DEVELOPMENT FINANCING AND LEASING COMMITMENT
(the "Commitment")
November 3, 1999
AEI Income & Growth Fund 23 LLC, or its assigns,
("AEI"), agrees to purchase, and you, Tumbleweed, Inc,
("Lessee"), agree to lease from AEI, a parcel of land to be
located at Kettering, 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") are to be developed by you
on the Parcel after AEI's purchase of the Parcel from Center-
Plex Venture ("Seller"), which Parcel's development and
lease will be subject to the provisions and conditions
herein contained:
▇. ▇▇▇▇▇▇
Lessee Name: Tumbleweed, Inc.
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
(hereinafter, the "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 $1,372,000("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). If Seller and AEI
must enter into a tax pro-ration agreement because
the Parcel is not as of the closing designated as
a separate tax parcel, ▇▇▇▇▇▇ hereby agrees to
indemnify and hold AEI harmless from any and all
liability under said agreement or the failure of
Seller to comply with the terms thereof. Lessee
further understands that AEI may pay the taxes
upon the larger parcel of which the Parcel is a
part for tax purposes, to avoid forfeiture in the
event Seller fails to pay its proportionate share
of the entire tax liability, and that this
indemnity by Lessee shall extend to such decision
to pay the entire tax liability to avoid tax
forfeiture.
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"), an executed copy of which shall
be provided to AEI in advance of the Closing Date.
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 $12,636 (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 payable by AEI (defined in
ARTICLE D.1 hereof), including the Parcel
Development Fee, shall not exceed the approved
MAI appraised value. If the Actual Total Project
Cost shall exceed the MAI appraised value, Lessee
shall provide the necessary Lessee Equity (as
defined in the Development Financing Agreement)
and at AEI's option, shall sell the Parcel to AEI
at 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
November 15, 1999 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
Dayton, Ohio, 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"), if
the same has materially changed from Exhibit
"B" attached hereto;
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
▇▇▇▇▇▇'s Title Insurance Company located in
Dayton, Ohio (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 Managing
Member of AEI and of said assignee, and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as an Individual Managing
Member 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-quarter
percent (8.25%).
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: nine and seven-eights
percent (9.875%).
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 (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 November 8, 1999 for the terms to be
effective.
AEI Income & Growth Fund 23 LLC
By:AEI Fund Management XXI, Inc.,
Managing Member
By:/s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
STATE OF MINNESOTA )
)SS.
COUNTY OF ▇▇▇▇▇▇ )
The foregoing instrument was acknowledged before me the
12th day of November, 1999, by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
of AEI Fund Management XXI, Inc., the corporate Managing
Member of AEI Income & Growth Fund 23 LLC, on behalf of said
Limited Liability Company.
/s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Notary Public
[notary seal]
This Commitment is accepted and agreed to
this 3rd day of November, 1999.
(Lessee) Tumbleweed, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its: Executive Vice President
By: /s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
Its: VP/Secretary
STATE OF Kentucky )
) ss
COUNTY OF Jefferson )
On this 3rd day of November, 1999, 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 Vice President and
VP/Secretary of Tumbleweed, Inc.., a Delaware corporation,
on behalf of said corporation.
/s/ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
Notary Public
/s/ My commission expires 4-27-
2003
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, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Its:Executive Vice President
Attest:By: /s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
Its: VP/Secretary
Dated: November 3, 1999
EXHIBIT `A'
LEGAL DESCRIPTION
[graphic of record plan map]
Exhibit B
TUMBLEWEED, INC. KETTERING, OH
PROJECT COST BUDGET OCTOBER 27, 1999
LAND AND HARD COSTS:
Land Acquisition Cost $ 450,000.00
Building/General Construction 453,000.00
Sitework $ 175,000.00
Owner Vendors
Landscaping 13,000.00
Dimmer Panels 4,560.00
Wains Coating/Trim 13,185.00
Electrical Panels 6,200.00
Air Balance 1,600.00
Lighting 5,275.00
HVAC 19,500.00
Joists 13,230.00
Construction Contingency-10.0% 78,205.00
SUBTOTAL HARD COSTS $1,232,755.00
Soft Costs:
Survey 2,500.00
Appraisal 3,500.00
Phase I Environmental 2,500.00
Permits/TAP Fees 9,000.00
Architect/Engineering 20,750.00
Title Insurance & Closing Costs 10,000.00
Development Interest 15,500.00
Attorney's Fees- AEI
(Construction/Sale/Leaseback) 10,000.00
Attorney's Fees-Borrower
(Construction/Sale/Leaseback) 2,500.00
AEI Sale/Leaseback Commitment Fee 2% 26,640.00
AEI Credit Report Fees (Promesa) 500.00
AEI State Qualification Fees 1,500.00
AEI Site Inspection Fee 1,500.00
Tumbleweed Parcel Development Fee 12,636.00
AEI 1% Reimbursement 13,320.00
Miscellaneous 4,899.00
SUBTOTAL SOFT COSTS $ 139,245.00
TOTAL PROJECT COST $1,372,000.00
EXHIBIT "C" TO DEVELOPMENT FINANCING COMMITMENT
FINANCIAL DOCUMENTATION REQUIREMENTS
Prior to Closing, the following must be received and
approved by AEI, along with those items specified more fully
in the Development Financing and Leasing Commitment:
▇. ▇▇▇▇▇▇'s prior three (3) fiscal years' audited
financial statement prepared by a nationally
recognized independent accounting firm acceptable
to AEI.
II. ▇▇▇▇▇▇'s internally generated consolidated
financial statements for the current and fiscal
year-to-date periods. Said financial statements
shall include at a minimum, a balance sheet and
statement of income. Cash flow statements and
statements of stockholder's equity should also be
provided if available.
III. Lessee's internally generated per store annual
financial statements for the current and fiscal year-
to-date periods. Said financial statements shall
include at a minimum, a balance sheet and statement
of income. Cash flow statements and statements of
stockholder's equity should also be provided if
available.
IV. Lessee's internally generated per store financial
statements for each of its prior two (2) fiscal
periods. Said financial statements shall include at
a minimum, a balance sheet and statement of income.
Cash flow statements and statements of
stockholder's equity should also be provided if
available.
▇. ▇▇▇▇▇▇'s prior three years' federal corporate
income tax return.
VI. Pro-forma of first year's operations for the
Parcel.
VII. Itemized budget of total project cost for the
Parcel.
▇▇▇▇▇▇'s financial statements, and any additional financial
information requested by AEI shall be prepared in accordance
with current GAAP guidelines and signed by an authorized
officer, who must certify to the accuracy thereof. The
certification language must read as follows:
"THE UNDERSIGNED HEREBY CERTIFIES AND WARRANTS THAT THE
INFORMATION CONTAINED IN THESE FINANCIAL STATEMENTS IS TRUE
AND CORRECT, UNDERSTANDS THAT AEI IS RELYING UPON SUCH
INFORMATION AS AN INDUCEMENT FOR ENTERING INTO A PURCHASE
AND LEASE TRANSACTION WITH THE UNDERSIGNED, AND EXPRESSLY
REPRESENTS THAT AEI MAY RELY UPON SUCH INFORMATION."
PLEASE DIRECT ALL QUESTIONS REGARDING THE FOREGOING TO THE
PROPERTY ACQUISITIONS DEPARTMENT. THE TOLL-FREE NUMBER IS
▇▇▇-▇▇▇-▇▇▇▇.
EXHIBIT "D-l"
INSTRUCTIONS TO INSURANCE AGENT
(Construction Phase)
The following instructions will be followed with respect to
the insurance policies on the Parcel:
1. AEI shall receive a Builder's Risk insurance policy,
covering "All Risk" or "Special Cause of Loss Form" covered
perils, including collapse, mudslide or mudflow and sinkhole
collapse, in the amount of Replacement Cost. The coverage
shall include building materials and property in transit.
The deductible shall not exceed $10,000 per occurrence.
2. AEI shall receive Comprehensive General Liability
insurance from the General Contractor (which coverage shall
extend to acts while on the project of the agents or
subcontractors hired by the General contractor) to cover the
property under construction, with limits of $2,000,000 per
occurrence and $5,000,000 general aggregate. AEI shall
receive Comprehensive General Liability insurance from any
other Contractor or supplier covering the Parcel under
construction with limits of $1,000,000 per occurrence and
$3,000,000 general aggregate. These limits can be
accomplished either by underlying liability policies or by
the sum of the underlying policy plus an excess or umbrella
policy. The coverage shall include an endorsement in favor
of AEI which is ISO form CG 20 11 11 85 - "Additional
Insured - Managers Or Lessors Of Premises", or an equivalent
endorsement and shall include Broad Form Contractual
Liability coverage. The Claims Made form of coverage is not
acceptable.
3. Flood insurance shall be required, in amounts of
$500,000 unless evidence is provided that the Parcel is not
located in a designated flood area or storm surge area.
Satisfactory evidence to determine if coverage is necessary
shall be a Base Flood Elevation Certificate and/or a
National Geodetic Vertical Datum (NGDV)-National standard
reference datum for elevations, formerly referred to as mean
Sea Level (MSL) of 1929. The deductible shall not exceed
$10,000 per occurrence.
4. Earthquake insurance shall be required, in the amounts
acceptable to AEI, unless evidence is provided that the
Parcel is not located in a federally designated earthquake
prone area or is not in an ISO High Risk Earthquake Zone.
The deductible shall not exceed 10% of the coverage
provided.
5. AEI shall receive Certificates of Insurance for
Comprehensive General Liability, with limits and provisions
referred to in Item 2 above, and for Workers' Compensation
coverage, from all contractors, subcontractors, independent
contractors and suppliers who will be present on the
jobsite. Certificates of Insurance for Employer's Liability,
with limits of $500,000/$500,000/$500,000 shall also be
provided.
6. AEI shall receive Certificates of Insurance for
Business Auto Liability, from all contractors and suppliers
whose vehicles will be present on the jobsite. The coverage
limits shall be $1,000,000 combined single limit.
7. The following will be required for all insurance
policies:
a. All property policies shall name AEI as Loss Payee
and Additional Insured.
b. All liability policies shall name AEI as Additional
Insured.
c. The additional insured and loss payee clause for
property and the additional insured clause for
general liability will name the Lessor, and its
corporate Managing Member as stated on the
signature page of this document. It will also name
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ its individual Managing Member,
its successors and assigns and any other owners as
their interests may appear.
d. AEI shall receive a thirty (30) day written notice
in the event of cancellation, material amendment,
or expiration of any insurance policies. The
following words will be deleted from the
cancellation notice: "endeavor to" and "but failure
to mail such notice shall impose no obligation or
liability of any kind upon the company, its agents
or representatives".
e. ▇▇▇▇▇▇ 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 Exhibit,
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, lapse, 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.
f. ▇▇▇▇▇▇ 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.
g. All property policies shall contain Waiver of
Subrogation Endorsements waiving all rights of
subrogation, if any, against AEI as defined above.
h. All insurance companies shall be approved in
writing by AEI.
EXHIBIT "D-2"
INSURANCE REQUIREMENTS
(Post Construction)
Post Construction Insurance must be in place at a point in time
determined by the earliest of the following events:
Occupancy date, business opening or cancellation of coverage
in Exhibit "D- 1".
The following instructions will be followed with respect to
requesting insurance policies and certificates of insurance
on the Parcel:
1. An original property insurance policy for "All Risk" or
"Special Cause of Loss Form" perils, including all
exclusions and endorsements, will be required. The policy(s)
shall be written with a coverage amount of full Replacement
Cost of the parcel, including improvements. The insured
parcel shall be described by street address. In the event
that it is impossible to furnish the original policy in time
for the closing on AEI's purchase of the parcel, an
Insurance Certificate, form ▇▇▇▇▇ 27, detailing the policy
coverage forms, shall be acceptable. The original policy,
along with paid receipts, shall be forwarded to AEI without
delay.
2. If the coverage referred to in Item 1 above is written via a
blanket insurance policy, a Certificate of Insurance with a
Statement of Values attached will be acceptable.
3. All property insurance policies shall include a Replacement
Cost endorsement or clause.
4. All property insurance policies shall include a Building
Ordinance Compliance Endorsement for an amount at least 10%
of replacement cost of the building at the inception of the
lease.
5. All property insurance policies shall be written with no co-
insurance.
6. The maximum deductible on any property insurance policy
shall be $10,000.
7. Property insurance shall include Loss Of Rents insurance in
an amount to cover at least a 12 month period with the loss
proceeds payable to AEI.
8. Flood insurance shall be required, in amounts acceptable to
AEI, unless evidence is provided that the Parcel is not
located in a designated flood area or storm surge area.
Satisfactory evidence to determine if coverage is necessary
shall be a Base Flood Elevation Certificate and/or a
National Geodetic Vertical Datum (NGDV)-National standard
reference datum for elevations, formerly referred to as mean
Sea Level (MSL) of 1929. If the coverage is necessary, it
shall be in the following amount: $500,000. The deductible
shall not exceed $10,000 per occurrence.
9. Earthquake insurance shall be required, in the amounts
acceptable to AEI, unless evidence is provided that the
Parcel is not located in a federally designated earthquake
prone area or is not in an ISO High Risk Earthquake Zone.
The deductible shall not exceed 10% of coverage provided.
10. Comprehensive general liability coverage shall be written,
with limits of $2,000,000 per occurrence and $5,000,000
general aggregate. These limits can be accomplished either
by underlying liability policies or by the sum of the
underlying policy plus an excess or umbrella policy. The
coverage shall include an endorsement in favor of AEI which
is ISO form CG 20 11 85 Additional Insured - Managers Or
Lessors Of Premises", or an equivalent endorsement. The
coverage shall by written on an Occurrence Form basis and
shall include Broad Form Contractual Liability coverage. The
Claims Made form of coverage is not acceptable. The maximum
deductible for any liability insurance policy shall be
$5,000.
11. If liquor is sold on the premises of the parcel, Liquor
Liability coverage (also known as Dram Shop coverage) shall
be required. If the state in which the parcel is located has
a maximum recovery statute, the coverage shall be written in
that amount. Otherwise the coverage shall be written with
limits of $2,000,000 per occurrence and $5,000,000 general
aggregate.
12. The additional Requirements for All insurance Policies" are
as follows:
a. All property policies shall name AEI as Loss Payee
and as an Additional Insured.
b. All liability policies shall name AEI as an
Additional Insured.
c. The additional insured and loss payee clause for
property and the additional insured clause for
general liability will name the Lessor, and its
corporate managing Member as stated on the
signature page of this document. It will also name
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ its individual Managing Member,
its successors and assigns and any other owners as
their interests may appear.
d. AEI shall receive a thirty (30) day written notice
in the event of cancellation, material amendment,
or expiration without renewal of the policies. The
following words will be deleted from the
cancellation notice: "endeavor to" and "but failure
to mail such notice shall impose no obligation or
liability of any kind upon the company, its agents
or representatives".
e. ▇▇▇▇▇▇ 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 Exhibit,
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.
f. ▇▇▇▇▇▇ 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.
g. All property insurance policies shall contain
Waiver of Subrogation Endorsements waiving all
rights of subrogation, if any, against AEI as
defined above.
h. All insurance companies shall be approved in
writing by AEI.
EXHIBIT "E-1" to Development Financing Commitment
ALTA 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 Ohio do hereby certify to AEI Income &
Growth Fund 23 LLC, 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" to Development Financing Commitment
ALTA 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
Ohio do hereby certify to AEI Income & Growth Fund 23 LLC,
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 November, 1999, by and between Tumbleweed ,
Inc. (hereinafter referred to as "Lessee"), whose address is
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, and AEI Income
& Growth Fund 23 LLC, whose principal business address is
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter 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, May 31, 2000,
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 Three Hundred Seventy-
Two Thousand Dollars ($1,372,000) 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, 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
Lessee'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.
▇▇.▇▇▇▇▇▇▇▇▇▇▇▇ 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.
▇▇.▇▇ 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.
▇▇.▇▇▇▇▇▇▇▇▇ 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 COMMENCEMENT\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 ▇▇▇▇▇▇ as fee owner insured to the extent of advances
made hereunder subject only to such exceptions as may be
reasonably approved by ▇▇▇▇▇▇.
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 ▇▇▇▇▇▇'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 Lessee; 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 ▇▇▇▇▇▇'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 Lessor.
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 COMMENCEMENT\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 dated the date of disbursement of the requested draw
insuring the Lessor as fee owner under the policy in the
aggregate amounts of all prior Disbursements and the
requested Disbursement.
▇▇.▇▇▇▇ 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
hereinabove 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 of
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
monies). 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
$3,159.06 per month absent an uncured Default by Lessee;
absent an uncured Default, accrued rent during the period of
construction of the Improvements prior to the Rental
Modification Date 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 $3,781.30 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-quarter percent
(8.25%) 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 9.875% 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, Inc., a Delaware
Corporation
By:
Its:
By:
Its:
[▇▇▇▇▇▇'s Signature appears on following page.]
AEI INCOME & GROWTH FUND 23 LLC
By: AEI Fund Management XXI, Inc.
By: ____________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
Exhibit B
TUMBLEWEED, INC. KETTERING, OH
PROJECT COST BUDGET OCTOBER 27, 1999
LAND AND HARD COSTS:
Land Acquisition Cost $ 450,000.00
Building/General Construction 453,000.00
Sitework $ 175,000.00
Owner Vendors
Landscaping 13,000.00
Dimmer Panels 4,560.00
Wains Coating/Trim 13,185.00
Electrical Panels 6,200.00
Air Balance 1,600.00
Lighting 5,275.00
HVAC 19,500.00
Joists 13,230.00
Construction Contingency-10.0% 78,205.00
SUBTOTAL HARD COSTS $ 1,232,755.00
Soft Costs:
Survey 2,500.00
Appraisal 3,500.00
Phase I Environmental 2,500.00
Permits/TAP Fees 9,000.00
Architect/Engineering 20,750.00
Title Insurance & Closing Costs 10,000.00
Development Interest 15,500.00
Attorney's Fees- AEI
(Construction/Sale/Leaseback) 10,000.00
Attorney's Fees-Borrower
(Construction/Sale/Leaseback) 2,500.00
AEI Sale/Leaseback Commitment Fee 2% 26,640.00
AEI Credit Report Fees (Promesa) 500.00
AEI State Qualification Fees 1,500.00
AEI Site Inspection Fee 1,500.00
Tumbleweed Parcel Development Fee 12,636.00
AEI 1% Reimbursement 13,320.00
Miscellaneous 4,899.00
SUBTOTAL SOFT COSTS $ 139,245.00
TOTAL PROJECT COST $ 1,372,000.00
Exhibit C to Development Financing Agreement
APPLICATION FOR PAYMENT
Tumbleweed, Inc. ("Lessee") hereby requests a
disbursement in the amount of______________________
($____________________) pursuant to that certain Development
Financing Agreement dated effective as of November _____,
1999 by and between Lessee and AEI Income & Growth Fund 23
LLC ("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 $1,372,000. To date,
$______________(exclusive of this request) has been
disbursed pursuant to the Development Financing Disbursing
Agreement.
Dated:______________________________
Lessee:
Tumbleweed, Inc., a Delaware corporation
By:
Its:
Lessee
Exhibit D-1 to Development Financing Agreement
DRAW REQUEST CERTIFICATE
This Certificate made by Tumbleweed, Inc.("Lessee").
RECITALS
WHEREAS, Lessee and AEI Income & Growth Fund 23 LLC
("Lessor") have entered into a Development Financing
Agreement dated effective as of November ,
1999 (the "Development Financing Agreement") pursuant to
which Lessor agreed to make Development Financing Proceeds
in the amount of $1,372,000 available 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 , 1999, ("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
____________________________, 1999 to _____________________,
1999, 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 ____________________, 1999.
Lessee: Tumbleweed, Inc.
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, Inc., 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 _________________, 1999.
____________________________
My commission expires:________ Notary Public
CONTRACTOR AND ARCHITECT
Exhibit D-2 to Development Financing Agreement
DRAW REQUEST CERTIFICATE
This Certificate made by ,("Contractor"),
AND ("Architect").
RECITALS
WHEREAS, Tumbleweed, Inc.. ("Lessee") and AEI Income &
Growth Fund 23 LLC ("Lessor") have entered into a
Development Financing Agreement dated effective as of
, 1999 (the "Development Financing Agreement") pursuant to
which Lessor agreed to make Development Financing Proceeds
in the amount of $1,372,000 available 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 , 1999, ("Construction Contract");
and
WHEREAS, ▇▇▇▇▇▇ and Architect have entered into a
contract dated , 1999, ("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
____________________________, 1999 to _____________________,
1999, 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 ____________________, 1999.
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 _________________, 1999.
_____________________
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 _________________, 1999.
_________________________________________
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 November, 1999, by and among Tumbleweed, Inc.
(hereinafter referred to as the "Lessee"), Lawyers Title
Insurance Corporation - Construction Disbursement Department
(hereinafter referred to as "LTIC-CDD" or "Title"), and AEI
Income & Growth Fund 23 LLC, a Minnesota limited liability
company, whose corporate Managing Member is AEI Fund
Management XXI, Inc., a Minnesota corporation; whose
principal business address is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(hereinafter 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 ▇▇▇▇▇▇ has agreed to make
advances to the Lessee in the aggregate principal amount of
up to and including $1,372,000 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 lien
rights on the Leased Premises 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 lien rights on the Leased Premises
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".
2. 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 who have lien rights on the
Leased Premises including 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 under Ohio Statute.
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, INC., a Delaware corporation
By:
Its:
By
Its
[Remainder of page intentionally left blank - additional
signatures on following pages]
LAWYERS TITLE INSURANCE CORPORATION-
CONSTRUCTION DISBURSEMENT DEPARTMENT
By
Its
[Remainder of page intentionally left blank - additional
signatures on following page]
AEI INCOME & GROWTH FUND 23 LLC
By: AEI Fund Management XXI, Inc.
By: ____________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
EXHIBIT "I"
FORM OF
NET LEASE AGREEMENT
NET LEASE AGREEMENT
THIS LEASE, made and entered into effective as of the
day of November, 1999, by and among AEI Income & Growth Fund
23 LLC, a Minnesota limited liability company whose
corporate Managing Member is AEI Fund Management XXI, Inc.,
a Minnesota corporation ("Fund 23"), whose principal
business address is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ World Trade Center, ▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter
referred to as "Lessor"), and Tumbleweed, Inc., a Delaware
corporation (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 Kettering, 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 the effective date hereof ("Occupancy Date"),
plus the period between the date hereof and the end of the
month in which the First Amendment hereto is executed as
contemplated under the Development Financing Agreement
described in Article 34 hereof .
(B) The first "Lease Year" of the Term shall be for a
period of twelve (l2) consecutive calendar months from the
Occupancy Date, plus the period between the date hereof and
the end of the month in which the First Amendment hereto is
executed as contemplated under the Development Financing
Agreement described in Article 34 hereof . 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 part of the first
Lease Year until execution of the First Amendment hereto or
adjusted as contemplated under the Development Financing
Agreement: Lessee shall pay to Lessor an annual Base Rent
of $37,908.75, which amount shall be payable in advance on
the first day of each month in equal monthly installments of
$3,159.06 to Lessor Fund 23. 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 expiration of
the applicable notice and cure period after 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 Indiana, 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, ▇▇▇▇▇▇'s corporate
managing members, and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, 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 Lessee
acting in such capacity. 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 gross
negligence of Lessor. In the event of any loss, damage, or
injury caused by the joint negligence or willful misconduct
of Lessor and Lessee, they shall be liable therefor in
accordance with their respective degrees of fault.
(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 to any other entity
controlled by or under common control with
Lessee or such successor 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 of 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;
▇▇▇▇▇▇ 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) Except as permitted under Section (A)(1) above, 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, Inc.,
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, and
▇▇▇▇▇▇ shall pay the reasonable attorney's fees incurred by
Lessor to review such proposed sublet or assignment.
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, and Lessee shall pay the reasonable
attorney's fees incurred by Lessor to review such proposed
sublet or assignment.
(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 34 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 Leased Premises and rent
hereunder shall be reduced by 9.875% 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 insurance proceeds (and the deductible
thereunder) payable under policies maintained pursuant to
this Lease.
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, 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 ▇▇▇▇▇▇.
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, Inc..
By:
Its:
By:
Its:
STATE OF )
)SS.
COUNTY OF )
The foregoing instrument was acknowledged before me
this ______ day of November, 1999, by
and , as
and , respectively,
of Tumbleweed, Inc. on behalf of said corporation.
Notary Public
LESSOR:
AEI INCOME & GROWTH FUND 23 LLC
By: AEI Fund Management XXI, Inc.
By:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
STATE OF MINNESOTA )
)SS.
COUNTY OF ▇▇▇▇▇▇ )
The foregoing instrument was acknowledged before me the
day of November, 1999, by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the President
of AEI Fund Management XXI, Inc., a Minnesota corporation,
corporate Managing Member of AEI Income & Growth Fund 23
LLC, on behalf of said limited liability company.
Notary Public