LEASE ASSIGNMENT AND ASSUMPTION AGREEMENT AND THIRD AMENDMENT OF LEASE
This Lease Assignment and Assumption Agreement and Third Amendment of Lease
dated March 30, 2000 is hereby made a part of that certain LEASE and FIRST
ADDENDUM TO LEASE dated September 16, 1983, the SECOND ADDENDUM TO LEASE
AGREEMENT dated October 20,1983, the SECOND ADDENDUM TO LEASE AGREEMENT dated
February 20, 1984, AMENDMENT TO LEASE dated July 16, 1992, ASSIGNMENT CONSENT
dated December 7, 1993, SECOND AMENDMENT TO LEASE dated September 20, 1995 and
ESTOPPEL CERTIFICATE dated September 20, 1995, (collectively hereinafter
referred to as "the Lease") for the real property located at 107 South First
Street, Burbank California (hereinafter the "Premises"), by and between C & P
Properties #1, a California limited partnership (hereinafter, "Landlord"),
Performance Restaurant Group, Inc. a Ohio corporation (hereinafter, "Assignor"),
and Cl&ago Pizza & Brewery, Inc., a California corporation (hereinafter,
"Tenant").
It is agreed that should there be any conflict between the provisions of This
Lease Assignment and Assumption Agreement and Third Amendment of Lease and that
certain LEASE and FIRST ADDENDUM TO LEASE dated September 16, 1983, the SECOND
ADDENDUM TO LEASE AGREEMENT dated October 20, 1983, the SECOND ADDENDUM TO LEASE
AGREEMENT dated February 20, 1984, AMENDMENT TO LEASE dated July 16, 1992,
ASSIGNMENT CONSENT dated December 7, 1993, SECOND AMENDMENT TO LEASE dated
September 20, 1995 and ESTOPPEL CERTIFICATE dated September 20, 1995, the
provisions of this Lease Assignment and Assumption Agreement and Third Amendment
of Lease shall prevail.
IT IS AGREED:
A) Assignment, Assumption and ConsentTenant hereby agrees to assume of all of
------------------------------------
the obligations under the Lease, and Landlord hereby consents to the assignment
of the Lease to Tenant by Assignor. Upon full execution of this Lease Assignment
and Assumption Agreement and Third Amendment of Lease, Tenant shall assume any
and all rights and obligations under the Lease. Such Assignment shall be
effective as of March30,2000 (hereinafter, the "Assignment Date").
--------
IT IS FURTHER AGREED THAT THE FOLLOWING SECTIONS OF THE LEASE WILL BE MODIFIED
AS PROVIDED HEREIN:
B) Section 1. of the Lease dated September 16, 1983, is hereby stricken in it's
entirety, and replaced with the following:
" 1. Premises.The Premises consists of the following: approximately 21,000 sq.
---------
ft. of land as more particularly described in Exhibit "B" attached hereto and
incorporated herein by this reference and depicted in red on the revised Exhibit
"A"; the improvements (hereinafter defined) thereon as herein provided; an
exclusive right of use the parking spaces around the Restaurant within the area
depicted in green on the revised Exhibit "X'; and a non-exclusive right to use
no less than 150 parking spaces within the adjacent office parking area depicted
in yellow on the revised Exhibit "N' for use on weekends and on weekdays after
5:30 PM, as provided for in section 5 herein."
Q. Section 2 of the Lease dated September 16, 1983, is hereby stricken in it's
entirety, and replaced with the following:
2. "Construction.
--------------
2.1 Plans. Assignor has previously constructed or cause to be constructed,
a
building, landscaping and related improvements (collectively the "Improvements")
for
the Premises according to plans and specifications previously prepared by
Assignor.
The Improvements consist of a restaurant, cocktail lounge, discotheque and patio
in a
building containing ' approximately 11,000 sq. ft. Tenant may make certain
improvements, modifications or alterations to the premises at its sole cost and
expense,
subject to Landlord's approval, according to plans and specifications to be
prepared by
Tenant at its expense (hereinafter, "Plans").
2.2 Approval ofPlans. Landlord shall have 15 days after receipt of the
------------
Plans from Tenant within which to review and approve them. If Landlord notifies
Tenant of Landlord's disapproval of the Plans, then Landlord shall advise tenant
of the reasons for the disapproval and the items that must be modified,
whereupon Landlord and Tenant shall meet and confer so as to modify the plans to
be acceptable to both Landlord and tenant. Upon approval of the Plans by
Landlord and Tenant, Tenant shall submit the Plans to the City and all other
necessary governmental authorities and shall proceed diligently to obtain all
requisite governmental approvals. If modifications are required to obtain such
governmental approvals, Tenant shall prepare such modifications and the Plans
shall be resubmitted for governmental approval.
2.3 Construction. Tenant shall cause construction of any modification or
alteration of the Improvements to be commenced as soon as possible after the
obtaining of governmental approval. Tenant shall undertake such construction in
a manner that does not adversely effect the operation OF THE ADJACENT OFFICE
WILDING, or impede or restrict access and traffic flow to and from the Premises.
2
2.4 Construction Costs.Tenant shall pay any and all cost associated with
--------------------
the improvement, modification ' or alteration of the Premises, and shall keep
the Premises free of mechanics' and materialmens' liens. Landlord is not, nor
shall Landlord be construed to be, the agent of Tenant for any purpose
whatsoever. At its expense, Tenant shall have the right at any time to post the
Prernises with appropriate notices of liquor license application, other notices
as Tenant may deem appropriate, and lawful signs in size, content and at such
locations as tenant may deem appropriate to advertise the pending opening of the
restaurant. During construction, Landlord shall have the right to conduct
inspections and review construction progress."
D). Late Charges,Section 3 of the Assignment Consent dated December 3, 1993 is
--------------
hereby stricken in it's entirety, and replaced with the following:
"3. Late Charges. Tenant hereby acknowledges that late payment by Lessee to
Lessor of Base Rent, or other sums due hereunder will cause Lessor to incur
costs not contemplated by tl-~s 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
Lessor by the terms of any mortgage or trust deed covering the Office Building
Project. Accordingly, if any installment of Base Rent, or any other sum due from
Lessee shall not be received by Lessor or Lessor's designee within ten (10) days
after written notice such amount is past due, then, without any further
requirement for notice to Lessee, Lessee shall pay to Lessor a late charge equal
to 6% of such overdue amount. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Lessor will incur by
reason of late payment by Lessee. Acceptance of such late charge by Lessor shall
in no event constitute a waiver of Lessee's default with respect to such overdue
amount, nor prevent Lessor from exercising any of the other rights and remedies
granted hereunder."
E) Parking,Section 5 (Termination Provisions) (including subsections 5.1 through
--------
5.10) of the Lease dated September 16, 1983, is hereby stricken in it's
entirety, and replaced with the following:
"5. Parking.
--------
5.1 Parking During Daytime OperationsDuring Daytime Operations (11:00 AM through
---------------------------------
3:00 PM, Monday through Friday) Tenant shall have the exclusive right to use the
parking spaces around the Restaurant within the area depicted in green on the
revised ExIdbit "N'. During Daytime Operations, Tenant shall engage the services
of a qualified valet service to park the cars of restaurant patrons in said
parking spaces on a "mandatory valet" basis.
3
5.2 Parking During Evening and Weekend OperationsDuring Evening and Weekend
-------------------------------------------------
Operations (5:30 PM through Midnight Monday through Friday and on weekends),
Tenant shall have the exclusive right of use the parking spaces around the
Restaurant within the area depicted in green on the revised Exhibit "N', and the
non-exclusive right to use no less than 150 parking spaces within the adjacent
office parking area depicted in yellow on the revised Exhibit "A". During
Evening and Weekend Operations, Tenant shall engage the services of a qualified
valet service to park the cars of restaurant patrons in said parking spaces on a
"non-mandatory valet" basis, whereby restaurant patrons would have the option of
either valet parking, or "self parking" their vehicles. However, in the event
that Landlord determines in it's sole discretion that "self parking' by
restaurant patrons is creating operational problems, increases insurance rates,
or other problems as Landlord may perceive, then Landlord shall have the right
to require Tenant to eliminate patron "self parking", and require mandatory
valet service during Evening and Weekend Operations as well as during Daytime
Operations.
5.3 Valet Parking Service QualificationsTenant shall engage the services of an
-------------------------------------
experienced and reputable valet parking service who shall thereafter be the
subcontractor of Tenant. Prior to the commencement of operations, Tenant shall
secure from the valet parking service sub-contractor evidence of Comprehensive
General Liability Insurance with a Broad Form Liability Endorsement in an amount
of not less than $1,000,000 per occurrence of bodily injury and property damage,
Workers Compensation and Employer Liability Coverage at statutory limits, and
other insurance coverage as may be reasonably required by Landlord naming
Landlord as an additional insured, and valet parking service sub-contractor
shall keep such insurance coverage in full force and effect throughout the term
of this Lease, Further. Tenant shall ensure that valet parking service
sub-contractor complies with any and all reasonable rules and regulation issued
by Landlord."
F). Use,Section 6 of the Lease dated September 16, 1983, is hereby stricken in
----
it's entirety, and replaced with the following:
" 6. Use Tenant may use the Premises for the operation of a restaurant, micro
brewery, cocktail lounge and other uses incidental thereto. After the
Commencement date, Tenant shall keep the Premises open for business not less
than 350 days each calendar year, from 11:00 am to 11:00 PM, however tenant may,
at Tenants option, extend its hours past 11: 00 PM but in no event shall Tenant
remain open past 2: 00 AM. This provision shall not apply if the Premises shall
be closed and the business temporarily discontinued on account of strikes,
walkouts, damage to building or equipment, the suspension or loss of the liquor
or other governmental permits or licenses or any other cause beyond the
reasonable control of Tenant, whether permit of the same or any other nature.
Tenant may close for any reasonable period to remodel or renovate the premises.
Tenant shall not use or permit the use of the Premises in any manner that will
create waste or violate applicable law."
4
G). Minimum Annual Rent,Section 7.1 of the Lease dated September 16, 1983, is
----------------------
hereby stricken in it's entirety, and replaced with the following:
7.1 Minimum Annual RentTenant shall pay to Landlord, at Landlord's address,
-----------------------
a minimum annual rent of $210,000.00, payable in twelve equal monthly
installments of $17,500.00 each, on the first day of each month of the lease
term. Such Minimum Annual Rent shall be paid by Assignor through the Assignment
Date, and shall be paid by Tenant thereafter."
H). Gross SalesDefined, Sub-section 7.2.2 of the Lease dated September 16, 1983,
-----------
is hereby stricken in it's entirety, and replaced with the following:
'72.2 Gross Sales DefinedThe term "Gross Sales" shall mean the aggregate
---------------------
amount of all sales, whether for cash, credit, or otherwise, of food, beverages,
goods, articles, any other merchandise and all charges for services performed,
made and rendered in, about or in connection with the Premises by Tenant,
including off-Premises sales and moneys derived at or away from the Premises
made in connection with the operation thereof, plus the net amount of all
receipts by Tenant from all sales made or performed by means of mechanical or
other vending devices except tobacco vending machines and pay telephones. Gross
sales shall be reduced by uncollectable accounts previously included in Gross
sales, but not to exceed one percent (1%) of sales, per year. Gross Sales shall
not include any federal, state, municipal or other sales, value added, retail,
excise or similar taxes paid or incurred by Tenant whether such taxes are
collected from customers or absorbed by Tenant; discounts from sales to
employees; complimentary meals; tips or gratuities; proceeds of insurance
policies received by Tenant; condemnation awards; bulk and intercompany
transfers of food or inventory; proceeds from the sale of used restaurant
equipment, fixtures or any other property that is not merchandise; or payments
for gift certificates or like vouchers."
1) Sales Statements and Adjustments,Sub-section 7.2.3 of the Lease dated
------------------------------------
September 16, 1983, is hereby stricken in it's entirety, and replaced with the
----
following:
"7.2.3 Sales Statements and AdjustmentsWithin 45 days after the end of each
-----------------------------------
threemonth period of each Lease Year (a "Lease Quarter"), Tenant shall deliver
to Landlord a statement signed by an officer or manager of Tenant setting forth
Tenant's Gross Sales for the prior Lease Quarter and Tenant shall pay to
Landlord the percentage rent due for that Lease Quarter as provided in Paragraph
7.2. 1. In calculating the percentage rent that is due, tenant shall base such
calculations on Tenant's accumulated business volume and accumulated rental
payments from the beginning of each Lease year. If such calculations shall show
a percentage rental owing for the preceding Lease Quarter, then Tenant shall pay
such amount with the statement of Tenant's Gross
5
Sales. If such accumulated rent calculation shall show a credit due tenant on
account of percentage rent paid for preceding Lease Quarters of the Lease Year,
then Landlord shall reimburse Tenant for such amounts due and if Landlord shall
fail to make such reimbursement forthwith, then without limitation upon any of
the rights that Tenant may have, Tenant shall have the right to deduct the
amounts from the next rental payments of any kind due to Landlord as they shall
fall due. Within 60 days after the close of each lease Year, Tenant shall
furnish to Landlord a statement of Tenant's Gross Sales for such entire Lease
Year and a computation of the rent previously remitted to Landlord for such
Lease Year. If the rent theretofore paid by Tenant for such Lease Year shall be
less than the total amount of rent so computed to be due, Tenant shall pay the
difference to Landlord at that time. If such cumulative calculations shall show
a credit due tenant on account of percentage rent paid for preceding Lease
Quarters of the Lease Year, then Landlord shall reimburse Tenant for such
amounts due, and if landlord shall fail to make such reimbursement forthwith,
then without limitation to any other rights which Tenant may have, Tenant shall
have the right to deduct the amounts from the next rental payments due to
Landlord as they shall fall due. Notwithstanding the forgoing, during the first
Lease year, the last year of the Lease Term, or during any other partial Lease
Year, including any year after a period in which the Restaurant facility has
been closed, the Percentage Rent due shall be calculated based upon a partial
year basis, whereby the Percentage Rent due shall be equal to the amount by
which six percent (6%) of Tenants monthly Gross Sales exceed the Tenant's
Minimum Monthly Rent due for the same period. Tenant shall keep at the Premises,
or at the p~incipal offices of Tenant full and accurate books of account,
records, cash receipts, and other pertinent data showing its Gross Sales. Such
books of account, records, cash receipts, and other pertinent data shall be kept
for a period of two years after the end of the Lease Year to which such items
are applicable. Landlord shall be entitled during the term of this Lease to
inspect and examine other pertinent data so that Landlord can ascertain Tenant's
Gross Sales. Tenant shall cooperate fully with Landlord in making the
inspection. Landlord shall also be entitled; once during each Lease year and
once within 60 days after expiration or termination of this Lease, to an
independent audit of Tenant's books of account, records, cash receipts, and
other pertinent data to determine Tenant's Gross Sales, by a certified public
accountant to be designated by Landlord. The audit shall be limited to the
determination of Gross sales, shall be conducted at the place at which the
aforesaid books are usually kept, and shall be paid for by Landlord, except in
any case when Tenant has understated sales by three percent or more, in which
case, Tenant shall pay Landlord's reasonable costs of audit. If the audit shows
that there is any deficiency in the payment of any percentage rent, the
deficiency, plus interest thereon at the rate of ten percent per annum from the
due date to the date of payment, shall become immediately due and payable unless
the deficiency is 10 percent or more, in which event, unless it is the result of
an unavoidable error, Tenant shall pay Landlord twice the amount, of the
deficiency. Landlord shall keep any information gained from such statement,
inspection or audit confidential and shall not disclose such information to any
other person.
6
J). Common Areas,Sub-section 8.4 of the Lease dated September 16, 1983, is
--------------
hereby stricken in it's entirety, and replaced with the following:
-
"8.4 Common AreasExcept as provided in Paragraphs 8.2 and 8.4, there shall be no
------------
charge, fee, or special assessment imposed on or payable by Tenant in regard to
the common areas of the Commercial Complex provided, however, that at its cost,
Tenant shall keep the Premises and grounds (as outlined red on the revised
Exhibit "A") clean, well kept and well landscaped, and shall keep its exclusive
Parking Area outlined in green on Exhibit "A" in a clean and swept condition and
Landlord shall remove debris and bottles from the nonexclusive Parking Area for
which Tenant shall pay to Landlord a fee of $250.00 per month. Such fee shall be
paid with Rent."
K). Notice,Section 19 of the Lease dated September 16, 1983, is hereby stricken
-------
in it's entirety, and replaced with the following:
"19. Notice Any notice, demand, request, consent, approval or communication that
either party desires or is required to give the other party or any other person
in connection herewith shall be in writing and either served personally or sent
by certified mail, with return receipt requested or by a nationally recognized
overnight delivery service. Any notice, demand, request, consent, approval or
communication that either party desires or is required to give to the other
party shall be addressed to the other party at the address set forth herein.
Either party may change its address by notifying the other party of the change
address.
Tenant: Landlord:
Chicago Pizza & Brewery, Inc. C & P Properties #1, a California
A California Corporation limited liability company
26131 Marguerita Pkwy, Ste. A 101 South First Street #400
Mission Viejo, California 92692 Burbank, CA 91502
Attn: President Attn: Michael Cusumano
Notice shall be deemed communicated upon the firstto occur of (i) actual receipt
of the notice, or (ii) 24 hours after the time of mailing, if mailed as provided
in this paragraph."
L). Surrender ofPremises, Sub-section 25.1 of the Lease dated September 16,
-------------
1983, is hereby stricken in it's entirety, and replaced with the following:
"25.1 Surrender of PremisesOn expiration or termination of the term, Tenant
-----------------------
shall surrender to Landlord the Premises and all of Tenant's improvements and
alterations in good condition (except for ordinary wear and tear occurring after
the last necessary maintenance made by Tenant and destruction to the Premises as
discussed herein), and, except for alterations or improvements that Tenant has
the right to remove under any provisions of this Lease. Tenant may remove all
its Trade Fixtures within a thirty (30)
7
day period prior to the above-stated time. Tenant shall perform all restorations
made necessary by the removal of any alterations, improvements, or Trade
Fixtures within the time periods stated in this paragraph."
M). Common AreaSub-section 26.1 of the Lease dated September 16, 1983, is hereby
-----------
stricken in it's entirety, and replaced with the following:
"26.1 Commercial Complex.The Premises is located within and is part of the
--------------------
Commercial Complex as described in Recital A. The Commercial Complex shall
include the Premises, the Parking Area, additional parking, an office building,
driveways, sidewalks and other common area as depicted on revised Exhibit A.
Tenant shall have the right to use the driveways, sidewalks and other common
area (collectively, "Common Area") jointly with other tenants of the Commercial
Complex during the lease terms without any additional charge or fee."
N). Exhibit A Exhibit A is hereby deleted in it's entirety, and replaced with
the revised Exhibit 'A' and attached hereto.
0). Exhibit C Exhibit C is hereby deleted in its entirety.
P). Section 30, Transfer Costs.The following Section 30 is added to the Lease.
---------------
"30. Transfer CostsThe assignment, assumption and transfer of this Lease from
---------------
Assignor to Tenant and the related modification of this Lease is being
undertaken by Landlord as an accommodation to Assignor and Tenant, and Landlord
shall assume no cost associated herewith. Further, any and all direct third
party costs incurred by Landlord associated with the assignment, assumption and
transfer of this Lease to Tenant, or t1iis Lease Assignment and Assumption
Agreement and Third Amendment of Lease, (such as fee charged by Landlord's
Lender, legal fees, etc.) shall, be reimbursed to Landlord equally by Assignor
and Tenant. In addition to any such fees which shall be reimbursed from Assignor
and Tenant to Landlord, Assignor shall pay to Landlord a "Transfer Fee" in the
amount of $5,000.00 to reimburse Landlord for it's internal costs and expenses
associated with drafting this Lease Assignment and Assumption Agreement and
Third Amendment of Lease, and in consideration of the modifications made to this
Lease. Said Transfer Fee shall be paid concurrently with the execution of this
Agreement."
P). Section 3 1. Headings. The following Section 31 is added to Lease.
8
"3 1. Headings. The headings for paragraphs, article and sections of this
Agreement are inserted for convenience only and do not constitute part of this
Agreement and shall not be used in it's construction."
Q). Section 32. Mutual Contribution. The following Section 32 is added to Lease.
"32. Mutual Contribution. This Agreement has been drafted on the basis of the
parties Mutual contributions of language and it is not to be construed against
any party as being the drafter (or causing the drafting) of this Agreement."
Except as modified herein, the provisions of the Lease shall remain in full
force and effect in accordance with the terms provided therein.
Landlord
C & P Properties #1, a California limited partnership
by Charles Cusumano Corporation, a California corporation
it's general partner
by Charles P.Cusumano
President
Assignor
Performance Restaurant Group, Inc. an Az corporation
by_
it's President
----------
Tenant
Chicago Pizza & Brewery, INC., A CALIFORNIA CORPORATION
by /s/Ernest T. Klinger
--------------------
it's President
---------
2
3
LEASE AGREEMENT
---------------
4
5
6
7
CHARLES P. CUSUMANO and DIANNA J. CUSUMANO,
8 husband and wife,
9 collectively, Landlord
11
12
13
14
15
BOBBY MCGEEIS CONGLOMERATION OF LONG BEACH, INC.,
16 a California corporation, Tenant
LEASE INDEX
- -----------
2
Paragraph Description Page
3
Premises 1
4
2. Construction 1
5
2.1 Plans 1
6
2.2 Approval of Plans 2
7
2.3 Construction 2
8
2.4 Construction Costs 3
9
2.5 Warranty 3
10
3. Term 3
11
3.1 Primary Term 3
12
3.2 Lease Year 3
13
3.3 Commencement Date 3
14
3.4 Extension Term 4
15
4. Guaranty 4
16
5. Termination conditions 4
17
5.1 Zoning 4
18
5.2 Approvals 4
19
5.3 Parking 4
20
5.4 Licenses 5
21
5.5 Title 5
22
5.6 Tests 5
23
5.7 Utilities 5
24
5.8 construction 5
25
5.9 Access 5
26
5.10 signs 5
27
28 6. Use 5
29 7. Rent 6
7.1 Minimum Annual Rent 1 6
30
31
32
-i-
7.2 PERCENTAGE RENT 6
7.3 PREPAID Rent a
2
8. Taxes; Assessments 8
3
8.1 Personal Property Taxes 8
4
8.2 Real Property Taxes 8
5
8.3 Substitute Taxes 9
6
8.4 Common Areas 9
7
9. utilities and services 9
8
10. Trade Fixtures 9
9
11. Alterations 9
10
12. Maintenance and Repair 10
11 1 '
13. Exculpation; Indemnity; Insurance 10
12
13.1 Exculpation of Landlord 10
13
13.2 Indemnity 10
14
13.3 Public Liability and Property
15
Damage Insurance 10
16
13.4 Tenant's Fire Insurance 11
17
13.5 Fire Insurance for Improvements 11
18
i3.6 Payment of Premiums 11
19
13.7 Waiver of Subrogation 11
20
13.8 other Insurance Matters 12
21
14. Destruction of Premises 12
22
23 14.1 Risk Covered by Insurance 12
14.2 Risk Not Covered by Insurance . 12
24
14.3 Termination 12
25
26 14.4 Proration 13
14.5 Restoration of Premises 13
27
28 14.6 Procedure for Restoring
Premises 14
29
30
31
32
15. Condemnation 15
15.1 Definitions 15
2
15.2 Parties' Rights and obligations
3
to be Governed by Lease 15
4
15.3 Total Taking 15
5 1
15.4 Partial Taking 16
6
15.5 Restoration of and Addition to
7
Premises and other Areas 17
8
15.6 Award - Distribution 17
9
16. Assignment 17
10
16.1 Voluntary 17
11 n
16.2 Involuntary is
12
17. Default 18
13
17.1 Tenant's Default 18
14
17.2 Landlord's Remedies 19
15
17.3 Appointment of Receiver 19
16
17.4 Landlord's Default 19
18. Subordination; Estoppel; Quiet
18
Enjoyment 19
19
18.1 Subordination 19
20
18.2 Estoppel Certificates 20
21
18.3 Quiet Enjoyment 20
22
19. Notice 20
23
20. waiver 21
24
21. Quitclaim Deed 21
25
22. Sale or Transfer of Premises 21
26
23. Attorneys' Fees 21
27
28 24. Waiver of Landlord's Lien - Tenant's
29 Property 21
30
31
32
-iii-
25. Surrender of Premises; Holding
Over 22
2
25.1 Surrender of Premises 22
3
25.2 Holding over 22
4
26. Common Area 22
5 1
26.1 Commercial Complex 22
6
26.2 Maintenance 23
7
27. Memorandum of Lease 23
8
28. Miscellaneous Provisions 23
9
28.1 Time of Essence 23
10
28.2 Consent of Parties 23
11
28.3 Corporate Authority 23
12
28.4 Successors 23
13
28.5 Rent Payable in United States
14
Currency 24
15
28.6 Status of Parties on
1'
Termination of Lease 24
17
28.7' Exhibits 24
18
28.8 Negation of Partnership 24
19
20 28.9 Brokerage 24
29. Interpretation of Lease 24
21
29.1 State Law 24
22
23 29.2 integrated Agreement;
modification 24
24
29.3 Provisions are Covenants and
25
Conditions 24
26
29.4 Definitions 24
27
28 29.5 Captions 25
29 29.6 Singular and Plural 25
30 29.7 Joint and Several Obligations- 25
29.8 Serveability 25
31
32 30. Addresses of Landlord and Tenant 26
- -iv-
I LEASE AGREEMENT
2 THIS LEASE IS EXECUTED AS of the L day of
September, 1983, by and between CHARLES P. CUSUMANO and
3 DIANNA J. CUSUMANO, husband and wife, dealing with their
community property, collectively as the "Landlord," and BOBBY
4 McGEE'S CONGLOMERATION OF LONG BEACH, INC., a California
corporation, as the "Tenant."
5
RECITALS:
6
A. Landlord is negotiating with the. Redevelopment
7 Agency of the City of Burbank (the "Agency") to enable
Landlord to serve as the developer of a commercial office,
8 restaurant and parking complex (the "Commercial Complex") to
be construct6d on approximately 88,000 sq. ft. of land within
9 the City Centre Redevelopment Project (the "Centre") of the
City of Burbank,. California. The Commercial Complex is
10 depicted in the site plan attached hereto as Exhibit "All and
11 incorporated herein by this reference.
B. Landlord anticipates and shall exercise their
12 best efforts and due diligence to cause a Disposition and
Development Agreement and all other requisite instruments
13 (collectively "Agency Development Agreements") to be entered
into between Landlord and the Agency within 120 days of this
14 date and by which Landlord shall acquire fee title to and
shall be allowed to commence the construction of the
15 commercial complex.
16 C. Tenant has agreed to construct and operate the
restaurant portion of the Commercial Complex in accordance
17 with the-provisions of this Lease.
1
18 THEREFORE, in consideration of the Recitals and the
mutual' covenants herein contained, Landlord leases to Tenant
19 the Premises (hereinafter described) for the purposes and
20 pursuant to the provisions herein set forth.
AGREEMENTS:
- -----------
21
1. Premises.
22
The Premises consists of the following: approx--
23 imately 21,000 sq. ft. of land as more particularly described
in Exhibit "B" attached hereto and incorporated herein by
24 this reference and depicted in red on Exhibit "All; the
Improvements (hereinafter defined) which shall be constructed
25 thereon as herein provided; an exclusive right of use and easement in the
75 parking spaces to be constructed by Land
26 lord as closely to the Premises as is feasible approximately within the
area depicted in green on Exhibit "All; and a non
27 exclusive right of use and easement in the 135 parking spaces to be
constructed by Landlord approximately within the area
28 depicted in blue on Exhibit "A".
29 2. Construction.
30 2.1 Plans. Subject to Landlord's obligation
to pay its portion of the Improvements Cost as defined in
31 Exhibit "C" attached hereto and incorporated herein by this reference,
Tenant shall construct, or cause to be
32 constructed, a building, landscaping and related improvements
(collectively the "Improvements") for the Premises according
I to plans and specifications (the "Plans") to be prepared by
Tenant at its expense and to be submitted to Landlord within
2 30 days of this date. The Improvements shall be designed so
as to accommodate the operation of a restaurant, cocktail
3 lounge and discotheque in a building containing approximately
11,000 sq. ft. In addition, in the areas depicted in green
4 and blue on Exhibit "All (the "Parking Area"), at their
expense, Landlord shall construct a parking area sufficient
5 to accommodate at least 210 automobiles, 76 within the area
depicted in green (for the exclusive use of Tenant) and 135
6 within the area depicted in blue (for the nonexclusive,
shared use of Tenant). The Parking Area and necessary
7 paving, striping, driveways and landscaping shall be built in
a manner satisfactory to Tenant, in accordance with the
8 requirements of the Agency and the standards generally
applicable to the Centre and shall be completed on or before
9 the completion of the Improvements. Landlord shall
bear all of the costs of constructing the Parking Area and
10 none of those costs shall be included within the Improvements
Cost.
2.2 Approval of Plans. Landlord shall have
12 15 days after receipt of the Plans from Tenant within which
to review and approve them. If Landlord fails to notify
13 Tenant in writing within such 15-day period of Landlord's
disapproval of the Plans, the Plans shall be deemed approved.
14 If Landlord notifies Tenant of Landlord's disapproval of the
Plans within such 15-day period, then Landlord shall advise
15 Tenant of the reasons for the disapproval and the items that
must be modified, whereupon Landlord and Tenant shall meet
16 and confer so as to modify the plans to be acceptable to both
Landlord and Tenant. If for any reason Landlord and Tenant
17 are unable to agree upon the Plans within 60 days of this
date, then upon written notice issued by either party to the
18 other at any time thereafter and prior to the approval of the
Plans by both Landlord and Tenant, this Lease shall terminate
19 without further liability to either party. Upon approval of
the Plans by Landlord and Tenant, Landlord promptly shall
20 submit the Plans to the Agency and all other necessary
governmental authorities and shall proceed diligently to
21 obtain all requisite governmental approvals. If modifica-tions are
22 required to obtain such governmental approvals, and
22 if such modifications are acceptable to Tenant, Tenant shall
prepare such modifications and the Plans shall be resubmitted
23 by Landlord for governmental approval. If Tenant does not
approve the modifications required for governmental approval
24 or such approval is not obtained within 90 days of this date,
then at any time thereafter and prior to such approval, by
25 written notice to Landlord, Tenant may terminate this Lease.
Tenant shall not unreasonably withhold its approval of such
26 modifications, albeit if the aggregate cost of the
modifications required for governmental approval exceeds
27 $50,000.00, Tenant may approve or disapprove them in
28 its sole discretion.
2.3 Construction. Tenant shall cause
29 construction of the Improvements to be commenced as soon as
possible after the obtaining of governmental approval.
30 subject to extension for causes beyond Tenant's control, if
construction of the Improvements does not commence within 130
31 days of this date, or if construction is not completed within
six months after the date of commencement of construction,
32 Landlord shall have the right at any time thereafter, so long
-2-
I as the construction has not been commenced or completed, as applicable,
within the time specified, either (a) to
2 terminate this Lease upon 30 days' written notice to Tenant, whereupon, if
the failure is that of commencement, Tenant and
3 Landlord shall be released of all obligations hereunder, or if the failure
is that of completion, Landlord shall
4 reimburse Tenant in cash for the Tenant's Improvements Costs (as defined
in Exhibit previously paid by Tenant, if
5 any, and upon Tenant's receipt of such payment, this Lease shall terminate
and the parties shall be -released of all
6 further obligations hereunder; or (b) as an alternative to termination,
upon written notice to Tenant, Landlord may
7 extend Tenant's time for commencement or completion, as applicable,
whereupon Tenant shall pay $250.00 for each day
8 of such delay in commencement or completion, as applicable. The
improvements shall be deemed to have been completed when
9 Tenant's- architect has certified that the Improvements have been
substantially completed in accordance with the Plans.
10
2.4 Construction Costs.Upon the condition
------
11 that Landlord timely pays its portion of the Improvements Cost as
provided in Exhibit "C", Tenant shall keep the
12 Premises free of mechanics' and materialmens' liens. Landlord is not, nor
shall Landlord be construed to be, the
13 agent of Tenant for any purpose whatsoever. At its expense, Tenant shall
have the right at any time to post the Premises
14 with appropriate notices of liquor license application, other notices as
Tenant may deem appropriate, and lawful signs in
15 size, content and at such locations as Tenant may deem appropriate to
advertise the pending opening of the
16 restaurant. During construction, Landlord shall have the right to conduct
inspections, review construction progress
17 and otherwise proceed as provided in Exhibit "C".
18 2.5 Warranty. Tenant shall cause the
Improvements to be constructed in a good and workmanlike
19 manner in compliance with the Plans and all applicable laws, regulations
and permits. Tenant's contractor shall fully and
20 unconditionally guarantee for one year following the date of completion
all materials and workmanship involved in
21 constructing the Improvements. Any repairs to or reconstruction of the
Improvements during that one-year
22 period shall be at the sole cost of Tenant or Tenant's
23 contractor, unless caused by the negligence of Landlord.
3. Term.
-----
24
3.1 Primary Term.This Lease shall be for a
-------------
25 primary term of twenty-five years, beginning on the Commencement Date and
ending on the last day of the twenty-fifth
26 consecutive Lease Year thereafter.
27 3.2 Lease Year. The term "Lease Year" shall
mean the fiscal year employed by Tenant for accounting
28 purposes, except that the first Lease Year shall begin on the
Commencement Date and expire on the expiration of the next
29 succeeding complete fiscal year of Tenant.
30 3.3 Commencement Date. The Commencement Date
of this Lease shall be the first to occur of the following:
31
3.3.1 the date on which Tenant shall
32 open the Premises fqr business to the public; or,
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1 3.3.2 the date which is 30 days follow-
ing the date of the completion of the Improvements and the
2 Parking Area and the issuance of certificates of occupancy
therefor by all applicable governmental authorities in form
3 acceptable to Tenant.
4 In order to avoid any subsequent controversy as to
the exact "Commencement Date," the parties hereto agree,
5 within 30 days after the Commencement Date, to execute a
declaration in recordable form confirming the commencement
6 and expiration dates of the primary term.
7 3.4 Extension Term. Landlord grants to
Tenant the option to extend the primary term for one
8 additional term of five years following expiration of the
primary term by giving notice of exercise of the option at
9 least six months, but not more than one year, prior to the
expiration of the primary term. The extension shall be upon
10 the same terms and conditions herein contained except the
minimum annual rent shall be the "market"* rate then
11 prevailing in comparable facilities within the Centre,
however, if Landlord and Tenant cannot agree as to such rate,
12 it shall be established by a mutually acceptable appraiser
and, provided further, if Landlord and Tenant cannot agree as
13 to an appraiser, then they each shall select an appraiser
who, in turn, shall select a third appraiser, which third
14 appraiser's decision shall be binding. The minimum annual
rent for the extension term shall not be less than
15 $240,000.00 per year.
16 4. Guaranty. Tenant's obligations under this
Lease shall be guaranteed by Bobby McGee's, U.S.A., Inc., an
17 Arizona corporation, through its execution below as
guarantor. However, the guaranty shall cease and be of no
18 further force or effect if at any time on or after 7;j
years
from this date, Tenant's net worth exceeds $3 million, as
19 established pursuant to generally accepted accounting
20 principles.
5. Termination Conditions. Tenant shall be
21 entitled to terminate this Lease by notice to Landlord
unless, prior to the expiration of 120 days from this date,
22 Tenant shall have received evidence satisfactory to it that
each of the following conditions precedent has been
23 satisfied:
24 5.1 Zoning. The Premises are zoned for use
25 as a restaurant, discotheque and cocktail lounge;
5.2 Approvals. All permits and licenses
26 necessary for the construction and contemplated operation and
use of the Improvements have been obtained from the requisite
27 governmental authorities;
28 5.3 Parkinq. At least 75 exclusive and 135
nonexclusive parking spaces within the Parking Area will be
29 available for use by Tenant, its employees, agents, customers
and guests, on or before the time the Improvements are
30 scheduled to be completed (albeit as to the 135
nonexclusive
parking spaces, they need only be available from 5:00 p.m. to
31 2:00 a.m. each day);
32
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5.4 Licenses. Tenant will be able timely to obtain from appropriate
governmental authorities all permits
2 and licenses for the on-premises sale and consumption of wine, beer,
cocktails and other alcoholic beverages and for
3 the operation and use of the Premises as a restaurant,
4 discotheque and cocktail lounge;
5.5 Title. Landlord shall have executed the
5 Agency Development Agreements and shall have acquired fee title to the
Premises subject only to such exceptions as are
6 satisfactory to Tenant and, in that regard, at its cost, Landlord shall
deliver a preliminary or condition of title
7 report for the Premises to Tenant within 15 days of the date hereof and
shall provide Tenant with a complete copy of the
8 Agency Redevelopment Agreements within 10 days of their execution;
9
5.6 Tests. The results of soil and
10 engineering tests to be obtained by Landlord at its expense are
acceptable to Tenant for the construction of the
11 Improvements;
12 5.7 Utilities. Gas, electricity, sewer,
water and other utilities connections will be available
13 within 5 feet of the Premises at no cost to Tenant and with
14 capacity and supply sufficient for Tenant's intended use;
5.8 Construction. Tenant has approved the
15 cost of constructing the Improvements as estimated in writing by the
contractor and Tenant has confirmed that Landlord has
16 funds sufficient to pay Landlord's $970,000.00 portion of the
17 Improvements Cost as required by Exhibit "C";
5.9 Access. The City of Burbank shall
18 provide or certify in writing to Tenant, that it shall provide ingress to
and egress from the Premises, satisfactory
19 to Tenant;
20 5.10 Signs. The City shall certify in writing
to Tenant, in a form satisfactory to Tenant, that Tenant may
21 construct: (i) a 36-foot billboard sign; and, (ii) a monument sign on the
Premises, which signs shall be located
22 at sites mutually agreeable to Landlord, Tenant and the City, and shall
have a top elevation not less then that of the
23 signs on the adjacent properties known as "Restaurant Row".
24 In the event that Tenant terminates this Lease for
failure of any of the foregoing conditions, the parties shall
25 be released of all further obligations hereunder and all funds, if any,
paid by Tenant immediately shall be refunded
26 to Tenant. The foregoing conditions are for the benefit of
27 Tenant and may be waived in writing by Tenant at any time.
28 6. Use. Tenant may use the Premises for the
operation of a restaurant, discotheque, cocktail lounge and
29 other uses incidental thereto. After the Commencement Date, Tenant shall
keep the Premises open for business not less than 350 days each calendar year,
from 11:00 a.m. to 2:00
30 p.m. during the days that luncheon is served and from 5:00 p.m. to 2:00
a.m. when luncheon is not served. Tenant shall
31 be open for lunch Monday through Friday and may be open for
32 lunch or brunch on Saturday and Sunday. This provision shall not apply if
the Premises shall be closed and the business
- -5-
temporarily discontinued on account of strikes, walkouts,
damage to building or equipment, the suspension or loss of
2 the liquor or other governmental permits or licenses or any
other cause beyond the reasonable control of Tenant, whether
3 of the same or any other nature. Tenant shall not use or
permit the use of the Premises in any manner that will create
4 waste or violate applicable law.
5 7. Rent.
6 7.1 Minimum Annual Rent. Tenant shall pay to
Landlord, at Landlord's address, a minimum annual rent of
7 $160,000.00, payable in twelve equal monthly installments of
$13,333.34 each, on the first day of each month of the lease
8 term. If the Commencement Date is the first day of the
month, then Tenant shall pay the first monthly installment of
9 rent on-the Commencement Date. Otherwise, the first monthly
installment of rent shall be due on the first day of the
10 month following the Commencement Date and shall include
additional rent for the period between the Commencement Date
11 and the first day of the following month based on the amount
of the monthly installment of the minimum rent and a 30-day
12 month. Upon the termination of this Lease, the minimum
annual rent shall be prorated to the date of termination and
13 Landlord shall repay immediately to Tenant all minimum annual
14 rent prepaid and unearned.
7.2 Percentage Rent.
15
7.2.1 Percentage Rent Rate. In addition
16 to minimum annual rent, Tenant shall pay to Landlord as
percentage rent, a sum equal to the amount by which six
17 percent of Tenant's Gross Sales made from or upon the
Premises 'during each Lease Year exceeds the minimum annual
18 rent for such Lease Year. The percentage rent shall be
payable quarterly, 45 days after the end of each three-month
19 period during the lease term, subject to adjustment at the
20 end of each Lease Year as provided in Paragraph 7.2.3.
7.2.2 Gross Sales Defined. The term
21 "Gross Sales" shall mean the aggregate amount of all sales,
whether for cash, credit or otherwise, of food, beverages,
22 goods, articles, any other merchandise and all charges for
services performed, made and rendered in, about or in
23 connection with the Premises by Tenant, including
off-Premises sales and monies derived at or away from the
24 Premises made in connection with the operation thereof, plus
25 the net amount of all receipts by Tenant from all sales made
or performed by means of mechanical or other vending devices
except tobacco vending machines and pay telephones. Gross
26 Sales shall not include any federal, state, municipal or
other sales, value added, retail, excise or similar taxes
27 paid or incurred by Tenant whether such taxes are collected
from customers or absorbed by Tenant; discounts from sales to
28 employees; complimentary meals; tips or gratuities; proceeds
of insurance policies received by Tenant; condemnation
29 awards; bulk and intercompany transfers of food or inventory;
proceeds from the sale of used restaurant equipment, fixtures
30 or any other property that is not merchandise; or payments
31 for gift certificates or like vouchers.
7.2.3 Sales Statements and Adjustments.
---------------------------------
32 Within 45 days after the end of each three-month period of
_6-
1 each Lease Year (a "Lease Quarter"), Tenant shall deliver to
Landlord a statement signed by an officer or manager of
2 Tenant setting forth Tenant's Gross sales for the prior Lease
Quarter and Tenant shall pay to Landlord the percentage rent
3 due for that Lease Quarter as provided in Paragraph 7.2.1.
In calculating the percentage rent that is due, Tenant shall
4 base such calculation on Tenant's accumulated business volume
and accumulated rental payments from the beginning of each
5 Lease Year. If such calculations shall show a percentage
rental owing for the preceding Lease Quarter, then Tenant
6 shall pay such amount with the statement of Tenant's Gross
Sales. If such accumulated rent calculation shall show a
7 credit due Tenant on account of percentage rent paid for
preceding Lease Quarters of the Lease Year, then Landlord
8 shall reimburse Tenant for such amounts due and if Landlord
shall fail to make such reimbursement forthwith, then without
9 limitation upon any of the rights that Tenant may have,
Tenant shall have the right to deduct the amounts from the
10 next rental payments of any kind due to Landlord as they
shall fall due. Within 45 days after the close of each Lease
11 Year, Tenant shall furnish to Landlord a statement of
Tenant's Gross Sales for such entire Lease Year and a
12 computation of the rent previously remitted to Landlord for
such Lease Year. If the rent theretofore paid by Tenant for
13 such Lease Year shall be less than the total amount of rent
so computed to be due , Tenant shall pay the difference to
14 Landlord at that time if such cumulative calculations shall
show a credit due Tenant on account of percentage rent paid
15 for preceding Lease Quarters of the Lease Year, then Landlord
shall reimburse Tenant for such amounts due, and if Landlord
16 shall fail to make such reimbursement forthwith, then without
limitation to any other rights which Tenant may have, Tenant
17 shall have the right to deduct the amounts from the next
rental payments due to Landlord as they shall fall due.
18 Tenant, shall keep at the Premises, or at the principal
offices of BOBBY McGEE'S U.S.A., INC., full and accurate
19 books of account, records, cash receipts, and other pertinent
data showing its Gross Sales. Such books of account,
20 records, cash receipts, and other pertinent data shall be
kept for a period of two years after the end of the Lease
21 Year to which such items are applicable. Landlord shall be
entitled during the term of this Lease to inspect and examine
22 all Tenant's books of account, records, cash receipts, and
other pertinent data so that Landlord can ascertain Tenant's
23 Gross Sales. Tenant shall cooperate fully with Landlord in
making the inspection. Landlord shall also be entitled, once
24 during each Lease Year and once within 60 days after
expiration or termination of this Lease, to an independent
25 audit of Tenant's books of account, records, cash receipts,
and other pertinent data to determine Tenant's Gross Sales,
26 by a certified public accountant to be designated by
Landlord. The audit shall be limited to the determination of
27 Gross Sales, shall be conducted at the place at which the
aforesaid books are usually kept, and shall be paid for by
28 Landlord, except in any case when Tenant has understated
sales by three percent or more, in which case, Tenant shall
29 pay Landlord's reasonable costs of audit. If the audit shows
that there is any deficiency in the payment of any percentage
30 rent, the deficiency, plus interest thereon at the rate of
ten percent per annum from the due date to the date of
31 payment, shall become immediately due and payable unless the
deficiency is 10 percent or more, in which event, unless it
32 is the result of unavoidable error, Tenant shall pay Landlord
-7-
twice the amount of the deficiency. Landlord shall keep any information gained
from such statements, inspection or audit
2 confidential and shall not disclose such information to any
other person.
3
7.3 Prepaid Rent.
4
7.3.1 Tenant shall deposit with Landlord
5 the sum of $33,325.00 upon the execution of this Lease by
Landlord (the "Initial Deposit"). Upon the commencement of
6 the construction of the Improvements, Tenant shall deposit with Landlord
the sum of $33,325.00 (the "Additional
7 Deposit"). Landlord and Tenant agree that the initial and
Additional Deposits automatically shall be applied by
8 Landlord and credited to Tenant in payment of the initial minimum-annual
rents as they become due hereunder.
9
7.3.2 In the event this Lease is
10 cancelled because the contingencies set forth herein are not satisfied or
for any other reason other than the default of
11 Tenant, the Initial and the Additional Deposits less such amounts as
previously have been applied pursuant hereto, if
12 any, shall be refunded and paid by Landlord to Tenant within 10 days of
Landlord's receipt of a written demand therefore
13 from Tenant and Landlord shall have no further right or
14 interest in the Deposits.
8. Taxes; Assessments.
-------------------
15
8.1 Personal Property Taxes.Tenant shall
------------------------
16 pay before delinquency all taxes, assessments, license fees and other
charges ("taxes") that are levied and assessed
17 against Tenant's Trade Fixtures installed or located in or on the
Premises and that become payable during the Lease term.
18 on demand by Landlord, Tenant shall furnish Landlord with
19 satisfactory evidence of such payments.
8.2 Real PropertyTaxes. Tenant shall pay
-------------
20 before delinquency any and all real property taxes that become due during
the Lease term with respect to the
21 Premises, 50 percent of such taxes on the Parking structure within the
Commercial Complex and 50 percent of such taxes on
22 the land within the Commercial Complex (excluding the Premises). If any
tax bill or statement is received by
23 Landlord, Landlord shall forward a copy thereof to Tenant and Landlord's
failure to do so shall excuse Tenant from the
24 obligation of payment thereof until Tenant receives such statement.
Landlord shall forward such statement within the
25 time required for Tenant to contest any increase in taxes and to avoid
penalties and late charges and, if Landlord fails to
26 do so, Landlord shall pay such increase, penalty or late charge, as
applicable. Landlord agrees to attempt to have
27 the Premises assessed separately from other property not covered by this
Lease, but in the event the Premises are not
28 so separately assessed, then and in such event, the taxes on the Premises
shall be apportioned on the basis of the ratio
29 between the square footage of the land within the Premises and the total
square footage of all land within the parcel
30 assessed. Tenant shall have the right to seek a reduction of, or contest,
any taxes that are to be paid by Tenant
31 hereunder. Tenant shall bear the cost of such actions or
32 proceedings, shall. hold Landlord harmless from any damage
- -8-
arising therefrom and shall pay any final judgment that may be rendered therein.
2
8.3 Substitute Taxes. Tenant shall not be
3 required to pay any municipal, county, state or federal income or
franchise taxes of Landlord, or any municipal,
4 county, state or federal estate, succession, inheritance or transfer taxes
of Landlord. If, at any time during the term,
5 the laws concerning the methods of real property taxation prevailing on
the effective date hereof are changed so that a
6 tax or excise on rents or any other such tax, however described, is levied
or assessed against Landlord as a direct
.7 substitution, in whole or in part, for any real property taxes or
assessments otherwise due, Tenant shall pay before
8 delinquency (but only to the extent that it can be ascertained that there
has been a substitution and that, as a
9 result, Tenant has been relieved from the payment of real property taxes
which Tenant would otherwise have been
10 obligated to pay), the substitute tax, assessment, or excise on rents.
11
8.4 Common Areas.Except as provided in
-------------
12 Paragraph 8.2, there shall be no charge, fee, or special assessment
imposed on or payable by Tenant in regard to the
13 common areas of the Commercial Complex provided, however, that at its
cost, Tenant shall keep its exclusive Parking
14 Area outlined in green on Exhibit "All in a clean and swept condition and
shall remove debris and bottles from the
15 nonexclusive Parking Area outlined in blue on Exhibit "A".
16 9. Utilities and Services. Tenant shall pay for
all utilities and services furnished to or used by it on the
17 Premises', including, without limitation, gas, electricity, water.,
telephone service, trash collection and sewer service.
18 At it~s expense, Landlord shall provide the necessary mains and conduits
for gas, electricity, sewer, water and telephone
19 to within five feet of the Premises.
20 10. Trade Fixtures. Tenant shall have the right
to erect, install, maintain and operate on the Premises such
21 improvements, equipment, trade and business fixtures, signs and other
personal property (collectively "Trade Fixtures")
22 as Tenant may deem appropriate for the operation of the Premises. The
Trade Fixtures shall remain the property of
23 Tenant. Tenant shall provide Landlord with a written description of such
Trade Fixtures at the Commencement Date and
24 thereafter within a reasonable time after the installation of additional
Trade Fixtures.
25
11. Alterations. At its sole cost and expense,
26 Tenant shall have the right to make any nonstructural alterations,
additions or improvements to the Premises
27 (collectively "Alterations") it deems necessary or appropriate in
connection with the requirements of its
28 business, without the necessity of obtaining the written consent of
Landlord and without the payment of any additional
29 rent, provided that any such Alterations shall not materially injure,
deface or impair the value of the Premises. Tenant
30 shall not make any material or structural Alterations without the prior
written consent of Landlord. Any Alterations made
31 by Tenant to the Premises shall remain on and be surrendered with the
Premises. upon expiration or termination of the
32 Lease, except such Alterations as may be removed without
- -9-
1 substantial damage to the Premises, which may be removed by Tenant within
30 days following the termination of this
2 Lease. If Tenant makes any Alterations to the Premises, they shall not be
commenced until 10 days after Landlord has
3 received notice from Tenant stating the date of commencement of the
installation of the Alterations so that Landlord can
4 post and record an appropriate notice of non-responsibility. Tenant shall
be solely responsible, at Tenant's expense, for
5 any and all Alterations to the Premises. Any such Alterations shall be
made in compliance with-applicable law.
6
12. Maintenance and Repair.
-----------------------
7
Except as provided in Paragraphs 14, 15 and 26,
8 during the term hereof, at its sole cost and expense, Tenant shall
maintain or cause to be maintained and kept in good
9 state of -repair and in a clean and sanitary condition, the
Premises and the -exclusive Parking Area outlined in green on
10 Exhibit "All including the paving, striping and lighting for the latter.
11
13. Exculpation; Indemnity; Insurance.
----------------------------------
12
13.1 Exculpation of Landlord.Except for
------------------------
13 damage caused by the acts or omissions of Landlord, its agents,
contractors or others for whom Landlord is
14 responsible, Landlord shall not be liable to Tenant for any damage
resulting from any fire or casualty; or the plumbing,
15 gas, water, steam, sprinklers or other pipe and sewage system; or the
bursting, running, or leaking of any tank,
16 washstand, closet, or waste, or other pipes, in or about the Premises;
water being upon or coming through any roof,
17 skylight,, vent, trap door or otherwise; or for any damage arising from
the acts of neglect of occupants of the
18 Premises, of adjacent property, or of the public. Landlord shall not be
liable in damages or otherwise for any
19 interruption of service of any water, gas, electricity, heated water,
steam or chilled water, or of any other service
20 to the Premises, caused by fire, accident, riot, strike, labor disputes,
acts of God, the making of repairs or
21 improvements, or any other causes beyond the control or
22 responsibility of Landlord.
13.2 Indemnity.Tenant shall indemnify and
----------
23 hold harmless Landlord from any and all claims arising out of the
negligence of Tenant, or its contractors, licensees,
24 agents, servants or employees, and from and against all costs, expenses,
and liabilities incurred in connection with
25 any claims or proceedings brought thereon; provided, however, that
Landlord shall be liable for such damage if it results
26 from the negligence or misconduct of Landlord or those for whom it is
responsible, and Landlord shall hold Tenant
27 harmless from all damages resulting from any such negligence ?r
misconduct. A party's obligation under this paragraph to
28 indemnify and hold the other party harmless shall be limited to the sum
that exceeds the amount of insurance proceeds, if
29 any, received by the party being indemnified.
30 13.3 Public Liability and Property Damage
------------------------------------
Insurance. At its sole cost, Tenant shall maintain public
---------
31 liability and property damage insurance with liability limits
of Two Million Dollars ($2,000,000.00) per occurrence, and
32 property damage limits of not less than one HurAred Thousand
_10-
Dollars ($100,000.00) per occurrence, against all liability of Tenant and its
representatives arising out of, or in connection with, Tenant's use or occupancy
of the Premises. ~11 public liability and property damage insurance shall
3 insure performance by Tenant of the indemnity provisions of Paragraph
13.2. Both parties shall be named as ccoinsureds,
4 and the policy shall contain cross-liability endorsements.
5 13.4 Tenant's Fire Insurance; At its sole
cost, Tenant shall maintain on all its Trade Fixtures in, on,
6 or about the Premises, a policy of standard fire and extended coverage
insurance, with vandalism and malicious mischief
7 endorsements, to the extent of at least 80 percent of their
8 replacement value.
13.5 Fire Insurance for Improvements.At its
--------------------------------
9 sole cost, Tenant shall maintain on the building and improvements that are
a part of the Premises, a policy or
10 policies of standard fire and extended coverage insurance, with vandalism
and malicious mischief endorsements, to the
11 extent of one hundred percent of replacement value excluding the cost of
excavations, foundations, footings, and
12 underground tanks, conduits, pipes, pilings and other underground items.
The insurance policy or policies, or a
13 certificate of insurance evidencing such policy or policies,
14 shall be issued in the names of Tenant and Landlord as their interests
appear. The insurance policy or policies, or the certificate of insurance, shall
provide that any proceeds
15 shall be made payable as stipulated herein.
16 13.6 Payment of Premiums. Tenant shall pay
the premiums for maintaining any and all of the insurance
17 required by this Lease. Tenant's obligation to pay the insurance costs
shall be prorated for any partial year at the
18 commencement and expiration or termination of the term.
19 13.7 Waiver of Subrogation. To the extent of
the insurance proceeds paid with respect thereto, the parties
20 release each other and each other's respective authorized representatives
from any claims for injury to any person or
21 damage to the Premises and to the fixtures, personal property,
improvements and alterations of either Landlord or
22 Tenant in or on the Premises, that are caused by or result from risks
insured against under any insurance policies
23 carried by the parties and in force at the time of any such damage. Each
party shall cause each insurance policy
24 obtained by it to provide that the insurance company waives all right of
recovery by way of subrogation against either
25 party in connection with any damage covered by any policy. To the extent
of the insurance proceeds paid with respect
26 thereto, neither party shall be liable to the other for any damage caused
by fire or any other risks insured against
27 under any insurance policy required by this Lease. If any
28 insurance policy cannot be obtained with a waiver of subrogation, the
party undertaking to obtain the insurance
29 Shall notify the other party and the other party shall have a period of
10 days after receiving the notice to locate a company that is reasonably
satisfactory to the other party
30 and that will issue the insurance with a waiver of
31 subrogation. If the insurance cannot be obtained, the other party is
relieved of the obligation to obtain a waiver of subrogation rights with respect
to the particular insurance
32
I involved and this paragraph shall have no application
thereto.
2
13.8 Other Insurance Matters. All the insur-
3 ance required under this Lease shall:
4 13.8.1 Be issued by insurance companies
authorized to do business in the State where the Premises are
5 located, with a financial rating of at least B-11 status as
rated in the most recent edition of Best's Insurance Reports.
6
13.8.2 Be issued as a primary policy or,
7 in the alternative, be issued as a part of a -so-called
"blanket policy."
8
13.8.3 Contain an endorsement requiring
9 10 days' written notice from the insurance company to both
parties before cancellation or change in the coverage, scope
10 or amount of any policy.
11 Each policy, or a certificate of the policy,
together with evidence of payment of premiums, shall be
12 deposited with the other party at the commencement of the
term and, on renewal of the policy, not less than 20 days
13 before expiration of the term of the policy.
14 14. Destruction of Premises.
15 14.1 Risk Covered by Insurance. Subject to
the provisions of Paragraph 14.3 below, if, during the term,
16 the Improvements are totally or partially destroyed by a
casualty covered and proceeds paid under the insurance
17 described in Paragraph 13, Tenant shall at its expense (not
to exceed the insurance proceeds received by Tenant) repair
18 such destruction as soon as reasonably possible and this
Lease shall continue in full force and effect.
19
14.2 Risk Not Covered by Insurance. Subject
20 to the provisions of Paragraph 14.3 below, if during the
term, the Improvements are totally or partially destroyed by
21 a casualty not covered by the insurance described in
paragraph 13 or the proceeds of applicable insurance are
22 insufficient to pay all the costs of restoration, at its
option, Tenant may either (a) repair such damage as soon as
23 reasonably possible at its expense, in which event this Lease
shall continue in full force and effect, or (b) give written
24 notice to Landlord within 30 days after the date of the
occurrence of such destruction of Tenant's intention to
25 cancel and terminate this Lease as of the date of the
occurrence of such destruction. If Tenant elects to cancel
26 and terminate this Lease, Landlord shall have the right
within ten days after the receipt of such notice to give
27 written notice to Tenant of Landlord's intention to effect
restoration at Landlord's expense, in which event, this Lease
28 shall continue in full force and effect and Landlord shall
complete such restoration forthwith. If Landlord does not
29 give such notice within such ten-day period, this Lease shall
be cancelled and terminated effective as of the date of the
30 occurrence of such destruction.
31 14.3 Termination. In addition to and
independent of the provisions of Paragraphs 14.1 and 14.2
32 above, in the event of a destruction of the Premises, by
- -12-
1 written notice to Landlord, Tenant may terminate this Lease
2 if any of the following events occur:
14.3.1 applicable laws do not permit
3 restoration to substantially the condition existing prior to the
destruction; or,
4
14.3.2 the restoration cannot be
5 completed within 280 days after the date of destruction; or,
6 -14.3.3 Landlord fails to complete
restoration within ninety days after it elects to do so
7 pursuant to Paragraph 14.2 above (by notice 'E-o"Landlord at
8 any time prior to the completion of restoration).
14.4 Proration.Upon termination of this
----------
9 Lease pursuant to the provisions of this paragraph, any advance rental or
other advance payments made by Tenant to
10 Landlord shall be prorated as of the termination date with the unearned
portion returned to Tenant in cash; the
11 insurance proceeds applicable to the Improvements constructed and paid
for by Landlord shall be paid to Landlord; the
12 insurance proceeds applicable to the Trade Fixtures and other property of
Tenant shall be paid to Tenant; and the insurance
13 proceeds derived from policies not required by this Lease shall be paid
to the party that procured the policies and
14 paid the premiums.
15 14.5 Restoration of Premises.
16 14.5.1 Adjustment of Minor Loss. If,
during the term, the Premises are destroyed by a risk covered
17 by the insurance described in Paragraph 13 and this Lease is not
terminated, provided the total amount of loss does not
18 exceed One Hundred Thousand Dollars ($100,000.00), Tenant shall make the
loss adjustment with the insurance company
19 insuring the loss. The proceeds shall be paid directly to Tenant for the
purpose of making the restoration of the
20 Premises.
21 14.5.2 Adjustment of Major Loss. If,
during the term, the Premises are destroyed by a risk covered
22 by the insurance described in Paragraph 13, and the total amount of loss
exceeds One Hundred Thousand Dollars
23 ($100,000.00), if this Lease is not terminated, Tenant shall make the
loss adjustment with the insurance company insuring
24 the loss and on receipt of the proceeds shall immediately pay them to any
appropriate institution (Insurance Trustee) named
25 by Landlord and Tenant. If the Premises are destroyed by a risk not
covered by the insurance described in Paragraph 13
26 or such insurance proceeds are insufficient to pay all the costs of
restoration, if this Lease is not terminated, then
27 the party or parties that have the obligation to restore the Premises (as
provided in Paragraph 14.2 above), shall deposit
28 with the Insurance Trustee their respective contributions toward the cost
of restoration. All sums deposited with the
29 Insurance Trustee shall be held for the following purposes and the
Insurance Trustee shall have the following powers and
30 duties:
31 The sums shall be paid in installments by the
Insurance Trustee to the contractor as construction
32 progresses, for payment of the cost of restoration. A ten
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percent retention fund shall be established that will be paid to the contractor
on completion of restoration, payment of
2 all costs, expiration of. all applicable lien periods, and proof that the
Premises are free of all mechanics' liens and
3 lienable claims.
4 Payments shall be made on presentation of
certificates or vouchers from the architect or engineer
5 showing the amount due. If the Insurance Trustee, in its reasonable
discretion, retains an architeat or engineer to
6 supervise construction and to authorize progress payments, the reasonable
expenses and charges of the architect or
7 engineer retained by the Insurance Trustee shall be paid by the Insurance
Trustee out of the trust fund.
8
If the sums held by the Insurance Trustee are not
9 sufficient to pay the actual cost of restoration, the party or parties
obligated to fund the restoration shall deposit
10 the amount of the deficiency with the Insurance Trustee within 20 days
after request by the insurance Trustee
11 indicating the amount of the deficiency.
12 Any sums not disbursed by the Insurance Trustee
after restoration has been completed and final payment has
13 been made to the contractor shall be delivered to Landlord in proportion
to Landlord's contribution to the trust fund, and
14 the balance, if any, shall be paid to Tenant.
15 All actual costs and charges of the Insurance
Trustee shall be paid proportionately by the party or parties
16 obligated to fund the restoration.
17 ! if the Insurance Trustee resigns or for any reason
is unwilling to act or continue to act, Landlord and Tenant
18 promptly shall substitute a new trustee in the place of the designated
Insurance Trustee. The new Trustee must be an
19 institutional lender or title company doing business in the
20 city where the Premises are located.
Both parties promptly shall execute all documents
21 and perform all acts reasonably required by the Insurance
22 Trustee to perform its obligations under this paragraph.
14.6 Procedure for Restoring Premises.within
-------------------
23 30 days after the date that it is obligated to restore the Premises, the
party obligated to fund the restoration, at its
24 cost, shall prepare final plans and specifications and working drawings
complying with laws that will be applicable
25 to the restoration of the Premises. The plans and specifications and
working drawings must be approved by
26 Landlord and Tenant. Each party shall have 30 days after receipt of the
plans and specifications and working drawings
27 either to approve or disapprove the plans and specifications and working
drawings and shall notify the other of its
28 objections and proposed solution to each objection. The plans and
specifications and working drawings shall be
29 subject to approval of the appropriate governmental bodies and they will
be prepared in such a manner as to obtain that
30 approval. The restoration shall be accomplished as follows:
31 14.6.1 Unless otherwise provided above,
the party obligated to restore shall complete the restoration
32 within 90 days after final plans and specifications and
- -14-
1 working drawings have been approved by the appropriate
governmental authorities and all required permits have been
2 obtained (subject to extension for delays resulting from
3 causes beyond reasonable control).
14.6.2 The party obligated to restore
4 shall retain a licensed contractor who is bondable. The
contractor shall be required to carry public liability and
5 property damage insurance, standard fire, and extended
coverage insurance with vandalism and malicious mischief
6 endorsements, during the period of construction in accordance
with Paragraph 13. Such insurance shall contain waiver of
7 subrogation clauses in favor of Landlord and Tenant in
8 accordance with the provisions of Paragraph 13.
14.6.3 The party obligated to restore
9 shall notify the other of the date of commencement of the
restoration not later than ten days before commencement to
10 enable the posting and recording of notices of
11 non-responsibility.
14.6.4 The restoration shall be
12 accomplished in a manner that will cause the least
13 inconvenience, annoyance and disruption at the Premises.
14.6.5 On completion of the restoration,
14 a notice of completion shall be recorded in the county in which the
Premises is located (if permitted by applicable
15 law).
16 15. Condemnation.
17 15.1 Definitions.
18 15.1.1 "Condemnation" means (a) the
exercise of any governmental power, whether by legal
19 proceedings or otherwise by a condemnor, and (b) a voluntary
sale or transfer to any condemnor, either under threat of
20 condemnation or while legal proceedings for condemnation are
21 pending.
15.1.2 "Date of taking" means the date
22 the condemnor has the right to possession of the property
23 being condemned.
15.1.3 "Award" means all compensation,
24 sums or anything of value awarded, paid or received on a
25 total of partial condemnation.
15.1.4 "Condemnor" means any public or
26 quasi-public authority, private corporation or individual
27 having the power of condemnation.
15.2 Parties' Rights and obligations to be
28 Governed by Lease. If during the term of this Lease, there
~s any taking of all or any part of the Premises or any
29 interest in this lease by condemnation, the rights and
obligations of the parties shall be determined pursuant to
30 this Paragraph 15.
31 15.3 Total Taking. If the Premises is totally
------------
taken by condemnation, this Lease shall terminate on the date
32 of taking, subject to the provisions of this Paragraph 15.
- -15-
1 15.4 Partial Taking.
2 15.4.1 Effect on Lease.
3 a. Taking of Improvements.
If any portion (but less than all) of the building or other
4 Improvements on the Premises is taken by condemnation, this Lease shall
remain in effect, except that Tenant can elect to
5 terminate this Lease if in its opinion the remaining portion of the
Premises is rendered unsuitable for Tenant's continued
6 use of the Premises. If Tenant elects to , terminate this
Lease, Tenant must exercise its right to terminate pursuant
7 'to this paragraph by giving notice to Landlord within 30 days after the
nature and the extent of the taking have been
8 finally determined. If Tenant elects to terminate this Lease, as provided
in this paragraph, Tenant also shall
9 notify Landlord of the date of termination, which date shall not be
earlier than 30 days, nor later than 90 days, after
10 Tenant has notified Landlord of its election to terminate; except that
this Lease shall terminate on the date of the
11 taking if the date of taking falls on a date before the date of
termination as designated by Tenant. If Tenant does not
12 terminate this Lease within the 30-day period, this Lease shall continue
in full force and effect, except that the
13 minimum annual rent shall be reduced according to Paragraph 15.4.2.
14
b. Taking of Parking. If the
------------------
15 Parking Area is taken by condemnation, this Lease shall remain in full
force and effect, except that, if ten percent
16 or more of the Parking Area of the Premises is taken by condemnation,
Tenant shall have the election to terminate
17 this Lease. If Tenant elects to terminate this Lease, it shall give
notice to the Landlord within 30 days after the
18 nature and extent of the taking have been finally determined. Tenant,
shall notify Landlord of the date of termination,
19 which date shall not be earlier than 30 days or later than 90 days after
Tenant has notified Landlord of its election to
20 terminate; except that this Lease shall terminate on the date of taking
if the date of taking falls on a date before the
21 date of termination designated in the notice from Tenant. if this Lease
is not terminated within the 30-day period, it
22 shall continue in full force and effect, except that the minimum annual
rent shall be reduced according to Paragraph
23 15.4.2.
24 15.4.2 Effect on Rent. If any portion
of the Improvements is taken by condemnation and this Lease
25 remains in full force and effect, on the date of the taking, the minimum
annual rent shall be reduced by an amount that is
26 in the same ratio to minimum annual rent as the total number of square
feet in the Improvements taken bears to the total
27 number of square feet therein immediately before the date of taking. If
any portion of the Parking Area is taken by
28 condemnation and this Lease remains in full force and effect, on the date
of taking the minimum annual rent shall be
29 reduced by the amount that is in the same ratio as the total number of
parking spaces taken bears to the total number of
30 such spaces immediately before the date of taking.
31
32
- -16-
15.5 Restoration of and Addition to Premises
and Other Areas.
2
15.5.1 Landlord's Election to Prevent
------------------------------
3 Lease Termination. If, within 30 days after the date that
- -----------------
the nature and extent of the taking are finally determined,
4 Landlord notifies Tenant that Landlord, at its cost, will add
on to the remaining Premises (including parking) so that the
5 area and approximate layout of the Premises (including
parking) will be substantially the same after the date of
6 taking as they were before the date of taking, and Landlord
commences the restoration immediately and completes the
7 restoration within 90 days after Landlord notifies Tenant,
this Lease shall continue in full force and effect without
8 any reduction in minimum annual rent, except the abatement or
9 reduction made pursuant to Paragraphs 15.4.2 and 15.5.3.
15.5.2 Restoration of Premises. if
-----------------------
10 there is a partial taking of the Premises and this Lease
remains in full force and effect pursuant to Paragraph 15.4,
11 Tenant shall accomplish all necessary restoration under the
same procedures specified' in Paragraph 14.6, except that
12 Tenant or the Insurance Trustee, as applicable, shall receive
from Landlord in cash at the time of the award an amount
13 equal to all of the costs of the restoration of the Premises.
14 15.5.3 Temporary Abatement or Reduc-
tion of Rent. Except for any percentage rent, rent shall be
15 abated or reduced during the period from the date of taking
until the completion of restoration, but all other
16 obligations of Tenant under the Lease shall remain in full
force and effect. The abatement or reduction of rent shall
17 be for such time and in proportion to the extent to which
Tenant's use of the Premises is impaired.
18
' 1 15.6 Award Distribution. The award shall
------------------
19 belong to and be paid to the parties as their interests
20 appear in accordance with applicable law.
16. Assignment.
21
16.1 Voluntary. Tenant shall not voluntarily
---------
22 sell or assign its interest in this Lease or in the Premises,
or sublease all or any part of the Premises, or allow any
23 other person or entity (except Tenant's authorized
representatives) to occupy or use all or any part of the
24 Premises, without first obtaining Landlord's prior written
consent, which consent shall not be unreasonably withheld.
25 Any sale, assignment or sublease to a party of equal or
better financial standing than Tenant would be one which
26 Landlord would, be expected to approve. Any
sale,
assignment
or sublease which requires but does not receive Landlord's
27 prior written consent shall be voidable by Landlord and, at
Landlord's election, shall constitute a default. No such
28 consent to any sale, assignment or sublease shall constitute
29 a further waiver of the provisions of this paragraph.
Landlord's consent to a sublease shall not relieve Tenant
from liability under this Lease. Any sale or assignment with
30 Landlord's consent shall relieve Tenant from liability
hereunder, otherwise a sale or assignment shall not relieve
31 Tenant from liability hereunder.
32
- -17-
16.2 Involuntary. No interest of Tenant in
this Lease shall be assignable by operation of law. Each of
2 the following acts shall be considered an involuntary
3 assignment:
16-2.1 If Tenant is or becomes bankrupt
4 or insolvent, makes an assignment for the benefit of
creditors, or institutes a proceeding under the Bankruptcy
5 Act in which Tenant is the bankrupt; or,
6 16.2.2 If a writ of attachment or
execution is levied on this Lease, provided that-Tenant shall
7 have 60 days in which to cause the writ of attachment or
execution to be removed; or,
8
16.2.3 If, in any proceeding or action
9 to which Tenant is a party, a receiver is appointed with
authority to take possession of the Premises, provided that,
10 if any involuntary proceeding in bankruptcy is brought
against Tenant or if a receiver is appointed, Tenant shall
11 have 60 days in which to have the involuntary proceedings
dismissed or the receiver removed.
12
Any involuntary assignment not cured within 30 days
13 after notice to Tenant by Landlord shall constitute a default
by Tenant and Landlord shall have the right to elect to
14 terminate this Lease, in which case this Lease shall not be
treated as an asset of Tenant.
15
17. Default.
16
17.1 Tenant's Default.The occurrence of any
-----------------
17 of the following events shall constitute a default by Tenant:
18 17.1.1 The failure to pay rent when due
if such failure continues for 10 days after written notice by
19 Landlord to Tenant;
20 17.1.2 The failure to perform any other
provision of this Lease, if the failure to perform is not
21 cured within 20 days after written notice by Landlord to
Tenant. If the default cannot reasonably be cured within 20
22 days, Tenant shall not be in default of this Lease if Tenant
commences to cure the default within the 20-day period and
23 diligently and in good faith continues to cure the default;
24 or,
17.1.3 The abandonment of the Premises
25 (failure to occupy and operate the Premises for any 15
consecutive day period shall be deemed an abandonment if
26 without Landlord's written consent; provided, however, that
failure to occupy and operate the Premises due to the
27 suspension or loss of the liquor license or other requisite
permit or license or other prohibition or governmental
28 regulation [including, without limitation, energy
conservation or shortage) for a period of less than six
29 months in any one Lease Year shall not be an abandonment).
The failure to occupy or operate the Premises as a result of
30 a destruction or condemnation shall not be an abandonment.
31 Notices given under this paragraph shall specify
the alleged default and the applicable Lease provisions, and
32 shall demand that Tenant perform the provisions of this Lease
- -18-
and pay the rent that is in arrears, as the case may be,
2 within the applicable period of time, or quit the Premises.
17.2 Landlord's Remedies. In the event of a
3 default by Tenant, Landlord may at any time thereafter: (a)
choose not to re-enter but to hold Tenant responsible for all
4 terms of this Lease; (b) re-enter the Premises, terminate
this Lease and hold Tenant responsible for all actual (but
5 not any consequential or punitive) damages resulting from the
default; or (c) re-enter the Premises, keep this Lease
6 intact, and attempt to relet the Premises on behalf of Tenant
as Tenant's agent. Upon re-entering the Premises, Landlord
7 may relet the Premises or any part thereof for-such term and
at such rental as Landlord may deem advisable with the right
8 to make alterations and repairs to the Premises. Landlord
may remove therefrom all persons and property. Should
9 Landlord elect to re-enter as herein provided, rentals
received by Landlord shall be applied against the rental and
10 other indebtedness due from Tenant hereunder. Should rentals
received from such reletting during any month be less than
11 that agreed to be paid during that month by Tenant, then
Tenant shall immediately pay and be liable for such
12 deficiency to Landlord. Should Landlord at any time
terminate this Lease for any default, Landlord may recover
13 from Tenant the reasonable cost of recovering the Premises
and the worth at the time of such termination of the rent
14 reserved in this Lease for the remainder of the term over the
then reasonable rental value of the Premises for the
15 remainder of the term.
16 17.3 Appointment of Receiver. If Tenant is in
default of this Lease, Landlord shall have the right to have
17 a receiver appointed to collect rent. Neither the filing of
a petition for the appointment of a receiver, nor the
18 appointment itself, shall constitute an election by Landlord
to terminate this Lease.
19
20 17.4 Landlord's Default. If Landlord shall
fail to observe or perform any of the provisions of this see
21 Lease to be performed by Landlord and such failure is not
cured within 10 days after notice has been given by Tenant to
Landlord, then Landlord shall be in default and without
22 further notice, Tenant may at any time thereafter: recover
all damageS resulting from the default whether by offset or
23 against rental or otherwise; effect a cure on Landlord's
behalf and all costs and expenses so incurred by Tenant
24 together with interest at the rate of ten percent per annum
shall be due and payable by Landlord on demand by Tenant; or
25 pursue any other right or remedy provided by law.
,
26 18. Subordination; Estoppel; Quiet Enjoyment
27 18.1 Subordination. Subject to the provisions
of paragraph 18.3, this Lease is and shall be subordinate to
28 any encumbrance now of record or recorded after the date of
29 this Lease affecting the Premises, provided such encumbrance
evidences the non-disturbance protections of Tenant set forth
below. Such subordination shall be effective without any
30 further act of Tenant. Tenant shall, from time to time on
request from Landlord, execute and deliver any documents or
31 instruments that may be required by a lender to effectuate
32 any subordination. As long as Tenant performs its
obligations under -this Lease, and is not in default
_19-
4
hereunder, no foreclosure of, deed given in lieu of
foreclosure of, or sale under the encumbrance, and no other
2 steps or procedures taken under the encumbrance, shall affect
Tenant's rights under this Lease, and this Lease shall
3 continue in full force and effect as a direct Lease between
Tenant and any person succeeding to Landlord's interest
4 hereunder (and such successor shall be deemed to have assumed
all of Landlord's obligations hereunder).
5
18.2 Estoppel Certificates. Each party,
6 within 10 days after notice from the other party, shall
execute and deliver to the other party, in recordable form, a
7 certificate stating that this Lease is unmodified and in full
force and effect, or in full force and effect as modified,
8 and stating the modifications. The certificate shall also
state the amount of minimum annual rent, the dates to which
9 the rent-has been paid in advance, and the amount of any
prepaid rent. Failure to deliver the certificate within the
10 10 days shall be conclusive upon the party failing to deliver
the certificate for the benefit of the party requesting the
11 certificate and any successor to the party requesting a
certificate, that this Lease is in full force and effect and
12 has not been modified, except as may be represented by the
party requesting the certificate.
13
18.3 Quiet Enjoyment. Landlord represents and
14 warrants that within 120 days of this date, they will be the
owner in fee simple of the Premises, that they alone have the
15 full right to lease the Premises, and that Tenant, on paying
the rent and performing the obligations hereunder, shall
16 peaceably and quietly hold and enjoy the Premises during the
term without any hindrance, molestation or ejection by
17 Landlord. During the term, Landlord shall not grant, create
or suffer to exist any claim, lien, encumbrance, easement,
18 restriction or other charge or exception to the title to the
Premises without the prior written consent of Tenant.
19 Further, Landlord warrants that the Premises does not violate
any applicable building code, zoning ordinance or other
20 applicable law at the time this Lease is executed. If it is
determined that this warranty has been violated, then
21 Landlord promptly shall rectify such violation at its sole
cost and expense.
22
19. Notice.
23
Any notice, demand, request, consent, approval or
24 communication that either party desires or is required to
give the other party or any other person in connection
25 herewith shall be in writing and either served personally or
sent by certified mail, with return receipt requested. Any
26 notice, demand, request, consent, approval or communication
that either party desires or is required to give to the other
27 party shall be addressed to the other party at the address
set forth herein in Paragraph 30. Either party may change
28 its address by notifying the other party of the change of
address. Notice shall be deemed communicated upon the first
29 to occur of (i) actual receipt of the notice, or (ii) 48
hours after the time of mailing, if mailed as provided in
30 this paragraph.
31
32
20-
20. Waiver.
-------
2 No delay or omission in the exercise of any right
or remedy by either party hereto on any default by the other
3 party hereto shall impair such a right or remedy or be construed as a
waiver. The receipt and acceptance by
4 Landlord of delinquent rent shall not constitute a waiver of any other
default; it shall constitute only a waiver of
5 timely payment for the particular rent payment involved. Landlord's
consent to or approval of any act by Tenant
6 requiring Landlord's consent or approval shall not be deemed to waive or
render unnecessary Landlord's con-sent to or
7 approval of any subsequent act by Tenant. Any waiver by Landlord or Tenant
of any default must be in writing and
8 shall not be a waiver of any other default concerning the
9 same or any other provision of this Lease.
10 21. Quitclaim Deed.
Tenant shall execute and deliver to Landlord on the
11 expiration or termination of this Lease, immediately on Landlord's
request, a quitclaim deed to the Premises, in
12 recordable form, designating Landlord as transferee.
13 22. Sale or Transfer of Premises. If Landlord
sells or transfers all or any portion of the Premises, on the
14 consummation of the sale or transfer, Landlord shall be released from any
liability with respect to the sold or
15 transferred property thereafter (but not previously) accruing under this
Lease. Any such sale or transfer of the Premises
16 by Landlord, except to Tenant, shall be conditioned upon and subject to
Landlord's successor assuming this Lease in its
17 entirety, In the event of any such sale, Tenant and Landlord's successor
shall execute in recordable form a
18 declaration and amendment to this Lease, whereby Landlord's successor
will assume all of Landlord's position, benefits,
19 rights, obligations, and duties under this Lease and whereby Landlord's
successor and Tenant shall be in privity of
20 contract under this Lease.
21 23. Attorneys' Fees.
22 If either party becomes a party to any litigation
concerning this Lease or the Premises by reason of any act or
23 omission of the other party or its authorized representatives, and not by
any act or omission of the party
24 that becomes a party to that litigation or any act or omission of its
authorized representatives, the party that
25 causes the other party to become involved in the litigation shall be
liable to that party for reasonable attorneys' fees
26 and court costs incurred by it in the litigation. if either party
commences an action against the other party out of or
27 in connection with this Lease, the prevailing party shall be
28 entitled to have and recover from the losing party reasonable attorneys'
fees and costs of suit.
29 24. waiver of Landlord's Lien - Tenant's Property.
30
Within ten days after receipt of a written demand
31 from Tenant, Landlord shall execute and deliver any document required by
any supplier, lessor or lender in connection with
32 the installation on the Premises of Tenant's Trade Fixtures and by which
Landlord waives any rights it may have or
- -21-
acquire with respect to that property, provided the supplier,
lessor or lender agrees, in writing, that, upon expiration or
2 termination of this Lease, it will remove that property from
the Premises within 10 days of the expiration of the term or
3 within 30 days after termination of the term, but, if it does
not so remove the property, it shall have waived any rights
4 it may have to the property.
5 25.-. Surrender of Premises; Holding over.
6 25.1 Surrender of Premises.
7 25.1.1 On expiration or termination of
the term, Tenant shall surrender to Landlord the Premises and
8 all of Tenant's improvements and alterations in good
condition (except for ordinary wear and tear occurring after
9 the last necessary maintenance made by Tenant and destruction
to the Premises. as discussed herein), and, except for
10 alterations or improvements that Tenant has the right to
remove under any provisions of this Lease. Tenant may remove
11 all its Trade Fixtures within the above-stated time. Tenant
shall perform all restorations made necessary by the removal
12 of any alterations, improvements, or Trade Fixtures within
the time periods stated in this paragraph.
13
25.1.2 Landlord can elect to retain or
14 dispose of, in any manner, any alteration, improvement or
Trade Fixtures that Tenant does not remove from the Premises
15 on expiration or termination of the term as allowed or
required by this Lease by giving at least 10 days' notice to
16 Tenant. Title to any such alterations, improvements or
Tenant's Trade Fixtures that Landlord elects to retain or
17 dispose of on expiration of the ten-day period shall vest in
Landlord. Tenant waives all claims against Landlord for any
18 damage to Tenant resulting from Landlord's retention or
disposition of any such alterations, improvements or Trade
19 Fixtures.
20 25.2 Holding Over. If Tenant remains in
possession of the Premises after expiration or termination of
21 the term, such possession by Tenant shall be deemed to be a
month-to-month tenancy terminable on 30 days' notice given at
22 any time by either party. During any such month-to-month
tenancy, Tenant shall pay all rent required by this Lease,
23 and, if percentage rent is required by this Lease, it shall
be paid monthly on or before the 15th day of each month for
24 Gross Sales during the preceding month. All provisions of
this Lease, except those pertaining to term and options to
25 extend, if any, shall apply to the month-to-month tenancy.
26 26. 'Common Area.
27 26.1 Commercial Complex. The Premises is
located within and is to be a part of the Commercial Complex
28 as described in Recital A. The Commercial Complex shall
include the Premises, the Parking Area, additional parking,
29 an office building, driveways, lanes, sidewalks and other
common areas substantially as shown on Exhibit "A". Tenant
30 shall have a right of use and easement in the Parking Area,
additional parking, driveways, lanes, sidewalks and other
31 common areas (collectively the "Common Area") jointly with
the other tenants -of the Commercial Complex at all times
32 during the lease term without any additional charge or fee of
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1 any kind to be paid by Tenant. In addition, as provided in
Paragraphs 1 and 2.1, the area depicted in green on Exhibit
2 "All shall contain not less than 75 parking spaces for the exclusive use
of Tenant, its employees, agents, customers and
3 guests, and the area depicted in blue on Exhibit "All shall contain not
less than 135 parking spaces for use by Tenant,
4 its employees, agents, customers and guests, in common with the other
tenants of the Commercial Complex. Landlord shall
5 bear the cost of the construction of the Common Area and Tenant shall have
no obligation to contribute thereto.
6
26.2 Maintenance. Except as provided in
7 Paragraph 8.4, and except for repairs resulting from the negligence of
Tenant, its employees or customers, Tenant
8 shall have no responsibility to maintain or repair the Common Area.
Landlord shall maintain the common Area in a neat,
9 clean and orderly condition, properly surfaced, striped, lighted and
landscaped with adequate security and sufficient
10 casualty and liability insurance naming Tenant as an additional insured.
Landlord shall repair any damage to the
11 Common Area promptly, such that at all times the Common Area shall be in
good, first-class working order, condition and
12 repair and available for use by Tenant. Landlord shall not alter or
modify the Common Area so as to impair Tenant's
13 access to the Premises or the Parking Area and, without Tenant's prior
written consent, Landlord shall not
14 substantially modify the Commercial Complex from that depicted in Exhibit
"A".
15
27. Memorandum of Lease.
--------------------
16
A Memorandum of Lease shall, upon the request of
17 either Landlord or Tenant, be executed by the parties and recorded in the
Office of the appropriate County Recorder.
18 The Memorandum of Lease shall expressly state that it is executed
pursuant to the provisions contained in this Lease
19 and is not intended to vary the terms and conditions of this Lease. in
the event that Landlord or Tenant shall terminate
20 this Lease pursuant to the provisions contained herein for any cause
other than Landlord's breach thereof, Tenant shall
21 forthwith prepare, execute, acknowledge and deliver to
22 Landlord a Release and Cancellation of this Lease.
23 28. Miscellaneous Provisions.
28.1 Time of Essence.Time is of the essence
-----------
24 of each provision of this Lease.
25 28.2 Consent of Parties. Whenever consent or
approval of either party is required, other than as specifi-
26 cally set forth to the contrary herein, that party shall not
27 unreasonably withhold such consent or approval.
28 28.3 Corporate Authority. If either party or
a guarantor is a corporation, that party or guarantor shall
29 deliver to the other party on the execution of this Lease, a certified
copy of a resolution of its board of directors authorizing the execution of this
Lease and naming the
30 officers that are authorized to execute this Lease on behalf
31 of the corporation.
28.4 Successors. This Lease shall be binding
32 on and inure to the benefit of the parties and their successors, except as
provided otherwise in this Lease. -23
28.5 Rent Payable inUnited States Currency.
---------- ----------------
Rent and all other sums payable under this Lease must be paid
2 in lawful currency of the United States of America.
3 28.6 Status of Parties on Termination of Lease
Except as provided otherwise in this Lease, if a party elects
4 to terminate this Lease as allowed in this Lease, on the date this Lease
is terminated, the parties shall be released from
5 further liabilities and obligations and Landlord shall return to Tenant
any unearned rent, as long as Tenant is not in
6 default an the date the Lease terminates.
7 28.7 Exhibits. All exhibits referred to
herein, whether or not attached to this Lease, are
8 incorporated herein by reference.
9 28.8 Negation of Partnership. Nothing in this
Lease shall be construed to render the Landlord in any way,
10 or for any purpose, a partner, joint venturer, or associate with Tenant,
nor shall this Lease be construed to authorize
11 either Landlord or Tenant to act for the other, except as expressly
stated herein. The only relationship between the
12 parties hereto is that of Landlord and Tenant.
13 28.9 Brokerage. Tenant has not employed a
finder or broker in connection with this Lease and agrees to
14 indemnify and hold Landlord harmless from any brokerage commission or
finder's fee arising as a result of the
15 employment of any finder or broker by Tenant. Similarly,
Landlord shall pay and be responsible for any finder's fee or
16 brokerage commission arising as a result of the employment of such finder
or broker by Landlord and agrees to indemnify and
17 hold Tenant harmless with respect thereto.
18 29. Interpretation of Lease.
19 29.1 State Law. This Lease shall be construed
and interpreted in accordance with the laws of the state of
20 California.
21 29.2 Integrated Agreement; Modification. This
Lease contains all the agreements of the parties concerning
22 the Premises and cannot be amended or modified, except by a
23 written agreement.
29.3 Provisions are Covenantsand Conditions.
------------------------ -----------
24 All provisions, whether covenants or conditions, on the part of Landlord
and Tenant shall be deemed to be both covenants
25 and conditions.
26 29.4 Definitions. As used in this Lease, the
following words and phrases shall have the following
27 meanings:
28 a. Authorized Representative. Any
officer, agent, employee or independent contract- retained.
29 or employed by either party, acting within authority given him by that
party.
30
b. CommencementDate. The date the
------------
31 lease term commences as described in Paragraph 3.3.
32
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1 C. Damage. Any material injury,
deterioration or loss to a person or property caused by
2 another's acts or omissions. Damage includes death.
3 d. Destruction. Any material damage to
4 or disfigurement of the premises.
e. Encumbrance.Any deed of trust,
------------
5 mortgage or other written security device or agreement affecting the
Premises, and the note or ather obligation
6 secured by it, that constitutes security for the payment of a
7 debt or performance of an obligation.
f. Hold Harmless.To defend and indem-
--------------
8 nify from all liability,- losses, penalties, damages as defined herein,
costs, expenses (including, without
9 limitation, attorneys' fees), causes of action, claims or
judgments arising out of or related to any damage to any
10 person or property.
11 9- Lease Year. Except for the first
Lease Year, a period of twelve consecutive calendar months as
12 described in Paragraph 3.2.
13 h. Person. One or more human beings,
legal entities, or other artificial persons, including,
14 without limitation, partnerships, corporations, trusts, estates,
associations and any combination of human beings,
15 legal entities, or other artificial persons.
16 i. Restoration. The reconstruction,
rebuilding, rehabilitation and repairs that are necessary to
17 return destroyed portions of the Premises and other property to a
complete architectural unit in substantially equal or
18 better physical condition than as immediately before the destruction.
19
j. Successor.Assignee, transferee,
----------
20 personal representative, heir, or other person or entity
.succeeding lawfully and pursuant to the provisions of this
21 Lease to the rights or obligations of either party.
22 k. Tenant's Trade Fixtures. Tenant's
equipment, furniture, merchandise and all other property.-
23 placed in the Premises by Tenant, including without limitation, any
property installed in or on the Premises by
24 Tenant for purposes of trade, merchandise or related use.
25 29.5 Captions. The captions in this Lease
shall have no effect on its interpretation.
26
29.6 Singular and Plural.When required by
--------------------
27 the context of this Lease, the singular shall include the
28 plural and the plural shall include the singular.
29.7 Joint and Several obligations. "Party"
------------------------------
29 shall mean Landlord or Tenant; and, if more than one person or entity is
Landlord or Tenant, the obligations imposed on
30 that party shall be joint and several.
31 29.8 Severability. The unenforceability,
32 invalidity or illegality of any provision hereof shall not
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render the other provisions unenforceable, invalid or illegal.
2
30. Addresses of Landlord andTenant:
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3
Landlord Tenant
4
1723 West Magnolia Boulevard Suite 500
5 Burbank, California 91506 2701 East Camelback
Phoenix,,-Arizona 85016
6
Executed by the parties hereto effective on the
7 date first above written.
8 LANDLORD: TENANT:
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9 BOBBY McGEE'S CONGLOMERATION
OF LONG BEACH, INC.
10 CHARLES P. CUSUMANO
11
By
12 DIANNA J. CUSUMANO
13 It's President
GUARANTOR:
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14
BOBBY McGEE'S, U.S.A., INC.
15
16 By
Robert F. Sikora
17 President
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
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EXHIBIT B
LEGAL DESCRIPTION
Beginning at the most northerly corner of Lot 2 6f Block 68 of the Town of
Burbank Tract in the City of Burbank, County-of Los Angeles, State of
California, as per map recorded in Book 17f Pages 19 to 22, et seq. of
Miscellaneous Records in the office of the County Recorder of said county, said
corner being the southerly corner of the intersection of Olive Avenue, 100 feet
wide, and First Street, 80 feet wide, as said intersection is shown on said map;
thence South 410 16' 02' West along the southeasterly line of said Olive Avenue
a distance of 6 feet to the TRUE POINT OF BEGINNING, thence North 480 41' 53"
West a distance of 28.00 feet7,to a, point on a line 28.00 feet northwesterly of
and parallel with the southeasterly line of said Olive Avenue; thence South 410
16' 02" West along said parallel line
- - distance of 262.97 feet to a point; thence South 520 261 53" East
- - distance of 335.23 feet to a point of tangency of a curve concave
northerly having a radius of 40 feet; thence southeasterly, easterly
and northeasterly along said curve a distance of 60.23 feet to a point
of tangency on a line that is 19 feet southeasterly of and parallel
with the north , westerly line of Angeleno Avenue, 80.00 feet wide, as
shown on said map; thence North 410 16' 48" East along said parallel
line a distance of 171.12 feet to a point of tangency of a curve
concave westerly having a radius of 30 feet; thence northeasterly,
northerly and.northwesterly along said curve a distance of 47.11 feet
to a point of tangency on a line 6.00 feet southwesterly of and
parallel with the southwesterly line of said First Street; thence
North 480 411 53" West along said parallel line a distance of 313.99
feet to the True Point of Beginning.
Checked by
Approved by
- -----------
- ------
FIRST ADDENDUM TO LEASE AGREEMENT
- --------------
DATE: September 16. , 1983.
PARTIES: (1) CHARLES p. CUSUMANO and DIANNA J. CUSUMANO,
husband and wife (collectively the "Landlord").
(2) BOBBY MCGEE'S CONGLOMERATION OF LONG BEACH, INC.,
a California corporation (the "Tenant").
RECITALS: Landlord and Tenant are parties to that certain
A.
Lease Agreement, dated September 16, 1983,
concerning the premises therein described situate
in Burbank, California.
- B. Landlord and Tenant wish to amend the Lease
Agreement so as to confirm certain assurances
that were provided by Landlord as an inducement
for Tenant to enter into the Lease Agreement.
AGREEMENTS: Landlord and Tenant agree as follows:
1. The following new Paragraph 3.5 is added to the Lease Agreement:
"3.5 Termination for Insufficient Sales.
---------------------------- ------
If at the end of the 84th month of the lease
term, Tenant's annual Gross Sales from the
Premises (as defined in Paragraph 7.2.2) for
the immediately preceding 12 months are less
than $4.5 million, then upon written notice
issued by Tenant to Landlord on or before
the last day of the 85th month of the lease
term, this Lease shall terminate on the last
day of the 90th month of the lease term, at
which time, in addition to removing its
Trade Fixtures and exercising such other
rights as are provided to Tenant by the terms
of this Lease, Landlord shall pay to Tenant
a cash termination payment of $200,000.00.
In order to assure Tenant's receipt of the
termination payment, within 15 days after
Landlord receives Tenant's notice of the
termination of this Lease as herein provided,
Landlord shall deliver to Tenant a $200,000.00
unconditional, irrevocable letter of credit
issued to Tenant by a state or national bank
acceptable to Tenant. If Landlord fails to
provide the letter of credit within the time
required, Tenant's obligation to pay minimum
annual rent, percentage rent, taxes and any
other sums (collectively "Rent required
by this Lease shall cease and abate, and
Tenant shall not be required to pay any
such Rent for the remainder of the lease term.
SECOND AMENDMENT OF LEASE
This SECOND AMENDMENT TO LEASE, dated September 20, 1995 and herewith made a
part of that certain LEASE and FIRST ADDENDUM TO LEASE AGREEMENT dated September
16,1983, the SECOND ADDENDUM TO LEASE AGREEMENT dated February 20, 1984 the
AMENDMENT TO LEASE dated July 16, 1992, the EXHIBIT A, PROMISSORY NOTE dated
July 16, 1992, for the Premises located at 107 South First Street, Burbank,
California, by and between Charles P. Cusumano (Landlord") and Performance
Restaurant Group, Inc. ("Tenant") which has been assigned the above referenced
Lease, Addendums, Amendments and Promissory Note from BOBBY MCGEE'S
CONGLOMERATION OF LONG BEACH, INC., a California corporation by order of the
U.S. Bankruptcy Court for the District of Arizona in Case #9303092PHXGBN.
It is agreed that should there be any conflict between the provisions of this
SECOND AMENDMENT TO LEASE, and the provisions of this Lease, FIRST or SECOND
ADDENDUMS TO LEASE, the AMENDMENT TO LEASE or the EXHIBIT A, PROMISSORY NOTE,
the provisions of this SECOND AMENDMENT TO LEASE shall prevail.
Whereas a dispute had arisen between the parties to the lease concerning the
effectiveness of the provisions of the FIRST ADDENDUM to LEASE AGREEMENT dated
September 16, 1983; and whereas in consideration of this Amendment all claims
and disputes have been resolved including any claim for back rent except as set
forth in paragraph 2 hereof.
IT IS FURTHER AGREED:
1. Minimum Annual Rent:The Minimum Annual Rent for the Premises required under
--------------------
Paragraph 7.1 of the Lease shall be $210,000.00 per year, payable at $17,500.00
per month commencing January 1, 1995.
2. Additional Rent: Tenant shall pay to Landlord on or before October 1, 1995,
$25,534.97 as additional rent for the months of January through September of
1995 giving
full credit for base and percentage rent paid by Tenant in 1995.
3. Assumption and Consent:Tenant hereby agrees to the assumption of all
-----------------------
obligations under the Lease as modified by this Second Amendment to Lease, as of
-----
December 15, 1993 (the date of the United States Bankruptcy Court Order
approving assignment of the Lease to Tenant); and Landlord hereby consents to
the assignment of the Lease to Tenant on said terms and conditions.
LANDLORD TENANT
Performance Restaurant Group, Inc.
Charles P. Cusumano John R. Radonovich
Chief Financial Officer
Dated: 10-3-95 Dated: 10-2-95
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