ASSIGNMENT AND ASSUMPTION OF LEASE AND GUARANTY
THIS
ASSIGNMENT
AND ASSUMPTION OF LEASE AND GUARANTY
("Assignment") effective as of this 29th day of December, 2006
by
and between
AEI FUND MANAGEMENT XVII, INC., a Minnesota
corporation,
("Assignor") and AEI
INCOME &
GROWTH FUND XXII
LIMITED PARTNERSHIP,
a Minnesota limited
partnership
and AEI
INCOME &
GROWTH FUND 26 LLC, a Delaware limited liability
company, as
tenants
in common (together, collectively
"Assignee").
RECITALS
WHEREAS,
Assignor is the owner of certain
real property
located at 1516 South
Washington Street, City of Crawfordsville,
Montgomery County,
Indiana as more
particularly
described on
EXHIBIT A attached hereto and incorporated herein by this
reference (the "Property")).
WHEREAS,
Assignor has leased the Property to Apple Indiana
II LLC, a Delaware limited liability
company ("Apple Indiana"),
pursuant to that certain Lease Agreement dated September 21,
2006
(the "Lease"); and
WHEREAS,
Apple American Group LLC., a Delaware limited
liability company ("Guarantor") has executed a Guaranty of
Lease
dated September 21, 2006 (the "Guaranty"); and
WHEREAS, in connection with Assignor's conveyance of its fee
simple interest
in the Property to Assignee, as tenants in
common, Assignor
desires to assign its right, title and interest
in and to the Lease
and the Guaranty to AEI Income & Growth Fund
XXII Limited
Partnership, an
undivided sixty
percent (60.0%)
interest as a tenant in common; and AEI Income & Growth
Fund 26
LLC, an undivided
forty percent (40.0%) interest as a tenant in
common, and
Assignee desires to
assume Assignor's right, title
and interest in and to the Lease and the Guaranty;
NOW,
THEREFORE,
for good and valuable
consideration, the
receipt and sufficiency of which is hereby acknowledged,
Assignor
and Assignee agree as follows:
1.
ASSIGNMENT. Assignor
hereby gives, grants, bargains,
sells, conveys,
transfers and sets over unto Assignee, its
successors and
assigns, as of the date first above written (the
"Effective Date"), all of Assignor's right, title and interest
in
and to the Lease and the Guaranty.
2.
ACCEPTANCE
OF ASSIGNMENT AND ASSUMPTION.
Assignee
hereby accepts the
foregoing assignment, and hereby assumes and
agrees to be bound by and perform all of
Assignor's obligations
and liabilities to be
performed and/or occurring under the Lease
or the Guaranty on or after the Effective Date, including,
without limitation,
the obligations for return of security
deposits as provided in the Lease or the Guaranty and/or
required
by law, and any and all obligations for any and
all leasing
commissions, brokerage fees and similar payments which become
due
and payable
after the Effective Date, including, without
limitation, any and all leasing commissions, brokerage fees and
similar payments which become due and payable in connection
with
the exercise of any option or right under the Lease.
3.
INDEMNIFICATION.
(a) Assignor
hereby indemnifies
Assignee, and
agrees to defend and
hold harmless Assignee
from
and against
any and all liability, loss, damage
and expense,
including without
limitation reasonable attorneys' fees, which
Assignee may or shall
incur under the Lease or the Guaranty by
reason of any failure or alleged failure of
Assignor to
have
complied with
or to have performed,
before the Effective
Date,
the obligations
of the landlord
thereunder which
were to be
performed before the Effective Date.
(b) Assignee
hereby indemnifies Assignor, and agrees
to defend and hold harmless Assignor from and against any and
all
liability, loss, damage and expense, including without
limitation
reasonable attorneys'
fees, which Assignor may or shall incur
under the Lease or the Guaranty by reason of
any failure or
alleged failure
of Assignee to comply
with or perform,
on or
after the Effective Date, all the
obligations of the
landlord
thereunder which are
to be performed on or after the Effective
Date.
4.
SUCCESSORS
AND ASSIGNS. The terms
and conditions of
this Agreement
shall be binding upon
and shall inure to the
benefit of the parties hereto and their respective successors
and
assigns.
5.
RETAINED RIGHTS.
Assignee hereby agrees
that Assignor
may, at Assignor's election and expense, proceed at law or
equity
to collect any delinquent rents accruing under the Lease prior
to
the Effective Date.
Assignor hereby agrees
that Assignee
shall
have no obligation to collect any rent due prior to the
Effective
Date under
the Lease; provided, however,
that in the event
Assignee is
paid rent from a tenant that has
delinquent
rent
accruing prior
to the Effective Date,
and such payment
is in
excess of current rent
due and payable under the Lease and any
collection costs incurred by Assignee to collect such rents,
then
Assignee agrees to pay such excess amount to Assignor as soon
as
reasonably practicable after the date of receipt by Assignee.
6.
MISCELLANEOUS. This
Assignment shall be governed and
construed in
accordance with the laws of the State of Indiana.
This Agreement may be
executed in several counterparts, each of
which shall
be deemed an original, and all of
which together
shall constitute one and the same instrument.
IN
WITNESS WHEREOF, Assignor and Assignee have executed this
Assignment as of the date and year first above written.
"ASSIGNOR"
AEI FUND MANAGEMENT XVII, INC.
a Minnesota corporation
By: /s/ Robert P
Johnson
Name:
Robert P Johnson
Title:
President
STATE OF MINNESOTA
)
) ss.
COUNTY OF RAMSEY
)
The foregoing
was acknowledged before me this 29th day of
December, 2006,
by Robert P. Johnson,
in his capacity
as the
President of
AEI Fund Management XVII, Inc., a Minnesota
corporation, who
acknowledged the
execution of
the foregoing
instrument to be the
voluntary act and deed of said corporation
by authority of its board of directors on behalf of the
company.
[Seal]
/s/ Jennifer L Dingmann
Print Name: Jennifer L
Dingmann
My Commission Expires: 1/31/2010
"ASSIGNEE"
AEI INCOME & GROWTH FUND XXII
LIMITED PARNTERSHIP,
a Minnesota limited partnership
By: AEI Fund
Management XXI, Inc.,
a Minnesota
corporation,
its
Corporate General Partner
By: /s/ Robert P
Johnson
Name:
Robert P Johnson
Title:
President
STATE OF MINNESOTA
)
) ss.
COUNTY OF RAMSEY
)
The foregoing
was acknowledged before me this 29th day of
December, 2006,
by Robert P. Johnson,
in his capacity
as the
President of
AEI Fund Management XXI, Inc., a Minnesota
corporation, the corporate General Partner of AEI Income &
Growth
Fund XXII Limited Partnership, a Minnesota
limited
partnership
("Partnership"), who acknowledged the execution of the foregoing
instrument to be the
voluntary act and deed of said corporation
by authority
of its board of directors on behalf of the
Partnership.
[Seal]
/s/ Jennifer L Dingmann
Print Name: Jennifer L
Dingmann
My Commission Expires: 1/31/2010
AEI INCOME & GROWTH FUND 26 LLC,
a Delaware limited liability company
By: AEI Fund
Management XXI, Inc.,
a Minnesota
corporation,
its
Managing Member
By: /s/ Robert P Johnson
Name: Robert P
Johnson
Title: President
STATE OF MINNESOTA
)
) ss.
COUNTY OF RAMSEY
)
The foregoing
was acknowledged before me this 29th day of
December, 2006,
by Robert P. Johnson,
in his capacity
as the
President of
AEI Fund Management XXI, Inc., a Minnesota
corporation, the Managing Member of AEI Income & Growth
Fund 26
LLC, a Delaware limited liability company, ("Company") who
acknowledged the execution of the foregoing instrument to be
the
voluntary act and deed
of said corporation by authority of its
board of directors on behalf of the Company.
[Seal]
/s/ Jennifer L Dingmann
Print Name: Jennifer L
Dingmann
My Commission Expires: 1/31/2010
EXHIBIT A
(Legal Description)
PARCEL 1:
Part of the Northwest Quarter of Section
8, Township 18
North,
Range 4 West, in Montgomery County,
Indiana, more
particularly
described as follows:
Commencing at
the Northwest corner of said
Northwest Quarter
Section; thence along the West line thereof, South 00 degrees
26
minutes 24
seconds East (assumed
bearing) 1179.37 feet;
thence
North 89 degrees 33 minutes 36 seconds East to the Easterly
right-
of-way of U.S. 231
46.19 feet to the POINT OF BEGINNING of this
description; thence
North 00 degrees 17 minutes 20 seconds West
on and along said
Easterly right-of-way 41.38 feet to the point
of curvature
of a tangent curve to
the right, from
which the
radius point of said
curve bears North 89 degrees 42 minutes 40
seconds East
914.93 feet; thence on
and along said right-of-way
Northerly along said
curve an arc distance of 252.49 feet to a
point on said curve, said point being North 74 degrees 28
minutes
36 seconds
West 914.93 feet from said radius point; thence
leaving said
right-of-way line
South 75 degrees 33
minutes 28
seconds East 79.71
feet; thence North 14 degrees 26 minutes 32
seconds East 62.16
feet; thence South 82 degrees 33 minutes 30
seconds East 16.10
feet; thence South 72 degrees 33 minutes 30
seconds East 58.14
feet; thence South 83 degrees 26 minutes 31
seconds East 49.09
feet; thence South 08 degrees 59 minutes 15
seconds East 91.19
feet to the point of curvature of a tangent
curve to the right, from which the radius
point of said
curve
bears South
81 degrees 00 minutes
45 seconds West 515.50
feet;
thence Southerly
along said curve on an
arc distance of
36.11
feet to a point on
said curve, said point being North 85 degrees
01 minutes 34 seconds East 515.50 feet from said radius point,
to
the point of curvature of a reverse curve to the left, from
which
the radius point of
said curve bears North 85 degrees 01 minutes
34 seconds East 19.50
feet; thence Southerly, Southeasterly, and
Easterly along
said curve an arc
distance of 28.94 feet
to a
point on said curve, said point being South 00 degrees 00
minutes
00 seconds East 19.50
feet from said radius point; thence North
90 degrees 00 minutes 00 seconds East 77.54 feet; thence South
29
degrees 32 minutes 35
seconds West 184.24 feet; thence South 89
degrees 34 minutes 00
seconds West 270.81 feet to the POINT OF
BEGINNING of this
description, containing 1.931 acres, more or
less.
LESS AND EXCEPT the real property conveyed by
Apple American
Limited Partnership of
Indiana, an Indiana limited partnership,
to the State of Indiana by Warranty Deed
recorded on June
15,
2000 in Deed Record 307, page 49 in the Office of the Recorder
of
Montgomery County, Indiana.
PARCEL 2:
Non-exclusive easement as set out in that certain Declaration
of
Easements and Restrictions recorded July 9, 1996, in Deed
Record
294, page 371, in the Office of the Recorder
of Montgomery
County, Indiana.
TAX KEY #:
023-25032-00
PROPERTY ADDRESS: 1516 South Washington
Street
Crawfordsville, IN
47933
LEASE
BETWEEN
AEI FUND MANAGEMENT XVII, INC
as Landlord,
and APPLE INDIANA II LLC
as Tenant
Dated as of September 21, 2006
(Crawfordsville, Indiana)
TABLE OF CONTENTS
Page
1. BASIC PROVISIONS
1
2. LEASING AGREEMENT;
TERM
1
3. RENT
3
4. TAXES
5
5. ENVIRONMENTAL
MATTERS
6
6. COMPLIANCE WITH
REQUIREMENTS
8
7. COVENANT AGAINST
LIENS
9
8. USE AND ENJOYMENT
9
9. TENANT'S PROPERTY;
LIEN WAIVER
12
10. ALTERATIONS; MAINTENANCE AND REPAIR
13
11. CONDEMNATION AND CASUALTY DAMAGE
14
12. INSURANCE
17
13. ASSIGNMENT AND SUBLETTING
19
14. INDEMNIFICATION
21
15. DEFAULT; REMEDIES
23
16. SURRENDER OF PREMISES
27
17. SUBORDINATION AND ATTORNMENT
28
18. ESTOPPEL CERTIFICATES
29
19. NOTICES
30
20. LEASEHOLD FINANCING
30
21. RIGHT OF FIRST REFUSAL
31
22. [INTENTIONALLY OMITTED]
32
23. GUARANTY
32
24. MISCELLANEOUS
33
LEASE
THIS
LEASE ("LEASE") dated September 21, 2006 ("EFFECTIVE
DATE"), is made and entered into by and between AEI FUND
MANAGEMENT XVII, INC., a Minnesota corporation ("LANDLORD"),
and
APPLE INDIANA II LLC, a Delaware limited liability company
("TENANT").
1. BASIC
PROVISIONS
1.1. Premises
Address:
1516 S. Washington Street
Crawfordsville, IN
47933
1.2. Landlord
Name and Address: AEI Fund Management XVII, Inc.
1300 Wells Fargo Place
30 Seventh Street East
St. Paul, Minnesota
55101
1.3. Tenant Name
and Address:
Apple Indiana II LLC
6200 Oak Tree Boulevard, Suite
250
Independence, OH 44131
Attn: Chief Financial
Officer
1.4. Lease Date:
September 21, 2006
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 1.4 acres 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 1516 South
Washington Street,
Crawfordsville, ("CITY"), Montgomery County,
Indiana. 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 Effective Date 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 mean 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 terminate 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 HAVE 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 OTHERWISE.
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, 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
$223,222.00
$18,601.83
6-10
$239,963.65
$19,996.97
11-15
$257,960.92
$21,496.74
16-20
$277,307.99
$23,109.00
21-25*
$298,106.09
$24,842.17
26-30**
$320,464.05
$26,705.34
31-35***
$344,498.85
$28,708.24
36-40****
$370,336.27
$30,861.36
[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 (as
hereinafter 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 be 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
not
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 (a)
criminal liability, penalty or sanction, (b) any civil
liability,
penalty or
sanction for which Tenant has not
made provisions
reasonably acceptable
to Landlord, or
(c) 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. 5101, 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 specifically including, but not limited to, any
condition existing on the Commencement Date, 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")
(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
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 14.1 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
Environmental
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 REQUIREMENTS
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, including without limitation, ancillary
carry-out food service and the sale of beer, wine and other
alcoholic beverages, 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 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, EASEMENTS. 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, modify or
grant such easements, covenants, waivers, approvals or
restrictions for utilities, parking or other matters as Tenant
may desire for the operation of the Premises (including,
without
limitation, consenting to site and common area changes
affecting
access, parking, tenant mix and the like and approving uses or
users of the other properties in the vicinity of the Premises
which Tenant reasonably believes will have a positive impact on
its business at 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 or, in Tenant's reasonable judgment, will have
a
positive impact on its business at 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.
If
Tenant shall submit a request to Landlord for Landlord's
cooperation in connection with any such Easement or Dedication
which requires Landlord's approval or execution of any
document,
Landlord shall (x) approve such Easement or Dedication, and
execute and deliver to Tenant all documents required in
connection therewith, within ten (10) days of receiving
Tenant's
request for approval, or (y) disapprove Tenant's request in a
written notice with a detailed explanation of its objections
delivered to Tenant within ten (10) days of receiving Tenant's
request for approval.
If Landlord fails to respond within such
ten (10) day period, Tenant's request with respect to such
Easement or Dedication shall be deemed to be approved by
Landlord
hereunder and Tenant is hereby authorized and empowered to
execute and deliver on behalf of Landlord, as Landlord's
attorney-
in-fact, all instruments and documents required in connection
therewith.
If
Landlord timely disapproves of a Tenant request under
this Section 8.5, then Tenant may elect, by delivering written
notice to Landlord, to resolve the matter by expedited
arbitration in accordance with this paragraph. Landlord and
Tenant shall mutually select a single arbitrator within ten
(10)
days after delivery of Tenant's notice of arbitration
hereunder.
If the parties cannot agree upon an arbitrator within such
period, then either party may request that a qualified
arbitrator
be appointed by the office of the American Arbitration
Association located nearest to the Premises. Following selection
or appointment, the arbitrator shall meet jointly with
representatives of Landlord and Tenant within twenty (20) days
to
consider the parties' positions on the disputed issue and the
arbitrator shall render a written decision within two (2)
business days following such meeting. The decision of the
arbitrator shall be final, binding on the parties and
nonappealable. The
arbitration shall otherwise be conducted in
accordance with the American Arbitration Association's rules
for
expedited dispute resolution in effect at the time. The non-
prevailing party in any such arbitration shall pay the
arbitrator's fee and expenses.
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) fixtures,
furniture,
furnishings, equipment (other than floor and wall
coverings, fixtures
which are "built-ins" or constitute an
integral part
of the Building, the walk-in cooler,
heat, air
conditioning and ventilation systems, electrical, mechanical
and
plumbing 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) fixtures, furniture,
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 PERSONALTY"). 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 of 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 consists of the demolition of the Building and
reconstruction of a new prototypical building so long as:
(A)
the
new building is constructed in compliance with applicable
codes and Permitted Exceptions, (B) Tenant continues to pay
Rent,
(C)
construction is completed within nine (9) months following
demolition of the Building, subject to extension for force
majeure events, (D)
Landlord has approved
in advance
the
construction budget (which shall include a contingency) for the
new
building, such approval not to be unreasonably withheld,
delayed or conditioned, and (E) either (y) in the case where
the
Guaranty is in full force and effect prior to demolition Tenant
has
provided Landlord with a commercially reasonable completion
bond
for the project or such other assurance of performance as
Landlord may reasonably accept, or (z) prior to demolition the
Tenant deposits with Landlord cash (the "Deposit") sufficient
to
construct the building and improvement pursuant to the approved
budget, with
the Deposit being
disbursed pursuant to
the
Landlord's then current construction disbursement procedures;
(ii)
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 (iii) in the case of
any
Alteration other than
those permitted under clause (ii)
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 (7)
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
