Exhibit 10.3
LEASE AGREEMENT
THIS LEASE IS made and entered in duplicate originals this the ___ day of
__________, 19__, by and between ____________________, hereafter called "Lessor"
and ____________________, hereafter called "Lessee".
W I T N E S S E T H:
That in consideration of and subject to the agreements and covenants
hereinafter contained and provided, the Lessor does hereby demise and lease to
the Lessee and the Lessee does hereby lease from the Lessor the land and
building located at ___________________________________________________________.
It is mutually covenanted and agreed that this Lease is made upon the
following terms and conditions:
1. TERM. The original term of this Lease shall commence on the date
hereof and shall exist and continue for a period of __________ (__) years
from the date specified in paragraph 2 hereof for the commencement of
payment of rental; the term ending at twelve o'clock midnight on the date
preceding the __________ anniversary of such date. The Lessee shall have
the option of renewing this Lease for up to _________ (__) additional
periods of __________ (__) years each after the expiration of said
__________-year (__) period upon the following terms and conditions.
(A.) Lessee giving Lessor written notice of their exercise of their
option to renew at least ninety (90) days prior to the expiration of
the original Lease and at least ninety (90) days prior to the
expiration of each __________-year (__) extension of the original
lease term, if same be exercised by the Lessee.
(B.) There being no default at the time such written notice or at
the time of the commencement of said extended terms in the payment
of any rental hereunder.
2. The monthly rental for the demised premises during the lease term
shall be the sum of ____________________ Dollars ($__________) and said
rent shall be payable in advance, without notice and demand, therefore
beginning on _______________________
to: ____________________________________________________________________.
The rent shall be adjusted, from time to time, on the basis of one-half
(0.50%) percent above the prime, according to _____________________'s
rate.
(A.) As additional rental, the Lessor shall receive, at the end of
each year of the Lease, a sum equal to five percent (5%) of the
gross sales of the Lessee from the demised premises on gross sales
during the lease year reduced by the total of all rentals paid
during the lease year under paragraph 2 above.
(B.) GROSS SALES DEFINED: For the purpose of interpreting this
paragraph, the following definition of "Gross Sales" is provided and
agreed upon by the parties hereto. The Lessee shall maintain
suitable books of account at its regular business office. Such
books, as to each, shall be available for inspection and audit by
the Lessor or its agent at any reasonable time during the term of
this Lease or any renewal thereof. Nothing in this paragraph, or in
any portion of this Lease, shall be construed to imply that
relationship between the Lessor and Lessee is other than that of
Lessor and Lessee.
The term "Gross Sales," as used herein, shall mean the total dollar
volume of all sales from merchandise and service from the leased
premises; with the exception of the sale of fixed assets and all
revenues of every kind, from or payable on account of business
conducted at the leased premises, by or for the account of the
Lessee (both for cash and on credit) including all orders taken at
the leased premises and filled or delivered from any other location.
The dollar volume of bona fide funds or credits granted to
customers shall be applied as a reduction of the gross sales for the
period within which such refund or credits are made.
3. LESSEE COVENANTS AND AGREES.(A.) That they will, during the life of
this Lease, occupy and use
the entire leased premises for retail sales during such hours and on
such days as they deem appropriate; that during such times, they
will maintain adequate personnel for the efficient service of their
customers and generally conduct their business in a high grade,
reputable manner so as to produce the maximum volume of sales and
establish and maintain a high reputation;
(B.) That they will not engage in any acts or practice which might
injure the building; that they will keep the premises, while under
their control, clean and free from rubbish; that they will not burn
any trash or garbage on the leased premises without the written
consent of the Lessor;
(C.) That they will, at their expense, make all repairs and
replacements not hereinafter expressly assumed by the Lessor;
including, but not being limited to, the repair of all plumbing,
toilets, heating and air conditioning equipment and the replacement
of all broken or damaged glass; that they will redecorate the
interior from time to time when necessary to put the premises in
first-class condition for conduct of business and that such repairs
and redecorating will be made promptly so as not to damage or
disturb the property and premises of Landlord and their other
tenants.
(D.) That they will not assign this Lease nor sublet the premises
in whole or in part without the written consent of the Lessor.
(E.) That they will pay for all water, sewer, heat, gas,
electricity; also, pay any and all other utility services furnished
to the leased premises.
(F.) That they will not make any structural changes or improvements
or additions to the leased premises without written consent of the
Lessor; which consent shall not be unreasonably withheld, except as
provided in the foregoing sentence. The Lessee may, during the
continuance of this Lease and at their expense, make such
alterations or improvements as may be proper or necessary for the
conduct of their business or for the full beneficial use of the
leased premises. The Lessee shall make such alterations or
improvements in a good and workmanlike manner and shall indemnify
and save harmless the Lessor against the claims of any and all
mechanics or materialmen's liens arising from such alterations or
improvements;
(G.) That commencing with the date specified in paragraph 2 hereof
said Lessee will, at their expense, provide and keep in force
comprehensive general liability insurance; in which, the Lessor
shall be named as additional insured with minimum limits of
liability in respect to bodily injury of ____________________
Dollars ($__________) for each person and
____________________Dollars ($__________) for each accident and in
respect of property damage for ____________________ Dollars
($__________) for each accident. The policy or policies of
insurance companies licensed to do business in the State of
_______________, at the request of the Lessor, certificates thereof
shall be delivered to the Lessor;
(H.) That they will surrender the leased premises, at the
termination of this Lease and any extensions or renewals thereof, in
as good condition as they shall be at the beginning, reasonable wear
and tear and damage by casualty alone excepted;
(I.) That they will promptly restore any damage done to the leased
premises; including: glass, by fire or other casualty, vandalism,
breaking and entering and other intentional or negligent acts of
person not parties to this Lease; that they will carry fire,
windstorm and extended coverage insurance on the building to be
erected to the extent of the full insurable value of the building
and pay the premiums thereon promptly as they become due. In the
event of loss or damage to the said building covered by one or more
of the said insurance policies, any proceeds received therefrom
because of such loss or damage shall be used for rebuilding or
repairing;
(J.) That they will pay all taxes assessed or imposed upon the
restaurant equipment and fixtures and will pay all ad valorem taxes
assessed against the leased premises and the building situated
thereon, and Lessee shall furnish copies of paid receipts to Lessor.
4. LESSOR COVENANTS AND AGREES.(A.) That they own the leased premises;
that they have the legal
right to enter into this Lease; that they will put the Lessee in
actual possession of the leased premises at the beginning of the
aforesaid terms; that said Lessee, so long as they pay the rent and
perform the covenants on their part as are herein set out, shall and
may peaceably and quietly have, hold and enjoy the leased premises
for the full term thereof;
(B.) That the use of the leased premises for a restaurant is not in
violation of any law, order, ordinance, requirement or regulation of
any governmental authority; that there are no restrictions in the
title to the said premises prohibiting such use; and that the
building to be constructed in accordance with and in compliance with
the applicable building codes and zoning regulations.
5. If the building shall be wholly or partially destroyed by fire or
other casualty, this Lease shall not be terminated; but the Lessor shall,
subject to the provision of paragraph 3(I) above, rebuild and restore said
premises suitable for the use of the Lessee within a reasonable time, and
the stated rent shall be abated proportionately until the leased premises
shall have been restored; provided that, if the building is damaged to the
extent that, in the opinion of the Lessee, it cannot be reasonably used by
the Lessee for the purpose to which it was devoted prior to the damage;
then there shall be a total abatement of rental until the building is made
usable; provided further that in any event if repairs have not been
commenced within sixty (60) days from the said damage and thereafter
completed within a reasonable time not to exceed eight (8) months, this
Lease may be immediately terminated by the Lessee by serving written
notice to the Lessor.
6. In the event any of the leased premises are taken by eminent
domain, the monthly rent shall be abated proportionately from the date of
such taking. If any portion of the building to be constructed upon the
leased premises is so taken; if the same, in the opinion of the Lessee,
materially interferes with the peaceful and profitable occupation of the
building, the Lessee may, at their option, terminate this Lease by giving
notice thereof to the Lessor and rent shall terminate as of the date the
leased premises are vacated, pursuant to such notice.
7. If the Lessee shall be adjudicated as bankrupt or voluntarily
petition for bankruptcy, or be placed in the hands of a receiver, or make
an assignment for the benefit of creditors; the Lessor may, at their
option, declare this Lease terminated and take immediate possession of the
premises; likewise, if the Lessor shall be adjudicated as bankrupt or
voluntarily petition for bankruptcy, or be placed in the hand of a
receiver, or make an assignment for the benefit of creditors; the Lessee
may, at their option, terminate this Lease by a thirty-day (30) written
notice given within twelve (12) months following either of the above
events.
8. Any fixtures or other property the Lessee places in or upon or
affixes or attaches to the leased premises shall remain their property and
the Lessee shall have the right to remove the same upon vacating the
premises at the end of any lease period; provided the Lessee shall, at
their expense, first make satisfactory arrangements to restore the
premises to the same condition as when the fixtures were installed;
provided that all rents have been fully paid and all other covenants of
Lessee complied with at such time. Lessee may, at any time, substitute
fixtures or other property of Lessee in the nature of stoves,
refrigerators, kitchen equipment, tables and chairs for similar items of
like quality.
9. Notwithstanding anything herein to the contrary, Lessee shall
have the right to erect and maintain signs on the leased premises, as
permitted by applicable ordinances and zoning regulations; subject only to
the approval of the Lessor first had and obtained, which approval shall,
not be unreasonably withheld.
10. Notices under or in connection with this Lease shall be
mailed by registered or certified be mailed by registered or certified
mail (return receipt requested) to the Lessor at:
_________________________________________________________
___________________________________________________.
11. If any rent payable by the Lessee shall remain unpaid for
more than fifteen (15) days after Lessee's receipt of written notice of
default in the payment thereof or if the Lessee should violate or default
in any of the other covenants and agreements herein set out and said
default continues for a period of thirty (30) days after receipt of
written notice thereof, the Lessor may, at their option, declare the Lease
terminated and take immediate possession of the premises or they may
institute suit to enforce this agreement; provided that notwithstanding
the running of the said thirty-day period, the Lessee shall not be deemed
to be in violation or default of this Lease with the exception of default
in rental payment if they shall, after receipt of such written notice of
default, commence with reasonable immediate possession suit to enforce
this speed to remedy such default. If the Lessor shall neglect to do or
perform any matter or thing herein agreed to be done and performed by them
and shall remain in default thereof for a period of thirty (30) days after
written speed to remedy such default.
12. Concurrently with the execution of this Lease, the parties
hereto shall execute a Memorandum of Lease with respect to the leased
premises; which Memorandum shall specify that this Lease shall extend for
a period of __________ (__) years with __________ (__) __________ (__)
year options to extend from the date thereof. The said Memorandum shall
be delivered to the Lessee for recording in the office of the Register of
Deeds, _______________ County, State of _______________, when date
specified in paragraph 2 hereof has been determined.
13. This Lease shall be construed under the law of the State of
____________________.
14. Neither the Lessor nor the Lessee (or any agent representing
either) has made any statement, promise or agreement (verbally or
otherwise) in addition to or in conflict with the terms of this Lease.
Any representations made during negotiations and not contained herein
shall not be binding upon either of the parties hereto.
15. OPTION TO PURCHASE. In the event the Lessor should decide
to sell the leased premises, they shall notify the Lessee of their intent
to sell and the Lessee shall have the first right to purchase. In the
event the Lessor and Lessee shall be unable to agree upon a purchase price
or other terms, the Lessor shall be free to offer the leased premises for
sale to third parties, provided the Lessee shall have the first right
thereafter to purchase upon the same purchase price and other terms and
conditions as any third party. Lessor shall be required to notify Lessee
in writing of any bona fide third-party offer and Lessee shall have forty-
five (45) days after receipt of notice to advise Lessor of its intention
to purchase or not to purchase pursuant to the terms of the third-party
offer. If at the end of the forty-five (45) day period the Lessee has
failed to notify Lessor in writing of their intent to purchase, Lessor
shall have the right to convey to such third party pursuant to the third-
party offer. In the event Lessee decides to purchase pursuant to a bona
fide third-party offer, the sale of the premises to Lessee shall be
concluded within thirty (30) days of Lessee's notice in writing to
purchase.
16. The remedies set forth herein, in all instances, are not
exclusive but cumulative and in addition to all other remedies which may
exist under the law.
17. The relationship between the Lessor and the Lessee is
strictly a Lessor-Lessee relationship and nothing in this Lease shall be
deemed to or construed as making the parties hereto partners.
IN TESTIMONY WHEREOF, the Lessor has hereunto set their hands and seals and
the Lessee has hereunto set their hands and seals all the day and year first
above written.
LESSOR: [LANDLORD]
___________________________________
______________________________
(Secretary)
LESSEE: [TENANT]
___________________________________
(PRESIDENT)
______________________________
(Secretary)
Schedule to Exhibit 10.3 summarizing material details of the Company's
restaurant leases with related parties.
Approximate Approximate Date
Base or Basis for Date of of Expiration of
Current Calculation of Expiration of Last Renewal
Location Lessee Rent/Month Additional Rent Current Term Option Lessor
Claremont, NC Sagebrush of $2,000 -- (2) County-Wide Insurance
South Carolina, LLC Agency, Inc.
Claremont, NC Sagebrush of $ 300 -- (2) Charles Connor, Jr.
South Carolina, LLC
Arden, NC Sagebrush of $6,500 5% of gross sales May 2004 May 2019 Arden Land Company
North Carolina, LLC
Asheville, NC Sagebrush of $5,000 5% of gross sales Apr 1997 Apr 2007 Merrimon Land Company
North Carolina, LLC
Boone, NC Sagebrush of $8,000 5% of gross sales May 1997 May 2012 Boone Land Company
North Carolina, LLC
Brevard, NC Sagebrush of $4,000 5% of gross sales Feb 2004 Feb 2019 Brevard Food
North Carolina, LLC Systems, Inc.
Hickory, NC Sagebrush of $6,000 Sept 2000 Sept 2005 County-Wide Insurance
North Carolina, LLC Agency, Inc.
Hickory, NC Sagebrush of $6,000 5% of gross sales Jul 1997 Jul 2012 RCM Investments
(Viewmont) North Carolina, LLC
Johnson City, TN Sagebrush of $8,200 -- Sept 1997 Sept 1234 Boone Land Company
Tennessee, LP
Kingsport, TN Sagebrush of $6,000 5% of gross sales Dec 2003 Dec 2018 Boone Land Company
Tennessee, LP
Monroe, NC Sagebrush of $6,000 (3) Sept 2004 Sept 2019 Monroe Land Company
North Carolina, LLC
Approximate Approximate Date
Base or Basis for Date of of Expiration of
Current Calculation of Expiration of Last Renewal
Location Lessee Rent/Month Additional Rent Current Term Option Lessor
Morganton, NC Sagebrush of $6,000 5% of gross sales Feb 1998 Feb 2013 RCM Investments
North Carolina, LLC
Morristown, TN Sagebrush of $8,000 6% of gross sales Nov 1997 Nov 2007 Tennessee Land
Tennessee, LP Company
Sevierville, NC Sagebrush of $6,500 5% of gross sales Apr 2004 Apr 2019 Sevier Land Company
North Carolina, LLC
Statesville, NC Sagebrush of $3,500 -- Oct 1997 Oct 2012 Statesville Food
North Carolina, LLC Systems, Inc.
Waynesville, NC Sagebrush of $4,000 -- Dec 2003 Dec 2018 Smokey Mountain
North Carolina, LLC Foods, Inc.
Wilkesboro, NC Sagebrush of $5,200 (4) Aug 2004 Aug 2019 Wilkes Land Company
North Carolina, LLC
_________________________
(1) Certain of the leases provide for contingent rental payments based on a
percentage of the applicable restaurant's gross sales. The additional rent
payable under these leases is equal to the difference between the total base
rent paid under the lease during the preceding year and the indicated percentage
of such restaurant's gross sales for such year.
(2) Leased on a month to month basis.
(3) Under this lease, the Company is required to pay as contingent rent by
October 5 of each year an amount equal to 5% of this restaurant's gross sales
in excess of $1,440,000 for the twelve-month period ending on September 20 of
such year.
(4) Under this lease, the Company is required to pay as contingent rent by
August 31 of each year an amount equal to 5% of this restaurant's gross sales
in excess of $1,248,000 for the twelve month period ending on August 16 of
such year.
??