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EXHIBIT 10.2
COCONUT GROVE MARKETPLACE
SUBLEASE AGREEMENT
Tenant: CINEMASTAR LUXURY THEATERS, INC.,
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INDEX TO SUBLEASE
PAGES
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SUMMARY OF LEASE INFORMATION
SPECIAL LEASE PROVISIONS.................................................. i-v
STANDARD TERMS AND PROVISIONS............................................. 1-45
PREMISES; COMMON AREAS.................................................... 1-4
1. Premises............................................................. 1
2. Common Areas......................................................... 2
TERM...................................................................... 4-6
3. Term; Tenant Occupancy............................................... 4
4. Surrender and Holding Over........................................... 5
RENT; PROPERTY EXPENSES................................................... 6-14
5. Monthly Minimum and Percentage Rent.................................. 6
6. Property Maintenance and Operating Expenses.......................... 9
7. Maintenance Reserve Account.......................................... 14
8. General Excise/Conveyance Taxes...................................... 14
SECURITY DEPOSIT.......................................................... 14
9. Security Deposit..................................................... 14
INSURANCE................................................................. 14-17
10. Insurance............................................................ 14
USE....................................................................... 17-21
11. Use of Premises...................................................... 17
12. Use of Property...................................................... 20
13. Rules and Regulations................................................ 21
ADVERTISING............................................................... 21-22
14. Advertising.......................................................... 21
15. Trademarks........................................................... 22
ALTERATIONS; UTILITIES; REPAIR AND MAINTENANCE............................ 22-27
16. Alterations and Improvements......................................... 22
17. Utilities............................................................ 24
18. Repairs and Maintenance.............................................. 25
19. Damage to or Destruction of Premises or Property..................... 26
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HAZARDOUS MATERIALS ................................. 27-30
20. Hazardous Materials ............................ 27
ASSIGNMENT AND SUBLETTING ........................... 30-33
21. Assignment and Subletting ...................... 30
DEFAULT ............................................. 33-37
22. Liens and Insolvency ........................... 33
23. Default ........................................ 33
CONDEMNATION ........................................ 37-38
24. Condemnation ................................... 37
LANDLORD ............................................ 39-42
25. Non-liability of Landlord ...................... 39
26. Indemnity of Landlord .......................... 39
27. Attorney's, Architect's, Etc. Fees ............. 39
28. Access to and Inspection of Premises ........... 40
29. Subordination of Lease ......................... 40
30. Estoppel Certificate; Financial Statements ..... 41
31. Additional Improvements Upon Property .......... 41
32. Submission to Condominium Property Regime ...... 41
33. Landlord's Consent ............................. 42
FORCE MAJEURE ....................................... 42
34. Force Majeure .................................. 42
NOTICES ............................................. 42
35. Notices ........................................ 42
MISCELLANEOUS; ENTIRE AGREEMENT ..................... 44-45
36. Miscellaneous .................................. 43
37. Entire Agreement ............................... 44
Personal Guaranty Of Lease Addendum
Special Conditions Addendum
Option Addendum
Exhibit "A" -- Site Plan
Exhibit "B" -- Monthly Minimum Rent Provisions
Exhibit "C" -- Construction Specifications
Exhibit "D" -- Landlord's Improvements
Exhibit "E" -- Tenant's Improvements
Exhibit "F" -- Confirmation of Rent Commencement Date
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COCONUT GROVE MARKETPLACE SUBLEASE
SUMMARY OF LEASE INFORMATION
(The terms of the Sublease shall control in the case of conflict.)
TENANT: CINEMASTAR LUXURY THEATERS, INC.,
PREMISES: THEATER PAD
AREA (APPROX.): 25,000 Sq. Ft.
USE OF PREMISES: MOVIE THEATER
COMMENCEMENT DATE: SEE PARAGRAPH B OF THE SPECIAL LEASE
PROVISIONS
TERMINATION DATE: SEE PARAGRAPH B OF THE SPECIAL LEASE
PROVISIONS
INITIAL MONTHLY
MINIMUM RENT: $1.25 per square foot per month
PERCENTAGE RENT: 10% of monthly Box Office Receipts, plus
5% of monthly non-box office receipts
PERCENTAGE OF PROPERTY
EXPENSES: ________%
SECURITY DEPOSIT: SEE SPECIAL CONDITIONS ADDENDUM
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COCONUT GROVE MARKETPLACE
SUBLEASE AGREEMENT
THIS SUBLEASE ("Lease") is made as of this 18th day of July 1996 by and
between BRIAN ANDERSON and MELVIN SHAPIRO, whose principal place of business is
in Kailua-Kona, Hawaii, and whose post office address is POB 5423, Kailua-Kona,
Hawaii 96745 ("Landlord"), and CINEMASTAR LUXURY THEATERS, INC., a California
corporation, whose mailing address is 431 College Boulevard, Oceanside,
California 92057, Attention: John Ellison, Jr., President ("Tenant"), to be
effective on the 18 day of July 1996 ( the "Effective Date")
SPECIAL LEASE PROVISIONS
A. LEASED PREMISES. Approximately 25,000 square feet, more or less, in
the COCONUT GROVE MARKETPLACE located at Auhaukeae 1st, Tax Map Keys (3)
7-5-009:025, 028 043 (the whole of the COCONUT GROVE MARKETPLACE and the
improvements thereon shall hereafter collectively be called the "Property"),
situate in the District of North Kona, County and State of Hawaii, as shown
outlined in red on Exhibit A attached hereto and more particularly described in
Paragraph 1 of the Standard Terms and Provisions (the "PREMISES"). Tenant
acknowledges that the square footage of the Premises as set forth in these
Special Lease Provisions is merely an approximation of the actual area of the
Premises. Prior to the Tenant's occupancy of the Premises, Landlord and Tenant
shall confirm the actual square footage of the Premises as provided in
Paragraph 1.a(i) of the Standard Terms and Provisions.
B. TERM. Unless sooner terminated as provided herein, or extended as
provided in the Option Addendum attached hereto, the initial term of this Lease
shall commence on the Effective Date and extend for two hundred and forty (240)
months from the earliest to occur of (1) one hundred and eighty (180) days from
the date the Landlord completes its construction obligations as set forth in
Paragraph E.2 of these Special Lease Provisions, or (2) the first day the
Premises are open for business (the "Rent Commencement Date") and end on first
day of the first calender month following the two hundred and fortieth monthly
anniversary date of the Rent Commencement Date (the "Termination Date"). Tenant
shall have access to the Premises on the date the Landlord completes its
construction obligations as set forth in Paragraph E.1 of these Special Lease
Provisions. See Paragraph 1.b of the Standard Terms and Provisions.
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C. RENT AND OTHER CHARGES.
1. Monthly Minimum Rent:
a. For the first thirty-six (36) months of the term, effective
on the Rent Commencement Date, the Monthly Minimum Rent shall be
ONE AND 25/100 DOLLARS ($1.25) per square foot of the Premises per month.
b. For the remaining two hundred and four (204) months of the term,
effective on the first day of the first calender month following the
thirty-sixth (36th) monthly anniversary date of the Rent Commencement Date,
the Monthly Minimum Rent shall be in the amount as determined according to
the terms of Exhibit B attached hereto.
2. Percentage Rent: During every calendar month or fraction of a
month of the term of this Lease, Tenant shall also pay Landlord (a) ten 10%
of Tenant's "box office receipts" and (b) five percent (5%) of Tenant's
non-box office sales receipts, concession (food and beverage) receipts, and
promotional and special events receipts, as Percentage Rent as provided in
Paragraph 5.b of the Standard Terms and Provisions.
3. Tenant's Percentage of Property Expenses and Utility Charges: ______%
Except as provided in the Special Conditions Addendum, during the entire term of
this Lease, including the extensions, if any, Tenant shall pay monthly, as
additional rent, its percentage of the "Property maintenance and operating
expenses" and utility charges not separately metered presently estimated at
forty-four cents ($ .44) per square foot per month, as provided in Paragraphs 6
and 17 of the Standard Terms and Provisions, subject to adjustment, however, as
provided in Paragraphs 6 and 17.
4. Tax on Payments: Tenant shall pay Landlord on the Monthly Minimum
Rent, Percentage Rent, additional rent and other payments to Landlord under this
Lease, for Landlord's general excise tax, an additional amount (presently
4.167%) as provided in Paragraph 8.a of the Standard Terms and Provisions.
D. TENANT'S PERMITTED USE; NAME. Tenant shall use the Premises for a
first-rate eight-screen motion picture theater and concessions and other uses
incidental thereto (excluding Motion Picture Association of America rated films
which Tenant determines, in its reasonable discretion, to be injurious to the
reputation of Tenant or offensive to patrons; in all cases, however, Motion
Picture Association of America "X" rated films are prohibited), the sale of
video cassettes of movies (excluding those rated "X") and incidental on-
Premises use of vending machines and up to ____ video game machines, and no
other purpose as provided in Paragraph 11.a of the Standard Terms and
Provisions. Tenant's business in the Premises shall be operated under the
name "____________________" or such other name as Landlord and Tenant may
agree in writing.
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E. Leasehold Improvements.
1. Tenant's Construction Obligation. The Tenant's construction obligation
with respect to the Premises, if any, shall be as set forth in Paragraph 1.b of
the Standard Terms and Provisions and more particularly described in Exhibits C
and E (if any) attached hereto.
2. Landlord's Construction Obligation. The Landlord's construction
obligation with respect to the Premises, if any, shall be as set forth in
Paragraph 1.c of the Standard Terms and Provisions and more particularly
described in Exhibits C and D (if any) attached hereto.
F. TENANT PARKING. Subject at all times to Paragraphs 2 and 13 of the
Standard Terms and Provisions, Tenant shall have the right to use any of the
parking spaces within the Property for customer parking; Tenant, however, shall
not use more than __ parking spaces for employee or business vehicle parking.
Tenant's employees shall only park in those areas designated for "EMPLOYEE
PARKING" on Exhibit A attached hereto.
G. SECURITY DEPOSIT. SEE SPECIAL CONDITIONS ADDENDUM.
H. ASSIGNMENT AND SUBLETTING. Tenant may not assign, sublet or mortgage
the Premises without Landlord's prior written consent as more particularly
described in Paragraph 21 of the Standard Terms and Provisions, subject in every
case, however, to the Landlord's right to adjust the Monthly Minimum Rent as
provided for in Paragraph 21.b of the Standard Terms and Provisions.
I. PAYMENTS. Tenant shall make all payments of Monthly Minimum Rent,
Percentage Rent, additional rent and other payments required under this Lease
to:
Coconut Grove Marketplace
POB 5423 KAILUA-KONA
Hawaii 96745
or such other address as Landlord may, from time to time, designate to Tenant
in writing.
J. ENTIRE AGREEMENT: AMENDMENT. This Lease, which consists of these
Special Lease Provisions, the attached Standard Terms and Provisions, and the
attached Addendum and Exhibits (check as applicable):
(X) PERSONAL GUARANTY OF LEASE ADDENDUM;
(X) SPECIAL CONDITIONS ADDENDUM;
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(XX) OPTION ADDENDUM;
(XX) EXHIBIT A -- Plot Plan of Tenant Premises
(X) EXHIBIT B -- Monthly Minimum Rent Provisions:
(X) EXHIBIT C -- Construction Specifications;
(X) EXHIBIT D -- Landlord's Improvements;
(X) EXHIBIT E -- Tenant's Improvements;
(X) EXHIBIT F -- Confirmation of Rent Commencement Date;
(_) EXHIBIT G -- ________________;
contains the entire understanding among the parties and supersedes any prior
or contemporaneous understandings or agreements between them respecting the
matters set forth herein. Any amendment of this Lease shall be as provided in
Paragraph 37 of the Standard Terms and Provisions.
By their signatures below, Landlord and Tenant acknowledge that they have
read, understand and accept all of the terms, covenants, conditions, agreements
and provisions contained in this Lease, including these Special Lease
Provisions, the attached Standard Terms and Provisions and the above indicated
Addendums and Exhibits.
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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
date and year first above written.
CINEMASTAR LUXURY THEATERS, INC.
a California corporation
Brian Anderson
- ------------------------------
BRIAN ANDERSON
By --------------------------------
--------------------------------
Melvin Shapiro Its: --------------------------------
- ------------------------------
MELVIN SHAPIRO
LANDLORD TENANT
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COCONUT GROVE MARKETPLACE
STANDARD TERMS AND PROVISIONS
Tenant: CINEMASTAR LUXURY THEATERS, INC.,
1. PREMISES.
a. Premises. Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord, upon the terms and provisions set forth herein and in the
attached Special Lease Provisions, Addendums and Exhibits, as applicable,
those certain premises on the Property described in the attached Special
Lease Provisions and shown outlined in red on Exhibit A attached hereto. The
premises so leased are herein called the "Premises".
(i) Tenant acknowledges that the square footage of the Premises set
forth in the attached Special Lease Provisions is merely an approximation
of the actual area of the Premises. On the date the Landlord completes its
construction obligations as set forth in Paragraph E.2 of the Special Lease
Provisions, Landlord and Tenant shall confirm the actual square footage of
the Premises and include such figure in the memorandum confirming the Rent
Commencement Date. In the event Landlord and Tenant are unable to agree as
to the actual square footage of the Premises, Tenant agrees that Landlord
shall select a licensed architect or contractor who shall independently
determine the actual square footage of the Premises and such determination
shall be binding on Landlord and Tenant. Failure of Tenant to execute and
deliver the memorandum described in Paragraph 3.a of these Terms and
Provisions shall constitute an acceptance by Tenant of the figure stated in
the memorandum signed by Landlord. Notwithstanding that the actual square
footage of the Premises may later be determined to be more or less than the
square footage of the Premises as confirmed by Landlord and Tenant in the
memorandum or the square footage set forth in the attached Special Lease
Provisions, Tenant agrees that the figure stated in the memorandum shall
govern in any question relating to the area of the Premises and Tenant
shall have no right to any adjustment in the Monthly Minimum Rent,
Percentage Rent or any other rent or other sum payable under this Lease in
the event it is later determined that the actual square footage of the
Premises is different from the square footage set forth in the memorandum
signed by Landlord and Tenant or in the Special Lease Provisions.
(ii) Notwithstanding any other term or provision of this Lease, the
Premises shall not be deemed to include any area designated as a "Common
Area" by the Landlord at the time of this Lease or hereafter, which areas
shall be subject to the exclusive control and management of Landlord as
herein provided. Notwithstanding the designation of any area as a Common
Area, however, Tenant shall have the right, upon the prior consent and
approval of Landlord, to enter and use such area for the installation,
repair and maintenance of electrical, plumbing, telephone and other utility
services and facilities, subject, however, at all times to the control,
direction and power of Landlord (a) to enter such area, (b) to install
utility lines, sprinkler equipment, air conditioning facilities, conduits,
connections, installations and other facilities therein, (c) to change,
modify, amend, add to or remove any improvements or other facilities
therein, and
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(d) to perform installations, connections, repairs, replacements and other
maintenance therein and thereon.
(iii) The term "Premises" wherever it appears herein includes and
shall be deemed to include (except where such meaning would be clearly
repugnant to the context) the premises described in the attached Special
Lease Provisions and the improvements now or at any time hereinafter
comprising or built in the Premises hereby leased.
b. Tenant's Work. All work which is to be performed by Tenant in the
Premises pursuant to this Lease shall be performed only in accordance with plans
and specifications previously approved by Landlord as provided in Exhibit C,
using a contractor licensed in the State of Hawaii. Tenant shall commence
construction of Tenant's work in accordance with such approved working drawings
and specifications within ten (10) days after issuance of permits and completion
of Landlord's work as described in Paragraph 1.c below. If Tenant shall have
access to or enter the Premises prior to the Rent Commencement Date to perform
Tenants work, all terms, covenants and conditions of this Lease to be observed
or performed by Tenant shall apply to Tenant from and after the date of such
early occupancy. Notwithstanding any other provision of this Lease, Tenant shall
pay as additional rent all amounts due to Landlord within ten (10) days of
demand by Landlord for any cost incurred or work or services performed by
Landlord for Tenant at Tenant's request or with Tenant's consent, which Tenant
is required to incur or perform according to Exhibit E.
c. Landlord's Work. Landlord shall complete all work required to be
performed by Landlord with respect to the Premises in accordance with Exhibit D
attached hereto on or prior to the Rent Commencement Date.
d. Acceptance of Premises. Tenant agrees that (i) neither Landlord nor
any employee, representative or agent of Landlord, has made any representations
concerning the suitability of the Premises for the conduct of Tenant's business
nor has there been any other representations covering the physical condition of
the Premises; (ii) Tenant's acceptance of the Premises evidenced by Tenant's
entry and the possession thereof shall constitute unqualified proof that the
Premises are, as of the date of commencement of Tenant's occupancy thereof, in a
tenantable and good condition; (iii) Tenant shall be deemed to have waived any
patent or latent defect in the Premises except those latent defects in the
Premises discovered by Tenant during the period of any contractor's warranty
covering such defective condition; (iv) Tenant will take good care thereof; and
(v) Tenant shall not make any repairs at Landlord's expense except as Landlord
and Tenant have by this Lease made specific provisions for such repairs.
e. Quiet Possession. Upon payment by Tenant of the rent and other
charges provided for herein and upon the observance and performance of the terms
and conditions by Tenant herein contained, Tenant shall peaceably and quietly
hold and enjoy the Premises for the term hereby leased without hindrance or
interruption by Landlord or any other person or persons lawfully or equitably
claiming by, through or under Landlord, except as otherwise provided herein.
2. COMMON AREAS. In addition to the Premises, Tenant shall, as an
appurtenance thereto, have full right of access to said Premises over and across
the common entrances,
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sidewalks, halls, corridors, driveways, service areas, parking areas and
stairways on the Property (the "COMMON AREAS"). The Common Areas shall also
include those portions of the Property, if any, which Landlord shall, from time
to time hereafter, designate as, or improve for, use by or for the benefit of
Tenant in common with other authorized users, including, without limitation,
parking areas, service areas, driveways, stairways, ramps, sidewalks, landscaped
areas, exterior or interior walks, comfort rooms, drinking fountains and/or
other public facilities, but excluding any portion of the Property designated by
the Landlord for non-common use. It is understood and agreed that the Common
Areas shall not, in any case, be deemed to be a portion of or included in the
Premises leased hereunder.
a. Exclusive Control. All Common Areas shall at all times be subject to
the exclusive control and management of Landlord, and shall be subject to such
reasonable rules and regulations as Landlord may adopt and promulgate from time
to time. Tenant, its employees, agents, customers, invitees and licensees shall
not have the right to use any of the Common Areas except as permitted by
Landlord. Tenant, its employees, agents and sublessees shall not solicit
business, advertise or distribute handbills in any Common Areas without
Landlord's prior consent, and Tenant will not use the Common Areas in such a way
as to impede or interfere with the operation of the Property, or with Landlord
or any Tenant therein or thereon.
b. Interference. If, as a result of labor disputes or activities
involving Tenant arising in any way from the conduct of Tenant's business, a
picket line is established on the Premises or any Common Area of the Property,
or in the vicinity of the Premises or the Property, or there is any other such
activity which, in the judgment of Landlord, interferes with or affects the
operations of the Property, Landlord may, at its option, terminate this Lease
forthwith by written notice to Tenant. Landlord may also, in its discretion, in
the event of any such activities, require Tenant by written notice to Tenant to
cease doing business in the Premises for such period of time as Landlord may
consider advisable, and in such event, the Monthly Minimum Rent payable by
Tenant shall be reduced on a pro rata basis during the period that Tenant's
place of business is closed.
c. Changes to Common Areas. Landlord shall have the right, in its sole
discretion, to increase or reduce the Common Areas, to rearrange the parking
spaces and improvements in the Common Areas and to make any other changes
therein from time to time. Landlord shall also have the right to change the
access to the Premises. Landlord may also, in its sole discretion, designate
certain access drives, corridors and passageways for deliveries. Tenant shall
cause its employees, agents, sublessees, and suppliers to use such drives,
corridors and passageways in the delivery of merchandise to and from the
Premises, during the hours designated by Landlord. Landlord shalt have the
right, from time to time, to change the area, level, location, and arrangement
of all Common Areas; to close temporarily all or any portion of the Common Areas
to such extent as may, in the opinion of Landlord's counsel, be legally
sufficient to prevent a dedication thereof or the accrual of any rights to any
person or the public therein; and to do and perform such other acts in and to
the Common Areas and improvements thereon as, in the use of good business
judgment, Landlord shall determine to be advisable with a view to the
improvement of the convenience and use thereof by tenants, their officers,
agents, employees and customers. There shall be no reduction of Tenant's Monthly
Minimum Rent, Percentage Rent or any other charges hereunder for any change to
the Common Areas.
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d. Parking. Landlord reserves the right to prohibit Tenant's employees
from parking on the Property, and in no event shall Tenant or any of Tenant's
employees park in any parking stalls reserved for use by customers of the
Property or reserved for limited periods of time. Employees of Tenant shall
park only in those areas of the Property designated as "Employee Parking" in
Exhibit A attached hereto and employee parking shall be limited as provided in
the attached Special Lease Provisions. Nothing herein shall be deemed to impose
any liability on Landlord for any damage to motor vehicles of customers or
employees or for loss of property from within such motor vehicles, unless caused
by the willful act or gross negligence of Landlord, its agents, servants or
employees. Landlord shall have the right to promulgate rules and regulations to
regulate and control tenant parking on the Property as provided in Paragraph 13
of these Standard Terms and Provisions.
3. TERM: TENANT OCCUPANCY.
a. Lease Term/Confirmation of Rent Commencement Date. The term of this
Lease shall commence and terminate on the dates stated in the attached Special
Lease Provisions. When the Rent Commencement Date has been determined as
provided in Paragraph B of the Special Lease Provisions, Landlord and Tenant
shall execute a written memorandum expressly confirming said Rent Commencement
Date in the form attached hereto as Exhibit F, and such memorandum shall
thereupon be deemed attached hereto, incorporated herein, and by this reference
made a part of this Lease. Failure of Tenant to execute and deliver such
memorandum shall constitute an acceptance of the Premises by Tenant as of the
date set forth in said memorandum signed by the Landlord and such date shall,
for all purposes of this Lease, be the Rent Commencement Date. Unless otherwise
agreed by Landlord and Tenant in writing, notwithstanding that the Rent
Commencement Date set forth in the memorandum may be earlier or later than the
Rent Commencement Date stated in the attached Special Lease Provisions, the
Termination Date stated in the attached Special Lease Provisions will remain the
same.
b. Tenant Occupancy. The Premises shall be deemed ready for occupancy by
Tenant when (i) Landlord's work with respect to the Premises has been
substantially completed in accordance with Exhibit D attached hereto and
(ii) Landlord has notified Tenant that Tenant is free to enter the Premises
to make its own improvements to the extent the improvements have been
approved by Landlord. If the work required to be performed by Landlord with
respect to the Premises depends wholly or partly on work to be performed by
Tenant, then the Premises shall be deemed ready for occupancy on the date
they would have been ready for occupancy if Tenant had performed its work
in a diligent and timely manner and in accordance with the schedule for the
performance of that work proposed by Tenant and approved by Landlord.
c. Non-Delivery. If Landlord for any reason cannot deliver occupancy of
the Premises to Tenant on or before two hundred and forty (240) days following
the Effective Date of this Lease, this Lease shall be voidable by Landlord or
Tenant and Landlord shall not be liable to Tenant for any loss or damage
resulting from Landlord's failure to deliver occupancy to Tenant. Upon written
notice to Tenant, Landlord shall have the right to extend the 240 day period
described above for two forty-five (45) day periods and upon such notice,
neither Tenant nor Landlord shall have the right to terminate this Lease as
provided in this Paragraph 3.c. In all cases, however, the Rent Commencement and
Termination Dates shalt remain the same even though the Tenant's
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construction obligations under this Lease shall not commence until the date the
Landlord offers to deliver occupancy of the Premises to the Tenant.
d. Payment of Rent. Except as provided in Paragraph 3.c above, Monthly
Minimum Rent, Percentage Rent, additional rent and other charges under this
Lease shall be due and payable as of the Rent Commencement Date. Tenant shall
make the first Monthly Minimum Rent and additional rent payments on or before
such date, which shall be accompanied by any other payments due from Tenant to
Landlord under this Lease. If the Rent Commencement Date is a date other than
the first day of the month, the payments due under this Paragraph 3.d shall be
prorated accordingly.
e. Failure of Tenant to Open. If Tenant fails to open the Premises for
business fully fixtured, stocked and staffed on the Rent Commencement Date, then
Landlord shall have, in addition to any and all remedies otherwise provided in
this Lease, the right at its option to collect not only the Monthly Minimum Rent
herein provided, but additional rent at the rate of $0.__ per square foot of the
Premises per day for each and every day that Tenant fails to commence to do
business as herein described; said additional rent shall be deemed to be in lieu
of any Percentage Rent that Landlord might have been earned during such period
of Tenant's failure to open.
f. Tenant Opening Ceremony. Within forty-five (45) days after the Rent
Commencement Date, Tenant shall have a ceremony at its cost to celebrate the
opening of its business. Such ceremony shall be either advertised to the
general public or by invitation only.
g. Extension. Except as may otherwise be provided herein, Landlord shall
have no obligation to extend or renew this Lease upon its termination or upon
such termination to give another lease to Tenant covering the Premises, and
upon such termination Landlord may lease the Premises to others to operate
therein a business the same as or different from that operated by Tenant.
4. SURRENDER AND HOLDING OVER.
a. Surrender Upon Termination. Upon the termination of this Lease, Tenant
shall surrender the Premises and all improvements thereon in the same condition
of cleanliness, repair and sightliness as the Premises were in upon Tenant's
commencement of business under this Lease, reasonable wear and tear during the
last two years of the term excepted. Tenant shall surrender all keys for the
Premises to Landlord at the place then fixed for the payment of rent and shall
inform Landlord about all combinations on locks, safes and vaults, if any, in
the Premises. On such day, unless Landlord shall, in its sole discretion,
require the removal thereof, all alterations, additions, improvements, all hard
surface bonded or adhesively affixed flooring, and all fixtures (other than
trade fixtures) in the Premises and installed in the Common Areas by Tenant
shall become the property of Landlord and shall remain upon and be surrendered
with the Premises as a part thereof, without disturbance, molestation or injury,
and without credit to Tenant, its sublessees, concessionaires or licensees. On
or before the last day of the term or the sooner termination hereof, Tenant, if
not then in default, shall remove all trade fixtures, operating equipment and
other personal property of Tenant and, if required by Landlord, remove all
alterations, additions, improvements, flooring and other fixtures, from the
Premises and Common
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Areas and repair any damage occasioned by any such removal. If Landlord is
required to repair any damage caused to the Premises or Common Areas by such
removal, Tenant shall repay Landlord for the cost of the same. Property not so
removed shall be deemed abandoned by Tenant. If the Premises are not surrendered
at such time, Tenant shall indemnify Landlord against loss or liability
resulting from delay by Tenant in so surrendering the Premises, including
without limitation, any claims made by any succeeding tenant based on such
delay, and/or Landlord's lost rental income. Tenant's obligation to observe or
perform this covenant shall survive the termination of this Lease.
b. Liquidated Damages. If Tenant shall, at the termination of this Lease,
fail to yield possession to Landlord, Landlord shall have the option to require
Tenant to pay and Tenant shall pay, as liquidated damages, for each day
possession is withheld, an amount equal to double the amount of the daily
Monthly Minimum Rent computed on the basis of a thirty (30)-day month, together
with any Percentage Rent, additional rent or other payments required under this
Lease.
c. Holding Over. Any holding over after the termination of this Lease,
with the consent of Landlord, shall be construed to be a tenancy from month to
month at a monthly rent specified by Landlord in writing and on the terms and
conditions specified in this Lease, so far as applicable.
5. MONTHLY MINIMUM AND PERCENTAGE RENT.
a. Monthly Minimum Rent. For each and every calendar month during the
term of this Lease, commencing on the Rent Commencement Date, Tenant shall pay
to Landlord, without notice, on or before the first (1st) day of each month, in
advance, at Landlord's address, the Monthly Minimum Rent set forth in the
attached Special Lease Provisions. If the beginning date for the payment of
Monthly Minimum Rent is not on the first (1st) day of the month, the Monthly
Minimum Rent for the first fractional month shall be paid prorata, together
with the first full month's Monthly Minimum Rent.
b. Percentage Rent: Radius Clause. In addition to the Monthly Minimum
Rent set forth in the attached Special Lease Provisions, the Tenant shall pay
Percentage Rent to the Landlord according to the following:
(i) Percentage Rent Determination. For each and every calendar
quarter or fraction of a quarter during the term of this Lease, the Tenant
shall pay to the Landlord, on or before the 15th day of the next month
following the quarter, as Percentage Rent, a sum of money equal to the
percentages set forth in the attached Special Lease Provisions (or, if
applicable, the percentage set forth in Paragraph 23.g below) of the box
office receipts and non-box office sales receipts, concession (food and
beverage) receipts, and promotional and special events receipts received by
the Tenant for the prior calendar quarter (or, if applicable, the calendar
quarter determined according to the provisions of Paragraph 11.a below);
provided, however, that the total quarterly rent to be paid by the Tenant
to the Landlord shall not, in any case, be less than the total Monthly
Minimum Rent for that quarter. Any Monthly Minimum Rent paid by the Tenant
to the Landlord under Paragraph 5.a above shall be credited to the Tenant's
Percentage Rent determined under this Paragraph 5.b. Within sixty (60) days
after the expiration of each calendar year during
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the term of this Lease, or within sixty (60) days after the termination of
this Lease if this Lease is terminated before the end of a calendar year,
the total Percentage Rent due, based on the amount of box office receipts
for the preceding calendar year or shorter period as reported in the annual
sales statement required under Paragraph 5.b(iv) below shall be computed.
If the total amount of Percentage Rent paid for any calendar year or
shorter period (after due credit for all Monthly Minimum Rent paid by the
Tenant) does not equal the total quarterly Percentage Rent calculated
according to the percentage formula for the same period, then the Tenant
shall pay any deficiency to the Landlord within (60) days after the
expiration of the calendar year or shorter period. If the total amount of
Percentage Rent paid for any calendar year or shorter period exceeds the
total quarterly Percentage Rent calculated according to the percentage
formula for the same period, then the Landlord will credit the excess to
the Tenant's future quarterly Percentage Rent obligations over at least the
next three (3) following quarters or, if this Lease has expired, refund the
excess to the Tenant, without interest, within thirty (30) days after the
excess is determined.
(ii) Definitions. The term "box office receipts" as used in this
Lease shall include the entire actual sales price, whether for cash or
otherwise, of all sales of theater seats and all other receipts whatsoever
of all businesses conducted at, in, from or upon the Premises, including
sales by any sublessee, concessionaire or licensee or otherwise at, in,
from or upon the Premises, but excluding, however, receipts by Tenant for
the sale of food and beverages from within the Premises. Box office
receipts shall not include, however, sales of theater seats for "90/10"
pictures, or of Tenant's equipment or fixtures not in the ordinary course
of Tenant's business. The term "non-box office safes receipts" shall
include concession (food and beverage) receipts and all promotional and
special events receipts received by Tenant. To the extent that the amount
of any tax shall be included as a separately stated amount in the sales
price charged to a customer, there shall be deducted from the gross sales
receipts any gross income, sales or excise tax, or any other tax upon or
measured by the gross receipts of Tenant or measured by the sales price of
merchandise sold in, at or from the Premises and directly imposed upon
Tenant by any duly constituted authority. Box office and non-box office
receipts shall be decreased by the amount of any cash or credit refund made
to a customer with respect to a sale from the Premises if such sale is or
has been included in the Tenants computation of such receipts as provided
herein.
(iii) Preservation and Disclosure of Records. For the purpose of
ascertaining the amount payable as Percentage Rent under this Lease, Tenant
agrees to prepare and keep within the State of Hawaii in a place accessible
to Landlord for a period of not less than two (2) years following the end
of each calendar year to which they pertain, adequate records which shall
show daily receipts from all sales and other transactions on or from the
Premises by Tenant and any other persons conducting any business upon or
from the Premises. The receipts shall include copies of checks, sales
slips, receipts or other evidences of sales furnished to all customers.
Tenant shall record at the time of sale, in the presence of the customer,
all receipts from sales or other transactions whether for cash or credit in
a cash register, cash registers, or a computer-based equivalent of a cash
register, each of which shall have a cumulative total which shall be sealed
in a manner approved by Landlord. Tenant further agrees to keep within the
State of Hawaii in a place accessible to Landlord for at least two (2)
years following the end of each calendar year to which they pertain, the
gross income, sales and occupation tax returns with respect to said
calendar years and all pertinent original sales records. Pertinent original
sales records shall
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include: (a) cash register tapes, including tapes from temporary registers,
and print-outs. magnetic tape files. magnetic disk files, and other storage
media used in a computer-based equivalent of a cash register; (b)
settlement report sheets of transactions with sub-tenants, concessionaires
and licensees; (c) such other sales records, if any, which would normally
be examined by an independent accountant pursuant to accepted auditing
standards in performing an audit of Tenant's sales; and (d) the records
specified in (a) to (c) above of subtenants, assignees, concessionaires, or
licensees. Landlord and Landlord's authorized representatives shall have
the right to examine Tenant's records as described above during regular
business hours.
With Landlord's prior written consent, Tenant may provide to Landlord
Tenant's original sales records, as defined in this Paragraph 5.b(iii), in
a magnetically recorded and computer readable form ("magnetic media") that
can be mounted and processed on a third-party's computer system based on
Microsoft software (or compatible software); Tenant shall provide any
additional necessary processing software and pay for reasonable amounts of
computer system usage by Landlord pursuant to this Paragraph 5.b(iii). Such
processing of Tenant's magnetic media shall include, without limitation,
the itemization and calculation of all receipts specified in this Paragraph
5.b(iii). Within fifteen (15) days of Landlord's written request, Tenant
shall provide to Landlord (i) such magnetic media and necessary software
and (ii) printed summaries of the sales records specified in this Paragraph
5.b(iii).
(iv) Reports of Receipts. The Tenant shall submit to the Landlord, on
or before the 30th day of each and every calendar month following a
quarterly period (including the 30th day of the month following the end of
this Lease), at the place designated for the payment of rent, together with
the remittance of the quarterly Percentage Rent as determined according to
this Paragraph 5.b, a written statement signed by the Tenant, or by a
person duly authorized by the Tenant, and certified by Tenant (or its
representative) to be true and correct, stating in reasonably accurate
detail, the amount of box office and non-box office receipts during the
preceding three calendar months (and any fractional month at the beginning
or ending of the term). Tenant shall also submit at the same time a copy of
Tenant's monthly or quarterly "General Excise and Use Tax Return" or such
form as may otherwise be designated for similar purposes, which Tenant is
required to file with the Hawaii Department of Taxation. Tenant consents to
allow Landlord to verify the authenticity of such copy with the Department
of Taxation. The Tenant shall also submit to the Landlord on or before the
30th day following the end of each calendar year or within thirty (30) days
after termination of this Lease prior to the end of a calendar year, at the
place designated for the payment of rent, an annual statement signed by the
Tenant or by a person duly authorized by the Tenant and certified by Tenant
(or its representative) to true and correct, showing in reasonably accurate
detail the amount of Tenant's receipts during the preceding calendar or
lease year. These statements shall be in such form and contain such details
as the Landlord may reasonably designate.
(v) Right to Examine Books. The acceptance by Landlord of Monthly
Minimum and/or Percentage Rent shall be without prejudice to Landlord's
right to an examination of Tenant's books and records of its gross sales
and inventories of merchandise at the Premises in order to verify the
amount of annual gross sales made by Tenant in and from the Premises.
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(vi) Audit: Termination. At its option, Landlord may cause, at any
reasonable time upon five (5) days prior written notice to Tenant, a
complete audit to be made of Tenant's entire business affairs and records
relating to the Premises for the period covered by any statement issued by
Tenant as above set forth. If such audit shall disclose a liability for
Monthly Minimum and/or Percentage Rent to the extent of five percent (5%)
or more in excess of the Rent theretofore computed and paid by Tenant for
such period, Tenant shall promptly pay to Landlord the cost of said audit
in addition to the deficiency, which deficiency shall be payable in any
event. In addition, if the deficiency is five percent (5%) or more, or if
a deficiency of three percent (3%) or more occurs more than twice during
any five consecutive years of the term of this Lease, Landlord, at its
option, may terminate this Lease upon thirty (30) days' written notice to
Tenant of Landlord's election to do so. Any information obtained by
Landlord as a result of such audit shall be held in strict confidence by
Landlord. In the event Landlord's audit should disclose any deficiency in
the payment of Percentage Rent, tenant shall have the right to obtain an
independent audit of the same records and, if such audit discloses an error
of five percent (5%) or more in Landlord's audit in Landlord's favor, then
Landlord shall promptly pay to Tenant the cost of said audit.
(vii) Radius Clause. Neither Tenant, nor any individual, firm or
corporation that controls Tenant or is controlled by Tenant, shall own,
operate or become financially interested in a business similar to the
business being operated in the Premises by Tenant, within ten (10) miles in
any direction from the Property, the mileage to be measured on a straight
line basis on a map, not following contours of the land anti streets. If
Tenant defaults in performance of its obligations under this Paragraph
5.b(vii), Landlord can elect to include the gross sales receipts (as
defined above) of such other business in the gross sales receipts of
Tenant's business in the Premises for the purpose of computing Percentage
Rent payable under this Lease, or may elect one or more of the other
remedies available to Landlord on account of any Tenant default under this
Lease, such remedies being cumulative.
c. No Adjustment. Except as otherwise provided herein, the amount of the
Monthly Minimum and Percentage Rent set forth in the attached Special Lease
Provisions are negotiated figures and shall govern whether or not the actual
square footage of the Premises is the same as the square footage set forth in
the attached Special Lease Provisions. Tenant shall have no right to withhold,
deduct or offset any amount from the Monthly Minimum or Percentage Rent even if
the actual square footage of the Premises is less than the approximate square
footage set forth in the attached Special Lease Provisions and/or the memorandum
signed by Landlord and Tenant as provided in Paragraph 3 of this Lease. In
addition, the square footage figure set forth in the memorandum signed by
Landlord and Tenant as provided in Paragraph 3 shall serve as the base figure in
determining pro rata rent reduction in the event of damage, condemnation or
other circumstance requiring such reduction, abatement or adjustment of any
rent, notwithstanding that the square footage set forth in the memorandum shall
be more or less than the actual square footage of the Premises.
6. PROPERTY MAINTENANCE AND OPERATING EXPENSES.
a. Tenant's Percentage as Additional Rent In addition to the Monthly
Minimum Rent and Percentage Rent, Tenant agrees to pay, as additional rent, a
percentage share of all
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Property maintenance and operating expenses as hereinafter defined -- which
expenses shall include certain utility charges not separately billed or metered
to Tenant (see Paragraphs 6.c(xiv) and 17.b below). Said percentage shall be in
the amount stated in the attached Special Lease Provisions or, if different, in
the amount stated in the memorandum signed by Landlord and Tenant as provided in
Paragraph 3 of these Standard Terms and Provisions. Tenant shall have no right
to withhold, deduct or offset any amount from the additional rent even if the
actual square footage of the Premises is less than the square footage of the
Premises set forth in the attached Special Lease Provisions or, if different,
the square footage of the Premises set forth in the memorandum signed by
Landlord and Tenant as provided in Paragraph 3. All additional rent will be due
and payable each month together with the Monthly Minimum Rent.
b. Computation of Additional Rent. The additional rent figure in the
attached Special Lease Provisions is based upon the estimated Property
maintenance and operating expenses as of the date of commencement of the lease
term. The maintenance and operating expenses for the Property shall be computed
on an annual basis, at the beginning of each calendar year, and, to the extent
such expenses are not fixed or known in advance, shall be estimated by the
Landlord for the ensuing year. The Tenant shall pay such expenses, as additional
rent, throughout the calendar year, in advance, with the Monthly Minimum Rent,
subject to reconciliation and adjustment as provided in Paragraph 6.d below.
Landlord shall notify Tenant of Tenant's share of the expenses for the coming
calendar year as soon as reasonably possible after the beginning of each year.
in the event Tenant's lease term shall commence or end at any other time than
the beginning or end of a calendar year, the Tenants additional rent shall be
adjusted pro rata for such shortened period. Landlord shall have the right, in
the event of unusual or extraordinary maintenance and operating expenses, to
assess and collect, as additional rent, either as a one time or continuing
charge, additional sums under this Paragraph 6 to pay such expenses without
affecting the Tenant's liability for the monthly sums hereinabove described.
c. Definition of Property Expenses. "Property maintenance and operating
expenses" shall include, without limitation:
(i) Landlord's reasonable overhead expenses pertaining to the
operation and management of the Property, its Common Areas and Common Area
funds, including payroll taxes and fringe benefits, professional building
management fees, and architectural, engineering, space planning, inspection
and consultation fees and costs required by law, and reasonable legal and
accounting fees, incurred in connection with the Property and/or the Common
Areas;
(ii) Costs of roof repairs, any other structural or non-structural
repairs, line painting, landscaping and irrigation, water, sewer,
electricity, other energy sources, maintenance of utility meters, building
supplies, bulb replacement, cleaning up, sweeping and janitorial service,
cost of garbage and refuse removal, and any repairs, improvements or
replacements required by law, not otherwise required to be paid for by any
tenant and necessary and/or appropriate for the operation, upkeep,
administration or maintenance of the Property, the Common Areas and/or the
Premises;
(iii) Costs of any repairs, alterations, modifications, amendments,
additions and/or improvements to the Property, Common Areas and/or the
Premises, not otherwise
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paid for by any tenant of the Property, necessary, required or appropriate
in order to bring the Property, the Common Areas and/or the Premises into
compliance with the requirements, policies and/or procedures of "The
Americans with Disabilities Act of 1990." 42 U.S.C. Section 12101 et.
seq., and/or any rules and/or regulations promulgated with respect thereto
subsequent to the Landlord's initial improvements to or construction of the
Property, the Common Areas and/or the Premises;
(iv) Property employees' compensation, including payroll taxes,
fringe benefits and medical, unemployment, disability and workmen's
compensation premiums and taxes;
(v) Costs of directing or controlling parking and other policing or
control of the Property and/or the Common Areas;
(vi) Costs of liability, fire, other property damage, flood, loss of
rent, business interruption and other insurance, including any deductibles
payable by the Landlord thereunder, which Landlord shall, in its sole
discretion, deem necessary and/or appropriate with respect to the Premises,
the Property, the Common Areas and/or Tenant and/or Tenant's business,
fixtures, equipment, installations and for operations in the Premises,
Common Areas and/or Property;
(vii) Real property taxes and any and all other taxes, including any
ground rent assessments or charges made under any betterment or improvement
law, attributable to the Property or the land on which it is located, the
Common Areas and/or the Premises;
(viii) Maintenance, repair and depreciation of machinery and equipment
used in operating and maintaining the Property, the Common Areas and/or the
Premises (as used herein the term "equipment" shall be taken to include
both personalty and fixtures);
(ix) Any expense attributable to costs incurred by Landlord for any
capital improvements or structural repairs to the Property required by any
change in the laws, ordinances, rules, regulations or otherwise that were
not in effect on the date Landlord obtained its building permit to improve
the Property, or required by any governmental or quasi-governmental
authority having jurisdiction over the Property, which costs will be
amortized over the useful life of the capital improvement or structural
repair as allowed under the internal Revenue Code;
(x) Any costs incurred by Landlord in making capital
improvements or other modifications to the Property or any part of the
Property that reduce the Property maintenance and operating expenses, which
costs will be amortized over the useful life of the capital improvement or
modification as allowed under the Internal Revenue Code;
(xi) All billing, auditing, security, management and legal
expenses incurred or paid by Landlord relating to the protection,
maintenance and operation of the Property, the Common Areas and/or the
Premises;
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(xii) Any expenses incurred in contesting real property assessments,
arbitrating or determining Master Lease rentals and any assessments or
charges made under any betterment or improvement law or otherwise;
(xiii) Master Lease rent and any other charges or assessments charged
to or payable by Landlord under the Master Lease, provided, however, that
any income received by Landlord on account of the real property covered by
the Master Lease shall be applied to offset any rent or other charges or
assessments which would be paid by Tenant as a Property maintenance and
operating expense under this Paragraph 6.c.(xiii);
(xiv) Any utility charges for the Property, the Common Areas and/or
the Premises not separately metered to or paid for by any tenant (see
Paragraph 17.b below);
(xv) A general overhead and administrative charge not to exceed
fifteen percent (15%) of all other Property maintenance and operating
expenses if Landlord shall elect to manage the COCONUT GROVE MARKETPLACE in
lieu of employing a third party professional management service;
(xvi) Any costs or expenses assessed to or payable by the Landlord
and/or the Property under the Declaration described in Paragraph 12.e
below; and
(xvii) Any other costs which Landlord shall conclude, in its sole
discretion, are reasonable and necessary for maintaining and operating the
Property, the Common Areas and/or the Premises, provided, however, that
such other costs shall not include:
(1) Attorneys' fees and other costs relating to negotiations
and/or disputes with tenants and prospective tenants;
(2) Compensation to principals or affiliates of Landlord in
excess of compensation that would be payable to a third party for
similar services under a bona fide contract negotiated at arm's
length.
(3) Depreciation, improvements, equipment replacements,
repairs and other items not required by law that constitute capital
expenses under generally accepted accounting principles (except to the
extent that reasonable amortization of any such item for any year does
not exceed the resulting Property maintenance and operating expenses
savings for such year;
(4) Costs resulting from violations by Landlord and/or other
tenants of laws, leases and other contracts;
(5) Interest, amortization, fees and charges relating to
indebtedness;
(6) Rent and other leasing costs for capital items (other than
equipment not affixed to the Property that is used for janitorial or
similar services);
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(7) Losses covered by insurance to the extent of such insurance
or losses which were required to be covered and could be covered by
insurance under any lease of space in the Property or the Master
Lease;
(8) Any capital expenditures in connection with the original
construction of the Common Areas, or the installation of equipment or
fixtures on the Common Areas, or capital expenditures for improvements
or additions to the Common Areas other than replacements, advertising
and promotion costs and capital expenditures for improvements or
additions to the Common Areas required by law;
(9) Costs relating to artworks other than reasonable costs
incurred for cleaning and minor maintenance;
(10) Costs relating to the correction of law violations existing
prior to the execution of this Lease;
(11) Costs paid or required to be paid by other tenants and all
costs not reasonably related to or reasonably allocable to the
operation of the Common Areas; and
(12) No ground rent other than the Master Lease rent.
Landlord may, but shall not be obligated to, maintain a shuttle bus
service, a refuse collection service, and such other common services which
Landlord in its sole discretion believes will benefit tenants of the COCONUT
GROVE MARKETPLACE and Tenant shall pay a prorata share of the cost of such
services pursuant to the terms of this Paragraph 6.
It is the intent of the parties under this Lease that the Property, the
Common Areas and the Premises shall be maintained in a Class-A, neat, clean and
fully serviceable manner and that the expenditures therefor shall be
commensurate with such purpose, the amount of such expenditures to be determined
by Landlord in its reasonable discretion.
d. Breakdown of Property Expenses. A breakdown of Property maintenance
and operating expenses shall be provided annually to Tenant within sixty (60)
days of each calendar year end. If the maintenance and operating expenses
according to such breakdown shall differ from the expenses estimated by Land-
lord pursuant to Paragraph 6.b, the expenses according to such breakdown shall
be deemed correct and an appropriate adjustment shall be made in the additional
rent by prompt payment by Tenant of any deficiency or, in the event of an
excess, subject to Paragraph 7 below, an adjustment of additional rent
thereafter due to Landlord to provide Tenant with reimbursement over a period of
time not to exceed twelve (12) months. Tenant shall have the right, at its sole
cost, to conduct an audit of the Property maintenance and operating expenses.
e. Tenant Charges. As provided in Paragraph 17 below, Tenant shall,
during the term of this Lease, pay for, prior to delinquency, all telephone,
water and other utility services, and all other materials and services, (i)
separately metered, furnished or delivered to, or used in,
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the Premises, and (ii) which may be furnished to or used in, on, or about the
Premises and not expressly required to be paid for by Landlord hereunder,
whether as a Property maintenance and operating expenses or otherwise.
7. MAINTENANCE RESERVE ACCOUNT. Notwithstanding anything to the
contrary contained in this Lease, Landlord shall have the option of establishing
and maintaining a "Maintenance Reserve Account" for the purpose of accumulating
funds for the payment of extraordinary maintenance and operating expenses as
defined in Paragraph 6 above. The Landlord shall have the option of depositing
any excess additional rent received from Tenant into the Account in lieu of an
adjustment in rent as provided in Paragraph 6.d above. All funds in the account
become the property of the Landlord for the purposes herein described and
Tenant, whether during the term of this Lease or upon termination, shall have no
right or claim to any such funds whether by way of offset, reimbursement, refund
or credit.
8. GENERAL EXCISE/CONVEYANCE TAXES.
a. Landlord's General Excise Tax. In addition to Monthly Minimum Rent,
Percentage Rent and additional rent herein provided, Tenant shall also pay over
and reimburse Landlord, on each rental payment date during the term hereof, an
amount equal to that portion of the State of Hawaii general excise or gross
income tax assessed to Landlord and attributable to the rent and other payments
made by or on behalf of Tenant under the terms of this Lease, and Tenant shall
also pay all and any increases in said taxes from time to time and any and all
other taxes or duties levied or assessed by the United States, the State of
Hawaii, the County of Hawaii, or any other political subdivision of the State of
Hawaii now or hereafter having power to levy taxes or duties which are
attributable to the rent or other payments made by or on behalf of Tenant under
the terms of this Lease. It is the intent of this provision and of the other
provisions of this Lease to insure that the rent herein provided to be paid to
Landlord by Tenant will be received by Landlord without diminution by any tax,
assessment, charge or levy of any nature whatever, except United States and
State of Hawaii net income taxes and taxes on the sale of property, and the
terms and conditions of this Lease shall be liberally construed to effect such
purpose.
b. Conveyance Tax. Any conveyance tax imposed pursuant to Chapter 247,
Hawaii Revised Statues, or any rules and regulations promulgated thereto, shall
be payable by Tenant. Landlord shall advise Tenant of the amount of said tax and
said tax shall be due and payable at the time of execution of this Lease.
Further, Tenant shall be responsible for and shall pay before delinquency, all
municipal, state or county taxes assessed during the term of this Lease against
it by reason of the conduct of its business in the Premises or with respect to
personal property of any kind, owned by or placed in, upon or about the Premises
by and/or at the expense of Tenant.
9. SECURITY DEPOSIT. SEE SPECIAL CONDITIONS ADDENDUM.
10. INSURANCE.
a. Liability Insurance. Tenant shall take out and keep in force during
the term of this Lease, at Tenant's expense, comprehensive general liability
insurance on an "occurrence"
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not "claims made" basis, with coverage in the minimum amount of ONE MILLION AND
NO/100 DOLLARS ($1,000,000.00) for property damage and in the amount of ONE
MILLION AND NO/100 DOLLARS ($1,000,000.00) for personal injury or death to one
or more persons or a single limit policy of not less than TWO MILLION AND NO/100
DOLLARS ($2,000,000.00) naming Landlord and Landlord's agent, if any, as
additional insureds. If Tenant's use of the Premises shall include the sale or
service of alcoholic beverages, Tenant's liability insurance shall include a
liquor liability endorsement naming Landlord and Landlord's agent, if any, as
additional insureds.
b. Property/Business Insurance. Tenant shall at its own expense and at
all times during the term of this Lease keep all buildings, other improvements
and fixtures, by whomsoever installed or constructed, existing on the Premises
on the Effective Date or at any time thereafter, insured against (a) all of the
risks covered by a standard "Special Form" endorsement, with additional
coverage for risk of loss by earthquake and flood, (b) such other hazards or
risks which a prudent businessman would insure against, and (c) in time of war
against war damage, if available at reasonable cost. This coverage shall be in
an amount equal to the full replacement cost of such buildings, improvements and
fixtures without deduction for depreciation, shall be written on an "Agreed
Value" basis, and shall have a further endorsement showing coverage for the loss
of rental income and extra expenses incurred after an insured-against occurrence
during the period of restoration of the Premises and shall be placed with an
insurance company or companies approved by Landlord. The limits of liability
with respect to this endorsement for loss of rental income shall be for a period
of restoration of not less than two (2) years after the insured against
occurrence and this endorsement shall be written on an "Agreed Value" basis.
Tenant shall also take out and maintain during the term of this Lease, at
Tenant's expense, "Basic Cause of Loss" form insurance, in an amount equal to
the full replacement value of all "Business Personal Property" in the Premises
and the Common Areas installed by or at the expense of Tenant. It is the
intention of the parties that the insurance required hereunder shall fully
protect the Premises from loss or damage and will further provide Tenant with a
source of income to meet its obligations under this Lease should Tenant suffer
an interruption of its business for which insurance protection can be obtained.
c. Interests in Insurance Proceeds. Every policy of insurance described
in Paragraph 10.b above shall be issued to cover and insure all the several
interests in the buildings, improvements, fixtures and rent required to be
insured in Paragraph 10.b above, of Landlord, Tenant and any mortgagees under
any mortgage of this Lease, as their respective interests are defined in this
Paragraph below. The respective interests of Landlord, Tenant and any mortgagees
in any proceeds of the insurance required in Paragraph 10.b above payable for
insured loss or damage shall be fixed and determined as of the date of such loss
or damage as follows:
(i) Landlord's Interest. The interest of Landlord in such proceeds
shall be a proportionate amount of such insurance proceeds in the ratio
which (a) the expired portion of the term, from the date of the initial
completion of the buildings, improvements or fixtures lost or damaged to
the date of such loss or damage, bears to (b) the portion of the term from
the date of completion of such buildings, improvements or fixtures to the
date of expiration of the term; provided, however, that Landlord's interest
in any rental loss insurance payments shall be one hundred percent (100%).
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(ii) Tenant's Interest. The interest of Tenant shall be the balance
of such insurance proceeds after first deducting the amount of the interest
of Landlord determined as set forth in Paragraph 10.c(i) above.
(iii) Mortgagee's Interest. The interest of any mortgagees in such
proceeds shall be limited to the amount of, and encumber only, the interest
of Tenant in such insurance proceeds as defined in Paragraph 10.c(ii)
above, to the extent of the then outstanding principal and accrued interest
secured under the mortgages of such mortgagees; provided, however, that if
the interest of Tenant in such insurance proceeds is insufficient to repay
the then outstanding principal and accrued interest secured under the
mortgages of such mortgagees, the interest of such mortgagees shall include
Landlord's interest as defined in Paragraph 10.c(i) above to the extent
necessary to repay such outstanding principal and accrued interest. Any
portion of Landlord's interest remaining after the outstanding principal
and accrued interest secured by such mortgages is repaid shall remain the
sole property of Landlord. The respective interests and rights of two or
more mortgagees in and to such interests of Tenant shall be determined
between them in accordance with the priority of their respective mortgages
of this Lease.
d. Use of Insurance Proceeds. In case the buildings, improvements or
fixtures required to be insured in Paragraph 10.b above or any part thereof
shall be destroyed or damaged by fire or such other casualty required to be
insured against, then and as often as the same shall happen, but except as
provided in Paragraph 19.a below, all proceeds of such insurance, including the
interest therein of Landlord and the balance of the interest therein of Tenant
after deducting such amount of the interest of any mortgagees in Tenant's
insurance proceeds as provided in Paragraph 10.c(iii) above and excluding the
proceeds of any rental value, or use and occupancy insurance of Tenant, shall be
available for and used with all reasonable dispatch by Tenant in rebuilding,
repairing, replacing or otherwise reinstating the buildings, improvements or
fixtures so destroyed or damaged in a good and substantial manner according to
the plan and elevation thereof, or according to such modified plan for the same
or substitute buildings, improvements or fixtures as shall be approved in
writing by the Landlord in accordance with Paragraph 1.b above. If the
available insurance proceeds shall be insufficient for rebuilding, repairing,
replacing or otherwise reinstating such buildings, improvements or fixtures in
the manner provided in this paragraph above, then Tenant shall provide the
balance of all funds required to completely rebuild, repair, replace or
otherwise reinstate such buildings, improvements or fixtures. If Landlord elects
not to have the buildings, improvements or fixtures rebuilt, repaired, replaced
or otherwise reinstated as provided in Paragraph 19.a below, the insurance
proceeds shall be paid to the Landlord, Tenant and any mortgagees as their
interests may appear as provided in Paragraph 10.c above.
e. Approval of Insurer Copies of Policies and Additional Insureds.
Whenever Tenant is required to insure against any risk under the terms of this
Lease, said insurance shall be in form and with coverage and in an insurance
company with a general policy holder's rating of not less than A and a Financial
Rating of Triple A as listed in the most current "Best Insurance Report" and a
copy of said policy or a certificate of insurance shall be delivered to Landlord
promptly after receipt with a commitment from the insurance carrier endorsed
thereon providing that said policy shall remain in full force and effect as to
Landlord's interest until Landlord has been notified in writing thirty (30) days
before the effective date of any change, cancellation or reduction in
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coverage or limits. Landlord and Landlord's agent, if any, shall be added as
additional insureds on all of Tenant's policies, including worker's compensation
and employer's liability. Tenant shall waive subrogation in favor of Landlord in
connection with such worker's compensation and employer's liability policy.
f. Increase in Insurance. Landlord shall have the option to require
Tenant, upon thirty (30) days' written notice, to increase the amount and type
of insurance required under this Paragraph 10 consistent with prudent and
customary practices in the State of Hawaii for businesses similar to Tenant's
business.
g. Tenant's Liability for Increased Cost of Property Insurance. If Tenant
shall do, fail to do or permit to be done anything which shall increase the cost
of the insurance to be acquired by Landlord on the Premises, or the COCONUT
GROVE MARKETPLACE of which they are a part, or the Common Areas or the Property,
Tenant shall pay, as additional rent, in addition to Tenant's pro rata share of
the insurance costs of Landlord under Paragraph 6 above, the amount of such
increases attributable to such act or omissions or operations of Tenant.
h. Reciprocal Waiver. Each of the parties hereto on its own behalf and on
behalf of any insurer in any policy insuring it, hereby waives any right of
recovery, claim or cause of action against the other party for destruction of or
injury or damage to the Property, Common Areas and/or the Premises, including
all fixtures and other improvements therein or thereon, and for destruction of
or injury or damage to personal property, arising out of or caused by any risk
which is or can be insured against under a standard form of fire insurance
policy with extended coverage endorsement or similar coverage, provided that
such waiver does not reduce or prejudice the protection under such insurance or
prejudice the party's ability to obtain or renew any such insurance, it being
agreed that such insurance or waiver shall not be effective if the insurer shall
require as a result thereof or as a condition thereto, any payment of any
additional premium or any other conditions which would not be required if such
waiver were not to be effective. The provisions hereof shall apply whether such
destruction, injury or damage is caused by or results from the negligence or
fault of the other party or from any other cause, and whether the same may
happen during the term hereof or thereafter, and while Tenant remains in
possession of all or a part of the Premises. Nothing in this Paragraph 10.h
shall be construed as relieving Tenant of the obligation to maintain insurance
and/or restore the Premises as may be set forth elsewhere in this Lease, nor as
relieving Tenant from any liability for damages in the event of failure to so
maintain insurance and/or restore the Premises.
11. USE OF PREMISES.
a. Specific Use/Continuous Operations. The Premises may be used and
occupied only for the purpose of carrying on the business described in the
attached Special Lease Provisions and for no other purpose or purposes. Tenant
shall not permit any business to be operated in or from the Premises by any
concessionaire or licensee without the prior written consent of Landlord, which
consent may be given or withheld in Landlord's sole and absolute discretion.
Tenant acknowledges and agrees that Tenant's observance and performance of its
obligations and agreements under this Paragraph 11.a is a substantial and
material element of this Lease and in the event Tenant shall fail to so observe
and perform its obligations and agreements
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under this Paragraph 11.a, Landlord may suffer substantial and irreparable
injury and damage on account of Landlord's undertakings with other tenants
within the COCONUT GROVE MARKETPLACE or other persons under the Declaration
described in Paragraph 12.e below. All operations by Tenant in the conduct of
its business shall be performed within the demised Premises and in no other
areas of the Properly without the written consent of Landlord. Tenant shall
conduct its business in the Premises for a minimum of ten (10) hours per day,
365 days per year commencing at 12:00 o'clock noon daily. If the Premises are
destroyed or partially condemned and this Lease remains in full force and
effect, Tenant shall continue operation of its business at the Premises to the
extent reasonably practical from the standpoint of good business judgment during
any period of reconstruction. Tenant shall adequately provide goods and services
at a competitive price and shall maintain adequate personnel for the efficient
serving of its customers. Tenant shall operate the business on the Premises in a
manner that will produce the maximum volume of box office receipts. Tenant shall
use only such space in the Premises for office, clerical and other nonselling
purposes as reasonably required for Tenant's business on the Premises. For the
purpose of computing Percentage Rent, the box office receipts for any period
during which Tenant does not conduct its business as required by this Lease
shall be deemed to be the greater of the box office receipts generated on the
Premises during that period or the box office receipts generated during the
corresponding period of the preceding calendar year, provided, however, that
such receipts shall be reduced in proportion to the amount of space that is
damaged and not usable.
b. Generally. Tenant shall not permit the Premises to be used for any
improper, offensive, or unlawful purpose or for any purpose which will increase
the existing rate of insurance on the Property. Tenant will, at Tenant's sole
cost and expense, keep the Premises in a strictly clean, safe, neat and sanitary
condition. Tenant recognizes and acknowledges that the appearance of the
Premises are of considerable import to Landlord and agrees to maintain the
Premises with particular attention being paid to their orderliness, cleanliness,
and quality. Tenant shall not be allowed to use the name of Landlord, the
Property or the COCONUT GROVE MARKETPLACE, or words to that effect, in
connection with any business carried on in the Premises, except as Tenant's
address, without the prior written consent of Landlord.
c. Compliance with Law. In Tenant's use of the Premises and Property,
Tenant shall, at Tenant's sole cost and expense, observe, perform and comply
with all laws, statutes, ordinances, rules and regulations of the health and
other government authorities applicable to the Premises and the Property,
including, but not limited to, the removal, alteration and refurbishing
requirements and standards imposed by "The Americans with Disabilities Act of
1990", 42 U.S.C. Section 12101 et. seq., and of all insurance policies at any
time duly issued or in force which are applicable to the conduct of Tenant's
business in or about the Premises or the Property, or any part thereof, and
will indemnify Landlord against all actions, suits, damages and claims by
whomsoever brought or made by reason of the nonperformance or nonobservance of
such laws, statutes, ordinances, rules and regulations or of this covenant,
such indemnification to include not only the award of any Court, but also
Landlord's court costs and attorney's fees.
d. Signs. Without the prior written consent of Landlord, Tenant shall not
place or permit to be placed any sign, advertising material or lettering upon
the exterior of the Premises. Upon request of Landlord, Tenant will immediately
remove any sign, advertising material or
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lettering that Tenant has placed or permitted to be placed in violation of this
Paragraph 11.d, and if Tenant fails so to do, Landlord may enter the Premises
and remove such sign, advertising material or lettering at Tenant's expense.
Provided such signs shall in all respects conform to the specifications, rules
and regulations promulgated by Landlord with respect thereto, Tenant shall have
the right to install on or in the Premises such signs as desired by Tenant.
Tenant's signs shall be installed at Tenant's own risk and expense, and Tenant
agrees to maintain said signs in good state of repair and to save Landlord
harmless from any loss, cost or damage which may have been caused by the
erection, existence, maintenance or removal of such signs. Upon the termination
of this Lease, Tenant shall remove all of Tenant's signs at Tenant's own expense
and repair all damage resulting from the placement or removal of the signs.
Landlord shall have sole authority and discretion with regard to any
off-Premises or centralized signs or directories within the COCONUT GROVE
MARKETPLACE or the Property, the costs of which shall be considered a Property
operating expense.
e. Security. Tenant shall, at its sole cost and expense, be responsible
for providing security services for the Premises and Tenant shall take such
steps as may reasonably be necessary to control its employees, agents, customers
and others in the Premises so as not to present security problems for any other
tenants of the Property or the Property. Landlord shall not be, in any way,
responsible for providing any security services within the Premises or for the
benefit of Tenant, Tenant's agents, employees or customers. Landlord makes no
warranties, either expressed or implied, as to the security of Premises.
Landlord shall provide security for the Property as a Property maintenance and
operating expense.
f. Refuse Collection. Landlord may, at its sole option, either
(1) require a uniform system of refuse collection to be followed by all
tenants in the COCONUT GROVE MARKETPLACE, in which case Tenant shall comply
with all requirements with respect thereto set by Landlord including the
color, size and placement of trash collection bins; or (2) arrange for refuse
collection services to be rendered by an independent contractor. If Landlord
elects to do either (1) or (2) above, Landlord shall have the further option
to assess the cost of such refuse collection to Tenant as either a Property
maintenance and operating expense under Paragraph 6 above or bill Tenant
separately for its prorata portion.
g. Off Premises Food Sales. In addition to Landlord's rights under this
Lease with respect to Property maintenance and operating expenses and other
costs and charges to be paid by Tenant hereunder, if Tenant shall use the
Premises to sell or serve food for consumption on or off of the Premises,
Landlord shall have the right to allocate additional cleaning and maintenance
resources and services to the Premises and the adjoining Common Areas to
maintain the Premises and the Common Areas in a neat, clean, well kept and
sanitary condition. Such resources and services may include, but not necessarily
be limited to, more frequent and/or increased capacity refuse collection, Common
Area and/or storefront cleaning, pest control treatment, drain cleaning, etc.
Landlord, in Landlord's sole discretion, shall have the right to charge Tenant
the costs and expense of such additional resources and services and, if
appropriate, to allocate the same among the restaurant and/or food
service/selling tenants within the COCONUT GROVE MARKETPLACE.
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12. USE OF PROPERTY. It is understood and agreed by Landlord and Tenant
that the Premises being leased hereunder are located in a Class-A shopping
center and that accordingly, Tenant, in the operation of its business, both with
regard to the services provided and the products offered for sale, must conduct
itself in a manner which is compatible with the COCONUT GROVE MARKETPLACE and
the other tenants located therein. In order to facilitate the implementation of
the foregoing understanding and agreement, Landlord and Tenant agree to the
following terms and conditions regulating the use of the Property:
a. Nuisance. Tenant shall not perform any acts or carry on any
practices which may be injurious to the Property or any improvements
thereon, or be a nuisance or menace to other tenants of the Property.
Tenant shall not commit or suffer to be committed any waste in or upon the
Premises or the Property or maintain any public or private nuisance or any
other action which may interfere with or disturb the quiet enjoyment of any
other tenant of the Property.
b. Solicitation. Tenant agrees not to place or cause to be placed on
the Property any notices, advertisements, written solicitations, or
writings of any nature for the purpose of soliciting or originating any
business with the other tenants of the Property.
c. Storage. Tenant shall not maintain, place or store any
products, equipment goods, materials, vehicles, boats, trailers, containers
or other items in any Common Areas of the Property, including parking
areas, without the specific written consent of Landlord.
d. Auctions. Tenant shall not conduct any auction, "going out of
business" sales or bankruptcy sales from the Premises or the Property
without Landlord's prior written consent.
e. Master Lease. This Lease is made subject to that certain General
Lease No. S-5188 dated April 18, 1990, made by and between the STATE OF
HAWAII, as Lessor, and LANIHAU PARTNERS L.P., a Delaware Limited
Partnership, as Lessee, a Short Form of which is recorded in the Bureau of
Conveyances of the State of Hawaii as Document No.________, as the same may
be amended from time to time, herein referred to in this Lease as "the
Master Lease". If there is any conflict between the provisions of this
Lease and the provisions of the Master Lease, then, in every such event,
the provisions of the Master Lease shall control, to the exclusion of any
inconsistent provisions of this Lease. Tenant covenants and agrees that it
will not violate any term, covenant or condition contained in the Master
Lease and on the part of Landlord to be observed and performed.
f. Compliance with Laws. Tenant, Tenant's employees, agents and
sublessees shall observe and comply with all rules, regulations, ordinances
and/or laws made by the Building Department, the Board of Health and/or any
other division of the municipal, county, State or federal governments
applicable to any activity or business of Tenant on the Property or use
thereof. Tenant shall procure at its sole expense any permits and licenses
required for the use of the Premises as permitted herein.
g. Signs, Awnings and Audio Systems. Tenant shall not place or
suffer to be placed or maintained on any door, wall or window within the
interior of the Premises but visible from
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the exterior of the Premises, or in any of the Common Areas of the
Property, any sign, awning or canopy, video or television equipment, or
advertising matter, flashing lights or search lights or any other object of
any kind, or install any sound system or speakers or other audible
advertising which can be heard outside the Premises, without first
obtaining the written approval and consent of Landlord, which approval and
consent may be withheld by Landlord in its sole discretion for any reason.
Tenant shall not, without the prior written consent of Landlord, keep,
display or sell any merchandise or any object outside the interior of the
Premises, or in any portion of the Common Areas.
i. Use of Exterior Walls. Landlord expressly reserves the exclusive
right to the use the exterior walls of the Premises.
13. RULES AND REGULATIONS. Landlord shall have the right to promulgate
reasonable rules and regulations to police, regulate traffic in and control
parking and Common Area use (including controlled access and employee parking),
restrict Tenant advertising and displays within the COCONUT GROVE MARKETPLACE
and otherwise regulate and control the Property, and amend the same from time to
time, with respect to the use and operation of the Property which shall be
binding upon Tenant on notice to Tenant. In enforcing these rules and
regulations, Landlord shall have all remedies provided in this Lease for a
breach of a term of this Lease, and all other legal and equitable remedies,
Landlord shall not be liable to Tenant or any other person for any nonobservance
or nonperformance of these rules and regulations nor shall Landlord be liable to
Tenant or any other person on account of Landlord's enforcement or
nonenforcement of these rules and regulations. Landlord shall also have the
right to enact and enforce reasonable monetary fines and penalties for any
violation of the rules and regulations promulgated by Landlord and Tenant shall
be liable to Landlord for such fines and penalties incurred by Tenant or
Tenant's employees, contractors or suppliers as additional rent under this
Lease.
14. ADVERTISING.
a. Generally. Tenant throughout the entire term of this Lease shall be
solely responsible for all advertising and promotional costs pertaining to the
advertising and promotion of its business operated in the Premises and shall not
change the advertised name of such business except as approved by Landlord.
Every mention of Tenant's business name in any public medium, including, but not
limited to, advertisements in print and broadcast media, and materials printed
for use within the COCONUT GROVE MARKETPLACE such as signs, brochures,
advertising bills, menus, etc., shall be accompanied by the mention of the
COCONUT GROVE MARKETPLACE in a prominent and aesthetic manner. Wherever
possible, Tenant shall use in all such printed materials the script; typeface,
and logo of the COCONUT GROVE MARKETPLACE as promulgated by Landlord. All
advertising shall conform to the image established by Landlord for the COCONUT
GROVE MARKETPLACE. Without limiting the generality of the foregoing, Tenant
shall not use any depiction, rendition or photograph of the COCONUT GROVE
MARKETPLACE or the COCONUT GROVE MARKETPLACE logo in any advertising medium
without Landlord's express consent, which consent may be given or withheld in
Landlord's sole discretion, nor shall Tenant use or create a new COCONUT GROVE
MARKETPLACE logo or sell any merchandise bearing the COCONUT GROVE MARKETPLACE
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logo without the express consent of Landlord which consent may be given or
withheld in Landlord's sole discretion.
b. Common Fund. INTENTIONALLY LEFT BLANK.
c. Tenant Advertising. INTENTIONALLY LEFT BLANK.
15. TRADEMARKS.
a. Landlord is Owner. Tenant acknowledges that Landlord is the owner of
all right, title and interest in the trade name "COCONUT GROVE MARKETPLACE" and
any trade or service marks created with respect thereto. The above trade names
and any trade or service marks created with respect thereto, together with any
changes or modifications thereof, are hereinafter collectively called the
"Trademarks". Tenant agrees never to contest Landlord's title thereto or the
validity of any Trademark application or registration therefor filed or
obtained by Landlord.
b. Use of Trademarks. Tenant shall not use the Trademarks in any manner
or for any purpose whatsoever without obtaining Landlord's prior written
consent, and if Landlord requests, Tenant shall execute a Trademark licensing
agreement. Tenant shall use such Trademarks subject to such restrictions and
conditions as Landlord may from time to time specify in writing. If Landlord
determines in its discretion that the nature or quality of any of the goods or
services offered under any of its Trademarks by Tenant is unsatisfactory,
Landlord will so notify Tenant and, at Landlord's request, Tenant will
immediately cease and desist from any further use of the Trademarks on or in
connection with the unsatisfactory goods or services. Tenant acknowledges that
Landlord shall be entitled to immediate injunctive relief against any misuse or
infringement of the Trademarks by Tenant, and Tenant agrees to pay all
attorneys' fees of Landlord resulting from any action taken by Landlord to
terminate such misuse, infringement or other violation of this Paragraph 15.b.
Tenant acknowledges and agrees that its right to use the Trademarks is
non-exclusive. Tenant shall not, either during or after the term of this Lease,
contest the rights of Landlord in the Trademarks or in any other way attempt to
infringe on diminish the value of or otherwise damage the Trademarks or
Landlord's rights therein. Tenant acknowledges that all goodwill which may
arise from Tenant's use of the Trademarks is and shall at all times remain the
sole and exclusive property of Landlord and shall inure to the sole benefit of
Landlord.
c. Trademark Infringement. Landlord shall have the exclusive right to
determine the existence of infringement of the Trademarks. Landlord makes no
warranties or representations regarding the validity or the ownership of the
Trademarks by Landlord.
d. Changes to Trademarks. In the event that Landlord changes or modifies
any of the Trademarks, Landlord shall not be liable to Tenant for any cost,
loss or expense whatsoever incurred by Tenant with respect thereto and Landlord
shall have no obligation to purchase from Tenant any inventory, advertising
materials or other property of Tenant which utilized the changed Trademark.
16. ALTERATIONS AND IMPROVEMENTS.
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a. Installations by Tenant. All improvements, fixtures and equipment
installed by Tenant in the Premises and any Common Areas shall be new or
completely reconditioned and acceptable in all respects to Landlord for use in
the Premises and Common Areas. Tenant will not make or cause to be made any
alterations or improvements or install or cause to be installed any trade
fixtures, exterior signs, interior or exterior lighting, plumbing fixtures,
shades, awnings, advertising matter or lettering, including, without limitation,
any sign, decoration, advertising matter or lettering which is visible outside
of the Premises and any sign, decoration, advertising matter or lettering which
is painted on or affixed to any exterior wall, window or door of the Premises,
floor covering, colored or tinted glass or make any changes to the Premises or
the Common Areas without the prior written consent of Landlord, which consent
may be given, withheld or made subject to such conditions as Landlord deems
appropriate, all in Landlord's sole and absolute discretion. Tenant shall
present to the Landlord plans and specifications for such work at the time
consent is sought, and shall comply with all terms and conditions contained in
Paragraph 1.b, this Paragraph 16 and in Exhibit C attached hereto. Landlord
shall require no further payment from Tenant for such consent except the costs,
if any, of legal and architectural review of such plans and specifications. In
no case shall Tenant make any changes to the exterior of the Premises, including
the painting of or the installation of any coverings on such exterior, without
Landlord's prior written consent as provided in this Paragraph 16.a. All
installations, alterations or improvements installed in the Premises or any
Common Area by Tenant shall remain for the benefit of Landlord and shall not be
removed unless otherwise expressly agreed in writing and shall be presumed to
become an integral part of the Premises and/or the Property. Notwithstanding the
fact that all such alterations and improvements shall become an integral part of
the Premises and/or the Property, such alterations and improvements shall not be
deemed a rent substitute or any other payment to or for the benefit of Landlord.
Tenant shall not install any paintings, murals, sculptures, mosaics or other
works of visual art in the Premises that cannot be removed without destroying,
damaging or modifying such art without Landlord's prior consent, which may be
withheld for any reason including, without limitation, Tenant's failure to
provide Landlord with written waivers under 17 U.S.C. section 113(d) by the
creators of such art of their rights thereto.
b. Permits and Payment. Tenant shall obtain all permits, licenses and
approvals required for any alterations or improvements in the Premises or any
Common Area and promptly pay all contractors and materialmen so as to minimize
the possibility of a lien attaching to the Premises or to the Property. Should
any such lien be made or filed, Tenant shall bond against or discharge the same
within ten (10) days after written request by Landlord. Prior to commencing any
interior construction, or any alterations, remodeling or other construction in
the Premises or any Common Area, Tenant shall furnish evidence satisfactory to
Landlord that Tenant has obtained all permits, licenses and approvals and is
financially able to pay the contractor, and shall furnish a copy of a bond in an
amount, in a form and with a surety acceptable to Landlord naming Landlord and
Tenant as obligees, and ensuring completion of the proposed work free and clear
of liens.
c. Americans with Disabilities Act. Notwithstanding any other term,
provision, covenant or agreement contained in this Lease, Landlord shall not be
under any obligation to Tenant, or any employee or invitee of Tenant, to
improve, alter, modify and/or repair any part or portion of the Property or the
Premises to bring the same into compliance with any requirement, policy or
procedure of "The Americans with Disabilities Act of 1990", U.S.C. Section
12101
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et. seq., or any rule, regulation or standard promulgated pursuant thereto
subsequent to the Landlord's initial improvements to or construction of the
Property, the Common Areas and/or the Premises.
17. UTILITIES.
a. Utility Facilities. Landlord shall provide and, except as provided in
Paragraph 17.c below, maintain the mains and conduits necessary to supply
utility services to the Premises, such provision and maintenance to be a
Property maintenance and operating expense. Landlord shall have the right to
locate within the Premises and the Common Areas utility mains and other
facilities serving other premises and areas within the Property, when such
location is dictated by necessities of engineering design, good practice and/or
code requirements. Such mains and other facilities shall be located, insofar as
is reasonably possible, so as to cause a minimum of interference with Tenant and
to be unobtrusive in appearance. If Tenant desires any additional mains,
conduits or other facilities for utility services beyond those provided by
Landlord in accordance with the original plans and specifications for the
Property, Tenant shall pay the cost of any such additional lines or equipment.
b. Utility Charges. Tenant shall be responsible for the payment of all
rates and charges for electricity, air conditioning, telephone and all other
utility services to the Premises which are metered or billed separately to
Tenant by Landlord or the provider of such services. Any meters recording the
amount of electricity, water and gas furnished to the Premises shall be
installed by Tenant at its expense and shall be subject to Landlord's prior
approval and Landlord's decision as to the proper location thereof. At
Landlord's option, Tenant will pay either directly to Landlord or to an
independent contractor, if so directed by Landlord, all electricity, water,
telephone, refuse removal, gas, sewer, other utilities and all other charges
incurred by Tenant in connection with its use and enjoyment of the Premises, on
or before the dates upon which such utility and other charges become delinquent.
If required by Landlord, Tenant shall, at Tenant's expense, install a check
meter for Tenant's utility services. Tenant shall pay its percentage share of
all utility services for the Property which are not metered or billed separately
to Tenant as a Property maintenance and operating expense. Notwithstanding any
other term, provision, covenant or condition of this Lease, Tenant agrees that
the utility services provided to the Premises which may be separately billed,
but not separately metered, by Landlord will be based upon the estimated
standard use for premises similar to the Premises and located in buildings
similar to the COCONUT GROVE MARKETPLACE as determined by Landlord in its sole
discretion. In the event Landlord shall determine that because of the nature of
Tenant's business, operating hours, fixtures, equipment, personal preferences or
any other cause or reason, Tenant's use of any one or more of the utility
services supplied to Tenant by Landlord is excessive and beyond the standard use
of such services, then in such event Landlord, at its option, shall have the
right to (i) separately meter and bill Tenant for such service(s), and/or (ii)
assess a surcharge to Tenant for the reasonable cost of such excess usage by
Tenant. Any such separate bill or surcharge to Tenant as provided for in this
Paragraph 17.b shall be paid by Tenant within ten (10) days of Tenant's receipt
thereof, and any failure by Tenant to pay such bill or surcharge as required in
this Paragraph 17.b shall be deemed a material default by Tenant under this
Lease and Landlord shall have all of its rights and remedies with respect to
such default as provided in Paragraph 23 below.
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c. Maintenance of Utilities. Tenant shall maintain all utilities,
equipment and electrical facilities within the Premises, and all of Tenant's
utilities, equipment and electrical facilities within the Common Areas,
including revamping, and Tenant shall maintain the sewer lines, if any, from the
Premises to the main sewer trunk. Tenant shall provide normal maintenance of the
air-conditioning system which serves the Premises, on a schedule and with a
maintenance company acceptable to Landlord. Janitorial services for the Premises
shall be provided by Tenant. Tenant shall also maintain all flues and exhaust
fans from the Premises, if any. If Tenant is permitted under this Lease to
operate a kitchen in the Premises, Tenant shall install at Tenant's expense and
maintain on a daily basis (i) a grease trap in the kitchen waste water lines,
(ii) an exhaust hood duct system for each stove or other cooking element, and
(iii) an automatic kitchen fire suppression system. In addition, Tenant shall
have the foregoing facilities serviced and cleaned by an independent contractor
acceptable to Landlord on a schedule acceptable to Landlord.
d. Interrupted Service. Landlord shall use reasonable efforts to
maintain electrical, plumbing, and other utility services to and in the Property
in good working order. If, however, any of these services shall fail or be
interrupted for any reason, Landlord shall not be liable to Tenant or any other
person for any damage or injury which may be sustained as a result thereof.
18. REPAIRS AND MAINTENANCE.
a. Repairs By Tenant. Tenant shall at all times keep the Premises
(including entrances, all interior glass and window moldings), and the roof of
the Premises and all partitions, doors, fixtures, equipment and appurtenances
therein and in the adjacent and overhead Common Areas (including lighting,
plumbing and other utility fixtures installed therein by or for the benefit of
Tenant, and any air conditioning system, but excluding structural portions of
the Premises and the Common Areas) in good order, condition, repair (including
reasonably periodic painting of the interior), free from waste and noxious
odors.
b. Landlord's Right To Cure Tenant's Default. If Tenant refuses or
neglects to repair and maintain any part of the Premises or any Common Area, or
any fixtures, equipment or other improvements or installations therein or
thereon, as required under this Lease to the reasonable satisfaction of Landlord
as soon as reasonably possible after written demand, Landlord may perform such
repairs or maintenance without liability to Tenant for any loss or damage that
may occur to Tenant's property or to Tenant's business, and upon completion
thereof, Tenant shall pay Landlord's costs for making such repairs upon a
presentation of the bills therefor, as additional rent.
c. Repairs, Modifications. etc. By Landlord. Except as may be provided in
Paragraphs 18.a above and 19.a below, Landlord shall keep all structural
portions of the Premises and Property, other than the roof of the Premises, in
good condition and repair during the term of this Lease. In this connection,
structural portions of the Premises shall mean the foundation, columns, girders,
supports and load-bearing walls (but excluding the roof of the Premises). The
cost of maintenance of such structural portions of the Premises and Property,
and the cost of repairs and/or replacement of such structural portions of the
Premises and Property shall be a maintenance and operating expense of the
Property. Notwithstanding anything to the contrary
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herein, Landlord shall not be required to make any repairs occasioned by the act
or negligence of Tenant, its agents, employees, subtenants, licensees and
concessionaires. Tenant waives the provisions of any law permitting Tenant to
make repairs at Landlord's expense. If Landlord is required to make
alterations, improvements, additions, modifications and/or repairs to structural
or nonstructural portions of the Property or the Premises by reason of Tenant's
negligent acts or omissions to act, or Tenant's failure to comply with or
perform any covenant, condition, term or agreement contained in this Lease,
including Tenant's obligation to comply with the requirements and standards of
"The Americans with Disabilities Act of 1990." Landlord may add the cost of such
alterations, improvements, additions, modifications and/or repairs to the rent
which shall thereafter become due, and Tenant shall pay the same as additional
rental.
19. DAMAGE TO OR DESTRUCTION OF PREMISES OR PROPERTY.
a. Repairs by Landlord. Except as may otherwise be required by the Master
Lease or any mortgage on the Property, if (i) the Premises or the Property
should be wholly damaged or destroyed during the term of this Lease by any
casualty, (ii), during the term of this Lease, the Property is damaged to an
extent of forty percent (40%) or more of the then tax assessed value
thereof--whether the Premises are damaged or not, (iii), at any time during the
term of this Lease, the Premises are destroyed or damaged to any extent
whatsoever as a result of any casualty or event not insured against by Landlord
and not required to be insured against by Tenant or (iv), at any time during the
last twelve (12) months of the term of this Lease, the Premises are destroyed or
damaged by any casualty such that the estimated cost of repair to Landlord
exceeds ten percent of the average Monthly Minimum Rent received by Landlord
from Tenant, then, in every such case, Landlord may either terminate this Lease
or elect to repair or restore or where required under this Lease, require Tenant
to repair or restore, said damage or destruction, in which latter event Landlord
or Tenant shall repair and/or rebuild the same as provided for below and the
Monthly Minimum Rent shall be abated proportionately as provided in Paragraph
19.d. Landlord shall advise Tenant in writing whether it elects to have the
Premises or Property rebuilt or repaired within ninety (90) days after the
casualty. If Landlord elects not to have the Premises or Property repaired or
rebuilt, this Lease shall terminate without further notice, in which event all
further obligations of either party shall cease, effective as of the date Tenant
shall cease business in the Premises and Tenant will at its own expense promptly
remove from the Premises all buildings, improvements and trade fixtures
constructed or installed thereon or therein by Tenant and restore the real
property to a good, orderly and sanitary condition and even grade. Any insurance
proceeds payable on account of the damage or destruction shall be paid as
provided in Paragraph 10.c above. If such damage or destruction occurs and this
Lease is not so terminated by Landlord, this Lease shall remain in full force
and effect and Landlord and Tenant shall undertake promptly to reinstate the
Premises and/or Property, or portions thereof, so destroyed or damaged according
to the original plans and elevations thereof (or according to such modified plan
as shall be approved in writing by Landlord) and according to the parties'
original obligations therefor as provided in Paragraphs 1.b and 1.c above.
Neither Landlord's nor Tenant's obligations under this Paragraph 19.a shall
exceed the scope of the work done by Landlord or Tenant in the original
construction of the Property and/or the Premises.
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b. Continuation of Business. Tenant agrees during any period of
reconstruction or repair of the Premises and/or of the Property to continue the
operation of its business in the Premises to the extent reasonably practicable
from the standpoint of good business practice.
c. Repairs by Tenant. Tenant shall, in the event of any damage or
destruction affecting the Premises, unless this Lease shall be terminated as
provided in Paragraph 19.a, promptly replace or fully repair all furniture,
improvements, trade fixtures, equipment, and other fixtures originally installed
by Tenant Landlord shall have no interest in the proceeds of any insurance
carried by Tenant on Tenant's interest in this Lease, and Tenant shall have no
interest in the proceeds of any insurance carried by Landlord on the Premises
and/or the Property.
d. Abatement of Monthly Minimum Rent. Except in those cases where damage
or destruction to the Premises shall have been caused by the fault of Tenant,
the Monthly Minimum Rent shall be abated proportionately during any period
during which, by reason of any damage or destruction to the Premises which
Landlord is obligated to repair or reconstruct, there is a substantial
interference with the operation of the business of Tenant in the Premises, and
such abatement shall continue for the period commencing with such destruction or
damage and ending with the completion by Landlord of such work of repair and/or
reconstruction as Landlord is obligated to do. Nothing in this Paragraph 19
shall be construed to abate or diminish Percentage Rent or additional rent or
abate Monthly Minimum Rent where interference with the operation of Tenant's
business shall have been a result of Tenant's acts, omissions or other fault.
20. HAZARDOUS MATERIALS.
a. Compliance. Tenant is expressly required at all times during the term
of this Lease to observe and perform the requirements of all "Hazardous
Materials Laws." This term means and includes all federal, state or local laws,
ordinances, or regulations, or other requirements, now or hereafter in effect,
relating to environmental conditions, industrial hygiene, occupational safety or
health, or hazardous materials in, on or under the Premises, including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, 42 U.S.C., Section 9601, et seq., the Resource
Conservation and Recovery Act, 42 U.S.C., Section 6901, et seq., the Hazardous
Materials Transportation Act, 49 U.S.C., Section 1801, et seq., the Clean Water
Act, 33 U.S.C., Section 1251, et seq., the Clean Air Act, 42 U.S.C., Section
7401, et seq., the Toxic Substances Control Act, 15 U.S.C., Sections 2601-2629,
the Safe Drinking Water Act, 42 U.S.C., Sections 300f-300j, Chapters 342B, 342C,
342D, 342H, 342I, 342J, 342L and 342N of the Hawaii Revised Statutes, and any
similar federal, state or local laws or ordinances and the regulations or other
requirements now or hereafter adopted, published or promulgated pursuant
thereto.
(i) As used herein, the term "hazardous material" means and includes
any and all radioactive materials, asbestos, polychlorinated biphenyls
("PCBs"), petroleum, crude oil, or any fraction thereof, chemicals known to
cause cancer or reproductive toxicity, pollutants, contaminants, toxic
substances and any and all other substances or materials defined as or
included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials" or "toxic substances" under, or for the purposes of,
the Hazardous Materials Laws.
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(ii) As used herein, the term "Hazardous Discharge" means any event
involving the use, deposit, disposal, spill, release or discharge of any
Hazardous Material in, on or under the Premises.
(iii) As used in this Lease, the phrase "in the Premises" shall mean
in, on, within or under the Premises.
(iv) If the requirements imposed by any of said laws, ordinances,
rules, regulations, covenants, conditions, restrictions or standards shall
be inconsistent with each other, Tenant shall comply with the most
stringent requirement.
b. Maintenance of Records. Tenant shall maintain and make available to
Landlord, during reasonable business hours, all records pertaining to Tenant's
improvements and alterations and all records required by Hazardous Materials
Laws and laws pertaining to underground storage tanks, including, but not
limited to, records of the size, type, location, use and monitoring of any such
storage tanks placed in the Premises. Any records required to be kept or filed
with any governmental authority regarding cessation of use of such storage tanks
or the investigation or remediation of any release from such tanks shall also be
furnished to Landlord.
c. Governmental Approval Tenant shall, before commencing operation of its
business or any construction or alteration of any improvements in the Premises,
seek and secure all approvals and permits therefor which may be required from
any governmental authority having jurisdiction thereof, including without
limitation, requirements regarding land, air and water use, emissions and noise
emissions, hazardous waste materials and underground storage tanks from time to
time in effect. Where a plan for operation of closure is required, Tenant shall
not commence operations or construction until such closure plan has been
approved by appropriate governmental authorities and by Landlord, and Tenant has
provided evidence satisfactory to Landlord of its ability to fund the estimated
cost of implementing such closure plan. All costs of attaining necessary
approvals and permits shall be at Tenant's sole cost and expense. Tenant agrees
to undertake to consult with supervising governmental authorities and to comply
with the directions and design requirements of such authorities for the
operation of its business and the construction or alteration of any improvements
in the Premises.
d. Approval by Landlord. Any approval by Landlord of such applications
shall be without any warranty of the adequacy or accuracy of the statements and
materials contained therein. Tenant shall provide Landlord with copies of all
permits received by Tenant from time to time upon Landlord's written request.
e. Tenant "Waste". With respect to these provisions, any noncompliance
with applicable governmental environmental standards, regulations,
administrative requirements or the requirements of hazardous material and
underground storage tank management shall constitute "waste." Tenant agrees that
anything produced or brought onto the Premises which is or becomes a hazardous
material shall only be handled, kept, utilized, stored, and disposed of in
accordance with all applicable laws. Tenant further agrees, at its sole cost and
expense, to dispose of all waste, whether hazardous or nonhazardous, solid,
liquid or gaseous, in accordance with the requirements of all applicable laws.
Tenant shall not burn any rubbish, including cuttings, weeds,
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brush or other waste material from the planting or growing of crops, on the
Premises. Tenant shall take all such measures as shall be necessary to preclude
the burial or disposal or release on the Premises, by Tenant, or the discharge
or disposal or release by Tenant into the sea, surface waters, underlying
aquifer or the air, or any other part of the environment, of any hazardous
material, whether liquid, gaseous, solid, radioactive or otherwise in
contravention of any applicable law. Tenant shall not permit any noise, smoke
or vibration to emanate from the Premises which materially interferes with the
use and enjoyment of the Premises or the Property. If any hazardous material is
buried in the Premises or the Property, or discharged into the sea, surface
waters, underlying aquifer or the air, or released into the environment, either
intentionally or inadvertently, by Tenant or anyone claiming by or through
Tenant, Tenant shall promptly investigate, remediate and remove all such
hazardous material as may remain and so much of any portion of the environment
as shall have become contaminated in accordance with all applicable government
requirements and replace any removed portion of the environment (such as soil)
with uncontaminated material of the same character as existed prior to
contamination.
f. Inspection by Landlord. Upon twenty-four (24) hours advance written
notice by Landlord to Tenant, Tenant will permit Landlord and Landlord's agents
at all reasonable times during the term of this Lease to enter the Premises to
inspect and examine the same and determine the state of repair and condition
thereof, including, without limitation, the right to inspect Tenant's records
regarding compliance with all governmental requirements and to make such
samplings, corings and other forms of testing as may be reasonably necessary to
determine or verify such compliance. Such inspection shall be at Landlord's cost
and expense, all without any rebate of rent or liability to Tenant for any loss
of occupation or quiet enjoyment of the Premises thereby occasioned. Tenant
shall build, maintain and repair at its own expense all structures and remedy
all defects required by the provisions of this Lease to be built, maintained,
made, remedies, and repaired by Tenant of which notice shall be given by
Landlord, Landlord's agent, or any governmental authority, within thirty (30)
days after the giving of such notice, or within such shorter period as required
by governmental order or other form of directive.
g. Indemnity of Landlord. With respect to the obligations of this
Paragraph 20, Tenant shall defend with counsel selected by Landlord, indemnify
and save harmless Landlord, and Landlord's officers, directors, employees,
agents, successors and assigns, against and from all liabilities, obligations,
damages, penalties, claims, cross-claims, charges, loss, cost, investigation and
remediation expenses including reasonable attorneys' and consultants' fees,
which may be imposed upon, brought against, reasonably incurred by Landlord by
reason of any cause whatsoever arising out of or in connection with the use,
occupancy and enjoyment of the Premises by Tenant or any other person thereon
claiming under Tenant, including, without limitation, any harm or contamination
resulting therefrom to Landlord, persons claiming under Tenant, other tenants of
Landlord, third parties, the aquifer underlying the Premises, the Property, the
sea, surface waters, the soil of the Premises and surrounding lands and the air,
or any accident, fire or nuisance in the Premises or any other adjacent area not
caused by any facilities of others, or any failure by Tenant to keep the
Premises and sidewalks in safe condition.
h. Remediation. Upon termination of this Lease, Tenant shall remove all
improvements, all trade fixtures and underground storage tanks in, on or under
the Premises, shall promptly investigate and remediate any release of hazardous
materials to the environment caused
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or reasonably suspected to be caused by such fixtures or tanks, and shall
promptly repair to Landlord's satisfaction all damages caused by such removal.
All such removals, repairs, investigation and remediation shall be at Tenant's
sole cost and expense. Tenant shall also, at Tenant's sole cost and expense,
provide Landlord with evidence satisfactory to Landlord that Tenant has fully
complied with all authority having jurisdiction over the Premises or any acts
or activities of Tenant therein, including, without limitation, full compliance
with any closure plan filed or required to be filed with any governmental
authority with respect to the removal of all Hazardous Material and underground
storage tanks from the Premises.
i. Landlord's Right to Cure. If Tenant fails to provide evidence to
Landlord of Tenant's compliance with the requirements of Paragraph 20.h above
within thirty (30) days after the termination of this Lease, Landlord may effect
such full compliance with the requirements of governmental authorities. All
costs incurred by Landlord in effecting such compliance shall be at Tenant's
expense and Tenant will, within thirty (30) days from Tenant's receipt of demand
by Landlord, reimburse Landlord for such cost, together with interest at the
rate of twelve percent (12%) per annum. Until such full compliance is complete,
either by Landlord or Tenant, and all costs therefor have been paid by Tenant or
reimbursed by Tenant to Landlord, together with interest thereon, if any, the
Premises and this Lease shall not be deemed surrendered and Tenant shall
continue to pay rent for the Premises in an amount equal to the rent paid by
Tenant during the month preceding termination, prorated for the period of time
from termination to surrender.
j. No Release of Tenant. Tenant shall not be relieved of its obligations
under this Lease until surrender is completed in accordance with these
provisions. Final inspection or release of the Premises by any interested
governmental agencies and by Landlord shall be a condition precedent to
completion of surrender and termination of Tenants obligations hereunder.
Nothing herein shall be deemed to relieve Tenant of any obligation, such as the
obligation to indemnify Landlord, which by the specific terms of this Lease
survives termination of this Lease.
k. Notice to Landlord. If Tenant at any time becomes aware of any
Hazardous Discharge or of any Hazardous Materials Claim in respect of the
Premises or the Property, Tenant will immediately so notify Landlord and provide
to Landlord such detailed reports of any such event as may be reasonably
requested by Landlord. Landlord shall have the right to join and participate, as
a party if it so elects, in any settlements, remedial actions, legal proceedings
or actions initiated in respect of any Hazardous Materials Claims.
21. ASSIGNMENT AND SUBLETTING.
a. Restriction on Assignment and Subletting. Except as may be provided in
the Special Conditions Addendum, Tenant shall not assign or mortgage this Lease,
or any interest therein, nor sublet the Premises or any part thereof or any
right or privilege appurtenant thereto, nor suffer any other person (the agents
and employees of Tenant excepted) to occupy or use the Premises, or any portion
thereof, without the prior written consent of Landlord, which consent Landlord
shall not unreasonably withhold. Landlord shall in all cases have the right to
determine that any proposed assignee or sublessee shall be of sound financial
condition and shall use the Premises only for suitable purposes. A consent by
Landlord to one assignment, mortgage, subletting, occupation or use by any other
person, shall not be deemed to be a consent to any
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subsequent assignment, mortgage, subletting, occupation or use by another
person. Any such assignment or subletting without Landlord's consent shall be
void, and shall, at the option of Landlord, terminate this Lease. Except as
provided herein, this Lease shall not, nor shall any interest therein, be
assignable, as to the interest of Tenant, by operation of law, without the
written consent of Landlord, which consent Landlord shall not unreasonably
withhold.
b. Consent Fee and Rent Adjustment. Landlord shall have the right to
impose, as a condition of any consent to an assignment or mortgage of this Lease
or a subletting of the Premises, a fee of $500.00 to be paid by Tenant to
Landlord for the costs of processing and reviewing the proposed assignment or
subletting.
c. Transfer of Ownership Interest. Except as may be provided in the
Special Conditions Addendum, prior to any proposed merger or transfer of stock
of a corporate tenant, or any sale or transfer of any partnership interest of a
partnership tenant, Tenant shall obtain Landlord's consent therefor. Any change
in the present ownership or management of Tenant or Tenant's business, whether
as a result of any sale of assets, transfer of stock or partnership interest,
merger, consolidation or otherwise, shall be deemed an assignment of this Lease
within the meaning of this Paragraph 21, whether or not such change of ownership
results in a change of control of Tenant. Any transfer of the beneficial
ownership of any stock of a corporate tenant, or the transfer of the beneficial
ownership of any partnership interest of a partnership tenant, or any transfer
of voting rights (whether to a voting trust or otherwise) in any stock of a
corporate tenant or in any partnership interest of a partnership tenant shall be
deemed a "change of ownership" for purposes of this Lease. Upon any such change
in the ownership of Tenant or Tenants business without Landlord's prior consent,
Landlord shall have all the rights and remedies provided in Paragraph 23 below.
Without limiting the generality of Landlord's right to withhold consent pursuant
to Paragraph 21.a above, Tenant acknowledges that Landlord will not consent to
any change in ownership unless it is satisfied with all particulars, including
but not limited to the amount of capital in any corporation or partnership
assuming any rights herein, the number and identity of other stockholders or
partners, the management structure, the financial status and place of
incorporation or organization of said corporation or partnership, and the
financial, personnel, management and experience qualifications of the
corporation, partnership and/or individuals to be assuming an ownership interest
in Tenant. Landlord may cause an investigation into the particulars of any
merged or transformed entity which is to operate Tenant's business and into the
particulars relating to any person to whom an ownership interest in Tenant's
business is proposed to be conveyed for the purpose of enabling Landlord to make
an informed decision as to whether to consent to such merger, transfer or change
in ownership. Despite the foregoing, if Tenant is a corporation or partnership,
a change in ownership of the corporate stock or a partnership interest of Tenant
resulting from the death of a stockholder or partner shall not be deemed a
default hereunder if the decedent's shares or interest in Tenant pass to the
surviving spouse and/or issue or to a trust for the primary benefit of such
spouse and/or issue.
d. Continuing Liability of Tenant. No assignment, mortgage or subletting
of Tenant's interest permitted under this Paragraph 21, or consented to by
Landlord, shall in any way release Tenant of any liability, obligation or
responsibility under the terms of this Lease.
e. Procedure to Sublet or Assign.
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(i) If Tenant desires Landlord's consent to a sublease. license,
concession or assignment of this Lease, or to a change of ownership of
Tenant, or the mortgaging or other hypothecating or encumbering of this
Lease, Tenant shall give Landlord thirty (30) days' prior written notice
thereof, setting forth all of the terms and conditions thereof, together
with the name and address of the proposed assignee, subtenant, new owner or
mortgagee, the nature of the business of the proposed assignee or subtenant
and its proposed use of the Premises and the authorization required under
Paragraph 21.e(iii) below. Tenant shall also include with such notice a
copy of any proposed documents to effect the proposed transaction and any
other information reasonably requested by Landlord. If Tenant notifies
Landlord of a proposed sublease, assignment, mortgage, change of ownership
or other hypothecation or other transaction, whether or not in connection
with a sale of Tenant's business, then at any time within the thirty (30)
day period following Tenant's notice to Landlord, Landlord may, by written
notice to Tenant, consent to the proposed transaction or withhold consent
to the proposed transaction. Landlord's failure to notify Tenant in
writing of Landlord's consent within the thirty (30) day period as herein
provided shall be deemed a denial of such consent by Landlord.
(ii) If Landlord consents to a mortgage, sublease, assignment or
other transaction by Tenant as provided in Paragraph 21.e(i) above,
Tenant may, within sixty (60) days after Landlord's consent but not later
than the expiration of such sixty (60) day period, enter into such
mortgage, assignment, sublease or other transaction and any attendant
sale of Tenant's business, on the terms and conditions set forth in
Tenant's written notice to Landlord.
(iii) Tenant, at the time of its request for Landlord's consent,
shall furnish Landlord with a written authorization, signed by the proposed
assignee, sublessee, new owner or other person and notarized, authorizing
Landlord to investigate the financial condition, business reputation,
credit standing, performance history and other relevant aspects relating to
the background, business ability and reliability of the proposed assignee,
sublessee, new owner or other person.
f. Landlord's Continuing Options. Landlord's options under this Paragraph
21 shall be continuing ones, i.e., Landlord shall have each of the foregoing
options available to it under Paragraphs 21.a, 21.b, 21.c, 21.d and 21.e above
each time that Tenant or any successor-in-interest to Tenant desires to sublet,
license or concession the Premises or any part thereof, assign this Lease,
change ownership or mortgage or otherwise hypothecate or encumber this Lease.
g. Assignment by Landlord. If Landlord transfers or assigns its
interest in this Lease or in the Property to any person, Landlord shall
thereby be released from any further obligations hereunder, and Tenant agrees
to look solely to such successor-in-interest of Landlord for performance of
such obligations. If any security given by Tenant to secure the performance of
Tenant's obligations hereunder is assigned or transferred by Landlord to any
such successor-in-interest, then Landlord shall thereby be discharged of any
further obligation relating thereto. For the purposes of this Paragraph 21.g,
any holder of a mortgage that affects the Premises or the Property at any
time, and any landlord in any Master Lease to which this Lease is subordinate
at any time, will be a successor-in-interest to Landlord as to the Premises
and the Property when it succeeds to the interest of the Landlord or any
successor-in-interest, whether by voluntary sale, assignment or transfer or
by way of foreclosure or dispossession of Landlord. Tenant agrees to
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attorn to the assignee, transferee, or purchaser of Landlord's interest from and
after the date of notice to Tenant of any such assignment, transfer or sate, in
the same manner and with the same force and effect as though this Lease were
made, in the first instance, by and between Tenant and such assignee, transferee
or purchaser. If any proceedings are instituted for foreclosure, or in the event
of the exercise of the power of sale under any mortgage made by Landlord
covering the Premises or the Property, or in the event the Master Lease shall be
terminated, Tenant shall, upon Landlord's request, attorn to the transferee or
successor-in-interest upon any such foreclosure, sale or termination and
recognize such transferee or successor-in-interest as the Landlord under this
Lease.
22. LIENS AND INSOLVENCY. Tenant shall keep the Premises and the Property
free from any liens or encumbrances arising out of any work performed by Tenant,
materials furnished by Tenant, or obligation incurred by Tenant. Upon the
occurrence of any of the following events and the Tenant's failure to pay any
rent, additional rent or other charges due to Landlord under this Lease,
Landlord may terminate this Lease forthwith by giving Tenant notice of its
election to do so: (i) if Tenant files a voluntary petition in bankruptcy, or
for reorganization under the bankruptcy laws, or is adjudged a bankrupt by a
court of competent jurisdiction; or (ii) if Tenant makes an assignment for the
benefit of creditors; or (iii) if a receiver is appointed by a court of
competent jurisdiction for Tenant's business and it is established in the
receivership proceedings that Tenant is insolvent.
23. DEFAULT.
a. Right to Re-enter. In the event of;
(i) Any failure of Tenant to pay any Monthly Minimum Rent,
Percentage Rent, additional rent or other sum due hereunder within five (5)
days of when it is due; or
(ii) The Tenant's failure to pay any Monthly Minimum Rent, Percentage
Rent, additional rent or other sum due hereunder within five (5) days of
when it is due and the occurrence of any event described in Paragraph 22
above; or
(iii) An abandonment of the Premises by Tenant or any taking of the
Premises or this Lease under any writ of execution, or Tenant's violation
of any of the use restrictions or other provisions contained in Paragraphs
11,12 and/or 13 above, or any failure of Tenant to perform any other of the
terms, conditions, or covenants of this Lease to be observed or performed
by Tenant (except for any default as described in Paragraphs 23.a.(i) and
23.a.(ii) above) for more than thirty (30) days after written notice of
such default shall have been mailed to Tenant;
then, in any such event, the same shall be considered a default by Tenant, and
Landlord, besides any other rights or remedies it may have, shall have the
immediate right, with or without termination, of re-entry and may remove all
persons and property from the Premises and such property may be removed and
stored in a public warehouse or elsewhere at the cost of, and for the account of
Tenant, all without service of notice or resort to legal process and without
Landlord being deemed guilty of trespass, or becoming liable for any loss or
damage which may be
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occasioned thereby; provided, however, that if Tenants default shall not consist
of any failure to pay any Monthly Minimum Rent, Percentage Rent, additional rent
or other sum due hereunder to Landlord when it is due and the nature of Tenant's
default is such that more than thirty (30) days are reasonably required to cure
such default, then Tenant shall not be in default if Tenant commences its cure
of such default within such thirty (30) day period and thereafter diligently
prosecutes the same to completion.
b. Right to Re-let. Should Landlord elect to re-enter under Paragraph
23.a, or should it take possession pursuant to legal proceedings or pursuant to
any notice provided for by law, it may either terminate this Lease or it may
from time to time without terminating this Lease, make such alterations and
repairs as may be necessary in order to re-let the Premises, and re-let the
Premises or any part thereof for such term or terms (which may be for a term
extending beyond the term of this Lease) and at such rent and upon such other
terms and conditions as Landlord in its sole discretion may deem advisable. All
rents received by Landlord from such re-letting shall be applied (i) to the
payment of any indebtedness (other than rent due hereunder) from Tenant to
Landlord, (ii) to the payment of any costs and expenses of such re-letting and
of such alterations and repairs, (iii) to the payment of rent due and unpaid
hereunder; and the residue, if any, shall be held by Landlord and applied in
payment of future rent as the same may become due and payable hereunder. If the
rent received from such re-letting during any month is less than that to be paid
during that month by Tenant hereunder, Tenant shall pay any such deficiency
(which shall be calculated and paid monthly) to Landlord.
c. Termination. Upon any uncured default by Tenant, as that term is
defined in Paragraph 23.a above, Landlord may terminate this Lease by giving
written notice to Tenant of its intention to do so, specifying a day not earlier
than five (5) days thereafter, and the term of this Lease and all right, title
and interest of Tenant hereunder shall expire as fully and completely on the day
so specified as if that day were the date fixed in this Lease for the expiration
of the term. No re-entry or taking possession of the Premises by Landlord shall
be deemed its election to terminate this Lease unless a written notice of
termination is given to Tenant or unless the termination is decreed by a court
of competent jurisdiction. Landlord may at any time after reletting the Premises
without terminating this Lease, elect to terminate this Lease for Tenant's
previous default.
d. Waiver of Jury Trial and Venue. The parties each hereby waive trial by
jury in any action, proceeding or counterclaim brought by either against the
other on any matter whatsoever arising out of or in any way connected with this
Lease or Tenant's use or occupancy of the Premises, including any claim of
injury or damage, and any emergency and other statutory remedy with respect
thereto. The parties also agree that the venue of any such action, proceeding or
counterclaim shall be in the Kona Division of the District or Circuit Court of
the Third Circuit, as appropriate.
e. Summary Possession. Tenant acknowledges that in the event of any
default or breach by Tenant, if the Landlord shall choose to obtain possession
of the Premises and terminate Tenant's possession, then Tenant hereby agrees to
submit irrevocably to the jurisdiction of the District Court of the Circuit
within the State of Hawaii wherein the Premises are situated, said District
Court to have exclusive jurisdiction to decide, under the provisions of Chapter
666, Hawaii
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Revised Statutes, Landlord's action for summary possession as well as any
counterclaims by Tenant.
f. Damages to Landlord. If Landlord terminates this Lease because of a
default by Tenant, in addition to any other remedies Landlord may have, it may
recover from Tenant all damages it may incur by reason of such default,
including the cost of recovering the Premises, reasonable attorney's fees, and
the worth at the time of such termination of the excess, if any, of the amount
of rent and additional rent reserved in this Lease for the remainder of the
stated term over the then reasonable rental value of the Premises for the
remainder of the stated term, all of which amounts shall be immediately due and
payable from Tenant to Landlord.
g. Determination of Percentage Rental on Default.
(i) For the purpose of determining the rents and other payments which
would be payable to Landlord by Tenant under this Lease subsequent to
Tenant's default, the rent and other payments for each year of the
unexpired term of this Lease shall deemed to be an amount equal to the
average, computed on and adjusted to an annual basis, of the total Monthly
Minimum Rent, Percentage Rent, and other charges paid or payable by Tenant
to Landlord under this Lease annually during the three (3) full lease years
immediately preceding the date of default.
(ii) It is agreed that, if there shall not have been three (3) full
lease years immediately preceding the date of default, it would be
impracticable or extremely difficult from the nature of the case to prove
what amount of Percentage Rent hereunder would have been paid or payable
hereunder by Tenant throughout the balance of the term of this Lease if
Tenant had not defaulted, and no other remedy would be adequate, convenient
or feasible. Accordingly, the parties agree that, in such event, the
amount of the Percentage Rent which would have been paid or payable by
Tenant each year throughout the term of this Lease if Tenant had not
defaulted shall be equal to the total Percentage Rent paid by Tenant for
the twelve (12) calender months immediately preceding the calender month of
default.
h. Separate Suits. Landlord shall have the privilege of splitting its
cause of action for rent so as to permit institution of a separate suit or
proceeding for the base and additional rent due Landlord under this Lease and a
separate suit or proceeding for any other payment required under this Lease and
neither the institution of any such suit or proceeding nor the entering of
judgment therein, shall bar Landlord from bringing a subsequent suit or
proceeding for the Monthly Minimum Rent, Percentage Rent, additional rent, or
for any other payments required hereunder.
i. Non-waiver. The waiver by Landlord of any breach of any term,
covenant or condition of this Lease shall not be deemed a waiver of such term,
covenant or condition for any subsequent breach of any term, covenant or
condition. The subsequent acceptance of rent by Landlord shall not be deemed a
waiver of any preceding breach by Tenant of any term, covenant or condition of
this Lease, other than the failure of Tenant to pay the particular rent so
accepted, regardless of Landlord's knowledge of such preceding breach at the
time of such acceptance.
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j. No Accord and Satisfaction. No payment by Tenant or receipt by
Landlord of a lesser amount than the rent herein stipulated shall be deemed to
be other than on account of the rent claimed by Landlord, nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment as rent be deemed an accord and satisfaction, and Landlord may accept
such check or payment without prejudice to Landlord's right to recover the
balance of such rent or pursue any other remedy provided in this Lease.
k. Late Fee and Interest on Past Due Amounts. Tenant hereby acknowledges
that late payment by Tenant of rent and other sums due under this Lease will
cause Landlord to incur costs not contemplated by this Lease, the exact amount
of which will be extremely difficult to ascertain. Such costs include, but are
not limited to, processing and accounting charges, and late charges which may be
imposed on Landlord by the terms of the Master Lease or any mortgage covering
the Premises and/or the Property. Therefore, in the event any amount due
hereunder shall not be received by the tenth (10th) day following the day it is
due, a late fee computed at the rate of two percent (2%) of the overdue amount
shall be automatically charged. Any amounts owing by Tenant to Landlord under
the terms of this Lease shall also carry interest from the date the same become
due until paid at the rate of ten percent (10%) per annum. Said interest shall
be considered as a part of the rent payable under this Lease.
l. Assignment of Rent. If the Premises or any part thereof are sublet or
Tenant is entitled to receive any payments of any kind whatsoever by reason of
his status as Tenant of the Premises, then, in the event of default by Tenant,
with or without penalty, Landlord shall have the immediate right to receive and
collect all rents, income and profits from the Premises due or accrued or to
become due, and said rents and profits are hereby assigned to Landlord and
Landlord is hereby irrevocably appointed the attorney-in-fact of Tenant in the
name of the Tenant or in Landlord's own name to demand, sue for, collect, or
recover and receive all such rents and profits, and to compromise and settle
claims for rents or profits upon such terms and conditions as Landlord may deem
proper, and to enter into, renew or terminate leases or tenancies.
m. Landlord's Right to Cure. If Tenant defaults in any of its obligations
under the terms of this Lease, other than the payment of rent or other charges
payable by Tenant hereunder, and Tenant fails to perform same promptly after
thirty (30) days written notice of default and demand to cure such default,
Landlord shall also have the right, but not the obligation, to cure such
defaults and the cost of same shall be immediately due and payable as additional
rent, provided, however, that if the nature of such default is such that the
same cannot be reasonably cured within such thirty (30) day period, Landlord
shall not have the right to cure such default if Tenant shall within such period
commence such cure and thereafter diligently prosecute the same to completion.
n. Landlord's Contractual Security Interest. In addition to any
statutory Landlord's lien, Landlord shall have at all times a valid security
interest to secure payment of all rent becoming due hereunder from Tenant, and
to secure payment of any damages or loss which Landlord may suffer by reason of
the breach by Tenant of any covenant, agreement or condition contained herein,
upon all goods, wares, fixtures and other personal property of Tenant presently,
or which may hereafter be, situated in the Premises or the Common Areas, and all
proceeds therefrom, and such property shall not be removed without the consent
of Landlord until all
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arrearages and rent as well as any and all other sums of money then due Landlord
or to become due to Landlord hereunder shall first have been paid and discharged
and all of the covenants, agreements and conditions hereof have been fully
complied with and performed by Tenant. Upon the occurrence of any default by
Tenant, Landlord may, in addition to any other remedies provided herein, enter
upon the Premises and take possession of any and all goods, wares, fixtures, and
other personal property of Tenant situated in the Premises or the Common Areas,
without liability for trespass or conversion, and sell the same at public or
private sale, with or without having such property at the sale, after giving
Tenant reasonable notice of the time and place of any public sale or of the time
at which any private sale is to be made, at which sale the Landlord or its
assigns may purchase unless otherwise prohibited by law. Unless otherwise
provided by law, and without intending to exclude any other manner of giving
Tenant reasonable notice, the requirement of a reasonable notice shall be met if
such notice is given in the manner prescribed in this Lease, at least thirty
(30) days prior to the time of sale. Any sale made pursuant to the provision of
this Paragraph shall be deemed to have been a public safe conducted in a
commercially reasonable manner if held in the Premises or where the property is
located after the time, place and method of sale and general description of the
types of property to be sold have been advertised in a daily newspaper published
in the County of Hawaii, for any five (5) of the seven (7) calendar days
immediately before the date of the sale. The proceeds from any such disposition,
less any and all expenses connected with the taking of the possession, holding
and selling of the property (including reasonable attorneys' fees), shall be
applied as a credit against the indebtedness secured by the security interest
granted in this Paragraph. Any surplus shall be paid to Tenant or as otherwise
required by law; Tenant shall pay any deficiencies forthwith. Upon request by
Landlord, Tenant agrees to execute and deliver to Landlord any financing
statements or other instruments in form sufficient to perfect the security
interest of Landlord in the aforementioned property and the proceeds thereof
under the provisions of the Hawaii Uniform Commercial Code.
o. Additional Remedies. The rights and remedies of Landlord set forth in
this Paragraph 23 shall be in addition to any other right and remedy now and
hereafter provided by law or otherwise provided in this Lease. All rights and
remedies shall be cumulative and non-exclusive of each other.
p. Default by Landlord. Landlord shall not be in default under this Lease
unless Landlord fails to perform obligations required of Landlord within thirty
(30) days after written notice by Tenant to Landlord; provided, however, that if
the nature of Landlord's obligation is such that more than thirty (30) days are
required for performance, then Landlord shall not be in default if Landlord
commences performance within such thirty (30) day period and thereafter
diligently prosecutes the same to completion.
24. CONDEMNATION.
a. Automatic Termination of Lease. Except as may otherwise be required by
the Master Lease or any mortgage on the Property, if the whole of the Premises
shall be taken by any public authority under the power of eminent domain, then
the term of this Lease shall cease as of the day possession is taken by such
public authority, and all rent shall be paid up to that date. If only a part of
the Premises shall be taken under eminent domain, this Lease shall terminate as
to the portion taken, and, unless this Lease shall be terminated as hereinafter
provided, it shall
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continue in full force and effect as to the remainder of the Premises, and the
Monthly Minimum Rent shall be reduced in the proportion the floor area taken
bears to the total floor area leased, and Tenant, at its own cost and expense,
shall make all necessary repairs and alterations to the Premises required by
such taking.
b. Option to Cancel. If the remainder of the Premises cannot be made
tenantable for the purposes for which Tenant has been using the Premises, Tenant
shall have the option, to be exercised within thirty (30) days after the filing
of such eminent domain action, of canceling this Lease effective as of the date
the condemning authority shall take possession; provided, however, that if more
than fifty percent (50%) of the square footage of the Premises shall be taken
under power of eminent domain, either party, by written notice to the other
delivered on or before the date of surrendering possession to the public
authority, may terminate this Lease, effective as of such surrender of
possession. All compensation and damages of any type awarded for any taking,
whole or partial, shall belong to and be the property of Landlord except as
hereinafter provided and except for Tenant's furnishings, fixtures and
equipment.
c. Tenant's Damages. Tenant shall have the right to claim and recover
from the condemning authority, but not from Landlord, such compensation as may
be separately awarded or recoverable by Tenant in Tenant's own right on account
of any cost or loss to which Tenant might be put in removing Tenant's
merchandise, furniture, fixtures and equipment.
d. Temporary Taking. In the event of a condemnation of a leasehold
interest, i.e., a temporary taking, in all or a portion of the Premises without
the condemnation of the whole leasehold or the fee simple title also, this Lease
shall not terminate and such condemnation shall not excuse Tenant from full
performance of all of its covenants hereunder, including the payment of rent,
but Tenant in such event shall be entitled to present or pursue against the
condemning authority its claim for and to receive all compensation or damages
sustained by it by reason of such condemnation, and Landlord's right to recover
compensation or damages shall be limited to compensation for and damages, if
any, to its reversionary interest; it being understood, however, that during the
time Tenant shall be out of possession of the Premises by reason of such
condemnation, this Lease shall not be subject to forfeiture for failure to
observe and perform those covenants not calling for the payment of money. If the
condemning authority shall fail to keep the Premises in the state of repair
required hereunder, or to perform any other covenant not calling for the payment
of money, Tenant shall have ninety (90) days after the restoration of possession
to it within which to carry out its obligations under such covenant or
covenants. At any time after such condemnation proceedings are commenced,
Landlord shall have the right, at its option, to require Tenant to assign all
compensation and damages payable by the condemner to Tenant to Landlord, to be
held without liability for interest thereon, as security for the full
performance of Tenant's covenants hereunder, such compensation and damages
received pursuant to said assignment to be applied first to the payment of
rents, taxes, assessments, insurance premiums and all other sums from time to
time payable by Tenant pursuant to the terms of this Lease as such sums fall
due, and the remainder, if any, to be payable to Tenant, it being understood and
agreed that such assignment shall not relieve Tenant of any of its obligations
under this Lease with respect to such rents, taxes, assessments, insurance
premiums and other sums except as the same shall be actually received by
Landlord.
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25. NON-LIABILITY OF LANDLORD. (i) Landlord and its agent, if any, shall
not be liable to Tenant for any damage or loss, including loss or interruption
to Tenant's business or services, occasioned by any service provided by Landlord
or its agent under this Lease or electricity, plumbing, gas, water, air
conditioning, sprinkler or other pipes and sewage systems, or the loss,
interruption or stoppage thereof, or by the bursting, leaking, overflowing or
running over of any tank, washstand, closet, waste or other pipes in or about
the Premises or the Property, nor for any damage occasioned by water coming into
the Premises from any source whatsoever, or for any damage or injury arising
from any acts or neglect of the other tenants of, or any other persons on, the
Property or of any adjacent property, or of the public, unless such damage or
loss shall result from a wanton and willful act of Landlord or Landlord's gross
negligence. All property of Tenant kept or stored on the Premises or in any
Common Area shall be kept or stored at the risk of Tenant only, and Tenant shall
hold Landlord harmless from any claims arising out of damage to the same,
including subrogation claims by Tenant's insurance carriers unless such damage
shall be caused by the wanton and willful act or gross negligence of Landlord.
In no event shall Landlord or any of its agents, employees, or principals be
liable to Tenant, its principals, agents or employees for lost profits or any
other consequential damages suffered by Tenant, its principals, agents or
employees from any cause, unless such losses or damages shall result from a
wanton and willful act of Landlord or Landlord's gross negligence.
26. INDEMNITY OF LANDLORD. Tenant shall indemnify and save Landlord, and
its agents, employees and principals, harmless against and from any and all
claims, damages, costs and expenses, including reasonable attorney's fees,
arising from the operation of the business conducted by Tenant in the Premises
or arising from any default by Tenant in the performance of any of the
covenants, conditions or terms of this Lease, or from any act or negligence or
omission to act of Tenant, its agents, contractors, servants, employees,
sublessees, concessionaires or licensees, in or about the Premises or the
Property or in connection with this Lease or any sublease. If any action or
proceeding is brought against Landlord, or its agents, employees and/or
principals, by reason of any such claim, even though such claim is based on the
alleged fault of Landlord, or its agents, employees and/or principals, Tenant
agrees to pay the reasonable costs and expenses thereof, including attorney's
fees, and any judgments or settlement of claims secured against Landlord, or its
agents, employees and/or principals, by reason of such action or proceedings.
27. ATTORNEY'S, ARCHITECT'S, ETC. FEES. If Landlord and/or its agent
shall, without fault, be made a party to any litigation by or against Tenant
arising out of Tenant's occupancy of the Premises or the Property, or any act of
Tenant concerning the Premises, the Property or this Lease, or if litigation
shall be brought for recovery of possession of the Premises, for the recovery of
rent or any other amount due under the provisions of this Lease, or because of
the breach of any covenant in this Lease to be kept or performed by Tenant, and
a breach shall be established, Tenant shall pay to Landlord and/or its agent all
expenses incurred in connection therewith, including attorney's fees. Tenant
shall also pay any and all costs and fees incurred or paid by Landlord,
including attorney's fees and the fees of architects or other professionals
employed by Landlord, to review, revise or prepare any document, plan or other
writing of any nature presented by or on behalf of Tenant to Landlord for review
or approval in connection with Tenant or any action by Tenant under this Lease,
including, without limitation, requests for consents to assignments, subleases,
mortgages or other similar items, or certificates, approvals, opinions, or other
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agreements with respect thereto, which such items in the opinion of Landlord
require the employment of an attorney or other professional on behalf of
Landlord. Any failure of Tenant to pay such costs or fees upon demand of
Landlord shall be deemed a default under this Lease and Landlord shall be
entitled to exercise its rights on account of such default as provided in
Paragraph 23 above. Landlord shall not be obligated to consider, review, execute
or deliver any consent, approval, certificate or other item until the costs and
fees herein required to be paid by Tenant have been paid.
28. ACCESS TO AND INSPECTION OF PREMISES. Landlord reserves and shall at
any and all times have the right to enter the Premises and the Common Areas to
inspect the same, to supply janitorial service and any other service to be
provided by Landlord to tenants of the Property, to exhibit the Premises to
prospective purchasers or tenants, to post notices of non-responsibility and
"for lease" signs, and to alter, improve or repair the Premises or any portion
of the Common Areas without abatement of rent, and may for that purpose erect
scaffolding and other necessary structures where reasonably required by the
character of the work to be performed, always providing that the entrance to the
Premises shall not be blocked thereby, and further providing that the business
of Tenant shall not be interfered with unreasonably. Tenant hereby waives any
claim for damages for any injury or inconvenience to or interference with
Tenant's business, any loss of occupancy or quiet enjoyment of the Premises, and
any other loss occasioned thereby to the degree the interference is not
substantial. For each of the aforesaid purposes, Landlord shall at all times
have and retain a key with which to unlock all of the doors in, upon and about
the Premises, excluding Tenant's vaults and safes, and Landlord shall have the
right to use any and all means which Landlord may deem proper to open said doors
in an emergency, in order to obtain entry to the Premises, and any entry to the
Premises obtained by Landlord by any of said means, or otherwise, shall not
under any circumstances be construed or deemed to be a forcible or unlawful
entry into, or a detainer of, the Premises, or any eviction of Tenant from the
Premises or any portion thereof.
29. SUBORDINATION OF LEASE. This Lease shall automatically be subordinate
to any mortgage, encumbrance or deed of trust heretofore or hereafter placed
upon the Property or the Premises by Landlord, to any and all advances made or
to be made thereunder, to the interest on the obligations secured thereby, and
to all renewals, replacements and extensions thereof; provided, however, that in
the event of foreclosure of any such mortgage or deed of trust or exercise of
the power of sale thereunder, Tenant shall attorn to the purchaser at such
foreclosure or sale, and recognize such purchaser as Landlord under this Lease
if so requested by such purchaser. Said encumbrances shall include, without
limitation, the lien of a mortgage executed in part to secure a loan to pay for
the construction of improvements in, on or to the Property and/or the Premises.
Within ten (10) days after request therefor by Landlord, or, in the event that
upon Landlord's sale, assignment or hypothecation of the land or improvements
which comprise the Property, an estoppel or offset statement shall be required
from Tenant, Tenant shall deliver in recordable form a certificate to any
purchaser, mortgagee under such mortgage, or to Landlord, certifying (if such be
the case) that this Lease is in full force and effect and that there are no
defenses or offsets thereto, or stating those claimed by Tenant, and stating
such other facts and conditions as may be reasonably required by Tenant. If any
mortgagee or beneficiary elects to have this Lease superior to its mortgage or
deed of trust and gives notice of its election to Tenant, then this Lease shall
thereupon become superior to the lien of such mortgage or deed of trust,
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whether this Lease is dated or recorded before or after the mortgage or deed or
trust. Tenant shall execute promptly after demand, without charge, all forms,
documents and instruments required by Landlord to carry out the terms of this
Paragraph 29.
30. ESTOPPEL CERTIFICATE: FINANCIAL STATEMENTS.
a. Estoppel Certificate. Tenant shall at any time upon not less than ten
(10) days' prior written notice from Landlord execute, acknowledge and deliver
to Landlord a statement in writing (i) certifying that this Lease is unmodified
and in full force and effect (or, if modified, stating the nature of such
modification and certifying that this Lease, as so modified, is in full force
and effect) and the date to which the rent and other charges are paid in
advance, if any, and (ii) acknowledging that there are not, to Tenant's
knowledge, any uncured defaults on the part of Landlord hereunder, or specifying
such defaults if any are claimed. Any such statement may be conclusively relied
upon by any prospective purchaser or encumbrancer of the Premises. At Landlord's
option, Tenant's failure to deliver such statement within such time shall be a
material breach of this Lease or shall be conclusive upon Tenant (i) that this
Lease is in full force and effect, without modification except as may be
represented by Landlord, (ii) that there are no uncured defaults in Landlord's
performance, and (iii) that not more than one (1) month's rent has been paid in
advance.
b. Financial Statements. If Landlord desires to finance, refinance, or
sell the Premises, the Property, or any part thereof, Tenant hereby agrees to
deliver to any lender or purchaser designated by Landlord such financial
statements of Tenant as may be reasonably required by such lender or purchaser.
Such statements shall include the past three (3) years' financial statements of
Tenant. All such financial statements shall be received by Landlord and such
lender or purchaser in confidence and shall be used only for the purposes herein
set forth.
31. ADDITIONAL IMPROVEMENTS UPON PROPERTY. Landlord reserves the right at
any time and from time to time, to add to, change, relocate, improve, or
demolish all or any portion of the Property, buildings, Common Areas and parking
areas (including, without limitation, the right to add additional floors to the
buildings, to build new improvements adjoining the buildings, and to change,
relocate, remove, or designate those parties who may use the lobbies, corridors,
elevators, stairways and service areas), and to construct controlled or elevated
parking facilities. Landlord's exercise of these rights will not require
Landlord to compensate Tenant in any way, nor will it result in any liability by
Landlord to Tenant or in any way affect Tenant's obligations under this Lease.
32. SUBMISSION TO CONDOMINIUM PROPERTY REGIME. Landlord shall also have
the right, without the consent of Tenant to submit all or a part of the Property
of which the Premises are a portion to a Condominium Property Regime under
Chapter 514A of the Hawaii Revised Statutes or any successor statute and to
execute and record a Declaration of Condominium Property Regime and any
amendments thereto, as deemed appropriate or necessary by Landlord; provided,
however, that any such submission to a Condominium Property Regime shall be
subject to the Tenant's rights under this Lease. Landlord shall have the right
to add, delete, relocate, realign, reserve and grant all easements and rights of
way over, under and on the Common Areas, the Property and the Premises as may be
necessary or desirable in connection with such
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submission of the Property; provided, however, that such easements and
rights-of-way shall not materially impair the use of the Premises by Tenant.
To the extent that the joinder of Tenant shall be required in order to
validate any Declaration of Condominium Property Regime or amendment
contemplated therein, Tenant hereby agrees to join in and to execute the same,
and for purposes of further securing the foregoing covenant, Tenant hereby
irrevocably appoints Landlord as its attorney-in-fact, coupled with an interest,
for purposes of executing, recording and acknowledging any such Declaration or
amendment for and on behalf of Tenant.
33. LANDLORD'S CONSENT. In any case in which the Landlord's consent or
approval is required hereunder, then unless otherwise expressly provided herein,
Landlord shall not unreasonably withhold its consent or approval. In any case in
which Landlord does not respond to Tenant's request for consent or approval,
Landlord shall be deemed to have withheld consent or to have disapproved, as the
case may be.
34. FORCE MAJEURE. In the event that either Landlord or Tenant shall be
delayed or hindered in or prevented from the performance from any act required
under this Lease by reason of strikes, lockouts, labor troubles, inability to
procure materials, failure of power, restrictive governmental laws or
regulations, unforeseeable delays in obtaining governmental permits, approvals
or consents, or riots, insurrection, war, or other reason of a like nature, not
the fault of the party delayed in performing the work or doing the acts required
under the terms of this Lease, then performance of such act shall be excused for
the period of the delay and the period for the performance of any such act shall
be extended for a period equivalent to the period of such delay. The provisions
of this Paragraph 34 shall not operate to excuse Tenant from the prompt payment
of rent or any other sums required by the terms of this Lease.
35. NOTICES.
a. Notices to Tenant. All notices to be given to Tenant may be given in
writing personally to Tenant, if Tenant is an individual, or to an officer,
partner or manager of Tenant, if Tenant is a corporation, partnership or
otherwise not available to Landlord, or by depositing the same in the United
States mail, registered or certified and postage prepaid, and addressed to
Tenant at the Premises, whether or not Tenant has departed from, abandoned or
vacated the Premises.
b. Notice to Landlord. Notice to Landlord shall be given in writing
personally to an agent or employee of Landlord or by depositing the same in the
United States mail, registered or certified and postage prepaid, and addressed
to Landlord at the address set forth in the attached Special Lease Provisions,
or at such other addresses as Landlord may give to Tenant in writing from time
to time.
c. Time of Service. Any written notice sent by registered or certified
mail shall be deemed to have been served as of the date it is mailed in
accordance with the foregoing provisions.
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36. MISCELLANEOUS.
a. No Representations by Landlord. Tenant acknowledges and agrees that
Landlord has not made and Tenant is not relying on any representations as to the
quality, marketing, or advertising of the Property or as to the amount of
traffic or customers expected.
b. Corporate Representations. If Tenant hereunder shall be a
corporation, the parties executing this Lease on behalf of the Tenant hereby
represent and warrant that (i) Tenant is a duly qualified corporation licensed
to do business in the State of Hawaii, (ii) all franchise and corporate taxes
have been paid to date, and that all future forms, reports, fees and other
documents necessary to comply with all applicable laws will be filed when due,
and (iii) Tenant has full power and authority to enter into this Lease. Tenant
shall provide Landlord with such evidence of the foregoing as Landlord may
reasonably require.
c. No Offer without Signature. The submission of this Lease document for
examination and negotiation does not constitute an offer to lease, or
reservation of, or option for the Premises, and this document becomes effective
and binding only upon execution and delivery hereof by Tenant and by Landlord,
or by a duly authorized representative of Landlord. No act or omission of any
employee or agent of Landlord or Landlord's broker, if any, shall alter, change
or modify any of the provisions thereof.
d. Further Assurances. The parties hereto shall, whether before or after
the date hereof, execute and deliver such further instruments and do such
further acts and things as may be reasonably required to carry out the intent
and purposes of this Lease.
e. Obligations Joint and Several. In any case, where there is more than
one Tenant, the obligation of Tenants hereunder shall be joint and several and
any notice given by Landlord to any one of the Tenants shall be construed as
notice to all.
f. No Partnership. Nothing herein contained, whether in the method of
computing rent or otherwise, shall create between the parties hereto, or be
relied upon by others as creating, any relationship of partnership,
association, joint venture or otherwise. The sole relationship of the parties
hereto shall be that of landlord and tenant.
g. No Transfer of Interest in Land or Air Rights. Nothing in this Lease
shall be construed as creating or transferring to Tenant any interest in the
land upon which the Premises are located or in the air space above the Premises
or the Common Areas, except as otherwise specifically provided in this Lease.
h. Diminution of Light and Air. No diminution or shutting off of light or
air by any structure which may be erected in the vicinity of the COCONUT GROVE
MARKETPLACE or the Property shall affect the rights or obligations of Landlord
or Tenant under this Lease or operate to impose any liability on the Landlord.
i. Counterparts. This Lease may be executed in multiple counterparts,
each of which shall be deemed an original and all of which shall constitute one
agreement and the
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signature of any party in counterpart shall be deemed as a signature to and may
be appended to any other counterpart.
j. Short-Form Counterpart. Upon request by either party, the other party
will execute and deliver to the party requesting the same a recordable
short-form counterpart of this Lease, stating the names of the parties, the
term, the description of the Premises, and the nature of any options for
renewal. Landlord will supply the form for the short-form counterpart. The party
requesting recordation shall pay any costs, taxes or assessments incurred in
connection with the recordation of any short-form counterpart.
k. Captions. Captions at the beginning of each Paragraph are for
convenience only and shall not be deemed to be a part of any contents of this
Lease.
l. Binding Effect. Except as otherwise provided herein, this Lease and
each and every provision hereof shall be binding on and shall, subject to the
required consent of Landlord, inure to the benefit of the parties hereto, their
respective personal representatives, successors, heirs, and permitted assigns,
and to each and every successor-in-interest of any party hereto, whether such
successor acquires any such interest by way of gift, purchase, foreclosure,
merger, or by any other method.
m. Severability. If any provision of this Lease or the application
thereto to any person or circumstances shall, for any reason and to any extent,
be invalid or unenforceable, the remainder of this Lease and the application or
such provision to the other persons or circumstances shall not be affected
thereby.
n. Governing Law. This Lease shall be governed by and construed in
accordance with the laws of the State of Hawaii.
o. Time of the Essence. Time is of the essence of this Lease.
37. ENTIRE AGREEMENT. This Lease contains the entire agreement between the
parties, and any agreement hereafter made shall be ineffective to change,
modify, discharge or effect an abandonment of the Lease in whole or in part
unless such agreement is in writing and signed by the party against whom
enforcement of the change, modification, discharge or abandonment is sought. It
is expressly understood and agreed (i) that each and all of the provisions of
this Lease are conditions precedent to be faithfully and fully performed and
observed by Tenant to entitle Tenant to continue in possession of the Premises
hereunder, (ii) that said conditions are also covenants on the part of Tenant,
and (iii) that time of performance of each is of the essence of this Lease.
44
54
IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the
date and year set forth in the attached Special Lease Provisions.
CINEMASTAR LUXURY THEATERS, INC.,
a California corporation
Brian Anderson
- ---------------------------------
Brian Anderson By: Alan Grossberg
---------------------------------
Alan Grossberg
Melvin Shapiro
- --------------------------------- Its: ---------------------------------
Melvin Shapiro
LANDLORD TENANT
45
55
Tenant: CINEMASTAR LUXURY THEATERS, INC.,
Date: July 18, 1996
PERSONAL GUARANTY OF LEASE ADDENDUM
PERSONAL GUARANTY by the undersigned Guarantor(s) with respect to the
Sublease between BRIAN ANDERSON and MELVIN SHAPIRO, Landlord, and CINEMASTAR
LUXURY THEATERS, INC., Tenant, dated the 18th day of July, 1996, for certain
Premises in the COCONUT GROVE MARKETPLACE situated in Kailua-Kona, Hawaii (the
"Lease"):
THE UNDERSIGNED GUARANTOR(S), do hereby unconditionally guarantee to
Landlord and its successors and assigns, the full and timely payment of the rent
and all other amounts provided to be paid under the Lease and do also guarantee
the full and timely observance and performance of all the other covenants, terms
and conditions of the Lease on the part of Tenant to be observed and performed,
and do hereby waive any and all notices of default, nonpayment, demand,
presentment or protest and agree that any extensions, modifications or
amendments of the Lease shall not in any manner release the undersigned
Guarantor(s), and that Landlord may at any time, with or without notice, release
any person, corporation or entity other than Tenant liable for observance or
performance of any covenants required to be observed or performed under the
Lease, and may extend the time for payment or modify or extend the time for
compliance with any covenant of the Lease, or in any other way amend, change or
modify the Lease without in any way releasing the undersigned Guarantor(s).
The liability of Guarantor(s) hereunder shall be primary. If at any time,
default shall be made by Tenant in the performance or observance of any of the
terms, covenants or conditions of the Lease on Tenants part to be kept,
performed or observed, Guarantor(s) will keep, perform and observe the same, as
the case may be, in place and stead of Tenant. If any right of action shall
accrue to Landlord under the Lease, Landlord may, at Landlord's option, proceed
against Guarantor(s) without having commenced any action or having obtained any
judgment against Tenant.
The liability of Guarantor(s) hereunder shall in no way be affected by (a)
the release or discharge of Tenant in any creditors', receivership, bankruptcy
or other proceedings, (b) the impairment, limitation or modification of the
liability of Tenant or the estate of Tenant in bankruptcy, or any remedy for the
enforcement of Tenants said liability under the Lease, resulting from the
operation of any present or future provision of the Federal Bankruptcy Code or
other federal and state statutes or from the decision in any court, (c) the
rejection or disaffirmance of the Lease in any such proceedings, (d) the
assignment or transfer of the Lease by Tenant or (e) any disability of Tenant.
Until all of the covenants and conditions of the Lease on Tenant's part to
be performed and observed are fully performed and observed, Guarantor(s) (a)
shall have no right of subrogation
56
against Tenant by reason of any payments or acts or performance by Guarantor(s),
in compliance with the obligation of Guarantor(s) hereunder, (b) waive any right
to enforce any remedy which Guarantor(s) now or hereafter shall have against
Tenant by reason of any one or more payments or acts of performance in
compliance with the obligations of Guarantor(s) hereunder, and (c) subordinate
any liability or indebtedness of Tenant now or hereafter held by Guarantor(s) to
the obligation of Tenant to the Landlord under the Lease.
The undersigned Guarantor(s) further agree to pay all costs of enforcement
of the Lease and this guaranty, including reasonable attorneys' fees in the
event that counsel is retained or suit is instituted to enforce this guaranty.
As a further inducement to Landlord to make this Lease and in consideration
thereof, Landlord and the undersigned Guarantor(s) covenant and agree that in
any action or proceeding brought by either Landlord or the undersigned
Guarantor(s) against the other on any matters whatsoever arising out of, under
or by virtue of the terms of the Lease or this Guaranty, that Landlord and the
undersigned Guarantor(s) shall and do hereby waive trial by jury.
This instrument may not be changed, modified, discharged or terminated
orally or any manner other than by agreement in writing signed by Guarantor(s)
and Landlord.
IN WITNESS WHEREOF, the undersigned have executed this Personal Guaranty as
of the 15 day of July, 1996.
JOHN ELLISON, JR.
--------------------------------
JOHN ELLISON, JR.
SSAN: ###-##-####
ALAN GROSSBERG
--------------------------------
ALAN GROSSBERG
SSAN: ###-##-####
RUSSELL SEHEULT
--------------------------------
RUSSELL SEHEULT
SSAN: ###-##-####
JERRY WILLITS
--------------------------------
JERRY WILLITS
SSAN: ###-##-####
2
57
Tenant: CINEMASTAR LUXURY THEATERS, INC.,
Date: July 18, 1996
SPECIAL CONDITIONS ADDENDUM
Landlord and Tenant agree that the following special provisions shall be a
part of the attached Lease only for the initial term set forth in the attached
Special Lease Provisions and shall not apply to any extended term of the Lease,
if any, unless Landlord and Tenant specifically agree in writing to such
application.
1. Throughout the term of this Lease and any extensions of the term under
the Option Addendum, Tenant may assign or sublease the Lease, in whole or in
part, without the express written consent of Landlord to:
a. Any corporation for which or with which Tenant merges or
consolidates;
b. Any parent, subsidiary or affiliate corporation of Tenant
(controlling, controlled by, or common control with Tenant (control of a
corporation shall be defined to mean fifty-one percent (51%) or more
ownership of each class of the outstanding capital stock of such
corporation]);
c. Any corporation which acquires all or substantially all of the
assets or issued and outstanding shares of capital stock of Tenant; or
d. Any partnership, the majority interest of which shalt be owned
by the parent of Tenant, if such parent is the general partner
subject, however, to the Tenant's and Guarantors' continuing liability under
this Lease as provided in Paragraph 21.d. of this Lease and the Personal
Guaranty of Lease Addendum.
2. Notwithstanding any other term or provision of this Lease, during the
first thirty-six months following the Rent Commencement Date, the Tenant's
percentage share of the Property maintenance and operating expenses shall not
exceed an amount equal to forty-four cents ($.44) per square foot per month.
3. During the entire term of this Lease, and provided the Tenant shall
not be in default under this Lease, Tenant shall have the exclusive right to
operate a movie theater on the Property.
4. Landlord and Tenant agree that the obligations, duties and liabilities
of Landlord and Tenant under this Lease are subject to Landlord's obtaining of a
construction loan for the construction of Landlord's intended improvements to
the Property, including Landlord's contribution to Tenant's improvements as
described in Paragraph 5 below, in an amount not less than $5,500,000.00 within
270 days of Landlord's and Tenant's execution of this Lease. To
58
facilitate such loan, Tenant agrees that Tenant and the Guarantors named in the
Personal Guaranty of Lease Addendum attached to this Lease will join in and
execute the Loan Documents requested by the lender, provided, however that the
liability of Tenant and the Guarantors with respect to such loan shall not
exceed the total sum of $1,000,000.00. If Landlord is unable to obtain the
construction as described above, this Lease shall be terminated and Landlord and
Tenant shall be released and discharged from any and all of the their
obligations, duties and liabilities under the Lease unless such 270 day period
shall have been extended by mutual agreement of Landlord and Tenant.
5. Landlord shall contribute the sum of $85.00 per square foot of the
Premises toward Tenant's building costs for completion of Tenant's Work as
described in Exhibits C and E attached hereto. This contribution shall be paid
from the construction loan to be obtained by Landlord as described in Paragraph
4 above and Tenant agrees that it shall cooperate in respects necessary to allow
the Landlord to make its draws on such loan for the purpose of Landlord's
contributions to Tenant under this Paragraph S and Tenant's cooperation with
Landlord and Landlord's lender shall be a precondition to Tenant's receipt and
use of Landlord's contribution described above. As used herein, the term
"building costs" shall mean the actual out of pocket costs incurred or paid by
Tenant for labor, materials and services actually rendered, including
architectural and engineering plans and project management, for Tenant's Work as
described in Exhibits C and E attached hereto and the costs of the tenant
improvements and appurtenances thereto, in compliance with all applicable
governmental codes, ordinances, and regulations, including, without limitation,
fire sprinkler system, detector check valves and vaults, and all utility
services, related to the theater construction. Building costs shall not include
so-called "soft costs" including, without limitation, any loan fees, points,
principal and interest payments, Tenant employee salaries and expenses,
marketing and sales costs, attorneys fees, etc., incurred by Tenant with respect
to Tenant's Work, all of which shall be borne by Tenant. Landlord, however,
shall be responsible for any mitigation fees related to the Property. Tenant
shall provide Landlord with copies of all invoices, statements, budgets,
summaries ,journals, etc., obtained or maintained by Tenant with respect to
Tenant's work and Tenant's providing of such copies to Landlord shall be a
precondition to Tenant's receipt and use of Landlord's contribution described
above. For purposes of this Paragraph 5, the square footage of the Premises
shall, in no event, be deemed to exceed 25,000 square feet; in the event the
square footage of the Premises as determined in accordance with Paragraph
1.a.(i) of the Standard Terms and Provisions be less than 25,000 square feet,
Tenant shall have the option to fix the square footage of the Premises at 25,000
square feet provided such square footage shall also be deemed to be the square
footage of the Premises for the purpose of calculating the Tenant's obligation
to pay Monthly Minimum Rent and Property maintenance and operating expenses
under this Lease and Exhibit B attached to this Lease.
6. Landlord and Tenant agree that the obligations, duties and liabilities
of Landlord and Tenant under this Lease are subject to the estimated building
costs of Tenant's improvements to the Premises being in an amount less than
$85.00 per square foot of the Premises. In the event the estimated building
costs of Tenant's improvements shall exceed $85.00 per square foot of the
Premises, either Landlord or Tenant may terminate this Lease upon 30 days prior
written notice to the other, provided, however, that during such 30 day period,
the nonterminating party shall have the right to void such termination if it
agrees to pay the full cost and expense of the building costs in excess of
$85.00 per square foot and so notifies the other party in writing. If this
Lease is
2
59
terminated by either Landlord or Tenant as provided in this Paragraph 6, and the
non-terminating party does not elect to void the termination as provided above,
then this Lease shall be terminated and Landlord and Tenant shalt be released
and discharged from any and all of the their obligations, duties and liabilities
under the Lease.
7. Notwithstanding any other term or provision of this Lease, for the
initial term of this Lease and any extension term under the Option Addendum, for
all purposes of calculating the square footage of the Premises, including the
calculation of Monthly Minimum Rent and Landlord's contribution toward Tenant's
building costs, the square footage of any mezzanine constructed in the Premises
shall be excluded and the square footage set forth in the Memorandum described
in Paragraph 1.a.(i) of the Standard Terms and Provisions shall control.
8. Notwithstanding any other term or provision of this Lease, for the
initial term of this Lease and any extension term under the Option Addendum,
Landlord and Tenant agree that, in lieu of any security deposit under this
Lease, Tenant shall install and place furniture, fixtures and equipment within
and on the Premises having a value of not less than $1,000,000.00 and free and
clear of any and all liens, claims and encumbrances of any third person and
record a UCC-1 Financing Statement in the Bureau of Conveyances of the State of
Hawaii perfecting the Landlord's security interest under Paragraph 23.n. of this
Lease therein.
9. Notwithstanding any other term or provision of this Lease, for the
initial term of this Lease and any extension term under the Option Addendum,
Landlord shall retain the right to enact a system of "validated" parking for the
Property, provided, however, that any such system shall allow the Tenant to
validate parking for its customers at no additional cost.
10. Landlord agrees that in the event it shall grant any tenant in the
COCONUT GROVE MARKETPLACE a credit against any the Property maintenance and
operating expenses (as that term is defined in Paragraph 6 of this Lease), the
amount of such credit shall not be charged back against the Tenant under
Paragraph 6, or any other provision, of this Lease.
CINEMASTAR LUXURY THEATERS, INC.,
a California corporation
BRIAN ANDERSON
- ---------------------------------
BRIAN ANDERSON
By Alan Grossberg
---------------------------------
MELVIN SHAPIRO ---------------------------------
- --------------------------------- Its: ____________________________
MELVIN SHAPIRO
LANDLORD TENANT
3
60
Tenant: CINEMASTAR LUXURY THEATERS, INC.,
Date July 18, 1996
OPTION ADDENDUM
Option to Extend Term: If Tenant at all times during the term of this Lease
shall have promptly paid the rent and observed and performed all of the terms
and conditions contained in the Lease, and Tenant shall not have assigned this
Lease or sublet the Premises, Tenant shall have the right to extend the term for
two (2) additional five (5) year terms and for one (1) additional four (4) year
and eleven (11) month term by giving Landlord written notice of such extension
on or before one hundred eighty (180) days prior to the end of the term of the
Lease or the preceding extension term. Any assignment of this Lease or
subletting of the Premises by Tenant requiring Landlord's consent shall void
this Option Addendum unless otherwise specifically agreed by Landlord. Such
extension shall be upon the same terms and conditions of the Lease, excepting
for this option, the Monthly Minimum Rent and the Percentage Rent. Monthly
Minimum Rent and Percentage Rent for each additional year of the extension term
shall, except as provided in Exhibit B for the first five year extended term, be
in such amount as may be agreed upon by the parties or the then-fair market
rental value of the Premises as may be established by arbitration if the parties
fail to agree by the end of the term of the Lease. The "then-fair market rental
value of the Premises shall include all improvements made to the Premises by
Tenant but exclude all trade furnishings or fixtures which Tenant has the right
to remove at the end of the term, if any, and shall mean what a landlord under
no compulsion to lease the Premises, and a tenant under no compulsion to lease
the Premises, would determine as the Monthly Minimum Rent (including any Monthly
Minimum Rent increases during the extension term) and Percentage Rent for the
extension term, as of the commencement of the extension term, taking into
consideration the uses permitted under this Lease, the characteristics, location
and quality of the Property, the quality, size, construction, design, and
location of the Premises, and the Monthly Minimum Rent and percentage rent for
comparable premises located in the vicinity of the COCONUT GROVE MARKETPLACE.
The then-fair market rental value of the Premises during any month of the
extension term as determined by arbitration (the Monthly Minimum Rent and
Percentage Rent), and the increases in the Monthly Minimum Rent, if any, during
the extension term, shall, in no case, be less than the Monthly Minimum Rent and
Percentage Rent during the immediately preceding month. Arbitration shall be by
three (3) arbitrators who shall be recognized real estate appraisers. Each
party shall name an arbitrator and notify the other in writing and, in case of
the failure of either to appoint an arbitrator within ten (10) days after
notification of appointment of an arbitrator, the party appointing the first
arbitrator may apply to the Circuit Court of the Third Circuit, State of Hawaii,
for the appointment of a second arbitrator; the two (2) arbitrators shall
appoint a third arbitrator and, in case of their failure to do so within ten
(10) days after the appointment of the second arbitrator, either party may have
such third arbitrator appointed by the Court. The three (3) arbitrators so
appointed shall proceed to determine the matter in question and the decision of
a majority of them shall be final, conclusive and binding upon the parties. In
no event, however, shall the Monthly Minimum Rent and Percentage Rent per month
during any extension term be less
61
than the Monthly Minimum Rent and Percentage Rent per month for the calendar
month immediately preceding the commencement of the extension term, nor shall
the additional rent be less than that as defined in Paragraphs 6 and 7 of the
Lease. The provisions herein shall be governed by the provisions of Chapter
658, Hawaii Revised Statutes as the same now is or may from time to time be
amended, and judgment may be entered upon the arbitrators' decision by the
Circuit Court of the Third Circuit as provided in said Chapter. The fee of the
arbitrators selected by each of the parties and attorney and witness fees shall
be borne by the party incurring the same; the balance of the costs of
arbitration, including the fee of the third arbitrator, shall be borne equally
by Landlord and Tenant. In the event the then-fair market rental value of the
Premises is not determined until after the beginning of the extension term,
then it shall be retroactive to the beginning of the extension term.
CINEMASTAR LUXURY THEATERS, INC.,
a California corporation
Brian Anderson
- ---------------------------------
BRIAN ANDERSON By: Alan Grossberg
---------------------------------
ALAN GROSSBERG
Melvin Shapiro
- --------------------------------- Its: ---------------------------------
MELVIN SHAPIRO
LANDLORD TENANT
2
62
EXHIBIT A
SITE PLAN
63
Tenant: CINEMASTAR LUXURY THEATERS, INC.,
Date: July 18, 1996
EXHIBIT B
MONTHLY MINIMUM RENT PROVISIONS
The Monthly Minimum Rent after the period provided for in Paragraph C.1.a
of the Special Lease Provisions shall be as follows:
1. On the thirty-sixth (36th) monthly anniversary date of the Rent
Commencement Date or, if such date is not the first day of a calender month,
then on the first day of the next calender month after the month in which the
thirty-sixth (36th) monthly anniversary date of the Rent Commencement Date
falls, the Monthly Minimum Rent shall be increased for the next twenty-four (24)
months of the term to ONE AND 50/100 DOLLARS ($1.50) per square foot per month.
2. Commencing on the sixtieth (60th) monthly anniversary date of the Rent
Commencement Date or, if such date is not the first day of a calender month,
then on the first day of the next calender month after the month in which the
sixtieth (60th) monthly anniversary date of the Rent Commencement Date falls,
and on the same day of each fifth (5th) calendar year thereafter during the
remainder of the term of this Lease (the "adjustment date"), the Monthly Minimum
Rent for the ensuing sixty (60) months of the term shall be adjusted to the
greater of:
a. The Monthly Minimum Rent for the last month immediately preceding
the adjustment date increased by an amount equal to the increase in the
Consumer Price Index for the sixty (60)-month period immediately preceding
the adjustment date, provided, however, that the amount of such increase
shall not, in any event, exceed fifteen percent (15%). The Consumer Price
Index hereinabove referred to is the United States Department of Labor,
Bureau of Labor Statistics, Consumer Price Index for all Urban Consumers,
Honolulu, Hawaii, All Items--Series A. Should the Bureau discontinue
publication of its Consumer Price Index, then the computation of the
adjustment of the Monthly Minimum Rent during each period shall be based
upon the index the Bureau designates as providing the most accurate
comparison with consumer prices for each period of the term of this Lease;
or
b. (1) For the sixty-first (61st) month through the one hundred and
twentieth (120th) month, Monthly Minimum Rent calculated at the rate of ONE
AND 65/100 DOLLARS ($1.65) per square foot per month.
(2) For the one hundred and twenty first (121st) month through
the one hundred and eightieth (180th) month, Monthly Minimum Rent
calculated at the rate of ONE AND 81.5/100 DOLLARS ($1.815) per square
foot per month.
64
(3) For the one hundred and eighty first (181st) month through
the two hundred and fortieth (240th) month, Monthly Minimum Rent
calculated at the rate of ONE AND 99.6/100 DOLLARS ($1.996) per
square foot per month.
(4) For the two hundred and forty-first (241st) month through
the three hundredth (300th) month -- if the Tenant exercises its
option to extend the term as provided in the Option Addendum, the
Monthly Minimum Rent as may be agreed upon by the parties or the then-
fair market rental value of the Premises as may be established by
arbitration if the parties fail to agree. The "then-fair market rental
value of the Premises" shall include all improvements made to the
Premises by Tenant but exclude all trade furnishings or fixtures which
Tenant has the right to remove at the end of the term, if any, and
shall mean what a landlord under no compulsion to lease the Premises,
and a tenant under no compulsion to lease the Premises, would
determine as the Monthly Minimum Rent as of the commencement of the
extension term, taking into consideration the uses permitted under
this Lease, the characteristics, location and quality of the Property,
the quality, size, construction, design, and location of the Premises,
and the Monthly Minimum Rent and percentage rent for comparable
premises located in the vicinity of the COCONUT GROVE MARKETPLACE.
Arbitration shall be by three (3) arbitrators who shall be selected
and who shall act in the same manner as is provided for for
arbitration in the Option Addendum.
The adjusted Monthly Minimum Rent as hereinabove determined shall become
the Monthly Minimum Rent for the next sixty (60) following-month period.
3. Within ten (10) days after any written request by Landlord, Tenant
will enter into an addendum to this Lease with Landlord setting forth and
confirming the new Monthly Minimum Rent as adjusted by the calculations in
Paragraph 2 and the date it commences.
CINEMASTAR LUXURY THEATERS, INC.,
a California corporation
Brian Anderson
- ---------------------------------
BRIAN ANDERSON By: Alan Grossberg
---------------------------------
ALAN GROSSBERG
Melvin Shapiro
- --------------------------------- Its: ---------------------------------
MELVIN SHAPIRO
LANDLORD TENANT
2
65
EXHIBIT C
CONSTRUCTION SPECIFICATIONS
I. GENERAL REQUIREMENTS
A. Design, construction and materials of Tenant improvements in the
Premises and/or the Common Areas shall be approved by Landlord prior to the
commencement of construction. Drawings and samples shall be submitted in a
timely manner and approved by Landlord prior to the commencement of
construction.
B. Landlord shall pay any fees imposed by any governmental authority to
obtain Building permits. All work performed by or on behalf of Tenant shall be
in accordance with the provisions of this Exhibit C and all applicable federal,
state and local building codes, ordinances and regulations.
C. Quality of workmanship and materials shall be approved by Landlord and
shall be in keeping with the general standards, appearance and motif of the
COCONUT GROVE MARKETPLACE.
D. Warranties for not less than one year against defects in workmanship,
material and equipment shall be provided by Tenant's contractors. On completion,
all facilities shall be in full use without defects.
E. Prior to entering into a contract with any contractor for work in the
Premises and/or the Common Areas, Tenant shall first obtain Landlord's approval
of such contractor.
F. Tenant's contractors shall carry public liability insurance in such
amounts as shall be designated by Landlord. Such insurance policy shall name
Landlord, Landlord's architect and any lender of Landlord, as designated by
notice from Landlord to Tenant, and such other parties as Landlord may specify,
as additional insureds insuring against any liability arising out of any and all
construction work in the Premises and/or the Common Areas and all areas
appurtenant thereto. Tenant's contractors also shall carry or cause to be
carried appropriate workers compensation and employers' liability insurance as
is required by (and which insurance shall be in conformity with) the laws of the
State of Hawaii for all employees and subcontractors working in or about the
Premises and/or the Common Areas. Each such insurance policy shall provide that
it cannot be canceled without at least thirty (30) days' prior notice to
Landlord. A current certificate that each such policy is in effect and, if
required by Landlord, a true copy of each such policy, shall be deposited with
Landlord prior to the commencement of any alterations, improvements or other
construction in the Premises and/or the Common Areas.
G. Tenant shall remove all debris and trash from the Property daily
during and upon completion of all work and construction. If such is not removed
by Tenant, Landlord may do the same at Tenant's cost and expense. Tenant shall
clean and repair any surfaces soiled or damaged by Tenant's construction or the
delivery of materials to the Premises.
66
H. Tenant's contractors must coordinate all work, deliveries, utility
connections and trash removal with Landlord before proceeding. Tenant or
Tenant's contractors must submit a construction progress schedule for Landlord's
review and approval two (2) weeks prior to the start of Tenant's construction
work.
I. Tenant's construction shall be performed in a manner that will not
interfere with the quiet enjoyment by other tenants, Landlord, guests or
invitees of the Property. Without limiting the generality of the foregoing,
Tenant shall confine all construction activity to the Premises and the required
portions of the Common Areas and shall keep loading and service areas and areas
in front of, beneath or adjacent to the Premises free of equipment, materials,
workers and other obstructions and shall minimize the emissions of noise, dust
and other sources of interference from the Premises.
II. LANDLORD'S WORK
Unless otherwise provided in Exhibits D and/or E attached hereto, Landlord,
at Landlord's expense, shall provide the following:
A. Site Work.
1. Landscaping and planting as may be determined by Landlord.
2. Completion of sidewalks, exterior stairways and walkways.
3. Completion of loading and unloading areas.
4. A compacted and sloped pad certified by the Tenant's architect to
be in conformance with the approved plans and specifications for
the Premises.
B. Utility Distribution Systems.
1. Dry wells, seepage pits, drains, branch sanitary waste lines.
2. Electrical distribution system to Tenant distribution panel
boards. An empty conduit from the distribution panel to the
Premises.
3. An empty conduit for telephone use will be installed from the
telephone company manhole in the street to the Property terminal
boards and then an empty conduit to the Premises.
4. Underground water, sanitary sewer and drains extended to common
service locations within the Property.
5. All utility distributions shall be stubbed to within 5 feet of
the Premises' building lines.
C. Common Areas: All Common Areas shall be designed by Landlord and
constructed by Landlord as follows:
2
67
1. Materials and finishes: Except as otherwise provided in this
Exhibit C or the Lease Agreement, all materials, landscaping and other
elements in the Common Areas shall be furnished by Landlord.
2. Electrical: All lighting, electrical receptacles, and fire alarm
boxes if any, in the public spaces and service areas, shall be furnished by
Landlord.
III. TENANT'S WORK
Unless otherwise provided in Exhibits D and/or E attached hereto, the
following work is to be performed by Tenant at Tenant's expense. Such work
includes all structural, mechanical and electrical work as well as interior
decoration normally designed by an interior designer or licensed architect.
A. Design Drawings, Working Drawings and Specifications.
1. All design drawings, working drawings and specifications setting
forth in detail Tenant's requirements for the Premises shall be prepared by
a licensed architect or engineer for Tenant.
2. Tenant's work shall comply with any design criteria promulgated
by the Landlord for the COCONUT GROVE MARKETPLACE generally. This criteria
represents minimum standards for all of Tenant's construction designs and
installations.
3. Any modifications and/or deviations from Landlord's criteria
shall be itemized by Tenant and shall be subject to the approval of
Landlord. All costs resulting therefrom shall be borne by Tenant.
4. There will be no changes whatsoever allowed to the exterior
facades by Tenant unless specifically approved by Landlord.
B. Mechanical.
1. Plumbing:
a. Landlord may provide sanitary lateral or stub outs, vents
and water supply stub outs to certain tenant space at location(s) to
be determined by Landlord.
b. Tenant shall do all plumbing and "roughing" work from stub
outs within the Premises. All work shall be approved by Landlord.
2. Fire Protection System. Tenant shall provide necessary piping
and sprinkler drops required for fire protection and extinguishing
equipment and cabinets required by any applicable governmental agency fire
code.
3. Air Conditioning. Tenant shall install an air conditioning system
in the Premises. An equipment layout which includes compressor, fan coil
units, location, piping, connections to fresh air intake and to condensate
drains shall be submitted to Landlord for approval.
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C. Electrical.
1. Tenant shall have prepared complete drawings of the electrical
system for the Premises by a registered electrical engineer. The electrical
system shall be complete with lighting fixtures, receptacles, and
connections to any special equipment including the feeders from the
distribution board and the extension of the feeder conduit within the
Premises.
2. All lighting fixtures and any special electrical displays shall
have the approval of Landlord and shall not be altered without the prior
consent of Landlord.
D. Permits. Prior to performing any work in or on the Premises or the
Property, Tenant shall obtain, at Landlord's expense, any and all governmental
permits, consents, approvals, licenses, etc. necessary to commence and complete
Tenant's work.
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EXHIBIT D
(Landlord's Improvements)
1. "Landlord's Work" shall be based on the engineering plans,
specifications, and drawings to be prepared by Tenant pursuant to Exhibits C and
F attached hereto and shall consist of providing Tenant with a certified
compacted pad of not more than 25,000 square feet, sloped to Tenant's
specifications, all required parking, all landscaping, all on-site paving,
parking, curbs, gutters, and sidewalks, all irrigation and all utilities stubbed
to within 5 feet of Tenant's building line.
2. The time in which Tenant and Landlord shall complete the Tenants Work
and the Landlord's Work may be extended pursuant to Paragraph 34 of the Lease.
3. Both parties shall perform their obligations under this Lease with
reasonable skill and diligence and may not intentionally interfere with or
prevent the other party's performance of its obligations under this Lease.
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EXHIBIT E
(Tenant's Improvements)
1. "Tenant's Work" shall consist of the construction of a first-class
theater building, and including, without limitation, all architecture and
engineering; all building structural costs and project management, including,
without limitation, all contingencies necessary for a first class theater
building including, a second floor mezzanine structure; concrete sloped and flat
floors; auditorium dividing walls; long span roof structure; complete fire
sprinkler system; stairways; drop ceiling; completed electrical; finished
plumbing (to include full, finished, and fixturized restroom facilities);
emergency exit-ways; all HVAC systems; storefront exit doors; all hardware; all
signage, (including a readerboard and marquee,) and all utilities, all as
provided in this Exhibit E and Exhibit C attached hereto.
2. Tenant's work shall also include all work necessary to complete
interior finishing improvements for a first-class motion picture exhibition
theater with approximately 25,000 square feet of Ground Floor Area, and in
accordance with all applicable governmental regulations which shall consist of,
without limitation, state-of-the-art screens, speakers, carpeting, auditorium
wall coverings, projection equipment, concession equipment, fixturization,
installation of seating, installing of furniture, and subject to approval of
applicable governmental entities.
3. Within forty five (45) days from the Effective Date of this Lease,
Tenant shall cause the Preliminary Plans to be prepared ("Preliminary Plans")
and thereafter submit the Preliminary Plans to Landlord for its approval or
disapproval, which approval shall not be unreasonably withheld or delayed and
which approval or disapproval shall be given within thirty (30) days following
receipt of the Preliminary Plans by Landlord. After Landlord has approved a set
of Preliminary Plans, Tenant shall cause its architect to prepare final plans
and specifications ("Final Plans") which shall be based upon and fall within the
scope of the Preliminary Plans approved by Landlord, which Final Plans shall be
submitted to Landlord for approval, (which approval shall not be unreasonably
withheld,) in the same manner and with the same procedure set forth for approval
of Preliminary Plans (the "Approved Plans"). Once approved by Landlord, Tenant
shall, within thirty (30) days submit the Approved Plans to the appropriate
governmental authorities for their approval. In connection with the governmental
approval process and subsequent construction, Tenant may, if required by any
applicable governmental agency, make any changes to the Approved Plans it may
deem reasonably necessary to obtain approvals, and may, without Landlord's
approval, make changes which are within the general scope of the Final Plans
approved by the Landlord. Otherwise, the Approved Plans shall not be modified or
amended without the prior written consent of Tenant and Landlord provided,
however, that Landlord's consent shall not be required for minor field changes
to conform to governmental requirements or the recommendations of the contractor
or architect. In the event Landlord disapproves of the Preliminary or Final
Plans ("Disapproved Plans"), Landlord shall notify Tenant in writing ("Notice of
Disapproval of Plans")
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within the above Thirty day (30-day) period and, at the same time, return to
Tenant one (1) set of the Disapproved Plans marked to show wherein the
Disapproved Plans have been disapproved. Tenant shall cause the, Disapproved
Plans to be appropriately revised, in a manner satisfactory to Landlord and
Tenant within Thirty (30) days of Tenant's receipt of Landlord's Notice of
Disapproval of Plans and submit to Landlord two (2) complete sets of the revised
Tenant's Plans for approval by Landlord. Landlord and Tenant agree to cooperate
reasonably with each other in resolving any objections to the Tenant's Plans or
requested revisions, provided that Tenant has diligently attempted, in a timely
manner, to obtain approval of the Final Plans from all governmental agencies.
Landlord or Tenant may terminate this Lease if, for any reason whatsoever,
Landlord and Tenant should fail to agree upon mutually satisfactory Preliminary
Plans within seventy-five (75) days of the date Tenant first submits the
Preliminary Plans to Landlord, or should Landlord and Tenant fail to agree upon
mutually satisfactory Final Plans within seventy (75) days of the date Tenant
first submits the Final Plans to Landlord, or in the event that all governmental
agencies have not approved and issued all necessary building permits for
Tenant's Work within Three Hundred & Sixty (360) days from the Effective Date of
this Lease.
4. Tenant shall, within Thirty (30) days of receipt of the necessary
permits and approvals from the applicable governmental agencies, commence actual
construction of Tenants Work. The time in which Tenant and Landlord shall
complete the Tenant's Work and the Landlord's Work may be extended pursuant to
Paragraph 34 of the Lease.
5. Both parties shall perform their obligations under this Lease with
reasonable skill and diligence and may not intentionally interfere with or
prevent the other party's performance of its obligations under this Lease.
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Tenant: CINEMASTAR LUXURY THEATERS, INC.,
Date: ____________________
EXHIBIT F
CONFIRMATION OF RENT COMMENCEMENT DATE
Landlord and Tenant hereby agree and confirm that the Rent Commencement
Date, as that term is defined in Tenant's Lease for the COCONUT GROVE
MARKETPLACE, was __________________, ______ and that the initial term of the
Lease shall be deemed to have begun as of this Rent Commencement Date. We also
hereby confirm that the Termination Date of the initial term of this Lease shall
be as provided in Paragraph B of the Special Lease Provisions or (if applicable)
_______________________, ______, whichever is LATER.
Landlord and Tenant further agree and confirm that:
1. The actual square footage of the Premises is _____________ sq. ft.;
and
2. Tenants percentage share of the Property maintenance and operating
expenses for purposes of Paragraph C.3 of the Special Lease Provisions
is ___________%.
CINEMASTAR LUXURY THEATERS, INC.,
a California corporation
_________________________________ By: __________________________________
BRIAN ANDERSON
_________________________________ Its: _____________________________
MELVIN SHAPIRO
LANDLORD TENANT