BJ'S Pizza and Grill
Assignment and Second Amendment of Lease
August 2, 1999
ASSIGNMENT AND SECOND AMENDMENT OF LEASE
THIS ASSIGNMENT AND SECOND AMENDMENT OF LEASE ("Agreement") is made as of
this 15th day of August 1999 ("Effective Date") by and among GROSSMONT
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SHOPPING CENTER CO., a California limited partnership ("Landlord"), PIZZA NOVA -
LA MESA, INC., a California corporation ("Assignor"), and CHICAGO PIZZA &
BREWERY, INC., a California corporation (Assignee").
R E C I T A L S
- - - - - - - -
A. Landlord and Tenant's predecessor-in-interest entered into that
certain Grossmont Center Lease dated March 12, 1992 ("Lease"), as amended by
that certain Assignment of and Amendment to Lease dated January 6, 1993 ("First
Amendment"), for the lease of certain premises more commonly known as a portion
of Building M ("Premises") in the City of La Mesa, County of San Diego, State of
California, in a commercial project commonly referred to as Grossmont Center
("Center"), all as more particularly set forth in the Lease.
B. Pursuant to the First Amendment, the original Tenant under the Lease,
Mango's Restaurants, Inc. ("Mango's"), assigned the Lease to Chart House
Enterprises, Inc. ("Chart House") (the "First Assignment").
C. Chart House thereafter assigned the Lease to F.C. San Diego, Inc. ("F.C.
San Diego"), pursuant to that certain Assignment of Lease dated March 1, 1994
(the "Second Assignment").
D. Subsequent to a default under the Lease by F.C. San Diego, Chart House
retook possession of the Premises as Tenant under the Lease, and thereafter
assigned the Lease to Pizza Nova III, a California limited partnership ("Pizza
III"), pursuant to that certain Assignment of Lease dated September 19, 1995
(the "Third Assignment").
D. Pizza III thereafter assigned the Lease to Assignor, as consented to by
that certain Consent to Lease Assignment Agreement dated September 4, 1997 (the
"Fourth Assignment").
E. The Lease, the First Amendment, the First Assignment, the Second
Assignment, the Third Assignment and the Fourth Assignment are collectively
herein referred to as the "Lease."
F. Assignor desires by this Agreement to assign all of its right, title
and interest in and to the Lease to Assignee subject to the terms of the Lease
and this Agreement.
G. Landlord and Assignee desire by this Agreement to amend the Lease as
hereinafter provided and Assignor desires to consent to the same.
T E R M S
- - - - -
NOW, THEREFORE, in consideration of the foregoing Recitals, the mutual
covenants herein contained, and good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. DEFINED TERMS. All initial capitalized terms used in this Agreement shall
have the same meaning given such terms in the Lease, unless otherwise defined in
this Agreement.
2. ASSIGNMENT
2.1. ASSIGNMENT. Assignor assigns to Assignee all of its right, title
and interest in the Lease as of the Effective Date.
2.2. ASSUMPTION. Assignee acknowledges that it has received a copy of
the Lease from Assignor and that Assignee assumes and agrees to be bound by and
perform all covenants, conditions, obligations and duties of Assignor under the
Lease. Without limiting the preceding, Assignee further agrees that it shall pay
to Landlord, upon demand, any Rent (including without limitation, Minimum Rent,
Percentage Rent and Additional Rent) which (a) shall be outstanding against
Assignor as of the Effective Date and which Assignor has failed to pay to
Landlord and/or (b) which, as a result of any adjustment provided in the Lease,
may become due against insufficient payment(s) of any previously paid sum(s).
2.3. ASSIGNOR'S OBLIGATIONS. Assignor shall remain obligated to
Landlord for the full performance of all covenants, conditions, obligations and
duties required of Tenant under the Lease, including during any Option Term, and
shall not be relieved of any such performance thereunder as a result of this
assignment of the Lease. However, as of the Effective Date, Assignor shall have
no continuing or future possessory rights in and to the Premises and thereafter
waives any right it may possess to receive notice from Landlord relative to this
Agreement or the Lease.
2.4. SECURITY DEPOSIT. Assignor and Assignee acknowledge that Landlord
does not hold any Security Deposit on behalf of either Assignor or Assignee or
otherwise in connection with the Lease.
2.5. CONSENT OF LANDLORD. Landlord's consent to the assignment of the
Lease to Assignee shall be effective only at such time as this Agreement has
been executed by all of the parties hereto.
2.6. ASSIGNOR'S REPRESENTATIONS. Assignor represents and covenants as
follows:
2.6.1. That the Lease is in full force and effect, Assignor's interest
therein is free and clear of all encumbrances, and Assignor has fully performed
all covenants and obligations under the Lease and has not done or permitted any
acts in violation of the covenants contained in the Lease.
2.6.2. That it has not heretofore assigned, mortgaged or otherwise
transferred, amended or encumbered, voluntarily or involuntarily, the Lease or
its interest therein.
2.6.3. That Landlord has fully performed all the covenants and
obligations on its part to be performed and observed under the Lease; that
Landlord has not done or permitted any act or acts in violation of any of the
covenants, provisions or terms thereof; and that there is not now in existence
any reason or claim to offset, deduct or decrease any payments due under the
Lease.
2.6.4 That to the best of its knowledge there are no Hazardous Materials, and
that Tenant has no reason to suspect that there are any Hazardous Materials,
present in or about the Premises.
2.6.5 That it will defend, indemnify and hold Assignee harmless from and
against any obligations of Tenant under the Lease arising or accruing prior to
the Effective Date.
2.7. ASSIGNEE'S REPRESENTATIONS. Assignee acknowledges and represents
that it has inspected the Premises and hereby agrees to take the Premises in the
condition existing upon the Effective Date.
2.8. NOTICE TO ASSIGNEE; CHART HOUSE. Landlord shall not be required
to provide any notice to Assignor, and Assignor hereby waives any right to
receive any such notice from Landlord; provided, however, the foregoing shall
not affect Landlord's obligation to provide notice to Chart House concerning any
default of Assignor under the Lease, or concerning any proposed amendment of the
Lease, further provided however, that Landlord shall only be required to give
such notices to Chart House until the "Release Date" as defined herein. Upon the
Release Date, Chart House shall no longer have any liability under the Lease.
The Release Date shall be the earlier to occur of: (i) December 31, 2003, or
(ii) twenty-four (24) months after the Effective Date, provided that Assignee
operates under the Lease during such period of time without a reporting,
monetary or other material default.
3. AMENDMENT OF LEASE
3.1. AMENDMENT OF LEASE. The Lease is amended as of the Effective Date,
unless another date is expressly provided, as follows:
3.1.1. Section 1.03 (Tenant's Mailing Address) of the Lease shall be
deleted in its entirety and replaced with the following:
26131 Marguerite Parkway, Suite A
Mission Viejo, CA 92692
With a copy to:
Ernest T. Klinger
3780 Kilroy Airport Way, Suite 200
Long Beach, CA 90806
3.1.2 Section 1.06 (Term) of the Lease shall be modified as follows: The
fourth (4th) paragraph of Section 1.06 shall be modified to delete the second
sentence, beginning "As provided in Section 3.02," and ending at "or food
service."
3.1.3 Section 1.08 (Permitted Use) of the Lease shall be deleted in its
entirety and replaced with the following:
The Premises shall be used for the operation of a full-service, sit-down
restaurant serving food items substantially similar to those indicated on
Tenant's menu attached hereto as Exhibit "A," and incorporated herein by this
reference, and for no other use or purpose whatsoever; provided, however,
incidental to Tenant's food service operation in the Premises, and subject to
any applicable legal requirements, Tenant may (i) serve beer and wine for
on-site consumption by its restaurant patrons, and (ii) provide take-out and
delivery service in connection with its restaurant business in the Premises.
3.1.4 Section 1.09 (Tenant's Trade Name) of the Lease is hereby deleted in
its entirety and replaced with the following: BJ's Pizza and Grill.
3.1.5 Section 2.04c(2) and (3) of the Lease shall be modified to provide
that at the end of each such subsection the following language shall be
inserted:
Notwithstanding the foregoing, Landlord shall provide Tenant with at least five
(5) days' notice of any such planned closure (except in the case of an
emergency, in which no such notice shall be required), and to the extent any
such closure results in Tenant being unable from the standpoint of prudent
business judgment, to operate its business in the Premises, and such inability
to operate continues for more than two (2) continuous days, then thereafter
Minimum Rent shall abate until such time as Tenant is reasonably able to
recommence operation of its business in the Premises.
3.1.6 Section 2.04c(6) of the Lease shall be modified by adding the
following at the end of such paragraph:
Any such rules and regulations governing the use of parking areas shall be
reasonable and nondiscriminatory.
3.1.7 Section 2.04c(11) of the Lease shall be modified by adding the
following at the end of such paragraph:
Notwithstanding the foregoing, such carts or kiosks shall not be located within
an area one hundred feet (100') directly in front of the storefront of the
Premises, measured by a straight line running parallel with the two side
exterior demising walls of the Premises and continuing for fifty feet (50')
directly in front of the storefront of the Premises.
3.1.8 Section 2.04c (Landlord's Reservation of Rights) of the Lease shall be
modified to provide a new subsection (13) to be inserted at the end of Section
2.04c as follows:
Notwithstanding Landlord's exercise of its rights hereunder, except to the
extent reasonably necessary to comply with any legal requirements, Landlord
shall not modify the Common Areas in a manner that materially adversely impacts
access to, or egress from, the Premises, or visibility of the Premises.
3.1.9 Section 2.06c(7) of the Lease shall be modified by adding the
following at the end of such paragraph:
The foregoing parking restrictions shall not apply to customers of Tenant.
3.1.10 Section 3.02 (Option Term) of the Lease shall be modified to
provide that the last two paragraphs of such Section 3.02, beginning "However,
in the event Landlord elects", and ending "written exercise of Option", are
hereby deleted in their entirety.
3.1.11 Section 5.02a (Statement of Gross Sales) of the Lease is hereby
modified as follows: In the third sentence of Section 5.02(a), the word
"annual" shall be inserted between the phrase "all statements".
3.1.12 Section 5.02(f) (Maintenance of Records) of the Lease shall be
modified as follows: In the third line of Section 5.02(f), the word
"accounting" shall be inserted between the phrase "corporate offices".
3.1.13 Section 5.02(g) (Landlord's Right to Audit) of the Lease shall be
modified as follows: In the third (3rd) sentence of Section 5.02(g), the words
"principal place" shall be deleted and inserted therein shall be the words
"corporate accounting offices."
3.1.14 Section 9.02(d) (Prohibited Activities) of the Lease shall be
modified to provide that at the end of such Section 9.02(d) the following
language shall be inserted:
Subject to any applicable legal requirements and Landlord's prior written
approval, not to be unreasonably withheld, provided that Landlord may impose
such reasonable conditions as it deems necessary in connection with such
activities, Tenant may provide valet parking services for Tenant's restaurant
patrons at the Premises.
3.1.15 Section 9.03(a) (Continuous Use) of the Lease shall be modified to
include the following language at the end of such Section 9.03(a):
Notwithstanding the foregoing to the contrary, Tenant may close the Premises
for a reasonable period of time for the purpose of making any necessary repairs
or improvements to the Premises, provided that the total number of days in any
calendar year does not exceed ten (10) days, and further provided that, except
in the event of an emergency or as a result of damage or destruction of the
Premises, such closures shall not occur at any time between December 10 and
January 10 of any year, or at any time that Landlord shall reasonably require
Tenant to postpone any such planned closure, for example, during certain holiday
or promotional events at the Shopping Center, and further provided that in any
event Tenant shall give Landlord at least five (5) days' written notice of any
such planned closure.
3.1.16 Section 10.02 (Tenant's Maintenance) of the Lease shall be modified
to provide that the following language shall be inserted at the end of such
Section 10.02:
A rating of less than "A" shall not be deemed a default hereunder if Tenant
immediately after being notified by any governing agency that it has failed to
maintain an "A" rating, exercises its best efforts to regain an "A" rating as
soon as reasonably possible, and further provided that in such event Tenant
shall keep Landlord reasonably and regularly informed of all such efforts
undertaken by Tenant to regain such an "A" rating.
3.1.17 Section 11 (Alterations) of the Lease shall be modified to provide that
the following subsection shall be inserted at the end of such Section 11:
11.04 Emergency Repairs. Notwithstanding the foregoing, this Section 11
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shall not prevent Tenant from making any repairs to the Premises, without
Landlord's prior approval, which are reasonably necessary in the event of an
emergency which poses substantial risk of harm to life or property, and where
under the circumstances it would be impracticable for Tenant to give Landlord
the notice otherwise required by this Section 11; then in such event, Tenant may
make such repairs, provided Tenant shall immediately attempt to give Landlord
telephonic or any other type of reasonable notice under the circumstances of
such emergency and Tenant's undertaking of such repairs.
3.1.18 Section 13.02 ("Tennat's Public Liability and Property Damage
Insurance") of the Lease shall be modified as follows: In the third (3rd) line
of Section 13.02 the figure "$1,000,000" shall be deleted and inserted therein
shall be the figure "$2,000,000".
3.1.19 Section 13.11 (Other Insurance Matters) of the Lease is hereby
modified to provide that in subparagraph "a" of such Section 13.11, the phrase
"A status" is hereby deleted, and replaced with the phrase "A- status."
3.1.20 Section 15.04b ("Partial Taking of Common Areas") of the Lease shall be
modified as follows: In the fourth (4th) line of Section 15.04b, after the
words "parking area" shall be inserted "between the Premises and the Shopping
Center theater".
3.1.21 Section 16.08 ("Intercompany Transfer") of the Lease shall be modified
to provide that at the end of such Section 16.08 the following language shall be
inserted:
Notwithstanding anything to the contrary contained in this Article 16, and so
long as Tenant is not in default under this Lease beyond any applicable period,
Tenant shall have the right, without the prior written consent of Landlord, to
assign the Lease to a corporation or other entity which: [a] is Tenant's parent
organization; or [b] is a wholly-owned subsidiary of Tenant; or [c] is a
corporation of which Tenant or Tenant's Parent Organization owns in excess of
fifty percent (50%) of the outstanding capital stock, or other majority
ownership equity interest; or [d] as a result of a consolidation or merger with
Tenant and/or Tenant's parent corporation shall own substantially all the
capital stock of Tenant or Tenant's parent corporation; or [e] is an entity
which purchases or otherwise acquires all or substantially all of Tenant's
assets or stock. Any assignment of the Lease pursuant to [a], [b], [c], [d], or
[e] above shall be subject to the following conditions: (1) Tenant shall remain
fully liable during the unexpired Lease Term, including any option terms; (2)
any such assignment shall be subject to all of the terms, covenants and
conditions of this Lease and any such transferee shall expressly assume for the
benefit of Landlord the obligations of Tenant under this Lease by a document
prepared by Landlord; (3) the resulting entity pursuant to [d] or [e] above
shall have a net worth and net assets equal to or greater than the net worth and
net assets of Tenant as of the Effective Date; (4) Tenant shall give Landlord
notice of such assignment at least thirty (30) days prior to its effective date
(which notice shall include all documentation necessary to verify the conditions
contained in this paragraph); and (5) Tenant shall reimburse Landlord for
Landlord's reasonable documentation costs incurred in conjunction with the
processing and preparation of documentation for any such assignment, provided
said costs shall not exceed One Thousand Dollars ($1,000.00) per transaction.
Anything to the contrary notwithstanding, Transfers of stock between or among
the present stock holders of Tenant, or partnership interests between the
current partners of Tenant, the issuance of additional capital stock of Tenant,
a public offering of Tenant's capital stock on a recognized national securities
exchange, or a transfer or series of transfers of less than a majority of
Tenant's capital stock (except in the event that Tenant is a publicly-traded
corporation on a recognized national securities exchange, then a transfer or
series of transfers of a majority of Tenant's capital stock shall not be deemed
a change of control for purposes of this Article 16), but all such transactions
shall be subject to subparagraph (1) of this Section 16.08.
3.1.22 Section 27.01 (Tenant's Restricted Right to Signs) of the Lease is
hereby modified to provide that Landlord's prior written consent as required in
the last line of the first paragraph of such Section 27.01 shall not be
unreasonably withheld.
3.1.23 Section 27.02 (Signs - - Center) of the Lease is hereby modified to
provide that Landlord's consent as required by such Section 27.02, shall not be
unreasonably withheld, and further, that Landlord's exercise of it's rights to
use for Landlord's signs the exterior and the roof of the building in which the
Premises is located, shall not materially adversely interfere with the
visibility of Tenant's signs.
3.2 CONSENT OF CHART HOUSE. Chart House hereby consents to the
amendment of Lease as provided in this Agreement.
4. FEE. Assignor shall pay to Landlord, upon execution of this
Agreement by Assignor and Assignee and delivery thereof to Landlord, the sum of
$500, which Assignor agrees is fair compensation for Landlord's handling and
processing of this transaction and as required pursuant to the provisions of
Section 16.05 of the Lease.
5. EFFECT. Except as expressly modified by this Agreement, the Lease
shall remain unchanged and in full force and effect.
6. NO MODIFICATION OR WAIVER. Except as otherwise expressly set forth
herein, nothing in this Agreement shall be deemed to waive or modify any of the
provisions of the Lease.
7. NO OFFER. Landlord and Tenant hereby agree that Landlord's
submission of this Agreement to Tenant shall not constitute an offer to amend
the Lease. This Agreement shall be effective only, and is expressly conditioned,
upon the execution of this Agreement by Landlord and Tenant.
8. BROKERS. Assignor and Assignee shall each hold Landlord, and each
other, harmless from, and indemnify Landlord, and each other. against, all
damages (including attorneys' fees and costs) resulting from any claims that may
be asserted against Landlord, or the other party, by any broker, finder or other
person with whom Assignor and/or Assignee, as the case may be, has, or
purportedly has, dealt in connection with the transactions set forth in this
Agreement.
9. CAPTIONS. The captions and Section numbers appearing in this
Agreement are for convenience only and are not a part of this Agreement and do
not in any way limit, amplify, define, construe or describe the scope or intent
of the terms or provisions of this Agreement.
10. SCHEDULES. The Schedules, if any, attached to this Agreement are
hereby incorporated herein and made a part hereof.
11. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.
12. SUCCESSORS. The provisions of this Agreement shall bind and inure
to the benefit of the heirs, representatives, successors and assigns of the
parties hereto.
13. ATTORNEYS' FEES. In the event that at any time after the date
hereof either Landlord, Assignor or Assignee shall institute any action or
proceeding against the other(s) relating to this Agreement, then and in that
event, the party(ies) not prevailing in such action or proceeding shall
reimburse the prevailing party for the reasonable expenses of attorneys' fees
and all costs and disbursements incurred therein by the prevailing party.
IN WITNESS WHEREOF, this Agreement has been entered into by the parties as
of the day and year first above written.
LANDLORD: GROSSMONT SHOPPING CENTER CO.,
a California Limited Partnership
By: DENELE CO., an Illinois limited partnership,
its general partner
By DELEN MANAGEMENT CO.,
an Illinois corporation, its general partner
By:
Denise Stefan
Chairman of the Board
ASSIGNOR: PIZZA NOVA - LA MESA, INC.,
a California corporation
By:
Name:
Title:
By:
Name:
Title:
ASSIGNEE: CHICAGO PIZZA & BREWERY, INC.,
a California corporation
By:
Name: Ernest T. Klinger
Title: President and Co-chairman of the Board
By:
Name:
Title:
CONSENTED TO BY:
CHART HOUSE: CHART HOUSE ENTERPRISES, INC.,
a Delaware corporation
By:
Name:
Title:
By:
Name:
Title: