NET LEASE AGREEMENT
THIS LEASE, made and entered into effective as of this 20th
day of November, 1998, by and between AEI INCOME & GROWTH FUND
XXII LIMITED PARTNERSHIP ("Fund XXII"), a Minnesota limited
partnership whose corporate general partner is AEI Fund
Management XXI, Inc., a Minnesota corporation, whose address is
1300 Minnesota World Trade Center, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Lessor"), and RTM Alabama, Inc., an
Alabama corporation, whose address is ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Lessee");
WITNESSETH:
WHEREAS, Lessor is the fee owner of a certain parcel of real
property and improvements located at Homewood, Alabama, and
legally described in Exhibit "A", which is attached hereto and
incorporated herein by reference; and
WHEREAS, Lessee constructed 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 Lessee, Lessor does hereby grant,
demise, lease, and let unto Lessee, and Lessee does hereby take
and hire from Lessor and does hereby covenant, promise, and agree
as follows:
ARTICLE 1.LEASED PREMISES
Lessor hereby leases to Lessee, and Lessee leases and takes
from Lessor, the Leased Premises subject to the conditions of
this Lease.
ARTICLE 2. TERM
(A) The Term of this Lease shall commence on November
20th, 1998 ("Occupancy Date"), and shall include the period from
the Occupancy Date until the date of the First Lease Amendment
contemplated under the Development Financing Agreement between
Lessor and Lessee of even date herewith as further set forth in
Article 35 hereof. Thereafter, the Lease shall continue for a
period of Twenty consecutive Lease Years, as hereinafter defined.
(B) If the date the First Lease Amendment is executed shall
not be the first day of a calendar month, the first full "Lease
Year" shall be the period from the date the First Lease Amendment
is fully executed to the end of the calendar month in which the
First Lease Amendment is fully executed, plus the following
twelve (l2) calendar months. Each Lease Year after the first
Lease Year shall be each successive period of twelve (l2)
calendar months thereafter.
(C) The parties agree that upon the request of either
party, a short form or memorandum of this Lease (prepared and
recorded at the expense of the requesting party) will be executed
for recording purposes. That short form or memorandum of this
Lease will be amended as of the date of the First Lease Amendment
to set forth the termination dates of the Term and optional
Renewal Terms, as defined in Article 28 hereof, and the existence
of any option to purchase or right of first refusal, and that
said option or right of first refusal 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 shall 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, and builder's risk
insurance (naming Lessor, Lessee, and contractor as co-insured),
for improvements made by or at the direction of Lessee.
(D) Opening for business in the Leased Premises by Lessee
shall constitute an acceptance of the Leased Premises and an
acknowledgment by Lessee that the Leased Premises are in the
condition described under this Lease.
ARTICLE 4. RENT PAYMENTS
(A) Annual Rent Payable from the Occupancy Date until execution
of the First Lease Amendment (wherein the Lease shall be amended
as contemplated under the Development Financing Agreement as
defined in Article 35 hereof): Rent until this provision shall be
superceded by the First Lease Amendment shall accrue in the
amount of $3,915 per month until March 15, 1999. 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.
After and including March 16th, 1999, (unless this provision
shall be superceded by the First Lease Amendment) Rent shall be
payable out of pocket by Lessee (prorata for the period of March
16th through March 31, 1999) and be payable in advance on the
first day of the month to Fund XXII.
(B) Rent for the first full Lease Year after the execution
of the First Lease Amendment (which includes any stub period from
the end of the calendar month in which the First Lease Amendment
is executed) shall be Six and One-Half Percent of the Total
Project Cost, and beginning in the Second Lease Year, Rent
shall increase to Nine Percent of the Total Project Cost, as
defined in the Development Financing Agreement of even date
herewith between Lessor and Lessee, to be set forth pursuant to
the First Lease Amendment, and shall remain at such level until
the beginning of the Third Lease Year.
(C) Annual Rent Payable beginning with the Third and
subsequent Lease Years:
The annual Base Rent due and payable shall increase in each
of the Lease Years beginning with the Third Lease Year by an
amount equal to One and One-Eighth Percent (1.125%) of the Base
Rent payable for the prior Lease Year. Such increased Base Rent
shall be payable in advance of the first day of each month in
equal monthly installments.
(D) Overdue Payments.
Lessee shall pay interest on all overdue payments of Rent or
other monetary amounts due hereunder at lesser of the rate of
fifteen percent (15%) per annum or the highest rate allowed by
law accruing after the expiration of any applicable cure period.
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 as may be
included in the broadest form of extended coverage insurance as
may, from time to time, be available in amounts sufficient to
prevent Lessor or Lessee from becoming a co-insurer within the
terms of the applicable policies. In any event, the insurance
shall not be less than one hundred percent (100%) of the then
insurable value, with such commercially reasonable deductibles as
Lessor may reasonably require from time to time. Additionally,
replacement cost endorsements, inflation guard endorsements,
vandalism endorsement, malicious mischief endorsement, waiver of
subrogation endorsement, waiver of co-insurance or agreed amount
endorsement (if available), and Building Ordinance Compliance
endorsement. Business Interruption Insurance endorsement (for a
period covering at least three months of interruption) 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 Leased Premises, with initial limits of at
least $1,000,000 per occurrence/$3,000,000 general aggregate, or
such additional amounts as Lessor shall reasonably require from
time to time with limits in amounts acceptable to Lessor.
(C) N/A
(D) Lessee agrees to notify Lessor in writing if Lessee is
unable to procure all or some part of the aforesaid insurance.
In the event Lessee fails to provide all insurance required under
this Lease, Lessor shall have the right, but not the obligation,
to procure such insurance on Lessee's behalf, following 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, either provide proof that such
coverages are in full force and effect or 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.
(E) All policies of insurance provided for or contemplated
by this Article can be under Lessee's blanket insurance coverage
and shall cover Lessor(s), AEI Fund Management XXI, Inc., and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, as the general partners of Lessor, as
additional insured and loss payee, as their respective interests
(as landlord and lessee, respectively) may appear, and Lessee as
insured. The policies shall provide that the policies cannot be
canceled, terminated, changed, or modified without thirty (30)
days written notice to the insured and additional insured
parties. In addition, all of such policies shall contain
endorsements by the respective insurance companies waiving all
rights of subrogation, if any, against Lessor. All insurance
companies providing coverages must be rated "A" or better by
Best's Key Rating Guide (the most current edition), or similar
quality under a successor guide if Best's Key Rating shall cease
to be published. Lessee shall provide Lessor certificates of
insurance on or before the Occupancy Date. No less than fifteen
(15) business days prior to expiration of such policies, Lessee
shall provide Lessor with legible copies of any and all renewal
Certificates of Insurance. Lessee agrees that it will not settle
any property insurance claims affecting the Leased Premises
(exclusive of any claims by Lessee for damages to Personalty or
Lessee=s loss or interruption of business) in excess of $50,000
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 Leased Premises. Any insurance proceeds for the
Personalty or Trade Fixtures of Lessee or its equipment lessors
or lenders shall be paid to the Lessee and shall not be
considered part of the insurance for the building and
improvements to the Leased Premises.
(F) Lessee shall defend, indemnify, and hold Lessor
harmless against any and all claims, damages, and lawsuits
arising after the Occupancy Date of this Lease and any orders,
decrees or judgments which may be entered therein, brought for
damages or alleged damages resulting from any injury to person or
property or from loss of life sustained in or about the Leased
Premises, unless such damage or injury results from the
intentional misconduct or the gross negligence of Lessor and
Lessee agrees to save Lessor harmless from, and indemnify Lessor
against, any and all injury, loss, or damage, of whatever nature,
to any person or property caused by, or resulting from any act,
omission, or negligence of Lessee or any employee or agent of
Lessee. In addition, Lessee hereby releases Lessor from any and
all liability for any loss or damage caused by fire or any of the
extended coverage casualties, except if 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.
(G) Lessor hereby waives any and all rights that it may
have to recover from Lessee damages for any loss occurring to the
Leased Premises by reason of any act or omission of Lessee;
provided, however, that this waiver is limited to those losses
for which Lessor is compensated by 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 and
prior to the expiration of the term hereof, or any Renewal Term.
(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 or
upon the Rents payable hereunder. Such payments shall be
considered as Rent paid by Lessee in addition to the Rent defined
at Article 4 hereof. If due to a change in the method of
taxation, a 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. In no event shall Lessee be
liable for any payment required of Lessor to qualify to do
business in the state where the Leased Premises are situate.
(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. For the purposes of this provision, all personal
property taxes, real estate taxes and special assessments shall
be deemed to have been assessed in the year that the first
payment or any installment thereof is due (presumed to be paid in
arrears for purposes of such proration).
(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
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, Lessee shall be entitled to receive and
retain the same, 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.
(G) Within thirty (30) days after Lessor notifies Lessee in
writing that Lessor has paid such amount, Lessee shall also pay
to Lessor, as additional Rent, the amount of any sales tax
imposed on Rent by the then current sales tax law, 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 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. Lessee
shall be entitled upon written request to copies of sales tax
returns of Lessor showing such tax was paid.
ARTICLE 7.PROHIBITION ON ASSIGNMENTS AND SUBLETTING; TAKE-BACK
RIGHTS
(A) Lessee, without the consent of Lessor, but after prior
written notice to Lessor, and at any time during the term of this
Lease, or any renewal or extension hereof, shall have the right
to assign this Lease, or its rights hereunder, and/or to sublet
all or any part of the Leased Premises to RTM, Inc, or any RTM
subsidiary or affiliate or any other licensed and approved Arby's
or Arby's\Mrs. Winner's (dual concept) operator, or ▇▇▇=s Famous
Recipe operator. Lessee and Guarantor(s), if any, will remain
liable for Rent, performance of the terms, covenants, and
conditions of Lessee hereunder, and shall sign a consent and
estoppel evidencing their continued liability in form and
substance satisfactory to Lessor, concurrent with the effective
date of any such assignment or sublet. Any other assignment or
sublease to an entity other than those set forth in the preceding
sentence shall require the prior written consent of Lessor, which
consent is conditioned upon Lessee and any guarantor signing a
consent and estoppel evidencing their continued liability in form
and substance satisfactory to Lessor, concurrent with the
effective date of any such assignment or sublet, and Lessor's
approval, which approval shall not be unreasonably withheld or
delayed.
(B) Except as otherwise expressly provided in this Article,
Lessee shall not, without obtaining the prior written consent of
Lessor, which consent shall not be unreasonably withheld or
delayed, in each instance:
1.assign or otherwise transfer this Lease, or any part of
Lessee's right, title or interest therein;
2.sublet all or any part of the Leased Premises or allow all
or any part of the Leased Premises to be used or occupied by any
other Persons (herein defined as a Party other than Lessee, be it
a corporation, a partnership, an individual or other entity); or
▇.▇▇▇▇▇▇▇▇, pledge or otherwise encumber this Lease, or the
Leased Premises.
(C) For the purposes of this Article:
1.an agreement by any other Person, directly or indirectly,
to assume Lessee's obligations under this Lease shall be deemed
an assignment;
2.any Person to whom Lessee's interest under this Lease
passes by operation of law, or otherwise, shall be bound by the
provisions of this Article;
3.each modification, amendment or extension or any sublease
to which Lessor has previously consented shall be deemed a new
sublease; and
4.Lessee shall present the signed consent to such assignment
and/or subletting from any guarantors of this Lease, such consent
to be in form and substance satisfactory to Lessor.
Lessee agrees to furnish to Lessor upon demand at any time
such information and assurances as Lessor may reasonably request
that neither Lessee, nor any previously permitted sublessee, has
violated the provisions of this Article.
(D) Except as set forth in subparagraph (A) above, if
Lessee agrees to assign this Lease or to sublet all or any
portion of the Leased Premises, Lessee shall, prior to the
effective date thereof (the "Effective Date"), deliver to Lessor
executed counterparts of any such agreement and of all ancillary
agreements with the proposed assignee or sublessee, as
applicable.
(E) If Lessee shall fail to comply with the terms of
subparagraph (A) or (B) above, Lessor shall then have all of the
following rights, any of which Lessor may exercise by written
notice to Lessee given within thirty (30) days after Lessor
receives the aforementioned documents:
1. With respect to a proposed assignment of this Lease,
the right to terminate this Lease on the Effective Date as if it
were the Expiration Date of this Lease;
2. With respect to a proposed subletting of the entire
Leased Premises, the right to terminate this Lease on the
Effective Date as if it were the Expiration Date; or
3. With respect to a proposed subletting of less than the
entire Leased Premises, the right to terminate this Lease as to
the portion of the Leased Premises affected by such subletting on
the Effective Date, as if it were the Expiration Date, in which
case Lessee shall promptly execute and deliver to Lessor an
appropriate modification of this Lease in form satisfactory to
Lessor in all respects.
(F) If Lessor exercises any of its options under Article
7(E) above, Lessor may then lease the Leased Premises or any
portion thereof to Lessee's proposed assignee or sublessee, as
the case may be, without liability whatsoever to Lessee.
(G) Notwithstanding anything above to the contrary, the
Lessee's interest herein shall not be assignable in any manner in
accordance with the terms hereof unless and until the termination
of the Development Financing Agreement as set forth in Article 35
hereof.
ARTICLE 8. REPAIRS AND MAINTENANCE
(A) Lessee covenants and agrees to keep and maintain in
good order, condition and repair the interior and exterior of the
Leased Premises during the term of the Lease, or any renewal
terms, and further agrees that Lessor shall be under no
obligation to make any repairs or perform any maintenance to the
Leased Premises. Lessee covenants and agrees that it shall be
responsible for all repairs, alterations, replacements, or
maintenance of, including but without limitation to or of:
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 further agrees to replace any of said equipment when
necessary. Lessee further agrees to be responsible for, at its
own expense, snow removal, lawn maintenance, landscaping,
maintenance of the parking lot (including parking lines, seal
coating, and blacktop surfacing), and other similar items.
(B) If Lessee refuses or neglects to commence or complete
repairs promptly and adequately, after receipt of five (5 ) days
prior written notice (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 receipt of written demand. It is
understood that Lessee shall pay all expenses and maintenance and
repair during the term of this Lease. If Lessee is not then in
default hereunder, Lessee 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 Lessee's
moveable Trade Fixtures. The term ATrade Fixtures" shall not
include oven hoods, Walk-in coolers or freezers, or the Leased
Premises exterior lighting, which shall be owned by Lessor and
leased from Lessor by Lessee according to the terms hereof, but
the term shall otherwise mean all other Trade Fixtures,
equipment, supplies, books, records, or other personalty,
including but not limited to those items set forth on Exhibit C
attached hereto (hereinafter referred to as ATrade Fixtures@ or
APersonalty@) placed on the Leased Premises by Lessee. Lessor
shall execute any instrument that any lien holder or party with a
security interest in Lessee=s Trade Fixtures may request
acknowledging that (a) the Lessee has a right to install such
Personalty on the Leased Premises; (b) the lien holder or secured
party may maintain an interest in the Personalty superior to any
interest in the same by Lessor; and (c) such lien holder or
secured party shall have the right to remove any and all such
Personalty in the event of a default in any instrument
establishing such lien or security interest, subject to 10 days
advance notice to Lessor and making reasonable repairs to the
Leased Premises for any injury caused to the Leased Premises
caused by the removal of the Personalty, except diminution in
value caused by the absence of the Personalty, nor shall the lien
holder or secured party have to replace the Personalty. In the
event of making such alterations as herein provided, Lessee
further agrees to indemnify and save harmless Lessor from all
expense, liens, claims or damages to either persons or property
or the Leased Premises which may arise out of or result from the
undertaking or making of said repairs, improvements, alterations
or additions, or Lessee's failure to make said repairs,
improvements, alterations or additions.
ARTICLE 9. COMPLIANCE WITH LAWS AND REGULATIONS
Lessee will comply with all statutes, ordinances, rules,
orders, regulations and requirements of all federal, state, city
and local governments, and with all rules, orders and
regulations of the applicable Board of Fire Underwriters which
affect the use of the improvements. Lessee will comply with all
easements, restrictions, and covenants of record against or
affecting the Leased Premises or required for operation of the
Leased Premises in accordance with Article 14 hereof.
ARTICLE l0. 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 ll. SUBORDINATION
(A) Lessor reserves the right and privilege to subject and
subordinate this Lease at all times to the lien of any mortgage
or mortgages now or hereafter placed upon Lessor's interest in
the Leased Premises and on the land and buildings of which said
Leased Premises are a part, or upon any buildings hereafter
placed upon the land of which the Leased Premises are a part,
provided such mortgagee shall execute its standard form,
commercially reasonable subordination, attornment and non-
disturbance agreement. 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, however, that such mortgagee
shall execute an appropriate subordination, attornment and non-
disturbance agreement respecting Lessee's rights to possession
under this Lease if Lessee shall not be in default hereunder.
(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 Lessor 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. Any such termination of this Lease shall
not preclude or restrict Lessee=s rights to any claim or award
for claims it may have as set forth in Article 12, paragraph (C)
below. If any part of the Leased Premises shall be so taken as
to render the remainder thereof materially unusable 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 interfere with the business of Lessee, then
Lessee shall, at Lessor=s cost and expense (and Lessor hereby
covenants to make condemnation proceeds available to Lessee
consistent with the terms hereof), 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 Lessee in originally constructing such building..
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 Lessee. 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 (expressly excluding any
Lessee's Award as hereinafter defined) shall belong to and be the
property of Lessor without any participation by Lessee, whether
such damages shall be awarded as compensation for diminution in
value to the leasehold or to the fee of the Leased Premises
herein leased. Nothing contained herein shall be construed to
preclude Lessee from prosecuting any claim directly against the
condemning authority in such proceedings for: Loss of business
and or destruction of its business; damage to or loss of value or
cost of removal of inventory, Trade Fixtures, furniture,
Personalty, and other personal property belonging to Lessee (any
and all such award collectively referred to supra and hereinafter
as "Lessee's Award"); provided, however, that no such claim shall
diminish or otherwise adversely affect Lessor's award or the
award of any fee mortgagee. Lessor and Lessee agree to cooperate
to maximize the amount of any such claim or award and agree to
minimize the interference with the other party=s prosecution of
its claims.
ARTICLE l3. RIGHT TO INSPECT
Lessor reserves the right to enter the Leased Premises on a
non emergency basis and to inspect and examine the Leased
Premises after reasonable 48 hours written notice to Lessee at
any time during business hours. and Lessee agrees to allow Lessor
free access to the Leased Premises to show the Leased Premises
upon an uncured event of default by Lessee. At any time within
Ninety (90) days of the expiration or termination of the Lease,
Lessee agrees to allow Lessor to then place "For Sale" or "For
Rent" signs on the Leased Premises and to show the Leased
Premises after reasonable 48 hours written notice to Lessee at
any time during non peak business hours, and Lessor agrees to
cause minimal disruption to Lessee=s business during such
showings of the Leased Premises.
ARTICLE l4. EXCLUSIVE USE
(A) After the Occupancy Date, Lessee expressly agrees and
warrants that the Leased Premises will be used exclusively as a
restaurant and other ancillary uses. Lessee acknowledges and
agrees that any other use without the prior written consent of
Lessor will constitute a default under and a violation and breach
of this Lease. Lessee agrees to conduct its business in a
first class and reputable manner consistent with its operation of
other restaurants in the same market area. If Lessee closes the
Leased Premises and it remains closed for ninety days, Lessor may
terminate this Lease and release Lessee and Guarantor of all
liability. However, so long as the Lessor does not terminate the
Lease, Lessee must continue to pay rent and perform all covenants
under the Lease.
ARTICLE l5. DESTRUCTION OF PREMISES
(A) If, during the term of this Lease, the Leased Premises
are totally or partially destroyed by fire or the elements, so as
to render the Leased Premises wholly unfit for occupancy, or make
it impossible to conduct the business of Lessee thereon, and if
in the opinion of a third party arbitrator reasonably acceptable
to Lessee and Lessor the Leased Premises cannot be repaired
within one hundred eighty (l80) days from the date of the
damage, then Lessor or Lessee in the last two years of the Lease
Term shall have the right to terminate this Lease from the date
of such damage or destruction by giving Lessee written notice.
Lessor's option to so terminate shall not apply if Lessee, within
30 days after receipt of the notice of termination, exercises any
remaining Option to Renew the Lease Term. Upon the giving of
such termination notice by Lessor, if Lessee shall not so extend
the term hereof, Lessee shall immediately surrender the Leased
Premises and all interest therein to Lessor, and in case of any
such termination, Lessor may re-enter and repossess the Leased
Premises and may dispossess all parties then in possession
thereof. Otherwise, the Leased Premises shall be repaired,
restored, and rebuilt by Lessee out of any insurance proceeds
received, within one hundred eighty (180) days from the date of
destruction. The insurance proceeds designated for building and
improvements or the items of personalty owned by the Lessor and
leased to Lessee hereunder under shall be used to reimburse
Lessee for the cost of rebuilding or restoration of the Leased
Premises and replacement of such personalty leased to Lessee from
Lessor. Insurance proceeds designated for the loss or damage of
Lessee's Personalty or Trade Fixtures shall not belong to the
Lessor. Rents payable by Lessee shall not be abated during the
period of repair and restoration. Except as otherwise provided
herein, Lessee shall be required to repair, rebuild and restore
the Leased Premises, but Lessor shall only be obligated to
contribute the net proceeds of monies received from insurance
policy or policies covering such loss or damages. Lessee shall
repair the Leased Premises with all reasonable speed. 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. Notwithstanding
anything above to the contrary, except in the last year of the
Lease Term as aforesaid, whether in the event of a partial or
total destruction of the Leased Premises, Lessor shall make
insurance proceeds available to Lessee to rebuild the Leased
Premises, provided Lessee shall, either through Business
Interruption Insurance or otherwise, continue to pay Rent during
the period of repair and restoration, and Lessee and any
guarantor confirm in writing their continued liability for the
obligations of Lessee hereunder.
(B) If the damage does not render the Leased Premises unfit
for occupancy, then Lessor and Lessee agree that the damage shall
be repaired by Lessee as soon as practicable out of insurance
proceeds when received. All Rents payable by Lessee shall not be
abated during the period of restoration and repair. All repairs
shall be paid for by Lessor out of any insurance proceeds
received, but if the insurance proceeds are insufficient to
rebuild or repair the Leased Premises according to the original
plans and specifications, whether repair or restoration is
commenced pursuant to Article 15(A) or (B) hereof, then Lessee
agrees to pay all additional amounts that are required to rebuild
the building in accordance with the original plans and
specifications. 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. All improvements or betterments
placed by Lessee on the demised Leased Premises shall, however,
in any event, be repaired and replaced by Lessee at its own
expense and not at the expense of Lessor. The purpose of this
Article is to require Lessee to carry insurance coverage on the
Leased Premises sufficient to rebuild the improvements in the
event of damage or destruction. Lessor shall be under no
obligation to make insurance proceeds available during the last
year of the Lease Term, and this Lease shall terminate upon
notice of Lessor=s intent to not make insurance proceeds
available, unless Lessee shall, within 30 days of notice of
Lessor's intent not to make insurance proceeds available in the
last year of the Lease Term, exercise any remaining Option to
Renew the Lease Term.
ARTICLE l6. ACTS OF DEFAULT
(A) Each of the following shall be deemed a default by
Lessee and a breach of this Lease:
1.Failure to pay the Rent or any monetary obligation herein
reserved, or any part thereof when the same shall be due and
payable and which failure continues for a period of five business
days after Lessee has received written notice of said failure.
Interest and late charges for failure to pay Rent when due shall
accrue from the date after the expiration of the five day cure
period.
2.Failure to do, observe, keep and perform any of the terms,
covenants, conditions, agreements and provisions in this Lease to
be done, observed, kept and performed by Lessee and which failure
continues for a period of thirty (30) days after Lessee has
received said notice of failure, or if such default is incapable
of cure within 30 days (except for the payment of monies, which
shall not excuse failure to cure within the 30 day period), and
Lessee is diligently pursuing a course of conduct reasonably
designed to cure the default, then Lessee shall have up to 120
days after receipt of said notice to cure said default.
3.The adjudication of Lessee as a bankrupt, the making by
Lessee of a general assignment for the benefit of creditors, the
taking by Lessee of the benefit of any insolvency act or law,
the appointment of a permanent receiver or trustee in bankruptcy
for Lessee property, or the appointment of a temporary receiver
which is not vacated or set aside within sixty (60) days from
the date of such appointment.
ARTICLE l7. TERMINATION FOR DEFAULT
In the event of any uncured default by Lessee and at any
time thereafter, Lessor may serve a written notice upon Lessee
that Lessor elects to terminate this Lease upon a specified date
not less than thirty (30) days after the date of serving such
notice of termination, and this Lease shall then terminate on the
date so specified as if that date had been originally fixed as
the expiration date of the term herein granted, provided,
however, that Lessee shall have continuing liability for future
rents for the remainder of the original term and any exercised
renewal term as set forth in Article 19, notwithstanding any
earlier termination of the Lease hereunder, preserving unto
Lessor the benefit of its bargained-for rental payments. Lessor
shall undertake reasonable efforts to mitigate Lessee's damages,
but the parties agree that Lessor shall be under no obligation to
expend its own funds for refurbishing or remodeling in connection
with any attempts to relet the Leased Premises.
ARTICLE l8. LESSOR'S RIGHT OF RE-ENTRY
In the event that this Lease shall be terminated as
hereinbefore provided, or if possession of the Leased Premises
shall be obtained by Lessor by summary proceedings or otherwise,
or in the event of an uncured default hereunder by Lessee, or in
the event that the Leased Premises or any part thereof, shall be
abandoned by Lessee, then Lessor or its agents, servants or
representatives, may immediately or at any time thereafter, re-
enter and resume possession of the Leased Premises or any part
thereof, and remove all persons and property therefrom, either by
summary dispossess proceedings or by a suitable action or
proceeding at law, or by force or otherwise without being liable
for any damages therefor.
ARTICLE l9. LESSEE'S CONTINUING LIABILITY
A) Should Lessor elect to re-enter as provided in this
Lease or should it take possession pursuant to legal proceedings
or pursuant to any notice provided for by law (including but not
limited to the statutory 10 day notice of termination for breach
under Alabama Code Section 35-9-6, or its successor statute, if
any, if such remedies are sought by Lessor), it may either (i)
terminate this Lease or (ii) it may from time to time (but shall
be under not obligation to do so), without terminating the
contractual obligation of Lessee to pay Rent under this Lease,
terminate Lessee's rights to possession, make such alterations
and repairs as may be necessary to relet the Leased Premises or
any part thereof for such Term or Renewal Terms, at such Rent or
Rents, and upon such other terms and conditions as Lessor in its
sole discretion may deem advisable.
(B) Upon each such reletting, without termination of the
contractual obligation of Lessee to pay Rent under this Lease,
all Rents received by Lessor shall be applied as follows:
1.First, to the payment of any indebtedness other than Rent
due hereunder from Lessee to Lessor;
2.Second, to the payment of any costs and expenses of such
reletting, including brokerage fees and attorney's fees and of
costs of such alterations and repairs;
3.Third, to the payment of Rent and other monetary
obligations due and unpaid hereunder;
4.Finally, the residue, if any, shall be held by Lessor and
applied in payment of future Rent as the same may become due and
payable hereunder.
If such Rents received from such reletting during any month
are less than that to be paid during that month by Lessee
hereunder, Lessee shall pay any such deficiency to Lessor. Such
deficiency shall be calculated and paid monthly. No such re-
entry or taking possession of such Leased Premises by Lessor
shall be construed as an election on its part to terminate
Lessee's continuing contractual obligation to pay rent under this
Lease unless a written notice of such intention be given to
Lessee.
(C) Notwithstanding any such reletting without termination,
Lessor may at any time thereafter elect to terminate this Lease
for any breach.
(D) If Lessee, after the expiration of any applicable
notice and cure period, is in default under a monetary obligation
under this Lease, then and only then may Lessor, in addition to
any other remedies Lessor may have with this Article 19, recover
from Lessee all damages it may incur by reason of any breach,
including: The cost of recovering and reletting the Leased
Premises; reasonable attorney's fees; and, the present value
(discounted at a rate of 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) for the remainder of the Term, all of which
amounts shall be immediately due and payable from Lessee to
Lessor in full. In the event that the Rent obtained from such
alternative or substitute tenant is more than the Rent which
Lessee is obligated to pay under this Lease, then such excess
shall be paid to Lessor provided that Lessor shall credit such
excess against the outstanding obligations of Lessee due pursuant
hereto, if any.
(E) It is the object and purpose of this Article 19 that
Lessor shall be kept whole and shall suffer no damage by way of
non-payment of Rent or by way of diminution in Rent. Lessee
waives and will waive all rights to trial by jury in any summary
proceedings or in any action brought to recover Rent herein which
may hereafter be instituted by Lessor against Lessee in respect
to the Leased Premises. Lessee hereby waives any rights of re-
entry it may have or any rights of redemption or rights to redeem
this Lease upon a termination of this Lease.
ARTICLE 20. PERSONALTY, FIXTURES AND EQUIPMENT
(A) All 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, and air conditioning
systems shall be the property of Lessor. All Trade Fixtures and
Personalty (as defined in Article 8(B) above) owned by Lessee
shall remain the property of Lessee, including but not limited to
those items set forth on Exhibit C attached hereto.
(B) Lessee shall furnish and pay for any and all
Personalty, except for such items, if any, described in Article
8(B) above, as owned by Lessor. Lessor acknowledges that it does
not have a lien on all Lessee's equipment, furniture, Trade
Fixtures, furnishings, and agrees to sign an equipment lien
waiver subject to the rights of any bona-fide third party
security interest in such property in a form substantially
similar to Exhibit D attached hereto or its commercially
reasonable equivalent. Provided Lessee is not in default
hereunder, Lessor will agree that its interest, if any, 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) days prior thereto, 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 2l. 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 twenty (20) days from the date of the
filing of said mechanic's or other lien and delivery of notice
thereof to Lessee of Lessee's obligation under this Lease.
Should Lessee fail to take the foregoing steps within said twenty
(20) day period, Lessor shall have the right, among other things,
to pay said lien without inquiring into the validity thereof, and
Lessee shall forthwith reimburse Lessor for the total expense
incurred by it in discharging said lien as additional Rent
hereunder.
ARTICLE 22. NO WAIVER BY LESSOR EXCEPT IN WRITING
No agreement to accept a surrender of the Leased Premises or
termination of this Lease shall be valid unless in writing signed
by Lessor. The delivery of keys to any employee of Lessor or
Lessor's agents shall not operate as a termination of the Lease
or a surrender of the Leased Premises. The failure of Lessor to
seek redress for violation of any rule or regulation, shall not
prevent a subsequent act, which would have originally constituted
a violation, from having all the force and effect of an original
violation. Neither payment by Lessee or receipt by Lessor of a
lesser amount than the Rent herein stipulated shall be deemed to
be other than on account of the earliest stipulated Rent. Nor
shall any endorsement or statement on any check nor any letter
accompanying any check or payment as Rent be deemed an accord and
satisfaction. Lessor may accept such check or payment without
prejudice to Lessor's right to recover the balance of such Rent
or pursue any other remedy provided in this Lease. This Lease
contains the entire agreement between the parties, and any
executory agreement hereafter made shall be ineffective to change
it, modify it or discharge it, in whole or in part, unless such
executory agreement is in writing and signed by the party against
whom enforcement of the change, modification or discharge is
sought.
ARTICLE 23. QUIET ENJOYMENT
Lessor covenants that Lessee, upon paying the Rent set forth
in Article 4 and all other sums herein reserved as Rent and upon
the due performance of all the terms, covenants, conditions and
agreements herein contained on Lessee's part to be kept and
performed, shall have, hold and enjoy the Leased Premises free
from molestation, eviction, or disturbance by Lessor, or by any
other person or persons lawfully claiming the same, and that
Lessor has good right to make this Lease for the full term
granted, including renewal periods.
ARTICLE 24.BREACH - PAYMENT OF COSTS AND ATTORNEYS' FEES
Each party agrees to pay and discharge all reasonable
costs, and actual attorneys' fees, including but not limited to
attorney's fees incurred at the trial level and in any appellate
or bankruptcy proceeding, and expenses that shall be incurred by
the prevailing party in enforcing the covenants, conditions and
terms of this Lease or defending against an alleged breach,
including the costs of reletting. Such costs, attorneys fees,
and expenses if incurred by Lessor shall be considered as Rent as
due and owing in addition to any Rent defined in Article 4
hereof.
ARTICLE 25. ESTOPPEL CERTIFICATES
Either party to this Lease will, at any time, upon not less
than ten (l0) days after receipt of written request by the other
party, execute, acknowledge and deliver to the requesting party a
statement in writing, executed by an executive officer of such
party, certifying that: (a) this Lease is unmodified (or if
modified then disclosure of such modification shall be made); (b)
this Lease is in full force and effect; (c) the date to which the
Rent and other charges have been paid; and (d) to the knowledge
of the signer of such certificate that the other party is not in
default in the performance of any covenant, agreement or
condition contained in this Lease, or if a default does exist,
specifying each such default of which the signer may have
knowledge. It is intended that any such statement delivered
pursuant to this Article may be relied upon by any prospective
purchaser or mortgagee of the Leased Premises or any assignee of
such mortgagee or a purchaser of the leasehold estate.
ARTICLE 26. FINANCIAL STATEMENTS
During the term of this Lease, Lessee will, within one
hundred twenty (120) days after the end of Lessee's fiscal year,
furnish to Lessor its financial statements including a profit and
loss statement and a store level operating profit and loss
statement for the Leased Premises. Lessee shall furnish to the
Lessor throughout the term of the Lease, including any option
periods, its balance sheet upon the reasonable request of Lessor
but in no event not more than twice during any Lease Year.
Lessee shall within forty-five (45) days after the end of each
fiscal quarter and within one hundred twenty (120) days after the
end of Lessee=s fiscal year, furnish financial statements
including a balance sheet, profit and loss statement, statement
of changes in financial conditions and all other related
schedules of the Guarantor. All financial statements shall be
prepared in accordance with generally accepted accounting
principles consistently applied from period to period. Financial
statements submitted by Lessee, on behalf of Lessee, shall be
certified to be true and correct and complete by Lessee or
Lessee=s Treasurer, or other appropriate officer, and if audited
by an independent certified public accountant. Financial
statements submitted by Lessee on behalf of Guarantor shall be
certified to be true and correct and complete by Guarantor or
guarantor's Treasurer, or other appropriate officer, and if
audited by an independent certified public accountant.
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 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 is not in uncured default under any of the covenants
and conditions in this Lease, 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 be as set forth in Article 4 hereof. Lessee
must give one hundred eighty (l80) 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 by
certified mail. Notices to either party shall be addressed to
the person and address given on the first page hereof. Lessor
and Lessee may, from time to time, change these addresses by
notifying each other of this change in writing. Notices of
overdue Rent may be sent to Lessee by nationally recognized
overnight mail. Notice shall be deemed received upon actual
signed receipt or rejection of the said notice.
(B) The terms, conditions and covenants contained in this
Lease and any riders and plans attached hereto shall bind and
inure to the benefit of Lessor and Lessee and their respective
successors, heirs, legal representatives, and assigns.
(C) This Lease shall be governed by and construed under the
laws of the State in which the Leased Premises are located.
(D) In the event that any provision of this Lease shall be
held invalid or unenforceable, no other provisions of this Lease
shall be affected by such holding, and all of the remaining
provisions of this Lease shall continue in full force and effect
pursuant to the terms hereof.
(E) The Article captions are inserted only for convenience
and reference, and are not intended, in any way, to define,
limit, describe the scope, intent, and language of this Lease or
its provisions.
(F) In the event Lessee remains in possession of the Leased
Premises herein leased after the expiration of this Lease and
without the execution of a new lease, it shall be deemed to be
occupying said Leased Premises as a tenant from month-to-month,
subject to all the conditions, provisions, and obligations of
this Lease insofar as the same can be applicable to a
month-to-month tenancy except that the monthly installment of
Rent shall be increased 200% from the amount due on the last
month prior to such expiration.
(G) If any installment of Rent (whether lump sum, monthly
installments, or any other monetary amounts required by this
Lease to be paid by Lessee and deemed to constitute Rent
hereunder) shall not be paid when due, Lessor shall have the
right to charge Lessee a late charge of $250.00 per month for
unpaid Rent for each month that any amount of Rent installment
remains unpaid. Said late charge shall commence after the
expiration of any applicable cure period and continue until said
installment, interest and all accrued late charges are paid in
full.
(H) Any part of the Leased Premises may be conveyed by
Lessor for private easement purposes at any time, provided such
easement does not interfere with 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 Lessee. All proceeds from any conveyance of a private
easement shall belong solely to Lessor.
(I) For the purpose of this Lease, the term "Rent" shall be
defined as Rent under Article 4, and any other monetary amounts
required by this Lease to be paid by Lessee.
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.
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 to the best of Lessee's knowledge, the Leased Premises
by any governmental authority which in any way pertain to
Hazardous Materials (iii) that to the best of Lessee's knowledge,
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 Lessee at the time of
execution and delivery of this Lease. Lessee agrees to indemnify
and reimburse Lessor, its successors and assigns, for:
(a)any breach of these representations and warranties, and
(b)any loss, damage, expense or cost arising out of or
incurred by Lessor which is the result of a breach of,
misstatement of or misrepresentation of the above covenants,
representations and warranties, and
(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 on the Leased Premises, if such liability
shall arise during Lessee's occupancy of the Leased Premises or
as a result of a release of Hazardous Materials on the Leased
Premises during Lessee's occupancy of the Leased Premises. Lessor
agrees to assign to Lessor and to subrogate Lessor=s claims
against any and all third parties for damages, costs, expenses,
or liability incurred by Lessor for which Lessee is required to
indemnify Lessor. Lessee=s liability hereunder shall expire five
years after the termination of this Lease.
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 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 written request of Lessor, after two or more
occurrences during any Lease Year, of a monetary or other
material event of default, cured or uncured, 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 ("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
Lessee of the bills therefor, pay the Charges or will upon
presentation of receipted bills therefor, reimburse Lessee for
such payments made by Lessee. In the event the deposits on hand
shall not be sufficient to pay all of the estimated Charges when
the same shall become due from time to time or the prior payments
shall be less than the currently estimated monthly amounts, then
Lessee shall pay to Lessor on demand any amount necessary to make
up the deficiency. The excess of any such deposits shall be
credited to subsequent payments to be made for such items. If a
default or an event of default shall occur under the terms of
this Lease, Lessor may, at its option, without being required so
to do, apply any Deposit on hand to cure the default, in such
order and manner as Lessor may elect.
ARTICLE 33. NET LEASE
Notwithstanding anything contained herein to the contrary it
is the intent of the parties hereto that this Lease shall be a
net lease and that the Rent defined pursuant to Article 4 should
be a net Rent paid to Lessor. Any and all other expenses
including but not limited to, maintenance, repair, insurance,
taxes, and assessments, shall be paid by Lessee.
ARTICLE 34. RIGHT OF FIRST REFUSAL
Lessor, for itself, its successors and assigns, hereby gives
and grants to Lessee a right of first refusal (the "Right of
First Refusal") to purchase the Leased Premises, subject to the
following terms and conditions:
(A) DURATION OF RIGHT OF FIRST REFUSAL. The Right of First
Refusal and all rights and privileges of Lessee hereunder shall
be in force for the term of this Lease until the expiration of
Lessee's right to possession.
(B) MANNER OF EXERCISING RIGHT OF FIRST REFUSAL. If Lessor
("Selling Lessor") shall desire to sell all or any portion of its
interest in the Leased Premises (subject to the terms of this
Lease), Selling Lessor shall give Lessee written notice of
Selling Lessor's intention to sell Selling Lessor's interest
(partial or whole) in the Leased Premises to a bona fide third
party purchaser. Such notice ("Lessor's Notice") shall give
Selling Lessor's name and address and state a price at which
Selling Lessor intends to sell and will sell a specified portion
or all of its interest in the fee simple to the Leased Premises
to a bona fide third party purchaser. If Lessee shall fail to
exercise its Right of First Refusal as set forth herein, the
terms of Article 34(E) shall apply. For twenty (20) business
days following the giving of such notice, Lessee shall have the
option to purchase such portion of the fee interest of the
Selling Lessor as set forth in Lessor's Notice at the price in
cash stated in the Lessor's Notice. A written notice in
substantially the following form, addressed to Selling Lessor and
signed by Lessee and given, in accordance with the provisions of
Article 29(A) hereof, within the period for exercising the Right
of First Refusal, submitted with a bank cashier's check or money
order payable to the order of Selling Lessor in the amount of
$5,000.00 (the "▇▇▇▇▇▇▇ Money") shall be an effective exercise of
Lessee's Right of First Refusal, to wit:
(date)
"We hereby exercise the Right of First Refusal to purchase such
portion of the fee interest of the Selling Lessor (as set forth
in Lessor's Notice) in the property commonly known as Arby=s,
Homewood, Alabama, pursuant to the Right of First Refusal
contained in that certain Net Lease Agreement between us
pertaining to said Leased Premises."
(C) TERMS OF SALE IF RIGHT OF FIRST REFUSAL EXERCISED.
Upon Lessee's exercise of the Right of First Refusal in
accordance with the provisions of subparagraph (B) hereof,
Selling Lessor shall be obligated to sell and convey by
recordable general warranty deed, good and indefeasible title to
its interest in the Leased Premises (or such portion thereof as
set forth in Lessor's Notice) subject only to the matters
affecting title which were of record at the time Selling Lessor
came into title to the Leased Premises and those matters which
Lessee created, suffered or permitted to accrue during the term
hereof, and Lessee shall be obligated to purchase such Lessor's
interest upon the following terms and conditions:
(i) PRICE. The price "Purchase Price" at which Selling
Lessor shall sell and Lessee shall purchase the Leased Premises
shall be the price stated in Lessor's Notice.
(ii) CLOSING. Closing shall be sixty (60) days after the
expiration of the twenty days within which Lessee may exercise
its Right of First Refusal, unless the parties mutually agree
otherwise. The Purchase Price less credit for the ▇▇▇▇▇▇▇ Money
and any other credits to which Lessee is entitled hereunder shall
be tendered in cash or other certified funds by Lessee at
Closing.
(iii) EVIDENCE OF TITLE. Not less than ten (10) days
prior to closing, Selling Lessor shall obtain a commitment for an
ALTA owner's policy of title insurance dated within thirty (30)
days of the closing date, issued by a nationally recognized title
insurance company selected by Selling Lessor (the "Title
Company") in the amount of the Purchase Price determined pursuant
to subparagraph (C)(i) above, naming Lessee as the proposed
insured, and covering the fee simple title to the Leased
Premises, and showing Selling Lessor vested with good title to
portion of the Leased Premises being sold, subject only to the
matters affecting title which were of record at the time Selling
Lessor came into title to the Leased Premises and those matters
which Lessee created, suffered or permitted to accrue during the
term hereof. Such title commitment shall be conclusive evidence
of good title. If Lessee shall make objection to the
marketability of title, Selling Lessor shall have no obligation
to make title marketable, but may withdraw Lessor's notice of
intent to market the Leased Premises.
(iv) PRORATIONS. Selling Lessor shall pay the cost of the
aforesaid title policy and any and all state and municipal taxes
imposed by law on the transfer of the title to the Leased
Premises, or the transaction pursuant to which such transfer
occurs. Water, sewer and other utility charges, if any, which
are not metered, driveway permit charges, if any, general real
estate taxes, and other similar items, shall be adjusted ratably
as of the Closing, except to the extent otherwise settled between
the parties pursuant to other provisions of this Lease. A
prorated portion of the Rent prepaid by Lessee for the month of
closing shall be credited toward the Purchase Price and Lessee
shall be given a credit for rent prepaid for any period after the
month in which the Closing occurs. Otherwise, Lessee shall not
receive a credit against the Purchase Price for Rent paid
hereunder.
(v) ESCROW CLOSING. At the election of Selling Lessor or
Lessee upon notice to the other party not less than five (5) days
prior to the Closing, this sale shall be closed through an escrow
with the Title Company, in accordance with the general provisions
of the usual form of Deed and Money Escrow Agreement then is use
by said company, with such special provisions inserted in the
escrow agreement as may be required to conform with this
agreement. Upon the creation of such an escrow, anything herein
to the contrary notwithstanding, paying of the purchase price and
delivery of the deed shall be made through the escrow. The cost
of the escrow shall be divided equally between the Selling Lessor
and Lessee. If for any reason other than Lessee's default, the
transaction fails to close, the ▇▇▇▇▇▇▇ Money shall be returned
to Lessee forthwith.
(vi) REMEDIES ON DEFAULT. If Lessee defaults under the
provisions of this subparagraph 34(C), Selling Lessor shall have
the right to annul the provisions of this paragraph 34 by giving
Lessee notice of such election, provided that Selling Lessor has
first notified Lessee of such default and Lessee has failed to
cure the same within ten (10) days after such notice. Upon
Selling Lessor's notice of annulment in accordance herewith, the
▇▇▇▇▇▇▇ Money shall be forfeited and paid to Selling Lessor as
liquidated damages, which shall be Selling Lessor's sole and
exclusive remedy. If Selling Lessor defaults under the
provisions of this subparagraph 34(C) and fails to cure such
default within ten (10) days after being notified of the same by
Lessee, then in such event, (i) the ▇▇▇▇▇▇▇ Money at Lessee's
election and immediately upon its demand shall be returned to
Lessee, which return shall not, however, in any way release or
absolve Selling Lessor from its obligations hereunder and (ii)
Lessee shall be entitled to all remedies (both legal and
equitable) the law (both statutory and decisional) of the state
in which the Leased Premises are situated provides without first
having to tender the balance of the purchase price as a condition
precedent thereof and without having to make any election of such
remedies.
(D) EFFECT OF RIGHT OF FIRST REFUSAL ON LEASE. If the
Right of First Refusal is exercised by Lessee and is exercisable
in Lessor's Notice as to the entire fee simple, this Lease shall
continue in full force and effect until the Closing herein above
specified. If the Right of First Refusal is exercised only as to
all of an undivided portion of the fee simple to the Leased
Premises, the Lease shall remain in full force and effect without
merger or termination of this Lease because of such purchase. If
for any reason such Closing fails to occur, this Lease shall
continue in full force and effect, except that if the provisions
of this paragraph 34 are annulled by Selling Lessor, in
accordance with subparagraph 34(C)(vi), by reason of a default by
Lessee, this Lease shall continue but without the provisions of
this paragraph 34 being a part hereof.
(E) If Lessee fails to exercise its Right of First Refusal,
Selling Lessor shall be free to sell all or any portion of its
interest in the Leased Premises to bona fide third party
purchasers for six months following the expiration of the twenty
days within which Lessee may exercise its Right of First Refusal,
provided that the Selling Lessor giving such Lessor's Notice
shall sell its interest (or a portion thereof) for a price equal
to or greater than the price (or the pro-rata portion thereof if
a portion of the Selling Lessor's interest in the Leased Premises
is sold) set forth in Lessor's Notice. This Right of First
Refusal shall survive any sale of the Leased Premises and shall
apply to any subsequent sale or potential sale by Lessor or its
successors and assigns.
Nothing herein shall give Lessee the right of first refusal over
transfers between affiliates of Lessor at Lessor=s cost.
ARTICLE 35. 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 36. 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, Lessor and Lessee have respectively
signed and sealed this Lease as of the day and year first above
written.
LESSEE: RTM ALABAMA, INC.
By: /s/ ▇ ▇ ▇▇▇▇▇▇▇
Its:Vice President
By: /s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
Its:V.P. Asst. Secretary
STATE OF GEORGIA}
}
COUNTY OF DEKALB}
I, the undersigned authority, a Notary Public in and for
said County in said State, hereby certify that ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇, whose name as V.P. and V.P. Asst Secy,
respectively, of RTM ALABAMA, Inc., are signed to the foregoing
instrument, and who are known to me, acknowledged before me on
this day that being informed of the contents of said instrument,
they as such officers and with full authority executed the same
voluntarily for and as the V.P. and V.P. Asst Secy of said
corporation.
Given under my hand and official seal this 18 day of
November, 1998.
Notary Public /s/ ▇▇▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇
My Commission expires:02-10-02
[notary seal]
LESSOR: AEI INCOME & GROWTH FUND XXII LIMITED PARTNERSHIP,
a Minnesota limited partnership
By: AEI FUND MANAGEMENT XXI, INC., a
Minnesota corporation
By: /s/ ▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
STATE OF MINNESOTA}
}
COUNTY OF ▇▇▇▇▇▇}
I, the undersigned authority, a Notary Public in and for
said County in said State, hereby certify that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
whose name as President of AEI Fund Management XXI, Inc., as
corporate general partner of AEI Income & Growth Fund XXII
Limited Partnership is signed to the foregoing instrument, and
who is known to me, acknowledged before me on this day that being
informed of the contents of said instrument, he as such officer
and with full authority executed the same voluntarily for and as
the President of AEI Fund Management XXI, Inc., for and as the
corporate general partner of AEI Income & Growth Fund XXII
Limited Partnership.
Given under my hand and official seal this 20th day of
November, 1998.
Notary Public /s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
My Commission expires:1/31/2000
[notary seal]
EXHIBIT A
Description of Leased Premises
Lot 1, Arby's Addition to Wildwood Centre, as recorded in Map
Book 193, Page 58, in the Probate Office of Jefferson County,
Alabama.