alterations, replacements, or
maintenance of, including but without limitation to or of: The
interior and exterior portions of all doors; door checks and
operators; windows; plate glass; plumbing (to the extent solely
located within the Leased Premises); water and sewage facilities
(to the extent solely located within the Leased Premises);
fixtures; electrical equipment; interior walls; ceilings; signs;
roof; structure; interior building appliances and similar
equipment; heating and air conditioning equipment; and further
agrees to replace any of said equipment when necessary. Lessee
further agrees to be responsible for, at its own expense, snow
removal, lawn maintenance, landscaping, maintenance of the
parking lot (including parking lines, seal coating, and blacktop
surfacing), and other similar items.
(B) If Lessee refuses or neglects to commence or complete
structural repairs or repairs that materially and adversely
affect the value of the Leased Premises promptly and adequately,
Lessor may, upon giving Lessee no less than thirty (30) days
prior written notice thereof and an opportunity to commence and
diligently pursue such repairs (provided that Lessor may cause
such repairs to be made upon less than thirty days notice, but
after notice to Lessee, to the extent required in order to avoid
additional waste to the Leased Premises or in the event of an
emergency requiring immediate correction, if Lessee has not
commenced such repairs as may be necessary to prevent such waste
to the Leased Premises or correct such emergency), cause such
repairs to be made, but shall not be required to do so, and
Lessee shall pay the reasonable-out-of-pocket cost thereof to
Lessor upon demand. It is understood that Lessee shall pay all
expenses and maintenance and repair during the term of this
Lease. If Lessee is not then in default hereunder beyond
applicable grace or cure periods, Lessee shall have the right to
make repairs and improvements to the Leased Premises without the
consent of Lessor. The plans and specifications for any repairs
or improvements in excess of One Hundred Thousand Dollars
($100,000.00) or affecting the structural integrity of the Leased
Premises may be done only with the prior written consent of
Lessor, such consent not to be unreasonably withheld, conditioned
or delayed. All alterations and additions to the Leased Premises
shall be made in accordance with all applicable laws and shall
remain for the benefit of Lessor. In the event of making such
alterations as herein provided, Lessee further agrees to
indemnify and save harmless Lessor from all expense, liens,
claims or damages to either persons or property or the Leased
Premises which may arise out of or result from the undertaking or
making of said repairs, improvements, alterations or additions,
or Lessee's failure to make said repairs, improvements,
alterations or additions, unless, in each such case, caused by
Lessor's negligence or willful misconduct.
ARTICLE 9. COMPLIANCE WITH LAWS AND REGULATIONS
Lessee will comply with all statutes, ordinances, rules,
orders, regulations and requirements of all federal, state, city
and local governments, and with all rules, orders and
regulations of the applicable Board of Fire Underwriters which
affect the use of the improvements. Lessee will comply with all
easements, restrictions, and covenants of record against or
affecting the Leased Premises and any franchise agreements
required for operation of the Leased Premises in accordance with
Article 14 hereof.
ARTICLE 10. SIGNS
Lessee shall have the right to install and maintain a sign
or signs advertising or otherwise used in connection with
Lessee's business, provided that the signs conform to law, and
further provided that the sign or signs conform specifically to
the written requirements of the appropriate governmental
authorities.
ARTICLE 11. SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
(A) Lessor reserves the right and privilege to subject and
subordinate this Lease at all times to the lien of any mortgage
or mortgages now or hereafter placed upon Lessor's interest in
the Leased Premises and on the land and buildings of which said
Leased Premises are a part, or upon any buildings hereafter
placed upon the land of which the Leased Premises are a part,
provided such mortgagee shall execute its standard form,
commercially reasonable subordination, attornment and non-
disturbance agreement, such form to be consistent with other such
forms used by commercial mortgagees in the industry, which form
shall provide that Lessee shall not be disturbed from its use and
possession of the Leased Premises and its other rights as
provided in accordance with the terms of this Lease so long as
Lessee is not in default hereunder beyond the expiration of
applicable grace or cure periods, notwithstanding any foreclosure
by such mortgagee of the Leased Premises or any part thereof, or
the exercise by such mortgagee of its rights and remedies as to
Lessor. Lessor also reserves the right and privilege to subject
and subordinate this Lease at all times to any and all advances
to be made under such mortgages, and all renewals, modifications,
extensions, consolidations, and replacements thereof, provided
such mortgagee shall execute its standard form, commercially
reasonable subordination, attornment and non-disturbance
agreement, such form to be consistent with other such forms used
by commercial mortgagees in the industry.
(B) Lessee covenants and agrees to execute and deliver, upon
demand, such further commercially reasonable instrument or
instruments subordinating this Lease on the foregoing basis to
the lien of any such mortgage or mortgages as shall be desired by
Lessor and any proposed mortgagee or proposed mortgagees,
provided such mortgagee shall execute its standard form,
commercially reasonable subordination, attornment and non-
disturbance agreement, such form to be consistent with other such
forms used by commercial mortgagees in the industry .
ARTICLE 12 . CONDEMNATION OR EMINENT DOMAIN
(A) If the whole of the Leased Premises or its related
parking facilities are taken by any public authority under the
power of eminent domain, or by private purchase in lieu thereof,
then this Lease shall automatically terminate upon the date
possession is surrendered, and Rent shall be paid only up to the
day of such taking. If (i) any part of the kitchen area (defined
as the area in which food is stored, prepared and cooked) located
within the Leased Premises which results in a material and
adverse effect on the kitchen area, (ii) ten percent (10%) or
more of the remaining portions of the Building, (iii) fifteen
percent (15%) or more of the parking spaces utilized by the
Leased Premises, or (iv) access to or from the Leased Premises to
publicly dedicated roadways shall be acquired or materially and
adversely altered by the right of condemnation or eminent domain
for any public or quasi-public use or purpose, or sold to a
condemning authority under threat of condemnation, and Lessor
cannot provide, at no cost or expense to Lessee, reasonably
comparable alternate access and/or parking reasonably
satisfactory to Lessee, then Lessee shall have the right and
option to terminate this Lease by giving written notice of such
termination to Lessor not later than six (6) months after
possession is taken by the condemning authority. In the event
that this Lease shall terminate or be terminated, the Rent shall
be paid up to the day that possession was surrendered (and the
Rent to be paid for the period following such taking and ending
on such date of surrender shall be proportionately abated to take
into account the reduction of the Leased Premises resulting from
such taking).
(B) If the Lease is not terminated pursuant to Paragraph
(A) above, then Lessee shall, with the use of all of the
condemnation proceeds (to be made available by Lessor,
immediately if such proceeds are less than $100,000, or if in
excess of $100,000, under a commercially reasonable construction
draw procedure in payment of invoices for work performed
submitted by Lessee or its contractors) but otherwise at Lessee's
own cost and expense, restore the remaining portion of the Leased
Premises to the extent necessary to render it reasonably suitable
for the purposes for which it was leased, and Rent shall be
abated during such period of construction, and thereafter Rent
shall be proportionately abated to take into account the
reduction of the Leased Premises resulting from such taking,
provided, however, Lessee may elect to replace the Leased
Premises with a different Permitted Use, subject to Lessor's
prior written approval, which approval shall not be unreasonably
withheld, conditioned or delayed, and further that Lessee shall
not be required (unless Lessee so elects) to repair or restore
the Leased Premises if the Term or any Renewal Term shall expire
within two years of such partial taking. Lessee shall notify
Lessor of Lessee's election to not so restore or repair the
Leased Premises after such a partial taking within 60 days of
notice of such taking.
(C) Subject to the provisions of Section 12(B), all
compensation awarded or paid upon such total or partial taking of
the Leased Premises shall belong to and be the property of Lessor
without any participation by Lessee, whether such damages shall
be awarded as compensation for diminution in value to the
leasehold or to the fee of the Leased Premises herein leased.
Nothing contained herein shall be construed to preclude Lessee
from prosecuting any claim directly against the condemning
authority in such proceedings for: Loss of business;
interruption of business; moving expenses; damage to or loss of
value or cost of removal of inventory, trade fixtures, furniture,
and other personal property belonging to Lessee; provided,
however, that no such claim shall diminish or otherwise adversely
affect Lessor's award or the award of any fee mortgagee.
ARTICLE 13. RIGHT TO INSPECT
Lessor reserves the right to enter upon, inspect and examine
the Leased Premises at any time during business hours, upon no
less than seventy-two (72) hours prior written notice to Lessee,
provided that Lessor shall conduct such inspection and
examination no more than three (3) times during the First Lease
Year, and no more than two (2) times during any subsequent Lease
Year. Notwithstanding the foregoing, (i) in the event that,
during any such foregoing inspection, Lessor determines in its
commercially reasonable discretion that the maintenance and/or
operation of the Leased Premises fails to materially conform to
the standards adopted by Lessor for its other properties which
are used for the same purposes as the Permitted Use, and
provided, further, that Lessor provides Lessee with a detailed,
itemized list of items to which Lessee has so failed to comply
with such standards within thirty (30) days of any such
inspection of the Leased Premises, Lessor shall, during the
twelve (12) month period following such inspection, not be
limited to the number of times for which it shall be allowed to
inspect and examine the Leased Premises, but shall still be
required to limit such inspections during business hours, upon no
less than seventy-two (72) hours prior written notice to Lessee;
and (ii) in the event that Lessee abandons the Leased Premises,
Lessee shall, after providing Lessor with ninety (90) days prior
written notice thereof, be required to use commercially
reasonable efforts to assign or sublet the Leased Premises, and
from and after such ninety (90) day period Lessor's rights to
inspect and examine the Leased Premises shall be unrestricted.
Upon default by Lessee beyond applicable grace and/or cure
periods or at any time within ninety (90) days of the expiration
or termination of the Lease, Lessee agrees to allow Lessor to
then place "For Sale" or "For Rent" signs on the Leased Premises,
and to allow Lessor free access to the Leased Premises to show
the Leased Premises. Notwithstanding anything in this Lease to
the contrary, (a) Lessor may not enter the back of the restaurant
or the kitchen area without being accompanied by a manager of
Lessee except in the case of an emergency, and (b) entry by
anyone who may be a competitor of Lessee shall not include entry
into the kitchen area at any time in order to protect Lessee's
trade secrets.
ARTICLE 14. PERMITTED USE
The "Permitted Use" is operating, conducting, or carrying on
the business of a restaurant and uses related to the operation of
a restaurant, including, without limitation, food service, sale
of alcoholic beverages, catering, party rooms, dancing, outdoor
cafe, carry-out and drive-up window services. Lessee shall
initially use the Leased Premises principally for the operation
of a Mexican theme restaurant. Lessee shall not use the Leased
Premises for any immoral lewd, indecent, obscene, or disreputable
business, purpose, activity, or use. Use of the Leased Premises
as a sexually oriented business, adult theater or bookstore,
cabaret, dance hall, massage parlor, establishment employing
topless or exotic dancers and/or employees dressed or uniformed
in an objectionably revealing manner, or any other endeavor which
involves lewd, lascivious, indecent or obscene products,
merchandise, activity, or conduct, or any activity which is
prohibited by any restrictive covenants of record enforceable
against the Leased Premises, shall be strictly prohibited.
Lessee's operations from the Leased Premises shall be a first
class, family oriented business. Lessee agrees to use all
reasonable efforts to encourage quality patronage and to prohibit
undesirable or disreputable activities. Any changes during the
term of the Lease of the Permitted Use are subject to the
reasonable approval of Lessor. If Lessor does not disapprove of
any proposed change in the Permitted Use within thirty (30) days
after Lessee's written request for such approval, then such
request shall be deemed to be approved by Lessor. Lessee may
change its trade name to such other trade name as may be used by
a majority of Lessees or Lessee's affiliates' restaurants in the
same vicinity without Lessor's prior approval or, otherwise, upon
Lessor's prior written approval, which shall not be unreasonably
withheld, conditioned, or delayed, based upon the following
criteria: (a) relationship of the proposed trade name to the
Permitted Use, and (b) appropriateness of the proposed trade name
for the atmosphere and environment of the surrounding area. Any
proposed trade name that suggests or contains lewd, indecent,
disreputable, or sexual innuendo or overtones shall be
prohibited.
ARTICLE 15. DESTRUCTION OF PREMISES
(A) Lessee shall give prompt notice to Lessor in case of fire or
other casualty ("Casualty") to the Leased Premises.
(B) If the Building shall be damaged to the extent of more than
twenty-five percent (25%) of the cost of replacement thereof
(which cost of replacement may be established by Lessee by the
affidavit of an independent third-party contractor) during the
last two (2) Lease Years of the Term or any extensions thereof,
if any such Casualty occurs during any such extension period, or
if it shall take more than sixty (60) days (which duration of
closure may be established by Lessee by the affidavit of an
independent third-party contractor as to the estimated time of
repair) during the last two (2) Lease Years of the Term or any
extensions thereof, if any such Casualty occurs during any such
extension period, to repair and restore the improvements so
damaged or destroyed, then, in such event, Lessee may terminate
this Lease by notice to Lessor prior to the sixtieth (60th) day
after the date when the damage occurred. If Lessee so terminates
this Lease then the termination date of the Lease shall be the
date set forth in the notice to Lessor, which date shall not be
less than thirty (30) days nor more than ninety (90) days after
the giving of said notice.
(C) Provided this Lease is not terminated, Lessee shall repair
and restore the improvements so damaged or destroyed as nearly as
may be practical to their condition immediately prior to such
casualty. All rents payable by Lessee shall be abated during the
period of repair and restoration to the extent that Lessor shall
be compensated by the proceeds of the rent loss insurance
required to be maintained by Lessee hereunder.
(D) Provided Lessee is not in default hereunder beyond
applicable grace or cure periods, (and retains according to the
terms hereof the right to rebuild), then Lessee shall have the
right to promptly and in good ▇▇▇▇▇ ▇▇▇▇▇▇ and adjust any claim
under such insurance policies with the insurance company or
companies on the amounts to be paid upon the loss. The insurance
proceeds shall be used to reimburse Lessee for the cost of
rebuilding or restoration of the Leased Premises. The Leased
Premises shall be so restored or rebuilt so as to be of at least
equal value and substantially the same character as prior to such
damage or destruction. Provided, however, Lessee may elect to
replace the Leased Premises with a different Permitted Use
subject to Lessor's prior written approval, which approval shall
not be unreasonably withheld or delayed. If the insurance
proceeds are less than One Hundred Thousand Dollars ($100,000),
they shall be paid to Lessee for such repair and restoration. If
the insurance proceeds are greater than or equal to One Hundred
Thousand Dollars ($100,000), they shall be deposited by Lessee
and Lessor into a customary construction escrow at a nationally
recognized title insurance company, or at Lessee's option, with
Lessor ("Escrowee") and shall be made available from time to time
to Lessee for such repair and restoration. Such proceeds shall
be disbursed in conformity with the terms and conditions of a
commercially reasonable construction loan agreement. Lessee
shall, in either instance, deliver to Lessor or Escrowee (as the
case may be) satisfactory evidence of the estimated cost of
completion together with such architect's certificates, waivers
of lien, contractor's sworn statements and other evidence of cost
and of payments as the Lessor or Escrowee may reasonably require
and approve. If the estimated cost of the work exceeds Twenty-
Five Percent (25%) of the cost of replacement of the Leased
Premises, all plans and specifications for such rebuilding or
restoration shall be subject to the reasonable approval of
Lessor.
(E) Any insurance proceeds remaining with Escrowee after the
completion of the repair or restoration shall be paid to Lessor.
(F) If the proceeds from the insurance are insufficient, after
review of the bids for completion of such improvements, or should
become insufficient during the course of construction, to pay for
the total cost of repair or restoration, Lessee shall, prior to
commencement of work, demonstrate to Escrowee and Lessor's
reasonable satisfaction, the availability of such funds necessary
to complete construction and Lessee shall deposit the same with
Escrowee for disbursement under the construction escrow
agreement.
(G) In the event Lessee elects to terminate this Lease in
accordance with the provisions of this Article 15, then Lessee
shall pay to Lessor an amount equal to Lessee's insurance
proceeds received by Lessee under the policy covering the
Building carried by Lessee and required to be maintained under
Section 5(A) hereof or, in the event that Lessee fails to
maintain such insurance, the insurance proceeds that would have
been received by Lessee but for such failure (in each such case,
to the extent covering the Building and not Lessee's Property)
and the deductible thereto.
ARTICLE 16. ACTS OF DEFAULT
(A) Each of the following shall be deemed a default by Lessee
and a breach of this Lease:
1. Failure to pay the Rent or any monetary obligation herein
reserved, or any part thereof when the same shall be due and
payable. Interest and late charges for failure to pay Rent when
due shall accrue if Lessee shall fail to make payment within five
days after notice to Lessee that Rent has not been paid. Lessee
shall be granted five days after written notice to cure such
failure to pay the Rent or any other monetary obligation herein
reserved.
2. Failure to do, observe, keep and perform any of the other
terms, covenants, conditions, agreements and provisions in this
Lease to be done, observed, kept and performed by Lessee;
provided, however, that Lessee shall have thirty (30) days after
written notice from Lessor within which to cure such default, or
such longer time as may be reasonably necessary if such default
cannot reasonably be cured within Thirty (30) days, if Lessee is
diligently pursuing a course of conduct that in Lessor's
reasonable opinion is capable of curing such default, but in any
event such longer time shall not exceed 90 days after written
notice from Lessor of the default hereunder.
3. The adjudication of Lessee as a bankrupt, the making by
Lessee of a general assignment for the benefit of creditors, the
taking by Lessee of the benefit of any insolvency act or law, the
appointment of a permanent receiver or trustee in bankruptcy for
Lessee property, or the appointment of a temporary receiver which
is not vacated or set aside within sixty (60) days from the date
of such appointment.
ARTICLE 17. TERMINATION FOR DEFAULT
In the event of any uncured default by Lessee and at any
time thereafter, Lessor may serve a written notice upon Lessee
that Lessor elects to terminate this Lease. This Lease shall
then terminate on the date so specified as if that date had been
originally fixed as the expiration date of the term herein
granted, provided, however, that Lessee shall have continuing
liability for future rents for the remainder of the original term
and any exercised renewal term as set forth in Article 19,
notwithstanding any earlier termination of the Lease hereunder,
preserving unto Lessor the benefit of its bargained-for rental
payments.
ARTICLE 18. LESSOR'S RIGHT OF RE-ENTRY
In the event that this Lease shall be terminated as
hereinbefore provided, or by summary proceedings or otherwise, or
in the event of an uncured default hereunder by Lessee, or in the
event that the Leased Premises or any part thereof, shall be
abandoned by Lessee, then Lessor or its agents, servants or
representatives, may immediately or at any time thereafter, re-
enter and resume possession of the Leased Premises or any part
thereof, and remove all persons and property therefrom, either by
summary dispossess proceedings or by a suitable action or
proceeding at law, or by force or otherwise without being liable
for any damages therefor.
ARTICLE 19. LESSEE'S CONTINUING LIABILITY
(A) Should Lessor elect to re-enter as provided in this Lease or
should it take possession pursuant to legal proceedings or
pursuant to any notice provided for by law: it may either (i)
terminate this Lease, or (ii) it may from time to time, without
terminating the contractual obligation of Lessee to pay Rent
under this Lease, make such alterations and repairs as may be
necessary to relet the Leased Premises or any part thereof for
such Term or Renewal Terms, at such Rent or Rents, and upon such
other terms and conditions as Lessor in its sole discretion may
deem advisable. Termination of Lessee's right to possession by
Court Order shall be sufficient evidence of the termination of
Lessee's possessory rights under this Lease.
(B) Upon each such reletting, without termination of the
contractual obligation of Lessee to pay Rent under this Lease,
all rents received by Lessor from such reletting shall be applied
as follows:
1. First, to the payment of any indebtedness other than Rent
due hereunder from Lessee to Lessor;
2. Second, to the payment of any costs and expenses of such
reletting, including brokerage fees and attorney's fees and of
costs of such alterations and repairs;
3. Third, to the payment of Rent and other monetary obligations
due and unpaid hereunder;
4. Finally, the residue, if any, shall be held by Lessor and
applied in payment of future Rent as the same may become due and
payable hereunder.
If such rents received from such reletting during any month are
less than that to be paid during that month by Lessee hereunder,
Lessee shall pay any such deficiency to Lessor. Such deficiency
shall be calculated and paid monthly. No such re-entry or taking
possession of such Leased Premises by Lessor shall be construed
as an election on its part to terminate Lessee's contractual
obligations under this Lease respecting the payment of rent and
obligations for the costs of repair and maintenance unless a
written notice of such intention be given to Lessee.
(C) Notwithstanding any such reletting without termination,
Lessor may at any time thereafter elect to terminate this Lease
for any breach.
(D) In addition to any other remedies Lessor may have with this
Article 19, Lessor may recover from Lessee all damages it may
incur by reason of any breach, including: The cost of recovering
and reletting the Leased Premises; reasonable attorney's fees;
and, the present value (discounted at a rate of 10% per annum) of
the excess of the amount of Rent and charges equivalent to Rent
reserved in this Lease for the remainder of the Term over the
then reasonable rent value of the Leased Premises (or the actual
rents receivable by Lessor, if relet) for the remainder of the
Term, all of which amounts shall be immediately due and payable
from Lessee to Lessor in full. In the event that the rent
obtained from such alternative or substitute tenant is more than
the Rent which Lessee is obligated to pay under this Lease, then
such excess shall be paid to Lessor provided that Lessor shall
credit such excess against the outstanding obligations of Lessee
due pursuant hereto, if any.
(E) It is the object and purpose of this Article 19 that Lessor
shall be kept whole and shall suffer no damage by way of non-
payment of Rent or by way of diminution in Rent. Lessee waives
and will waive all rights to trial by jury in any summary
proceedings or in any action brought to recover Rent herein,
which may hereafter be instituted by Lessor against Lessee in
respect to the Leased Premises. Lessee hereby waives any rights
of re-entry it may have or any rights of redemption or rights to
redeem this Lease upon a termination of this Lease.
ARTICLE 20. PERSONALTY, FIXTURES AND EQUIPMENT
(A) All present and future alterations, additions, renovations,
improvements and installations made to the Leased Premises,
including the Building ("Leasehold Improvements") shall be deemed
to be the property of Lessor. Notwithstanding the foregoing,
upon Lessee's vacation of the Leased Premises, Lessee may, at its
election, remove any walk-in cooler, overhead hood system and/or
built in safe (collectively "Removable Leasehold Improvements").
All movable goods, inventory, office furniture, equipment, trade
fixtures (including exterior signs) and other movable personal
property belonging to Lessee that are not permanently affixed to
the Leased Premises (collectively, "Lessee's Property"),
including, without limitation, any item or matter that contains
or represents Lessee's trade names, trademarks, service marks,
trade secrets, trade dress or similar assets of Lessee
(collectively, "Lessee's Intellectual Property"), shall remain
Lessee's property and may be removable by Lessee at any time,
provided that Lessee (i) is not in default beyond applicable
notice and cure period under this Lease, and (ii) shall repair
any damage to the Leased Premises caused by the removal of any of
Lessee's Property. Lessor has no right or interest in Lessee's
Intellectual Property.
(B) Lessee shall furnish and pay for Lessee's Property.
(C) At the end of the term of this Lease, the Lessee's Property
shall be removed from the Leased Premises by Lessee regardless of
whether or not such property is attached to the Leased Premises
so as to constitute a "fixture" within the meaning of the law;
however, all damages and repairs to the Leased Premises which may
be caused by the removal of such property shall be paid for by
Lessee.
ARTICLE 21. LIENS
Lessee shall not do or cause anything to be done whereby the
Leased Premises may be encumbered by any mechanic's or other
materialmens liens. Whenever and as often as any mechanic's or
other materialmens lien is filed against said Leased Premises
purporting to be for labor or materials furnished or to be
furnished to Lessee, Lessee shall remove the lien of record by
payment or by bonding with a surety company authorized to do
business in the state in which the property is located, within
sixty (60) days from the date of the filing of said mechanic's or
other lien and delivery of notice thereof to Lessee of Lessee's
obligation under this Lease. Should Lessee fail to take the
foregoing steps within said sixty (60) day period, Lessor shall
have the right, among other things, to pay said lien without
inquiring into the validity thereof, and Lessee shall forthwith
reimburse Lessor for the total expense incurred by it in
discharging said lien as additional Rent hereunder.
ARTICLE 22. NO WAIVER BY LESSOR EXCEPT IN WRITING
No agreement to accept a surrender of the Leased Premises or
termination of this Lease shall be valid unless in writing signed
by Lessor. The delivery of keys to any employee of Lessor or
Lessor's agents shall not operate as a termination of the Lease
or a surrender of the Leased Premises. The failure of Lessor to
seek redress for violation of any rule or regulation, shall not
prevent a subsequent act, which would have originally constituted
a violation, from having all the force and effect of an original
violation. Neither payment by Lessee or receipt by Lessor of a
lesser amount than the Rent herein stipulated shall be deemed to
be other than on account of the earliest stipulated Rent. Nor
shall any endorsement or statement on any check nor any letter
accompanying any check or payment as Rent be deemed an accord and
satisfaction. Lessor may accept such check or payment without
prejudice to Lessor's right to recover the balance of such Rent
or pursue any other remedy provided in this Lease. This Lease
contains the entire agreement between the parties, and any
executory agreement hereafter made shall be ineffective to change
it, modify it or discharge it, in whole or in part, unless such
executory agreement is in writing and signed by the party against
whom enforcement of the change, modification or discharge is
sought.
ARTICLE 23. QUIET ENJOYMENT
Lessor covenants that Lessee, upon paying the Rent set forth
in Article 4 and all other sums herein reserved as Rent and upon
the due performance of all the terms, covenants, conditions and
agreements herein contained on Lessee's part to be kept and
performed, shall have, hold and enjoy the Leased Premises free
from molestation, eviction, or disturbance by Lessor, or by any
other person or persons lawfully claiming the same, and that
Lessor has good right to make this Lease for the full term
granted, including renewal periods.
ARTICLE 24. BREACH - PAYMENT OF COSTS AND ATTORNEYS' FEES
Each party agrees to pay and discharge all reasonable costs,
and actual attorneys' fees, including but not limited to
attorney's fees incurred at the trial level and in any appellate
or bankruptcy proceeding, and expenses that shall be incurred by
the prevailing party in enforcing the covenants, conditions and
terms of this Lease or defending against an alleged breach,
including the costs of reletting. Such costs, attorneys fees,
and expenses if incurred by Lessor shall be considered as Rent as
due and owing in addition to any Rent defined in Article 4
hereof.
ARTICLE 25. ESTOPPEL CERTIFICATES
Either party to this Lease will, at any time, upon not less
than ten (l0) days prior request by the other party, execute,
acknowledge and deliver to the requesting party a statement in
writing, executed by an executive officer of such party,
certifying that: (a) this Lease is unmodified (or if modified
then disclosure of such modification shall be made); (b) this
Lease is in full force and effect; (c) the date to which the Rent
and other charges have been paid; and (d) to the knowledge of the
signer of such certificate that the other party is not in default
in the performance of any covenant, agreement or condition
contained in this Lease, or if a default does exist, specifying
each such default of which the signer may have knowledge. It is
intended that any such statement delivered pursuant to this
Article may be relied upon by any prospective purchaser or
mortgagee of the Leased Premises or any assignee of such
mortgagee or a purchaser or lender of the leasehold estate.
ARTICLE 26. FINANCIAL STATEMENTS
During the term of this Lease, Lessee will, within one
hundred twenty (120) days after the end of Lessee's fiscal year,
furnish Lessor with Lessee's financial statements. The financial
statements shall be prepared in conformity with generally
accepted accounting principles (GAAP) and do not need to be
prepared by an independent certified public accountant, but shall
be certified as true and correct by the chief financial officer
or other authorized officer of Lessee. Lessee shall also provide
Lessor with financial statements for the Leased Premises within
120 days after the end of Lessee's fiscal year. The financial
statements for the Leased Premises do not need to be prepared by
an independent certified public accountant, but shall be
certified as true and correct by the chief financial officer or
other authorized officer of Lessee. Additionally, during the
term of the Lease, Lessee will within forty-five (45) days from
the end of each quarter of each fiscal year, furnish Lessor with
Lessee's financial statements and financial statements of the
Leased Premises for such quarter. Lessor shall have the right to
require such financial statements for the Lessee and the Leased
Premises on a monthly basis after the occurrence of a default
beyond applicable grace or cure periods in any Lease Year.
Provided, however, if Lessee shall not commit a default for
twelve consecutive months, Lessor's right to require such monthly
financial statements shall terminate until Lessee shall again
commit a default in any given Lease Year. Said quarterly (or
monthly, if required by Lessor) financial statements do not need
to be prepared by an independent certified public accountant, but
shall be certified as true and correct by the chief financial
officer or other authorized officer of Lessee. The financial
statements shall conform to GAAP, and include a balance sheet and
related statements of operations, statement of cash flows,
statement of changes in shareholder's equity, and related notes
to financial statements, if any.
ARTICLE 27. MORTGAGE
Lessee does hereby agree to make reasonable modifications of
this Lease requested by any Mortgagee of record from time to time
provided such modifications are not substantial and do not
increase any of the Rents or materially modify any of the
elements of this Lease or materially increase Lessee's other
obligations under this Lease.
ARTICLE 28. OPTION TO RENEW
If this Lease is not previously canceled or terminated and
if Lessee is not then in default, then Lessee shall have the
option to renew this Lease upon the same conditions and covenants
contained in this Lease for four (4) consecutive periods of five
(5) years each (singularly "Renewal Term"). Rent during each of
the Lease Years of any Renewal Term shall be as provided in
Schedule A hereto.
The first Renewal Term will commence on the day following
the date the original Term expires and successive Renewal Terms
will commence on the day of following the last day of the then
expiring Renewal Term. Lessee must give ninety (90) days written
notice to Lessor of its intent to exercise this option prior to
the expiration of the original Term of this Lease or any Renewal
Term, as the case may be.
ARTICLE 29. MISCELLANEOUS PROVISIONS
(A) All notices, consents, approvals, or other instruments
required or permitted to be given by either party pursuant to
this Lease shall be in writing and given by (i) hand delivery,
(ii) express overnight delivery service or (iii) certified or
registered mail, return receipt requested, and shall be deemed to
have been delivered upon (a) receipt, if hand delivered, (b) the
next business day, if delivered by express overnight delivery
service, or (c) the third business day following the day of
deposit of such notice with the United State Postal Service, if
sent by certified or registered mail, return receipt requested.
Notices shall be provided to the parties and addresses (or
facsimile numbers, as applicable) specified on the first page
hereof.
(B) The terms, conditions and covenants contained in this Lease
and any riders and plans attached hereto shall bind and inure to
the benefit of Lessor and Lessee and their respective successors,
heirs, legal representatives, and assigns.
(C) This Lease shall be governed by and construed under the laws
of the State where the Leased Premises are situate.
(D) In the event that any provision of this Lease shall be held
invalid or unenforceable, no other provisions of this Lease shall
be affected by such holding, and all of the remaining provisions
of this Lease shall continue in full force and effect pursuant to
the terms hereof.
(E) The Article captions are inserted only for convenience and
reference, and are not intended, in any way, to define, limit,
describe the scope, intent, and language of this Lease or its
provisions.
(F) In the event Lessee remains in possession of the Leased
Premises herein leased after the expiration of this Lease and
without the execution of a new lease, it shall be deemed to be
occupying said Leased Premises as a tenant from month-to-month,
subject to all the conditions, provisions, and obligations of
this Lease insofar as the same can be applicable to a
month-to-month tenancy except that the monthly installment of
Rent shall be increased 150% of the amount due on the last month
prior to such expiration.
(G) If any installment of Rent (whether lump sum, monthly
installments, or any other monetary amounts required by this
Lease to be paid by Lessee and deemed to constitute Rent
hereunder) shall not be paid when due and shall remain unpaid for
five days after written notice to Lessee, or financial statements
required to be delivered hereunder by Lessee remain undelivered
when due for five days after written notice to Lessee, Lessor
shall have the right to charge Lessee a late charge of $250.00
per month for each month (or portion thereof) that any amount of
Rent installment remains unpaid or such financial statements
remain undelivered.
(H) Any part of the Leased Premises (excluding the Building) may
be conveyed by Lessor for public non-exclusive easement purposes
at any time, provided such easement does not interfere with the
business of Lessee, as determined by Lessee in its reasonable
discretion, and provided Lessor has delivered to Lessee written
notification, together with a description of the location and
reason for such easement, at least 30 days prior to such
conveyance. In such event Lessor shall, at its own cost and
expense, restore the remaining portion of the Leased Premises to
the extent necessary to render it reasonably suitable for the
purposes for which it was leased, all to be done without
adjustments in Rent to be paid by Lessee. All proceeds from any
conveyance of an easement shall belong solely to Lessor.
(I) For the purpose of this Lease, the term "Rent" shall be
defined as Rent under Article 4, and any other monetary amounts
required by this Lease to be paid by Lessee.
(J) Lessee agrees to cooperate with Lessor to allow Lessor to
obtain and use at Lessor's expense promotional photographs of the
Leased Premises.
ARTICLE 30. [INTENTIONALLY DELETED]
ARTICLE 31. HAZARDOUS MATERIALS INDEMNITY
Lessee covenants, represents and warrants to Lessor, its
successors and assigns, (i) that (except for items normally used
by Lessee in the course of restaurant operations and in such
case, such items are used and stored in accordance with
applicable law or regulation) it has not used or permitted and
will not use or permit the Leased Premises to be used, whether
directly or through contractors, agents or tenants, and to
Lessee's knowledge and except as disclosed to Lessor in writing,
the Leased Premises has not at any time been used for the
generating, transporting, treating, storage, manufacture,
emission of, or disposal of any dangerous, toxic or hazardous
pollutants, chemicals, wastes or substances as defined in the
Federal Comprehensive Environmental Response Compensation and
Liability Act of 1980 ("CERCLA"), the Federal Resource
Conservation and Recovery Act of 1976 ("RCRA"), or any other
federal, state or local environmental laws, statutes,
regulations, requirements and ordinances ("Hazardous Materials"),
in violation of any Environmental Laws; (ii) that to Lessee's
knowledge, except as disclosed to Lessor in writing at or prior
to the date of this Lease, there have been no investigations or
reports involving Lessee, or the Leased Premises by any
governmental authority which in any way pertain to Hazardous
Materials, in violation of any Environmental Laws; (iii) that to
Lessee's knowledge, except as disclosed to Lessor in writing, the
operation of the Leased Premises has not violated and is not
currently violating any federal, state or local law, regulation,
ordinance or requirement governing Hazardous Materials
(collectively, "Environmental Laws"); (iv) that to Lessee's
knowledge, except as disclosed to Lessor in writing, the Leased
Premises is not listed in the United States Environmental
Protection Agency's National Priorities List of Hazardous Waste
Sites nor any other list, schedule, log, inventory or record of
Hazardous Materials or hazardous waste sites, whether maintained
by the United States Government or any state or local agency; and
(v) that to Lessee's knowledge, the Leased Premises will not
contain any formaldehyde, urea or asbestos, except as may have
been disclosed in writing to Lessor. Lessee agrees to indemnify
and reimburse Lessor, its successors and assigns, for:
(A) any loss, damage, expense or cost arising out of or incurred
by Lessor which is the result of a breach of, misstatement of or
misrepresentation of the above covenants, representations and
warranties, and
(B) any and all liability of any kind whatsoever which Lessor
may, for any cause and at any time, sustain or incur by reason of
Hazardous Materials discovered on the Leased Premises during the
Lease Term or placed or released on the Leased Premises by
Lessee; together with all attorneys' fees, costs and disbursements
incurred in connection with the defense of any action against
Lessor arising out of the above. Lessee shall not be responsible
for any liabilities under this Article if the liability results
from the activities, negligence or willful misconduct of Lessor
or any agent, employee, or contractor of Lessor, and Lessor
agrees to indemnify and reimburse Lessee, its successors and
assigns, for any and all liabilities of any kind whatsoever
respecting Hazardous Materials, which Lessee may, for any cause
and at any time, sustain or incur by reason of any such
activities, negligence or willful misconduct of Lessor or any
agent, employee, or contractor of Lessor These covenants,
representations and warranties shall be deemed continuing
covenants, representations and warranties for the benefit of the
indemnified party, and any successors and assigns of the
indemnified party and shall survive expiration or sooner
termination of this Lease.
ARTICLE 32. [INTENTIONALLY DELETED]
ARTICLE 33. NET LEASE
It is the intent of the parties hereto that this Lease shall
be a net lease and that the Rent defined pursuant to Article 4
should be a net Rent paid to Lessor. Any and all other expenses
including but not limited to, maintenance, repair, insurance,
taxes, and assessments, shall be paid by Lessee.
IN WITNESS WHEREOF, Lessor and Lessee have respectively
signed and sealed this Lease as of the day and year first above
written.
LESSEE:
TIA'S MARYLAND, LLC, a Maryland limited liability company
By: Tia's Restaurant, Inc., a Delaware corporation
Its Sole Member
By:/s/ C ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, Secretary/Treasurer
LESSOR:
AEI INCOME & GROWTH FUND 24 LLC
By: AEI Fund Management XXI, Inc.
By: /s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President