DEVELOPMENT FINANCING AND LEASING COMMITMENT
(the "Commitment")
April 24, 1998
AEI Real Estate Fund XVIII Limited Partnership, or its
assigns, (together,"AEI"), agrees to purchase, and you,
Tumbleweed, LLC. ("Lessee"), agree to lease from AEI, a parcel of
land to be located at East Broad Street, Columbus, Ohio legally
described on EXHIBIT "A" attached hereto (together with the
"Improvements" as defined below, the "Parcel"), with the
understanding that the building, site improvements, fixtures,
HVAC, non-trade fixture items financed by AEI, constituting a
Tumbleweed restaurant (the "Improvements") is to be developed by
you on the Parcel after AEI's purchase of the Parcel from Broad
Street Retail, LLC ("Seller"), which Parcel's development and
lease will be subject to the provisions and conditions herein
contained:
▇. ▇▇▇▇▇▇
Lessee Name: Tumbleweed LLC
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone: ▇▇▇ ▇▇▇-▇▇▇▇
B. ACQUISITION OF PARCEL
This Commitment is contingent upon AEI's purchase of the
Parcel from Seller, pursuant to an assignment to AEI of the
purchaser's interest in a purchase agreement between Lessee and
Seller. Said purchase agreement and assignment shall be in a
form and substance reasonably satisfactory to AEI. The
assignment of the purchase agreement to AEI would not be executed
until the Closing Date, defined in ARTICLE D.2.
C. FEES AND COSTS
1. A commitment fee equal to Two percent (2.0%) of the
Estimated Total Project Cost of the Parcel (defined below) (the
"Commitment Fee"), will be payable by Lessee to AEI upon the
signing and delivery of this Commitment by Lessee to AEI.
▇▇▇▇▇▇'s estimate of the total project cost which will be
incurred to acquire the land and complete the Improvements is
$1,490,000 ("Estimated Total Project Cost").
Subject to ARTICLE L hereof, the Commitment Fee shall
be considered earned upon AEI's execution and delivery of this
Commitment to Lessee. At Lessee's election, the Commitment Fee
may be included as a funded project cost and reimbursed to Lessee
at closing on AEI's acquisition of the Parcel (the "Closing").
Said Commitment Fee will be adjusted on the date of the final
disbursement of the Development Financing, defined in ARTICLE C.4
hereof, (the "Final Disbursement Date") to reflect two percent
(2.0%) of the final Actual Total Project Cost, defined in ARTICLE
D.1 hereof.
2. All outstanding real estate taxes, and levied and
pending special assessments, due and payable prior to the Closing
Date, as defined in ARTICLE C.2 hereof, or assessed for the year
in which closing shall occur, if due and payable in the year in
which closing shall occur, shall be paid by Seller or Lessee in
full at or prior to the Closing Date (pro-rated in the Purchase
Agreement for the Parcel as of the Closing Date).
3. Lessee shall pay all expenses incident to the Closing
and necessary to comply with the requirements herein, as
consistent with this Commitment, including AEI's outside legal
costs incurred by AEI and reimburseable in such amounts as agreed
to by AEI as set forth on the Estimated Total Project Cost Budget
set forth on EXHIBIT B . Such costs may be included, at Lessee's
option, as project costs funded by AEI.
4. AEI shall permit Lessee to construct the Improvements
on the Parcel owned by AEI, according to the plans and
specifications submitted to AEI, and pursuant to a construction
contract between Lessee and its contractor ("General
Contractor"), a copy of which would be provided in advance of the
Closing Date to AEI. Subject to the terms of the Development
Financing Agreement, attached as EXHIBIT "G" hereto, funds will
be advanced for the construction of the Improvements and related
soft costs, up to the Actual Total Project Cost set forth in
ARTICLE D.1 hereof (the "Development Financing") by AEI as set
forth in ARTICLE E. hereof.
At the Final Disbursement Date, AEI shall pay Lessee a
fee for developing the Improvements in the amount of $15,675 (the
"Parcel Development Fee"). The Parcel Development Fee will be
included as a funded project cost and paid to Lessee on the Final
Disbursement Date. However, the Actual Total Project Cost
(defined in ARTICLE D.1 hereof), including the Parcel Development
Fee, shall not exceed the approved MAI appraised value.
D. CLOSING TERMS
1. Actual Total Project Cost: The Actual Total Project
Cost will include only all verifiable project costs actually
incurred, which costs are approved by AEI, either as part of the
Estimated Total Project Cost Budget, or subsequently in AEI's
reasonable discretion (the "Actual Total Project Cost"), being
those costs described on EXHIBIT "B" attached hereto.
2. Closing Date: The closing date for AEI's purchase of
the Parcel from Seller and the commencement of the Lease
described in ARTICLE F. hereof shall be May 15, 1998 or sooner
(the "Closing Date"), after delivery and approval of all of the
items contemplated hereunder including, but not limited to, the
execution of the documents described in ARTICLE H. hereof. If
Lessee has not performed under this Commitment by the Closing
Date, this Commitment shall be null and void at the option of
AEI. In the event Lessee requests an extension of this
Commitment, and said extension is approved by AEI in its sole
discretion, a written addendum to this Commitment shall be
required.
3. Closing Agent: The closing contemplated hereunder
shall be handled by the national office of ▇▇▇▇▇▇'s Title
Insurance Company located in Phoenix, Arizona, acting under
instructions from AEI's counsel.
4. This Commitment shall not be assignable by ▇▇▇▇▇▇
without AEI's prior written approval, by law, or otherwise, but
may be assigned by AEI at its option, in whole or in part, in
such manner as AEI may determine, to an affiliate or affiliates
of AEI.
5. Parcel Inspection: As a condition precedent to AEI's
obligations hereunder, the Parcel shall be inspected and approved
by AEI.
6. As a condition precedent to closing on AEI's
acquisition of the Parcel and AEI's first disbursement for the
Development Financing, the supporting documentation listed below
must be submitted to AEI not less than ten (10) business days
prior to the Closing Date, in form and content satisfactory to
AEI and its counsel:
a. Lessee is to furnish AEI with an acceptable cost
breakdown itemizing estimated construction costs, including, but
not limited to, land acquisition, building construction, site
development, landscaping and soft costs, equal to the Estimated
Total Project Cost (the "Project Cost Budget");
b. The Lessee shall submit to AEI current financial
statements as described on EXHIBIT "C".
c. The Lessee shall furnish a commitment for an ALTA
Owner's Policy of Title Insurance (ALTA owner - most recent
edition) insuring marketable title in the Parcel, subject only to
such matters as AEI may approve and excluding exceptions for
mechanic's liens, survey and parties in possession (the "Title
Commitment"). The policy shall be issued by the national office
of Lawyer's Title Insurance Company located in Phoenix, Arizona
(the "Title Company") and shall contain such endorsements as AEI
may require including, a future disbursements endorsement up to
the Estimated Total Project Cost, an extended coverage
endorsement, creditor's rights endorsement, and an owners
comprehensive coverage endorsement. The Title Commitment shall
list Seller as the present fee owner and should show AEI as the
fee owner to be insured. The Title Commitment shall also include
an itemization of all outstanding and pending special assessments
or should state that there are none, if such is the case, and
state the manner in which any outstanding assessments are
payable, that is, whether they are payable in monthly or yearly
installments, setting forth the amount of each such installment
and its duration. The Title Commitment shall also include an
itemization of taxes affecting the Parcel and the tax year to
which they relate; should state whether taxes are current and, if
not, shall show the amounts unpaid, the tax parcel numbers, and
whether the tax parcel includes property other than the Parcel to
be purchased. All easements, restrictions, documents, and other
items affecting title should be listed in Schedule "B" of the
Title Commitment. COPIES OF ALL INSTRUMENTS CREATING SUCH
EXCEPTIONS MUST BE ATTACHED TO THE TITLE COMMITMENT.
During construction of the Improvements, AEI is to
be furnished with down-date endorsements to the owner's title
insurance policy with continuing affirmative mechanic's lien
coverage pursuant to acceptable endorsements increasing coverage
to the aggregate of all disbursements made by AEI to the date
thereof.
d. AEI is to be furnished with a policy of builder's
risk insurance, as well as public liability coverage, hazard
insurance, and ▇▇▇▇▇▇▇'▇' compensation coverage, all in such
amounts and placed with such companies as may be reasonably
acceptable to AEI, in accordance with the Instructions to
Insurance Agent set forth on EXHIBIT "D-1" attached hereto. In
addition, AEI shall be furnished with satisfactory flood and
earthquake insurance, unless satisfactory evidence is given that
the Parcel is not located within a federally designated flood
plain area or is above the applicable 100 year flood plain level,
and not in a federally designated earthquake prone area or is not
in an ISO High Risk Earthquake Zone respectively.
All policies of insurance must name as additional
named insureds: AEI or its specific assigns and the Corporate
General Partners of AEI and of said assignee, and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, as the Individual General Partner of said assignee, and
▇▇▇▇▇▇ as insured or additional insured, as their respective
interests may appear, and shall provide that the policies cannot
be canceled without thirty (30) days written notice to the
parties. In addition, all policies shall contain endorsements by
the respective insurance companies waiving all rights of
subrogation, if any, against the parties named as insured or
additional insured. All insurance companies must be approved in
writing by AEI. No closing will occur without all insurance
policies completed and in place.
e. Preliminary survey acceptable to AEI prepared by a
licensed surveyor, complying with the guidelines set forth on
EXHIBIT "E-1" attached hereto.
f. Final plans and specifications for the
Improvements upon which construction shall commence, prepared by
an architect or engineer reasonably acceptable to AEI.
g. A soils report prepared by an engineer reasonably
acceptable to AEI.
h. Appraisal of the Parcel by an independent MAI
appraiser acceptable to AEI (AEI shall make the initial attempts
to obtain such appraisal in a form satisfactory to AEI).
i. A letter from the appropriate officer of the
municipality or county exercising land use control over the
Parcel stating: (a) the zoning code affecting the Parcel; (b)
that the Parcel and its intended use complies with such zoning
code, city ordinances and building and use restrictions; (c) that
there are no variances, conditional use permits or special use
permits required for use of the Improvements on the Parcel, or if
such permits are required, specifying the existence of same and
their terms, and (d) that the Parcel complies with the platting
ordinances affecting them and can be conveyed without the
requirement of a plat or replat of the Parcel. If the Parcel
falls within any subdivision rules or regulations, evidence of
compliance with such subdivision regulations, or waiver of the
same by the appropriate officials, is required. (AEI shall make
the initial attempts to obtain such zoning compliance letter in a
form satisfactory to AEI).
j. Written advice from all proper public utilities
and municipal authorities, that utility services are available
and connected to the Parcel for gas, electricity, telephone,
water and sewer (AEI shall make the initial attempts to obtain
such utility letters in a form satisfactory to AEI).
k. Copy of the building permit for construction of
the Improvements on the Parcel.
l. Copies of all construction contracts.
m. Copy of architect's contract.
n. Copy of purchase agreement for the land between
▇▇▇▇▇▇ and
Seller and all amendments and assignments of said purchase
agreement, including the assignment of the purchase agreement
to AEI.
o. Photographs of all sides of the Parcel.
p. Certified copies of the Articles of Formation or
Incorporation, By-Laws (and/or Operating or Membership Agreement)
and Good Standing Certificate for the Lessee, together with all
other documents AEI deems necessary to support the authority of
the persons executing any documents on behalf of the corporation,
including encumbrancy certificates and corporate resolutions of
the directors and shareholders (or of the Partnership, including
resolution of the partners).
q. UCC searches on Seller and Lessee from the offices
of the Secretary of State and the county recorder for the state
and county in which the Parcel is located.
r. Phase I Environmental Assessment Report prepared
by an engineer reasonably satisfactory to AEI containing evidence
satisfactory to AEI that the Parcel complies with all federal,
state and local environmental regulations. Additional reports may
be required by AEI based upon its review of the Phase I report.
If ▇▇▇▇▇▇ fails to deliver any additional reports AEI may deem
necessary to complete and approve its environmental investigation
of this Parcel, AEI may terminate this Commitment and retain that
portion of the Commitment Fee to cover any and all of its costs
incurred hereunder.
s s.Executed documents described in Article H.
hereof.
t. All documentation listed on Exhibit "F" attached
hereto.
7. At the completion of construction of the Improvements
on the Parcel and prior to the Final Disbursement of the
Development Financing, Lessee shall deliver the following
documents to AEI:
a. Certificate of Completion executed by the Project
Architect, General Contractor. Said Certificate shall be in a
form reasonably satisfactory to AEI, and substantially similar to
the form previously delivered by Lessee in prior transactions
with Lessor or its affiliates.
b. Certificate of Occupancy.
c. Copies of all necessary permits and licenses of
any governmental body or authority which are necessary to permit
the use and occupancy of the Improvements on the Parcel,
specifically including, but not limited to, liquor licenses.
d. Certified cost statement itemizing the Actual
Total Project Costs signed by the Lessee and related
documentation supporting said project costs.
e. Insurance policies issued by companies acceptable
to AEI for coverage as required by the lease, with AEI named as
additional named insured, complying with the guidelines set forth
on EXHIBIT "D-2" attached hereto.
f. As-built survey, complying with the requirements
of EXHIBIT "E-2" attached hereto.
g. Final date-down endorsement to title policy.
h. Final draw documentation as required by the
development financing documentation described in ARTICLE E.
hereof.
i. Estoppel from Lessee.
j. Lease amendment setting forth the second full
lease year's commencement date, the rent for the remainder of the
term and terminating the Development Financing Agreement (as
described in ARTICLE E. hereof).
E. DEVELOPMENT FINANCING TERMS
Disbursements for construction of the Improvements and related soft
costs, the Development Financing, will be made in accordance with
the provisions of the Development Financing Agreement and
Development Financing Disbursement Agreement attached hereto as
EXHIBITS "G" AND `H" respectively.
F. LEASE TERMS
The Lease, in the form attached hereto as EXHIBIT "I" (or to
be agreed upon between the parties hereto prior to the Closing
Date), will be executed and delivered by AEI and Lessee at
Closing, to include the following terms:
1. Base Rent:
a. Annual rent on the Initial Disbursed Funds from
date of disbursement through the Rental Modification Date: eight
and one-half percent (8.5%).
b. Initial Annual Rent as a Percentage of Actual
Total Project Cost from the earlier of the Rental Modification
Date or the Final Disbursement Date: ten and one quarter percent
(10.25%).
Rent shall be payable in advance of the first day
of each month in equal monthly installments.
c. Beginning in the second lease year and each lease
year thereafter, such annual rent will increase as set forth in
the Lease attached as EXHIBIT I.
2. Initial Lease Term: Fifteen (15) years plus the
Development Financing Period set forth in the Development
Financing Agreement.
3. Renewal Terms: Two (2) terms of five (5) years each
with rent increases as set forth above in ARTICLE F.1.C.
4. Type of Use: Tumbleweed Restaurant
5. Lease effective date: The Lease shall be effective as
of the Closing Date.
6. ▇▇▇▇▇▇'s Right of Assignment: The Lease shall not be
assignable by ▇▇▇▇▇▇ until after the Final Disbursement Date, and
then only in accordance with the terms of the Lease.
▇. ▇▇▇▇▇▇▇▇▇(S) OF LEASE AND DEVELOPMENT FINANCING AGREEMENT
Not Applicable.
H. DOCUMENTS
The documents listed below shall be prepared by AEI's
counsel in accordance with the terms hereof and executed at, or
prior to, the Closing Date in form and substance satisfactory to
AEI:
1. Development Financing Agreement;
2. Development Financing Disbursement Agreement;
3. Assignment of purchase agreement for the land;
4. Assignments of construction contracts and
architect's contract;
5. Net Lease Agreement;
6. Attorney's Opinion Letter to be given by ▇▇▇▇▇▇'s
internal and outside counsel necessarily familiar with the
conduct of ▇▇▇▇▇▇'s business and the jurisdiction in which the
Parcel is situated to render such opinion, as to the
enforceability of the Lease and compliance of the Lease with
local law and due authority of the signatures, in a form and
substance reasonably satisfactory to AEI. Such form of opinion
shall be satisfactory if reasonably similar in form and content
(except as to matters and documents particular to this
transaction) to opinions previously delivered to AEI or its
affiliates by similarly situated Lessees;
7. Affidavit of ▇▇▇▇▇▇;
8. Hazardous Substances Indemnification Agreement of
Lessee;
9. FIRPTA Affidavit of Seller;
Lessee, or its counsel, shall furnish a copy of the proposed
warranty deed and opinions to AEI's counsel for its review and
approval prior to closing and such other documents as the Title
Company deems necessary for the terms contemplated hereunder in
accordance with the provisions of this Commitment.
I. FAIR CREDIT REPORTING ACT
Lessee warrants that all credit information submitted is
true and correct, and authorizes AEI to make credit
investigations and obtain credit reports and other financial
information, written or oral, respecting ▇▇▇▇▇▇'s credit and
financial positions, as it may deem necessary or expedient at
▇▇▇▇▇▇'s cost and expense.
J. INTERPRETATION
This Commitment and the terms of the transaction
contemplated to be made in conformity herewith, shall be
construed in accordance with all applicable governmental
regulations and in accordance with the laws of the state where
the Parcel is located.
K. CERTIFICATION
Lessee hereby certifies that:
1. It has no actions or proceedings pending, which would
materially affect the Parcel, Lessee, except matters fully
covered by insurance;
2. The consummation of the transactions contemplated
hereby, and the performance of this Commitment and the delivery
of the Lease and other security and credit instruments
contemplated hereunder, will not result in any material breach
of, or constitute a material default under, any indenture, bank
loan or credit agreement, or other instruments to which Lessee is
a party or by which Lessee may be bound or affected, which breach
or default would have a material adverse effect on ▇▇▇▇▇▇'s
performance under this Commitment;
3. All of Lessee's covenants, agreements, and
representations made herein, and in any and all documents which
may be delivered pursuant hereto, shall survive the delivery to
AEI of the Lease and other documents furnished in accordance
herewith, for one year from the Final Disbursement Date, and the
provisions hereof shall continue to inure for such period to
AEI's benefit, and its successors and assigns;
4. The Parcel is in good condition, substantially
undamaged by fire and other hazards, and has not been made the
subject of any condemnation proceeding.
L. TERMINATION
This Commitment may be terminated in writing prior to
closing at AEI's option (but reserving to AEI its right to pursue
its remedies at law or equity for ▇▇▇▇▇▇'s breach hereof) in such
manner as AEI may reasonably determine, if: 1) Lessee fails to
comply with any of the material terms hereof, including but not
limited to, obtaining AEI's approval of the documents listed in
ARTICLE D.6. hereof, and does not satisfactorily cure the same on
or before the Closing Date; 2) a material default exists in any
financial obligation of Lessee which would have a material
adverse effect on Lessee's performance under this Commitment; 3)
any representation made in any submission proves to be untrue,
substantially false or misleading at any time prior to the
Closing Date which would have a material adverse effect on
▇▇▇▇▇▇'s performance under this Commitment; 4) there has been a
material adverse change in the financial condition of Lessee or
there shall be a material action, suit or proceeding pending or
threatened against Lessee which would have a material adverse
effect on ▇▇▇▇▇▇'s performance under this Commitment; 5) any
bankruptcy, reorganization, insolvency, withdrawal, or similar
proceeding is instituted by or against Lessee and such proceeding
is not removed prior to Closing; 6) Seller's financial condition
gives rise to a commercially reasonable risk that the transaction
contemplated hereby constitutes a fraudulent conveyance subject
to attack by ▇▇▇▇▇▇'s creditors. Provided, however, if AEI shall
terminate this Agreement under paragraph 6 only, AEI's remedy
shall be limited to reimbursement of its out of pocket costs
(including reasonable attorneys fees), and AEI shall return the
remaining balance, if any, after such out of pocket expenses, of
the Commitment Fee of Lessee hereunder.
In the event ▇▇▇▇▇▇ and AEI do not reach mutual agreement
prior to the Initial Disbursement of Funds on the documents
contemplated to be executed by either party hereunder by delivery
of written notice to the other party, this Commitment may be
terminated at the option of either party. AEI shall, in such
event, refund the Commitment Fee to ▇▇▇▇▇▇, less AEI's reasonable
out-of-pocket expenses incurred hereunder, including, but not
limited to, attorney's fees.
AEI and ▇▇▇▇▇▇ acknowledge the unique nature of the Parcel
and agree that the mutual remedies of any party hereunder shall
be limited to the liquidated damages in the amount of either the
return of the Commitment Fee to Lessee or retention of the
Commitment Fee by AEI plus the outside counsel fees incurred by
the non-breaching party in connection with this Commitment prior
to the date of termination hereof; provided, however, if ▇▇▇▇▇▇
shall refuse to close (and being without right to terminate this
Commitment as otherwise set forth herein) even though AEI shall
be ready, willing, and able to do so, and ▇▇▇▇▇▇ shall thereafter
occupy the Leased Premises, AEI shall retain all remedies
available to it at law or in equity.
N. INCORPORATION OF SUBMITTED WRITTEN MATERIALS AND AMENDMENTS
This Commitment is issued by AEI pursuant to all written
materials previously submitted by Seller, Lessee to AEI as set
forth on EXHIBIT J (the "Submitted Written Materials") and it is
a proviso hereof that the content, terms and provisions of said
Submitted Written Materials are by express and specific reference
incorporated herein and made a part hereof. Provided, however,
in the case of any contradiction, variance, or ambiguity between
any of the content, terms and provisions hereof and those of the
Submitted Written Materials, the terms specifically delineated in
this Commitment shall govern and shall supersede the conditions
of the Submitted Written Materials. Neither this Commitment nor
any provision hereof may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by
the party against whom enforcement of the change, waiver,
discharge or termination is sought, and in the case of AEI,
signed by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President of AEI, or his designee in
writing signed by ▇▇. ▇▇▇▇▇▇▇ authorizing such other party to
execute a specific change, waiver, discharge or termination
instrument on behalf of AEI.
O. FEES AND COSTS
As a condition hereof, ▇▇▇▇▇▇ agrees to pay the fees of
▇▇▇'s outside counsel plus all costs and expenses incurred by
▇▇▇, as well as all title and escrow charges, the cost of
issuance of interim title certifications, recording and release
fees and all other costs incurred in connection with the
transaction contemplated hereunder.
P. ADVERTISING
During construction, AEI may place a sign on the Parcel at a
location to be determined by Lessee in its reasonable discretion,
specifying that it is participating in the financing on the
Parcel, to the extent permitted by law or private covenant,
condition, or agreement affecting the Project. Further, AEI may
publicize the financing and may include in publicity releases, if
applicable, the names of ▇▇▇▇▇▇'s corporate officers, principals,
and a general description of the Parcel, occupancy and rentals.
Q. EXPIRATION
This Commitment must be executed and returned to AEI no
later than May 1, 1998 for the terms to be effective.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
By: AEI Fund Management XVIII, Inc.
By:/s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
Witness:
/s/ ▇▇▇▇ ▇ ▇▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇ [Print Name]
Witness:
/s/ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ [Print Name]
STATE OF MINNESOTA )
)SS.
COUNTY OF ▇▇▇▇▇▇ )
The foregoing instrument was acknowledged before me the 24th
day of April, 1998, by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President of AEI Fund
Management XVIII, Inc, the corporate general partner of AEI Real
Estate Fund XVIII Limited Partnership.
/s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Notary Public
[notary seal]
This Commitment is accepted and agreed to
this 22nd day of April, 1998.
(Lessee) Tumbleweed LLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its: Executive VP & CFO
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
Its: President
Witness:
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇[Print Name]
Witness:
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇[Print Name]
STATE OF Kentucky )
) ss
COUNTY OF Jefferson )
On this 22nd day of April, 1998, before me, the undersigned,
a Notary Public in and for said State, personally appeared ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇, personally known to me to be the
persons who executed the within instrument as the Executive VP &
CFO and President of Tumbleweed, LLC., a Kentucky limited
liability company, on behalf of said limited liability company.
/s/ ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Notary Public
[notary seal]
I authorize the release of any information deemed necessary by
AEI to verify any and all information supplied to AEI. Lessee
shall hold AEI harmless for any damages arising from verification
of said information.
(Lessee) Tumbleweed LLC
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its: Executive VP & CFO
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
Its: President
Dated: April 22nd, 1998
EXHIBIT `A'
LEGAL DESCRIPTION
EXHIBIT "B"
ESTIMATED TOTAL PROJECT COST BUDGET
TUMBLEWEED, LLC
COLUMBUS, OH
PROJECT COST BUDGET
MARCH 31, 1998
Land and Hard Costs:
Land Acquisition Cost $ 495,000.00
Building/General Construction 750,000.00
Construction Contingency - 10.0% 75,000.00
Soft Costs:
Surveys 2,500.00
Appraisal 4,000.00
Phase I Environmental 2,000.00
TAP Fees 5,000.00
Design Fee-Architect 2,500.00
Architect/Engineering 32,000.00
Liquor License 5,000.00
Title Insurance & Closing Costs (Development financing) 12,000.00
Development Interest 24,500.00
Attorney's Fees-Borrower (Development Financing) 66,000.00
Attorney's Fees-AEI (Development Financing) 12,500.00
AEI Development Commitment Fee 2%* 29,800.00
AEI Credit Report Fees (Promesa) 300.00
AEI State Qualification Fees 1,500.00
AEI Site Inspection Fee 1,500.00
Tumbleweed Parcel Development Fee 15,675.00
Miscellaneous 13,225.00
TOTAL PROJECT COST $1,490,000.00
* Total project costs prior to AEI commitment fee is $1,460,200.
The Commitment Fee (rounded) is calculated on the total project
cost.
EXHIBIT "E-1"
Survey Requirements
(Pre-Construction)
1. The plat or map of such survey must bear the name, address
and signature of the licensed land surveyor who made the survey,
that surveyor's official seal and license number (if any, or
both), and the date of the survey, with the following
certification:
I, _________________________, a registered land surveyor, in
and for the State of ___________ do hereby certify to
(PLEASE CONTACT ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ AT ▇-▇▇▇-▇▇▇-▇▇▇▇ FOR
INFORMATION), and _________________ (insert name of title
company), that this is a true and correct plat of a survey of
(Insert Legal Description)
which correctly shows the location of all buildings,
structures and improvements on said described Parcel; that there
are no visible encroachments onto adjoining properties, streets,
alleys, easements or setback lines by any of said buildings,
structures or improvements; that there are no recorded or visible
right of ways or easements on said described Parcel, except as
shown on said survey; that there are no party walls or visible
encroachments on said described Parcel by buildings, structures
or other improvements situated on adjoining property, except as
shown on said plat or survey; and that the described ▇▇▇▇▇▇ has
direct access to a publicly dedicated right-of-way at the
location shown on said plat or survey.
By: _________________________
Dated: _______________________
2. If the street address of the Parcel is available, it should
be noted on the survey.
3. The survey boundary should be drawn to a convenient scale,
with that scale clearly indicated. If feasible, a graphic scale
should be indicated. When practical, the plat or map of survey
should be oriented so that North is at the top of the drawing.
Supplementary or exaggerated scale diagrams should be presented
accurately on the plat
or map and drawn to scale. No plat or map drawing less than
the minimum size of 8-1/2" by 11" will be acceptable.
4. The plat or map of survey should meet with the minimum
Standard Detail Requirements for Land Title Surveys as adopted by
the American Title Association and American Congress on
Surveying and Mapping.
5. The character and location of all buildings upon the Parcel
must be shown and their location given with reference to
boundaries. Proper street numbers should be shown where
available. Physical evidence of easements and/or servitudes of
all kinds, including but not limited to those created by roads,
rights of way, water courses, drains, telephone, telegraph or
electric lines, water, sewer, oil or gas pipelines, etc., on or
across the surveyed Parcel and on adjoining properties if they
appear to affect the enjoyment of the surveyed Parcel should be
located and noted. If the surveyor has knowledge of any such
easements and/or servitudes, not physically evidenced at the time
the present survey is made, such physical non-evidence should be
noted. All recorded easements, rights of way and other record
matters affecting the Parcel should be located and identified by
recording date. Surface indications, if any, of underground
easements and/or servitudes should also be shown. If there are
no buildings erected on the Parcel being surveyed, the plat or
map of survey should bear the statement "No Buildings". Curb
cuts and adjoining streets should be shown.
6. Joint or common driveways and alleys must be indicated.
Independent driveways along the boundary must be shown together
with the width thereof. Encroaching driveways, strips, ribbons,
aprons, etc., should be noted. Rights of access to public
highways should be shown. The right-of-way line of any public
street must be shown in relationship to the Parcel surveyed and
the street must be labeled "Publicly Dedicated" or "Private
Thoroughfare" as the case may be.
7. As a minimum requirement, at least two (2) sets of prints of
the plat or map of survey should be furnished to AEI and one (1)
set to the title company.
8. The survey should certify as to the total square footage of
the area surveyed and as to the square footage at the exterior
walls of any improvements on the Parcel. The survey should note
the absence of, or indicate the existence of, any building
restriction or setback lines. Paved areas should be shown and
the survey should designate the area for parking and its
dimensions. If completed, the survey should indicate the actual
number of parking spaces and, if possible, the actual parking
spaces should be outlined on the survey.
EXHIBIT "E-2"
Survey Requirements
(As-Built/Post-Construction)
1. The plat or map of such survey must bear the name, address
and signature of the licensed land surveyor who made the survey,
that surveyor's official seal and license number (if any, or
both), and the date of the survey, with the following
certification:
I, _________________________, a registered land surveyor, in
and for the State of ___________ do hereby certify to
(PLEASE CONTACT ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ AT ▇-▇▇▇-▇▇▇-▇▇▇▇ FOR
INFORMATION), and ____________________ (insert name of title
company), that this is a true and correct plat of a survey of
(Insert Legal Description)
which correctly shows the location of all buildings,
structures and improvements on said described Parcel; that there
are no visible encroachments onto adjoining properties, streets,
alleys, easements or setback lines by any of said buildings,
structures or improvements; that there are no recorded or visible
right of ways or easements on said described Parcel, except as
shown on said survey; that there are no party walls or visible
encroachments on said described Parcel by buildings, structures
or other improvements situated on adjoining property, except as
shown on said plat or survey; and that the described ▇▇▇▇▇▇ has
direct access to a publicly dedicated right-of-way at the
location shown on said plat or survey.
By: _________________________
Dated: _______________________
2. If the street address of the Parcel is available, it should
be noted on the survey.
3. The survey boundary should be drawn to a convenient scale,
with that scale clearly indicated. If feasible, a graphic scale
should be indicated. When practical, the plat or map of survey
should be oriented so that North is at the top of the drawing.
Supplementary or exaggerated scale diagrams should be presented
accurately on the plat or map and drawn to scale. No plat or map
drawing less than the minimum size of 8-1/2" by 11" will be
acceptable.
4. The plat or map of survey should meet with the minimum
Standard Detail Requirements for Land Title Surveys as adopted by
the American Title Association and American Congress on
Surveying and Mapping.
5. The character and location of all buildings upon the Parcel
must be shown and their location given with reference to
boundaries. Proper street numbers should be shown where
available. Physical evidence of easements and/or servitudes of
all kinds, including but not limited to those created by roads,
rights of way, water courses, drains, telephone, telegraph or
electric lines, water, sewer, oil or gas pipelines, etc., on or
across the surveyed Parcel and on adjoining properties if they
appear to affect the enjoyment of the surveyed Parcel should be
located and noted. If the surveyor has knowledge of any such
easements and/or servitudes, not physically evidenced at the time
the present survey is made, such physical non-evidence should be
noted. All recorded easements, rights of way and other record
matters affecting the Parcel should be located and identified by
recording date. Surface indications, if any, of underground
easements and/or servitudes should also be shown. If there are
no buildings erected on the Parcel being surveyed, the plat or
map of survey should bear the statement "No Buildings". Curb
cuts and adjoining streets should be shown.
6. Joint or common driveways and alleys must be indicated.
Independent driveways along the boundary must be shown together
with the width thereof. Encroaching driveways, strips, ribbons,
aprons, etc., should be noted. Rights of access to public
highways should be shown. The right-of-way line of any public
street must be shown in relationship to the Parcel surveyed and
the street must be labeled "Publicly Dedicated" or "Private
Thoroughfare" as the case may be.
7. As a minimum requirement, at least two (2) sets of prints of
the plat or map of survey should be furnished to AEI and one (1)
set to the title company.
8. The survey should certify as to the total square footage of
the area surveyed and as to the square footage at the exterior
walls of any improvements on the Parcel. The survey should note
the absence of, or indicate the existence of, any building
restriction or setback lines. Paved areas should be shown and
the survey should designate the area for parking and its
dimensions. If completed, the survey should indicate the actual
number of parking spaces and, if possible, the actual parking
spaces should be outlined on the survey.
EXHIBIT "F"
PRELIMINARY DOCUMENTATION CHECKLIST
Prior to closing, the following should be received and approved
by AEI, along with those items specified more fully in the
Commitment:
1. Purchase Agreement for the Parcel
2. Site Investigation Package as prepared by Project Civil
Engineers
3. Site Documents
4. Site plan and maps showing site(s) and location(s) of
competition.
5. Complete city map.
EXHIBIT `G'
FORM OF
DEVELOPMENT FINANCING AGREEMENT
DEVELOPMENT FINANCING AGREEMENT
THIS AGREEMENT, made and entered into effective as of this
____ day of May, 1998, by and between Tumbleweed, LLC
(hereinafter referred to as "Lessee"), whose address is ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, and AEI Real Estate Fund
XVIII Limited Partnership, whose principal business address is
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter collectively referred to as
"Lessor") .
W I T N E S S E T H, that:
WHEREAS, ▇▇▇▇▇▇ is contemplating building the following
Improvements on the premises described in Exhibit "A" attached
hereto :
Construction of an approximately 5,500 square foot building
and improvements to be used as a Tumbleweed Restaurant.
WHEREAS, ▇▇▇▇▇▇ has made application to Lessor for development
financing to defray the costs of constructing such Improvements;
WHEREAS, ▇▇▇▇▇▇'s Assignor has issued to Lessee its
Development Financing and Leasing Commitment to advance funds in
the amount hereinafter specified, subject to compliance with the
terms and conditions of this Development Financing Agreement and
the Net Lease Agreement (the "Lease") of even date herewith;
NOW, THEREFORE, in consideration of entering into the Lease
and other good and valuable consideration, the receipt of which
is hereby acknowledged by the parties hereto, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following terms shall have
the following meanings:
1. "Application" shall mean ▇▇▇▇▇▇'s application to the
Lessor for the Development Financing the terms and conditions
of which are incorporated herein by reference.
2. "Architect's Contract" shall mean ▇▇▇▇▇▇'s contract
with the Project Architect.
3. "Commitment" shall mean Lessor's Commitment to Lessee
agreeing to provide the Development Financing. (The
"Development Financing and Leasing Commitment" dated of even
date herewith.)
4. "Completion Date" shall mean midnight, November 15,
1998, subject to Force Majeure, as defined herein.
5. "Construction Costs" shall mean land costs, all costs
paid to construct and complete the Improvements, as specified
on Exhibit "B" attached hereto and made a part hereof.
6. "Construction Contracts" shall mean the contracts
between Lessee and Contractors for the furnishing of labor,
services or materials to the Leased Premises in connection
with the construction of the Improvements.
7. "Contractors" shall mean those firms directly engaged
by ▇▇▇▇▇▇ to construct the Improvements, whether one or more.
8. "Contract Documents" shall mean the Project Architect's
Contract, Plans and Specifications and the contract with the
Contractor.
9. "Development Financing" shall mean the funds to be made
available pursuant to the Commitment and not to exceed the
lesser of the Construction Costs or the maximum loan amount
of One Million Four Hundred Ninety Thousand Dollars ($
1,490,000) as specified in the Commitment.
10. "Development Financing and Carrying Charges" shall mean
all fees, taxes and charges incurred under the Development
Financing and in the construction of the Improvements
including, but not limited to, non-refundable commitment
fees; interest charges, service and inspection fees,
attorney's fees, title insurance fees and charges, recording
fees and insurance premiums.
11. "Development Financing Documents" shall mean this
Agreement, the Lease, Assignment of Architects and
Construction Contracts, Guarantees, and such other documents
given to the Lessor as security for the Development
Financing.
12. "LTIC-CDD" shall mean Lawyers Title Insurance
Corporation, Construction Disbursement Department, the
nationally recognized title insurer, or Lessor's in-house
designee, to be LTIC-CDD under the Development Financing
Disbursement Agreement executed by and between the parties of
even date herewith.
13. "Final Disbursement Date" shall mean the date of the
final disbursement of the Development Financing provided
hereunder.
14. "Improvements" shall mean the structures and other
improvements to be constructed on the Leased Premises in
accordance with the Plans and Specifications.
15. "Initial Disbursed Funds" shall mean those funds
disbursed on the Closing Date for land acquisition and
related soft costs upon Lessor's acquisition of the Leased
Premises.
16. "Inspecting Architect" shall mean the architect, if
any, hired by ▇▇▇▇▇▇ to perform inspections of the premises.
An Inspecting Architect may only be engaged by ▇▇▇▇▇▇ in the
event of a default relating to construction of the
Improvements under the Development Financing Documents.
17. "Leased Premises" shall mean the real property
described in the Exhibit "A" attached to this Agreement,
together with all Improvements, equipment and fixtures
thereon.
18. "Lessee Equity" shall mean the final Construction Costs
less the amount of the Development Financing.
19. "Plans and Specifications" shall mean the plans and
specifications prepared by the Project Architect who shall be
licensed in the jurisdiction of the Leased Premises and
selected by ▇▇▇▇▇▇.
20. "Project" shall mean the construction of the
Improvements on the Leased Premises.
21. "Project Architect" shall mean the architect retained
by ▇▇▇▇▇▇ to design and supervise construction of the
Improvements.
22. "Rental Modification Date" shall mean a date one
hundred and twenty days (120) from the date hereof.
23. "Sub-Contractors" shall mean those persons furnishing
labor or materials for the Project pursuant to the Sub-
Contracts.
24. "Sub-Contracts" shall mean the contracts between the
Contractor and its materialmen and mechanics in the
furnishing of labor or materials for the Project.
25. "Title" shall mean Lawyers Title Insurance Corporation
issuing the Lessor's fee owner's title insurance policy.
ARTICLE II
THE DEVELOPMENT FINANCING
Subject to compliance with the provisions of this Agreement,
▇▇▇▇▇▇ agrees to advance to ▇▇▇▇▇▇, and ▇▇▇▇▇▇ agrees to request
from ▇▇▇▇▇▇, the Development Financing. The Development
Financing shall be advanced in stages by Lessor to LTIC-CDD and
disbursed by LTIC-CDD pursuant to the provisions of Article VIII
hereof. The Development Financing, or so much thereof as has
been advanced hereunder, shall bear interest at the rate and
shall be repaid in accordance with the terms hereof and the
Lease. The proceeds of the Development Financing shall be used
exclusively for the purposes of defraying Construction Costs.
ARTICLE III
N/A
ARTICLE IV
CONSTRUCTION OF IMPROVEMENTS
▇▇▇▇▇▇ agrees to commence construction of the Improvements
within thirty (30) days from the date of this Agreement. After
commencement of construction of any Improvements, ▇▇▇▇▇▇ agrees
to diligently pursue said construction to completion, and to
supply such moneys and to perform such duties as may be necessary
to complete the construction of said Improvements pursuant to the
Plans and Specifications and in full compliance with all terms
and conditions of this Agreement and the Development Financing
Documents, all of which shall be accomplished on or before the
Completion Date, subject to Force Majeure and without liens,
claims or assessments (actual or contingent) asserted against the
Leased Premises for any material, labor or other items furnished
in connection therewith, subject to Lessee's right to contest
such liens, claims, or assessments provided the same are removed
as a lien upon the Leased Premises prior to foreclosure of such
lien, and all in full compliance with all construction, use,
building, zoning and other similar requirements of any pertinent
governmental jurisdiction. Lessee will provide to Lessor, upon
request, evidence of satisfactory compliance with all the above
requirements.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE LESSEE
Lessee hereby represents and warrants to the Lessor, which
representations and warranties shall be deemed to be restated by
Lessee each time Lessor makes an advance of the Development
Financing, that:
1. VALIDITY OF DEVELOPMENT FINANCING DOCUMENTS - The Development
Financing Documents are in all respects legal, valid and binding
according to their terms.
2. NO PRIOR LIEN ON FIXTURES - No mortgage, bill of sale,
security agreement, financing statement, or other title retention
agreement (except those executed in favor of Lessor) has been, or
will be, executed with respect to any fixture (except ▇▇▇▇▇▇'s
trade fixtures not financed with this Development Financing) used
in conjunction with the construction, operation or maintenance of
the improvements.
3. CONFLICTING TRANSACTION OF LESSEE - The consummation of the
transactions hereby contemplated and the performance of the
obligations of Lessee under and by virtue of the Development
Financing Documents will not result in any breach of, or
constitute a default under, any mortgage, lease, bank loan or
credit agreement, corporate charter, by-laws, partnership
agreement, or other instrument to which Lessee is a party or by
which it may be bound or affected, the breach of which would
materially affect ▇▇▇▇▇▇'s ability to perform its obligations
hereunder.
4. PENDING LITIGATION - There are no actions, suits or
proceedings pending, or to the knowledge of Lessee threatened,
against or affecting it or the Leased Premises, or involving the
validity or enforceability of any of the Development Financing
Documents, at law or in equity, or before or by any governmental
authority, except actions, suits and proceedings that are fully
covered by insurance or which, if adversely determined would not
substantially impair the ability of Lessee to perform each and
every one of its obligations under and by virtue of the
Development Financing Documents; and to the Lessee's knowledge it
is not in default with respect to any order, writ, injunction,
decree or demand of any court or any governmental authority.
5. VIOLATIONS OF GOVERNMENTAL LAW, ORDINANCES OR REGULATIONS -
To the best knowledge of Lessee, there are no violations or
notices of violations of any federal or state law or municipal
ordinance or order or requirement of the State in which the
Leased Premises are located or any municipal department or other
governmental authority having jurisdiction affecting the Leased
Premises, which violations in any way have a material adverse
affect on the Leased Premises and which remain uncured after
notice by such governmental authority or department (if notice is
required) and the expiration of the time within which Lessee may
cure such violation, or if no time limitation is specified,
within a reasonable time after notice to cure such violation .
6. COMPLIANCE WITH ZONING ORDINANCES AND SIMILAR LAWS - To the
best knowledge of Lessee, the Plans and Specifications and
construction pursuant thereto and the use of the Leased Premises
contemplated thereby comply and will comply with all present
governmental laws and regulations and requirements, zoning
ordinances, standards, and regulations of all governmental bodies
exercising jurisdiction over the Leased Premises. ▇▇▇▇▇▇ agrees
to provide the Project Architect's certification to such effect
prior to the funding of the first disbursement under the
Development Financing.
7. LESSEE'S STATUS AND AUTHORITY - If the Lessee be a
corporation, limited liability company, trust or a partnership,
Lessee warrants and represents that (i) it is duly organized,
existing and in good standing under the laws of the state in
which it is incorporated or created; (ii) it is duly qualified to
do business and is in good standing in the state in which the
Leased Premises are located; (iii) it has the corporate or other
power, authority and legal right to carry on the business now
being conducted by it and to engage in the transactions
contemplated by this Agreement and the Development Financing
Documents; and (iv) the execution and delivery of this Agreement
and the Development Financing Documents and the performance and
observance of the provisions hereof and thereof have been (or
future acts will be) duly authorized by all necessary trust,
partnership, or corporate actions of Lessee. Lessee will furnish
such resolutions, affidavits and opinions of counsel to such
effect as Lessor may reasonably require.
8. AVAILABILITY OF UTILITIES - All utility services necessary for
the construction of the Improvements will be available prior to
the commencement of construction, and all utility services
necessary for the proper operation of the Improvements for their
intended purposes are available at the Leased Premises or will be
available at the Leased Premises prior to the Final Disbursement
Date, at commercially comparable utility rates and hook-up
charges for the vicinity, including water supply, storm and
sanitary sewer facilities, gas, electricity and telephone
facilities. Lessee shall furnish evidence of such availability
of utilities from time to time at ▇▇▇▇▇▇'s request.
9. BUILDING PERMITS - All building permits required for the
construction of the Improvements have been obtained prior to the
commencement of the construction of the Improvements and copies
of same will be delivered to Lessor.
10. CONDITION OF LEASED PREMISES - The Leased Premises are
not now damaged or injured as a result of any fire, explosion,
accident, flood or other casualty, nor to the best of ▇▇▇▇▇▇'s
knowledge, subject to any action in eminent domain.
11. APPROVAL OF PLANS AND SPECIFICATIONS - To the best
knowledge of Lessee in reliance upon the Project Architect's
certification to such effect, the Plans and Specifications
conform to the requirements and conditions set out by applicable
law or any effective restrictive covenant, to all governmental
authorities which exercise jurisdiction over the Leased Premises
or the construction thereon, and no construction will be
commenced upon the Leased Premises until said Plans and
Specifications shall have been approved by Lessor, which consent
shall not be unreasonably withheld or delayed and shall be given
or withheld within ten business days after written request
therefor. Subject to Article VI, paragraph 14, no material
changes are to be made in the Plans and Specifications as
approved without Lessor's prior consent, which consent shall not
be unreasonably withheld or delayed and shall be given or
withheld within ten business days after written request therefor;
except, after prior written notice to Lessor, provided the
Development Financing shall remain in balance as set forth in
Article VII, paragraph 3 herein, Lessor shall consent to
reallocation among line items or use of the Construction
Contingency in the aggregate of not more than the amount budgeted
as set forth on Exhibit B for Construction Contingency, unless
Lessee shall deposit Owner Equity with LTIC-CDD in the amount of
such excess over the budgeted amount.
12. CONSTRUCTION CONTRACTS - Lessee has entered into
contracts with the Contractors or separate contracts with
materialmen and laborers providing for the construction of the
Improvements. Lessee will cause the Contractors to promptly
furnish Lessor with the complete list of all Sub-contractors or
entities as and when under contract, which Contractors propose to
engage to furnish labor and/or materials in constructing the
Improvements (such list containing the names, addresses, and
amounts of such sub-contracts as written in excess individually
of $5,000, and prior to disbursement of funds to or for the
benefit of such Subcontractors, affidavits of authorized
signatory and other documents commercially reasonably required by
Title to insure that the Leased Premises remain lien free) and
will from time to time furnish Lessor or Title with true copies
of all Contracts entered into by ▇▇▇▇▇▇ and with the terms of all
verbal agreements therefor, if any, and as to subcontractors,
letters signed by sub-contractors whose contracts are in excess
of $5,000 setting forth the present amount of their contract and
the amounts remaining to be paid under that contract, if the same
information is not stated on a lien waiver reflecting the most
currently requested payment to such subcontractor.
13. BROKERAGE COMMISSIONS - No brokerage commissions are due
in connection with the transaction contemplated hereby or if
there are commissions due or payable the same will be paid by
▇▇▇▇▇▇. ▇▇▇▇▇▇ agrees to and shall indemnify Lessor from any
liability, claims or losses arising by reason of any such
brokerage commissions. This provision shall survive the
repayment of the Development Financing and shall continue in full
force and effect so long as the possibility of such liability,
claims or losses exists.
14. NO PRIOR WORK - Except as may have been permitted by
Lessor, no work or construction has been commenced or will be
commenced by or on behalf of Lessee on the Leased Premises, nor
has Lessee entered into any contracts or agreements for such work
or construction which could result in the imposition of a
mechanic's or materialmen's lien on the Leased Premises or the
Improvements prior to or on parity with the interest of Lessor.
15. ENVIRONMENTAL IMPACT STATEMENT - All required
environmental impact statements as required by any governmental
authority having jurisdiction over the Leased Premises or the
construction of the Improvements have been duly filed and
approved.
16. ACCESS - The Leased Premises front on a publicly
maintained road or street or have access to such a road or street
under an easement or private way, which is not subject to a
reversion in favor of any party.
17. FINANCIAL INFORMATION - Any financial statements
heretofore delivered to Lessor are true and correct in all
respects, have been prepared in accordance with generally
accepted accounting practice, and fairly present the respective
financial conditions of the subject thereof as of the respective
dates thereof and no materially adverse change has occurred in
the financial conditions reflected therein since the respective
dates thereof.
18. NOTICE OF COMMENCMENT\FURNISHING - To provided Lessor prior
to the initial request for a Disbursement, with a copy of the
Notice of Commencement and any amendments thereto prepared in
accordance with Ohio Revised Code Section 1311.04 and to be
recorded with the Franklin County Recorder's Office. ▇▇▇▇▇▇
represents and warrants that a Notice of Commencement has not
been and will not be recorded prior to the recording of the Deed
transferring title to the Leased Premises to Lessor. Lessee
shall post and keep posted the Notice of Commencement and all
amendments thereto in a conspicuous place on the Premises during
the course of construction of the Project. Lessee further
represents and warrants to timely comply with all provisions of
Ohio Revised Code Section 1311.04 and failure to do so shall be
deemed an Event of Default as defined under the Lease. Lessee
shall provide Lessor with a copy of each Notice of Furnishing (as
defined in Ohio Revised Code Section 1311.05) received by Lessee
during the course of construction of any Improvements on the
Leased Premises.
ARTICLE VI
COVENANTS OF LESSEE
Lessee hereby covenants and agrees with ▇▇▇▇▇▇ as follows:
1. SURVEYS - Prior to execution of any Development Financing
Documents and prior to the initial request for a Disbursement (as
defined in ARTICLE VIII hereof), Lessee has furnished to Lessor
three copies of a current perimeter land survey, in form and
substance satisfactory to Lessor, certified to Lessor, giving a
description of the Leased Premises and showing all encroachments
onto or from the Leased Premises, currently certified by a
registered surveyor and bearing his registry number and showing
access rights, easements, or utilities, rights of way, all
setback requirements upon the Leased Premises, improvements,
matters affecting title and such other items as Lessor may
reasonably request.
2. TITLE INSURANCE - Prior to the initial request for
Disbursement the Lessee has furnished Lessor with an ALTA policy
of title insurance, and prior to any subsequent request for
Disbursement such ALTA policy of title insurance shall be brought
down to the date of Disbursement by endorsement, all in form and
substance satisfactory to Lessor issued at the Lessee's expense
and written by Title insuring the Leased Premises to be
marketable, free from exceptions for mechanic's and materialmen's
liens and free from other exceptions not previously approved by
the Lessor, naming Lessor as fee owner insured to the extent of
advances made hereunder subject only to such exceptions as may be
reasonably approved by Lessor.
3. RESTRICTIONS ON CONVEYANCE OR SECONDARY FINANCING - Lessee
will not transfer, sell, convey or encumber the Leased Premises
or subject the Leased Premises to any secondary financing in any
way without the written consent of the Lessor, except as
permitted in Article V, paragraph 2 relating to trade fixture
financing sources or suppliers.
4. INSURANCE - To obtain or cause Contractor to obtain and
maintain such insurance or evidence of insurance as Lessor may
reasonably require, including but not limited to the following:
(a) BUILDER'S RISK INSURANCE - Builder's Risk Insurance
written on the so-called "Builder's Risk-Completed Value
Basis" in an amount equal to the full replacement cost of the
Improvements at the date of completion with coverage
available on the so-called multiple peril form of policy,
including coverage against collapse and water damage, naming
Lessor as additional named insured, such insurance to be in
such amounts and form and written by such companies as shall
be reasonably approved by Lessor, and the originals of such
policies (together with appropriate endorsement thereto,
evidence of payment of premiums thereon and written
agreements by the insurer or insurers therein to give Lessor
ten (10) days' prior written notice of any intention to
cancel) shall be promptly delivered to Lessor, said insurance
coverage to be kept in full force and effect at all times
until the completion of construction of the Improvements.
(b) HAZARD INSURANCE - Fire and Extended Coverage
Insurance, and such other hazard insurance as Lessor may
require and as called for in the Lease in an amount equal to
the full replacement cost of the Improvements naming Lessor
as an additional named insured, such insurance to be in such
amounts and form and written by such companies as shall be
reasonably approved by Lessor, and the originals of such
policies (together with appropriate endorsements thereto,
evidence of payment of premiums thereon and written agreement
by the insurer or insurers therein to give Lessor ten (10)
days' prior written notice of any intention to cancel) shall
be promptly obtained and delivered to Lessor immediately upon
completion of the construction of the Improvements and before
any portion is occupied by Lessee or any tenant of Lessee
with such insurance to be kept in full force and effect at
all times thereafter.
(c) PUBLIC LIABILITY - Comprehensive public liability
insurance (including operations, contingent liability
operations, operations of sub- contractors, completed
operations and contractual liability insurance) in limits of
coverage as set forth in the Lease.
(d) WORKMEN'S COMPENSATION INSURANCE - Evidence of
compliance with the required coverage under statutory
workmen's compensation requirements.
5. COLLECTION OF INSURANCE PROCEEDS - To cooperate with Lessor in
obtaining for Lessor the benefits of any insurance or other
proceeds lawfully or equitably payable to it in connection with
the transaction contemplated hereby and the collection of any
indebtedness or obligation of the Lessee to Lessor incurred
hereunder (including the payment by ▇▇▇▇▇▇ of the expense of an
independent appraisal on behalf of Lessor in case of a fire or
other casualty affecting the Leased Premises).
6. APPLICATION OF DEVELOPMENT FINANCING PROCEEDS - To use the
proceeds of the Development Financing solely for the purpose of
paying for Construction Costs and such incidental costs relative
to the construction as may be reasonably approved from time to
time in writing by ▇▇▇▇▇▇, and in no event to use any of the
Development Financing proceeds for personal, corporate or other
purposes.
7. EXPENSES - To pay all costs of closing the Development
Financing and all expenses of Lessor with respect thereto,
including, but not limited to, legal fees by Lessor's counsel and
all other reasonable attorney's fees (limited as set forth in the
Commitment), costs of title insurance, transfer taxes, license
and permit fees, recording expenses, surveys, intangible taxes,
appraisal fees, Inspecting Architect fees, expenses of retaking
possession upon default by Lessee hereunder or other costs of
enforcement (including reasonable attorney's fees) and similar
items.
8. LAWS, ORDINANCES AND ETC. - To comply promptly with any law,
ordinance, order, rule or regulation of all authorities
exercising jurisdiction over the Leased Premises or the
construction thereon, including appropriate supervising boards of
fire underwriters and similar agencies and the requirements of
any insurer issuing coverage on the Project.
9. RIGHT OF LESSOR TO INSPECT LEASED PREMISES - Upon 48 hours
notice, except in cases which Lessor reasonably deems to be an
emergency, in which event upon reasonable notice under the
circumstances, to permit Lessor and Title and their
representatives and agents to enter upon the Leased Premises and
to inspect the Improvements and all materials to be used in
construction thereof and to cooperate and cause Contractor to
cooperate with Lessor or Title and their representatives and
agents during such inspections, provided that such is
accomplished without interrupting the construction process.
Provided, further, however, that this provision shall not be
deemed to impose upon Lessor or Title any duty or obligation
whatsoever to undertake such inspections, to correct any defects
in the Improvements or to notify any person with respect thereto.
10. BOOKS AND RECORDS - To set up and maintain accurate and
complete books, accounts and records pertaining to the Project
including the working drawings in a manner reasonably acceptable
to Lessor. The Lessor, Title and Inspecting Architect shall have
the right at all reasonable times and upon reasonable prior
notice to inspect, examine and copy all books and records of
Lessee relating to the Project, and to enter and have free access
to the Leased Premises and Improvements and to inspect all work
done, labor performed and material furnished in or about the
Project, provided that such is accomplished without interrupting
the construction process. Notwithstanding the foregoing, Lessee
shall be responsible for making inspections as to the
Improvements during the course of construction and shall
determine to its own satisfaction that the work done or materials
supplied by the Contractors and all Subcontractors has been
properly supplied or done in accordance with the applicable
contracts. Lessee will hold Lessor and Title harmless from and
Lessor and Title shall have and have no liability or obligation
of any kind to Lessee or creditors of Lessee in connection with
any defective, improper or inadequate workmanship or materials
brought in or related to the Improvements or the Leased Premises,
or any mechanic's liens arising as a result of such workmanship
or materials. Upon Lessor's request, Lessee shall replace or
cause to be replaced any such work or material found to be
materially deficient by the Project Architect or Independent
Architect. Lessor shall cooperate with Lessee in obtaining any
rights under any applicable warranties to accomplish such work.
Any inspections made by Inspecting Architect, Title or Lessor are
for the sole benefit of Lessor and neither Lessee nor any
creditor, tenant or vendee of Lessee shall be entitled to rely on
such inspection. Lessee shall obtain for Lessor coincident
rights to rely upon any warranties obtain by Lessee from its
Contractors or subcontractors.
11. CORRECTION OF DEFECTS - To promptly correct any
structural defects in the Improvements or any material departure
from the Plans and Specifications not previously approved by
Lessor. The advance of any Development Financing proceeds shall
not constitute a waiver of Lessor's right to require compliance
with this covenant.
12. SIGN REGARDING DEVELOPMENT FINANCING - To allow Lessor to
erect and maintain at a suitable site on the Leased Premises, at
a location to be chosen by Lessee in its reasonable discretion, a
sign indicating that Development Financing is being provided by
Lessor, to the extent permitted by law or private covenant,
condition, or agreement affecting the Project.
13. ADDITIONAL DOCUMENTS - To furnish to Lessor all
instruments, documents, initial surveys, footing or foundation
surveys, if conducted, certificates, plans and specifications,
appraisals, financial statements, title and other insurance
reports and agreements and each and every other document and
instrument required to be furnished by the terms hereof, all at
Lessee's expense; to assign and deliver to Lessor such documents,
instruments, assignments and other writings, and to do such other
acts necessary or desirable to preserve and protect the Leased
Premises, as Lessor may require; and to do and execute all and
such further lawful and reasonable acts, conveyances and
assurances for the carrying out of the intents and purposes of
this Agreement, the Lease, or the Commitment, as Lessor shall
reasonably require from time to time.
14. ARCHITECTS AND CONSTRUCTION CONTRACTS - To commit no
default nor knowingly permit a default under the terms of the
Architects or Construction Contracts; To waive none nor knowingly
permit a waiver of the obligations of the parties thereunder; To
do no act which would relieve such parties from their obligations
thereunder; To make no amendments to such contracts, without the
prior written consent of Lessor; To enter into no change orders
or extras that cause a reallocation among budgeted line items, or
that in the aggregate or singularly result in a net increase in
excess of 10% of the original contract amount without Lessor's
prior written consent, which consent shall not be unreasonably
withheld or delayed; provided, however, Lessor shall be given
written notice and copies of all change orders; provided,
further, however, with written notice to Lessor prior to any
request for funds subsequent to any such change order or
reallocation, the Lessee shall be allowed to enter into any
change order or extra which is accounted for by use of any
reallocation among line items or any remaining budgeted
Contingency line item, or if the same has been exhausted, Lessee
shall be allowed increases in the original contract amount
without Lessor's consent if Lessee has, upon the execution of
said change order, deposited with Lessor the amount by which such
change order increases the total Construction Cost; To allow all
such contracts to be subject to the approval of Lessor for its
loan purposes; To allow Lessor to take advantage of all the
rights and benefits of the contracts upon any default by ▇▇▇▇▇▇;
and to submit evidence to Lessor that both the Architect and the
Contractors will permit Lessor to acquire ▇▇▇▇▇▇'s interest under
their respective contracts and the Contract Documents without
additional charge or fee should an event of default occur
hereunder, which default is not cured within applicable notice
and cure periods.
15. ENFORCE PERFORMANCE OF SUB-CONTRACTS - To enforce, or
cause to be enforced, the prompt performance of the Sub-Contracts
in accordance with their terms and not to approve any changes in
the same that in the aggregate or singularly result in a net
increase in excess of 10% of the original General Contractor's
contract amount without Lessor's prior written consent, which
consent shall not be unreasonably withheld or delayed, provided
▇▇▇▇▇▇'s right to enter into any such change order shall be on
the same terms set forth in Section 14 above.
16. COMPLIANCE WITH RULES - To comply with, and to require
the Contractors to comply with, all rules, regulations,
ordinances and laws bearing on the conduct of the work on the
Improvements, including the requirements of any insurer issuing
coverage on the Project and the requirements of any applicable
supervising boards of fire underwriters.
17. OPINIONS OF COUNSEL - To furnish such opinions of counsel
as may be reasonably requested of the Lessee in connection with
the matters contemplated by this Agreement.
18. SOIL TESTS - To provide the Lessor with a soil report
prepared by an acceptable engineer certifying as to the status of
the soil conditions on the Leased Premises, the need or lack of
need for special pilings and foundations and that either any
pilings and foundation necessary to support the Improvements have
been placed in a manner and quantity sufficient to provide the
required support or that no such pilings and foundations are
necessary for the support and construction of the Improvements.
19. MARKETABLE TITLE - To execute and deliver or cause to be
executed and delivered such instruments as may be required by the
Lessor and Title to provide Lessor with a marketable, valid title
to the Leased Premises subject only to such exceptions to title
as may be reasonably approved by ▇▇▇▇▇▇.
20. VIOLATIONS OF GOVERNMENTAL LAW, ORDINANCES OR REGULATIONS
- Lessee will permit no violations nor commit the same, of any
federal or state law or municipal ordinance or order or
requirement of the State in which the Leased Premises are located
or any municipal department or other governmental authority
having jurisdiction affecting the Leased Premises, which
violations in any way have a material adverse affect on the
Leased Premises and which remain uncured after notice by such
governmental authority or department (if notice is required) and
the expiration of the time within which Lessee may cure such
violation, or if no time limitation is specified, within a
reasonable time after notice to cure such violation .
21. COMPLIANCE WITH ZONING ORDINANCES AND SIMILAR LAWS - The
Plans and Specifications and construction pursuant thereto and
the use of the Leased Premises contemplated thereby will comply
with all governmental laws and regulations and requirements,
zoning ordinances, standards, and regulations of all governmental
bodies exercising jurisdiction over the Leased Premises,
including environmental protection and equal employment
regulations, and appropriate supervising boards of fire
underwriters and similar agencies.
22. APPROVAL OF PLANS AND SPECIFICATIONS - The Plans and
Specifications will conform to the requirements and conditions
set out by applicable law or any effective restrictive covenant,
and to all governmental authorities which exercise jurisdiction
over the Leased Premises or the construction thereon.
23. NOTICE OF COMMENCMENT\FURNISHING - To provide Lessor prior to
the initial request for a Disbursement, with a copy of the Notice
of Commencement and any amendments thereto prepared in accordance
with Ohio Statute and to be recorded with the County Recorder's
Office where the Leased Premises are situate immediately
following the recording of the Memorandum of Lease between the
parties hereto. Lessee shall post and keep posted the Notice of
Commencement and all amendments thereto in a conspicuous place on
the Leased Premises during the course of construction of the
Project. Lessee further represents and warrants to timely comply
with all provisions of Ohio Statute respecting keeping the Leased
Premises free of mechanic's liens and failure to do so shall be
deemed an Event of Default as defined under the Net Lease
Agreement and this Agreement. Lessee shall provide Lessor with a
copy of each Notice of Furnishing (as defined in Ohio Statute)
received by Lessee during the course of construction of any
Improvements on the Leased Premises.
ARTICLE VII
CONDITIONS PRECEDENT TO A DISBURSEMENT
It shall be a condition precedent to each Disbursement under this
Development Financing Agreement that:
1. DEVELOPMENT FINANCING DOCUMENTS - The Development Financing
Documents shall have been duly executed and delivered to Lessor
and shall be in full force and effect.
2. LESSEE EQUITY - Lessee shall have paid all of the Lessee
Equity funds into the Project before the first Disbursement (or
any subsequent Disbursement if additional Lessee Equity should be
required) and Lessee shall deliver evidence of such payment
reasonably satisfactory to Lessor.
3. DEVELOPMENT FINANCING BALANCE - As of the date immediately
prior to any Disbursement, the total amount of unadvanced
proceeds of the Development Financing shall be sufficient, in the
commercially reasonable opinion of Lessor (the opinion of Lessor
being based upon affidavit of the General Contractor, the Project
Architect, the Inspecting Architect, or other reliable licensed
third party contractor) to complete the Improvements free of
liens. To the extent the total of the unadvanced proceeds of the
Development Financing shall be insufficient, at any time, in
Lessor's reasonable opinion, (based upon the affidavit as set
forth above) to complete the Improvements, or be less than the
total Construction Costs not yet paid for or not yet incurred
(including interest accruing for the remainder of the term or
extensions thereof, if any), the Lessee shall immediately deposit
with the Lessor or with Title, as additional Lessee Equity funds,
an amount equal to such deficiency and such additional Lessee
Equity funds shall be disbursed by LTIC-CDD prior to the
Disbursement of any further advance or advances under this
Agreement.
4. NO DEFAULT - No event of default, which remains uncured after
the expiration of applicable cure periods, shall exist under this
Agreement or the Development Financing Documents.
5. REPRESENTATIONS AND WARRANTIES - The representations and
warranties in Article V hereof shall be true and correct on and
as of the date of each Disbursement.
6. COVENANTS - ▇▇▇▇▇▇ shall have complied with all of the
covenants made by it in Article VI hereof.
7. SWORN CONSTRUCTION STATEMENT - Prior to the initial
disbursement hereunder, the Lessee shall have submitted to Lessor
and Title a Construction Cost Statement or the Construction
Contract (if such information is contained therein) sworn to by
Lessee and Contractors reflecting all major Sub-Contractors or
materialmen who shall then be engaged in furnishing labor,
materials or supplies for the Improvements. The list should show
the name of each and every Contractor, Sub-Contractor and
materialman (or at least such entities or individuals whose
contract is in excess of $5,000), its address and an estimate of
the dollar value of the work, labor and materials to be done or
supplied and a general statement of the nature of the work to be
done or materials to be supplied by each Contractor. Thereafter,
if such list should change or new subcontractors shall execute
contracts not reflected on the above list, the Lessee shall
furnish to the Lessor any amendments or additions to the original
statement as so submitted.
8. APPLICATION FOR PAYMENT - Lessor shall have received an
Application for Payment pursuant to Article VIII hereof.
9. TITLE - Title shall issue its endorsement to the title policy
insuring the Lessor as fee owner under the policy in the
aggregate amounts of all prior Disbursements and the requested
Disbursement.
10. WORK IN PLACE - All work or materials for which a
Disbursement is requested shall be in place and incorporated into
the Improvements.
11. AMENDED NOTICE OF COMMENCEMENT - Lessee shall provide Lessor
with any amended Notice of Commencement filed in accordance with
Ohio Statue, and any Notice of Furnishing (as defined in Ohio
Statute) received by Lessee during the course of construction of
any Improvements on the Leased Premises.
ARTICLE VIII
METHODS OF DISBURSEMENTS OF DEVELOPMENT FINANCING PROCEEDS
The Development Financing shall be disbursed (a "Disbursement")
as follows:
1. PROCEDURE - Not more often than monthly, Lessee may submit an
Application for Payment in the form attached hereto as Exhibit
"C" requesting the Disbursement of proceeds under the Development
Financing, which request shall be submitted to Lessor and to LTIC-
CDD at least five (5) business days prior to the date on which a
Disbursement is requested. Provided the conditions of this
Development Financing Agreement are met on the date requested for
such advance, Lessor shall advance to LTIC-CDD amounts certified
to be currently payable by Lessee (excluding the retainage
hereinafter specified) for the then incurred portion of Total
Construction Costs pursuant to the Application for Payment. All
costs shall have been approved in writing by the Project
Architect, Lessee, Contractor, and if required by Lessor, by the
Inspecting Architect. All interest accruing need not be
disbursed to LTIC-CDD, but may be immediately and automatically
credited by ▇▇▇▇▇▇ to the Development Financing account. LTIC-
CDD shall disburse all funds advanced to it by ▇▇▇▇▇▇ in
accordance with the terms and provisions of this Agreement and
any special escrow requirements imposed by LTIC-CDD as a
condition to its acting as the disbursing agent hereunder. The
disbursed proceeds of the Development Financing shall bear
interest from and including the date of disbursement to LTIC-CDD
or the date of credit by Lessor provided that in the event LTIC-
CDD shall fail to disburse any advances within five (5) business
days after the date set for an advance, LTIC-CDD shall return
said advance to Lessor and interest on such advance shall ▇▇▇▇▇
from and after the date of such return. Any amounts disbursed to
LTIC-CDD and returned by LTIC-CDD to the Lessor shall not be
deemed to be advanced under the Development Financing Documents.
Each Application for Payment shall clearly set forth the amounts
due to Lessee and to each Contractor out of the requested
Development Financing and shall be accompanied by the following:
a. A Draw Request Certificate in the form attached hereto
as Exhibit "D" certifying that each contractor or materialman
for which payment is requested in the relevant Application
for Payment has satisfactorily completed the work or
furnished the materials for which payment is requested in
accordance with the applicable contract; that all work for
which an Application for Payment is made substantially
conforms to the Contract Documents and any approved changes,
and is in place; and that sufficient funds remain of the
undisbursed Development Financing proceeds to complete the
Project and that all funds previously disbursed have been
applied as per the previous Application for Payment.
b. Waivers of Mechanics' Liens and Materialmen's Liens
executed by all Contractors for all work done and all
materials furnished to the Leased Premises and included in
such current Application for Payment, or evidence reasonably
required by Title to insure over the same by special specific
endorsement, or such other releases of lien pursuant to
bonding or otherwise to prevent such liens from attaching to
the Leased Premises.
c. Waivers of Mechanics' Liens and Materialmen's Liens
executed by all Sub-Contractors and workmen and materialmen
for all work done and all materials furnished to the Leased
Premises and included in the immediately preceding
Application for Payment, or evidence reasonably required by
Title to insure over the same by special specific
endorsement, or such other releases or lien pursuant to
bonding or otherwise to prevent such liens from attaching to
the Leased Premises.
d. Such other supporting evidence, including invoices and
receipts as may be requested by Lessor or LTIC-CDD to
substantiate all payments which are to be made out of the
Disbursement or to substantiate all payments then made in
respect to the Project.
2. INTEREST ADVANCE - If interest has accrued on the Development
Financing and is unpaid or fees are payable to the Lessor
hereunder, Lessor shall be, and hereby is, authorized at any time
to advance to itself from the proceeds of the Development
Financing the total amount of such accrued interest and fees,
whether or not an Application for Payment has been submitted by
the Lessee and the same shall be deemed to be an advance of the
proceeds of the Development Financing under this Agreement in the
same manner and with the same effect as if advanced under the
provisions above. It is understood Lessor may establish an
automatic interest reserve whereby ▇▇▇▇▇▇ may withdraw from the
Development Financing account on a regular basis the accrued
interest on the Development Financing and credit the Development
Financing balance with the same.
3. ASSESSMENT AND TAX ADVANCE - As taxes and assessments become
due on the Leased Premises, Lessor shall be, and hereby is,
authorized to advance to itself automatically from the proceeds
of the Development Financing, the total amount of such taxes and
assessments and the same shall be deemed to be an advance of the
proceeds of the Development Financing under this Agreement in the
same manner and with the same effect as if advances under the
provisions above, if not previously paid before due pursuant to
Lessee's obligations under the Lease.
4. DISBURSE UNDER DEVELOPMENT FINANCING DOCUMENT - All sums
advanced and disbursed hereunder shall be disbursed under and
shall be secured by the Development Financing Documents.
5. PAYMENTS TO SUBCONTRACTORS - In its reasonable discretion LTIC-
CDD may make payments directly to any subcontractor or
materialman.
6. RETAINAGE - Each Disbursement shall be limited to an amount
equal to ninety percent (90%) of the value, exclusive of
Contractor's profit and overhead, of the materials and labor
furnished to the Leased Premises and the balance (herein called
the Retainage) shall be retained by Lessor, provided that thirty
(30) days after completion by each subcontractor or materialman
of his subcontract Lessor will disburse to such party, or to the
Contractor on behalf of such party the Retainage withheld from
said party, provided that as a condition to such disbursement the
Lessee and Project Architect and the Inspecting Architect shall
certify to Lessor the date that such Party's subcontract has been
fully and satisfactorily completed and the subcontractor or
materialmen shall have supplied Title with satisfactory final
lien waivers, including final lien waivers for any of its
submaterialmen or sub- contractors and the requirements of any
bonding company issuing the Bonds shall have been fulfilled. Any
Retainage due the Contractor for work performed or materials
furnished by the Contractor and the final balance of Contractor's
profit and overhead shall be disbursed on the Final Disbursement
Date pursuant to Article IX hereof. Contractor's profit and
overhead shall be disbursed based upon and in proportion to the
percentage of completion of the Project, or amounts payable under
the Construction Contract for work actually performed, whichever
is less, as certified by the Project Architect.
ARTICLE IX
FINAL DEVELOPMENT FINANCING BALANCE
Unless and until Lessor and ▇▇▇▇▇▇ have entered into a mutually
satisfactory escrow holdback and undertaking agreement to, inter
alia, complete the Improvements and otherwise satisfy the
requirements of this Article IX, at no time and in no event shall
Lessor be obligated to disburse the balance of the proceeds of
the Development Financing, including any Retainage until the date
the following have been satisfied (the "Final Disbursement
Date"):
1. Lessor shall have received reasonably satisfactory evidence of
the final completion of the Improvements in substantial
accordance with the Contract Documents and the Certificate of
Final Completion from the Project Architect accepted by the
Contractor and Lessee.
2. Lessor shall have received satisfactory as-built surveys
reflecting the final location of the Improvements as fully
completed on the Leased Premises in accordance with the Contract
Documents, said survey to be prepared by a registered or licensed
surveyor bearing his registry number, certifying to Lessor as to
the legal description of the Leased Premises and showing all
Improvements located on the Leased Premises and indicating the
street address of the Improvements, absence of any encroachments
on the Leased Premises or from the Leased Premises onto adjacent
land, showing all access points, and showing conformance to all
set back requirements and delineating all utility easements that
are specifically legally described, rights of way and other
matters affecting the Leased Premises, and certifying as to the
total acreage of the land, the exterior dimensions of the
Improvements, and the number of parking spaces, if any, and such
other matters as Lessor may reasonably request.
3. Lessor shall have received a requisite affidavit of the
Lessee, Contractor and Project Architect, and approved by the
Inspecting Architect certifying as to the final cost of the
Improvements.
4. Title shall have been furnished with such final lien waivers
sufficient in the opinion of Title to dissolve any possible
Mechanic's and Materialman's Liens affecting title to the Leased
Premises or Lessee shall have provided a bond or other security
sufficient to remove the lien as an encumbrance upon title to the
Leased Premises and Title shall have issued its endorsements to
the title policy increasing the insured coverage to the full
amount of all sums disbursed under this Development Financing
Agreement.
5. Lessor shall have received evidence that all of the terms,
provisions and conditions on the part of the Lessee to be
performed or caused to be performed hereunder and under the
Lease, including but not limited to obtaining casualty insurance
for the full insurable value of the Improvements, have been
fulfilled to the satisfaction of Lessor.
6. Lessor shall have received a Final Certificate of Occupancy
issued by the appropriate governmental authority covering the
Improvements and a Certificate of Substantial Completion from the
Project Architect indicating that the Improvements as built
comply with all building codes and zoning ordinances, including
any plat requirements or requirements of recorded operating
covenants or agreements affecting the Leased Premises.
7. All remaining uncompleted "punch list" items shall have been
satisfactorily completed.
8. The requirements of all bonding companies, if any, with
respect to release of retainage shall have been met.
9. An amendment to the Lease shall be executed by ▇▇▇▇▇▇ and
Lessor setting forth the date the first Lease Year shall end and
the Rent for the balance of the first Lease Year, and evidencing
the satisfaction and termination of this Agreement.
ARTICLE X
EVENTS OF DEFAULT
An "event of default" shall be deemed to have occurred hereunder
and under the Lease, if:
1. DEFAULT UNDER DEVELOPMENT FINANCING DOCUMENTS - Any default or
event of default occurs (which remains uncured after the
expiration of any applicable cure period as may be set forth in
any Development Financing Document) under any of the Development
Financing Documents as defined therein; or
2. FAILURE TO COMPLETE CONSTRUCTION - Lessee shall fail for any
reason, except ▇▇▇▇▇▇'s wrongful refusal to fund the Development
Financing pursuant to the terms hereof, to substantially complete
the construction of the Improvements by the Completion Date; or
3. BREACH OF AGREEMENT - Lessee breaches or fails to perform,
observe or meet any covenant or condition of this Agreement,
provided, however, with respect to non-monetary defaults
hereunder, Lessee shall have twenty days after notice from Lessor
to cure such non-monetary default, or if such default (but for
the payment of monies) cannot be cured within twenty days, such
longer time as may be reasonably necessary to effect a cure if
Lessee is diligently pursuing a course of conduct reasonably
designed to cure the default.; or
4. BREACH OF WARRANTY - Any warranties made or agreed to be made
in any of the Development Financing Documents or this Agreement
shall be breached by Lessee or shall prove to be false or
misleading, and the same shall not be cured or made to be true
and correct within the applicable cure periods; or
5. FILING OF LIENS AGAINST THE LEASED PREMISES - Any lien for
labor, material, taxes or otherwise shall be filed against the
Leased Premises and such lien shall not be promptly paid,
released, contested in an appropriate forum, or bonded over to
Lessor's reasonable satisfaction before the lien shall materially
adversely affect Lessor's interest in the Premises; or
6. LITIGATION AGAINST LESSEE - Any suit shall be filed against
Lessee, and is not resolved within 120 days and, which if
adversely determined, could substantially impair the ability of
Lessee to perform each and every one of its obligations under and
by virtue of the Development Financing Documents; or
7. LEVY UPON THE LEASED PREMISES - A levy be made under any
process on the Leased Premises and such levy shall not be
promptly Bonded over prior to the execution of such levy; or
8. TRANSFER OF LEASED PREMISES - Lessee shall without the prior
written consent of Lessor, voluntarily or by operation of law,
sell, transfer, convey or encumber all or any part of its
interest in the Leased Premises or in any of the personalty
located thereon, or used or intended to be used in connection
therewith; or
9. ABANDONMENT - Lessee abandons the project or delays or ceases
work thereon for a period of fifteen consecutive (l5) days, or
delays construction or suffers construction to be delayed for any
period of time for any reason whatsoever so that completion of
Improvements cannot be accomplished in the judgment of Lessor on
or before the Completion Date, subject to force majeure; or
10. BANKRUPTCY - Lessee shall make an assignment for the
benefit of its creditors or shall admit in writing its inability
to pay its debts as they become due or shall file a petition in
bankruptcy or shall be adjudicated a bankrupt or insolvent or
shall file a petition seeking any reorganization, dissolution,
liquidation, arrangement, composition, readjustment, or similar
relief under any present or future bankruptcy or insolvency
statute, law or regulation, or shall file an answer admitting to
or not contesting the material allegations of a petition filed
against it in any such proceedings, or shall not have the same
dismissed or vacated, or shall seek or consent or acquiesce in
the appointment of any trustee, receiver or liquidator of a
material part of its properties, or shall not after the
appointment without the consent or acquiescence of it of a
trustee, receiver, or liquidator of any material part of its
properties have such receiver, liquidator or appointment vacated;
or
11. EXECUTION LEVY - Execution shall have been levied against
the Leased Premises or any lien creditors commence suit to
enforce a judgment lien against the Leased Premises or such
action or suit shall have been brought and shall not be
immediately bonded over and shall continue unstayed and in effect
for a period of more than 120 consecutive days; or
12. ATTACHMENT - Any part of the Lessor's commitment to make
the advances hereunder shall at any time be subject or liable to
attachment or levy at the suit of any creditor of the Lessee or
at the suit of any subcontractor or creditor of the Contractor
and shall remain unstayed prior to the time Lessor shall be
obligated to comply with the same.
ARTICLE XI
REMEDIES OF LESSOR
Lessee hereby agrees that the occurrence of any one or more of
the events of default set out in Article X hereof, shall also
constitute an event of default under each of the Development
Financing documents, thereby entitling Lessor, after the
expiration of any applicable cure period, at its option, to
proceed to exercise any or all of the following remedies:
1. EXERCISE OF REMEDIES - To exercise any of the various remedies
provided in any of the Development Financing Documents, including
the acceleration of the Put described in Articles XIV hereof;
2. CUMULATIVE RIGHTS - Cumulatively to exercise all other rights,
options and privileges provided by law;
3. CEASE MAKING ADVANCES - To refrain from making any advances
under this Agreement but Lessor may make advances after the
happening of any such event without thereby waiving the right to
refrain from making other further advances or to exercise any of
the other rights Lessor may have.
4. RIGHTS TO ENTER - To require Lessee to vacate the Leased
Premises and permit Lessor (whether prior to the exercise of the
Put or during any period prior to the closing of the sale
pursuant to the Put;
(a) To enter into possession;
(b) To perform or cause to be performed any and all work
and labor necessary to complete the Improvements in
accordance with the Plans and Specifications;
(c) To employ security watchmen to protect the Leased
Premises; and
(d) To disburse that portion of the Development Financing
Proceeds not previously disbursed (including any Retainage) to
the extent necessary to complete the construction of the
Improvements in accordance with the Contract Documents and if the
completion requires a larger sum than the remaining undisbursed
portion of the Development Financing, to disburse such additional
funds, all of which funds so disbursed by Lessor shall be deemed
to have been disbursed to Lessee. For this purpose, Lessee
hereby consents upon an uncured default by Lessee after the
expiration of any applicable notice and cure period, to the
Lessor taking the following actions, or not, in Lessor's
reasonable discretion: to complete the construction of the
Improvements in the name of the Lessee, and hereby empowers
Lessor to take all actions necessary in connection therewith
including but not limited to using any funds of Lessee including
any balance which may be held in escrow and any funds which may
remain unadvanced hereunder for the purpose of completing the
said portion of the Improvements in the manner called for by the
Contract Documents; to make such additions and changes and
corrections in the Contract Documents which shall be necessary or
desirable to complete the said portion of the Improvements in
substantially the manner contemplated by the Contract Documents;
to employ such contractors, subcontractors, agents, architects,
and inspectors as shall be required for said purposes; to pay,
settle or compromise all existing or future bills and claims
which are or may be liens against said Leased Premises, or may be
necessary or desirable for the completion of the said portion of
the Improvements or the clearance of title to the Leased
Premises; to execute all applications and certificates in the
name of Lessee which may be required by any construction contract
and to do any and every act with respect to the construction of
the said portion of the Improvements which Lessee may do in its
own behalf. Lessor shall also have power to prosecute and defend
all actions and proceedings in connection with the construction
of the said portion of the Improvements and to take such action
and require such performance as it deems necessary. In
accordance therewith, ▇▇▇▇▇▇ hereby assigns and quitclaims unto
Lessor all sums to be advanced hereunder including Retainage.
Any funds so disbursed or fees or charges so incurred shall be
included in any amount necessary for the Lessee to pay pursuant
to the Put.
(e) To discontinue making advances hereunder to the Lessee
and to terminate ▇▇▇▇▇▇'s obligations under this Agreement.
5. RIGHTS NON CUMULATIVE - No right or remedy by this Agreement
or by any Development Financing Document or instrument delivered
by the Lessee pursuant hereto, conferred upon or reserved to the
Lessor shall be or 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 or now or hereafter
arising at a law or in equity or by statute. Except as Lessor
may hereafter otherwise agree in writing, no waiver by Lessor or
any breach by or default of Lessee of any of its obligations,
agreements, or covenants under this Agreement shall be deemed to
be a waiver of any subsequent breach of the same or any other
obligation, agreement or covenant, nor shall any forbearance by
Lessor to seek a remedy for such breach be deemed a waiver of its
rights and remedies with respect to such a breach, nor shall
Lessor be deemed to have waived any of its rights and remedies
unless it be in writing and executed with the same formality as
this Agreement.
6. EXPENSES - The Development Financing and this Agreement and
the performance by the Lessor or Lessee of their obligations
hereunder shall be without cost and expense to the Lessor, all of
which costs and expenses the Lessee agrees to pay and hold Lessor
harmless of and payment of which shall be secured by the
Development Financing Documents. Specifically, ▇▇▇▇▇▇ agrees to
pay all title charges, surveyor's fees, appraisals, loan fees and
attorney's fees and costs and the like incurred in connection
with this Agreement.
ARTICLE XII
GENERAL CONDITIONS AND MISCELLANEOUS
The following conditions shall be applicable throughout the term
of this Agreement:
1. RIGHTS OF THIRD PARTIES - All conditions of the obligations of
Lessor hereunder, including the obligation to make disbursements
are imposed solely and exclusively for the benefit of Lessee, and
no other person shall have standing to require satisfaction of
such conditions in accordance with their terms or be entitled to
assume that Lessor will refuse to make advances in the absence of
strict compliance with any or all thereof, and no other person
shall, under any circumstances, be deemed to be a beneficiary of
such conditions, any and all of which may be freely waived in
whole or in part by Lessor at any time if in its sole discretion
it deems it desirable to do so. In particular, ▇▇▇▇▇▇ makes no
representations and assumes no duties or obligations as to third
parties concerning the quality of the construction of the
Improvements or the absence therefrom of defects. In this
connection, ▇▇▇▇▇▇ agrees to and shall indemnify Lessor from any
liability, claims or losses resulting from the disbursement of
the Development Financing proceeds or from the condition of the
Leased Premises whether related to the quality of construction or
otherwise and whether arising during or after the term of the
Development Financing made by Lessor to Lessee in connection
therewith, except for Lessor's gross negligence or willful
misconduct. This provision shall survive the termination of this
Agreement and shall continue in full force and effect so long as
the possibility of any such liability, claims or losses exists.
2. EVIDENCE OF SATISFACTION OF CONDITIONS - Any condition of this
Agreement which requires the submission of evidence of the
existence or non- existence of a specified fact or facts implies
as a condition the existence or non- existence, as the case may
be, of such fact or facts, and Lessor shall, at all times, be
free independently to establish to its reasonable satisfaction
such existence or non-existence.
3. ASSIGNMENT - Lessee may not assign this Development Financing
Agreement or any of its rights or obligations hereunder without
the prior written consent of ▇▇▇▇▇▇.
4. SUCCESSORS AND ASSIGNS - Whenever in this Agreement one of the
parties hereto is named or referred to, the heirs, legal
representatives, successors and assigns of such parties shall be
included and all covenants and agreements contained in this
Agreement by or on behalf of the Lessee or by or on behalf of the
Lessor shall bind and inure to the benefit of their respective
heirs, legal representatives, successors and assigns, whether so
expressed or not.
5. HEADINGS - The headings of the sections, paragraphs and
subdivisions of this Agreement are for the convenience of
reference only, and are not to be considered a part hereof and
shall not limit or otherwise affect any of the terms hereof.
6. INVALID PROVISIONS TO AFFECT NO OTHERS - If fulfillment of any
provision hereof, or any transaction related thereto at the time
performance of any such provision shall be due, shall involve
transcending the limit of validity prescribed by law, then, ipso
facto, the obligation to be fulfilled shall be reduced to the
limit of such validity; and such clause or provision shall be
deemed invalid as though not herein contained, and the remainder
of this Agreement shall remain operative in full force and
effect.
7. NUMBER AND GENDER - Whenever the singular or plural number,
masculine or feminine or neuter gender is used herein, it shall
equally include the other.
8. AMENDMENTS - Neither this Agreement nor any provision hereof
may be changed, waived, discharged or terminated orally, but only
by an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination is
sought.
9. NOTICES - Any notice which any party hereto may desire or may
be required to give to any of the parties shall be in writing and
the mailing thereof by certified mail, or equivalent, to the
respective parties' addresses set forth herein above or to such
other place such party may by notice in writing designate as its
address shall constitute service of notice hereunder.
10. GOVERNING LAW - This Development Financing Agreement is
made and executed pursuant to and is intended to be governed by
the laws of the State where the Leased Premises are located.
11. FORCE MAJEURE - Anything in this Agreement to the contrary
notwithstanding, Lessee shall not be deemed in default with
respect to the performance of any of the terms, provisions,
covenants, and conditions of this Agreement (except for the
payment of all other monetary sums payable hereunder, to which
the provisions of this Section shall not apply), if the same
shall be due to any strike, lockout, civil commotion, warlike
operations, invasion, rebellion, hostilities, sabotage,
governmental regulations or controls, impracticability of
obtaining any materials or labor(except due to the payment of
monies), shortage or unavailability or a source of energy or
utility service, Act of God, casualty, adverse weather
conditions, or any cause beyond the reasonable control of Lessee
(except due to the payment of momies). Provided, however, in
order to invoke the extension of the Completion Date afforded by
this section, Lessee shall notify Lessor in writing within five
days of the occurrence of such force majeure, and in any event
the Completion Date shall be extended as a result of such
occurrence no more than reasonably necessary and in no event no
more than 90 days.
ARTICLE XIII
DAMAGE, DESTRUCTION, CONDEMNATION, USE OF INSURANCE PROCEEDS
1. DAMAGE OR DESTRUCTION OF THE LEASED PREMISES. Lessee will
give the Lessor prompt notice of any damage to or destruction of
the Leased Premises and in case of loss covered by policies of
insurance the Lessor (whether before or after the exercise of the
Put if Lessee be in default hereof) is hereby authorized at its
option to settle and adjust any claim arising out of such
policies and collect and receipt for the proceeds payable
therefrom, provided, that the Lessee may itself adjust and
collect for any losses arising out of a single occurrence
aggregating not in excess of $50,000.00. Any expense incurred by
the Lessor in the adjustment and collection of insurance proceeds
(including the cost of any independent appraisal of the loss or
damage on behalf of Lessor) shall be reimbursed to the Lessor
first out of any proceeds. The proceeds or any part thereof
shall be applied to reduction of the Put Price, which Put may
then be exercised by Lessor, without the application of any
prepayment premium, or to the restoration or repair of the Leased
Premises, the choice of application to be solely at the
discretion of Lessor.
2. CONDEMNATION. Lessee will give the Lessor prompt notice
of any action, actual or threatened, in condemnation or eminent
domain affecting the Leased Premises and hereby assigns,
transfers, and sets over to the Lessor the entire proceeds of any
award or claim for damages for all or any part of the Leased
Premises taken or damaged under the power of eminent domain or
condemnation, the Lessor being hereby authorized to intervene in
any such action and to collect and receive from the condemning
authorities and give proper receipts and acquittances for such
proceeds. Lessee will not enter into any agreements with the
condemning authority permitting or consenting to the taking of
the Leased Premises unless prior written consent of Lessor is
obtained. Any expenses incurred by the Lessor in intervening in
such action or collecting such proceeds shall be reimbursed to
the Lessor first out of the proceeds. The proceeds or any part
thereof shall be applied to reduction of the Put Price, which Put
may then be exercised by Lessor, without the application of any
prepayment premium, or to the restoration or repair of the Leased
Premises, the choice of application to be solely at the
discretion of Lessor.
3. DISBURSEMENT OF INSURANCE AND CONDEMNATION PROCEEDS. Any
restoration or repair shall be done under the supervision of an
architect acceptable to ▇▇▇▇▇▇ and pursuant to plans and
specifications approved by the Lessor. Subject to paragraph 4
below, in any case where Lessor may elect to apply the proceeds
to repair or restoration or permit the Lessee to so apply the
proceeds they shall be held by Lessor for such purposes and will
from time to time be disbursed by Lessor to defray the costs of
such restoration or repair under such safeguards and controls as
Lessor may reasonably require to assure completion in accordance
with the approved plans and specifications and free of liens or
claims. Lessee shall on demand deposit with Lessor any sums
necessary to make up any deficits between the actual cost of the
work and the proceeds and provide such lien waivers and
completion bonds as Lessor may reasonably require. Any surplus
which may remain after payment of all costs of restoration or
repair shall be applied against the rent then most remotely to be
paid, whether due or not, without application of any prepayment
premium or credit.
4. LESSOR TO MAKE PROCEEDS AVAILABLE. In the event of
insured damage to the improvements or in the event of a taking by
condemnation of only a portion of the improvements or land area
of the Leased Premises, and provided, the portion remaining can
with restoration or repair continue to be operated for the
purposes utilized immediately prior to such damage or taking, and
if the appraised value of the Leased Premises after such
restoration or repair shall not have been reduced, and provided
further, no event of default exists under this Agreement after
the expiration of any applicable cure periods and Lessee is
diligently pursuing a course of conduct reasonably designed to
cure such default, and the Lessee certified to Lessor their
intention to remain in possession of the Leased Premises without
any abatement or adjustment of rental payments, the Lessor agrees
to make the proceeds available to the restoration or repair of
the improvements on the Leased Premises in accordance with the
provisions of paragraph 3 hereof.
ARTICLE XIV
MANDATORY PUT UPON DEFAULT
Should Lessee commit an event of Default under this Agreement
or any Development Financing Document (after the expiration of
any applicable notice and cure period) ("Uncured Default"),
Lessor shall have the following rights:
Upon an Uncured Default, or damage or destruction or
condemnation of the Leased Premises not addressed by paragraph
XIII (4), if Lessor elects to exercise the following option,
Lessee shall purchase the Leased Premises from Lessor subject to
the following terms and conditions:
A. The purchase price at which Lessor shall sell the
Leased Premises to Lessee, shall be the total amount of
Initial Disbursed Funds disbursed by Lessor to acquire
the Leased Premises at the Closing Date (as defined in
the Commitment), plus the total amount of funds
disbursed pursuant to this Agreement, plus all accrued
interest and incurred expenses of Lessor fundable
pursuant to this Agreement, plus all reasonable costs of
collection and enforcement of the terms hereof.
B. At such time as Lessor shall elect to sell the Leased
Premises, Lessor shall give Lessee written notice of its
intent to exercise its option to sell the Leased
Premises to Lessee, including in such notice Lessor's
calculation of the Purchase Price through the actual
closing of the sale of the Leased Premises to Lessee
pursuant to the terms hereof (the "Sale Date"), which
shall be sixty days from such notice by Lessor. Lessee
shall on or before the Sale Date deliver the purchase
price as set forth in subparagraph (A) of this Article
to Lessor. Upon such delivery, which shall be preceded
by ten (10) days notice to Lessor, Lessor shall deliver
to Lessee a warranty deed and appropriate affidavits
evidencing that Lessor transfers the Leased Premises to
Lessee subject to restrictions, easements or other
encumbrances upon title existing as of the date of
delivery, if any, except to the extent, if any, placed
of record or caused by Lessor. The purchase price to be
paid to Lessor shall be a net amount. All expenses in
connection with the transfer of the Leased Premises,
including, but not limited to appraisal fees, title
insurance, recording fees, documentary stamps,
conveyance tax, title evidence, and all other closing
costs, shall be paid by the Lessee. The purchase price
shall be paid by Lessee in cash to Lessor concurrently
with the conveyance of the Leased Premises by the Lessor
to the Lessee. If Lessor elects to sell the Leased
Premises to Lessee pursuant to the terms hereof, the
Leased Premises shall be conveyed by the Lessor to the
Lessee "As Is".
If Lessee shall fail to pay the Purchase Price on or before
the Sale Date, Lessor may terminate the Lease, and sell the
Leased Premises to any third party purchaser. Lessor may then
send Lessee notice of the shortfall (the "Deficiency"), if any,
between the amount of the net proceeds received by Lessor in such
sale, and the total amount of Initial Disbursed Funds disbursed
by Lessor to acquire the Parcel at the Closing Date (as defined
in the Commitment), plus the total amount of funds disbursed
pursuant to this Agreement, plus all accrued interest and
incurred expenses of Lessor fundable pursuant to this Agreement,
plus all reasonable costs of collection and enforcement of the
terms hereof. Lessee shall immediately upon receipt of such
notice of Deficiency remit the amount of the Deficiency in good
funds to Lessor.
Lessor's rights under this Mandatory Put shall expire on the
Final Disbursement Date when the amendment to the Lease has been
executed by all parties as set forth in Article IX hereof.
ARTICLE XV
RENT, INTEREST, AND RENTAL MODIFICATION DATE
1. Rent shall be payable by Lessee and calculated as follows, on
the funds advanced by Lessor on the Closing Date for the purchase
of the land and related closing costs (the "Initial Disbursed
Funds"): Rent shall accrue in the amount of $
per month absent an uncured Default by Lessee; absent an uncured
Default, accrued rent during the period of construction of the
Improvements shall not be payable until the Final Disbursement
Date. Upon the occurrence of an uncured Default, all accrued
rent shall be immediately due and payable.
On the Rental Modification Date, if not otherwise in default
hereunder, Lessee shall begin paying Rent by the first of each
month (prorata for the balance of any partial month in which the
Rental Modification Date occurs, payable with the first such
adjusted Rent payable on the first day of the first full month
following the Rental Modification Date) in the amount of $
per month out of pocket. On the Final Disbursement Date, absent
an Uncured Default, Rent shall be adjusted and documented by the
lease amendment contemplated in ARTICLE IX hereof and paid to
▇▇▇▇▇▇ as described in ARTICLE F. of the Commitment.
2. Disbursed proceeds of the Development Financing shall
accrue interest at a rate of eight and one-half percent (8.5%)
per annum, which interest shall accrue unpaid unless advanced by
Lessor to itself, or Lessee shall default hereunder, which
default shall remain uncured after the expiration of any
applicable notice and cure period. However, one hundred and
twenty days (120) from the date hereof, (the "Rental Modification
Date"), Lessee shall begin making monthly payments of
subsequently accruing interest at the rate of 10.25% per annum
out of pocket ("Out of Pocket Invoiced Interest") within 5 days
after invoice from Lessor.
3. Upon the occurrence of an event of default which remains
uncured after the expiration of applicable notice and cure
periods, disbursed proceeds of the Development Financing shall
accrue interest at a rate of Fifteen Percent (15.0%) per annum,
or the highest rate allowed by law, whichever is less, and the
rental rate on the Initial Disbursed funds shall increase to
Fifteen Percent (15.0%) per annum, or the highest rental rate
allowed by law, whichever is less.
ARTICLE XVI
COUNTERPART EXECUTION
Counterpart Execution. This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original
and all of which shall constitute one and the same instrument.
IN WITNESS WHEREOF, ▇▇▇▇▇▇ and ▇▇▇▇▇▇ have hereunto caused
these presents to be executed on the date first above written.
Tumbleweed, LLC, a Kentucky Limited
Liability Company
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its: Executive VP & CFO
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
Its: President
[▇▇▇▇▇▇'s Signature appears on following page.]
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
By: AEI Fund Management XVIII, Inc.
By:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
EXHIBIT B
CONSTRUCTION COSTS
PROJECT COST BUDGET
EXHIBIT "B"
ESTIMATED TOTAL PROJECT COST BUDGET
TUMBLEWEED, LLC
COLUMBUS, OH
PROJECT COST BUDGET
MARCH 31, 1998
Land and Hard Costs:
Land Acquisition Cost $ 495,000.00
Building/General Construction 750,000.00
Construction Contingency - 10.0% 75,000.00
Soft Costs:
Surveys 2,500.00
Appraisal 4,000.00
Phase I Environmental 2,000.00
TAP Fees 5,000.00
Design Fee-Architect 2,500.00
Architect/Engineering 32,000.00
Liquor License 5,000.00
Title Insurance & Closing Costs (Development financing) 12,000.00
Development Interest 24,500.00
Attorney's Fees-Borrower (Development Financing) 66,000.00
Attorney's Fees-AEI (Development Financing) 12,500.00
AEI Development Commitment Fee 2%* 29,800.00
AEI Credit Report Fees (Promesa) 300.00
AEI State Qualification Fees 1,500.00
AEI Site Inspection Fee 1,500.00
Tumbleweed Parcel Development Fee 15,675.00
Miscellaneous 13,225.00
TOTAL PROJECT COST $1,490,000.00
* Total project costs prior to AEI commitment fee is $1,460,200.
The Commitment Fee (rounded) is calculated on the total project
cost.
Exhibit C
APPLICATION FOR PAYMENT
Tumbleweed, LLC. ("Lessee") hereby requests a disbursement
in the amount of______________________ ($____________________)
pursuant to that certain Development Financing Agreement dated
effective as of May _____, 1998 by and between Lessee, AEI Real
Estate Fund XVIII Limited Partnership ("Lessor"). The amounts
requested have been or will be used to pay the items identified
on Exhibit "A" attached hereto and made a part hereof.
After payment of the amounts requested herein, the balance
of undisbursed Development Financing proceeds of
$_____________________ will be sufficient to complete
construction and pay all related project costs currently known
and approved by Lessor. In the event of cost overruns which
cannot be accounted for by re-allocation among line items, ▇▇▇▇▇▇
agrees to contribute the necessary equity to complete
construction pursuant to Development Financing Agreement and
Development Financing Disbursement Agreement.
All representations and warranties made by the Lessee in the
Development Financing Documents (as defined in the Development
Financing Agreement) are true and correct as of the date hereof
and Lessee is not in default of any of the provisions thereof.
The total cost of the items for which Lessor is funding is
estimated to be $1,490,000. To date, $______________(exclusive
of this request) has been disbursed pursuant to the Development
Financing Disbursing Agreement.
Dated:______________________________
Lessee:
Tumbleweed, LLC., a Kentucky
Limited Liability Company
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its: Executive VP & CFO
Lessee
Exhibit D-1
DRAW REQUEST CERTIFICATE
This Certificate made by Tumbleweed, LLC.("Lessee").
RECITALS
WHEREAS, Lessee and AEI Real Estate Fund XVIII Limited
Partnership("Lessor") have entered into a Development Financing
Agreement dated effective as of May , 1998 (the
"Development Financing Agreement") pursuant to which Lessor
agreed to loan $1,490,000 to Lessee for the purpose of
constructing a Tumbleweed Restaurant on certain real property
described on Exhibit "A" attached to the Development Financing
Agreement ("Project"); and
WHEREAS, ▇▇▇▇▇▇ and Contractor have entered into a contract
dated , 1998, ("Construction Contract"); and
WHEREAS, the Development Financing Agreement requires the
submission to Escrowee and Lessor of this Certificate prior to
the advancement of any loan proceeds under the Development
Financing Agreement.
NOW, THEREFORE, Lessee does hereby certify to Escrowee and
Lessor as follows:
1. This Draw Request for the period from
____________________________, 1998 to _____________________,
1998, showing work completed to date of $
and requesting a current payment of $________________________
relates to costs incurred pursuant to the Construction Contract,
and other line items, all as shown on the Development Financing
Budget attached to the Development Financing Agreement, and are
costs only pertaining to the Project and are included in the
Development Financing Agreement.
2. As of the date of this Draw Request, the balance
remaining due for all costs under the Construction Contract,
including retainage and approved change orders, to complete the
Project after receipt of payments requested herein will be
$________________.
3. As of the date of this Draw Request, the remaining
balance due on the Development Financing Agreement as set forth
above is sufficient to complete the Project in accordance with
the Plans and Specifications (as defined in the Development
Financing Agreement) to the degree set forth by the Development
Financing Agreement.
4. That all work covered by this Draw Request has been
completed in accordance with the Construction Contract, Plans and
Specifications, and any amendments thereto approved by Lessor.
5. That all work completed to date conforms to the
Construction Contract, Plans and Specifications, and any
amendments thereto approved by Lessor.
6. That all funds previously disbursed for costs incurred
pursuant to the Construction Contract under the Development
Financing Agreement have been applied as provided in all previous
Draw Request Certificates.
7. That as of the date hereof, to the best of ▇▇▇▇▇▇'s
knowledge after due inquiry, the Project complies with the
requirements of all zoning and building laws, ordinances,
regulations and permits; the requirements of all governmental
agencies having jurisdiction over the Project; and there is no
action or proceeding pending before any court or administrative
agency with respect to such laws, ordinances, regulations and/or
any certifications or permits issued thereunder.
Dated this ______ day of ____________________, 1998.
Lessee: Tumbleweed, LLC.
By:
Its
STATE OF )
)ss.
COUNTY OF )
I, _______________________________________________, a Notary
public of the said State and County do hereby certify that
_________________________________________ personally appeared
before me this day and he is the ____________________________ of
Tumbleweed, LLC., and that by authority duly given and as the act
of the corporation, the foregoing instrument was signed in its
name by its _______________________________, on behalf of said
limited liability company.
Witness my hand and official stamp or seal, this ______ day of
_________________, 1998.
_____________________________
____________
My commission expires:________ Notary Public
CONTRACTOR AND ARCHITECT
Exhibit D-2
DRAW REQUEST CERTIFICATE
This Certificate made by
,("Contractor"), AND
("Architect").
RECITALS
WHEREAS, Tumbleweed, LLC. ("Lessee") and AEI Real Estate
Fund XVIII Limited Partnership ("Lessor") have entered into a
Development Financing Agreement dated effective as of May ,
1998 (the "Development Financing Agreement") pursuant to which
Lessor agreed to advance $1,490,000 to Lessee for the purpose of
constructing a Tumbleweed Restaurant on certain real property
described on Exhibit "A" attached to the Development Financing
Agreement ("Project"); and
WHEREAS, ▇▇▇▇▇▇ and Contractor have entered into a contract
dated , 1998, ("Construction Contract"); and
WHEREAS, ▇▇▇▇▇▇ and Architect have entered into a contract
dated , 1998, ("Architect Contract"); and
WHEREAS, the Development Financing Agreement requires the
submission to Escrowee and Lessor of this Certificate prior to
the advancement of any loan proceeds under the Development
Financing Agreement.
NOW, THEREFORE, Contractor and Architect do hereby certify
to Escrowee and Lessor as follows:
1. This Draw Request for the period from
____________________________, 1998 to _____________________,
1998, showing work completed to date of $
and requesting a current payment of $________________________
relates to costs incurred pursuant to the Construction Contract,
and are costs only pertaining to the Project.
2. As of the date of this Draw Request, the balance
remaining due for all costs under the Construction Contract,
including retainage and approved change orders, to complete the
Project after receipt of payments requested herein will be
$________________.
3. As of the date of this Draw Request, the remaining
balance due on the Construction Contract as set forth above is
sufficient to complete the Project in accordance with the Plans
and Specifications (as defined in the Construction Contract) to
the degree set forth by the Construction Contract.
4. That all work covered by this Draw Request has been
completed in accordance with the Construction Contract, Plans and
Specifications, and any amendments thereto approved by Lessor.
5. That each subcontractor or materialmen for which payment
is requested in this Draw Request has satisfactorily completed
the work or furnished materials for which payment is requested in
accordance with the Construction Contract.
6. That all work completed to date conforms to the
Construction Contract, Plans and Specifications, and any
amendments thereto approved by Lessor.
7. That all funds previously disbursed for costs incurred
pursuant to the Construction Contract have been applied as
provided in all previous Draw Request Certificates.
8. That as of the date hereof, to the best of Contractor's
and Architect's knowledge after due inquiry, the Project complies
with the requirements of all zoning and building laws,
ordinances, regulations and permits; the requirements of all
governmental agencies having jurisdiction over the Project; and
there is no action or proceeding pending before any court or
administrative agency with respect to such laws, ordinances,
regulations and/or any certifications or permits issued
thereunder.
Dated this ______ day of ____________________, 1998.
CONTRACTOR:
By:
Its:
ARCHITECT:
By:
Its:
STATE OF )
)ss.
COUNTY OF )
I, _______________________________________________, a Notary
public of the said State and County do hereby certify that
_________________________________________ personally appeared
before me this day and he is the ____________________________ of
, a corporation, and that by authority duly
given and as the act of the corporation, the foregoing instrument
was signed in its name by its _______________________________, on
behalf of said corporation.
Witness my hand and official stamp or seal, this ______ day of
_________________, 1998.
_____________________________
____________
My commission expires:________ Notary Public
STATE OF )
)ss.
COUNTY OF )
I, _______________________________________________, a Notary
public of the said State and County do hereby certify that
_________________________________________ personally appeared
before me this day and he is the ____________________________ of
, a corporation, and that by authority duly
given and as the act of the corporation, the foregoing instrument
was signed in its name by its _______________________________, on
behalf of said corporation.
Witness my hand and official stamp or seal, this ______ day of
_________________, 1998.
_____________________________
____________
My commission expires:________ Notary Public
EXHIBIT `H'
FORM OF
DEVELOPMENT FINANCING DISBURSEMENT AGREEMENT
DEVELOPMENT FINANCING DISBURSEMENT AGREEMENT
THIS AGREEMENT, made and entered into effective as of this
day of May, 1998, by and among Tumbleweed, LLC (hereinafter
referred to as the "Lessee"), Lawyers Title Insurance Corporation
- Construction Disbursement Department (hereinafter referred to
as "LTIC-CDD" or "Title"), and AEI Real Estate Fund XVIII Limited
Partnership, a Minnesota limited partnership whose corporate
general partner is AEI Fund Management XVIII, Inc., a Minnesota
corporation; whose principal business address is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ (hereinafter collectively referred to as the "Lessor").
WITNESSETH:
WHEREAS, the Lessor and Lessee have entered into that
certain Net Lease Agreement and that certain Development
Financing Agreement of even date herewith (hereinafter referred
to as the "Lease" or the "Development Financing Agreement")
pursuant to which Lessor has agreed to make advances to the
Lessee in the aggregate principal amount of up to and including
$1,490,000 upon the terms and conditions therein set forth; and
WHEREAS, LTIC-CDD acknowledges receipt of an executed copy
of the Development Financing Agreement for the reference purposes
as specifically cross-referenced herein; and
WHEREAS, the Lessor desires that LTIC-CDD disburse the
advances made by the Lessor under the Development Financing
Agreement, and LTIC-CDD is willing to do so, on the terms and
subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the terms of the Lease
and the Development Financing Agreement and other good and
valuable consideration, the receipt and the sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
1. For purposes of this Agreement, unless the context
otherwise requires, all words used herein which are
defined in the Development Financing Agreement shall
have the same meaning as is given to them in the
Development Financing Agreement.
2. At the request of the Lessee, the Lessor will
deposit with LTIC-CDD from time to time undisbursed
proceeds of the Development Financing.
3. LTIC-CDD is authorized and directed to disburse
the funds deposited hereunder to:
a. Pay costs of construction of the
improvements to be erected on the above leased
premises.
b. Obtain releases and satisfaction of
liens and other encumbrances, if any, pursuant to
statements of amounts due which must be approved
by the Lessor.
4. The Inspecting Architect, if any, is to be
selected by Lessor at Lessor's option and the General
Contractor is to be a contractor selected by ▇▇▇▇▇▇,
licensed to do business in the state wherein the Leased
Premises are located and selected by ▇▇▇▇▇▇.
5. Prior to the first disbursement of funds
hereunder, it is a requirement of this Agreement that
LTIC-CDD be furnished:
a. A sworn Lessee statement disclosing the
various contracts entered into by the Lessee and
setting forth the names (when under contract) of
the contractors, their addresses, work or
materials to be furnished, amounts of the
contracts (if in excess of $5,000), amounts paid
to date and balance due and the names of all
parties who have furnished a Notice to Furnishing
pursuant to applicable Ohio Statute and copies of
said notice;
b. A sworn General Contractor's statement
setting forth in detail all contractors and
material suppliers with whom it has contracted to
date for or in connection with the improvements to
the Leased Premises, their addresses, work or
materials to be furnished, amounts of the
contracts (if in excess of $5,000), amounts paid
to date, and balance due and the names of all
parties who have furnished a Notice of Furnishing
pursuant to applicable Ohio Statute and copies of
said notice;
c. An approval by the Lessor for the
purposes of loan disbursement of the General
Contractor's statement and the Lessee's statement,
which are provided at 5.a. and 5.b. above.
d. Copies of the contracts with the
Architect, General Contractor and any other
construction contracts required by LTIC-CDD.
6. Prior to each disbursement of funds hereunder, it
is a requirement of this Agreement that LTIC-CDD be
furnished:
a. An Application for Payment in the form
attached to the Development Financing Agreement as
Exhibit "C".
b. A Draw Request Certificate in the form attached to
the Development Financing Agreement as Exhibit "D".
c. Sufficient funds to cover the requested
disbursements, and to pay for extras or change
orders for which waivers have not been deposited
and for which funds have not previously been
deposited.
d. Sufficient funds to cover unpaid title
and escrow charges.
e. Statements, waivers, affidavits,
supporting waivers and releases of lien (if
necessary) satisfactory to LTIC-CDD and Lessor.
f. Approval of Lessor of the relevant
Application for Payment.
g. Updated Sworn Lessee Statement as set
forth in paragraph 5(a) above.
h. Updated Sworn Contractors Statement as
set forth in paragraph 5 (b) above.
7. Not later than five (5) business days following
receipt of the documents delivered to it pursuant to
Paragraph 6, LTIC-CDD will orally notify the Lessor (i)
whether the delivered documents are satisfactory to it
and (ii) whether it has received lien waivers from all
contractors who should have been paid by it from the
proceeds of the disbursement made in response to the
previous Application for Payment. If waivers are
missing, LTIC-CDD will promptly advise Lessor and
Lessee, in reasonable detail, of the deficiency or
missing lien waivers, as the case may be. If such
deficiency is corrected to the reasonable satisfaction
of the Lessor, or if missing lien waivers are furnished
to LTIC-CDD, or if the Lessor is initially notified by
LTIC-CDD that the documents delivered to it are
satisfactory and that such lien waivers have been
delivered by it, the Lessor will (on the requested date
of disbursement) transmit to LTIC-CDD the amount of the
disbursement applied for in the relevant Application
for Payment, less an amount sufficient to pay interest
on the Note and fees of the Inspector/Architect, if
any, which have accrued and are payable in connection
with the relevant Application for Payment, by transfer
of such funds to LTIC-CDD for deposit in LTIC-CDD's
Account.
8. Upon receiving the funds transmitted by Lessor
pursuant to Paragraph 7, LTIC-CDD will pay the Lessee
and\or Contractor directly the amount in the relevant
Application for Payment under the terms and conditions
described herein, or, if less because Lessee Equity is
required to bring the Development financing into
balance as set forth in the Development Financing
Agreement, the amount approved by the Lessor. If
direct disbursements are required by Lessor to the
parties disclosed in the Application for Payment as
being entitled to receive payment, a sworn statement
from the Lessee and\or Contractor must be furnished
disclosing all parties to be paid and the amount to be
paid. Direct disbursements will be undertaken only the
written direction to do so from Lessor. If, for any
reason any of said funds on deposit in LTIC-CDD's
account are not disbursed by LTIC-CDD by the close of
business on the twelfth (12) business day following
credit of funds to its accounts, (if not sooner
requested to do so by Lessee) LTIC-CDD will forthwith
remit to the Lessor, in immediately available funds,
the amount of the funds in such account that were not
so disbursed. LTIC-CDD shall not be liable to Lessor
for interest on the funds deposited with it, except and
to the extent that LTIC-CDD fails to remit to Lessor
undisbursed funds deposited with it in accordance with
this Paragraph 8, in which event interest shall be at
the rate provided in the Note and shall be payable on
demand.
9. LTIC-CDD will keep and maintain, at all times,
full, true and accurate books and records, in
sufficient detail to reflect the disbursements made by
it hereunder. The Lessor may during normal business
hours, examine all books and records of LTIC-CDD
pertaining to disbursements made by it hereunder and
make extracts therefrom and copies thereof.
10. As LTIC-CDD makes a partial disbursement of
Development Financing Proceeds hereunder, it will cause
Title to furnish the Lessor the following:
ALTA down-date endorsement and upon
final advance, deletion of pending disbursement
clause.
11. Prior to the final disbursement of funds
hereunder, it is a requirement of this Agreement that
LTIC-CDD furnish to Lessor a Commitment for a ALTA
Owner's Policy of Title Insurance prepared by LTIC-CDD
(also referred to as "Title") subject to the usual
terms, conditions and exceptions contained in that form
of policy, exceptions approved by ▇▇▇▇▇▇ and together
with the coverages required by the Lessor.
12. If at any time during the course of construction,
the total of the unpaid disclosed cost of the
construction as indicated by the column totals on the
general contractor's sworn statement exceeds the amount
of the undisbursed Development Financing Proceeds, as
calculated by subtracting the total amount of the
liability taken on the endorsement from the face amount
of the Development Financing, and the Development
Financing Balance shall be insufficient, in Lessor's
reasonable opinion, as set forth in Article VII,
paragraph 3, of the Development Financing Agreement, to
complete the Project, LTIC-CDD need not make further
disbursements under the terms of this Agreement until
the Lessee has deposited the sum necessary to make the
available funds equal to the unpaid disclosed cost of
construction, or unless specifically directed to do so
by ▇▇▇▇▇▇. Also, if LTIC-CDD discovers a material
misstatement in an affidavit furnished by the general
contractor or the Lessee, it may stop disbursement
until the misstatement has been corrected. No
liability is assumed by LTIC-CDD to the Lessee as
regards protection against mechanic's lien claims.
13. The functions and duties assumed by LTIC-CDD
include only those described in this Agreement and LTIC-
CDD is not obligated to act except in accordance with
the terms and conditions of this Agreement. LTIC-CDD
does not insure that the building will be completed,
nor does it insure that the building when completed
will be in accordance with the plans and
specifications, nor that sufficient funds will be
available for the completion, nor does it make the
certifications of the Inspector/Architect its own, nor
does it assume any liability for same other than
procurement as one of the conditions precedent to each
disbursement.
14. The Lessee shall pay all reasonable title and
escrow charges as they are determined. These items are
to be considered as a cost of construction for purposes
of Paragraph 8.
15. At any time prior to its commitment of
disbursement of funds hereunder, LTIC-CDD reserves the
right to decline any risk offered for insurance
hereunder, whereupon it shall return to Lessor any
documents in its possession relating to such loan and
the funds received by it. Commencement of disbursement
makes this Agreement effective as to all funds that are
received and disbursed on the construction in question.
16. Where, after first disbursement, a further title
search reveals a subsequently arising exception over
which Title is unwilling to insure, LTIC-CDD will
notify Lessor and may discontinue disbursement until
the exception has been disposed of to its reasonable
satisfaction.
17. LTIC-CDD has no liability for loss caused by an
error in the certification furnished it hereunder as to
work in place.
18. LTIC-CDD shall not be responsible for any loss of
documents or funds while such documents or funds are
not in its custody. Documents or funds which are
deposited in the United States mail shall not be
construed as being in the custody of LTIC-CDD.
19. This Agreement shall be binding upon the parties
hereto and their respective successors and assigns;
provided, however, that LTIC-CDD may not assign its
duties hereunder without the prior written consent of
the Lessor and ▇▇▇▇▇▇.
20. This Agreement can be amended or modified only by
a writing signed by the parties hereto.
21. For the Final requisition of construction funds
the Contractor, in addition to the requirement for the
submission of a final Draw Request, shall furnish a
Final Contractors Affidavit stating that all parties
furnishing labor service or materials have been paid in
full along with Final Waivers of Lien from all parties
furnishing Notice of Furnishing and the Contractor. If
the fact be otherwise, the affidavit must show the name
of each party who has not been paid in full and the
amount due. Final Payment will then be made to the
Lessee or to those parties submitting Final Waivers,
when Final Waivers are submitted from the parties
requesting payment set forth in the Final Affidavit and
a Final Waiver of ▇▇▇▇ is furnished by the Contractor
or Sub-Contractor. If Final Waivers are not available,
LTIC-CDD shall not disburse any funds until it receives
joint directions in writing to fund from the Lessee and
Lessor as well as sufficient funds to make each
disbursement.
22. LTIC-CDD may satisfy its obligation hereunder as
to any construction lien for which it may be liable due
to its failure to follow the instructions herein by
bonding off the claim of lien in accordance with
applicable Ohio Statute.
23. LTIC-CDD shall have no responsibility to a)
inspect the construction site; b) for claims of liens
not disclosed by the lessees or contractor statement;
c) to see that the improvements are constructed in
accordance with the plans and specifications, or that
said improvements are constructed, or that sufficient
funds are available for completion;
24. The Lessee covenants and agrees to promptly secure
the necessary recordable lien release or transfer any
construction lien filed on the Property to surety or
cash bond as further provided by Ohio Statutes as same
relates to construction liens.
25. In consideration of, among other things, LTIC-CDD
entering into this Agreement, ▇▇▇▇▇▇ indemnifies and
saves LTIC-CDD harmless from any and all losses, costs,
damages, expenses and liabilities, including attorneys
fees, which may incur under this agreement, arising
from any construction liens or from the breach of any
warranty or covenant made to LTIC-CDD by ▇▇▇▇▇▇, or any
person claiming by, through, or under it.
26. Nothing contained in this Agreement shall in any
way limit or diminish the obligations of the Lessee or
Contractor nor the rights of the Lessor as may be
contained in any Development Financing Agreement
between the parties.
27. LTIC-CDD has no responsibility for determining
whether Lessee or Contractor is in compliance with the
terms of any Agreement with the Lessor, nor shall LTIC-
CDD be responsible for the failure of either party to
perform under such agreement. The funding of any
Development Financing Proceeds to LTIC-CDD shall be
deemed ▇▇▇▇▇▇'s direction to LTIC-CDD to Disburse.
28. Prior to the actual disbursement of funds by LTIC-
CDD, pursuant to this Agreement, LTIC-CDD will make a
record title search. If any intervening recorded
instruments appear of record, LTIC-CDD will advise
▇▇▇▇▇▇ and ▇▇▇▇▇▇ of the same. No disbursements will
be made until the matter is removed from the record or
until LTIC-CDD shall receive from the Lessor written
approval to disburse and to reflect the instruments or
instrument in the endorsement to be issued.
29. LTIC-CDD will execute this Agreement only upon the
condition that the Deed conveying title to Lessor will
be recorded prior to the recording of a Notice of
Commencement.
30. Counterpart Execution. This Agreement may be
executed in multiple counterparts, each of which shall
be deemed an original and all of which shall constitute
one and the same instrument.
Tumbleweed, LLC, a Kentucky Limited
Liability Company
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its: Executive VP & CFO
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
Its President
LAWYERS TITLE INSURANCE COMPANY
CONSTRUCTION DISBURSEMENT DEPARTMENT
By
Its
[Remainder of page intentionally left blank - signature pages on
following pages]
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
By: AEI Fund Management XVIII, Inc.
By:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
Development Financing Disbursement Agreement, Tumbleweed,
Columbus, Ohio
EXHIBIT "I"
FORM OF
NET LEASE AGREEMENT
NET LEASE AGREEMENT
THIS LEASE, made and entered into effective as of the
day of May, 1998, by and among AEI Real Estate Fund XVIII Limited
Partnership, a Minnesota limited partnership whose corporate
general partner is AEI Fund Management XVIII, Inc., a Minnesota
corporation ("Fund XVIII"), whose principal business address is
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter collectively referred to as
"Lessor"), and Tumbleweed, LLC., a Kentucky limited liability
company (hereinafter referred to as "Lessee"), whose principal
business address is ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇;
WITNESSETH:
WHEREAS, Lessor is the fee owner of a certain parcel of real
property and improvements located at East Broad Street, Columbus,
Ohio, and legally described in Exhibit "A", which is attached
hereto and incorporated herein by reference; and
WHEREAS, ▇▇▇▇▇▇ will be constructing the building and
improvements (together the "Building") on the real property
described in Exhibit "A", which Building is described in the
plans and specifications heretofore submitted to Lessor; and
WHEREAS, Lessee desires to lease said real property and
Building (said real property and Building hereinafter referred to
as the "Leased Premises"), from Lessor upon the terms and
conditions hereinafter provided;
NOW, THEREFORE, in consideration of the Rents, terms,
covenants, conditions, and agreements hereinafter described to be
paid, kept, and performed by ▇▇▇▇▇▇, 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
May , 1998 ("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 request of either party, a short form or
memorandum of this Lease will be executed for recording purposes.
That short form or memorandum of this Lease will set forth the
actual occupancy and termination dates of the Term and optional
Renewal Terms, as defined in Article 28 hereof, and the existence
of any right of renewal, and that said right shall terminate when
the Lessee shall lose right to possession or this Lease is
terminated, whichever occurs first.
ARTICLE 3. CONSTRUCTION OF IMPROVEMENTS
(A) Lessee warrants and agrees that the Building will be
constructed on the Leased Premises, and all other improvements to
the land, including the parking lot, approaches, and service
areas, will be constructed in all material respects by Lessee
substantially in accordance with the plot, plans, and
specifications heretofore submitted to Lessor.
(B) Lessee warrants that the Building and all other
improvements to the land contemplated do comply with the laws,
ordinances, rules, and regulations of all state and local
governments.
(C) Lessee agrees to pay, if not already paid in full, for
all architectural fees and actual construction costs relating to
the Building and other related improvements on the Leased
Premises, in the past, present or future, which shall include,
but not be limited to, plans and specifications, general
construction, carpentry, electrical, plumbing, heating,
ventilating, air conditioning, decorating, equipment
installation, outside lighting, curbing, landscaping,
blacktopping, electrical sign hookup, conduit and wiring from
building, fencing, and parking curbs, builder's risk insurance
(naming Lessor, Lessee, and contractor as co-insured), and all
construction bonds for improvements made by or at the direction
of ▇▇▇▇▇▇.
(D) Opening for business in the Leased Premises by Lessee
shall constitute an acceptance of the Leased Premises and an
acknowledgment by ▇▇▇▇▇▇ that the premises are in the condition
described under this Lease.
ARTICLE 4. RENT PAYMENTS
(A) Annual Rent Payable for the first Lease Year:
Lessee shall pay to Lessor an annual Base Rent of $
, which amount shall be payable in advance on the first
day of each month in equal monthly installments of $
to Lessor Fund XVIII. If the first day of the Lease
Term is not the first day of a calendar month, then the
monthly Rent payable for that partial month shall be a
prorated portion of the equal monthly installment of
Base Rent.
(B) Annual Rent Payable beginning in the second and
each Lease Year thereafter:
1. In the second and each Lease Year
thereafter, the annual Base Rent due and payable
shall increase by an amount equal to the lesser
of: a) Two Percent (2%) of the Base Rent payable
for the immediately prior Lease Year, or b) A
percentage equal to two times the "CPI-U
Percentage Increase" of the Base Rent payable for
the prior Lease Year.
"CPI-U" shall mean the Consumer Price
Index for All Urban Consumers, (all items),
published by the United States Department of
Labor, Bureau of Labor Statistics (BLS) (1982-84
equal 100), U.S. Cities Average, or, in the event
said index ceases to be published, by any
successor index recommended as a substitute
therefor by the United States Government or a
comparable, nonpartisan substitute reasonably
designated by Lessor. If the BLS changes the base
reference period for the Price Index from 1982-
84=100, the CPI-U Percentage Increase shall be
determined with the use of such conversion formula
or table as may be published by the BLS.
The term "CPI-U Percentage Increase"
shall mean the percentage increase in the CPI-U
determined by reference to the increase, if any,
in the latest monthly CPI-U issued prior to the
first day of the Lease Year for which Base Rent is
being increased, over the CPI-U issued for the
same month in the year prior (e.g., the January
CPI-U for the year 2000 over the January CPI-U for
the year 1999.) Said month's CPI-U shall be used
even though that CPI-U will not be for the month
in which the renewal term commences. In no event
shall the CPI-U Percentage Increase be less than
zero.
(C) Overdue Payments.
Lessee shall pay interest on all overdue payments of Rent or
other monetary amounts due hereunder at the rate of fifteen
percent (15%) per annum or the highest rate allowed by law,
whichever is less, accruing from the date such Rent or other
monetary amounts were properly due and payable.
ARTICLE 5. INSURANCE AND INDEMNITY
(A) Lessee shall, throughout the Term or Renewal Terms, if
any, of this Lease, at its own cost and expense, procure and
maintain insurance which covers the Leased Premises and
improvements against fire, wind, and storm damage (including
flood insurance if the Leased Premises is in a federally
designated flood prone area) and such other risks (including
earthquake insurance, if the Leased Premises is located in a
federally designated earthquake zone or in an ISO high risk
earthquake zone) as may be included in the broadest form of all
risk, extended coverage insurance as may, from time to time, be
available in amounts sufficient to prevent Lessor or Lessee from
becoming a co-insurer within the terms of the applicable
policies. In any event, the insurance shall not be less than one
hundred percent (100%) of the then insurable value, with such
commercially reasonable deductibles as Lessor may reasonably
require from time to time. Additionally, replacement cost
endorsements, vandalism endorsement, malicious mischief
endorsement, waiver of subrogation endorsement, waiver of co-
insurance or agreed amount endorsement (if available), and
Building Ordinance Compliance endorsement and Rent loss
endorsements (for a period of twelve months) must be obtained.
(B) Lessee agrees to place and maintain throughout the Term
or Renewal Terms, if any, of this Lease, at Lessee's own expense,
public liability insurance with respect to Lessee's use and
occupancy of said premises, including "Dram Shop" or liquor
liability insurance, if the same shall be or become available in
the State of Ohio, with initial limits of at least $2,000,000 per
occurrence/$5,000,000 general aggregate (inclusive of umbrella
coverage), or such additional amounts as Lessor shall reasonably
require from time to time.
(C) ▇▇▇▇▇▇ agrees to notify ▇▇▇▇▇▇ in writing if ▇▇▇▇▇▇ is
unable to procure all or some part of the aforesaid insurance.
In the event Lessee fails to provide all insurance required under
this Lease, Lessor shall have the right, but not the obligation,
to procure such insurance on Lessee's behalf, following five (5)
business days written notice to Lessee of Lessor's intent to do
so (unless insurance then in place would during such period, or
already has, lapsed, in which case no notice need be given) and
Lessee may obtain such insurance during said five day period and
not then be in default hereunder. If Lessor shall obtain such
insurance, Lessee will then, within five (5) business days from
receiving written notice, pay Lessor the amount of the premiums
due or paid, together with interest thereon at the lesser of 15%
per annum or the highest rate allowable by law, which amount
shall be considered Rent payable by Lessee in addition to the
Rent defined at Article 4 hereof.
(D) All policies of insurance provided for or contemplated
by this Article can be under ▇▇▇▇▇▇'s blanket insurance coverage
and shall name Lessor, Lessor's corporate general partner, and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, individual general partner, and ▇▇▇▇▇▇ as
additional insured and loss payee, as their respective interests
(as landlord and ▇▇▇▇▇▇, respectively) may appear, and shall
provide that the policies cannot be canceled, terminated,
changed, or modified without thirty (30) days written notice to
the parties. In addition, all of such policies shall be in place
on or before the Occupancy Date and 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 maintain legible copies of any and all policies and
endorsements required herein, to be made available for Lessor's
review and photocopy upon Lessor's reasonable request from time
to time. On the Occupancy Date and no less than fifteen (15)
business days prior to expiration of such policies, Lessee shall
provide Lessor with legible copies of any and all renewal
Certificates of Insurance reflecting the above terms of the
Policies (including endorsements). ▇▇▇▇▇▇ agrees that it will
not settle any property insurance claims affecting the Leased
Premises in excess of $25,000 without Lessor's prior written
consent, such consent not to be unreasonably withheld or delayed.
Lessor shall consent to any settlement of an insurance claim
wherein Lessee shall confirm in writing with evidence reasonably
satisfactory to Lessor that Lessee has sufficient funds available
to complete the rebuilding of the Premises.
(E) ▇▇▇▇▇▇ 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
▇▇▇▇▇▇ agrees to save ▇▇▇▇▇▇ harmless from, and indemnify Lessor
against, any and all injury, loss, or damage, of whatever nature,
to any person or property caused by, or resulting from any act,
omission, or negligence of Lessee or any employee or agent of
▇▇▇▇▇▇. In addition, Lessee hereby releases Lessor from any and
all liability for any loss or damage caused by fire or any of the
extended coverage casualties, unless such fire or other casualty
shall be brought about by the intentional misconduct or
negligence of Lessor. In the event of any loss, damage, or
injury caused by the joint negligence or willful misconduct of
Lessor and Lessee, they shall be liable therefor in accordance
with their respective degrees of fault.
(F) Lessor hereby waives any and all rights that it may
have to recover from Lessee damages for any loss occurring to the
Leased Premises by reason of any act or omission of Lessee;
provided, however, that this waiver is limited to those losses
for which Lessor is compensated by its insurers, if the insurance
required by this Lease is maintained. Lessee hereby waives any
and all right that it may have to recover from Lessor damages for
any loss occurring to the Leased Premises by reason of any act or
omission of Lessor; provided, however, that this waiver is
limited to those losses for which Lessee is, or should be if the
insurance required herein is maintained, compensated by its
insurers.
ARTICLE 6. TAXES, ASSESSMENTS AND UTILITIES
(A) Lessee shall be liable and agrees to pay the charges
for all public utility services rendered or furnished to the
Leased Premises, including heat, water, gas, electricity, sewer,
sewage treatment facilities and the like, all personal property
taxes, real estate taxes, special assessments, and municipal or
government charges, general, ordinary and extraordinary, of every
kind and nature whatsoever, which may be levied, imposed, or
assessed against the Leased Premises, or upon any improvements
thereon, at any time after the Occupancy Date of this Lease for
the period prior to the expiration of the term hereof, or any
Renewal Term, if exercised.
(B) Lessee shall pay all real estate taxes, assessments for
public improvements or benefits, and other governmental
impositions, duties, and charges of every kind and nature
whatsoever which shall or may, during the term of this Lease, be
charged, laid, levied, assessed, or imposed upon, or become a
lien or liens upon the Leased Premises or any part thereof. Such
payments shall be considered as Rent paid by ▇▇▇▇▇▇ in addition
to the Rent defined at Article 4 hereof. If due to a change in
the method of taxation, a franchise tax, Rent tax, or income or
profit tax shall be levied against Lessor in substitution for or
in lieu of any tax which would otherwise constitute a real estate
tax, such tax shall be deemed a real estate tax for the purposes
herein and shall be paid by Lessee; otherwise Lessee shall not be
liable for any such tax levied against Lessor.
(C) All real estate taxes, assessments for public
improvements or benefits, water rates and charges, sewer rents,
and other governmental impositions, duties, and charges which
shall become payable for the first and last tax years of the term
hereof shall be apportioned pro rata between Lessor and Lessee in
accordance with the respective number of months during which each
party shall be in possession of the Leased Premises (or through
the expiration of the term hereof, if longer) in said respective
tax years. Lessee shall pay within 60 days of the expiration of
the term hereof ▇▇▇▇▇▇'s reasonable estimate of ▇▇▇▇▇▇'s pro-rata
share of real estate taxes for the last tax year of the term
hereof, based upon the last available tax bill. Lessor shall
give Lessee notice of such estimated pro-rata real estate taxes
no later than 75 days from the end of the term hereof. Upon
receipt of the actual statement of real estate taxes for such
prorated period, Lessor shall either refund to Lessee any over
payment of the pro-rata Lessee obligation, or shall assess and
Lessee shall pay promptly upon notice any remaining portion of
the Lessee's pro-rata obligation for such real estate taxes.
(D) Lessee shall have the right to contest or review by
legal proceedings or in such other manner as may be legal (which,
if instituted, shall be conducted solely at Lessee's own expense)
any tax, assessment for public improvements or benefits, or other
governmental imposition aforementioned, upon condition that,
before instituting such proceeding Lessee shall pay (under
protest) such tax or assessments for public improvements or
benefits, or other governmental imposition, duties and charges
aforementioned, unless such payment would act as a bar to such
contest or interfere materially with the prosecution thereof and
in such event Lessee shall post with Lessor alternative security
reasonably satisfactory to Lessor. All such proceedings shall be
begun as soon as reasonably possible after the imposition or
assessment of any contested items and shall be prosecuted to
final adjudication with reasonable dispatch. In the event of any
reduction, cancellation, or discharge, Lessee shall pay the
amount that shall be finally levied or assessed against the
Leased Premises or adjudicated to be due and payable, and, if
there shall be any refund payable by the governmental authority
with respect thereto, if Lessee has paid the expense of Lessor in
such proceedings, Lessee shall be entitled to receive and retain
the refund, subject, however, to apportionment as provided during
the first and last years of the term of this Lease.
(E) Lessor, within sixty (60) days after notice to Lessee
if Lessee fails to commence such proceedings, may, but shall not
be obligated to, contest or review by legal proceedings, or in
such other manner as may be legal, and at Lessor's own expense,
any tax, assessments for public improvements and benefits, or
other governmental imposition aforementioned, which shall not be
contested or reviewed, as aforesaid, by Lessee, and unless Lessee
shall promptly join with Lessor in such contest or review, Lessor
shall be entitled to receive and retain any refund payable by the
governmental authority with respect thereto.
(F) Lessor shall not be required to join in any proceeding
referred to in this Article, unless in Lessee's reasonable
opinion, the provisions of any law, rule, or regulation at the
time in effect shall require that such a proceeding be brought by
and/or in the name of Lessor, in which event Lessor shall upon
written request, join in such proceedings or permit the same to
be brought in its name, all at no cost or expense to Lessor.
(G) Within thirty (30) days after Lessor notifies Lessee in
writing that Lessor has paid such amount, ▇▇▇▇▇▇ shall also pay
to Lessor, as additional Rent, the amount of any sales tax,
franchise tax, excise tax, on Rents imposed by the State where
the Leased Premises are located. At Lessor's option, Lessee
shall deposit with Lessor on the first day of each and every
month during the term hereof, an amount equal to one-twelfth
(1/12) of any estimated sales tax payable to the State in which
the property is situated for Rent received by Lessor hereunder
("Deposit"). From time to time out of such Deposit Lessor will
pay the sales tax to the State in which the property is situated
as required by law. In the event the Deposit on hand shall not
be sufficient to pay said tax when the same shall become due from
time to time, or the prior payments shall be less than the
current estimated monthly amounts, then Lessee shall pay to
Lessor on demand any amount necessary to make up the deficiency.
The excess of any such Deposit shall be credited to subsequent
payments to be made for such items. If a default or an event of
default shall occur under the terms of this Lease, Lessor may, at
its option, without being required so to do, apply any Deposit on
hand to cure such default, in such order and manner as Lessor may
elect.
ARTICLE 7. PROHIBITION ON ASSIGNMENTS AND SUBLETTING; TAKE-BACK
RIGHTS
(A) Except as otherwise expressly provided in this Article,
Lessee shall not, without obtaining the prior written consent of
Lessor, in each instance:
1. assign or otherwise transfer this Lease,
or any part of ▇▇▇▇▇▇'s right, title or interest
therein, except in the event the Lease is assigned
by Tumbleweed to its successor entity in the event
of either an Initial Public Offering or Direct
Public Offering of Lessee; or
2. sublet all or any part of the Leased
Premises or allow all or any part of the Leased
Premises to be used or occupied by any other
Persons (herein defined as a Party other than
Lessee, be it a corporation, a partnership, an
individual or other entity); or
3. mortgage, pledge or otherwise encumber
this Lease, or the Leased Premises.
(B) For the purposes of this Article:
1. 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;
2. an agreement by any other Person,
directly or indirectly, to assume ▇▇▇▇▇▇'s
obligations under this Lease shall be deemed an
assignment;
3. any Person to whom ▇▇▇▇▇▇'s interest
under this Lease passes by operation of law, or
otherwise, shall be bound by the provisions of
this Article;
4. each material modification, amendment or
extension or any sublease to which Lessor has
previously consented shall be deemed a new
sublease; and
▇▇▇▇▇▇ agrees to furnish to Lessor within five (5) business
days following demand at any time such information and assurances
as Lessor may reasonably request that neither ▇▇▇▇▇▇, nor any
previously permitted sublessee or assignee, has violated the
provisions of this Article.
(C) If ▇▇▇▇▇▇ agrees to assign this Lease or to sublet all
or any portion of the Leased Premises, Lessee shall, prior to the
effective date thereof (the "Effective Date"), deliver to Lessor
executed counterparts of any such agreement and of all ancillary
agreements with the proposed assignee or sublessee, as
applicable. If ▇▇▇▇▇▇ shall fail to do so, and shall have
surrendered possession of the Leased Premises in violation of its
duty of prior notice and failed to obtain Lessor's prior consent
(if and where required herein), and, if in such event, Lessor in
its sole discretion (except as otherwise specifically limited
herein) shall not consent to a proposed sublease or assignment,
Lessor shall then have all of the following rights (in addition
to any rights Lessor may possess occasioned by ▇▇▇▇▇▇'s default
hereunder), any of which Lessor may exercise by written notice to
Lessee given within thirty (30) days after ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇'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 ▇▇▇▇▇▇'s proposed assignee or
sublessee, as the case may be, without liability whatsoever to
Lessee.
(E) Notwithstanding anything above to the contrary, ▇▇▇▇▇▇
agrees to consent to any assignment or sublease all or any
portion of the Lessee's interests herein to a franchisee or
licensee in good standing of Tumbleweed, LLC, for the Tumbleweed
restaurant concept, provided Lessor is given prior written notice
of such sublease or assignment, accompanied by a copy of such
sublease or assignment, and the consents of Lessee (such consent
to be in form and substance satisfactory to Lessor) to such
assignment or sublet, affirming their continued liability
hereunder.
Lessor agrees that its consent to any other proposed
assignment or sublet shall not be unreasonably withheld or
delayed, provided ▇▇▇▇▇▇ is given prior written notice of such
sublease or assignment, accompanied by a copy of such sublease or
assignment, and the consents of Lessee (such consent to be in
form and substance satisfactory to Lessor) to such assignment or
sublet, affirming their continued liability hereunder.
(F) Notwithstanding anything above to the contrary, the
Lessee's interest herein shall not be assignable in any manner in
accordance with the terms hereof unless and until the termination
of the Development Financing Agreement as set forth in Article 35
hereof.
ARTICLE 8. REPAIRS AND MAINTENANCE
(A) Lessee covenants and agrees to keep and maintain in
good order, condition and repair the interior and exterior of the
Leased Premises during the term of the Lease, or any renewal
terms, and further agrees that Lessor shall be under no
obligation to make any repairs or perform any maintenance to the
Leased Premises. Lessee covenants and agrees that it shall be
responsible for all repairs, alterations, replacements, or
maintenance of, including but without limitation to or of: The
interior and exterior portions of all doors; door checks and
operators; windows; plate glass; plumbing; water and sewage
facilities; fixtures; electrical equipment; interior walls;
ceilings; signs; roof; structure; interior building appliances
and similar equipment; heating and air conditioning equipment;
and any equipment owned by Lessor and leased to Lessee hereunder,
as itemized on Exhibit B attached hereto (if any) and
incorporated herein by reference; and further agrees to replace
any of said equipment when necessary. ▇▇▇▇▇▇ further agrees to
be responsible for, at its own expense, snow removal, lawn
maintenance, landscaping, maintenance of the parking lot
(including parking lines, seal coating, and blacktop surfacing),
and other similar items.
(B) If Lessee refuses or neglects to commence or complete
repairs promptly and adequately, after prior written notice as
required under Article 16(B) (except in cases of emergency to
prevent waste or preserve the safety and integrity of the Leased
Premises, in which case no notice need be given), Lessor may
cause such repairs to be made, but shall not be required to do
so, and Lessee shall pay the cost thereof to Lessor within five
(5) business days following demand. It is understood that Lessee
shall pay all expenses and maintenance and repair during the term
of this Lease. If ▇▇▇▇▇▇ is not then in default hereunder,
▇▇▇▇▇▇ shall have the right to make repairs and improvements to
the Leased Premises without the consent of Lessor if such repairs
and improvements do not exceed Fifty Thousand Dollars
($50,000.00), provided such repairs or improvements do not affect
the structural integrity of the Leased Premises. Any repairs or
improvements in excess of Fifty Thousand Dollars ($50,000.00) or
affecting the structural integrity of the Leased Premises may be
done only with the prior written consent of Lessor, such consent
not to be unreasonably withheld or delayed. All alterations and
additions to the Leased Premises shall be made in accordance with
all applicable laws and shall remain for the benefit of Lessor,
except for ▇▇▇▇▇▇'s moveable trade fixtures. In the event of
making such alterations as herein provided, ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇'s failure to make said repairs, improvements,
alterations or additions.
ARTICLE 9. COMPLIANCE WITH LAWS AND REGULATIONS
Lessee will comply with all statutes, ordinances, rules,
orders, regulations and requirements of all federal, state, city
and local governments, and with all rules, orders and
regulations of the applicable Board of Fire Underwriters which
affect the use of the improvements. Lessee will comply with all
easements, restrictions, and covenants of record against or
affecting the Leased Premises and any franchise or license
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 Lessee's business, provided that the signs
conform to law, and further provided that the sign or signs
conform specifically to the written requirements of the
appropriate governmental authorities.
ARTICLE 11. SUBORDINATION
(A) Lessor reserves the right and privilege to subject and
subordinate this Lease at all times to the lien of any mortgage
or mortgages now or hereafter placed upon ▇▇▇▇▇▇'s interest in
the Leased Premises and on the land and buildings of which said
premises are a part, or upon any buildings hereafter placed upon
the land of which the Leased Premises are a part, provided such
mortgagee shall execute its standard form, commercially
reasonable subordination, attornment and non-disturbance
agreement. 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.
(B) Lessee covenants and agrees to execute and deliver,
upon demand, such further instrument or instruments subordinating
this Lease on the foregoing basis to the lien of any such
mortgage or mortgages as shall be desired by ▇▇▇▇▇▇ and any
proposed mortgagee or proposed mortgagees, provided such
mortgagee shall execute its standard form, commercially
reasonable subordination, attornment and non-disturbance
agreement.
ARTICLE l2. CONDEMNATION OR EMINENT DOMAIN
(A) If the whole of the Leased Premises are taken by any
public authority under the power of eminent domain, or by private
purchase in lieu thereof, then this Lease shall automatically
terminate upon the date possession is surrendered, and Rent shall
be paid up to that day. If any part of the Leased Premises shall
be so taken as to render the remainder thereof materially
unusable in the opinion of a licensed third party arbitrator
reasonably approved by Lessor and Lessee, for the purposes for
which the Leased Premises were leased, then Lessor and Lessee
shall each have the right to terminate this Lease on thirty (30)
days notice to the other given within ninety (90) days after the
date of such taking. In the event that this Lease shall
terminate or be terminated, the Rent shall, if and as necessary,
be paid up to the day that possession was surrendered.
(B) If any part of the Leased Premises shall be so taken
such that it does not materially interfere with the business of
▇▇▇▇▇▇, then Lessee shall, with the use of the condemnation
proceeds to be made available by Lessor, but otherwise at
▇▇▇▇▇▇'s own cost and expense, restore the remaining portion of
the Leased Premises to the extent necessary to render it
reasonably suitable for the purposes for which it was leased.
Lessee shall make all repairs to the building in which the Leased
Premises is located to the extent necessary to constitute the
building a complete architectural unit. Provided, however, that
such work shall not exceed the scope of the work required to be
done by ▇▇▇▇▇▇ in originally constructing such building unless
Lessee shall demonstrate to Lessor's reasonable satisfaction the
availability of funds to complete such work. Provided, further,
the cost thereof to Lessor shall not exceed the proceeds of its
condemnation award, all to be done without any adjustments in
Rent to be paid by ▇▇▇▇▇▇. This lease shall be deemed amended to
reflect the taking in the legal description of the Leased
Premises.
(C) All compensation awarded or paid upon such total or
partial taking of the Leased Premises shall belong to and be the
property of Lessor without any participation by ▇▇▇▇▇▇, whether
such damages shall be awarded as compensation for diminution in
value to the leasehold or to the fee of the premises herein
leased. Nothing contained herein shall be construed to preclude
▇▇▇▇▇▇ from prosecuting any claim directly against the condemning
authority in such proceedings for: Loss of business; 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, after
reasonable notice to ▇▇▇▇▇▇, and ▇▇▇▇▇▇ agrees to allow Lessor
free access to the Leased Premises to show the premises. Upon
default by Lessee or at any time within ninety (90) days of the
expiration or termination of the Lease, ▇▇▇▇▇▇ agrees to allow
Lessor to then place "For Sale" or "For Rent" signs on the Leased
Premises. Lessor and ▇▇▇▇▇▇'s representatives shall at all times
while upon or about the Leased Premises observe and comply with
▇▇▇▇▇▇'s reasonable health and safety rules, regulations,
policies and procedures. ▇▇▇▇▇▇ agrees to indemnify and hold
Lessee, its successors, assigns, agents and employees from and
against any liability, claims, demands, cause of action, suits
and other litigation or judgements of every kind and character,
including injury to or death of any person or persons, or
trespass to, or damage to, or loss or destruction of, any
property, whether real or personal, to the extent resulting from
the negligence or willful misconduct or Lessor or Lessor's
representatives while upon or about the Leased Premises.
ARTICLE 14. EXCLUSIVE USE
(A) After the Occupancy Date, ▇▇▇▇▇▇ expressly agrees and
warrants that the Leased Premises will be used exclusively as a
Tumbleweed Restaurant or other casual dining sit-down restaurant.
In any other such case, after obtaining ▇▇▇▇▇▇'s prior written
consent, such consent not to be unreasonably withheld or delayed,
Lessee may conduct any lawful business from the Leased Premises.
▇▇▇▇▇▇ acknowledges and agrees that any other use without the
prior written consent of Lessor will constitute a default under
and a violation and breach of this Lease. Lessee agrees: To
open for business within a reasonable period of time after
completion of construction of the contemplated Improvements; to
operate all of the Leased Premises during the Term or Renewal
Terms during regular and customary hours for businesses similar
to the permitted exclusive use stated herein, unless prevented
from doing so by causes beyond ▇▇▇▇▇▇'s control or due to
remodeling; and to conduct its business in a professional and
reputable manner.
(B) If the Leased Premises are not operated as a Tumbleweed
Restaurant or other casual dining sit-down restaurant or other
permitted use hereunder, or remain closed for thirty (30)
consecutive days (unless such closure results from reasons beyond
Lessee's reasonable control) and in the event Lessee fails to pay
Rent when due or fulfill any other obligation hereunder, then
Lessee shall be in default hereunder and Lessor may, at its
option, cancel this Lease by giving written notice to Lessee or
exercise any other right or remedy that Lessor may have;
provided, however, that closings shall be reasonably permitted
for replacement of trade fixtures or during periods of repair
after destruction or due to remodeling.
ARTICLE 15. DESTRUCTION OF PREMISES
If, during the term of this Lease, the Leased Premises are
totally or partially destroyed by fire or other elements, within
a reasonable time (but in no event longer than one hundred eighty
(180) days and subject to the provisions herein below), Lessee
shall repair and restore the improvements so damaged or destroyed
as nearly as may be practical to their condition immediately
prior to such casualty. All rents payable by Lessee shall be
abated during the period of repair and restoration to the extent
that Lessor shall be compensated by the proceeds of the rent loss
insurance required to be maintained by Lessee hereunder.
Provided Lessee is not in default hereunder (and retains
according to the terms hereof the right to rebuild) with the
Lessor's prior written consent, which consent shall not be
unreasonably withheld or delayed, 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. Risk that the insurance
company shall be insolvent or shall refuse to make insurance
proceeds available shall be with Lessee. The Leased Premises
shall be so restored or rebuilt so as to be of at least equal
value and substantially the same character as prior to such
damage or destruction. If the insurance proceeds are less than
Fifty Thousand Dollars ($50,000), they shall be paid to Lessee
for such repair and restoration. If the insurance proceeds are
greater than or equal to Fifty Thousand Dollars ($50,000), they
shall be deposited by Lessee and Lessor into a customary
construction escrow at a nationally recognized title insurance
company, or at Lessee's option, with Lessor ("Escrowee") and
shall be made available from time to time to Lessee for such
repair and restoration. Such proceeds shall be disbursed in
conformity with the terms and conditions of a commercially
reasonable construction loan agreement. Lessee shall, in either
instance, deliver to Lessor or Escrowee (as the case may be)
satisfactory evidence of the estimated cost of completion
together with such architect's certificates, waivers of lien,
contractor's sworn statements and other evidence of cost and of
payments as the Lessor or Escrowee may reasonably require and
approve. If the estimated cost of the work exceeds One Hundred
Thousand Dollars ($100,000), all plans and specifications for
such rebuilding or restoration shall be subject to the reasonable
approval of Lessor.
Any insurance proceeds remaining with Escrowee after the
completion of the repair or restoration shall be paid to Lessor
to reduce the sum of monies expended by Lessor to acquire its
interest in the Lease Premises and rent hereunder shall be
reduced by 10.25% of such amount.
If the proceeds from the insurance are insufficient, after
review of the bids for completion of such improvements, or should
become insufficient during the course of construction, to pay for
the total cost of repair or restoration, Lessee shall, prior to
commencement of work, demonstrate to Escrowee and Lessor's
reasonable satisfaction, the availability of such funds necessary
to completion construction and Lessee shall deposit the same with
Escrowee for disbursement under the construction escrow
agreement.
Provided, further, that should the Leased Premises be
damaged or destroyed to the extent of fifty (50%) percent of its
value or such that Lessee cannot carry on business as a casual
dining restaurant without (in the opinion of a licensed third
party architect reasonably approved by ▇▇▇▇▇▇ and Lessee) being
closed for more than sixty (60) days (which duration of closure
may be established by Lessee by the affidavit of the approved
independent third party architect as to the estimated time of
repair) during the last two (2) years of the remaining term of
this Lease or any of the option terms of this Lease, if any
further options to renew remain, Lessee may elect within 30 days
of such damage, to then exercise at least one (1) option to renew
this Lease so that the remaining term of the Lease is not less
than five (5) years in order to be entitled to such insurance
proceeds for restoration or rebuilding. Absent such election,
this Lease shall terminate upon ▇▇▇▇▇▇'s receipt of funds at
least equal to the estimated cost of such repair or restoration.
ARTICLE 16. ACTS OF DEFAULT
Each of the following shall be deemed a default by ▇▇▇▇▇▇
and a breach of this Lease:
(A) 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 from the first date such Rent was due
and payable; provided, however, Lessee shall have
five (5) business days after written notice from
Lessor within which to cure the failure to pay the
Rent or any monetary obligation herein reserved.
(B) Failure to do, observe, keep and perform
any of the other terms, covenants, conditions,
agreements and provisions in this Lease to be
done, observed, kept and performed by 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 120 days after written
notice from Lessor of the default hereunder.
(C) The abandonment of the premises by
▇▇▇▇▇▇, the adjudication of Lessee as a bankrupt,
the making by ▇▇▇▇▇▇ 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; provided, however, that the
foregoing shall not constitute events of default
so long as Lessee continues to otherwise satisfy
its obligations (including but not limited to the
payment of Rent) hereunder.
ARTICLE 17. TERMINATION FOR DEFAULT
In the event of any uncured default by ▇▇▇▇▇▇ 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
(except where ▇▇▇▇▇▇ has exercised a right to terminate where
granted herein), preserving unto Lessor the benefit of its
bargained-for rental payments.
ARTICLE 18. ▇▇▇▇▇▇'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 ▇▇▇▇▇▇, or in the
event that the premises or any part thereof, shall be abandoned
by Lessee and Rent shall not be paid or other obligations
(including but not limited to repair and maintenance obligations)
of Lessee hereunder shall not be met, then Lessor or its agents,
servants or representatives, may immediately or at any time
thereafter, re-enter and resume possession of the premises or any
part thereof, and remove all persons and property therefrom,
either by summary dispossess proceedings or by a suitable action
or proceeding at law, or by force or otherwise without being
liable for any damages therefor, except for damages resulting
from ▇▇▇▇▇▇'s negligence or willful misconduct. Notwithstanding
anything above to the contrary, if ▇▇▇▇▇▇ is still in possession
of the Leased Premises, ▇▇▇▇▇▇ agrees to use such legal
proceedings (summary or otherwise) prescribed by law to regain
possession of the Leased Premises.
ARTICLE 19. ▇▇▇▇▇▇'S CONTINUING LIABILITY
(A) Should Lessor elect to re-enter as provided in this
Lease or should it take possession pursuant to legal proceedings
or pursuant to any notice provided for by law, Lessor shall
undertake commercially reasonable efforts to mitigate Lessee's
continuing liability hereunder as such efforts may be prescribed
by law or statute (which shall include listing the Leased
Premises with a licensed commercial real estate broker and
securing the property against waste, but shall not otherwise
include the expenditure of Lessor's funds, unless the same be
required by law or statute and cannot be waived as provided for
herein), and in addition, Lessor 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 the remainder of the
original Term or any exercised Renewal Terms, at such Rent or
Rents, and upon such other terms and conditions as Lessor in its
sole discretion may deem advisable. Termination of ▇▇▇▇▇▇'s
right to possession by Court Order shall be sufficient evidence
of the termination of ▇▇▇▇▇▇'s possessory rights under this
Lease, and the filing of such an Order shall be notice of the
termination of ▇▇▇▇▇▇'s renewal rights as set forth in any
Memorandum of Lease of record.
(B) Upon each such reletting, without termination of the
contractual obligation of Lessee to pay Rent under this Lease,
all Rents received by Lessor shall be applied as follows:
1. First, to the payment of any
indebtedness other than Rent due hereunder from
▇▇▇▇▇▇ to ▇▇▇▇▇▇;
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 ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇'s contractual
obligations under this Lease respecting the payment of rent and
obligations for the costs of repair and maintenance unless a
written notice of such intention be given to Lessee.
(C) Notwithstanding any such reletting without termination,
Lessor may at any time thereafter elect to terminate this Lease
for any uncured breach.
(D) In addition to any other remedies Lessor may have with
this Article 19, Lessor may recover from Lessee all damages it
may incur by reason of any uncured breach, including: The cost
of recovering and reletting the Leased Premises; reasonable
attorney's fees; and, the present value (discounted at a rate of
8% per annum) of the excess of the amount of Rent and charges
equivalent to Rent reserved in this Lease for the remainder of
the Term over the then reasonable Rent value of the Leased
Premises (or the actual Rents receivable by Lessor, if relet),
(the Lessee bearing the burden of proof to demonstrate the amount
of rental loss for the same period, that through reasonable
efforts to mitigate damages, could have been avoided) for the
remainder of the Term, all of which amounts shall be immediately
due and payable from Lessee to Lessor in full. In the event that
the Rent obtained from such alternative or substitute tenant is
more than the Rent which Lessee is obligated to pay under this
Lease, then such excess shall be paid to Lessor provided that
Lessor shall credit such excess against the outstanding
obligations of Lessee due pursuant hereto, if any.
(E) It is the object and purpose of this Article 19 that
Lessor shall be kept whole and shall suffer no damage by way of
non-payment of Rent or by way of diminution in Rent. ▇▇▇▇▇▇
▇▇▇▇▇▇ and will waive all rights to trial by jury in any summary
proceedings or in any action brought to recover Rent herein which
may hereafter be instituted by Lessor against Lessee in respect
to the Leased Premises. Lessee hereby waives any rights of re-
entry it may have or any rights of redemption or rights to redeem
this Lease upon a termination of this Lease.
ARTICLE 20. PERSONALTY, FIXTURES AND EQUIPMENT
(A) All building fixtures, building machinery, and building
equipment used in connection with the operation of the Leased
Premises including, but not limited to, heating, electrical
wiring, lighting, ventilating, plumbing, walk-in
refrigerators/coolers, walk-in freezers, air conditioning
systems, and the equipment owned by Lessor and leased to Lessee
hereunder as specifically set forth on Exhibit B attached hereto,
if any, and incorporated herein by reference shall be the
property of Lessor. All other trade fixtures and all other
articles of personal property owned by Lessee shall remain the
property of ▇▇▇▇▇▇.
(B) Lessee shall furnish and pay for any and all equipment,
furniture, trade fixtures, and signs, except for such items, if
any, described in Article 20(A) above, as owned by Lessor.
▇▇▇▇▇▇ agrees that Lessor shall have a lien on all Lessee's
equipment, furniture, trade fixtures, furnishings, and signs as
security for the performance of and compliance with this Lease,
subject to the rights of any bona fide third party's security
interest in such property. Provided Lessee is not in default
hereunder, ▇▇▇▇▇▇ will agree that its interest in the personal
property of Lessee will be subordinated to financing which may
exist or which Lessee may cause to exist in the future on that
same personal property.
(C) At the end of the term of this Lease, the property
described at Article 20(B) above, after written notice to Lessor
given at least ten (10) business days prior to any proposed
removal, may be removed from the Leased Premises by Lessee
regardless of whether or not such property is attached to the
Leased Premises so as to constitute a "fixture" within the
meaning of the law; however, all damages and repairs to the
Leased Premises which may be caused by the removal of such
property shall be paid for by Lessee.
ARTICLE 21. LIENS
Lessee shall not do or cause anything to be done whereby the
Leased Premises may be encumbered by any mechanic's or other
liens. Whenever and as often as any mechanic's or other lien is
filed against said Leased Premises purporting to be for labor or
materials furnished or to be furnished to Lessee, Lessee shall
remove the lien of record by payment or by bonding with a surety
company authorized to do business in the state in which the
property is located, within forty-five (45) days from the date of
the filing of said mechanic's or other lien and delivery of
notice thereof to Lessee. Should Lessee fail to take the
foregoing steps within said forty-five (45) day period (or in any
event, prior to the expiration of the time within which Lessee
may bond over such lien to remove it as a lien upon the Leased
Premises), Lessor shall have the right, among other things, to
pay said lien without inquiring into the validity thereof, and
▇▇▇▇▇▇ shall forthwith reimburse Lessor for the total expense
incurred by it in discharging said lien as additional Rent
hereunder.
ARTICLE 22. NO WAIVER BY ▇▇▇▇▇▇ 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 ▇▇▇▇▇▇. The delivery of keys to any employee of Lessor or
Lessor's agents shall not operate as a termination of the Lease
or a surrender of the premises. The failure of Lessor to seek
redress for violation of any rule or regulation, shall not
prevent a subsequent act, which would have originally constituted
a violation, from having all the force and effect of an original
violation. Neither payment by Lessee or receipt by Lessor of a
lesser amount than the Rent herein stipulated shall be deemed to
be other than on account of the earliest stipulated Rent. Nor
shall any endorsement or statement on any check nor any letter
accompanying any check or payment as Rent be deemed an accord and
satisfaction. Lessor may accept such check or payment without
prejudice to ▇▇▇▇▇▇'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 ▇▇▇▇▇▇'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 (10) business days prior request by the other party,
execute, acknowledge and deliver to the requesting party a
statement in writing, executed by an executive officer of such
party, certifying that: (a) this Lease is unmodified (or if
modified then disclosure of such modification shall be made); (b)
this Lease is in full force and effect; (c) the date to which the
Rent and other charges have been paid; and (d) to the knowledge
of the signer of such certificate that the other party is not in
default in the performance of any covenant, agreement or
condition contained in this Lease, or if a default does exist,
specifying each such default of which the signer may have
knowledge. It is intended that any such statement delivered
pursuant to this Article may be relied upon by any prospective
purchaser or mortgagee of the Leased Premises or any assignee of
such mortgagee or a purchaser of the leasehold estate.
ARTICLE 26. FINANCIAL STATEMENTS
During the term of this Lease, Lessee will, within ninety
(90) days after the end of Lessee's fiscal year, furnish Lessor
with ▇▇▇▇▇▇'s financial statements (in SEC Form 10-K, if
available). The financial statements shall be audited, at the
Lessee's expense, by a nationally recognized independent
certified public accounting firm reasonably acceptable to Lessor
and shall be prepared in conformity with generally accepted
accounting principles (GAAP). Lessee shall also provide Lessor
with financial statements for the Leased Premises within 90 days
after the end of each Lease Year. The financial statements for
the Leased Premises do not need to be prepared by an independent
certified public accountant, but shall be certified as true and
correct by the chief financial officer or other authorized
officer of Lessee. 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 ▇▇▇▇▇▇'s
financial statements (in SEC Form 10-Q if available)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 in any Lease Year. Provided, however, if
Lessee shall not commit a default for twelve consecutive months,
▇▇▇▇▇▇'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 obligations of Lessee under this
Lease or substantially modify any of the business elements of
this Lease.
ARTICLE 28. OPTION TO RENEW
If this Lease is not previously canceled or terminated and
if Lessee has materially complied with and performed all of the
covenants and conditions in this Lease after applicable cure
periods and is not currently in default, then Lessee shall have
the option to renew this Lease upon the same conditions and
covenants contained in this Lease for Two (2) consecutive
periods of Five (5) years each (singularly "Renewal Term"). Rent
during the Renewal Term shall increase each Lease Year by the
lesser of Two Percent (2%) of the Rent payable for the preceding
Lease Year, or the CPI-U Percentage Increase, as defined in
Article 4 hereof.
The first Renewal Term will commence on the day following
the date the original Term expires and successive Renewal Terms
would commence on the day following the last day of the then
expiring Renewal Term. Except as otherwise provided in Article
15 hereof, Lessee must give ninety (90) days written notice to
Lessor of its intent to exercise this option prior to the
expiration of the original Term of this Lease or any Renewal
Term, as the case may be.
ARTICLE 29. MISCELLANEOUS PROVISIONS
(A) All written notices shall be given to Lessor or Lessee
by certified mail or nationally recognized overnight mail.
Notices to either party shall be addressed to the person and
address given on the first page hereof. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ may,
from time to time, change these addresses by notifying each other
of this change in writing. Notices of overdue Rent may be sent
to Lessee by regular, special delivery, or nationally recognized
overnight mail.
(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 ▇▇▇▇▇▇ and ▇▇▇▇▇▇ and their respective
successors, heirs, legal representatives, and assigns.
(C) This Lease shall be governed by and construed under the
laws of the State where the Leased Premises are situate.
(D) In the event that any provision of this Lease shall be
held invalid or unenforceable, no other provisions of this Lease
shall be affected by such holding, and all of the remaining
provisions of this Lease shall continue in full force and effect
pursuant to the terms hereof.
(E) The Article captions are inserted only for convenience
and reference, and are not intended, in any way, to define,
limit, describe the scope, intent, and language of this Lease or
its provisions.
(F) In the event Lessee remains in possession of the
premises herein leased after the expiration of this Lease and
without the execution of a new lease and without Lessor's written
permission, Lessee shall be deemed to be occupying said premises
as a tenant from month-to-month, subject to all the conditions,
provisions, and obligations of this Lease insofar as the same can
be applicable to a month-to-month tenancy except that the monthly
installment of Rent shall be One Hundred Fifty percent (150%) the
amount due on the last month prior to such expiration.
(G) If any installment of Rent (whether lump sum, monthly
installments, or any other monetary amounts required by this
Lease to be paid by ▇▇▇▇▇▇ and deemed to constitute Rent
hereunder) shall not be paid when due, or non-monetary default
shall remain uncured after the expiration of any applicable cure
period, Lessor shall have the right to charge Lessee a late
charge of $250.00 per month for each month that any amount of
Rent installment remains unpaid or non-monetary default shall go
uncured after the first such occurrence in any 12 month period.
Said late charge shall commence after such installment is due or
non-monetary default goes uncured after the expiration of any
applicable cure period and continue until said installment,
interest and all accrued late charges are paid in full or such
non-monetary default is cured.
(H) Any part of the Leased Premises may be conveyed by
Lessor for private or public non-exclusive easement purposes at
any time, provided such easement does not interfere with the
access to the Leased Premises, visibility, or operations of the
business of Lessee. In such event Lessor shall, at its own cost
and expense, restore the remaining portion of the Leased Premises
to the extent necessary to render it reasonably suitable for the
purposes for which it was leased, all to be done without
adjustments in Rent to be paid by ▇▇▇▇▇▇. 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 ▇▇▇▇▇▇.
(J) ▇▇▇▇▇▇ agrees to cooperate with Lessor to allow ▇▇▇▇▇▇
to obtain and use at ▇▇▇▇▇▇'s expense promotional photographs of
the Leased Premises, to the extent permitted by ▇▇▇▇▇▇'s
franchisor or licensor.
ARTICLE 30. REMEDIES
NON-EXCLUSIVITY. Notwithstanding anything contained herein
it is the intent of the parties that the rights and remedies
contained herein shall not be exclusive but rather shall be
cumulative along with all of the rights and remedies of the
parties which they may have at law or equity. In the event of a
breach by ▇▇▇▇▇▇, ▇▇▇▇▇▇ shall be entitled to all remedies at law
or equity, to be cumulatively enforced.
ARTICLE 31. HAZARDOUS MATERIALS INDEMNITY
Lessee covenants, represents and warrants to Lessor, its
successors and assigns, (i) that it has not used or permitted and
will not use or permit the Leased Premises to be used, whether
directly or through contractors, agents or tenants, and to the
best of Lessee's knowledge and except as disclosed to Lessor in
writing, the Leased Premises has not at any time been used for
the generating, transporting, treating, storage, manufacture,
emission of, or disposal of any dangerous, toxic or hazardous
pollutants, chemicals, wastes or substances as defined in the
Federal Comprehensive Environmental Response Compensation and
Liability Act of 1980 ("CERCLA"), the Federal Resource
Conservation and Recovery Act of 1976 ("RCRA"), or any other
federal, state or local environmental laws, statutes,
regulations, requirements and ordinances ("Hazardous Materials");
(ii) that there have been no investigations or reports involving
Lessee, or the Leased Premises by any governmental authority
which in any way pertain to Hazardous Materials (iii) that the
operation of the Leased Premises has not violated and is not
currently violating any federal, state or local law, regulation,
ordinance or requirement governing Hazardous Materials; (iv) that
the Leased Premises is not listed in the United States
Environmental Protection Agency's National Priorities List of
Hazardous Waste Sites nor any other list, schedule, log,
inventory or record of Hazardous Materials or hazardous waste
sites, whether maintained by the United States Government or any
state or local agency; and (v) that the Leased Premises will not
contain any formaldehyde, urea or asbestos, except as may have
been disclosed in writing to Lessor by ▇▇▇▇▇▇ at the time of
execution and delivery of this Lease. ▇▇▇▇▇▇ agrees to indemnify
and reimburse Lessor, its successors and assigns, for:
(a) any breach of these representations and warranties, and
(b) any loss, damage, expense or cost arising out of
or incurred by ▇▇▇▇▇▇ which is the result of a breach
of, misstatement of or misrepresentation of the above
covenants, representations and warranties, and
(c) any and all liability of any kind whatsoever which
Lessor may, for any cause and at any time, sustain or
incur by reason of Hazardous Materials discovered on
the Leased Premises during the term hereof or placed or
released on the Leased Premises by ▇▇▇▇▇▇;
together with all attorneys' fees, costs and disbursements
incurred in connection with the defense of any action against
Lessor arising out of the above. These covenants,
representations and warranties shall be deemed continuing
covenants, representations and warranties for the benefit of
Lessor, and any successors and assigns of Lessor and shall
survive expiration or sooner termination of this Lease. The
amount of all such indemnified loss, damage, expense or cost,
shall bear interest thereon at the lesser of 15% or the highest
rate of interest allowed by law and shall become immediately due
and payable in full on demand of Lessor, its successors and
assigns.
ARTICLE 32. ESCROWS
Upon a default by Lessee which is uncured after the
expiration of any applicable notice and cure period, or upon the
request of Lessor's Mortgagee, if any, Lessee shall deposit with
Lessor on the first day of each and every month, an amount equal
to one-twelfth (1/12th) of the estimated annual real estate
taxes, assessments and insurance (if the insurance is to be
purchased by Lessor) ("Charges") due on the Leased Premises, or
such higher amounts reasonably determined by Lessor as necessary
to accumulate such amounts to enable Lessor to pay all charges
due and owing at least thirty (30) days prior to the date such
amounts are due and payable. From time to time out of such
deposits Lessor will, upon the presentation to Lessor by ▇▇▇▇▇▇
of the bills therefor, pay the Charges or at Lessee's option,
will upon presentation of receipted bills therefor, reimburse
Lessee for such payments made by ▇▇▇▇▇▇. In the event the
deposits on hand shall not be sufficient to pay all of the
estimated Charges when the same shall become due from time to
time or the prior payments shall be less than the currently
estimated monthly amounts, then Lessee shall pay to Lessor on
demand any amount necessary to make up the deficiency. The
excess of any such deposits shall be credited to subsequent
payments to be made for such items. If a default or an event of
default shall occur under the terms of this Lease, Lessor may, at
its option, without being required so to do, apply any Deposit on
hand to cure the default, in such order and manner as Lessor may
elect.
ARTICLE 33. NET LEASE
Notwithstanding anything contained herein to the contrary it
is the intent of the parties hereto that this Lease shall be a
net lease and that the Rent defined pursuant to Article 4 should
be a net Rent paid to Lessor. Any and all other expenses
including but not limited to, maintenance, repair, insurance,
taxes, and assessments, shall be paid by Lessee.
ARTICLE 34. DEVELOPMENT FINANCING AGREEMENT
The parties hereto hereby acknowledge that the terms hereof
are subject to and shall in the event of conflicts be controlled
by that certain Development Financing Agreement of even date
herewith, until such Agreement is terminated in accordance with
its terms.
ARTICLE 35. COUNTERPART EXECUTION
This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original and all of which shall
constitute one and the same instrument.
IN WITNESS WHEREOF, ▇▇▇▇▇▇ and ▇▇▇▇▇▇ have respectively
signed and sealed this Lease as of the day and year first above
written.
LESSEE: Tumbleweed, LLC.
Witness
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ Its: Executive VP & CFO
Print Name
Witness
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
Print Name
Witness
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ Its: President
Print Name
Witness
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
Print Name
STATE OF Kentucky )
)SS.
COUNTY OF Jefferson)
The foregoing instrument was acknowledged before me this
22nd day of April, 1998, by ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, as Executive VP &
CFO of Tumbleweed, LLC. on behalf of said limited liability
company.
/s/ ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Notary Public
[notary seal]
STATE OF Kentucky)
)SS.
COUNTY OF Jefferson)
The foregoing instrument was acknowledged before me this
22nd day of April, 1998, by ▇▇▇▇ ▇▇▇▇▇▇▇, as President of
Tumbleweed, LLC. on behalf of said limited liability company.
/s/ ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Notary Public
[notary seal]
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
By: AEI Fund Management XVIII, Inc.
Witness
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
Print Name
Witness
Print Name
STATE OF MINNESOTA )
)SS.
COUNTY OF ▇▇▇▇▇▇ )
The foregoing instrument was acknowledged before me the
day of May, 1998, by , the
of AEI Fund Management XVIII, Inc., a Minnesota corporation,
corporate general partner of AEI Real Estate Fund XVIII Limited
Partnership, on behalf of said limited partnership.
Notary Public
EXHIBIT "J"
MATERIALS PREVIOUSLY SUBMITTED BY ▇▇▇▇▇▇