Exhibit 10.13
THIS LEASE ("Lease") is made November 1, 1999 , by and between
HUNTINGTON EXECUTIVE PARK, a California Limited Partnership ("Landlord"), and
CHICAGO PIZZA & BREWERY, INC., a corporation incorporated under the laws of the
State of California (Tenant").
In consideration of the mutual covenants and agreements herein
contained, and intending to be legally bound, the parties hereby covenant and
agree as follows:
Article I
Demise
1.01 Leased Premises. Landlord hereby leases to Tenant and Tenant
hereby takes from Landlord, the Leased Premises for the Term (as defined in
Section 1.04) and at the Rent (as defined in Section 2.01) and upon the
provisions and conditions hereinafter set forth. "Leased Premises" and/or
"Premises" mean Landlord's Building, outlined in red on Exhibit A, and described
as follows: a freestanding building containing approximately 8,031 square feet
having a street address of ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
The Leased Premises shall not include the land lying under the Leased Premises.
1.02 Common Areas. Tenant shall have the right to use, in common
with other tenants of the Shopping Center, the Common Areas and Facilities;
subject, however, to the terms and conditions of this Lease, to the right of
Landlord to alter such areas from time to time and to establish from time to
time uniform rules and regulations for the use thereof.
1.03 "Shopping Center" Defined. "Shopping Center" means certain
parcels of land commonly referred to as Huntington Executive Park, situated in
the City of Huntington Beach, State of California, and more particularly
described in Exhibit A attached hereto (as the same may be altered or reduced
from time to time) and any other parcel(s) of land at any time designated by
Landlord to be added thereto (but only so long as such designation remains
unrevoked), which are or are to be used for shopping center and office related
purposes, including but not limited to, expansion area, employee parking, or the
furnishing to the Shopping Center of any utility or other service, for any
office and/or professional building or for any other improvement appropriate or
related to the operation or functioning of the Shopping Center, together with
all buildings on and improvements to any such parcel(s) of land. Landlord shall
have the right to exclude in its discretion, any of the foregoing parcels,
whether or not such parcels shall be used for shopping center and office or
related purposes.
1.04 Term and Commencement Date. The Term shall commence on the
Commencement Date and, unless sooner terminated or extended in accordance with
the terms of this Lease, shall expire on the last day of the last month of the
fifteenth (15th) Lease Year.
The "Commencement Date" means the earlier of two hundred seventy (270)
days from the date that this Lease is signed by both Tenant and Landlord or the
date Tenant opens for business in the Leased Premises. Possession of the Leased
Premises shall be delivered to Tenant within five (5) days following lease
execution. Tenant shall not make any modifications or cause any damage to the
Leased Premises without Landlord's permission until Tenant has waived its
cancellation rights specified in Section 1.06 of this Lease. Promptly after the
occurrence of the Commencement Date, Landlord and Tenant shall execute and
deliver an amendment to this Lease in the form attached hereto as Exhibit C
documenting the Commencement Date, term and expiration date of the Lease. The
term "Lease Year" shall mean a period of twelve (12) consecutive full calendar
months. The first Lease Year shall begin on the Commencement Date, if the
Commencement Date occurs on the first day of a calendar month, otherwise, the
first Lease Year shall begin on the first day of the first full calendar month
after the Commencement Date. Each succeeding Lease Year shall begin on the
anniversary of the first lease Year. The first Lease Year shall include the
period of time, if any, between the Commencement Date and the first day of the
first Lease Year.
1.05 Option to Renew. Tenant may, at its option, renew this Lease
for one (1) renewal term
of five (5) years. The renewal period shall commence immediately upon the
conclusion of the original term of this Lease. This option to renew may be
exercised only by written notice in the manner provided in Section 22.05
hereof no later than one (1) year prior to the expiration date of the
original term of this Lease. This shall be the exclusive and only method of
exercising this renewal option and any other method shall not constitute an
exercise thereof. The renewal term, granted pursuant to this option to renew,
shall be on the same terms and conditions as are to be in effect during the
original terms of this Lease except that: (i) Tenant shall have no further
option to renew this Lease beyond the expiration of the renewal period
created by this Section; (ii) the Minimum Rent for the renewal period shall
be $193,000 per Lease Year.
Tenant's Option to Renew is personal to the original Tenant and may
only be exercised by the original Tenant while occupying the Leased Premises.
If: (i) Tenant shall fail to exercise this renewal option(s)
during the period(s) in which it is available and in the manner required hereby,
or (ii) this Lease is no longer in full force and effect for any reason, or
(iii) Tenant is in default and has not cured said default within the required
cure period, under this Lease, at the time of such exercise, this renewal
option(s) shall terminate, be void and of no further force or effect.
Unless otherwise herein expressly provided, any reference in this Lease
to the "term of this Lease" shall mean the original term hereof and such renewal
period(s), if validly exercised by Tenant pursuant to its option(s) to renew set
forth in this Section, except to the extent that the original term or any
renewal period may be sooner terminated or canceled under any provisions of this
Lease.
1.06 Cancellation Options. The obligations of both Tenant and
Landlord under this Lease are expressly conditioned upon Tenant's procurement of
a liquor license, and the City of Huntington Beach (the "City") approval of
Tenant's use of the Leased Premises and Tenant's procurement of a building
permit for the mutually agreed upon modifications to the Leased Premises. In the
event Tenant is unable to procure the liquor license or approval for either its
intended use of the Leased Premises, as specified in Article 5 of the Lease, or
a building permit, Tenant shall have the Option to Cancel the Lease by giving
Landlord written notice, along with reasonable evidence of City rejection, not
later than ninety (90) days from the date this Lease is signed by both Landlord
and Tenant. Tenant agrees to apply for the liquor license, City approval of
Tenant's use, and submit its plans to the City for plan check not later than
forty-five (45) days from the date the Lease is signed by the parties. In the
event Tenant fails to apply for the liquor license, City approval of use, or
fails to submit its plans to the City within said forty-five (45) day period,
Landlord shall have the Option to Cancel the Lease by giving Tenant written
notice to cancel within ten (10) days following the forty-five (45) day period.
In the event that the Tenant fails to take possession and to open the
Leased Premises for business fixtured, stocked and staffed within two hundred
seventy (270) days from the date both Tenant and Landlord have signed this
Lease, then the Landlord shall have the option, but not the obligation, to
cancel this Lease, in which event, both parties shall be released of any further
liability under this Lease. In such event, Landlord shall be entitled to retain
the Advance Rent specified in Section 2.01A below. All obligations of Tenant set
forth in this section shall be subject to and extended during any period of
force majeure but in no event shall the period of time Tenant has to perform its
obligations be later than twelve (12) months from the date both Tenant and
Landlord have signed the Lease.
Article II
Rent
2.01 Rent Payable. Tenant shall pay to Landlord as rent (sometimes
collectively referred to as "Rent") for the Leased Premises, the following:
A. "Advance Rent," as defined in Section 2.08, means the sum of
$11,250.00;
B. "Minimum Rent," as defined in Section 2.02;
C. "Annual Percentage Rent" means the applicable percent (the
"Annual Percentage"), as
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set forth in Section 2.03, of all Gross Sales (as defined in Section 2.04) in
excess of the applicable Percentage Base as set forth in Section 2.03;
D. Tenant's proportionate share of Operating Costs as defined in
Section 6.04 and as the same may be from time to time adjusted. The first
month's charge shall be due and payable in advance on the Commencement Date and
monthly on the first day of each month thereafter;
E. Tenant's proportionate share of Taxes, as defined in Section
3.01, and Insurance Premiums, as defined in Section 9.02, as the same may be
from time to time adjusted, the first installment of which shall be due and
payable in advance on the Commencement Date and monthly on the first day of each
to be paid each month thereafter;
F. "Security Deposit" means $____-0-______ to be paid pursuant to
Section 2.09 hereof;
G. In addition to Minimum Rent and Annual Percentage Rent, all
additional sums, charges or amounts of whatever nature to be paid by Tenant to
Landlord in accordance with the provisions of this Lease, shall be considered
"Additional Rent" whether or not such sums, charges or amounts are referred to
as such.
2.02 Minimum Rent. Pursuant to the rent schedule listed below,
Tenant hereby covenants and agrees to pay to Landlord, at its office or at such
other place as Landlord may from time to time designate, "Minimum Rent" for the
Leased Premises during the original Term of this Lease, without deduction or
setoff, in equal monthly installments, in advance on the first day of each and
every calendar month during the Term. Set out below is the schedule for Minimum
Rent to be paid by Tenant during the initial lease term (not including the
renewal term specified in Section 1.05.
MINIMUM RENT SCHEDULE
LEASE YEARS MINIMUM RENT (YEARLY) MONTHLY
1 - 5 $135,000 $11,250.00
6 - 10 $145,000 $12,083.00
11 - 15 $167,000 $13,917.00
2.03 Annual Percentage Rent. Tenant shall pay, as Annual Percentage
Rent, for each of the Lease Years, the dollar amount by which six percent (6%)
(the "Annual Percent") of Tenant's Gross Sales (as defined in Section 2.04)
exceeds the Minimum Rent for each Lease Year (the "Percentage Base"). Annual
Percentage Rent shall be due and payable on the fifteenth (15th) day of the
month immediately following the month in which the Annual Percent of Tenant's
Gross Sales (as defined in Section 2.04) for the Lease Year exceeds the Minimum
Rent for the Lease Year. Thereafter, Annual Percentage Rent shall be due and
payable monthly on or before the fifteenth (15th) day of each month on all
additional Gross Sales during the remainder of the Lease Year. Within ninety
(90) days after the end of each Lease Year, the Annual Percentage Rent paid or
payable for such Lease Year shall be adjusted between Landlord and Tenant so as
to reflect the actual Annual Percentage Rent due for such Lease Year, and Tenant
shall promptly pay Landlord or Landlord shall promptly credit to Tenant's
account as the case may be, the amount necessary to effect such adjustment. If
the Minimum Rent is prorated, reduced or abated for any reason, then the
Percentage Base shall be proportionately prorated, reduced or abated for the
same period.
2.04 "Gross Sales" Defined.
(a) "Gross Sales" means the actual sales price of all goods,
wares and merchandise sold, leased, licensed or delivered, and the actual
charges for all services performed by Tenant or by any person, firm or
corporation on its behalf, or by any subtenant, licensee, or concessionaire
in, at, from, or arising out of the use of the Leased Premises, whether for
wholesale or retail, and whether for cash or credit, including the value of
all consideration other than money received, without reserve or deduction for
inability or failure to collect. Gross Sales shall include, without
limitation, sales and services: (i) where the orders therefor originate in,
at, from, or arising out of the use of the Leased Premises, whether delivery
or performance is made from the Lease Premises or from some other place; (ii)
made or performed by mail, telephone or telegraph orders; (iii) made or
performed by
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means of mechanical or other vending devices in the Leased Premises; and (iv)
which Tenant or any subtenant, licensee, concessionaire or other person in
the normal and customary course of its business would credit or attribute to
its operations at the Leased Premises or any part thereof. Any deposit not
refunded shall be included in Gross Sales. Each installment or credit sale
shall be treated as a sale for the full price in the month during which such
sale is made, regardless of the time, if ever, that Tenant receives payment
therefor. No franchise or capital stock tax and no income or similar tax
based on income or profits shall be deducted from Gross Sales. Nothing
contained herein shall imply any consent by Landlord to any sublease, license
or concession in violation of any other term of this Lease.
(b) The following shall not be included in Gross Sales: (i) any
exchange of merchandise between stores of Tenant where such exchange is made
solely for the convenient operation of Tenant's business and not for the purpose
of consummating a sale made in, at or from the Leased Premises, or for the
purpose of depriving Landlord of the benefit of a sale which would otherwise be
made in or at the Lease Premises; (ii) returns to shippers or manufacturers;
(iii) cash or credit refunds to customers on transactions (not to exceed the
actual selling price of the item returned) previously included in Gross Sales;
(iv) sales of trade fixtures, machinery and equipment after use thereof in the
conduct of Tenant's business; (v) amounts collected and paid by Tenant to any
governmental authority for any sales, sales based or excise tax; (vi) amounts
collected from vending machines and pool tables; and (vii) bad debts not
exceeding one percent (1%) of Gross Sales written off by Tenant for income tax
purposes may be deducted from Gross Sales in the Lease Year in which they are
written off, however, if any account receivable previously written off as a bad
debt is later collected, that amount shall be included in the amount of Gross
Sales in the Lease Year in which collected.
(c) Radius Clause: Excepting Tenant's existing ▇.▇.'s Pizza
Restaurant on Main Street, in Huntington Beach, during the Term of this Lease,
neither Landlord nor Tenant, nor any parent, subsidiary, affiliate, franchisee,
officer, director or shareholder of Landlord or Tenant, will within a radius of
five (5) miles of the perimeter of the Shopping Center, either directly or
indirectly, own, operate or be financially interested in, with or without
others, a business like or similar to the business permitted to be conducted
pursuant to this Lease, nor will Landlord or Tenant permit any pizza, brewery,
brewhouse type restaurant within such radius to be operated under a name which
shall be the same or similar to the Tenant's trade name. Without limiting
Landlord's remedies, if this Section is not complied with, in addition to any
other rights or remedies available to Landlord, Landlord shall have the right to
include the gross sales of such other business in the Gross Sales from the
Leased Premises for the purpose of computing Annual Percentage rent due under
this Lease. The provisions of this Section shall survive re-entry into the
Leased Premises by Landlord resulting from a breach of this Lease by Tenant.
2.05 Statements of Gross Sales. Tenant shall deliver to Landlord:
(a) within fifteen (15) days after the end of each calendar month of the Term a
written report signed by Tenant's accountant or by an authorized executive
officer or authorized agent of Tenant and certified by such person to be
complete and accurate, setting forth the Gross Sales made in the preceding
calendar month; and (b) within ninety (90) days after the end of each Lease Year
and within ninety (90) days after the expiration or earlier termination of this
Lease, a statement of Gross Sales for the preceding Lease Year or other period
preceding the termination of this Lease. The annual statement shall be
accompanied by a signed certificate of an authorized executive officer stating
specifically that: (i) he or she has examined the report of Gross Sales for the
preceding Lease Year; (ii) such report presents fairly the Gross Sales of the
preceding Lease Year; and (iii) such Gross Sales conform with and are computed
in compliance with the definition of Gross Sales contained in Section 2.04
hereof. If Tenant shall fail to deliver the monthly report or the annual
statement and certificate to Landlord within the time required, then, in
addition to any other rights of Landlord, Landlord shall have the right
thereafter to employ, at Tenant's reasonable expense, an independent certified
public accountant to examine such books and records as may be necessary to
determine the amount of Tenant's Gross Sales for such month or Lease Year, as
the case may be. Both the monthly report and the annual statement shall be in
the form and style and contain such detail as set forth in Exhibit B.
2.06 Tenant's Records. For the purpose of permitting verification
by Landlord of any amounts due as Annual Percentage Rent, Tenant will keep and
preserve for at least two (2) years, and during the Term shall keep at the
Tenant's general accounting office address, original or duplicate books and
records which shall disclose all information required to determine Gross Sales,
including: (i) settlement report sheets of transactions with subtenants,
concessionaires and licensees;
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(ii) daily and/or weekly transaction reports; and (iii) such other records,
if any, which would normally be examined by an independent accountant
pursuant to generally accepted auditing standards in performing an audit of
Tenant's sales. At any time or from time to time but not more than three (3)
times every twenty-four (24) months, unless Tenant is in default, after at
least ten (10) business days' advance notice to Tenant, Landlord and any
mortgagee and/or their respective agents and accountants, shall have the
right to make any examination or audit of Tenant's books and records which
Landlord or such mortgagee may desire to verify or ascertain Gross Sales. If
such audit shall disclose a liability in any Lease Year for Annual Percentage
Rent in excess of the Annual Percentage Rent therefore paid by Tenant for
such period, then Tenant shall promptly pay such excess. Should any such
liability for Annual Percentage Rent equal or exceed two and one half percent
(2-1/2%) of the Annual Percentage Rent previously paid for such Lease Year,
Tenant shall, in addition promptly pay the cost of the audit and interest at
the Default Rate on all additional Annual Percentage Rent then payable, from
the date such additional Annual Percentage Rent should have been paid. Should
any such liability for Annual Percentage Rent equal or exceed five percent
(5%) of the Annual Percentage Rent previously paid for such Lease Year,
Landlord may, in addition to any right or remedy available to Landlord,
terminate this Lease by notifying Tenant in writing within ninety (90) days
after Landlord discovers such liability, and the Term of this Lease shall
expire on the last day of the second full calendar month after the date of
such notice and both parties' obligations shall cease as of that date.
2.07 Payment of Rent. Tenant shall pay all Rent when due and
payable, without any setoff, deduction or prior demand therefor whatsoever. If
Tenant fails to make any payment of rent, including without limitation, Annual
Percentage Rent and Additional Rent when due and payable under this Lease, and
said payment remains unpaid after three (3) business days of written notice by
Landlord, Tenant shall pay to Landlord as a late charge and in consideration of
the additional costs incurred by Landlord and the additional record keeping
required to be performed by Landlord, an additional sum equal to five percent
(5%) of the amount of rent due and owing from Tenant. In addition, any Rent
which is not paid when due shall bear interest from the original due date at the
Default Rate, which is hereby defined as being ten percent (10%) per annum or
the maximum rate of interest for which Tenant may lawfully contract in the State
of California, whichever is less. Any Additional Rent which shall become due
shall be payable, unless otherwise provided herein, on the first day of each
month during the Term. Rent and statements required of Tenant shall be paid and
delivered to Landlord at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ of California. Any payment by Tenant or acceptance by Landlord of a lesser
amount than shall be due from Tenant to Landlord shall be treated as payment on
account. The acceptance by Landlord of a check for a lesser amount with an
endorsement or statement thereon, or upon any letter accompanying such check,
that such lesser amount is payment in full, shall be given no effect, and
Landlord may accept such check without prejudice to any other rights or remedies
which Landlord may have against Tenant.
2.08 Advance Rent. Concurrently with the execution of this Lease,
Tenant shall deposit with the Landlord the Advance Rent as described in Section
2.01 hereof. The Advance Rent shall be applied by Landlord against the first
installment of Rent due hereunder. No interest shall be payable to Tenant on
account of the Advance Rent.
Article III
Taxes
3.01 Tenant to Pay Taxes. Tenant shall pay for each calendar year
(or portion thereof) during the Term, as Additional Rent, all real estate taxes,
ad valorem taxes and assessments, general and special assessments, or any other
tax imposed upon or levied against real estate and/or improvements or upon
owners of real estate and/or improvements as such, rather than levied upon
persons generally, payable with respect to or allocable to Landlord's Building
and parcel, together with the reasonable cost (including fees of attorneys,
consultants, accountants and appraisers) of any negotiation, contest or appeal
pursued by Landlord in an effort to reduce or lower the amount of any increase
in any such tax, assessment or charge, the same being collectively referred to
herein as "Taxes." For the calendar year in which the Term commences or
terminates, Tenant's liability for any Taxes for such year shall be subject to a
pro rata adjustment based upon the number of days of such calendar year falling
within the Term.
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3.02 Payment of Taxes. Taxes shall be paid by Tenant in equal
monthly installments in such amounts as are estimated and billed for each year
by Landlord in its sole discretion at the commencement of the Term or as a
result of revised assessments during the Term and at the beginning of each
successive year during the Term, each such installment being due and payable on
the first day of each calendar month. The first monthly payment shall include a
prorated portion of Tenant's proportionate share of Taxes for the period from
the Commencement Date to the first day of the first full calendar month of the
Term. Within a reasonable time after Landlord's receipt of tax bills for a
particular year, Landlord will notify Tenant of the amount of Taxes for the year
in question and the amount of Tenant's proportionate share thereof. The
proportionate share paid or payable for each year shall be adjusted between
Landlord and Tenant, and Tenant shall pay Landlord or Landlord shall credit to
Tenant's account (or, if such adjustment is at the end of the Term, pay Tenant),
as the case may be, within ten (10) days of the aforesaid notice, the amount
necessary to effect such adjustment. Landlord shall provide the aforesaid notice
to Tenant within sixty (60) days of receipt by Landlord.
3.03 Taxes on Rent. In addition to Taxes, Tenant shall pay to the
appropriate agency any and all sales, income and excise taxes (not including,
however, Landlord's income personal or estate taxes) levied, imposed or assessed
by the State of California or any political subdivision thereof or other taxing
authority upon any Rent payable hereunder.
3.04 Tenant's Municipal, County, State or Federal Taxes. Tenant
shall be responsible for and shall pay, before delinquency, all municipal,
county, state or federal taxes assessed against: (i) the income or gross
receipts of Tenant; and/or (ii) any leasehold interest or any fixtures,
furnishings, equipment, stock-in-trade or other personal property of any kind
owned, installed or used in or on the Premises.
Article IV
Improvements
4.01 Improvements.
(a) Landlord has no obligation to alter, remodel or improve the
Premises in any way. Tenant agrees to accept the Premises in an "as is"
condition. Tenant further agrees to fully and promptly pay for all improvements
and to indemnify and hold Landlord harmless from and against any loss, cost,
expense or lien in connection therewith.
(b) Tenant shall submit to Landlord, on or before thirty (30) days
after the date of this Lease, drawings for the renovation of the Premises.
(c) Within ten (10) days after the receipt of the Tenant's
drawings, Landlord, by notice in writing addressed to Tenant, shall indicate
Landlord's approval of them or clearly specify any objections to them, the
objections in all events to be reasonable. Failure by Landlord to provide notice
to Tenant within ten (10) days shall be construed as Landlord's acceptance of
said drawings. Tenant will, within ten (10) days after receipt of a notice of
disapproval, as aforesaid, appropriately amend and modify the drawings so as to
reflect all changes, modifications and corrections that Landlord reasonably
requests. The revisions and resubmissions shall continue until Landlord approves
in writing the drawings. The work to be performed by Tenant as described in the
drawings therefore, approved by Landlord as provided above, are herein referred
to as "Tenant's Work."
(d) The drawings for Tenant's Work shall be prepared by licensed
architects hired by Tenant. Tenant shall bear all costs of preparing the
drawings. Landlord's approval of the drawings shall not constitute an opinion or
agreement that they are in compliance with law (it being agreed that such
compliance is solely Tenant's responsibility) nor shall such approval impose any
present or future liability on Landlord or waive any of Landlord's rights under
this Lease, except as set forth in 4.01(c). Tenant shall provide Landlord with
two (2) sets of the drawings.
(e) Tenant shall commence, construct, perform and complete all
Tenant's Work in a good and workmanlike manner, in complete accordance with the
drawings approved by Landlord.
(f) At all times prior to the Commencement Date, all the
provisions, covenants and
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conditions of the Lease shall be applicable to the Premises other than
Sections II, III, IV, V, VI, VIII and XIV.
(g) Prior to the commencement of construction of Tenant's Work,
Tenant shall obtain, at its sole cost and expense, all permits and licenses and
other consents and approvals of all governmental authorities as may be required
in connection with Tenant's Work and shall deliver copies thereof to Landlord.
Tenant shall, at its sole cost and expense, furnish to Landlord all certificates
and approvals with respect to work done by Tenant or on Tenant's behalf that may
be required from any governmental authority for the issuance of a certificate of
occupancy for the Premises and shall obtain such certificate and furnish
Landlord with a copy of such certificate prior to the Commencement Date.
(h) Tenant's Work and all of Tenant's trade fixtures and equipment
shall be performed, constructed and installed in accordance and in full
compliance with all applicable governmental requirements, including without
limitation all applicable laws, statutes, codes, ordinances and governmental
rules, regulations and orders, as well as reasonable rules and regulations
established by Landlord. Tenant's Work shall be performed without interference
and disruption to Landlord or other tenants.
(i) Prior to commencement of work, any contractor used by Tenant
to perform Tenant's Work (of, any kind whether improvements or alterations),
shall provide Landlord with proof of insurance reasonably acceptable to Landlord
and naming Landlord as additionally insured. In connection with the performance
of Tenant's Work or the use and occupancy of the Premises, Tenant shall not
permit anything to occur which directly or indirectly interferes in any way with
the use and occupancy of any tenant or the normal operations of the Shopping
Center.
(j) As part of its Improvements, Tenant shall install a grease
trap on the Leased Premises' sewer line before connection with the main sewer
line servicing the Shopping Center. Tenant shall install the grease trap in a
location mutually acceptable to Landlord and Tenant.
4.02 Alterations. Tenant covenants and agrees that it will not make
or permit any structural or nonstructural alterations of the Leased Premises in
excess of Fifty Thousand ($50,000.00) Dollars except by and with the prior
written consent of the plans and specification therefor by Landlord. All
alterations and other improvements made by Tenant shall be made in a good and
workmanlike manner in accordance with all applicable laws, shall become the
immediate property of Landlord and shall remain for the benefit of Landlord
unless otherwise provided in the written consent mentioned above. Tenant shall
obtain and furnish Landlord with all permits that may be required for and prior
to the commencement of such work. Tenant further agrees in the event of making
such alterations as herein provided, fully and promptly to pay for same and to
indemnify and save Landlord and the Shopping Center harmless from and against
any loss, cost, expense or lien in connection therewith. In the event any such
alterations are removed by Tenant (without hereby implying Landlord's consent to
such removal), Tenant shall, at its sole cost and expense, repair any damage to
the Leased Premises occasioned by such removal.
4.03 Changes and Additions to Buildings. The Landlord hereby
reserves the right at any time and from time to time to make additions or
alterations to any buildings in the Shopping Center. The Landlord also reserves
the right to construct other buildings or improvements in the Shopping Center
from time to time and to make alterations thereof or additions thereto and to
build additional stories on any building or buildings or to build adjoining same
or to construct double-deck or elevated parking facilities. Notwithstanding
anything contrary herein, this section shall not be applicable to the Premises
and Landlord shall use reasonable care not to interfere or disrupt Tenant's
business or its customers. Further, excepting parking spaces lost due to the
Dedication (pursuant to paragraph 3 of Addendum #1), Landlord shall not reduce
the number of parking spaces currently existing on the Restaurant Parcel of the
Shopping Center (shaded in blue on Exhibit A) by more than three (3) spaces
without Tenant's approval, which approval shall not be unreasonably delayed or
withheld.
4.04 Mechanic's Liens. The interest of Landlord in the Shopping
Center and the Premises shall not be subject to liens for improvements made by
Tenant.
Notwithstanding anything to the contrary contained in the statutes of
the State of California or
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in this Lease, Tenant shall not be deemed to be a partner, joint venturer or
agent of Landlord; and in no event shall any lien resulting from Tenant's
improvements to the Premises encumber Landlord's underlying fee simple
estate. Tenant agrees that it shall not enter into any contract for
improvements to the Premises unless the following language is included in
such contract:
"Notwithstanding anything herein contained to the contrary, the
contractor acknowledges that CHICAGO PIZZA & BREWERY, INC. holds only a
leasehold interest in the property which is the subject of this
contract. CHICAGO PIZZA & BREWERY, INC. is not the agent of the owner
of the property, and no lien resulting from work performed under this
contract shall attach to the interest of such owner."
Tenant shall not permit any work to be commenced until such time as Tenant has
provided Landlord with a fully executed copy of the construction contract
evidencing incorporation of the aforesaid language. In addition, prior to the
commencement of the work, Tenant shall post the following notice in a
conspicuous place on the Premises, and shall assure that such notice is
maintained throughout the entire course of construction:
"NOTICE TO CONTRACTORS, SUBCONTRACTORS, MATERIALMEN
AND LABORERS
Notice is hereby given that work on ▇.▇.'S CHICAGO PIZZA,
GRILL & BREWERY, located at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ of California, is being performed for CHICAGO PIZZA & BREWERY, INC..
CHICAGO PIZZA & BREWERY, INC. is not the agent of the owner of this property,
and any lien rights shall be limited to the Leasehold estate of CHICAGO PIZZA &
BREWERY, INC. and shall in no event attach to the interest of the owner."
If, for whatever reason, any mechanic's or other lien shall be
filed against the Premises, or the Shopping Center, purporting to be for labor
or material furnished or to be furnished at the request of Tenant, then Tenant
shall, at its expense, cause such lien to be discharged of record by payment,
bond or otherwise as allowed by law, within ten (10) days after the filing
thereof. If Tenant shall fail to cause such lien to be discharged of record
within such ten (10) day period, Landlord, in addition to any other rights and
remedies, may, but shall not be obligated to, cause such lien to be discharged
by payment, bond or otherwise, without investigation as to the validity thereof
or as to any offsets or defenses thereto, and Tenant shall, upon demand,
promptly within ten (10) days, reimburse Landlord for all amounts paid and costs
incurred, including attorneys' fees and interest thereon at the maximum legal
rate from the respective dates of Landlord's payments therefor, in having such
lien discharged of record, and, further, Tenant also shall otherwise indemnify,
protect, defend and save Landlord harmless from any claim or damage resulting
therefrom.
Article V
Conduct of Business by Tenant
5.01 Use of Premises. Tenant shall use the Leased Premises solely
to operate a ▇.▇.'S CHICAGO PIZZA, GRILL & BREWERY restaurant serving liquor,
beer, wine and food, and such other items for sale as Tenant shall offer in any
of its other restaurants, (the "Permitted Use") and for no other purpose
whatsoever. Tenant's right to use the Premises for the Permitted Use is
expressly conditioned upon Tenant obtaining all required liquor permits from the
Department of Liquor Control of the State of California and maintaining such
liquor permits in full force and effect throughout the Term of this Lease in
full compliance with all laws, rules and regulations in connection therewith.
From and after the Commencement Date, Tenant shall occupy the Leased Premises
and shall conduct continuously in the Leased Premises the business above stated.
Tenant will not use or permit, or suffer the use of, the Leased Premises for any
other business or purpose or any purpose contrary to law or the rules and
regulations of any public authority or in any manner deemed extra hazardous on
account of fire or otherwise nor in any manner so as to increase the cost of
fire and extended coverage insurance of the Leased Premises.
5.02 Operation of Business. Tenant shall operate continuously one
hundred percent (100%) of the Leased Premises for the Permitted Use (and such
other use as necessary to comply with this section) during the entire term under
the trade name ▇.▇.'S CHICAGO PIZZA, GRILL & BREWERY, with due diligence and
efficiency so as to produce the maximum amount of Gross Sales which may
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be produced by such manner of operation. Tenant shall carry at all times in
the Leased Premises a stock of merchandise of such size, character and
quality as shall be reasonably designed to produce the maximum amount of
Gross Sales. Tenant agrees to keep the Premises open for business from at
least 12:00 noon to 11:00 p.m., seven days per week; provided, however, (i)
Tenant may open for business with the public as early as 11:00 a.m. and may
remain open past 2:30 a.m. (however, Tenant shall not serve liquor, beer or
wine past 2:30 a.m.); (ii) the above hours are not in conflict with any law,
ordinance or union contract provisions; (iii) Tenant shall be relieved of
such obligation to operate during such hours to the extent it may be
necessary that the Premises be closed on account of the order of any duly
constituted authority, or for the purpose of making repairs or improvements,
or during the period of any strikes, lockouts, emergencies or other causes
beyond Tenant's control, so long as Tenant shall make all reasonable efforts
to shorten such periods; and (iv) Tenant is permitted to close on the
following holidays: New Year's Day, Easter Sunday, Fourth of July,
Thanksgiving and Christmas Day, and as may be mutually agreed to by both
parties. Tenant shall keep the display windows and signs, if any, in the
Leased Premises well lighted during the hours from sundown to 11:00 p.m.,
unless prevented by causes beyond the control of Tenant.
5.03 Storage, Office Space. Tenant shall warehouse, store
and/or stock in the Leased Premises only such goods, wares and merchandise as
Tenant intends to offer for sale at retail at, in, from or upon the Leased
Premises. This shall not preclude occasional emergency transfers of merchandise
to the other stores of Tenant, if any, not located in the Shopping Center.
Tenant shall use for office, clerical or other non-selling purposes only such
space in the Leased Premises as is from time to time reasonably required for
Tenant's business in the Leased Premises.
5.04 Deliveries. All deliveries to the Leased Premises
shall be made through the rear entrance to the Leased Premises.
Article VI
Parking and Common Areas and Facilities
(see Section 3 and 4 of Addendum #1 to the Lease)
6.01 Common Areas and Facilities. "Common Areas and Facilities"
means the portions of the Shopping Center, whether owned or ground leased by
Landlord or made available for use by other owners or ground lessors of parcels
within the Shopping Center, which have, at the time in question, been designated
and improved for common use by or for the benefit of more than one occupant of
the Shopping Center; including, without limitation (if and to the extent
facilities therefor are provided by the Landlord at the time in question), the
land and facilities utilized as: parking lots; access and perimeter roads;
landscaped areas; exterior walks, lakes, arcades, stairways and ramps;
underground storm and sanitary sewers, utility lines and the like installed at
the cost of Landlord; but excluding all portions of the Shopping Center which
are (i) used or intended for use by one occupant only; or (ii) designated by
Landlord for the exclusive use of office tenants, including without limitation
all interior corridors and public lavatories. Any portion of the Shopping Center
so 'included within Common Areas and Facilities shall be excluded therefrom when
designated by Landlord for a non-common use, and any portion thereof not
theretofore included within Common Areas and Facilities shall be included when
so designated and improved for common use.
6.02 Control of Common Areas and Facilities by Landlord. All Common
Areas and Facilities shall at all times be subject to the exclusive control and
management of the Landlord, and the Landlord shall have the right from time to
time to establish, modify and enforce reasonable rules and regulations with
respect to all facilities and areas mentioned in this Article. The Landlord
shall have the right to construct, maintain and operate lighting facilities on
all such areas and improvements; to police the same; from time to time to change
the size area, level, location and arrangement of parking areas and other
facilities referred to above; to restrict parking by tenants, their officers,
agents and employees to employee parking areas; to close all or any portion of
such areas or facilities to such extent as may, in the opinion of Landlord's
counsel, be legally sufficient to prevent a dedication thereof or the accrual of
any rights to any rights to any person or the public therein; to close
temporarily all or any portion of the parking areas or facilities; to discourage
non-customer parking; and to do and perform such other acts in and to such areas
and improvements as, in the use of good business judgment, the Landlord shall
determine to be advisable with a view to the improvement of the convenience and
use thereof by Tenant, other tenants and their officers, agents, employees and
customers. The Landlord will operate and maintain the Common Areas and
Facilities
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in such manner as the Landlord, in its sole discretion, shall determine from
time to time. Without limiting the scope of such discretion, the Landlord
shall have the full right and authority to employ all personnel and to make
all rules and regulations pertaining to and necessary for the operation and
maintenance of the Common Areas and Facilities.
Notwithstanding the above, Landlord shall not reduce the Leased
Premises. Any physical changes to the Shopping Center, or any changes to or new
rules or regulations of the Landlord that materially limit, or reduce, Tenant's
capability to reasonably conduct its business, as set forth in section V, shall
reduce Tenant's rent on a prorata basis based on a verifiable reduction of
Tenant's Gross Sales of twenty percent (20%) or greater for the twelve (12)
months following a change compared to the twelve (12) months preceding the
change. As the result of any material physical changes to the Shopping Center or
Shopping Center rules and regulations changes by the Landlord, if Tenant can no
longer reasonably operate as a restaurant, Tenant shall have the option to
terminate the Lease. For purposes of this paragraph, the changes to the parking
area and signage caused by the Dedication specified in paragraph 3 of Addendum
#1 to the Lease shall be excluded.
6.03 License. All Common Areas and Facilities, which the Tenant may
be permitted to use and occupy, are to be used and occupied under a revocable
license, and if the amount of such areas be diminished, the Landlord shall not
be subject to any liability however the Tenant shall be entitled to diminution
or abatement of Rent subject to verification of loss of revenue by Tenant, as
specified in Section 6.02 above, however, such diminution of such areas shall
not be deemed constructive or actual eviction.
6.04 Tenant to Share Expense of Common Areas and Facilities.
(a) Tenant shall pay during the Term as Additional Rent its
proportionate share of Landlord's Operating Costs. Tenant's proportionate share
(which share shall not be more than eleven percent (11%) during the term of the
Lease) of Landlord's Operating Costs shall be computed by multiplying the
operating costs for the period then being billed by a fraction, the numerator of
which is the Land Area of the Restaurant Parcel (as shown on Exhibit A) and the
denominator of which is the total Land Area of Huntington Executive Park. Such
proportionate share shall be paid by Tenant in equal monthly installments in
such amounts as are estimated and billed by Landlord at the commencement of the
Term and at the beginning of each successive calendar year, each such
installment being due on the first day of each calendar month. The first monthly
payment shall include a prorated portion of Landlord's Operating Costs for the
period from the Commencement Date to the first day of the first full calendar
month of the Term. For the calendar year in which the Term commences or
terminates, Tenant's liability for its proportionate share of Landlord's
Operating Costs shall be subject to a pro rata adjustment based upon the number
of days of such calendar year falling within the Term. Within a reasonable time,
not to exceed six (6) months, after the end of each calendar year, Landlord
shall deliver to Tenant a statement of Landlord's Operating Costs for such
calendar year, and the monthly installments paid or payable shall be adjusted
between Landlord and Tenant, and Tenant shall pay Landlord or Landlord shall
credit to Tenant's account (or, if such adjustment is at the end of the Term,
pay Tenant), as the case may be, within fifteen (15) days of receipt of such
statement, such amounts as may be necessary to effect such adjustment for such
calendar year. Upon reasonable notice, Landlord shall make available for
Tenant's inspection at Landlord's office, during normal business hours,
Landlord's records relating to Landlord's Operating Costs for the preceding
calendar year. Failure of Landlord to provide the statement called for hereunder
within the time prescribed shall not relieve Tenant of its obligations
hereunder, however, for every thirty (30) day period said statement is delayed,
Landlord's administrative fee (under Section 6.05) shall be reduced by five
percent (5%) for that year.
(b) Tenant's proportionate share of any increase in Operating
Costs for Lease Years two (2) through five (5) shall not exceed one hundred five
percent (105%) of Tenant's proportionate share of those expenses for the
preceding Lease Year (the "Cap"), unless Tenant's proportionate share percentage
increase of those expenses for any preceding Lease Year was less than the Cap,
in which event the difference between the Cap and the lesser percentage increase
shall be carried forward and added to the Cap for the current Lease Year and
future Lease Years.
6.05 "Landlord's Operating Costs" Defined. "Landlord's Operating
Costs" means the costs and expenses of every kind and nature paid or incurred in
operating, maintaining and preserving Landlord's Building, and the Common Areas
and Facilities, including, without limitation, all costs and
10
expenses of: (i) installation, maintenance, repair, replacement, improvement,
operation, lighting, signing, cleaning, painting, striping, policing and
security (including cost of uniforms, equipment and employment taxes); (ii)
alarm systems, provided the costs are incurred in connection with the Common
Areas and Facilities as defined in section 6.01; (iii) insurance, including
liability insurance for personal injury, death and property damage, insurance
against fire, extended coverage, flood, theft or other casualties, worker's
compensation insurance covering personnel, fidelity bonds for personnel,
insurance against liability for defamation and claims of false arrest, and
plate glass insurance for glass exclusively serving the Common Areas and
Facilities, provided the costs are incurred in connection with the Common
Areas and Facilities as defined in section 6.01; (iv) maintenance of
sprinkler systems serving the Leased Premises, and the Common Areas or
Facilities; (v) removal of snow, ice, trash and debris, provided it is
removal from the parking areas and not general rubbish removal; (vi)
regulation of traffic; (vii) inspection and depreciation of machinery and
equipment used in the operation and maintenance of the Shopping Center,
together with personal property taxes, rent and other charges incurred in
connection with such equipment, provided the costs are incurred in connection
with the Common Areas and Facilities as defined in section 6.01; (viii) fire
protection and fire hydrant charges; (ix) paving, curbs, walkways,
landscaping, guardrails, bumpers, fences, screens, flagpoles, bicycle racks,
traffic signals, markers and signs, drainage, pipes, ducts, conduits and
similar items, and lighting facilities; (x) planting, replanting and
replacing flowers, shrubbery and planters; (xi) costs associated with
maintenance of the lake including pumps and related equipment; (xii)
reasonable capital cost reserves for Landlord's parking lots; (xiii) water;
(xiv) sewage charges; (xv) services, if any, furnished by Landlord for
nonexclusive use of all tenants; (xvi) all license and permit fees, and all
parking surcharges that may result from any environmental or other laws,
rules, regulations guidelines or orders; (xvii) obtaining and operating
public transportation or shuttle bus systems used in connection with bringing
customers to Landlord's Building or if required by any environmental or other
laws, rules, regulations, guidelines or orders; (xviii) rent or other costs
or charges payable by Landlord with respect to any rights, privileges and
easements now or hereafter benefiting the Shopping Center; (xix) personnel,
including, without limitation, security and maintenance people working on the
common areas or providing services to all buildings; and (xx) an allowance
for administrative costs equal to fifteen percent (15%) of the total of the
foregoing costs and expenses. Such costs and expenses shall not include
depreciation (other than depreciation as above specified). The costs and
expenses referred to above are for definition only and are not to be
construed so as to impose any obligation or obligations on Landlord or to
indicate that any particular service or item is required to be furnished by
Landlord. Tenant shall be solely responsible for the cost of any parking lot
replacements on the Restaurant Parcel (Parcel 3B on Exhibit A) and any
landscape replacements in the planters adjacent to Landlord's Building marked
in yellow on Exhibit A.
Article VII
Signs
7.01 Signs. Tenant shall at its sole cost erect and maintain a
sign, advertising Tenant's business, on the exterior front and on the freeway
side of the Leased Premises and on the monument sign for the Landlord's Building
on Beach Boulevard. Due to Landlord's dedication of land to the City of
Huntington Beach for a right hand turn lane on Beach Boulevard, the monument
sign may be relocated from its current location at the time of Lease execution.
Tenant's sign(s) shall conform to Landlord's standard sign criteria.
Tenant shall not install any sign(s) facing on the parking areas or elsewhere on
the Leased Premises or in the Shopping Center, or place on the roof or any
exterior wall (including both the interior and exterior surfaces of windows and
doors) of the Leased Premises any sign, symbol, advertisement, neon or other
light, shade, or any other object or thing visible to public view outside of the
Leased Premises, without first obtaining Landlord's approval as to whether the
same shall be so installed or placed and, if so, as to the location, number,
type and appearance of each thereof. In addition, prior to installation of any
exterior signage Tenant shall first obtain the necessary approvals and permits
from the City of Huntington Beach.
Landlord and Tenant agree to use best efforts to submit a design
package to City of Huntington Beach to replace the existing project monument
sign at the corner of Edinger and Beach Boulevard. Landlord shall allow Tenant
to participate in the new project sign provided, however, that Tenant's
participation does not prevent Landlord from replacing the existing project
sign. Tenant's
11
participation in the new project sign is limited to having its name on the
new project sign and sharing the cost of the new project sign. Without any
obligation to Tenant, Landlord shall control the design, location,
construction, cost and all other characteristics of the new project sign. In
the event that the City of Huntington Beach will not allow a new project sign
at the corner of Edinger and Beach, or the City will allow a new project sign
with conditions unacceptable to Landlord, Landlord agrees to allow Tenant,
subject to City approval, to add its logo to the existing project sign
provided, however, that such addition be installed under conditions
acceptable to Landlord and Tenant shall be responsible for all costs
associated with said addition. In no event shall Landlord be obligated to
replace the existing project sign or add Tenant to the existing project sign
if either action will limit, prevent or have any other unacceptable impact
(to Landlord) on signage at the Shopping Center.
Article VIII
Condition and Maintenance of Leased Premises
8.01 Condition of Leased Premises. Tenant acknowledges that neither
Landlord nor its agents have made any representations as to the condition or
repair of the Leased Premises except those specified in this Lease.
8.02 Maintenance by Tenant. The Tenant shall, at all times, keep
the Leased Premises (including maintenance of exterior entrances, all glass,
show window moldings and frames, delivery doors and loading docks) and all
partitions, doors, fixtures, equipment and appurtenances thereof (including
lighting, heating and plumbing fixtures and equipment, sewer systems and any
air-conditioning system exclusively serving the Leased Premises whether located
inside or outside the Leased Premises) in good order, condition and repair
(including reasonable periodic painting as determined by the Landlord), damage
by unavoidable casualty excepted, except for structural portions of the Leased
Premises, which shall be maintained by the Landlord. The Tenant further agrees
to keep the inside and outside of all glass in doors and windows of the Leased
Premises cleaned; to replace promptly at its own expense with glass of a like
kind and quality any plate glass or window glass of the Leased Premises which
may become cracked or broken; not to place or maintain any merchandise or other
articles on the foot walk adjacent thereto or elsewhere on the exterior thereof;
to maintain the Leased Premises in a clean, orderly and sanitary condition and
free of insects, rodents, vermin and other pests; not to permit accumulations of
garbage, trash, rubbish, litter and other refuse in the Leased Premises and the
immediately adjacent portion of the Shopping Center, to remove the same at its
own expense, and to keep such refuse in proper containers (or in trash room
maintained by Tenant) on the exterior of the Leased Premises until called for it
to be removed; to keep all mechanical apparatus free of vibration and noise
which may be transmitted beyond the confines of the Leased Premises; not to
cause or permit objectionable odors to emanate or be dispelled from the Leased
Premises; to comply with all laws and ordinances and all valid rules and
regulations of any Federal, state, municipal or public authority having
jurisdiction with respect to the Leased Premises, and to conduct its business in
the Leased Premises in all respects in a dignified manner in accordance with
high standards of store operation. In the event the Landlord is required to make
repairs: (i) to structural portions of the Leased Premises by reason of Tenant's
negligent acts or negligent omissions to act, or (ii) to the Common Areas and
Facilities of the Shopping Center by reason of the acts of Tenant, its employees
or agents, the Landlord may add the cost of such repairs to the Rent.
8.03 Snow and Ice. Tenant shall provide for the removal of all snow
and ice from the Leased Premises, the sidewalk in front of the Leased Premises
if any, and the customer exits and delivery entrances at the rear of the Leased
Premises, if any. Landlord shall provide for the removal of snow and ice from
the parking areas and driveways of the Shopping Center.
8.04 Landlord's Maintenance and Repairs. Subject to the provisions
of Articles XV and XVI hereof, and except for repairs, maintenance or
replacements made necessary by the acts of Tenant, its employees, agents,
customers or persons making deliveries to the Leased Premises (which repairs,
maintenance or replacements shall be the responsibility of Tenant), Landlord
covenants and agrees:
(a) to maintain in good order, condition replacement and repair
the foundation, roof and exterior walls of the Leased Premises; and
12
(b) to maintain in good order, condition, replacement and repair,
the conduits providing utility services for gas, electricity, sewer and water up
to the Leased Premises.
8.05 Surrender of Premises. At the expiration of the tenancy hereby
created, the Tenant shall surrender the Leased Premises in the same condition as
the Leased Premises were upon delivery of possession thereto under this Lease
and as thereafter improved, reasonable wear and tear excepted, and damage by
unavoidable casualty excepted, and shall surrender all keys for the Leased
Premises to the Landlord at the place then fixed for the payment of Rent and
shall inform the Landlord of all combinations on locks and vaults, if any, in
the Leased Premises. The Tenant shall, if requested by the Landlord, remove all
of its trade fixtures and other improvements before surrendering the Leased
Premises as aforesaid, shall repair any damage to the Leased Premises caused
thereby, and shall restore the Leased Premises to their original condition,
normal wear and tear excepted. The Tenant's obligation to observe or perform
this covenant shall survive the expiration or earlier termination of the Term of
this Lease.
Article IX
Insurance and Indemnity
9.01 Liability Insurance. The Tenant shall, during the entire Term
hereof, keep in full force and effect a policy of public liability and property
damage insurance with respect to the Leased Premises, and the business operated
by Tenant and any subtenants, concessionaires and licensees of the Tenant in the
Leased Premises in which the limits of public liability shall be not less than
$1,000,000 per occurrence and $3,000,000 aggregate. The policies shall name the
Landlord, any person, firms or corporations designated by the Landlord, and the
Tenant as insured, and shall contain a clause that the insurer will not cancel
or change the insurance without first giving the Landlord thirty (30) days prior
written notice. The policies shall be written to provide that such coverage
shall be primary and that any insurance maintained by Landlord shall be excess
insurance only. All such insurance shall provide for severability of interests;
shall provide that an act or omission of one of the named insureds shall not
reduce or avoid coverage to the other named insureds; and shall afford coverage
for all claims based on acts, omissions, injury and damage, which claims
occurred or arose (or the onset of which occurred or arose) in whole or in part
during the policy period. Any deductible amounts under any insurance policies
required hereunder shall be subject to Landlord's prior written approval. Such
insurance shall be in an insurance company with a Best rating of not less than
A- and a copy of the policy or a certificate of insurance shall be delivered to
the Landlord prior to the Commencement Date.
9.02 Landlord's Insurance.
(a) Tenant will pay Landlord, as Additional Rent, a proportionate
share of the cost of all insurance as Landlord may from time to time maintain
with respect to the Leased Premises (including, but without limitation,
comprehensive general liability insurance, fire, extended coverage, vandalism
and malicious mischief and all-risk insurance, flood insurance, loss of rent
insurance, and boiler and sprinkler insurance), provided such coverage is with
respect to the Premises and the Common Areas and Facilities. Such insurance may
include Landlord's interest in the improvements and betterments installed in the
Premises by Tenant (except inventory, trade fixtures, wall and floor coverings,
furniture and other personal property of Tenant removable by Tenant under the
provisions of this Lease), whether the same have been paid for entirely or
partially by Tenant.
(b) Tenant will pay in twelve (12) consecutive equal monthly
installments in such amounts as are estimated and billed by Landlord at the
commencement of the Term and at the beginning of each successive billing period,
each installment being due on the first day of each calendar month. The first
monthly payment shall include a prorated portion of Insurance Premiums for the
period from the Commencement Date to the first day of the first full calendar
month of the Term of this Lease. Within a reasonable time after the end of each
calendar year, Landlord shall deliver to Tenant a statement of Insurance
Premiums for the previous year, and the monthly installments paid or payable
shall be adjusted between Landlord and Tenant, and Tenant shall pay Landlord or
Landlord shall credit Tenant's account (or, if such adjustment is at the end of
the Term, pay Tenant), as the case may be, within fifteen (15) days of receipt
of such statement, such amounts as may be necessary to effect such adjustment
for such year.
13
(c) Tenant shall have no rights in any policy or policies
maintained by Landlord and shall not, by reason of the reimbursement required by
this section, be entitled to be a named insured thereunder.
(d) Tenant shall furnish Landlord, within thirty (30) days after
the Commencement Date, a written statement, certified by Tenant or an executive
officer of Tenant, of the actual cost incurred by Tenant in making all
improvements and betterments to the Leased Premises, in order to assist Landlord
in providing adequate insurance coverage.
9.03 Mutual Waiver of Subrogation. Landlord and Tenant hereby
release each other to the extent of their respective insurance coverage, from
any and all liability to the other or anyone claiming through or under it by way
of subrogation or otherwise, for any loss or damage to property covered by the
fire or extended coverage insurance policies carried by Landlord and Tenant,
respectively, even if such damage shall have been caused by the fault or
negligence of the other party, or anyone claiming through or under it, provided
however, that this release shall be applicable and in force and effect only with
respect to loss or damage occurring during such time as such policies shall
contain a clause or endorsement to the effect that any such release shall not
adversely affect nor impair such policies or prejudice the right to recover
thereunder. Each party agrees that its policies of insurance will include such a
clause or endorsement so long as the same shall be obtainable.
9.04 Indemnification. The Tenant will indemnify the Landlord and
save it harmless from and against any and all claims, actions, damages,
liability, suits and expense in connection with the loss of life, personal
injury and damage to property arising from or out of any occurrence in, upon, or
at the Leased Premises, or the occupancy or use by the Tenant of the Leased
Premises or any part thereof, or the conduct by Tenant of its business therein,
thereon and therefrom, or occasioned wholly or in part by any act or omission of
the Tenant, its agents, contractors, employees, servants, lessees or
concessionaires or the sale of merchandise by Tenant in, on or from the Leased
Premises. In case the Landlord shall be made a party to any litigation commenced
by or against the Tenant, then the Tenant shall protect and hold the Landlord
harmless and shall pay all costs, expenses and reasonable attorneys' fees
incurred or paid by Landlord in connection with such litigation. The Tenant
shall also pay all costs, expenses and reasonable attorneys' fees that may be
incurred or paid by the Landlord in the enforcing of the covenants and
agreements of this Lease.
The Landlord will indemnify the Tenant and save it harmless from and
against any and all claims, actions, damages, liability, suits and expenses in
connection with the loss of life, personal injury and damage to property arising
from or out of any occurrence in, upon, or at the Shopping Center, or the
occupancy or use by the Landlord of the Shopping Center, or any part thereof,
caused by the negligent or wrongful conduct of the Landlord of its business
therein, thereon and therefrom, or occasioned by the negligent or wrongful act
or omission of Landlord, its agents, employees, or the sale of merchandise by it
on or from the Shopping Center. In case the Tenant shall be made a party to any
litigation commenced against Landlord, Landlord shall protect and hold Tenant
harmless therefrom and pay all costs, expenses and reasonable attorneys fees
incurred by Tenant therein.
9.05 Increases in Fire Insurance Premiums Attributable to Tenant.
Tenant shall not keep, use, sell or offer for sale in or upon the Premises any
article which may be prohibited by the standard form of fire insurance policy.
Tenant agrees to pay one hundred percent (100%) of any increase in premiums for
fire and extended coverage insurance that may be charged during the Term on the
amount of such insurance which may be carried by Landlord on Landlord's
Building, resulting from the type of merchandise sold by Tenant in the Premises,
whether or not Landlord has consented to the same. In determining whether
increased premiums are the sole result of Tenant's use of the Premises, a
schedule, issued by the organization making the insurance rate on the Premises,
showing the various components of such rate, shall be evidence of the several
items and charges which make up the fire insurance rate on the premises. If said
amount results in an increase of ten percent (10%) or more in Tenant's insurance
charge, said rates shall be subject to arbitration.
In the event Tenant's occupancy causes any increase of premium for the
fire, and/or casualty rates on Landlord's Building, Tenant shall pay the
additional premium on the fire and/or casualty insurance policies by reason
thereof. The Tenant also shall pay, in such event, any additional premium on the
rent insurance policy that may be carried by the Landlord for its protection
against rent loss through fire. Bills for such additional premiums shall be
rendered by Landlord to Tenant, within sixty (60) days of receipt by Landlord,
and shall be due from, and payable by, Tenant within
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thirty (30) days of receipt by Tenant, and the amount thereof shall be deemed
to be, and be paid as, Additional Rent.
Article X
Utilities
10.01 Utility Charges. The Tenant shall be solely responsible for
and promptly pay all charges for heat, water, sewer, gas, oil, electricity and
any other utility used or consumed in the Leased Premises. In no event shall the
Landlord be liable for an interruption of or failure in the supply of, or for
the quantity or quality of, any of such utilities to the Leased Premises (unless
due to the willful negligence or misconduct of Landlord) and no such
interruption or failure shall ever be deemed to be an actual or constructive
eviction.
Article XI
Subordination, Estoppel Certificate
11.01 Mortgage Subordination. Tenant agrees that, within ten (10)
days after written request of Landlord, it will subordinate this Lease to the
lien of any present or future mortgage to a bank, savings and loan association,
insurance company, real estate investment trust or similar institution,
irrespective of the time of execution or time of recording of any such mortgage.
Tenant agrees that if the mortgagee or any person claiming under the mortgage
shall succeed to the interest of Landlord in this Lease, it will recognize such
mortgagee or person as its landlord under the terms of this Lease. The word
"mortgage" as used herein includes mortgages, deeds of trust or other similar
instruments and modifications, consolidations, extensions, renewals,
replacements and substitutes thereof. Nothing contained herein shall take away
any of Tenant's rights or benefits as set forth in this Lease.
11.02 Estoppel Certificates. At any time and from time to time
Landlord and Tenant each agree, within ten (10) days after request in writing
from the other, to execute, acknowledge and deliver to the other or to any
person designated by the other a statement in writing certifying that the Lease
is unmodified and in full force and effect (or if there have been modifications,
that the same is in full force and effect as modified and stating the
modifications), that the other party is not in default in the performance of its
covenants hereunder (or if there are such defaults, specifying the same), and
the dates to which the rent and other charges have been paid.
Article XII
Assignments and Subletting
12.01 Landlord's Consent Required. Tenant will not mortgage, pledge,
encumber, assign or in any manner transfer this Lease, in whole or in part, nor
sublet all or any part of the Leased Premises, nor license concessions or lease
departments therein, without, in each instance, first obtaining the written
consent of Landlord. The within prohibition against transfer without the
Landlord's prior written consent includes any subletting or assignment which
would otherwise occur by operation of law, merger, consolidation,
reorganization, transfer or other change of Tenant's corporate or proprietary
structure, or an assignment, subletting to or by a receiver or trustee in any
federal or state bankruptcy, insolvency, or other proceedings. The consent by
Landlord to any assignment, subletting or other transfer shall not constitute a
waiver of the requirement for such consent to any subsequent assignment,
subletting or other transfer. Any assignment, subletting or other transfer, even
with the consent of Landlord, shall not relieve Tenant from primary liability
for the payment of Rent or from the primary obligation to keep and be bound by
the terms, conditions and covenants of this Lease. If, at any time, Tenant shall
request Landlord's consent to assign or otherwise transfer this Lease or to
sublet all or any portion of the Leased Premises, then Landlord shall have the
right, by notifying Tenant in writing within thirty (30) days after receipt of
such request, to terminate this Lease as of the date specified in such notice
from Landlord to Tenant, which effective date shall be not more than ninety (90)
nor less than thirty (30) days from the date of such notice. In the event of
such termination, all Rent (other than any Rent or Additional Rent due Landlord
resulting from Tenant's failure to perform any of its obligations under this
Lease) shall be adjusted as of the date of such termination. Landlord's failure
or refusal to so terminate this Lease shall not constitute a consent to the
proposed assignment, subletting or other transfer. In the event Tenant shall
assign or sublet the Leased Premises or request the consent of Landlord for any
act
15
that Tenant proposes to do, then Tenant shall pay Landlord's reasonable
attorneys' fees incurred in connection therewith. Should Tenant assign,
sublet or otherwise dispose of the Leased Premises, whether with or without
Landlord's consent, any and all sums payable by virtue of such assignment,
sublease or other demise excluding any amounts received for Tenant's
Furniture, Fixtures, Equipment and Goodwill, shall be due and payable solely
to Landlord. Tenant does hereby appoint Landlord as its attorney-in-fact to
▇▇▇▇ and collect any and all such sums for the use and benefit of Landlord
without liability whatsoever to Tenant.
12.02 Excluded Assignment. Notwithstanding anything to the contrary
contained in this Article XII, 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's parent corporation shall
own substantially all the capital stock of Tenant of 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 the Lease and any such transferee
shall expressly assume for the benefit of Landlord the obligations of Tenant
under this Lease document prepared by Landlord; [3] the resulting entity
pursuant to (d) or (e) above shall have net assets equal to or greater than the
net assets of Tenant as of the Effective Date; and [4] Tenant shall give
Landlord notice of such assignment at least thirty (30) days prior to its
effective date (which shall include all documentation necessary to verify the
conditions contained in this paragraph). Anything to the contrary
notwithstanding, transfers of stock between or among the present stockholders 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 publicly-traded corporation on a recognized national
securities exchange, than 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 XII.
12.03 Acceptance of Rent from Transferee. The acceptance by Landlord
of the payment of Rent following any assignment, subletting or other transfer
restricted or prohibited by this Article shall not be deemed to be a consent by
Landlord to any such assignment or other transfer nor shall the same be deemed
to be a waiver of any right or remedy of Landlord hereunder.
Article XIII
Waste, Governmental Regulations
13.01 Waste or Nuisance. The Tenant shall not commit or suffer to be
committed any waste upon the Leased Premises or any nuisance or other act or
thing which may disturb the quiet enjoyment of any other tenant in Landlord's
Building or in the Shopping Center.
13.02 Governmental Regulations. The Tenant shall, at Tenant's sole
cost and expense, comply with all of the requirements of all county, municipal,
state, federal and other applicable governmental authorities, now in force, or
which may hereafter be in force, pertaining to the Leased Premises, and shall
faithfully observe in the use of the Leased Premises and the Shopping Center all
municipal and county ordinances and state and federal statutes now in force or
which may hereinafter be in force.
Article XIV
Advertising
14.01 Solicitation of Business. The Tenant and Tenant's employees
and agents shall not solicit business or place any signs or advertising devices
in the Common Areas and Facilities, nor
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shall the Tenant distribute any handbills or other advertising matter to
automobiles parked in the parking areas or in other Common Areas and
Facilities without permission from the Landlord.
14.02 Advertised Name. Tenant agrees not to change its trade name or
the advertised name of the business operated in the Leased Premises without
Landlord's prior written consent unless such change is outside Tenant's control
or due to a change of ownership as permitted by the terms of this Lease.
14.03 Promotional Activities. Tenant shall not use any portion of
the Common Areas and Facilities of the Shopping Center for promotional or
advertising activities without the prior written approval of the Landlord.
14.04 Special Sales, Conduct of Business. No auction, fire removal,
closing, going-out-of-business or bankruptcy sales may be conducted in or from
the Leased Premises without the prior written consent of Landlord. Tenant will
not use the sidewalk or mall area adjacent to the Leased Premises for sale or
display of merchandise or wares, nor will it use any loudspeaker, phonograph,
radio or television for advertising in the Shopping Center in such manner that
it may be heard or seen outside the Leased Premises without first securing
Landlord's written consent.
Article XV
Damage or Destruction
15.01 Damage to Leased Premises Repairable Quickly. If the Leased
Premises shall be damaged or destroyed by any cause so as to be unfit for
occupancy and such damage or destruction could reasonably be repaired or rebuilt
within one hundred eighty (180) days from the happening of such damage or
destruction, then Tenant shall not be entitled to terminate this Lease nor shall
Tenant's liability to pay Rent under this Lease cease, but in the case of any
such damage or destruction Landlord shall repair or rebuild the same with all
reasonable speed, and substantially complete such repairs or rebuilding within
one hundred eighty (180) days from the happening of such damage or destruction,
subject to delays beyond its control. If Tenant shall be deprived of the
occupancy of any portion of the Leased Premises because of any such damage or
destruction, but can nevertheless reasonably continue to engage in its business,
a proportionate allowance shall be made to Tenant from the Minimum Rent and
Additional Rent corresponding to the time during which and to the portion of the
Leased Premises of which Tenant shall be deprived on account of such damage or
destruction and the making of such repairs. No Minimum Rent or Additional Rent
shall be payable during such period as Tenant shall be deprived of the occupancy
of the Leased Premises because of such damage or destruction or the effecting of
such rebuilding.
15.02 Non Repairable Quickly. If such damage or destruction cannot
reasonably be repaired or rebuilt within one hundred eighty (180) days from the
happening thereof, Landlord shall notify Tenant within sixty (60) days after the
happening of such damage or destruction whether or not Landlord will repair or
rebuild. If Landlord elects not to repair or rebuild, and the estimated cost to
repair or rebuild is not greater than Five Hundred Thousand Dollars
($500,000.00), and provided Tenant's Gross Sales for the twelve (12) months
prior to the damage or destruction were not less than $3,5000,000, then Tenant
shall have the option to; (a) make such repair, or rebuild and amortize said
costs over the remaining life of the Lease as a reduction to percentage rent due
hereunder, but in no case reduce the percentage rent more than fifty percent
(50%) of the amount due or, (b) elect to terminate this Lease, in which event
the parties shall be relieved from their respective obligations which would
otherwise thereafter accrue. If Landlord shall elect to repair or rebuild,
Landlord shall specify the time within which such repairs or rebuilding will be
completed, and Tenant shall have the option within thirty (30) days after
receipt of such notice, to elect either to terminate this Lease or to extend the
term of the Lease by a period of time equivalent to the time from the happening
of such damage or destruction until the Leased Premises are restored to their
former condition. In the event Tenant elects to extend the Term of the Lease, or
shall fail to terminate this Lease within the time specified, Landlord shall
repair or rebuild the Leased Premises to their former condition within the time
specified in the notice (excluding Tenant's personal property or leasehold
improvements, changes or betterments to the Leased Premises made by or for
Tenant) subject to delays beyond its control, and Tenant shall be entitled to an
abatement of Minimum Rent and Additional Rent in the manner hereinbefore set
forth and this Lease shall continue in full force and effect.
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15.03 Damage to Leased Premises. If more than forty percent (40%) of
the rentable square footage of the Premises is destroyed or damaged by any
cause, and cannot be repaired in the time period set forth in Section 15.01,
Landlord shall have the option, upon giving notice to Tenant within sixty (60)
days after the happening of such damage or destruction to cancel this Lease as
of a date sixty (60) days after the giving of such notice.
15.04 Uninsured Damage; Loss Near End of Term. Notwithstanding the
foregoing, in the event that damage or destruction of the Leased Premises shall
not result from any of the causes covered by Landlord's policies of fire and
extended coverage insurance as now or hereafter constituted, or if Landlord's
mortgagee does not make the applicable insurance proceeds available to Landlord,
or if such damage or destruction shall occur during the last two (2) years of
the original term or any extended term of this Lease, Landlord shall have the
election of repairing or rebuilding, in which event Tenant shall remain liable
under the Lease, or of terminating this Lease, in which event the parties shall
be relieved from their respective obligations which would otherwise thereafter
accrue. Landlord shall give Tenant notice within thirty (30) days after such
damage or destruction of its election.
Article XVI
Eminent Domain
16.01 Taking. If, as a result of the taking by way of appropriation
or right of eminent domain (a "Taking") of any part of the Leased Premises,
Tenant's use of the Leased Premises for the conduct of its business therein is
materially adversely impaired, either party may terminate this Lease, in which
event the parties shall be relieved of all obligations hereunder thereafter
accruing. Tenant's use of the Leased Premises for the conduct of its business
shall be deemed to be "materially adversely impaired" if more than twenty
percent (20%) of the parking spaces on the Restaurant Parcel are taken. This
section (including Sections 16.02 and 16.03) shall not apply to the parking
spaces identified in paragraph 3 of Addendum #1 of this Lease.
16.02 Award. All compensation awarded for any Taking, whether for
the whole or a portion of the Leased Premises or the Shopping Center, shall be
the sole property of Landlord, whether such compensation shall be awarded for
diminution in the value of, or loss of, the leasehold or for diminution in the
value of, or loss of, the fee in the premises, or otherwise, and Tenant hereby
assigns to Landlord all of Tenant's right, title and interest in any and to any
and all such compensation. This section shall not be applicable to an award for
Tenant's Furniture, Fixtures, Equipment, Improvements or Goodwill.
16.03 Non-Termination. If there is a Taking of the Leased Premises
and the Lease does not terminate, the Minimum Rent and Additional Rent will be
reduced by that proportion which the number of square feet of the Leased
Premises of which Tenant is thereby deprived bears to the total square feet
encompassed within the entire Leased Premises immediately prior to such Taking.
Article XVII
Default
17.01 Events of Default and Remedies. In the event that any
installment of Minimum Rent or Additional Rent shall be and remain unpaid for a
period of five (5) days after written notice by Landlord to Tenant; or in the
event Tenant shall at any time be in default in the observance or performance of
any of the other covenants, obligations, terms, or conditions assumed by or
imposed upon Tenant hereunder and such default continues for a period of fifteen
(15) days after written notice to Tenant of such default provided said default
is non monitory and Tenant can reasonably cure said default within said fifteen
(15) days; or if any waste be committed or unnecessary damage done upon or to
the Leased Premises; or if Tenant shall fail to remain open for business for
five (5) consecutive business days except for remodeling, approved by Landlord
or due to events beyond Tenant's control; or if any audit of Tenant's books and
records shall disclose a liability for annual Percentage Rent to the extent of
five percent (5%) or more in excess of the rentals theretofore computed and paid
by Tenant for any period (whether or not Tenant thereafter reimburses Landlord
for such deficiency); or if a temporary or permanent receiver or trustee of
Tenant's property or the
18
property of any guarantor of this Lease ("Guarantor") be appointed by any
court; or if Tenant or any Guarantor shall make any assignment for the
benefit of creditors; or if any execution or attachment shall be issued
against Tenant or any Guarantor or Tenant's leasehold interest hereunder and
shall not be discharged within forty-five (45) days; or if Tenant shall
commence proceedings in a court of bankruptcy or insolvency; or if Tenant or
any Guarantor shall be declared or adjudicated bankrupt or insolvent
according to law; or if any proceedings are commenced against Tenant or
Guarantor in a court of bankruptcy or insolvency, which shall not be
discharged within forty-five (45) days; then, and in any one or more of such
events, Landlord shall be entitled, at its election, to exercise concurrently
or successively, any one or more or all of the following rights and remedies:
(a) Without waiving such default, Landlord may pay any sum
required to be paid by Tenant to third parties other than Landlord and which
Tenant has failed to pay, and may perform any obligation required to be
performed by Tenant for the account of Tenant, and any amount so paid by
landlord shall bear interest thereon at the Default Rate. Any amount or amounts
paid by Landlord for the account of Tenant for the performance of any
obligations required to be performed by Tenant shall be treated as Additional
Rent due hereunder and Landlord may exercise concurrently or successively any
one or more of the rights and remedies contained in this Lease for the
enforcement of the payment of Rent;
(b) Landlord may enjoin any breach or threatened breach by Tenant
of the covenants hereof;
(c) Landlord may bring suit for the collection of the Rent or
other amounts for which Tenant may be in default, or for the performance of
any other covenant devolving upon Tenant for performance, or damages therefor,
all without entering into possession or terminating this Lease;
(d) Landlord may re-enter the Leased Premises by summary
proceedings or otherwise, and take possession thereof, without terminating this
Lease, and thereupon, to expel all persons and remove all property therefrom,
either peaceably or by force, without becoming liable to prosecution therefor,
and relet the Leased Premises making reasonable efforts therefor, for such
periods and upon such terms according to Landlord's sole discretion, and receive
the rent therefrom. Such rent shall be applied first to the payment of the
reasonable expenses of such re-entry and the cost of such reletting, including
but not limited to the expense of such decorations, alterations and remodeling
as shall be incident to such reletting, and then to the payment of the Rent and
other sums accruint hereunder, the balance, if any, to be retained by Landlord
as a security deposit against Tenant's defaults during the remainder of the Term
of this Lease. Tenant, whether or not the Leased Premises are relet, shall
remain liable for any deficiency, which deficiency shall be paid by Tenant to
Landlord, periodically, upon the successive days upon which the Rent hereunder
is payable.
It is agreed that the commencement and prosecution of any action by
Landlord in forcible entry and detainer, ejectment or otherwise, or the
appointment of a receiver, or any execution of any decree obtained in any action
to recover possession of the Leased Premises, or any re-entry, shall not be
construed as an election to terminate this Lease unless Landlord shall, in
writing, expressly exercise its election to declare the term hereunder ended and
to terminate this Lease, and such re-entry or entry by Landlord, whether taken
under summary proceedings, or otherwise, shall not be deemed to have absolved or
discharged Tenant from any of its obligations and liabilities for the remainder
of the term of this Lease.
(e) Landlord may terminate this Lease, re-enter the Leased
Premises and take possession thereof, wholly discharged from this Lease. In the
event Landlord shall elect to terminate this Lease, as aforesaid, all rights and
obligations of Tenant shall cease, except that Landlord shall have and retain
full right to ▇▇▇ for and collect all Rent and other amounts for the payment of
which Tenant shall then be in default and all damages to Landlord by reason of
such breach, and Tenant shall surrender and deliver up the Leased Premises to
Landlord, together with all improvements and additions thereto, and upon any
default by Tenant in so doing, Landlord shall have the right to recover
possession by summary proceedings or otherwise, and to obtain a receiver and
other ancillary relief in such action, and again to have and enjoy the Leased
Premises, fully and completely, as if this Lease had never been made. Tenant
hereby expressly waives any and all rights of redemption granted by or under any
present or future laws in the event of Tenant being evicted or dispossessed for
any cause, or in the event Landlord obtains possession of the Leased Premises by
reason of the breach or violation by Tenant of any of the covenants and
conditions in
19
this Lease contained or otherwise. No such expiration or termination of this
Lease, or summary proceedings, abandonment or vacancy, shall relieve Tenant
of its liability and obligation under this Lease, whether or not the Leased
Premises shall be relet. In any such event Tenant shall pay Landlord the Rent
and all other charges required to be paid by Tenant up to the time of such
event. Thereafter:
(1) Tenant, until the end of the term of this Lease, or
what would have been such term in the absence of any such event, shall
be liable to Landlord as damages for Tenant's default, the equivalent
of the amount of the Rent, and the other charges which would be payable
under this Lease by Tenant if this Lease were still in effect, less the
net proceeds of any reletting, effected pursuant to the provisions of
this Section, after deducting all Landlord's expenses in collection
with such reletting, including, without limitation, all repossession
costs, brokerage and management commissions, operating expenses, legal
expenses, reasonably attorneys' fees, alterations, costs and expenses
of preparation for such reletting.
(2) Tenant shall pay such current damages (herein called
"deficiency") to Landlord monthly on the days on which the Rent would
have been payable under this Lease if this Lease were still in effect,
and Landlord shall be entitled to recover from Tenant each monthly
deficiency as the same shall arise.
(f) If Tenant shall at any time during the term hereof be adjudged
bankrupt, then this Lease, at the option of Landlord, shall terminate. Landlord,
in the event it exercises such option to terminate, shall be entitled to
receive, as liquidated damages, the difference between the Rent provided for
hereunder and the then rental value of the Leased Premises, which liquidated
damages shall, however, in no event be less than any sums or allowances to which
Landlord may be entitled at that time under any then existing statutes of the
State of California or the United States of America.
(g) All rights and remedies granted Landlord herein and any other
rights or remedies which Landlord may have at law or in equity are cumulative
and not exclusive, and the fact that Landlord may have exercised any remedy
without terminating this Lease shall not impair Landlord's rights thereafter to
terminate or to exercise any other remedy herein granted or to which it may be
otherwise entitled.
(h) For purposes of this Article, the Annual Percentage Rent for
any period when Tenant is out of possession following any event to which the
provisions of this Article are applicable shall be deemed, for each Lease year
during such period, to be at the rate equal to the greatest amount of Gross
Sales for any one Lease year prior to such time multiplied by the Annual Percent
that would be applicable under this Lease if Tenant was still in possession. If
this Article becomes applicable prior to the expiration of the first Lease Year,
then Tenant's average Gross Sales for the months prior to the invocation of this
Article shall be annualized for the purpose of determining "the greatest amount
of Gross Sales for any one Lease Year."
17.02 Laches. No waiver of any covenant or condition or the breach
of any covenant or condition of this Lease shall be taken to constitute a waiver
of any subsequent breach of such covenant or condition, nor to justify or
authorize the non-observance on any other occasion of the same, or any other
covenant or condition hereof, nor shall the acceptance of Rent by Landlord at
any time when Tenant is in default under any covenant or condition hereof be
construed as a waiver of such default, nor shall any waiver or indulgence
granted by Landlord to Tenant be taken as an estoppel against Landlord. It is
expressly understood that if at any time Tenant shall be in default in any of
the covenants or conditions hereunder, an acceptance by Landlord of Rent during
the continuance of such default, or of the failure on the part of Landlord
promptly to avail itself of such other rights or remedies as Landlord may have,
shall not be construed as a waiver of such default; but Landlord may at any time
thereafter, if such default continues, take action it deems necessary on account
of such default, in the manner provided in this Article XVII. Every demand for
rent due wherever and whenever made, or demand for the performance or observance
of any of the other obligations devolving upon Tenant hereunder, shall have the
same effect as if made at the time it falls due and at the place of payment; and
after the service of any notice of commencement of any suit or final judgment
therein, Landlord may receive and collect any rent due, and such collection or
receipt shall not operate as a waiver of nor affect such notice, suit or
judgment.
17.03 Self-help. If Tenant shall default in the performance or
observance of any agreement
20
or condition in this Lease contained on its part to be performed or observed
and shall not cure such default within fifteen (15) days after notice from
Landlord specifying the default, or if such default shall reasonably take
more than fifteen (15) days to cure, shall not have commenced the same within
the fifteen (15) days and diligently prosecuted the same to completion,
Landlord may, at its option, in addition to any other remedy specified
herein, without waiving any claim for damages for breach of agreement, at any
time thereafter cure such default for the account of Tenant and any amount
paid or any contractual liability incurred by Landlord in so doing shall be
deemed paid or incurred for the account of Tenant and Tenant agrees to
reimburse promptly Landlord therefor and save Landlord harmless therefrom;
provided that Landlord may, however, cure any such default as aforesaid prior
to the expiration of such waiting period, if the curing of such default prior
to the expiration of such waiting period is reasonably necessary to protect
the Leased Premises or the Shopping Center or to prevent injury or damage to
persons or property. If Tenant shall fail promptly to reimburse Landlord for
any amount paid for the account of Tenant hereunder, such failure shall
constitute an additional default by Tenant under this Lease and such amount
shall be added to and become due as a part of the next payment of Rent due
hereunder. If Landlord shall default in the performance or observance of any
agreement or condition in this Lease on its part to be performed or observed
and shall not cure such default within a reasonable period of time after
receiving written notice thereof, and if the immediate curing of such default
is necessary to protect the Leased Premises and to prevent injury to persons
or to prevent substantial damage to property, Tenant may take reasonable
action to cure Landlord's default, and Landlord shall reimburse Tenant
therefor.
17.04 Bankruptcy. If Landlord shall not be permitted to terminate
this Lease as provided above because of the provisions of Title II of the United
States Code relating to Bankruptcy, as amended ("Bankruptcy Code"), then Tenant
as a debtor-in-possession or any trustee for Tenant agrees promptly, within no
more than fifteen (15) days upon request by Landlord to the Bankruptcy court, to
assume or reject this Lease and Tenant on behalf of itself, and any trustee
agrees not to seek or request any extension or adjournment of any application to
assume or reject this Lease by Landlord with such Court. In such event, Tenant
or any trustee for Tenant may only assume this Lease if (a) it cures or provides
adequate assurance that the trustees will promptly cure any default hereunder,
(b) compensates or provides adequate assurance that Tenant will promptly
compensate Landlord for any actual pecuniary loss to Landlord resulting from
Tenant's defaults, and (c) provides adequate assurance of performance during the
fully stated term hereof of all of the terms, covenants, and provisions of this
Lease to be performed by Tenant. In no event after the assumption of this Lease
shall any then-existing default remain uncured for a period in excess of the
earlier of ten (10) days or the time period set forth therein. Adequate
assurance of performance of this Lease, as set forth above, shall include,
without limitation, adequate assurance [1] of the source of rent reserved
hereunder, [2] that any Annual Percentage Rent due hereunder will not decline
from the levels anticipated, and [3] the assumption of this Lease will not
breach any provision hereunder. In the event of a filing of a petition under the
Bankruptcy Code, Landlord shall have no obligation to provide Tenant with any
services or utilities as herein required, unless Tenant shall have paid and be
current in all payments of Landlord's Operating Costs, utilities or other
charges therefor.
Article XVIII
Access by Landlord
18.01 Right of Entry; For Lease Signs. The Landlord or the
Landlord's agents shall have the right to enter the Leased Premises upon
reasonable notice (except in the case of an emergency where no prior notice will
be required), to examine the same, and to show them to prospective purchasers or
lessees of the Leased Premises or the Shopping Center, to make such repairs,
alterations, improvements or additions as set forth elsewhere in this Lease; and
the Landlord shall be allowed to take all material into and upon such Leased
Premises that may be required therefor without the same constituting an eviction
of the Tenant in whole or in part and the Rent reserved shall be in no wise
abated while such repairs, alterations, improvements or additions are being
made, by reason of loss or interruption of business of the Tenant or otherwise.
Landlord or Landlord's agents shall use reasonable care not to interfere with
Tenant's business or Tenant's customers. During the six (6) months prior to the
expiration of the Term of this Lease or any renewal term, or at any time during
which Tenant has ceased to conduct its business with the public, the Landlord
may place upon the Leased Premises the usual notices "For Rent" or "For Sale,"
which Tenant shall permit to remain thereon without molestation. If the Tenant
shall not be personally present to open and permit an entry into the Premises,
at any time, when for any reason an entry therein shall be necessary or
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permissible, the Landlord or the Landlord's agents may enter the same peaceable
or by force, without rendering the Landlord or such agents liable therefor, and
without in any manner affecting the obligations and covenants of this Lease.
Nothing herein contained, however, shall be deemed to impose upon the Landlord
any responsibility or liability whatsoever, for the care, maintenance or repair
of the Leased Premises, Landlord's Building or any part thereof, except as
otherwise herein specifically provided.
18.02 Excavation. If an excavation shall be made upon land adjacent
to the Leased Premises, or shall be authorized to be made, the Tenant shall
afford to the person causing or authorized to cause such excavation, license to
enter upon the Leased Premises for the purpose of doing such work as the
Landlord shall deem necessary to preserve the wall or walls of Landlord's
Building from injury or damage and to support the same by proper foundations,
without any claim for damages or indemnification against the Landlord or
diminution or abatement of Rent. Such excavation shall be performed, as
reasonably possible, during times Tenant is not open for business, but in any
case except emergencies or other situations beyond Landlord's control shall not
interfere with Tenant's business or hinder Tenant's customers from entering
Tenant's parking area or entering the Leased Premises. Excepting work performed
by governmental authorities or other circumstances unavoidable if Tenant owned
the Leased Premises, any reduction in Tenant's ability to operate its business
for more than twenty-four (24) hours shall result in a corresponding reduction
in Rent and Additional Rent in proportion to the amount of verifiable sales
lost. Landlord shall indemnify and hold Tenant harmless for any claims and costs
incurred by Tenant as a result of such excavation by Landlord, or Landlord's
other Tenants if approved by Landlord.
Article XIX
Tenant's Property
19.01 Loss and Damage. The Landlord shall not be responsible for any
damage to the property of the Tenant or of others located on the Leased
Premises, nor for the loss of or damage to any property of the Tenant or of
others by theft or otherwise excepting Landlord's willful misconduct or
negligent acts. The Landlord shall not be liable for any injury or damage to
persons or property resulting from fire, explosion, falling plaster, steam, gas,
electricity, water, rain or snow, or leaks from any part of the Leased Premises,
or from the pipes, appliances or plumbing works, or from the roof, street or
sub-surface, or from any other place, or by any other cause whatsoever of any
nature excepting Landlord's willful misconduct or negligent acts. The Landlord
shall not be liable for any such damage caused by other tenants or persons who
are occupants of adjacent property, or of the Shopping Center, or the public, or
caused by operations in construction of any private, public or quasipublic work
excepting Landlord's willful misconduct or negligent acts. The Landlord shall
not be liable for any latent defects in the Leased Premises or in Landlord's
Building. All property of the Tenant kept or stored on the Leased Premises shall
be so kept or stored at the risk of the Tenant only, and the Tenant shall hold
the Landlord harmless from any claims arising out of damage to the same.
19.02 Notice by Tenant. The Tenant shall give immediate notice to
the Landlord in case of fire or accidents in the Leased Premises and of defects
therein.
Article XX
Holding Over, Successors
20.01 Holding Over. Should Tenant, with Landlord's written consent,
hold over at the end of the Term of this Lease, Tenant shall become a Tenant at
will and any such holding over shall not constitute an extension of this Lease.
During such holding over, Tenant shall pay Rent (including Percentage Rent) and
other charges at the highest monthly rate provided for herein. If Tenant holds
over at the end of the Term without Landlord's written consent, Tenant shall pay
Landlord as liquidated damages, a sum equal to twice the Rent (including
Percentage Rent) to be paid by Tenant to Landlord for all the time Tenant shall
so retain possession of the Premises; provided that the exercise of the
Landlord's rights under this clause shall not be interpreted as a grant of
permission to Tenant to continue in possession.
20.02 Successors. All rights, duties and liabilities herein given
to, or imposed upon, the
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respective parties hereto, shall extend to and bind the several respective
heirs, executors, administrators, successors, and assigns of the said
parties; and if there shall be more than one tenant, they shall all be bound
jointly and severally by the terms, covenants and agreements herein. No
rights, however, shall inure to the benefit of any assignee of the Tenant
unless the assignment to such assignee has been approved by the Landlord in
writing as provided in Section 12.01 hereof.
Article XXI
Quiet Enjoyment
21.01 Landlord's Covenant. Landlord covenants and agrees that if
Tenant shall perform all of the covenants and agreements herein stipulated to be
performed on Tenant's part, Tenant shall at all times during the Term hereof
have the peaceable and quiet enjoyment and possession of the Leased Premises and
the appurtenances thereto without any manner of hindrance from Landlord or any
persons lawfully claiming through Landlord, and it is understood and agreed that
this covenant and all other covenants of Landlord contained in this Lease shall
be binding solely upon Landlord and not any partner thereof and its successors
in interest only with respect to breach occurring during its and their
respective ownership of the Landlord's interest hereunder.
21.02 Landlord's Liability. Notwithstanding anything to the contrary
in this Lease, it is specifically agreed that the monetary liability of any
Landlord hereunder in the event of a breach by the Landlord of any of the terms,
covenants and conditions of this Lease to be performed by Landlord or in the
event of any other claim by Tenant against Landlord, whether under this Lease,
imposed by statute, or existing at common law, in respect of any matter related
to, arising out of or occurring in connection with this Lease, the Leased
Premises, the Shopping Center or their relationship to each other as landlord
and tenant, shall be limited to and enforceable solely against the Landlord's
interest in the Shopping Center and that no personal or other money judgment
shall be sought or obtained against Landlord or any partners or shareholders
thereof.
Article XXII
Miscellaneous
22.01 Entire Agreement. This Lease and the Exhibits attached hereto
and forming a part hereof, set forth all the covenants, promises, agreements,
conditions and understandings between the Landlord and Tenant, concerning the
Leased Premises and there are no covenants, promises, agreements, conditions or
understandings, either oral or written, between them other than are herein set
forth. Except as herein otherwise provided, no subsequent alteration, amendment,
change or addition to this Lease shall be binding upon the Landlord or Tenant
unless reduced to writing and signed by them.
22.02 No Partnership. The Landlord does not by virtue of this Lease,
in any way or for any purpose, become a partner of the Tenant in the conduct of
its business, or otherwise, or joint venturer or a member of a joint enterprise
with the Tenant. The provisions of this Lease relating to the Annual Percentage
Rent payable hereunder are included solely for the purpose of providing a method
whereby rent is to be measured and ascertained.
22.03 Cost and Expense. Whenever this Lease provides for the doing
of any act by any party, such act shall be done by such party at its sole cost
and expense unless a contrary intent is expressed.
22.04 Force Majeure. In the event that Landlord shall be delayed or
hindered in or prevented from the performance of any act required hereunder by
reason of strikes, lock-outs, labor troubles, inability to procure materials,
failure of power, restrictive governmental laws or regulations, riots,
insurrection, war or other reason of a like nature not the fault of the Landlord
in performing work or doing acts required under the terms of this Lease, then
performance of such act shall be excused for the period of delay and the period
for the performance of any such act shall be extended for a period equivalent to
the period of such delay. In the event that Tenant shall be delayed or hindered
in or prevented from the performance of any act required hereunder by reason of
failure of power, restrictive governmental laws or regulations, riots,
insurrection, war or other reason of a like nature
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not the fault of the Tenant in performing work or doing acts required under
the terms of this Lease, then performance of such act shall be excused for
the period of delay and the period for the performance of any such act shall
be extended for a period equivalent to the period of such delay.
22.05 Notices. Any notice, demand, request or other instrument which
may be or are required to be given under this Lease shall be in writing and
delivered in person or sent by United States certified mail, return receipt
requested, postage prepaid, and shall be addressed to the Landlord at ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ of California, or at
such other address as the Landlord may designate by written notice, and if to
Tenant, at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇), with a copy to: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (Attention: ▇▇▇▇ ▇▇▇▇▇▇▇) or at such other
address as the tenant shall designate by written notice (the "Tenant Notice
Address"). Notices shall be effective upon delivery unless delivery is refused
or cannot be made in which event notice shall be effective upon mailing.
22.06 Captions and Section Numbers. The captions, section numbers,
article numbers, and table of contents appearing in this Lease are inserted only
as a matter of convenience and in no way define, limit construe, or describe the
scope or intent of such sections or articles or this Lease nor in any way affect
this Lease.
22.07 Tenant Defined, Use of Pronoun. The word "Tenant" shall be
deemed and taken to mean each and every person or party mentioned as a Tenant
hereunder, be the same one or more, and if there be more than on Tenant, any
notice required or permitted by the terms of this Lease may be given by or to
any one thereof, and shall have the same force and effect as if given by or to
all thereof. The use of the neuter, singular pronoun to refer to the Landlord or
to the Tenant shall be deemed a proper reference even though the Landlord or the
Tenant may be an individual, a partnership, a corporation, or a group of two or
more individuals or corporations. The necessary grammatical changes required to
make the provisions of this Lease apply to the plural sense where there is more
than one Landlord or Tenant and to either corporations, associations,
partnerships, or individuals, males or females, shall, in all instances, be
assumed as though in each case fully expressed.
22.08 Broker's Commission. Each of the parties represents and
warrants that there are no claims for brokerage commissions or finder's fees in
connection with this Lease, except a commission payable to CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ and
▇▇▇ ▇▇▇▇▇▇ & Associates which fee shall be paid by the Landlord pursuant to a
separate agreement between Landlord and CB ▇▇▇▇▇▇▇ ▇▇▇▇▇; and each of the
parties agrees to indemnify the other against and hold it harmless from all
liabilities arising from any breach of its respective warranty (including,
without limitation, the cost of counsel fees in connection therewith).
22.09 Partial Invalidity. If any term, covenant or condition of this
Lease or the application thereof to any person or circumstance shall, to any
extent, be invalid or unenforceable, the remainder of this Lease, or the
application of such term, covenant or condition to persons or circumstances
other than those to which it is held invalid or unenforceable, shall not be
affected thereby, and each term, covenant and condition of this Lease shall be
valid, and be enforced, to the fullest extent permitted by law.
22.10 No Option. The submission of this Lease for examination does
not constitute a reservation of or option for the Leased Premises and this Lease
becomes effective as a lease only upon the execution and delivery thereof by
both the Landlord and the Tenant.
22.11 Recording. The Tenant shall not record this Lease without the
written consent of the Landlord. However, upon the request of either party
hereto, the other party shall join in the execution of a memorandum or so-called
"short form" of this Lease to the purpose of recordation. Such memorandum or
short form of this Lease shall describe the parties, the Leased Premises and the
Term of this Lease and shall incorporate this Lease by reference. The party
requesting such short form lease shall pay all recording fees.
22.12 Joint and Several Liability. If Tenant is a partnership or
other business organization the members of which are subject to personal
liability, the liability for each such member shall be deemed to be joint and
several. If Tenant is individual persons, then the individual persons
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comprising Tenant shall be liable for all obligations of Tenant under this
Lease.
22.13 Confidentiality. Tenant shall keep the contents of this Lease
confidential and shall not disclose the contents of this Lease in any manner
whatsoever, except that (i) Tenant may make any disclosure of information
contained in this Lease to which Landlord gives its prior written consent, and
(ii) any information contained in this Lease may be disclosed to Tenant's
Representatives who need to know that information for the purpose of assisting
Tenant in connection with its business at the Premises and who agree in writing
to keep that information confidential. Tenant shall be responsible for any
breach of the provisions of this Section by any of its Representatives. The term
"Representatives" as used in this Section of the Lease means Tenant's directors,
officers, partners, employees, attorneys, accountants and bankers.
If Tenant or its Representatives receive a request to disclose all or
any part of the contents of this Lease under the terms of a subpoena or other
order issued by a court of competent jurisdiction or by a government agency,
Tenant shall: (i) promptly notify Landlord of the existence, terms and
circumstances surrounding such request; (ii) consult with Landlord on the
advisability of taking steps to resist or narrow that request; (iii) if
disclosure of any portion of this Lease is required, furnish only such portion
of this Lease as Tenant is advised by counsel is legally required to be
disclosed; and (iv) cooperate with Landlord in its efforts to obtain an order or
other reliable assurance that confidential treatment will be accorded to that
portion of the Lease that is required to be disclosed.
The parties hereto agree to protect, indemnify, defend and hold
harmless each other from any damages or other adverse consequences that the
injured party may incur or suffer as a result of a breach of the covenants
contained in this Section of the Lease. In addition, both parties understand,
acknowledge and agree that any breach of the provisions of this Section on the
part of either party or its Representatives shall constitute a default under
this Lease. The provisions of this Section shall survive the expiration or
earlier termination of the Term of this Lease.
22.14 Exhibits. The exhibits enumerated in this Section and attached
hereto are incorporated herein by reference and made a part hereof.
Exhibit A. Drawing depicting location and configuration of the Leased
Premises and the Shopping Center
Exhibit ▇. ▇▇▇▇▇ Sales Report
IN WITNESS WHEREOF, the parties hereto have executed this Lease
Agreement as of the day and year first above written.
TENANT: LANDLORD:
CHICAGO PIZZA & BREWERY, INC., HUNTINGTON EXECUTIVE PARK,
a California Corporation a California Limited Partnership
BY: HUNTINGTON CAPITAL CORP.,
a California Corporation
BY: General Partner
---------------------------------
BY:
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DATE: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
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DATE:
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