ASSIGNMENT AND ASSUMPTION OF LEASE
This instrument
is executed and delivered as of the 30th day
of April, 2004, pursuant to that certain Contract of Sale
("Agreement") by and between PRECO II CRIC LLC, a Delaware
limited liability company ("Assignor"),
and AEI INCOME &
GROWTH
FUND 25 LLC, a Delaware limited liability
company ("Assignee").
1. ASSIGNMENT OF LEASE AND
GUARANTY. For good and
valuable
consideration, Assignor hereby assigns, sells,
transfers,
sets
over and conveys to Assignee, and Assignee
hereby accepts
such
assignment, all right, title and interest
of Assignor in, to
and
under (i) that certain Lease dated as of
October 21, 2003, by and
between Assignor, as Landlord, and APPLE
OHIO LLC, a Delaware
limited liability company ("Tenant"), as
Tenant (the
"Lease"),
all rights and obligations of Assignor
under the Lease; and (ii)
that certain Guaranty with respect to the Lease (the "Lease
Guaranty"), executed as of October 21, 2003,
by Apple American
Group LLC, a Delaware limited liability
company with respect
to
that certain parcel of real property
located in Macedonia, Ohio,
which is more fully described on Exhibit A
attached hereto.
A
Memorandum of Lease dated October 21, 2003,
was recorded November
17, 2003, in the Recorder's Office,
Summit County, Ohio,
having
Instrument No. 54976007.
2. ASSUMPTION;
INDEMNITIES. Assignee
hereby assumes the
obligations of Assignor under the Lease
arising from and
after
the Closing Date (as defined in the
Agreement) and shall defend,
indemnify and hold harmless Assignor from and against any
liability, damages, causes of action,
expenses, and
attorneys'
fees incurred by any such indemnified party by
reason of the
failure of Assignee to fulfill, perform,
discharge, and
observe
its obligations with respect to the Lease
arising on or after the
date hereof. Assignor shall defend, indemnify
and hold harmless
Assignee from and against any liability,
damages, causes of
action, expenses, and attorneys' fees
incurred by
Assignee by
reason of the failure of Assignor to
fulfill, perform, discharge,
and observe its obligations with respect to
the Lease arising
before the date hereof.
3. DISCLAIMER. Except as otherwise expressly
provided in the
Agreement, the Lease is assigned by
Assignor and accepted by
Assignee AS IS, WHERE IS, WITHOUT ANY
REPRESENTATIONS OR
WARRANTIES OF WHATSOEVER NATURE, EXPRESS OR
IMPLIED, IT BEING THE
INTENTION OF ASSIGNOR AND ASSIGNEE
EXPRESSLY TO NEGATE AND
EXCLUDE ALL WARRANTIES, INCLUDING WITHOUT
LIMITATION, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR ANY PARTICULAR
PURPOSE, WARRANTIES CREATED BY ANY
AFFIRMATION OF FACT OR PROMISE
OR BY ANY DESCRIPTION OF THE LEASE ASSIGNED
HEREUNDER, AND ALL
OTHER REPRESENTATIONS AND WARRANTIES
WHATSOEVER.
4. GOVERNING LAW. This instrument shall be governed
and
controlled by the law of the State of
Ohio.
IN
WITNESS WHEREOF, the undersigned have caused this
Assignment and Assumption of Lease to be
executed as of the
date
first written above.
ASSIGNOR:
PRECO II CRIC LLC,
a Delaware
limited liability
company
By: /s/ Marjorie S Palace
Marjorie S. Palace,
Authorized Person
COMMONWEALTH OF MASSACHUSETTS )
) SS.
COUNTY OF SUFFOLK
)
I, Andrea M Mullen, a Notary Public
in and for said County,
in the State aforesaid, DO HEREBY CERTIFY,
that Marjorie S.
Palace, personally known to me to be the Authorized
Person of
PRECO II CRIC LLC, a Delaware limited liability company
("Company"), and personally known to me to be
the same person
whose name is subscribed to the foregoing
instrument as
such
Authorized Person, appeared before me this
day in person and
acknowledged that she signed and delivered
the said instrument as
her own free and voluntary act, and as the
free and voluntary act
and deed of said Company, for the uses
and purposes therein
set
forth.
GIVEN
under my hand and Notarial Seal this
29th day of
April, 2004.
/s/ Andrea M Mullen
Notary Public
[notary seal]
ASSIGNEE:
AEI INCOME & GROWTH FUND 25 LLC,
a Delaware
limited liability
company
By: AEI Fund Management XXI, Inc.,
a Minnesota corporation,
its Managing Member
By: /s/ Robert P Johnson
Robert P. Johnson, President
STATE OF MINNESOTA
)
)
COUNTY OF RAMSEY
)
I,
Jennifer L Schreiner,
a Notary Public in and
for said
County, in the State aforesaid, DO HEREBY
CERTIFY, that Robert P.
Johnson, personally known to me to be the
President of AEI
FUND
MANAGEMENT XXI, INC., a Minnesota
corporation, on its own behalf
and as the Managing Member for AEI INCOME
& GROWTH FUND 25 LLC, a
Delaware limited liability company
("Company"), and
personally
known to me to be the same person whose
name is subscribed to the
foregoing instrument as such President,
appeared before me
this
day in person and acknowledged that he
signed and delivered
the
said instrument as his own free and
voluntary act, and
as the
free and voluntary act and deed of said
Company, for the uses and
purposes therein set forth.
GIVEN
under my hand and Notarial Seal this
day of
April, 2004.
/s/ Jennifer L Schreiner
Notary Public
[notary seal]
This Instrument Prepared by:
G. Dean Reed, Esq.
Liechty & McGinnis, P.C.
7502 Greenville Avenue, Suite 750
Dallas, Texas 75231
EXHIBIT A
LEGAL DESCRIPTION
PARCEL 1
SITUATED IN THE CITY OF MACEDONIA, COUNTY
OF SUMMIT AND STATE
OF
OHIO AND KNOWN AS BEING A PART OF "BLOCK G"
IN W & M PROPERTIES
MACEDONIA COMMONS SUBDIVISION AS SHOWN ON
THE PLAT RECORDED
IN
PLAT CABINET I, SLIDES 475 THROUGH 478,
INCLUSIVE, OF THE SUMMIT
COUNTY RECORDS, ALSO KNOWN AS BEING A PART
OF ORIGINAL NORTHFIELD
TOWNSHIP LOT NO. 26, FURTHER BOUNDED AND
DESCRIBED AS FOLLOWS:
BEGINNING AT THE INTERSECTION OF THE CENTERLINE OF AKRON-
CLEVELAND ROAD (S.R. 8) WITH THE CENTERLINE
OF MACEDONIA
COMMONS
BOULEVARD, 80.00 FEET WIDE AND VARIABLE, AS
SHOWN ON SAID PLAT OF
MACEDONIA COMMONS SUBDIVISION; THENCE
NORTHEASTERLY ALONG
SAID
CENTERLINE OF MACEDONIA COMMONS BOULEVARD,
SAID LINE BEING
THE
ARC OF A CURVE DEFLECTING TO THE LEFT, SAID
CURVE HAVING A RADIUS
OF 452.50 FEET AND A CHORD OF 363.15
FEET, WHICH CHORD BEARS N.
47 DEG. 13' 12" E, 373.68 FEET TO A
POINT OF TANGENCY N 23
DEG.
33' 45" E, CONTINUING ALONG SAID
CENTERLINE OF MACEDONIA COMMONS
BOULEVARD, 426.67 FEET TO A POINT THEREIN;
THENCE S. 66 DEG.
26'
15" E, 37.87 FEET TO A POINT IN THE
SOUTHEASTERLY LINE OF
SAID
MACEDONIA COMMONS BOULEVARD, WHICH LINE ALSO
BEING NORTHWESTERLY
LIMITED ACCESS LINE OF INTERSTATE ROUTE
271; THENCE N. 22
DEG.
21' 20" E ALONG SAID SOUTHEASTERLY LINE OF
MACEDONIA COMMONS
BOULEVARD AND NORTHWESTERLY LIMITED ACCESS LINE
OF INTERSTATE
ROUTE 271, 59.67 FEET TO A POINT
THEREIN, SAID POINT
BEING THE
MOST SOUTHERLY CORNER OF THE AFOREMENTIONED
"BLOCK G", SAID POINT
ALSO BEING THE PRINCIPAL PLACE OF
BEGINNING.
COURSE NO. 1: THENCE NORTHWESTERLY, CONTINUING
ALONG THE NOW
NORTHEASTERLY LINE OF MACEDONIA COMMONS BOULEVARD, SAID LINE
BEING THE ARC OF A CURVE DEFLECTING TO THE LEFT,
SAID CURVE
HAVING A RADIUS OF 527.62 FEET AND A CHORD
OF 380.55 FEET,
WHICH
CHORD BEARS N 04 DEG. 04' 07" W, 389.32 FEET
TO A POINT OF
TANGENCY;
COURSE NO. 2: THENCE N 25 DEG. 12' 26" W,
CONTINUING ALONG
SAID
NORTHEASTERLY LINE OF MACEDONIA COMMONS
BOULEVARD, 113.98 FEET TO
A POINT OF CURVATURE;
COURSE NO. 3: THENCE NORTHWESTERLY, CONTINUING ALONG SAID
NORTHEASTERLY LINE OF MACEDONIA COMMONS BOULEVARD, SAID LINE
BEING THE ARC OF A CURVE DEFLECTING TO THE
RIGHT, SAID
CURVE
HAVING A RADIUS OF 437.46 FEET AND A CHORD
OF 145.17 FEET,
WHICH
CHORD BEARS N. 15 DEG. 39' 22" W 145.85
FEET TO A POINT THEREIN;
COURSE NO. 4: THENCE S 85 DEG. 41' 01" E,
358.39 FEET TO A
POINT
IN THE AFOREMENTIONED NORTHWESTERLY LIMITED ACCESS LINE OF
INTERSTATE ROUTE 271;
COURSE NO. 5: THENCE S. 21 DEG. 56' 04" W, ALONG SAID
NORTHWESTERLY LIMITED ACCESS LINE OF
INTERSTATE ROUTE 271, 285.27
FEET TO AN ANGLE POINT THEREIN;
COURSE NO. 6: THENCE S 22 DEG. 21' 20" W,
CONTINUING ALONG
SAID
NORTHWESTERLY LIMITED ACCESS LINE OF
INTERSTATE ROUTE 271, 357.79
FEET TO THE PRINCIPAL PLACE OF BEGINNING
AND CONTAINING
2.0565
ACRES, BE THE SAME MORE OR LESS, BUT SUBJECT TO ALL LEGAL
HIGHWAYS AND EASEMENT OF RECORD AND BEING
ACCORDING TO A
SURVEY
DATED JUNE 22, 1994 MADE BY LESLIE P. KENT,
PROFESSIONAL SURVEYOR
NO. 6627 OF SEYMOUR D. WEISS & ASSOCIATES,
INC., CONSULTING
ENGINEERS & SURVEYORS.
PARCEL 2
TOGETHER WITH A NON-EXCLUSIVE PERPETUAL EASEMENT
FOR DRAINAGE
FACILITIES AND ACCESS AS CONTAINED IN AN
EASEMENT AGREEMENT
BY
AND BETWEEN APPLE AMERICAN LIMITED
PARTNERSHIP OF OHIO AND W & M
PROPERTIES DATED AUGUST 3, 1994 AND
RECORDED ON AUGUST 5, 1994 IN
VOLUME 1732 PAGE 837 IN THE OFFICE OF THE RECORDER
OF SUMMIT
COUNTY, OHIO.
PARCEL NO. 33-10568 (PPN NF-00029-01-017)
Commonly known as: 7159 Macedonia Commons
Blvd., Macedonia,
OH
44056
LEASE
BETWEEN
PRECO II CRIC LLC
as Landlord,
and APPLE OHIO LLC
as Tenant
Dated: As of October 21, 2003
TABLE OF CONTENTS
1. BASIC PROVISIONS
1
2. LEASING AGREEMENT; TERM
2
3. RENT
4
4. TAXES
5
5. ENVIRONMENTAL MATTERS
6
6. COMPLIANCE WITH REQUIREMENTS
9
7. COVENANT AGAINST LIENS
9
8. USE AND ENJOYMENT
10
9. TENANT'S PROPERTY; LIEN
WAIVER
12
10. ALTERATIONS; MAINTENANCE AND
REPAIR
12
11. CONDEMNATION AND CASUALTY DAMAGE
14
12. INSURANCE
17
13. ASSIGNMENT AND SUBLETTING
18
14. INDEMNIFICATION
20
15. DEFAULT; REMEDIES
22
16. SURRENDER OF PREMISES
27
17. SUBORDINATION AND ATTORNMENT
28
18. ESTOPPEL CERTIFICATES
29
19. NOTICES
29
20. LEASEHOLD FINANCING
30
21. RIGHT OF FIRST REFUSAL
31
22. TENANT'S RIGHT TO SUBSTITUTE THE
PREMISES
33
23. GUARANTY
36
24. MISCELLANEOUS
37
SCHEDULES AND EXHIBITS
EXHIBIT A
LAND LEGAL DESCRIPTION
EXHIBIT B
LANDLORD AGREEMENT
EXHIBIT C
MEMORANDUM OF LEASE
EXHIBIT D
GUARANTY
EXHIBIT E
SUBORDINATION , NON-DISTURBANCE AND
ATTORNMENT AGREEMENT
LEASE
THIS LEASE ("Lease") dated October .21,
2003, is made and
entered into by and between PRECO II CRlC
LLC, a Delaware
limited liability company ("Landlord"), and
APPLE OHIO LLC,
a Delaware limited liability company
("Tenant").
I. BASIC
PROVISIONS
1.1. Premises Address:
7159 Macedonia Commoms Blvd
Macedonia, Ohio
44056
1.2. Landlord Name and Address:
PRECO II CRJC LLC
One Exeter Place
Boston, MA 02116.
1.3. Tenant Name and Address:
Apple Ohio LLC
6200 Oak Tree Boulevard,
Suite 250
Independence, OH 44131
Attn: Chief Financial Officer
1.4. Lease Date:
October 21, 2003
1.5. Term:
Twenty (20) Lease Years
1.6. Options to Extend:
Four (4) periods of five
(5) Lease Years each
1.7. Exhibits:
Exhibit A -Land Legal Description
Exhibit B -Landlord Agreement
Exhibit C -Memorandum of Lease
Exhibit D -Guaranty of Lease
Exhibit E -Subordination, Non-Disturbance
and Attornment Agreement
2. LEASING AGREEMENT; TERM
2.1.
LEASING AGREEMENT.
Landlord leases to Tenant and
Tenant leases from Landlord upon and
subject to the
terms
and conditions set forth in this Lease
certain real
estate
consisting of approximately 84,358 square
feet of land,
as
legally described in attached Exhibit A,
together with all
easements, rights and appurtenances
thereto, including,
but
not limited to all of Landlord's
rights, if any, to use any
common areas, parking, access drives and
sidewalks in
any
center of which the real estate may be a
part (the "Land").
The Land is commonly known as 2250
Claremont Avenue, Ashland
("City"), Ashland County, Ohio. The Land,
together with the
restaurant and other related improvements now
or hereafter
thereon ("Improvements"), are referred to
in this Lease as
the "Premises." The Premises are leased subject to all
restrictions, covenants, encumbrances and
other matters
of
record on the date of this Lease.
2.2.
TERM. The term of this Lease ("Term") shall
commence ("Commencement Date") on the date set forth
opposite the signatures of the parties on
the signature page
of this Lease and, unless extended or
earlier terminated as
provided herein, shall expire ("Expiration Date") at
midnight on the last day of the twentieth
(20th) "Lease
Year" thereafter. "Lease Year" shall me~
and refer to that
period of twelve (12) full consecutive calendar months
beginning with the first full calendar
month of the Term and
each subsequent period of twelve (12)
consecutive
calendar
months during the Term, provided that if
the Term commences
on other than the first day of a calendar
month, then the
initial fractional month of the Term plus the next
succeeding twelve (12) full calendar months
shall constitute
the first Lease Year of the Term and
provided, further, that
if this Lease is terminated prior to the
Expiration Date,
the last Lease Year may contain less
than twelve (12)
full
calendar months.
2.3. EXTENSION
OF THE TERM. Provided that this Lease is
in full force and effect and no Event of Default has
occurred and is continuing, Tenant shall
have the option to
extend the Term for up to four (4) successive
periods of
five (5) Lease Years each upon all of the
provisions of this
Lease, which extension options shall
automatically be deemed
exercised two hundred seventy (270) days
prior to the
then
current Expiration Date without the requirement for any
further notice; provided, however, that
Tenant shall
have
the right to tem1inate this Lease (and void any such
automatic extension and all remaining extension options)
effective as of any then current Expiration
Date by giving
written notice thereof to Landlord not less
than two hundred
seventy (270) days before such then current
Expiration Date;
and provided, further, that this Lease shall not be
automatically extended (and Tenant shall be
deemed to have
given written notice of non-renewal) if on
the date which is
two hundred seventy (270) days prior to the
then current
Expiration Date an Event of Default has
occurred and is
continuing, and in such event this Lease
shall terminate on
the then current Expiration Date. If and
each time this
Lease is so extended, the word "Term" shall
be deemed to
include the five (5) year extension period
with respect to
which the option has been exercised and the
term "Expiration
Date" shall mean the last day of such five (5) year
extension period.
2.4.PREMISES
LEASED " AS-IS".
LANDLORD HEREBY
LEASES
AND WILL LEASE AND TENANT TAKES AND WILL
TAKE THE PREMISES
"AS IS" AND TENANT ACKNOWLEDGES THAT LANDLORD (WHETHER
ACTING AS LANDLORD HEREUNDER OR IN ANY
OTHER CAPACITY)
HAS
NOT MADE AND WILL NOT MAKE, NOR SHALL
LANDLORD BE DEEMED
TO
HAVE MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR
IMPLIED, WITH RESPECT TO ANY OF THE PREMISES, INCLUDING
WITHOUT LIMITATION ANY WARRANTY OR
REPRESENTATION AS TO
ITS
FITNESS FOR USE, PURPOSE, DESIGN OR CONDITION FOR ANY
PARTICULAR USE OR PURPOSE, AS TO THE
QUALITY OF THE MATERIAL
OR WORKMANSHIP THEREIN, LATENT OR
PATENT, OR AS TO
VALUE,
COMPLIANCE WITH SPECIFICATIONS, LOCATION, USE,
CONDITION,
MERCHANTABILITY, QUALITY, DESCRIPTION, DURABILITY OR
OPERATION, IT BEING AGREED THAT ALL RISKS
INCIDENT THERETO
ARE TO BE BORNE BY TENANT. TENANT
ACKNOWLEDGES THAT
THE
PREMISES ARE OF ITS SELECTION AND TO ITS
SPECIFICATIONS, AND
THAT THE PREMISES HAVE BEEN INSPECTED BY
TENANT AND ARE
SATISFACTORY TO IT. IN THE EVENT OF ANY
DEFECT OR DEFICIENCY
IN ANY OF THE PREMISES OF ANY NATURE,
WHETHER PATENT
OR
LATENT, LANDLORD SHALL NOT HAVE ANY RESPONSIBILITY OR
LIABILITY WITH RESPECT THERETO OR FOR
ANY INCIDENTAL OR
CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT
LIMITATION, STRICT
LIABILITY IN TORT). THE PROVISIONS OF THIS
SECTION 2.4 HAYE
BEEN NEGOTIATED, AND THE FOREGOING
PROVISIONS ARE
INTENDED
TO BE A COMPLETE EXCLUSION AND NEGATION OF
ANY WARRANTIES BY
LANDLORD, EXPRESS OR IMPLIED, WITH RESPECT
TO ANY OF THE
PREMISES, ARISING PURSUANT TO STATUTE, JUDICIAL
DECISION,
THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW, RULE,
REGULATION OR ORDER NOW OR HEREAFTER
IN EFFECT OR OTHER
WISE.
Tenant
acknowledges and agrees that Tenant has examined
the title to the Premises prior to the execution and
delivery of this Lease and has found such title to be
satisfactory for the purposes contemplated
by this Lease.
2.5.
TRUE LEASE. Landlord
and Tenant intend for
this
Lease to be a true lease and not a
transaction creating
a
financing arrangement. Each party shall take
all reasonable
steps to reflect the transaction
represented hereby in
all
applicable books, records and reports (including,
without
limitation, income tax filings) in a manner
consistent with
"true lease" treatment rather than
"financing" treatment.
2.6.
NON- TERMINABLE. Except as and to the extent
expressly set forth in Section 2.3 (with respect
to non-
renewal of this Lease) and in Article 11 of
this Lease, and
Article 22 of this Lease (provided that Tenant (or an
affiliate of Tenant) shall enter into a new
Lease for the
Exchange Property), Tenant shall have no
right to terminate
this Lease. Tenant shall remain
obligated under this
Lease
in accordance with its terms and
shall not take any
action
to terminate, rescind or avoid this Lease,
notwithstanding
any bankruptcy, insolvency, reorganization, liquidation,
dissolution or other proceeding affecting
Landlord or
any
action with respect to this Lease which may
be taken by any
trustee, receiver or liquidator or by any
court.
3. RENT
3.1.
BASE RENT. Tenant
shall pay to Landlord as annual
base rent ("Base Rent") the amount set
forth in column
(b)
below for the corresponding Lease Years
set forth in column
(a) below:
(a) Lease Year (b)
Annual Base Rent
(c)
Monthly Base Rent
1-5
$238,673.00
$19,889.42
6-10
256,573.44
21,381.12
11-15
275,816.40
22,984.70
16-20
296,502.60
24,708.55
21-25*
318,740.28
26,561.69
26-30**
342,645.84
28,553.82
31-35***
368,344.32
30,695.36
36-40****
395,970.12
32,997.51
[an asterisk (*) indicates an
extension period; the
number
of asterisks corresponds to the respective extension
period.]
Base
Rent shall be paid to. Landlord in monthly
installments ("Monthly Base Rent") in the
respective amounts
set forth in column (c) above in advance on
the first day of
each month for which the same is due
during the Term.
Rent
for any partial month shall be prorated on
a per diem basis.
3.2.
PAYMENT. All charges
and costs payable by
Tenant
to Landlord or any other third party
pursuant to this Lease
in addition to Base Rent shall be considered
"Additional
Rent". Base Rent and Additional Rent are
sometimes referred
to collectively as "Rent." Except as
otherwise specifically
provided in this Lease, all Rent shall be
paid by Tenant to
Landlord without notice, demand, offset, abatement,
reduction or deduction by check payable to
Landlord and sent
to Landlord at the address indicated
in Section 1.2 or
to
such other person, entity or place as
Landlord may from time
to time designate by notice to Tenant. If required by
Landlord, Tenant shall make payments of
Monthly Base Rent to
Landlord by wire transfer in immediately
available federal
funds to such account in such bank as
Landlord may designate
from time to time upon not less than thirty
(30) days'
notice to Tenant, which account shall be
the same account to
which Tenant and/or Tenant's affiliates
who lease other
properties from Landlord named herein (or its
affiliates)
wire transfer payments of Monthly Base
Rent for at least
nine (9) other properties. Monthly Base
Rent for the period
from and including the Commencement Date through and
including the last day of the first full
calendar month
of
the Term shall be paid in advance on the
Commencement Date.
3.3.
LATE PAYMENTS. If Tenant shall fail to make
payment of any installment of Base Rent or
any Additional
Rent payable to Landlord (rather than to
a third party)
within ten (10) days after the date when
each such payment
is due, Tenant shall pay to Landlord
interest at
a rate
equal to the Default Rate
(ashereii1after defined) on the
amount unpaid computed from the date such
payment of
Base
Rent or Additional Rent was due to and
including the date of
payment thereof (but only with respect to amounts
payable
directly to Landlord or that are not
otherwise subject to an
interest or similar charge that. will be
treated as
Base
Rent or Additional Rent hereunder). Further, if any
installment of Monthly Base Rent is not
paid within
fifteen
(15) days after the date the same is
due, Tenant shall
pay
to Landlord, on demand, as Additional
Rent. a late
charge
(the "Late Charge") equal to four percent (4%) of such
overdue installment of Monthly Base
Rent.
3.4.
NET LEASE. This is a net lease
and Base Rent,
Additional Rent and, except as otherwise
expressly set forth
herein, all other sums payable hereunder by
Tenant shall be
paid without defense (other than
defense of prior payment),
notice, demand, setoff, counterclaim,
recoupment, abatement,
suspension, deferment, diminution, deduction
or reduction.
During the Term of this Lease, Tenant shall
be obligated to
pay and shall be liable for all costs and expenses
associated with or arising from the use, operation,
maintenance, repair or improvements of the Premises
(regardless of whether such costs and expenses
are charged
or imposed against Landlord or Tenant).
4. TAXES
4.1.
As used in this Lease,
the term "Premises
Taxes"
shall mean all real estate, personal
property, ad
valorem
and other taxes and assessments, general and
special, and
all other governmental charges levied,
assessed or
imposed
on or with respect to the Premises or
which arise from
the
ownership, leasing, use, occupancy or
possession of all
or
any portion of the Premises. Without limitation of the
foregoing, it is hereby specifically agreed
that "Premises
Taxes" include all taxes and other governmental charges
assessed or levied (i) on or with respect
to any Base Rent
or Additional Rent payable under this Lease, (ii) with
respect to any period prior to or during
the Term, and (iii)
any interest, penalties, fines and other
amounts charged for
late payment or non-payment of any Premises Taxes.
Notwithstanding the foregoing, Premises Taxes shall not
include (A) any taxes or assessments imposed
on or with
respect to Tenant's Property (as defined in
Section 9.1),
(B) any income, franchise or other taxes measured by
Landlord's income or profit from the Premises on a net
basis, other than any sales, use, rent
occupancy or similar
taxes on or with respect to Base Rent or
Additional Rent, or
(C) any gifts estate or other transfer taxes
imposed on
Landlord.
4.2.
PAYMENT.
(a) Tenant
shall pay Premises Taxes to the
appropriate
governmental authority
before delinquency
and before any interest, penalties or
fines may be
charged with
respect thereto and shall deliver a copy
of all paid tax bills to Landlord promptly upon
request.
(b) If any Premises Taxes relate to a fiscal
period which is
partly within and partly outside of the
period
for which Tenant is responsible,
the amount
thereof
shall b~ prorated so that Tenant will be
responsible
for that portion which relates to the
period
prior to and after the Commencement
Date and
through
the Expiration Date and Landlord will be
responsible for
the portion after the Expiration Date.
(c) Any refunds (including any accrued
interest)
of Premises
Taxes applicable to the period prior to and
during-the Term
shall be the property of Tenant and to
the extent received by Landlord shall
be paid over to
Tenant
promptly after receipt
thereof. Any refund
of
Premises
Taxes
shall be deemed a reduction of
Additional Rent
hereunder.
4.3. CONTEST.
Subject to the provisions hereof, Tenant,
at its own expense, may contest Premises
Taxes in any manner
permitted by law, in Tenant's name, and,
whenever necessary,
in Landlord's name and Landlord will
cooperate at
Tenant's
sole cost and expense with Tenant and
execute any documents
reasonably required for such purpose. Any
such contest shall
be conducted by Tenant in good faith
and at its sole
cost
and expense, by appropriate
proceedings which shall operate
during the pendency thereof to prevent (i)
the collection
of, or other realization upon, the Premises Taxes so
contested, (ii) the sale, forfeiture or loss of the
Premises, any Base Rent or any Additional
Rent to satisfy
the same, (iii) any interference with the
use or occupancy
of any of the Premises, and (iv) any
interference with
the
payment of any Base Rent or the portion of
any Additional
Rent that does riot represent the Premises
Taxes being
contested under this Section 4.3.
In no event shall
Tenant
pursue any contest with respect to any
Premises Taxes in any
manner that exposes Landlord to (i) criminal liability,
penalty or sanction, (ii) any civil
liability, penalty
or
sanction for which Tenant has not made
provisions reasonably
acceptable to Landlord, or (iii) defeasance
of its interest
the Premises. Tenant agrees that each such
contest shall be
diligently prosecuted to a final conclusion.
Tenant shall
pay and save Landlord harmless from
and against any and all
losses, judgments, decrees and costs (including. without
limitation, attorneys' fees and expenses)
in connection with
any such contest and shall, promptly after the final
determination of such contest, fully pay and
discharge the
amounts which shall be levied, assessed,
charged or imposed
or be determined to be payable therein or
in connection
therewith, together with all penalties, fines, interest,
costs and expenses thereof or in connection
therewith.
5. ENVIRONMENTAL MATTERS
5.1.
DEFINITIONS.
For purposes of this Lease the
following terms shall have the following
meanings:
(a) "ENVIRONMENTAL
LAWS" -all present and
future
laws,
statutes, rules,
regulations, orders
and other
requirements
of any federal, state, local or other
governmental
authority relating
to the environment,
environmental
protection or
regulation, the
emission,
disposal or discharge or the actual or threatened
release
into
the environment of pollutants or
contaminants
or to any Hazardous Substance or HS
Activity.
Without
limitation
of the foregoing,
Environmental
Laws include each of
the following,
as
enacted
as of the date hereof
or as hereafter amended:
the Comprehensive Environmental
Response, Compensation
and Liability Act of 1980, 42 U.S.C.
9601 et seq; the
Resource
Conversation and
Recovery Act
of 1976, 42
U.S.C. 6901 et
seq. the Toxic Substance Control Act, 15
U.S.C.
2601 et seq, the Water Pollution
Control Act
(also knows as
the Clean Water Act), 33 U.S.C. 1251 et
seq.;
the Clean Air Act, 42 U.S.C. 7401 et
seq.; and
the Hazardous Materials Transportation
Act, 49 U.S.C.
5l01 et seq. and
any similar state laws.
(b) "HAZARDOUS
SUBSTANCE" -any substance defined
or classified in any Environmental
Laws as a toxic or
hazardous
chemical, waste, material or substance. or as
a pollutant or contaminant (including, without
limitation,
petroleum or any
by-product or
fractions
thereof,
lead,
asbestos
and asbestos containing
materials,
polychlorinated byphenyls and radioactive or
explosive
materials);
and any substance which if
present requires
investigation or remediation under any
Environmental
Law or results in liability
thereunder
for exposure
thereto or discharge thereof.
(c) "HS ACTIVITY" -the generation,
manufacture,
handling,
transportation, usage,
treatment,
release,
discharge,
removal,
storage or disposal of any
Hazardous
Substance.
5.2. TENANT
OBLIGATIONS.
(a) On or after
the Commencement Date, Tenant (i) shall
not conduct or knowingly permit any HS
Activity in, on
or
from the Premises or knowingly allow any Hazardous
Substances on the Premises, in each case, in
violation of
any Environmental Laws, and (ii) shall comply or cause
compliance with all Environmental Laws applicable to
Tenant's use or occupancy of the Premises,
and shall cause
the Premises to comply with all
Environmental Laws; in each
case, except to the extent such
violation results from, or
compliance is required as a result of, any
act of Landlord
or any act or omission of any other person
other than Tenant
and its members, managers, affiliates,
officers, directors,
employees, contractors, representatives,
agents, assignees
or subtenants (collectively, "Tenant's
Parties"), or relates
to any condition existing on the Commencement
Date (the
obligations of Tenant under the preceding
clauses (i)
and
(ii) are called "Tenant's Compliance
Obligation").
Tenant
shall promptly give notice to Landlord if
Tenant becomes
aware of any action, claim, suit or
proceeding relating to a
violation or alleged violation of any
Environmental
Laws
with respect to Tenant's use or occupancy of
the Premises
filed or threatened against Tenant or
the Premises. If,
at
any time during the Term, Hazardous
Substances shall
exist
in or on the Premises to which Tenant's Compliance
Obligation applies, then Tenant shall, or shall cause
responsible third parties to, promptly commence and
diligently implement all investigation, site monitoring,
containment, cleanup, removal, restoration
or other remedial
work of any kind or nature
(collectively, "Remedial Work")
to the extent required by Environmental Laws, and in
compliance with all Environmental Laws, all
at Tenant's sole
cost and expense.
(b) Tenant agrees to indemnify, defend and hold
harmless Landlord, any Landlord Lender and
their respective
managers, partners, members, officers, directors,
shareholders, employees and agents ("Landlord
Indemnitees")
from and against any and all claims, demands, actions,
liabilities, damages, assessments, losses,
fines, penalties,
costs and expenses, including remediation,
clean-up and
detoxification costs and reasonable
attorneys' fees, arising
from or related to any breach or violation
by Tenant of its
obligations set forth in Section 5.2(a).
The provisions
of
Section 5.2 shall survive the expiration
or termination of
this Lease.
(c) Upon Landlord's request, at any
time after the
occurrence and during the continuance of an
Event of Default
or at such other time as Landlord has
reasonable grounds to
believe that Tenant is in violation of
Tenant's
Compliance
Obligation, Tenant shall cause an
inspection or audit of the
Premises by an environmental engineer or other
appropriate
consultant reasonably approved by Landlord
to determine the
presence or absence of Hazardous Substances
on the Premises.
If Tenant fails to effectuate the commencement
of such
inspection or audit within thirty (30) days after such
request or fails to deliver a written report of such
inspection or audit to Landlord within
sixty (60) days after
such request, Landlord may order the same,
and Tenant hereby
grants to Landlord and its respective
employees, contractors
and agents access to the Premises upon prior reasonable
notice to undertake such inspection or
audit, provided
that
such inspection or audit does not interfere
with the conduct
of Tenant's business on the Premises, Landlord provides
Tenant certificates of insurance naming Tenant as an
additional insured and containing such types
of insurance
and limits as Tenant reasonably
requires, Landlord promptly
repairs any damage caused by such testing
and restores the
Premises to the condition in which it existed
immediately
prior to such damage at Landlord's sole
cost and expense,
and Landlord shall indemnify Tenant if and to
the extent
required under Section 14.2 hereof for all loss, cost,
damage, liens, claims, liabilities or
expenses
(including,
but not limited to, reasonable
attorneys' fees, court costs
and disbursements) incurred by Tenant
arising from
or by
reason of such inspection or audit. The cost of such
inspection or audit shall be paid (i) by
Tenant if such
inspection or audit shall confirm a violation
of Tenant's
Compliance Obligation or (ii) by Landlord
if such inspection
or audit does not confirm a violation of
Tenant's Compliance
Obligation.
(d) Landlord and Tenant expressly agree that,
notwithstanding anything to the contrary
set forth in
this
Lease (including, but not limited to, the provisions of
Section l4.l hereof), except in the case of Tenant's
obligations expressly set forth under Sections
5.2(a), (b)
and (c) hereof, Tenant shall have no
obligation under
this
Lease (i) to defend, indemnify or hold
harmless Landlord
or
Landlord Indemnitees with respect to any. Hazardous
Substance, Environmental Laws or HS
Activity, (ii) to engage
any environmental engineer or
appropriate consultant
with
respect to any Hazardous Substance,
Environmental Laws or HS
Activity, (iii) to conduct any audit or
inspection of
the
Premises with respect to any Hazardous Substance,
Environmental Laws or HS Activity, (iv) to
comply or cause
compliance with any Environmental Laws, or
(v) to perform or
cause performance of any Remedial Work
with respect to
any
Hazardous Substance, Environmental Laws or
HS Activity.
5.3. LANDLORD
OBLIGATIONS.
On or after the Commencement Date,
Landlord shall not
conduct any HS Activity on, about or from
the Premises.
Landlord shall promptly give notice to
Tenant if Landlord
becomes aware of any action, claim, suit or proceeding
relating to a violation or alleged violation of any
Envirorn11ental Laws filed or threatened
against Landlord or
the Premises or if Landlord has received
notice or has
actual knowledge of any HS Activity on
the Premises
caused
by a person other than Tenant or any Tenant
Party.
6. COMPLIANCE WITH REOUIREMENTS
6.1. COMPLIANCE WITH
LAW
During
the Term, Tenant shall
comply, and shall
cause
the Premises to comply, in all
material respects with
and
shall correct any violation of any laws, statutes,
ordinances and other legal and insurance requirements,
whether now or hereafter in force, applicable to the
Premises or Tenant's use or occupancy of the Premises,
including without limitation, the
Occupational Safety
and
Health Act, as amended ("OSHA "), the Americans with
Disabilities Act of 1990, as amended ("
ADA"), and,
subject
to Section 5.2, all Environmental Laws. Tenant shall
procure, maintain and comply, and shall
cause the Premises
to comply, with any and all permits,
approvals, licenses and
other governmental authorizations
required for the
lawful
use, operation, maintenance and any " Alteration"
(hereinafter defined) of the Premises.
6.2. COMPLIANCE
WITH PERMITTED ENCUMBRANCES
Tenant
agrees that with respect to all easements,
conditions, covenants, restrictions, encumbrances or
agreements now affecting the Premises or
which are hereafter
created by or consented to by Tenant
(collectively,
the
"Permitted Encumbrances"), Tenant shall
observe, perform and
comply with, and cause the Premises to comply
with, and
carry out and perform all of the
obligations therein
which
are to be observed and performed by the owner or any
occupant of the Premises thereunder, and
shall pay all
assessments, fees, costs and expenses
required to be paid by
the owner or any occupant of the Premises
thereunder .
7. COVENANT AGAINST LIENS
7.1.
LIENS. Tenant shall
not cause, suffer or
permit
any mechanic's, materialmen's judgment or other lien
("Lien") to be filed against the Premises
(other than
any
Lien arising due to any act or omission
of Landlord or its
agents); provided that nothing herein shall
be deemed to
limit the rights of Tenant Lender under
Section 20.2 hereof.
If any Lien shall be filed against all or
any portion of the
Premises (other than any Lien arising due
to any act or
omission of Landlord or its agents), (i)
Tenant shall give
notice thereof to Landlord within ten (10)
business days
after the date on which Tenant first
becomes aware of
the
filing of any such Lien, and (ii) within
forty-five (45)
days after first becoming aware of such
filing, (but in
any
event before any enforcement action to
foreclose is
taken
with respect to such Lien), Tenant, at its sole
cost and
expense, shall cause the Lien to be
discharged of record
or
bonded over by any statutory bonding
procedure sufficient to
prevent foreclosure or other enforcement
of such Lien, and
shall deliver notice thereof to Landlord, failing which
Landlord shall have the right, but shall
not be obligated,
to discharge the Lien without
investigating the validity or
amount thereof. Tenant shall reimburse
Landlord on
demand
for any reasonable amounts so paid or
incurred by Landlord,
including reasonable expenses and attorneys'
fees incurred
in connection therewith.
Notice
is hereby given that Landlord shall not be
liable for any labor, services or materials
furnished or to
be furnished to Tenant, or to anyone holding
any of the
Premises through or under Tenant, and that
no mechanic's.
materialman's or other Liens for any such
labor. services or
materials shall attach to or affect the
interest of Landlord
in and to any of the Premises.
8. USE AND ENJOYMENT
8.1. Use.
(a) Unless
otherwise approved in writing by
Landlord,
during the Term the
Premises shall be
used
only for the
operation of an Applebee's Restaurant, or.
If a change in use is requested by Franchisor,
any
other
restaurant
which may be affiliated with or
franchised
by Franchisor. The Premises shall be
attractive
in appearance and
Tenant shall conduct
its
business in a
lawful and reputable manner. Tenant shall
not commit waste on the Premises and
shall not occupy
or use the Premises or permit the same to
be used or
occupied for any
purpose or in any manner that violates
any applicable
legal or governmental requirement.
(b) Tenant shall continuously operate a business
pursuant to Section 8.1(a) from the
Premises during the Term
of this Lease; provided, however,
that if Tenant has
given
Landlord notice of Tenant's intent to substitute the
Premises pursuant to Section 22 hereof,
Tenant may close its
business at the Premises for a continuous
period of up
to
two (2) years while Tenant is arranging for
an Exchange
Property. In addition, Tenant may temporarily cease its
operations at the Premises for (i)
restoration,
alteration
and repair obligations pursuant to the terms of its
Franchise Agreement; (ii) the performance of Alterations
permitted under this Lease; or (iii) as a
result of any
emergency, casualty or event of force
majeure.
(c) All garbage, trash and refuse
generated from the
operation of the business conducted on the
Premises shall be
placed in appropriate garbage receptacles
and, at Tenant's
sole cost and expense, removed from the Premises with
sufficient frequency so as to avoid any
accumulation thereof
outside of such receptacles.
8.2.
EXTERIOR SIGNS,
AWNINGS AND CANOPIES. Tenant, at
its sole cost and expense, may at any time
and from time to
time during the Term install, alter, and/or
replace any and
all exterior signs, awnings and/or
canopies as Tenant
may
determine, so long as they are in compliance with all
applicable laws and all Permitted
Encumbrances. Tenant,
at
its sole cost and expense, shall obtain all necessary
permits for all signs, awnings and
canopies on the Premises
and shall maintain the same in good
condition and repair.
8.3.
UTILITIES. Tenant
shall arrange and contract, in
its name, for and pay when due all
charges for water,
gas,
electricity, cable TV, telephone, trash
removal, scavenger
service and other utility services used or
consumed on
the
Premises by Tenant or its agents during the
Term, all of
which shall be separately metered and
billed to Tenant.
8.4.
QUIET ENJOYMENT. Landlord covenants with
Tenant
that Tenant, upon paying Rent to Landlord
and performing
Tenant's other covenants in this Lease, shall and may
peaceably and quietly have, hold, occupy,
possess and enjoy
the Premises during the Term without
any interference
from
Landlord or anyone claiming by, through or
under Landlord.
8.5.
SIGNAGE
RIGHTS,
PARKING, ACCESS. Landlord
covenants with Tenant that Landlord shall
not engage in any
action, or grant any rights which affect
parking at the
Premises access to the Premises, means of
ingress and egress
to and from the Premises, visibility to or from the
Premises, Tenant's signage at the Premises
or rights to the
roof of the Premises, any
telecommunications equipment or
utilities which service the Premises,
Tenant's air
rights
and any other rights to which Tenant may be entitled
pursuant to any easement agreements or similar
agreements
affecting the Premises without Tenant's prior written
consent, which may be granted or withheld
in Tenant's sole
discretion but shall not be unreasonably
withheld if
such
action will not materially adversely
affect the conduct
of
Tenant's business at the Premises. Landlord agrees to
deliver to Tenant copies of any notices
Landlord receives
with respect to the aforementioned
rights. Landlord
agrees
that so long as no Event of Default shall
have occurred and
be continuing, upon request by Tenant
(and only after
all
documentation reasonably required to
consummate the relevant
transaction shall have been provided to
Landlord),
Landlord
shall (i) enter into or modify such
easements,
covenants,
waivers, approvals or restrictions for
utilities, parking or
other matters as Tenant may desire for the
operation of the
Premises (collectively, "Easements"), or
(ii) dedicate
or
transfer, minor non-essential unimproved portions
of the
Premises for road, highway or other public
purposes to
the
extent such dedications or transfers are
consistent
with
commercially reasonable development
or operation of the
Premises (the ..Dedications"); provided,
that Landlord shall
be obligated to take such action only if (A) any such
Easements or Dedications do not adversely
affect the value
of the Premises (other than to a de
minimis extent), do not
unreasonably render the use of the Premises
dependent upon
any other property or unreasonably
condition the use of the
Premises upon the use of any other property,
and do not
adversely affect (other than to a de minimis
extent) the
use, or visibility of, or access to, the Premises, (B)
Tenant advises Landlord of the amount of
the consideration,
if any, being paid for such Easements or
Dedications and
that Tenant considers such consideration,
if any, to be fair
under the circumstance and that such
consideration, if
any,
shall be paid to Landlord, (C) Tenant acknowledges in
writing that for so long as this Lease is
in effect, Tenant
will perform all obligations, if any, of
Landlord under the
applicable instrument and Tenant will
remain obligated under
this Lease and AAG (if the Guaranty is
then in effect)
acknowledges in writing that AAG will
remain obligated under
the Guaranty, in each case in accordance with their
respective terms, and (D) Tenant pays all out-of-pocket
costs and expenses incurred by Landlord
in connection with
said Easements or Dedications
including, without limitation
reasonable attorneys' fees. Subject to the
foregoing clauses
(A) through (D), Landlord shall cooperate
with Tenant's
efforts to enter into any Dedications or
Easements.
8.6.
WARRANTIES, GUARANTIES
AND INDEMNITIES.
Landlord
assigns to Tenant, without recourse or
warranty whatsoever,
all warranties, guaranties and indemnities, express or
implied, and similar rights which Landlord
may have against
any manufacturer, seller (other than
the Seller under
the
Purchase and Sale Agreement from whom
Landlord acquired
the
Premises), engineer, contractor or builder
with respect to
the Premises, including, but not
limited to, any rights and
remedies existing under contract or
pursuant to the
Uniform
Commercial Code (collectively, the "guaranties"). Such
assignment shall remain in effect during
the Term. Landlord
hereby agrees to execute and deliver at Tenant's
expense
such further documents, including
powers of attorney (which
shall contain indemnity agreements from
Tenant to Landlord
which shall be in form reasonably
satisfactory to Landlord),
as Tenant may reasonably request in order
that Tenant may
have the full benefit of the assignment of guaranties
effected or intended to be effected by this
Section 8.6.
Upon the occurrence of a termination
of this Lease the
guaranties shall automatically revert to
Landlord.
9. TENANT'S PROPERTY: LIEN WAIVER
9.1.
TENANT'S PROPERTY.
Landlord agrees that
all (i)
furniture, fixtures, furnishings, equipment (other than
floor and wall coverings, fixtures and
equipment which
are
"built-ins" or constitute an integral part
of the Building,
any walk-in cooler, heat, air conditioning and
ventilation
systems, electrical, plumbing and
mechanical systems, all of
which are owned by and are the property of Landlord),
Kitchen Equipment (as hereinafter defined), inventory,
merchandise, goods, chattels, trade fixtures, signage,
appliances display cases, supplies, tools, machinery,
security systems, computer software or other personal
property of Tenant (including, without
limitation,
trade
fixtures in, on, around or affixed to the
Premises), (ii)
furniture, fixtures, furnishings, equipment, supplies,
tools, machinery, security systems, computer software,
signage and other personal property (including, without
limitation, trade fixtures in, on, around
or affixed to the
Premises) which display the name, trade
name, trademark,
service mark, logo, insignia, slogan,
emblem or symbol
of
Applebee's International Inc.'s
("Franchisor") or of
Tenant
("Distinctive Property"), and (iii) all
licenses, permits,
approvals and authorizations. if any, which
are required in
connection with the operation of Tenant's business,
including, without limitation, all liquor
licenses, at
any
time located on the Premises (collectively, "Tenant's
Property"), shall be and at all times
remain the property of
Tenant regardless of whether the same (x)
is affixed to the
Improvements on the Land or the manner in
which the same is
affixed (unless permanently affixed) or
(y) may now or
hereafter be regarded as a fixture or as property of
Landlord by operation of law or otherwise,
unless, however,
such fixtures and equipment cannot be removed without
substantial damage to any Improvements which cannot be
easily repaired. As used herein the term
"Kitchen Equipment"
shall include, without limitation,
kitchen fixtures (except
for sanitary plumbing fixtures),
counters, stainless
steel
equipment, ranges, ovens, display cases
and refrigeration
equipment (excluding the walk-in cooler).
Tenant shall have
the right at any time and from time to
time during the Term
and, subject to the provisions of Section
16.2 below, within
fifteen (15) days after the end of the
Term to remove
any
Tenant's Property from the Premises.
9.2.
WAIVER OF LANDLORD'S LIEN. Tenant
contemplates
financing from time to time some or all of
Tenant's Property
with a lender or vendor ("TE Lender") who
will require
a
security interest therein (those items of
Tenant's Property
which are subject to such security
interest being
referred
to collectively as "Financed
Personality"). Landlord hereby
disclaims and waives any and all liens or right which
Landlord may have to claim a lien against the Tenant's
Property for nonpayment 9f Rent or
otherwise and agrees
to
execute and deliver promptly upon request
a waiver with
respect thereto.
10. ALTERATIONS: MAINTENANCE AND REPAIR
10.1.
Alterations.
(a) ALTERATIONS. For
purposes of this Lease, any
physical improvement addition, enhancement
or change with
respect to all or any portion of the
Premises is referred to
as an "Alteration." Tenant or Franchisor
shall have the
right at any time and from time to time
during the Term to
make or cause to be made any Alteration
in or to the
Premises (i) without Landlord's consent, if
such Alteration
is performed in order to comply with any of Tenant's
agreements with Franchisor and such Alteration does not
adversely affect any structural component of
the Building
and (ii) in the case of any Alteration other
than those
permitted under clause (i) above, with Landlord's prior
consent, which consent shall not be unreasonably
withheld
provided that such Alteration does not
(A) diminish the
value of the Premises (including, by way of
example only,
but without limitation, by diminishing
the utility of
the
Improvements for use as a restaurant or diminishing the
useful life of the Improvements), except to a
de minimis
extent, or (B) adversely affect any
structural component
of
the Building. Every Alteration shall
be made in
accordance
with all applicable laws, legal requirements and the
Permitted Encumbrances. If Tenant shall
submit a request
to
Landlord for Landlord's approval of
an Alteration which
requires Landlord's approval, Landlord
shall (x) approve
such Alteration proposed by Tenant within
twenty-one (21)
days of receiving Tenant's proposal and
request for approval
or (y) disapprove Tenant's proposal in writing with a
detailed explanation of its objections within twenty-one
(21) days of receiving Tenant's proposal and
request for
approval. If Tenant submits a proposal to Landlord and
Landlord disapproves such proposal within the twenty-one
(21) day time period, Tenant may submit another
proposal
with modifications thereto made in
response to
Landlord's
objections and Landlord shall so approve or
disapprove same
within seven (7) days after submission of
such modified
proposal. If Landlord does not approve or
disapprove
any
proposal or modified proposal in writing with
a detailed
explanation of its objections within the
applicable seven
(1) or twenty-one (21) day period, Tenant
may submit to
Landlord a reminder notice, which shall state that
Landlord's failure to disapprove the applicable proposal
within seven (7) days after receipt of
such reminder notice
shall be deemed to constitute Landlord's
approval thereof.
If Landlord does not disapprove such proposal
or modified
proposal in writing with a detailed explanation of
Landlord's objections to Tenant's
modifications within seven
(7) days after receipt of Tenant's reminder
notice, Landlord
shall be deemed to have approved the
Alterations proposed by
Tenant.
(b) In connection with any Alteration: (i) the
Alterations to be made will be constructed
using materials
of a quality and workmanship at least as good as the
original work; (ii) all such Alterations
shall be performed
in a good and workmanlike manner, and shall
be performed
diligently in a commercially reasonable
time period
subject
to force majeure in compliance with all laws, legal
requirements and the terms of all Permitted
Encumbrances;
(iii) all work done in connection with any
such Alteration
shall comply in all material respects
with all requirements
of any insurance policies in effect with
respect to the
Premises (the "Insurance Requirements");
(iv) Tenant shall
pay when due all costs and expenses of
any such Alteration,
and shall discharge all liens filed
against any of the
Premises arising out of the same; (v)
Tenant shall
procure
and pay for all permits and licenses
required in connection
with any such Alteration; (vi) all such
Alterations shall be
the property of Landlord and shall be
subject to this Lease
(except for any Alteration which constitutes Tenant's
Property); and (vii) all Alterations shall
be made under the
supervision of an architect or engineer
selected by
Tenant
and in accordance with plans and
specifications which shall
be submitted to Landlord prior .to
the commencement of
the
Alterations, provided, however, Landlord
shall have no right
to approve such architect, engineer, plans or
specifications, except as expressly set
forth in Section
IO.I(a).
10.2.
MAINTENANCE AND
REPAIR. During the Term, Tenant
at its sole cost and expense, agrees to
make all necessary
repairs and replacements to the Improvements
as often as
required to keep and maintain the Premises
in good and safe
condition and repair. Notwithstanding any
provision to
the
contrary, Tenant's obligations under this
section shall not
include making any repair or improvement
necessitated by the
act of Landlord, its agents, employees or servants. If
Tenant shall default in its obligations
under this Section
10.2, Landlord may, after thirty (30) days
written notice to
Tenant and failure by Tenant to perform any necessary
repairs and replacements to the Improvements
within such
thirty (30) day period, enter the Premises
to commence such
repairs or replacement. All reasonable
sums incurred by
Landlord in connection with any such repair or
replacement
shall constitute Additional Rent payable
by Tenant under
this Lease and shall be paid by Tenant to
Landlord within
ten (10) days of Tenant's receipt of a
detailed invoice for
such charges.
11.
CONDEMNATION AND CASUALTY DAMAGE
11.1.
SUBSTANTIAL TAKING. If
all or substantially
all
of the Premises is taken or
appropriated for any public or
quasi-public use or purpose by any lawful
power or authority
by the exercise of the right of
eminent domain or by virtue
of condemnation or other similar
proceedings, including
a
deed given in lieu thereof ("Taking"), other than a
temporary Taking for a period of one (1)
year or less, this
Lease shall terminate as of the date
possession is required
by the condemning authority and Rent and
all other charges
and costs payable hereunder shall be
adjusted and paid
to
the effective date of termination.
11.2.
OTHER TAKING. (a) If there shall be
a Taking,
other than a temporary Taking for a
period of one (1)
year
or less, of (i) a portion of the Building,
(ii) twenty
percent (20%) or more of the parking area
of the Premises,
or (iii) any material part of a driveway or roadway
necessary for access to the Premises, and in Tenant's
reasonable judgment such Taking under clauses
(i),(ii) or
(iii), would render the Premises (or the
remainder thereof)
unsuitable for the conduct of Tenant's business, Tenant
shall have the right to terminate this
Lease as of the
date
possession is required by the condemning
authority by giving
notice to that effect to Landlord within
sixty (60)
days
after notice to Tenant of the date such possession is
required. In such event, Rent and all other
charges and
costs payable hereunder shall be
adjusted and paid to
the
effective date of termination.
(b) If only a portion of the Premises
is subject to a
Taking and Tenant is not entitled to or
shall not exercise
its right to terminate this Lease pursuant to Section
11.2(a) this Lease shall continue in full
force and effect,
and there shall be no abatement or
reduction of Rent payable
hereunder. Tenant shall make any and all repairs and
restorations to the remainder of the
Premises to the
extent
necessary to render the same a complete
architectural unit
suitable for Tenant's use.
11.3.
COMPENSATION. (a) In
the event that all or
any
portion of the Premises is subject to a
Taking, Landlord and
Tenant shall cooperate to maximize the amount of the
recovery from the condemning authority. If
the recovery from
the condemning authority is paid into
a common fund or paid
only to Landlord, such recovery shall be allocated as
follows and in the following priority: (i)
so long as no
Event of Default shall have occurred and
be continuing, to
Tenant for the cost of any repairs required
pursuant to
Section 11.2(b), subject, however, to the provisions of
Section 11.3(b) hereof; (ii) to Landlord, that portion
allocable to Land which is taken; (iii) to
Landlord, that
portion allocable to Improvements which
are taken; (iv) to
Tenant, that portion allocable to Tenant's Property or
Tenant's relocation and moving expenses; and (v) to
Landlord, the balance. Notwithstanding the
foregoing, all
proceeds from a temporary Taking shall be
(A) paid to Tenant
if this Lease is not terminated and
(B) equitably allocated
between Landlord and Tenant as of the date
of termination if
this Lease is terminated. The provisions of
this section
shall survive any termination of this Lease
pursuant to
Section 11.1 or 11.2(a).
(b) If the proceeds from a Taking, and
the estimated
costs of repairs to be performed by Tenant pursuant to
Section 11.2(b), exceeds $125,000.00, then
such proceeds
shall be held by Landlord or Landlord's
Lender, and Landlord
shall cause the proceeds to be paid out
from time to time to
Tenant as the work progresses, subject
to each of the
following conditions:
(i) Each request for
payment shall be made on not
less
than ten (10) business days' prior notice to
Landlord,
and shall be accompanied by an officer's
certificate
stating (A) that no Event of Default exists
under
this Lease and (B) that the sum requested is
validly
required to reimburse
Tenant for payments
by
Tenant
to complete the repair
work, or is validly
due
to the contractor, subcontractors, materialmen,
laborers,
engineers,
architects
or other persons
rendering
services or materials for the work (giving a
brief
description of such
services and materials). At
the time of disbursement, no Event of Default
shall
have occurred
and be continuing.
(ii) Each request for payment shall be accompanied
by waivers of lien reasonably
satisfactory to Landlord
covering
that part of the work for which
payment or
reimbursement
has been made as of the date shown on the
current
request.
(iii) Landlord shall
release to Tenant the amount
requested by
Tenant, subject to the amount retained by
Landlord
in accordance with subsection (iv) below,
within
ten (10) business days
of Tenant's satisfaction
of the items set forth in subsection
(i) and (ii)
above.
Disbursements shall be
made not more frequently
than once every
thirty (30) days.
(iv) Except
and to the extent that Tenant is
already
retaining a like
amount from its
contractors,
Landlord
(or Landlord Lender)
may retain 10%
of the
proceeds as
retainage until the repairs and restoration
are
substantially complete.
(v) Proceeds held by
Landlord in accordance
with
this
Section shall be held in an interest bearing
account and any
interest earned on the proceed shall be
a part of the proceeds, and shall be
disbursed in
accordance
with this Lease Landlord shall take any
interest
earned
into
account for purposes of
determining its
federal income tax liability, if any,
and shall pay
any income taxes thereon.
11.4.
CASUALTY DAMAGE.
(a) If the Improvements or any portion
thereof are
damaged or destroyed by fire or other
casualty ("Casualty"),
and this Lease is not terminated pursuant
to subsection
11.4(b) below, Tenant shall, promptly and
diligently repair
such damage and restore the Improvements as nearly as
possible to the condition which existed prior to the
occurrence of such Casualty or to any
comparable or improved
condition consistent with Tenant's or Franchisor's then-
current store design and this Lease shall remain
in full
force and effect. Tenant promptly shall commence and
diligently pursue to completion the repair,
restoration and
replacement of the damaged or destroyed
Improvements, due
allowance being made for time needed to obtain permits,
adjust insurance and for delay on account
of events of force
majeure. Such repair, restorat
